WWW.MARIJUANAVENTURE.COM VOLUME 3 / ISSUE 1 M A R I J U A N A

THEVENTURE JOURNAL OF PROFESSIONAL GROWERS AND RETAILERS SPACE-AGE GROW Inside the nation’s most high-tech aquaponic production facility 2015’s TOP STORIES A look back at the past year of legal cannabis

DIRT WEED IN NAME ONLY Low-tech grow, high-potency bud

JANUARY 2016 $6.99 Vuber Waters UrbanGro Clarity Farms features 46 COLORADO LEAF Snowfall tests Colorado Leaf’s contingency plans as the Sprau brothers work through the final weeks of phase two 50 YEAR IN REVIEW The top stories that changed the legal cannabis industry in 2015 72 CONSTRUCTION Experts provide an inside look at best practices for constructing a grow facility 94 DIRT WEED Uncle Buds opts for low-tech cultivation, produces high- potency flower

ABOUT THE COVER: One of the hundreds of seed- lings being developed with the latest in aquaponics, LED and automation technology at Ceres in Bellev- ue, Washington. Photo by: Kristen Angelo.

MJVenture

4 | Venture // January 2016 Terpp features 66 SECURITY Security experts outline the pitfalls of operating in a cash-only industry 80 WOMEN IN SCIENCE Science and cannabis — two sectors that have traditionally been dominated by men — are benefiting from the rise of female leaders 86 SPACE-AGE GROW Ceres gets ahead of the curve by operating with cutting-edge of technology 102 WINTERS IN JAMAICA Leslie Sherman takes readers back 30 years as she recalls her winter vacations spent at one of CEO Kevin Sullivan (left) and Chris Colby, from Jamaica’s secret gardens Forever Green Indoors, visit the Ceres grow facility in Bellevue, Washington. Photo by Kristen Angelo.

6 | Marijuana Venture // January 2016 Elem•n•tal contents

18 56 132

BASICS 120 18 | Calendar ARTIFICIAL ENVIRONMENTS 26 | Market Watch Humidity and temperature are tricky 40 | Blowing Smoke variables; make sure to consider 115 | P.O.V. 54 them when designing a grow facility. 143 | Ad Directory BUSINESS APPLICATIONS California attorney Michele Brooke 130 PROFILES gives a step-by-step guide on submit- CASH AND E-COMMERCE 28 | Meg’s Marijuana ting a winning license application. Maverick Labels devises simple 30 | Growing ReLeaf plan for cash-only customers. 32 | Summit Medical Compassion 56 PRODUCT LIABILITY 132 SPOTLIGHTS The cannabis industry may need to BREEDING 34 | RezinOFF take extra steps to remain compliant Molecular geneticist, C.J. Schwartz 34 | Rx Green Solutions with labeling and standards. explains how to map plant genomes. 36 | LightRail 4.20 AdjustaDrive 36 | OdorBoss with Heat 108 GUEST COLUMNS 38 | Stoned LEGAL PAGES 136 | Alen Nguyen 38 | Agri-Mon • Tribal leaders are urged to tread 138 | Amanda Reiman carefully into legal cannabis LIVING THE DREAM • New York’s emergency program is OPINIONS 42 | Danielle Rosellison ripe with opportunities 12 | Message from the Publisher 42 | Bethany Niebauer • Get ready for California’s licens- 16 | Letter to the Editor 44 | Shawn DeNae ing requirements 140 | Letter from the Editor

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

8 | Marijuana Venture // January 2016 For Sale: Grow Operation BotaniPack

A MESSAGE FROM THE PUBLISHER Contrasting styles Best techniques haven’t been determined yet

ne of the interest- operators can focus on refining their mar- Oing things about keting and sales messages, as well as their the marijuana business back office functions. On the other hand, is that its relative new- low-tech has a significant advantage cost- ness means just about wise, but it comes at the expense of pre- everyone in the indus- dictability and consistency; factors like try is a pioneer. In par- the weather and seasonal price fluctua- ticular, the cultivation tions can have a big impact. and production sector has no real tried Who wins? That’s the $64,000 question and proven commercial models to follow. that won’t be answered for several years. Unlike other forms of agricultural pro- Finally, what’s important when mea- PUBLISHER duction that have been refined for de- suring success in this unique business GREG JAMES cades, growing marijuana is a crapshoot can also vary because of unique person- [email protected] in which cultivators take their chances and al goals, rather than traditional measures EDITOR based purely on numbers. What are the roll the dice on a particular grow method GARRETT RUDOLPH or model. Thus, all growers are basically most important metrics of success? Is [email protected] in a wait-and-see game that will ultimate- it year-over-year growth? Gross sales? SALES MANAGER ly be decided by market forces, marketing ROI? Margins? Quality? Margin dollars? LISA SMITH prowess and consumer demand. Low carbon footprint? EBITA (earnings [email protected] If you read about the two cultivators fea- before interest, taxes and amortization)? tured this month, you’ll discover two com- Market share? At this stage of the game, ACCOUNT EXECUTIVE AARON GREENREICH pletely different approaches to the same it’s all a complete unknown because the endeavor. Both are growing legal marijua- future — unlike with most businesses — STAFF WRITERS is also a complete unknown. CHRIS BAYLEY As I’ve said before, I owned and oper- PATRICK WAGNER ALL WE REALLY ated one of the top-10 largest consumer GRAPHIC DESIGN software companies for 20 years. It was CHLOÉ MEHRING KNOW IS THAT a lot of work, but also super rewarding. MARKETING There were plenty of parallels with the SHELBY TALMADGE marijuana industry: venture capital, fast WE DON’T KNOW CONTRIBUTORS growth, excitement, new companies, Ben Adams Amanda Reiman na for the retail market, and both have the dreamers, emerging technologies, crazy Michele Brooke Lauren Rudick Karen A. Canton C.J. Schultz ultimate goal of making a profit. However, valuations, etc., etc. Tom Dillon John Strieder the approaches are at complete opposite However, there are several big differ- David Hodes Sue Vorenberg Martina L. Jaccarino Jana Weltzin ends of the spectrum: One license-holder ences between the two industries. Unlike Alen Nguyen cannabis, computers are perfectly legal created a state-of-the-art indoor facility MARIJUANA VENTURE VOL. 3, ISSUE 1 that can fairly be described as “space age,” everywhere, and there was no chance of Marijuana Venture (ISSN #2376-0710) is published monthly “ by MJ Directions LLC. PO Box 1419, Renton, WA, 98057. while the other went a different route and the government stepping in to stop the ad- Phone: (425)656-3621. Website: www.marijuanaventure. vances in technology. And, perhaps more com. Copyright 2015 by Marijuana Venture. All rights re- settled on an outdoor grow best described served. Reprinting, in whole or in part, is expressly forbidden as “old-school” or “back-to-nature.” importantly, scaling up was relatively without written permission from the publisher. Which is the better way to go? That’s easy once you knew the game and had re- ADVERTISING For advertising rates, call (425)656-3621 or email Greg@ the unanswered question. High-tech has lationships with big retailers. Neither of MarijuanaVenture.com. much higher initial set-up costs, as well the above are present in the current legal SUBSCRIPTION SERVICES marijuana industry. For subscription services, please call (425)656-3621, visit www. as significantly greater ongoing opera- marijuanaventure.com or email Editor@MarijuanaVenture. tional expenses. Low-tech is the opposite: I’ll end by saying this: Indoor, out- com. For change of address, please include the old address and new address, along with an address label from a recent issue, set-up costs are minimal, and operational door, greenhouse or some combination if possible. Please allow up to three weeks for address to be changed. If an address is not updated when the magazine is costs are low. … which is best? It’s all guesswork right mailed, we are not responsible for delivery of your magazine. If now, and all we really know is that we the Post Office alerts us that your magazine is undeliverable, we The high-tech facility produces mar- will suspend our subscription until a correct address is received. don’t know. Anyone who says they do is ijuana in a controlled environment that Marijuana Venture assumes no responsibility for any claims virtually guarantees a continuous output selling snake oil. or representations contained in the magazine or in any adver- tisement. All materials contained are for educational purposes of predictable, high-quality product. With and intended for the legal marijuana business where allowed by state law. Marijuana Venture does not encourage the illegal everything tightly controlled, the produc- GREG JAMES use of any of the products contained within. tion guesswork is largely gone, and the PUBLISHER

12 | Marijuana Venture // January 2016 Helderpad Cannaline

LETTER to the EDITOR

n Oct. 22, the Oregon Liquor place in Oregon for the craft growers who worried about where their medicine will Control Commission released have been supporting the medical needs come from, and citizens in conservative temporary rules for recreation- of patients and local economies for the counties may not be able to participate in al marijuana that will be in ef- past decade. this opportunity at all. The members of Ofect until fall of 2016 when final rulemak- The rules that were developed place Oregon Sungrown Growers’ Guild will ing will take place. Oregon Sungrown Oregon at the forefront of the national continue to work hand in hand with the Growers’ Guild has been working hard legalization movement and will be ex- Legislature and the OLCC to ensure ev- to represent the interests of small family amined and emulated by many states in ery Oregonian has the opportunity to ben- farms throughout the process. We want the years to come. We are proud to have efit from this historic transition. to thank the Legislature and the OLCC helped shape this framework, but we are for allowing us to tell our story through conscious that there is still work to be the resource advisory council and direct done. Medical growers and small farms WILL FEETHAM conversations with lawmakers. We feel are struggling to find a way to participate OREGON SUNGROWN it’s vital that the new system preserve a in this great new opportunity, patients are GROWERS’ GUILD

Cannasure

16 | Marijuana Venture // January 2016 to the EDITOR

CannaSol CANNABIS CALENDAR

The Rx Green Solutions sales team speaks with potential customers at CannaCon. Right: Marijuana activist/celebrity Cheryl Shuman signs autographs at CannaCon 2015. Photos by Garrett Rudolph.

MORE EVENTS Jan. 8: The Cannabis Alliance will Northwest’s largest industry be hosting the second annual Washing- ton Cannabis Summit on Jan. 8 at the Crowne Plaza Seattle Airport hotel. show returns to Seattle The event is dedicated to positioning SEATTLE — CannaCon will return nabis consumption allowed, Smart said. Washington as the thought leader in the to Seattle’s Smith Cove Cruise Terminal “We are open to the public because we cannabis industry. Discussions will be at Pier 91 on Feb. 18-20. The third annual want the public to see us doing business held on cannabis legislation, research, show for growers, processers and retailers as businesses,” he added. education and the future of the indus- promises to be a global venue for network- The three-day event has more than 300 try. Several groups will be co-hosting ing, vendors, keynotes and innovation. booths and 30 seminars planned. In addi- the event, including the Coalition for “We had 10,983 ticketed in February tion to a number of industry insiders giv- Cannabis Standards and Ethics, Center (2015) and we’re expecting more for ing advice on everything from cultivation for the Study of Cannabis and Social this show,” said Bob Smart, CannaCon’s to retail, Smart said he has been working Policy, Northwest Producers, Proces- founder and show organizer. to arrange several celebrity appearances sors and Retailers Association, Seattle Smart has been working to produce the for the 2016 show. Hempfest and Washington Marijuana largest cannabis industry show in the Pa- CannaCon has also expanded its scope Association. cific Northwest. It’s also one of the biggest to include more retail vendors and content More information: eventbrite. trade shows that is open to the public, rath- specific to smaller operations. com/e/2nd-annual-washington-canna- er than being restricted to business owners. “We’re going to have more end-user bis-summit-tickets-19196892422. “It’s kind of a big thing with my show,” products this year,” Smart said. “High- Smart said. “Honestly, you look at the end glass and high-end vaping technol- Jan. 8-10: Central California will be other business shows and the public isn’t ogies. We’ve got more of those vendors home to Hempcon 2016, its first event even allowed to go. The only thing that coming just because there are so many re- in the region. The exact location in Ba- the public really gets to see is Hempfest, tail stores open now — they need product kersfield has yet to be announced, but the and the for their stores. So we’ve added about 40 the event will feature competitions, legal Dope Cup. CannaCon is the only busi- booths just for that.” resources, assorted glassware, hydropon- ness show the public is allowed to be at The show will also include educational ics and growing products. There will be as participants.” seminars for aspiring extractors, cultiva- a number of cannabis vendors in atten- Although the show is open to the public, tors and artisan bakers. dance. there will be absolutely no smoking or can- More information: cannacon.org. More information: hempcon.com.

18 | Marijuana Venture // January 2016 Precision Extraction CANNABIS CALENDAR

Jan. 21-22: Lab directors, researchers, event’s keynote speaker. Tickets are limit- holders on Feb. 4. producers and others interested in the ed to 300 attendees and start at $299. More information: womengrow. science of cannabis will gather in Las More information: www.theemerald- com/2016-women-grow-conference. Vegas on Jan. 21 and 22 for the Emerald conference.com. Conference. Feb. 13-14: The International Can- The two-day event at Monte Carlo Feb. 1-2: Dispensary Next will hit nabis Business Conference will be tak- Resort and Casino will be filled with the Red Lion Jantzen Beach in Port- ing place at the Hyatt Regency in San presentations covering the latest in can- land, Oregon on Feb. 1-2. The two-day Francisco on Feb. 13-14. nabis-related analytical science and re- educational event will focus on the next The event aims to blend international search. Topics will include chemotyping, generation of industry standards, strat- activism and business together for unique testing, quality assurance and cannabis’ egies, products and services for canna- networking opportunities. Featured at the potential in pain management and opioid bis dispensaries. The event will feature show will be keynote speakers, celebrity addiction. Additionally, the most recent 17 educational sessions exploring best interviews and workshops on successful results of the only nationwide Inter-lab practices in dispensary management. business strategies, pitching approaches Comparison and Proficiency Test (ILC/ Opportunities will be available for net- and the profitable areas of cannabis busi- PT) for cannabis testing labs will be un- working and for the latest in technology, ness. The show will also cover updates on veiled. These results are expected to of- tips, techniques and services. Tickets are federal banking, 280E, California legaliza- fer significant insights regarding potency available now. tion and regulations and the ever-expand- testing methodologies. More information: dispensaryexpo.com. ing list of burgeoning states and countries Dr. Mark Steven Wallace, chair of the who are taking the “wait and see” approach Division of Pain Medicine at the Univer- Feb. 3-5: Women Grow 2016 Lead- to repealing prohibition. Early bird tickets sity of California, San Diego will be fea- ership Summit will be taking place early are available now for $499. tured. Bruce Barcott, the author of Weed February at The Curtis Hotel in Denver. More information: internationalcbc.com. the People and Time Magazine’s cover The event will host a number of activi- story, “The Highly Divisive, Curiously ties including a networking breakfast and March 3-5: The second annual Mar- Underfunded and Strangely Promising lighting talks from cannabis experts. A ijuana Investor Summit and Business World of Pot Science” will serve as the sponsor job fair will be open to all ticket Expo will be at the Hilton Union Square

02 Grow

20 | Marijuana Venture // January 2016 Daily Extractions CANNABIS CALENDAR in San Francisco on March 3-5. The three- More information: cannagrowexpo.com. summit.com. day event will host workshops for infused products manufacturers, cultivators and June 15-17: After a pair of successful Sept. 22-23: Canncon, a scientific or- dispensaries, round-table sessions, key- shows in 2015, the Cannabis World Con- ganization dedicated exclusively to can- notes, a job fair, a “shark tank” style gress and Business Expo will return to nabis testing and research, will be tak- pitching session and networking opportu- the Javits Center in New York City to kick ing place in Portland, Oregon on Sept. nities. The show will also host a number off the beginning of summer. The expo 22-23. Not to be confused with the trade of amenities ranging from food service to is set for June 15-17 and plans to deliver show of a similar name in Seattle, this after-parties, to guided tours of San Fran- business connections, workshops and ed- two-day conference will bring testing cisco. A variety of ticket and sponsorship ucational seminars. The show’s organizers experts together with attendees who are packages are available now. have also announced a follow-up to their looking to learn more about testing pro- More information: marijuanainvestor- Los Angeles event for September 2016. cesses, cannabis science and research. summit.com. More information: cwcbexpo.com. Topics will include sample preparation, chromatography, mass spectrometry, ter- May 7-8: The CannaGrow Expo will June 20-22: Coming June 20-22, the pene profiling, contamination analysis open in San Diego, California on May Cannabis Business Summit and Expo (pesticides, residual solvents, microor- 7-8 at the Paradise Point Hotel & Spa. will be held at the Oakland Marriott City ganisms and heavy metals), genetics/ The expo will focus on education for Center in Oakland, California. The NCIA genomics, regulations, legalization, sci- cannabis growers, dispensary owners, show will include a network of 3,000 entific methods/standards and medicinal grow managers and enthusiasts who are growers, dispensary owners, senators, cannabis. A venue for the event has yet looking for the newest and best in tech- congressional representatives, processors to be announced. Registration is avail- nology, tools and techniques for the can- and NCIA members. The show will also able online now. nabis cultivator. The expo will feature 18 include over 30 industry sessions, Can- More information: canncon.org. different educational sessions hosted by nabis Carnival III and industry speakers. expert growers. Single-day access passes Tickets are available now with a special To submit an event for inclusion in the are available now for $189 and two-day discount for NCIA members. Marijuana Venture calendar, email Edi- passes are available for $369. More information: cannabisbusiness- [email protected].

Ms. Mary Staffing

22 | Marijuana Venture // January 2016 Apeks Green Thumb

MARKET WATCH POWERED BY A look at business metrics from the legal cannabis market, with information provided by FrontRunnerData.com

Oregon's impact on neighboring recreational stores

The Oct. 1, 2015 opening of Oregon’s medical market to all adults 21 and older took a bite out of sales revenue from retail stores $2 along the border in Washington. For the month of October, Clark County saw about a 39% reduction in total sales from the previous month. This graph represents the top four retail businesses in revenue from Vancouver, Washington. Note: The revenue figures for The Herbery include two different locations. Below is a representation of the total retail sales revenue for the openings of Washington, Colorado and Oregon’s recreational markets

$1 Revenue in Revenue Millions

$0 Main Street Marijuana New Vansterdam The Herbery High End Market Place

August September October November

Opening retail sales for Washington, Colorado and Oregon

WASHINGTON COLORADO OREGON $2 million $5 million $11 million First month First week First week

26 | Marijuana Venture // January 2016 Dyna-Gro BUSINESS PROFILES

A look at the sales floor. Bottom: Employees prepare joints for customers.

Megan Summers is the co-owner of Meg’s Marijuana.

tion. Summers made it a priority to develop Meg’s Marijuana personal connections with her customers. Arizona transplant finds niche in crowded Oregon market “Something that I learned when I moved up here to Oregon is that people By Patrick Wagner talk and word of mouth can be a powerful SPRINGFIELD, Ore. — Employees “Truthfully, I hated Arizona,” she add- thing,” she said. She quickly discovered at Meg’s Marijuana are encouraged to ed. “The quality of product here is in- that interacting with her clientele spread try every product they sell. Megan Sum- finitely better.” the word about her dispensary. mers, the co-owner and namesake of the Summers said she knew recreational Inside and out, the look of Meg’s Mari- Springfield, Oregon dispensary, wants her cannabis was on the horizon in Oregon juana is different than most other dispen- staff to be able to give first-hand testimo- and wanted to be a part of the transition. saries — simple, feminine and featuring ny about each product on the shelves. She had been working as a dispensary a spacious sales floor. Chandeliers dip “From their own experience, I think, manager in Tucson, Arizona when she low from the center of the sales floor and is one of the best ways for patients to met her future partner, reflect off the black feel comfortable and trust your opinion,” Nicholas Salsberry. Company: Meg’s marble floors and Summers said. “He was looking lights up the modern, Thanks in part to the opening of rec- for someone he could Marijuana black and red color reational sales in Oregon, revenue has invest in and I wanted Location: Springfield, scheme of the interi- quadrupled since Summers opened her to create a dispensary Oregon or. The open format store in November 2014 in the crowded that had what I val- also provides sepa- Eugene-Springfield metropolitan area. ued,” she said. Owners: Megan Summers rate points of sale for “The first day of recreational sales we Summers wanted a and Nicholas Salsberry medical and recre- made over $20,000,” Summers said. “Just storefront where she Employees: 15 ational customers. in that one day.” would be free to work “We definitely have Summers, an Arizona transplant, suf- with each individual Operation: Medical a classy vibe,” Sum- fers from PTSD and helped legitimize it patient in a more inti- dispensary and 5,000- mers said. as a qualifying condition for medical mar- mate setting. The part- square-foot indoor hydro- “I would describe ijuana in Arizona before leaving the arid nership with Salsberry ponic grow it as high-end profes- desert for the Pacific Northwest. was a step in that direc- sional.”

28 | Marijuana Venture // January 2016 ViPova BUSINESS PROFILES

A look inside Nyah Keliy’s Beaverton dispensary.

when we have a line out the door, I know Growing ReLeaf that there are other places that are com- Former commercial pilot opens Beaverton’s first dispensary pletely empty.” With recreational sales under way, By Patrick Wagner Keliy said Growing ReLeaf is “trying to BEAVERTON, Ore. — Nyah Keliy proved, Keliy got a medical card. But for hold onto the coattails, just to keep up was a commercial airline pilot, flight in- a person stopping by dispensaries on his with the traffic increase.” He said part of structor and college lecturer before ven- way to teach college courses, Oregon’s Growing ReLeaf’s success was due to it turing into legal cannabis and opening dispensary scene lacked the professional- being a dispensary first and having a grow the first medical dispensary in Beaverton, ism Keliy wanted to see. in place only to fill in supply chain gaps. Oregon. When he founded Growing ReLeaf in But Keliy didn’t hold back when design- An Air Force veteran, Keliy suffered February 2015, he wanted a medical of- ing a portion of his 2,000-square-foot op- an injury in the line of duty that required fice. No themes. No gimmicks. eration for a small grow. surgery. “You want it done right, do it yourself,” “We do all LED and we’ve had phe- “That surgery fixed one problem, but he said. nomenal results,” he said. opened up a couple new ones,” he said. But prior to the state allowing medical Keliy went forward with the LED build- Keliy went through four years of trying dispensaries to sell to all adults, Keliy out despite naysayers who tried to dis- to get medical clearance to get back into the said owning and oper- courage the decision. cockpit. During one stretch, he was hospi- ating a medical busi- Company: Growing The grow was intend- talized in an intensive care unit 13 times in ness was becoming ed to supplement the a single year. He became well-acquainted increasingly difficult ReLeaf dispensary so Keliy with narcotics and pain medication. with every passing Location: Beaverton, could take advantage “The last time they sent me a line of month. Oregon of the glut of product morphine and it was horrible,” Keliy said. “Each month there throughout the state. “I was still in pain. The treatments made were dozens more Owner: Nyah Keliy “We get to be very me nauseous. I couldn’t see straight. I was dispensaries com- Employees: 12 selective and pick pretty much a vegetable on the couch.” ing into it,” he said. Operation: Indoors, LED, from all over the Out of desperation, Keliy turned to “It was definitely a state,” he said. “We get cannabis, knowing it would take him one struggle to be in med- soil to be choosey. I think more step away from his federal pilot’s ical with so many Top Vendors: Hud Farms, that is one of the se- license. other places contin- Oregon Liberty crets to the quality that After seeing how drastically his life im- ually opening. Even we’re known for.”

30 | Marijuana Venture // January 2016 Forever Green BUSINESS PROFILES

Louis “Max” Sousa and Ayla Crossman, from Summit Medical Compassion Center.

wears multiple hats. I don’t have anybody Summit Medical Compassion that isn’t willing to pitch in elsewhere.” Success fuels Rhode Island dispensary’s expansion As the third and final dispensary al- lowed in Rhode Island, Nichols said Sum- By Patrick Wagner mit was established with the intention of WARWICK, R.I. — Many dispensaries area,” Nichols said. “We don’t have any being completely transparent within its across the country have adopted themes flashy signs and we try to keep our glass community. The general manager and in- to attract their clientele, including design products to a clear, medicinal, beaker style.” vestors all reached out to local communi- cues from speakeasies, Haight-Ashbury Since Summit’s launch in Novem- ty, police and politicians as plans to open or even steampunk to differentiate them- ber 2014, its staff has doubled in size Summit transitioned into reality. selves from the competition. and its patient base has tripled to more “We’ve worked very hard at being a Summit Medical Compassion Center than 2,500. Sales growth has warranted good neighbor,” Nichols said. “We’re in Warwick, Rhode Island has taken the expansion, so Nichols said the center is renting one unit out of a very large build- opposite approach. expanding with a new cultivation facility ing, so we’re sharing a lot of the same “We have a very nice, pleasantly bor- ready to drop seeds this winter. space with our neighbors.” ing, professional atmosphere,” said Jes- “We exceeded (ex- Summit has defi- sen Nichols, Summit’s director of op- pectations) in sales Company: Summit nite plans for the fu- erations. “It’s a doctor’s office with a and so the board had to ture expansion of its Pandora soundtrack.” open the purse strings Medical Compassion business as well as That is not to say Summit Medical is faster than anticipat- Center looking ahead to the boring; the retail space has a remarkably ed,” Nichols said. Location: Warwick, potential of a recre- clean design to serve a single purpose — Paramount to Sum- ational market open- dispensing medical marijuana. And al- mit’s success, Nich- Rhode Island ing in the near future. though it’s great fun to have themed cos- ols said, was the key Employees: 15 “We’ve already far tumes, elaborate retail spaces and wildly roles the staff has been exceeded expecta- expensive glassware, there’s something playing since opening. Operation: Dispensary tion,” Nichols said. to be said about a “straight down the mid- “What I’ve got is a and indoor, hydroponic “I think we’re all a dle” approach like Summit’s. fantastic staff here,” grow facility little stretched, but in “We’re in a very modest, low-key retail he said. “Everybody a good way.”

32 | Marijuana Venture // January 2016 NanoLux PRODUCT SPOTLIGHT

Rx Green Solutions which increases carbon metabolism. Rx Green Solutions’ naturally-based, This leads the plant to uptake more two-part nutrient program contains a nitrogen, resulting in increased plant full spectrum of nutrients at balanced growth rates. ratios designed for superior plant per- • Built-in terpene enhancer: Patent- formance. The simple two-part pro- ed technology enhances the shikimic gram was developed for growers who pathway, which converts carbohydrates want to improve both yields and qual- into three amino acids: tryptophan, ty- ity (terpenes, profiles and rosine and phenylalanine. The shikimic potency). Rx Green Solutions’ program pathway is one of the first steps in the utilizes a technology platform to en- biosynthesis of terpenes and cannabi- hance these characteristics: noids. • Phosphorus uptake: Utilizes a pat- • Amino acid complexation che- ented phosphite technology proven to lates: The amino acid complex keeps increase phosphorus uptake by 45% or micronutrients in an optimal form un- more compared to traditional phospho- til they are ready to be utilized by the rus forms. Additionally, the technology plant. These amino acids are neutrally protects phosphorus from oxidation charged and therefore easily absorbed when mixed with other nutrients, re- by the plant with minimal energy loss. sulting in more phosphorus being avail- Because Rx Green Solutions micronu- able for the plant. trients are more easily absorbed, fewer • Nitrogen usage: Nitrogen efficien- are needed than with traditional nutri- cy technology enhances the fixation ent products, thereby reducing the risk of CO2 through a natural plant me- of phototoxicity. tabolite. This natural plant metabolite More information: www.grow-bet- stimulates the plant to fix more CO2, ter.com.

RezinOFF JDSD Enterprises, a family-owned and operated business in the Pacif- ic Northwest, has developed a new way to remove sticky resin from pipes, hands and all types of trim- ming equipment. RezinOFF was designed as a safer, more effective alternative to harsh chemicals. Using RezinOFF is simple: soak the equipment for 10-20 minutes, brush clean and rinse. Repeat if need- ed. Wash hands with soap and water. JDSD calls RezinOFF the “safest liquid resin remover available on the market today.” RezinOFF is colorless, odor free, hypoallergenic and made with- out volatile organic compounds. It comes in 16-ounce bottles, as well as one- and five-gallon buckets for commercial purposes. More information: www.rezin-off. com.

34 | Marijuana Venture // January 2016 NanoLux PRODUCT SPOTLIGHT

LightRail 4.20 AdjustaDrive Growers put a lot of effort into selecting the right lighting for their operation. However, it might not be the lights them- selves that are holding back production output … it could be the limitations of stationary lighting. Stationary lighting only shines on the parts of the plants that are directly underneath the lamp, leaving some leaves and flowers underdeveloped due to the lack of light exposure. LightRail, from Gualala Robotics, solves this problem by mov- ing lamps and providing light to areas that would otherwise be shaded. This creates a more balanced, productive crop. The LightRail 4.20 AdjustaDrive kit comes complete with a variable speed LightRail 4.0 AdjustaDrive motor, a two-piece rail, auxiliary trolley and more. Growers can move two lights along 13 feet of rail from one kit using adjustable time delay. LightRail 4.20 will move any lights or hoods, and the system can be scaled for any size or weight needed. More information: lightrail3.com.

OdorBoss with Heat A global innovator in industrial odor control technology has an- nounced a new heated model in its lineup of mobile equipment. Dust Control Technology recently unveiled the OdorBoss 60G with Heat for use in freezing temperatures. Like the standard Odor- Boss systems, the heated model is designed to manage odor vapor from landfills, waste treatment facilities, livestock operations, pa- per mills and processing facilities that might be subject to clean air regulations. The heated OdorBoss features insulation, heat tracing and internal heat generation to protect equipment and compo- nents during operation and storage in freezing conditions. It was originally developed at the request of a customer in the Midwest who needed a year-round odor control solution capable of surviving the chill of winter. “The challenge was how to keep the whole system, from tank to nozzle, producing the same results in the winter as at any other time of the year,” Dust Control Technology president Laura Stiver- son said. “Each liquid-bearing component is insulated, heat traced or both, to ensure that there is no disruption in operation during cold weather.” More information: www.odorboss.com. Quincy Green

www.marijuanaventure.com | 37 PRODUCT SPOTLIGHT

Agri-Mon Harsoe Industries recently announced it will be offering “plug and play” Agri-Mon packages tailored to give medical marijuana growers the abili- ty to monitor moisture, humidity, temperature, lights, nutrients, security and more in real time. “We have basic packages that you just have to plug in to your Internet router, mount the sensor control module (SCM), place your sensors and plug in the power,” Harsoe general manager Peter Harrison said. “Every- thing is already connected and tested before shipment. Within minutes you have data streaming to your cell phone or PC. The system can also send you text alerts if you need to be informed of any situation such as when your lights go on or off or when your plants may need watering.” Various Agri-Mon sensors are available and extra sensors can be added to a basic sensor control module. Plant moisture sensors are available in packs of four with a maximum of 24 moisture sensors per module. Remote outdoor grows can also be configured with solar and cell packages that include backup batteries. “Our standard sensor control module can have extra sensors added as you expand or as you can afford,” Harrison said. Automatic control of irrigation, lighting, heating and ventilation can be achieved using customized control modules. There is also an optional Agri- Mon security control module with lasers, glass breakage sensors, sound detectors, movement detectors, window and door loops and fingerprint access with text alerts on any trigger. Custom designed Agri-Mon products are available for larger operations. More information: www.harsoeindustries.com. Stoned Despite all of the anecdotal evidence about the medical properties of cannabis, there have been shockingly few scientific studies into claims of it being a miracle cure. Dr. David Casarett sets out on a journey of discovery in his book, “Stoned” — an inter- esting read for anybody involved in the busi- ness of medical marijuana. Casarett, a palliative care physician, goes to great lengths in his attempt to prove or debunk medical marijuana claims, including smearing a mysterious cannabis paste on his legs, drinking marijuana-infused wine, taking lessons from an artisanal hash maker and speaking with researchers, patients and doc- tors around the world. His travels and exper- iments bring to light stories of both success and skepticism regarding one of the most controversial plants of modern times. “My goal with this book is to shift the na- tional discussion, and to bring these ques- tions about effectiveness and safety to the forefront,” Casarett writes in the opening chapter. “These are the questions we really need to be asking. And these are the ques- tions that I wanted to be able to answer in order to decide, as a physician, what advice I should give my patients when they ask me whether they should use medical marijuana.” More information: davidcasarett.com.

38 | Marijuana Venture // January 2016 Hydrobuilder “What really bothers me is the notion that marijuana is also medicinal because it’s not. We can have an intellectually honest debate about whether we should legalize something that is bad and dangerous, but don’t call it medicine — that is a joke.” Chuck Rosenberg, acting head of the DEA, sparking outrage from activists throughout the nation. Source: CBS.

“What I do want is for us to support research into medical marijuana because a lot more states have passed medical marijuana than have legalized marijuana. … And the problem with medical marijuana is there’s a lot of anecdotal evidence about how well it works for certain conditions, but we haven’t done any research. Why? Because it’s considered what’s called a Schedule I drug and you can’t even do research in it.” Democratic presidential candidate Hillary Clinton, on the importance of marijuana policy reforms. Source: The Huffington Post.

“The General Assembly finds and declares that it is in the best interest of the citizens of North Carolina to promote and encourage the development of an industrial industry in the State in order to expand employment, promote economic activity, and provide opportunities to small farmers for an environmentally sustainable and profitable use of crop lands …” The text of North Carolina Senate Bill 313. Source: North Carolina General Assembly website.

“Hemp really gives us a crop during the summertime that is a viable cash crop to us. We’re in a perfect geographical location for the production of hemp with our climate.” Lee Edwards, a Kinston, N.C. farmer, who is eager to begin producing hemp. Source: The Charlotte Observer.

“Today’s a momentous day for the patients of New York. We’re very excited to be actively participating in the first harvest in probably a century — the first legal harvest in about a century in New York.” Vireo Health CEO Kyle Kingsley, whose company became the first to legally harvest medical cannabis in New York. Source: Time Warner Cable News.

“The demand has been really strong, which is great, and patients seem to be really enjoying the experience. When you see the patients, it just makes you feel good that you’re providing relief for them.” Ross Morreale, chairman of the Medical Cannabis Alliance of Illinois and chief compliance officer of Ataraxia, a licensed grow facility in Albion. The first week of medical marijuana sales in Illinois was deemed a success, with more than $210,000 worth of product sold. Source: Chicago Tribune.

40 | Marijuana Venture // January 2016 RX Green Solutions Living the Marijuana Venture sought out a group of professionals to tell the trials and tribulations of everyday DREAM life in the legal marijuana industry.

each other. They care about social justice. Trail Blazin’ Productions They feel there is enough money to go Canna Advisors around. For example, a group of concerned DANIELLE ROSELLISON citizens has been working on the Wash- BETHANY NIEBAUER Bellingham, Washington ington Cannabis Commission Formation Denver, Colorado Project for more than a year. These in- dividuals come from all sectors of the industry and have served as a collabo- rative work group to begin forming the commission. After several meetings with the state Department of Agriculture, I feel confident that we will be able to move forward in 2016 with the forma- tion a Washington Cannabis Commis- sion. This, in itself, will be a landmark as the first of its kind in the nation. More specifically, a commission will help to establish cannabis as an agricultural commodity, provide access to standard agricultural resources, support the eco- hen we started this adven- nomic and environmental sustainability n Jan. 10, 2015, I rolled into ture in October 2013, I of Washington cannabis and educate the Denver in my aging Chevrolet. thought I’d be financially public, industry professionals and gov- I had never been to Colorado Wfree by now. I’d be lying if I said other- ernment agencies about the cannabis in- Oin my life. I don’t think I even knew any- wise. And when I say “financially free,” dustry. Basically, farmers will have a co- one from Colorado. I remember sitting I mean rolling in dough. We searched hesive voice to maintain and protect the in traffic on Interstate 70, my car loaded for investors with these pie-in-the-sky legal cannabis market, thereby increas- with whatever belongings it could hold, numbers, our enthusiasm and confidence ing productivity and sales for themselves as well as my two cats. exuding from our pores. Experienced in- and their retail partners. “Please,” I prayed, “please let there be vestors told us we were overly ambitious I’m still looking forward to financial something here that I can relate to.” about our numbers; we ignored them. freedom — although I’m conscious that I needn’t have worried. I arrived on a Turns out they were totally right. it is probably a five-year goal rather than Saturday, and by Wednesday, I had vis- We’ve been lucky at Trail Blazin’ Pro- a 12-month goal. However, I’m most ex- ited my first dispensary. Years ago, I vis- ductions. So far we’ve been able to op- cited that in 2016, due to many people ited coffee shops in Amsterdam, which erate in the black, but as Marijuana Ven- in this industry working together and I generally found to be dingy with poor ture has pointed out time and time again, the formation of a Washington Cannabis customer service. In Denver though, the this is business, and just like every other Commission, the entire cannabis com- dispensaries were clean and professional, business you need to have your numbers munity will be able to procure the ben- with friendly staff. Within a week or two, dialed in, your projections articulated and efits of this great plant enhancing all of I decided that making Colorado my home constantly adapt to the ever-changing our lives. would be my next great adventure. market. Before moving to Colorado, I had grad- While financial freedom is still import- Danielle Rosellison is part of the collab- uated law school in North Carolina and ant to me, I’m more focused and excited orative work group to form the Washing- failed the state bar exam (a few times). I about the cannabis community as a whole. ton Cannabis Commission. You can learn had also made the decision to leave my The overwhelming majority of the people more about the Washington Cannabis husband of eight years. North Carolina, I’ve met in this industry are good people, Commission Formation Project at http:// which had always been my home, sud- with goals and visions that are way bigger wacannabiscommission-4486396.onsim- denly had nothing left for me. I had no than themselves. They care about helping plybuilt.com. job, and no family to tie me to the area.

42 | Marijuana Venture // January 2016 Flying Skull DUE TO MARIJUANA’S HISTORY IN THE BLACK MARKET, THERE IS A RELUCTANCE TO HIRE PEOPLE “WHO ARE VIEWED AS OUTSIDERS

Broke and facing eviction, I left North Carolina for Virginia Beach, Virginia, and THE RULES IN WASHINGTON worked as a housekeeper and nanny while applying for jobs all over the country. On New Year’s Eve, I got a call from the STATE ARE EVERCHANGING Colorado Department of Labor and Em- ployment, which had a backlog of unem- AND THE NORMAL HURDLES ployment benefit claims. I was offered a position as a hearing officer. I was thrilled OF BUSINESS ARE TENFOLD — this was a great job with generous, government benefits. The only downside was that it was temporary — the job was landed a job as a regulatory specialist for the banning and moratorium issues of only 11 weeks. Even though it was two a consulting“ firm in Boulder, where I as- 2015 as an example. I rallied others in my time zones away, I decided to jump on sist marijuana businesses as they apply county, attended multiple hearings, got this opportunity in the hopes that it would for licensure in other states. My law de- out notices, paid for professional council lead to a permanent position. gree gives me an edge whenever I have to and generally hit my head against a brick It didn’t. The job lasted just under three read or explain statutes, and I’ve always wall trying to get a significant number months, exactly as promised. Once again, been a strong writer. After failing the of others to participate. I did this all in I was unemployed and now I was living bar exam, I thought I might never have a the name of “helping the industry,” even far from home with very few connections. fulfilling career, and I’m ecstatic to have though my parcel was already grandfa- I was discouraged at having to start my been proven wrong. thered in ahead of the strict zoning laws. job hunt over from the very beginning. It set my company back considerably in I wish I had thought of it myself, but a A life-long advocate for human rights, our quest to obtain a license, and we still friend suggested that I try for a job in the Bethany Niebauer graduated from Char- lost the political battle. cannabis industry. lotte School of Law in 2013. She currently The next resolve is to use my time and The legal ambiguity due to the conflict lives in Denver and works as a regulatory energy in a positive manner. Getting into between state and federal law made it a specialist for Canna Advisors. this industry has become the most diffi- good fit for my rebellious personality. cult decision-making process that could I already believed that access to medi- ever be imagined. The rules in Washing- cal marijuana was a human right, and ton state are ever-changing and the nor- retail marijuana just made good sense. Washington Bud Company mal hurdles of business are tenfold in Furthermore, the industry was growing cannabusiness. I need to keep my focus by leaps and bounds. I thought that if I SHAWN DENAE on the possibilities, stay flexible and open could start a career now, I might be able to opportunity and continue to push for Snohomish, Washington to build something noteworthy in 20 or industry improvements. It is all too easy 30 years. to dive deep into negative conversations I started networking. I attended events on how FUBAR the whole thing seems to hosted by Women Grow, the Colorado be. That is a conversation I wish to avoid Cannabis Chamber of Commerce and in 2016. Women in Weed. Due to marijuana’s The most vital goal of 2016 is to get history in the black market, there is a re- that golden ticket. A license this year is luctance to hire people who are viewed a must as the state Liquor and Cannabis as “outsiders.” Employers have a strong Board is pulling applications that do not preference for hiring people they know move forward in a timely manner. Now they can trust, so I wanted to become a that the 25% wholesale sin tax is gone familiar face. I worked with Gradujuana, and the Liquor and Cannabis Board is li- a cannabis staffing and recruiting agen- censing medical stores, there should be a cy, which became instrumental in my job healthier market in which to enter. search because of its inroads with a lot With the Luck o’ the Irish and of employers. Working with them end- teeth-grinding resolve, Washington Bud ed up being one of the smartest things I t is just as important for me to re- Company will be on the shelves by St. did. The single biggest piece of advice I solve what not to do this year as it Patrick’s Day. can give to anyone else looking for work is to discern what is important to ac- in the cannabis industry is to network as Icomplish in 2016. though your life depends on it. Doors are The first thing that comes to mind is to Shawn DeNae is CEO of Washington more likely to open for people with con- take care of me and mine. I find that far Bud Company, an aspiring applicant for a nections. too much of my energy has gone toward producer/processor license. She is one of After months of searching, and more helping others in their cannabis quests — the founding members of the Marijuana interviews than I could count, I finally whether they appreciate it or not. Take Business Association Women’s Alliance.

44 | Marijuana Venture // January 2016 TraceWeed LONG ROAD TO RETAIL and not us,” Keith added. “And then Chapter 6: Stress Test what? We woke up to six inches of white By Patrick Wagner powder.” The early snowfall froze the gutters olorado Leaf owners Keith and Brett Sprau woke and blanketed the roof, but it didn’t block access to the greenhouse. up one morning in November to an unexpected Brett and Keith both joke about Vic- six inches of fresh white powder covering their tor being the company contingency plan, but that November morning he was the commercial greenhouse, including their newly first to respond. Victor’s first priority added 488 cannabis plants. was to check the generators to make sure they were topped off with diesel. Next, C“Everything they warn you about in perienced with the first blast of winter. he reviewed the environmental control the beginning to be careful with — it all All three have witnessed dire weather log with the hope of determining exact- happened within the first four days of predictions that never came to fruition. ly when the snowfall had hit while they this greenhouse being up and running,” They’ve often watched the forecasted were sleeping only 200 yards away. Keith said. weather pummel the slopes of the Rock- The team pushed through the unex- The Colorado Leaf grow facility sits ies across the street without a drop of pected snow, checking every few hours roughly a football field’s length away rain or snow touching their property. on the generators and temperatures un- from the base of the Rocky Mountains. But this mini-storm caught the team til the threat of large-scale crop loss had The Sprau brothers and head grower unawares. melted away just days later. Victor Moran all live onsite, giving them “They kept calling for nasty snow but “Everything worked great,” Victor quick access to the greenhouse in the it was 60 degrees the day before so we said of the greenhouse and environmen- case of an emergency, such as they ex- kind of figured that it’ll hit the hillside tal control systems in place.

46 | Marijuana Venture // January 2016 Nexus Greenhouse Contractors pause during construction to flex for the camera. Below: Victor Moran tends to the first crop of seedlings. Right: Moran (left) and Keith Sprau (right) prepare for the veg cycle.

LOGISTICAL KINKS Phase one of the Nexus greenhouse con- struction has been completed, and the end of phase two is within sight. But before the team can focus solely on the 488 plants in the veg house, they’ll need to oversee the final stages of work from the contractors. Colorado Leaf needs to finish installing the last of the computers and software sys- tems, and the company’s standard operat- ing procedures still need to be written. The 20,000-square-foot facility’s stan- dard operating procedures are being penned by the three men as they simul- taneously coordinate with the remaining contractors and state inspectors, nurture the plants during early growth stages, and wrestle with occasional snowballs Mother Nature likes to throw. Victor has been working to establish a consistent atmosphere for the plants via the environmental controls. He is also setting up ancillary systems that will help streamline the new control systems. “We’ve got all the state systems up that we’re required to have, but we are getting a couple of extra ones that are going to make our lives a little easier,” Keith said. “Not easier, but more efficient is what it boils down to.” The extra layer of controls will work with tablets and wireless scanners to re- move several steps from Colorado Leaf’s daily operations. These systems will au- tomate certain greenhouse maintenance tasks that are tedious but paramount to the operation. For Victor, chores like feeding the plants can be reduced to simply pulling

48 | Marijuana Venture // January 2016 The Sprau brothers admit to not being the “most tech-savvy guys” and with- ONCE WE GET out reliable cell phone service at their head house they cannot rely on having THE LOGISTICS an IT specialist talk them through trou- bleshooting. The bandwidth has also AND COMPUTER proven to be too slow for specialists to fix problems by remote access. The re- SERVICE UP strictions have forced the brothers to cover what technical gaps they can and hire yet another IT contractor to tackle AND RUNNING the remaining problems. “So that’s been a big thing but once“ DOWN THERE we get the logistics and computer ser- vice up and running down there we’ll be WE’LL BE FINE fine,” Keith said. cal action of clones, veg, flower, harvest- GREEN AT THE END ing, selling and getting it all back.” OF THE TUNNEL “We’ll put out the ones that we know are After Keith, Brett and Victor establish really good, that Vic is very, very comfort- their standard operating procedures and able with growing commercially,” Brett a trigger. see the final crop of contractors through added. “Just so we can get a consistent “We can go in and batch our plants, scan the door, they can focus on populating top-quality product out there.” them and feed them,” Victor said. “By lit- the grow. Victor will use the original 488 In the meantime, Brett will be focusing erally scanning three things we can feed an plants to build out the plant count to the on grassroots marketing, sales and sched- entire house.” state allowed limit of 3,600. uling limited releases for the OG strains. Brett has been handling the finances, “When we wake up in the morning, all Colorado Leaf is hoping to have the “ar- marketing, sales and all other clerical as- three of us, the only thing that will be on tisan” strains ready for 4/20, with anoth- pects of the operation. Meanwhile, Keith our minds is the plants,” Keith said. “So er limited release slated for Christmas of has been refining each daily, weekly and basically that next stage is getting these 2016. The timing could be perfect as Col- monthly process into a readable standard plants healthy and big, then cutting them orado has recently seen an unprecedented operating procedure and coordinating with down and then getting them heathy and spike in wholesale prices. the last of the contractors. big. Then we can actually get into a cycli- At one point, wholesale cultivators like the Spraus had been bracing themselves for a price drop. As growers prepared to fight over precious 2016 shelf space, the market did the complete opposite. “We don’t know why,” Brett said. “But it (the wholesale price) jumped from $1,800 per pound to almost $3,000. So the demand has become really high for whole- sale rec right now in Colorado.” Having survived the first threat of win- ter and seeing the new surge in wholesale prices, the Sprau brothers have reluctantly started to feel optimistic for the future of Colorado Leaf. “We got all of the crazy extremes, hope- fully, taken care of right when we started,” Brett said. “We’ll see how the rest of the winter goes.”

Marijuana Venture is following Colorado Leaf as it undergoes the first year of being a licensed wholesale grower in Colorado, from facility construction to putting product on retail store shelves.

www.marijuanaventure.com | 49 2015A LOOK BACK AT Eight stories that helped shape the cannabis industry over the past year ― ― ― By GARRETT RUDOLPH and PATRICK WAGNER

Ohio voters re- critical. “It’s incredibly far from the truth east of the Rocky Mountains to legalize soundingly de- — 36% of the people voted for this thing. recreational marijuana. nounced a bill to le- That’s a million people who said, ‘Hey, I galize marijuana, want marijuana no matter what the cost.’” but would have also All 88 counties in Ohio voted against it. In a stunningly pro- 1 given a small group The ResponsibleOhio initiative could gressive approach of companies com- have been a landmark piece of legislation. to cannabis policy, plete control of the state’s cannabis indus- It would have made Ohio the first state to the Oregon Legisla- try. Voters rejected the wildly controver- fully legalize cannabis without taking the ture allowed li- sial Issue 3 by a margin of 64% in intermediary medical step. Washington, 2 censed medical opposition to 36% in favor. Colorado, Oregon and Alaska had all le- marijuana dispensa- “People are saying, ‘Ohio doesn’t want galized medical marijuana prior to voting ries to open their doors to all adults begin- marijuana.’ That’s not true at all,” said in recreational. ning Oct. 1, 2015. Andy Joseph, of Ohio-based Apeks Super- Ohio would have been the first state Although there were several restric-

50 | Marijuana Venture // January 2016 tions placed on sales to non-cardholders — no edibles or concentrates — Oregon’s MAJOR CHANGES ARE existing cannabis retailers saw a banner day of sales. COMING TO STATES THAT With the regulated infrastructure al- ready in place, Oregon businesses were HAVE UNREGULATED MEDICAL able to hit the ground running. Of the 400-plus existing medical dispensaries, MARIJUANA PROGRAMS more than 250 took part in recreational sales that totaled about $3.5 million on day one and surpassed $11 million for the Weltzin wrote in an email to Marijuana — that faced significantly different levels first week. Venture. “The board neither approved of regulations. One was largely unregu- In comparison, Colorado retailers sold nor “rejected this concept — it just noted lated and untaxed, while the other faced $5 million of product from the first week of it cannot ban this type of business mod- heavy regulations, a challenging licensing recreational sales, while Washington took a el because it is not a licensed activity process and excessively high tax rates. full month to reach a meager $2 million. through the board.” The Washington Legislature effec- Oregon promises to remain prominently tively killed the existing medical sector in the news in 2016, as well. The state will to bring it under the regulations of the begin accepting applications Jan. 4 for pro- Major changes are state Liquor and Cannabis Board in a ducer, processor, wholesaler and retailer li- coming to states manner similar to the recreational mar- censes for the recreational market. that have unregu- ket. The bill was highly controversial, lated medical mari- particularly among medical patients and juana programs. advocates. Alaska has gone 4 Two of the earliest The state’s new medical marijuana back and forth be- adopters of medical sector is slated to begin operating some- tween being a marijuana legalization — California and time in 2016. trendsetter in the Washington — announced they would be cannabis industry implementing completely revamped sets 3 and stalling the de- of rules that would begin in 2016. After a meeting in veloping industry’s California was the first state in the Washington, D.C. growth with heavy-handed restrictions. country to legalize marijuana for medi- and weeks of dis- While the state has yet to begin accept- cal purposes, but only had a loose set of cussion with state ing applications for licenses, the Marijuana statewide rules in place. Local rules fea- and federal authori- 2015 Control Board surprisingly voted to allow tured a great deal of disparity. The state’s 5 ties, the Flandreau some retailers to permit on-site consump- business owners often found themselves Santee Sioux tribe tion, in a similar manner as the cannabis the targets of federal raids and prosecu- in South Dakota decided to pull the plug cafes that are popular in Amsterdam. tion as the pioneers of the legal cannabis on plans for a cannabis resort and lounge. Alaska would be the first place with industry, but as the Feds have become Flandreau Santee Sioux president An- state-sanctioned cannabis cafes, opening more accepting of cannabis as a business thony Reider authorized the destruction an entirely new angle for business own- venture, one of their requirements is a of the tribe’s first marijuana crop, report- ers looking to make their mark in the strict set of guidelines. edly worth millions of dollars. The tribe marijuana industry. In the coming year or so, business has since ceased plans for the resort and The amendment also “removed the owners will be required to get one of 17 lounge that was originally announced in prohibition on consumption locations different state licenses to stay in compli- September. It was originally slated to be that allow for people to come and bring ance (see more about California’s chang- the first marijuana resort and lounge in the their own product to consume in the lo- ing laws on Page 112). country, which would be an addition to cation because the board doesn’t have Meanwhile, Washington faced the tre- the tribe’s existing portfolio of businesses regulatory authority over a business that mendous challenges of having two com- (including a casino, 120-room hotel and a does not sell cannabis,” attorney Jana peting sectors — medical and recreational buffalo ranch) as a way of adding revenue for the 400-person tribe. Although the Santee Sioux had already legalized the possession, consumption, THE PRESIDENTIAL CAMPAIGN cultivation and distribution of marijuana in June, South Dakota remains a prohibi- TRAIL BROUGHT (MARIJUANA) tion state. South Dakota Attorney Gener- al Marty Jackley cited that the changes TO THE FOREFRONT OF in tribal law were only applicable to trib- AMERICAN POLITICS al members on reservation land. “ www.marijuanaventure.com | 51 CoolJarz

52 | Marijuana Venture // January 2016 holders and the Massachusetts market con- tinues to grow rapidly.

The 2016 election loomed large over the latter half of 2015 as dozens of advocacy groups 8 ramped up their ef- forts to get mea- sures on ballots. 2016 could be a revolu- tionary year for the cannabis industry. The presidential campaign trail brought Canadian Prime bill in the Nevada Legislature that was the topic to the forefront of American poli- Minister Justin passed two years earlier. In Salem, Mas- tics with several candidates openly address- Trudeau announced sachusetts, Alternative Therapies Group ing the failures of the War on Drugs. Dem- plans to start the pro- began sales to medical card holders in ocrat Bernie Sanders and Republican Rand cess of legalizing June. After voters overwhelmingly ap- Paul have both expressed their support of 6 marijuana after tak- overhauling the nation’s drug laws. Sanders proved of the state’s initiative more than ing office last No- was the only presidential candidate to be three years ago, Massachusetts Gover- vember. In a letter where Trudeau outlined given an A grade by the Marijuana Policy nor Charlie Baker gave the dispensary the Liberal Party’s agenda, he specified that Project for his stance on cannabis legaliza- a special waiver for the sale of medical work will be done with the Health ministers tion, while Paul was given a B-minus. and Public Safety and Emergency Prepared- marijuana despite the state not having its gave Republi- ness to “create a federal-provincial-territori- testing standards in place. can front runners Donald Trump and Ben al process that will lead to the legalization Since opening, both states have seen an Carson a C and a D, respectively. Democrat and regulation of marijuana.” overwhelming demand for more dispensa- Hillary Clinton received a B. This was following Trudeau’s announce- ries. Nevada has opened additional dispen- Republican Chris Christie received an F ment on the eve of his victory that the Lib- saries for its 10,000-plus registered card — the worst grade of all candidates. eral government would get to work “right away” on the legalization of marijuana throughout Canada. The announcement cap- tured headlines across the world as Canada has pledged to surpass the U.S. as the first nation to legalize and regulate marijuana on a commercial scale. The cannabis industry surged the day following the announcement, seeing the country’s biggest producer, Canopy Growth Corp., with a 21% percent spike in share value. PDI

Medical dispensa- ries finally opened in Massachusetts and Nevada during the summer of 2015. 7 Both states legalized medical marijuana several years ago, but only recently com- pleted the licensing process and began al- lowing dispensaries to operate. After 10 years of medical marijuana be- ing legal for possession in Nevada, Silver State Relief, a licensed medical dispensa- ry in Sparks, opened its doors to the quali- fying public on July 30, thanks in part to a

www.marijuanaventure.com | 53 Cannabis BUSINESS APPLICATIONS

Securing real estate is often one of the toughest challenges of getting101 a legal operation up and running ― ― ― By MICHELE BROOKE

he time is finally here. Applications are being whether the blueprints will be open to the public. If made public record, plans could accepted for dispensaries and cultivation sites be used by the unsavory to plan a burglary by the local governing authority. You know there or robbery. As a matter of safety, discuss will be competition, and you hope the applica- this issue with the city. On top of making sure you have all the el- tion process will be fair. But how can you make ements of the application in place, it is advis- your application stand out from the others? able to have the following extra items com- T municate to the governing entity that you are First, you will want to review the appli- Traditional leases do not contain provi- ready for business and that the company will cation and the corresponding ordinances sional language. Signing a lease without this be run as a legitimate business. with your attorney. language is not advisable, unless you have • Business records, including bylaws Next, you need to find real property. a Plan B to use the building in another way. and corporate minutes; This is actually the hardest part of the Also, if you are the landlord, you will want • A business plan; process. Local ordinances (and state laws, protections put into the lease that traditional • A standard operating procedures where applicable) will tell you the required boilerplate real estate leases do not contain. manual for your business; distance cannabis enterprises need to be A landlord should have an attorney who is • An industry-specific employee manual; located away from sensitive areas such as familiar with the cannabis industry review • Complete financial records, which schools, churches, day care facilities, etc. or draft an industry-specific lease. Not all also identify your accountant; The licensing requirements vary widely real estate attorneys have experience with • Proper insurance policies; from city to city and state to state. the cannabis industry, and some may not • The biographies of your officers and/ Also, be prepared: It’s not uncommon for foresee industry concerns. or board members. real estate brokers and property owners to Next, you will want to go through each Finally, remember that preparing your give the cannabis industry the cold shoulder. provision and requirement of the application application is not something that should be There is still a stigma on marijuana busi- with a fine-toothed comb. Try to utilize local done at the last minute. If you can, delegate nesses in many places. I have been hung up businesses; this looks good to city admin- sections of the application to others in your on several times trying to help a client find a istrators, because these are businesses they group. Just make sure everyone is account- building. Don’t take it personally. know and are more likely to trust. For exam- able to stay on schedule, and plan on some Once you do find a cannabis-friendly ple, you might hire a local professional secu- things taking more time or being more ex- landlord and building in a proper zone, two rity company to go over your building blue- pensive than you thought. Don’t stress. You things are advisable. First, hire someone to print to suggest cameras, lighting and other are ready for this. Go for it! do a professional survey of the property, ev- security measures. If there is anything in the idencing that it is not too close to a sensitive rules that addresses security, make sure to Michele Brooke is an attorney in Cal- area. Next, have your attorney draft a provi- include the security plan in the license appli- ifornia who practices civil litigation and sional lease. The lease should be provisional cation. Follow every instruction to the letter. civil cannabis law (www.brookelaw- because you do not want to become respon- As a side note on this issue: discuss group). She is a member of Americans for sible for a lease if your application is not a with the government agency or city plan- Safe Access, NORML and the American winner in the selection process or lottery. ner in charge of the applications as to Herbal Products Association.

54 | Marijuana Venture // January 2016 N2 Packaging THC Factory Examining PRODUCT LIABILITY roduct liability is the way that busi- Marijuana businesses could be prime targets nesses are regulated through tort for lawsuits unless measures are taken to ensure Pdamages in the United States. There have been repeated attempts to create an- proper labeling and standards other standard for safety, but ultimately ― ― ― the standard is set by juries in pivotal, By KAREN A. CANTON game-changing lawsuits. Many business owners have the mistaken impression and MARTINA L. JACCARINO that if they comply with regulations set by state legislators, they will be protected

56 | Marijuana Venture // January 2016 insurance covers losses under this catego- ry, which includes slip-and-falls and com- mercial vehicle accidents. Product liability is different. The busi- ness owner will not know about an inci- dent until much later and it may involve Examining the actual customer, or someone else PRODUCT LIABILITY who foreseeably came in contact with a from civil liability. This is not the case. cal marijuana establishments, whether the product the business sold. An example For example, civil courts have consis- entity can maintain its license. They are can be found with regard to children. It tently and clearly ruled that medications not relevant to the availability of financial is foreseeable that if patients are not ad- and foods that meet the onerous regula- liability, which is addressed in civil law- vised of the risks to children, the entities tions of the Food and Drug Administra- suits. who made and sold the product may have tion (FDA) cannot use that as a defense in Most business owners have some liability. People involved in the industry a civil lawsuit. Those regulations, like the awareness of liability based on negli- have a responsibility to acknowledge regulations put in place by state legisla- gence; you owe a duty, breach that duty that injuries have occurred, and that the tors, govern whether or not a product can and this is a direct cause of damage to law places a greater burden on the indus- stay on the shelves, or in the case of medi- someone. Your business’ general liability try that created the product than com-

www.marijuanaventure.com | 57 mon-sense handling of the product by the owner to take certain preventive the consumer. A person injured by a steps. The more serious cases are when About the product will most likely make a claim the seller and/or producers have made against the dispensary where the prod- promises that are not supported by re- uct was sold, but the law allows the search, or fail to give warnings about AUTHORS plaintiff to initiate the lawsuit against the dangers of misusing the product and ― ― ― anyone in the chain of distribution, in- a consumer has a negative outcome. cluding the grower or manufacturer. All Here we must acknowledge that, in of these players will become involved some ways, product liability cases are in the case and the lawyers will sort out about irresponsible people doing stupid who is held accountable. things and getting money because the business owners did not foresee their STANDARD OF CARE behavior. This concept is difficult to Product liability claims are analyzed accept, but a brief overview of cases in under a strict liability standard. Strict related areas supports that conclusion. liability means that all the plaintiff has to prove is that a product was either de- BREACH OF WARRANTY fective, contaminated or unreasonably As business owners and marijuana ad- dangerous, and that the product caused vocates, it is tempting to ignore the pan- harm. There are defenses, of course, oply of scientific research indicating that which will be addressed below. marijuana has undesirable side effects The marijuana business has a two- that can lead to dangerous activities and fold exposure. One exposure is like any that foreseeable misuse can have serious aren A. Canton has been in the other consumable, such as food poison- consequences. However, in order to pro- insurance and bonds business for ing from improp- tect our businesses more than 35 years. She is a pub- lished author and hosts a radio er food handling, and maintain the Kshow on CannabisRadio.com called or a contaminant AS THE integrity of our Grass Roots Marketing. She can be coming in contact movement, we reached at www.mmjbonds.com. with a crop or a MARIJUANA have a responsibil- product. These are ity to familiarize manufacturing de- BUSINESS ourselves with the fects. These losses most significant have a statistically MATURES, potentially neg- small probability ative results and of occurring, and BUSINESSES warn our patients can be settled for WILL BE ABLE and consumers to a relatively small“ use marijuana re- amount in most sponsibly. cases. They also TO OBTAIN People in the may be covered INSURANCE industry and so- by available in- ciety at large are surance policies. FOR MOST OF becoming more The second aware of the risk type of exposure THESES LOSSES of over-con- stems from mari- suming edibles. artina L. Jaccarino is a trial juana as a medicine, as a product that in While most people consider smoking attorney who has been prac- some forms is intended to be smoked, unhealthy, some people new to mari- ticing in Nevada since 1995. and as an intoxicating substance. These juana do not realize how much stronger She has completed more cases are areas where the business own- marijuana products are today, particu- Mthan a dozen jury trials ranging from ers can have an impact on exposure. larly with the delayed effect of edibles. multi-million dollar brain injury cases, These losses stem from product liabil- For example, there is a growing class to professional negligence cases and ity claims arising from design defects, action lawsuit in Colorado arising from insurance contract disputes. She has specific language in advertising and in- mislabeled products at the Denver recently been heavily involved in Ne- vada’s medical marijuana program. adequate warnings. County Fair. The plaintiffs allege that She also holds a license to practice As the marijuana business matures, there were clearly visible signs stating law in Oregon and North Carolina, as businesses will be able to obtain insur- that there was no marijuana in the free well as the states that have reciproc- ance for most of these losses. However, chocolate samples made available. In ity. She can be reached through her as in other potentially harmful prod- fact, there was marijuana in the choc- website at www.mjlawvegas.com. ucts, your policies may require you as olate candy.

58 | Marijuana Venture // January 2016 Groco According to the package instruction, there were three recommended servings of cannabis extract in a very small piece of chocolate. The entities in the chain of distribution of that product face potential liability for false advertising, failure to warn and design defect because the dose per bite was too high, which makes mis- use foreseeable. If an employee acted on his or her own, thinking that marijuana in that small of a dose is harmless or even enjoyable, the illegal conduct may serve as a defense in that case depending upon the specific facts. However, if the signs stating there was no marijuana in the product were not Good Earth present, and a consenting adult had an ad- verse effect after consuming the marijua- na-infused chocolate, the plaintiff’s case would actually be stronger because the Organics defense attorneys would not have the em- ployee’s unforeseeable illegal behavior as a defense. Again, business owners must understand the paths to exposure to avoid a lawsuit that could result in expenses and liability that could far exceed any reason- able expectation.

WARNINGS OF GENERAL RISKS While death caused by cannabis alone is very rare (if not completely nonexis- tent), there are still many serious conse- quences of an overdose. Obviously, hal- lucinations that lead to bizarre behavior, such as jumping off a building, are sup- posed to be avoided by responsible use. However, how can the industry use “re- sponsible use” as a defense when some dispensaries forgo laboratory testing, sell product without dose information or use dose information that is inconsistent with traditional serving sizes? Compounding matters is that “hot spots” are known to occur when an extract is distributed un- evenly throughout a product. While this is the case, entities selling or distributing edibles must be very cau- tious about having more than one serving per consumable item or risk liability for adverse reactions to over-consumption, such as hallucinations or comas. The only solution is proper warnings and a push for truly scientific, peer-re- viewed research. The barriers to warn- ings and promises based on science are beyond the scope of this article, but there are those in our industry who are working diligently to overcome them.

60 | Marijuana Venture // January 2016 Crew Consulting PRODUCT LIABILITY TRENDS However, addiction is diagnosed using decrease in adult IQ and six times the pos- One controversial area is warning about other factors, including behavior, regulari- sibility of having schizophrenia. These the risk of addiction and the need to gen- ty, the impact that use has on other areas of statistics are highly debatable, but a battle erally use cannabis responsibly. According the individual’s life without the user realiz- between expert witnesses in a courtroom to the National Institute of Health, 1 in 6 ing the connection between inappropriate is sure to have the same outcome every time — very high legal bills. The battle over addiction and other so- A BATTLE BETWEEN EXPERT cial consequences is being fought in Illi- nois by the City of Chicago versus John- WITNESSES IN A COURTROOM IS SURE son & Johnson, Purdue and others, as well as in California with Orange County as TO HAVE THE SAME OUTCOME EVERY the plaintiff. The essence of the lawsuits is that Big Pharma launched a campaign TIME – VERY HIGH LEGAL BILLS in 1999 to change public perception about opioid use at the same time it was market- teenagers who try marijuana ultimately use and adverse consequences, etc. Most ing drugs like OxyContin to doctors for become addicted to the drug. This statis- important, though, is the fact that lawsuits use in treating chronic pain. tic comes from scientific research that has are filed every day without support for The consequences have been signifi- “ the plaintiff’s accusations. In the cases in- cant because patients develop a tolerance been peer-reviewed and accepted by ex- perts on the front line of treatment. Many volving marijuana, plaintiffs will have all to these medications and addiction is like- of us would contest using the word “addict- the support they need for a wide range of ly. The plaintiff municipalities in those ed” to apply to marijuana use for two rea- complaints. It will be the dispensaries, pro- ongoing cases argue that the drug com- sons. First, our general experience is that ducers and growers who will have fewer panies knew this when they engaged in a there are no physical withdrawal symptoms options for expert opinions. false advertising campaign and made rep- when stopping marijuana use. Second, According to the director of the Nation- resentations to physicians that they knew there is no evidence thus far indicating that al Institute on Drug Abuse, whose mission were false. Individual patients have suc- the user develops a dependence on THC. In is to prevent and treat drug abuse, social cessfully sued doctors and manufacturers other words, people do not become phys- consequences of heavy marijuana among over addiction to these medications. The ically ill when they stop using marijuana. teenagers include an average eight-point claims and defenses available in lawsuits

DK Law

62 | Marijuana Venture // January 2016 West Coast Horticulture between prescribers and patients is be- Minimize youth-targeted advertising; we this, we will face the same growing pains yond the scope of this article, but will be know from Big Tobacco that it will even- of Big Tobacco. At such an early stage of covered in a later issue. The lesson is that tually be banned (as several states have legalization, it will endanger the pro-can- while marijuana is becoming generally already done). Use common sense warn- nabis movement. Warn against home ex- accepted, we continue to live in a society ings against use during pregnancy, keeping tractions with butane; people engaging in deeply divided on many issues, and the cannabis products out of reach of children, that behavior and lighting themselves on consequences of using cannabis products fire are a risk to our entire movement if we will be looked upon with a critical eye by do not take responsible steps toward pre- many segments of the population. ADVERTISING vention. Last year, 2,000 studies were complet- CONCLUSION THAT GOES ed about the , but only Obviously, obtaining insurance that 6% of those studies were intended to es- covers as many potential liabilities as BEYOND THE tablish the benefits it offers. The reason possible is a necessary part of the canna- SCIENCE MUST for this is the almost insurmountable ob- bis industry. Unfortunately, many of the stacles to studying Schedule I narcotics. major insurers are not yet issuing insur- BE SPECIFICALLY We must make it a priority to complete ance coverage for marijuana. Addition- scientific, peer-reviewed research about ally, the insurers who are willing to take DISCLAIMED AS our product’s benefits. In the meantime, on the risk will have exclusions for some “ we must familiarize ourselves with the of the most expensive risks. At this point, WARRANTIES OR scientific, peer-reviewed studies that the best benefit from some of the insur- demonstrate the benefits of our product. ance policies will be the cost of defense. PROMISES Advertising that goes beyond the science Most policies will cover the insured’s le- promoting responsible use and educating must be specifically disclaimed as - war gal expenses, even if the loss is ultimately consumers on the time delay for the effects ranties or promises, and our actual prom- excluded from coverage. of edibles. Consider using green food dye ises or warranties should be limited. If we The most important thing growers, in any extractions. We need to take pre- fail to do this and a patient has a negative manufacturers and retailers can do to lim- cautions against accidental ingestions and outcome, the financial and social conse- it exposure is to focus on loss prevention. people using extractions to surreptitiously quences on the cannabis industry may be We have a wealth of history to learn from. intoxicate another person. If we do not do its own negative outcome. We protect what is most important in your life. WEYour Complete DO Security Solution CAMERAS for Video and Intrusion Alarms Systems BETTER! • We willSmart beat Phone any bid and from remote any computer camera access company to systems by 10% with better camerasAll camera and a three-yearsystems remotely warranty assessable on the withentire your system. internet wifi • We doAll not Intrusion sell low-resolution systems guaranteed cameras to be with remotely fuzzy accessible image, and in any we location,don’t no over-sellinternet the amountor phone oflines cameras needed. needed, like our competitors. Cheap camerasWe shipneed product more cameras.nationwide-Free Shipping on camera packages • We sellWe the Guarantee right camera our videoStatewide for solutions the job, andwhich Intrusion means Solutions fewer camerasto be compliant Security with all State Regulation(s). are needed and customers get better cameras for less money. In Washington and Oregon we offer onsite Technician during inspections • Free intrusion system with orders of more than 16 cameras. Free Plans for State requirements with purchase of Video System and/or • ServingIntrusion clients systems throughout the nation. Free shipping. • We haveWe sellinstalled 4-8-16-32- systems and for64 morechannel than NVR 50 and growers DVR/TVI and recorders up to 32 T Memory retailers, as well as dozens of packages for DIY installers. New IP and HD Analog camera systems available.

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64 | Marijuana Venture // January 2016 VC999 When CRIME hits the industry

Until legislation opens doors to banking, businesses must be prepared for potential theft ― ― ― By DAVID HODES

hile the cannabis industry picks up momentum, stories of crime related to the cash-only na- ture of the business continue. Smash-and-grabs, late-night burglaries and internal theft make it a challenge for business owners to feel secureW or to trust their employees.

66 | Marijuana Venture // January 2016 CCTV Security experts believe it’s important for business owners to be prepared. The biggest danger is that banks con- tinue to largely reject the cannabis indus- try. Without action from state and federal agencies, this conundrum seems unlikely to change, forcing businesses to deal in large quantities of cash. “I believe the only thing that will shock the legislative bodies into doing anything important will be some major incidents where people lose their lives,” says Noah Stokes, founder of Oregon-based Canna- Guard. “And then it’s going to be on their radar.” Dispensaries can easily have daily cash drops of $60,000 to $75,000 in Colorado. Sometimes it is picked up by an armored truck. Sometimes it’s transferred to a quietly participating bank by a modified company-owned vehicle. But there’s a big bag of cash out there. And it’s not go- ing unnoticed. “This is a high-risk industry,” says

how to

How to drive away potential robbers by making LOOKthe facility look secure, according to TonySECURE Gallo, senior director of Sapphire Protection:

At night, leave the cash 1 registers empty & open

68 | Marijuana Venture // January 2016 Tony Gallo, senior director for Sapphire enough,” he says. “But that is not a na- Protection. “That is one of the things that tional check, just a state check. And it’s people forget. It has a large amount of very basic.” cash and a very desirable piece of mer- Internal theft can often be traced to the OFF-SITE chandise. It’s a lot like pawn shops or growers and back room assistants, Gallo jewelry stores or liquor stores. says. RECORDING “No one really tells these owners how “There are a lot of problems in the bud to run the day-to-day processes of their trimming area and the storage area,” he retail company in this high-risk environ- says. “I think that a lot of people think COMPLICATES ment — understanding the exposure to that someone will steal the plant. But it’s cash management issues, internal theft, really the dry room and storage areas that robberies, break-ins. No one gave them have to be better secured.” OREGON RULES the tools for that,” Gallo says. Keeping a marijuana business safe Right now, though, internal shrinkage is from crime begins with the physical envi- Bandwidth usage becomes the biggest problem for retail and medical ronment, Porter says. issue if requirement stays marijuana stores, says Derek Porter, CEO “You want to manipulate the physical ― ― ― of Security Grade Protective Services. surroundings to not only give that warm By RYAN NEWKIRK “You would be surprised by how many and friendly atmosphere to patrons, but to owners don’t do a deep background check deter the criminal element,” he says. eading Oregon’s temporary rules on their employees,” Porter says. “They Porter says bars on the windows, sig- for recreational marijuana, I realized think their governing body, like the Colo- nage about cameras on the premises, Rthat Oregon had learned a thing rado Department of Regulatory Agencies better lighting and displays that keep or two from the trials of Washington and and the Marijuana Enforcement Divi- products out of reach from consumers are Colorado. From what I’ve read, the law is sion (MED) background check is good security measures that can be utilized, de- relatively straightforward and avoids the major pitfalls of Washington. That being said, there is one major prob- lem with the current proposed law — the redundant off-site recording, especially with the resolution requirement that the Oregon Liquor Control Commission wants businesses to keep both on and off site. One of the biggest problems is a pure bandwidth issue. If you have a stan- Store and dard one-megapixel camera, which will produce the 720p required resolution, you 2 lock away are looking at an average of one to four megabytes-per-second per channel. all product Even the low end of this bandwidth us- age, multiplied by the number of cameras required at a processing facility (on aver- age about 20-plus cameras), the band- width required is enormous. I don’t know Have , but also of a single Internet service provider that multiple cameras has enough upload bandwidth available one connected to a monitor showing the to support this type of setup. entrance to the facility or This problem will be especially difficult for behind the facilities located in rural areas like many 3 growers. I have written to the Liquor Con- sales counter showing the sales floor trol Commission to help explain the situa- tion, and I hope it will help. I think it would be fine if they were only looking for a few select cameras for off-site recording, which is what the Colorado law requires. Put bars on windows or Overall, I believe the rules committee has done a good job with its research, but still have metal rolldowns needs a little guidance to perfect this law. 4 over windows at night Ryan Newkirk is the sales manager of Security Camera King, a company that provides security and surveillance solu- tions to companies throughout the U.S.

www.marijuanaventure.com | 69 pending on the level of security needed and the look desired for the store. Many factors, such as the placement of cameras and recording devices are spelled out in state regulations. BE PREPARED Guards at the door appear to be a good idea for deterring criminals. But having someone who is armed could bring le- Cooperate. gal troubles to your business because of The robber is not there to hurt you. He state and federal laws banning firearms in conjunction with drug-related busi- wants to get something from you. 1 nesses. “You can have an unarmed guard at the door, who is basically a greeter,” Gallo Don’t volunteer says. “But most robbers know that these guards are unarmed. So they end up just more. becoming a paid witness to the crime.” 2 Some companies provide a service of If a robber asks you for money, open walking their clients through robbery the register drawer and give them the and active shooter scenarios. “These are money. Don’t offer more money from fairly common security practices that in some ways you would think are common the safe. Same with cannabis. If a rob- sense,” he says. “But if they are not regi- ber demands products, don’t offer any mented and routine, they end up creating more than is in the case. a lot of holes in your security.” The robbery training includes simply paying attention to what is going on in- side and directly outside the business, Don’t make any says David Beckett, vice president of operations for Security Grade Protec- sudden moves. tive Services. “You see the guy who is 3 wearing a low hat and dark clothing, he’s Nine out of 10 times that robber is just as nervous as you are. trying to avoid the cameras, head down, looking nervous. A trained security pro- fessional would watch that guy more than a person who is not doing those Don’t surprise things.” “It’s about using your own intuition and them. reading people’s emotions,” Porter adds. 4 “If you feel that something is wrong, then Alert them if there is someone in an- you are probably right.” other room — just so there are no He says that cannabis store robberies surprises. occur in much the same way as conve- nience store robberies; more than 90% of the time, the criminal has been to the business many times. Get control of “They probably live around the corner,” Porter says. “They know who is working the situation. when, and who is weak. They know when 5 store traffic is low.” Get control of the situation. You want Gallo recommends using an alert phrase them in and out as quickly as possible. that will communicate to other employ- ees, and no one else but those employees, that something is wrong — something such as the phrase “Mr. Smith’s batteries Don’t be a hero. came in.” There is no need to put yourself in “Well, there is no Mr. Smith and no danger. batteries,” he says. “But every employee 6 knows that there is a concern.” 70 | Marijuana Venture // January 2016 Rolland BUILDOUTS that won’t Break the Bank

Growers, consultants and construction professionals share their secrets ― ― ― By JOHN STRIEDER

lanning to build out a cultivation facility? Buckle up. wiring. It’s kind of a whole new world to understand that you’re now going to have For better or for worse, marijuana is not as to deal with what everybody else does in simple as a tomato. Building or outfitting a every other market.” greenhouse or warehouse for cannabis will cost The good news is that, once business owners have accepted this brave new a chunk of change. Adjustable light, controlled world, they can discover a number of humidity and temperature, protection from insects and ways to control costs when building out a P new grow facility. thieves, and robust HVAC systems take time as well as money to design, permit and install. FINDING THE PROS If you don’t know construction, find “Building out a grow facility can be some expect. somebody who does. Sarah Batterby, a very expensive and time-consuming,” “It’s really nice to have a grower who specialist in startup companies whose lat- says consultant Reed Porter, of Shift Can- can respect and value the fact that, as est venture is Hifi Farms near Portland, nabis Company in Colorado. “We see a you’re becoming a full-fledged industry, Oregon, did just that when she brought in lot of groups go over their budget during these are the protocols you have to go Dan Gustafik to engineer Hifi’s new cli- construction and try to value-engineer through,” says Dan Gustafik, chief tech- mate-controlled greenhouse. their project.” nology officer of Hybrid Tech, a West “We were very curious about sustain- Business owners will also incur the Coast contractor that works with the can- ability and cost savings,” she says, “and stress of “green gouging” by contractors nabis industry. “Sixty percent of the peo- so we went for a much more engaged and other professionals who reportedly ple I know don’t understand that process. partnership with someone who had the take advantage of the cannabis industry. They get very frustrated when you tell technical and engineering background. But honestly, even with the friendliest them three months is ‘expedited deliv- This is not a piece of your business where of contractors, building a grow facility ery’ when, before, they would put down you want to go it alone or have a consul- for legal cannabis is more daunting than their own two-by-fours and run their own tant in another state.”

72 | Marijuana Venture // January 2016 Bios Susy Wilson, of W.O.W. Weed researched every chain-link fence provider within a 250-mile radius before making her decision.

Saving Coin in the

Columbia It’s also worth noting that Batterby’s Nae says you’ll find them at networking master plan didn’t start with the green- meetings hosted by trade groups. The house. Hifi’s first harvest was a small Washington-focused 502Cannabis Goo- Gorge test grow in April 2015 to establish gle Group even hosts a forum called a proof of concept for investors. The “Mary Jane’s List,” named after the web- company will be building an interim in- site Angie’s List. door facility to get cashflow going. Once you get some names, vet them usy Wilson, owner of W.O.W. “I felt like it was really important to for their knowledge of the work you want Weed in Dallesport, Wash- prove that we could deliver a superior done. “We’ve found the most success ington, spent a lot of time product to market and also establish a working with a (general contractor) that researching ways to keep brand,” Batterby says. builds hospital clean rooms and sterile Sbuild-out expenses manageable Another grower, Shawn DeNae, rec- facilities,” Porter says. “I would get at for her Tier 2 production facility, ommends going a different route. The least three bids for the project, and really which includes both indoor and CEO of Washington Bud Company says, spend time interviewing the GC during outdoor growing areas. simply: “I would start outside the indus- the bid process. Go line by line to ensure One area she found she could try.” that each contractor is delivering the same save some money was the Find someone who doesn’t specialize quality, and expectations are known. Gen- security system. She bought the in cannabis but is the best in a category. erally, I’ve found the cheapest contractor 32-camera system for $3,200 and You’ll avoid cannabis specialists who will have underbid to get the job, costing went to Newegg to purchase the jack up their prices accordingly, as well more in the end. necessary hard drives, which her as contractors who know nothing about “Contractors know this industry is business partner installed. the cannabis industry but want to jump on growing quickly, and stressing up front the bandwagon, DeNae says. that you’re looking for a long-term rela- “We shared that info with a great If growers in your area don’t want to tionship might motivate them to be even number of other I-502 applicants help with a referral, ask a flower green- more competitive.” and it literally saved them as much house manager, someone at the planning Finally, be prepared. Michelle Koster, as $15,000 per system because department or even another contractor. of Colorado-based Your Green Contrac- security companies were quoting “Most of us in this industry have pre- tor, hopes that growers who contact her ridiculous prices for this,” she ferred contractors that we like to work will come to the table with three things: says. with,” says Washington electrician Jon The budget for the project, what type of Wilson shares her first-hand ex- Murfitt, of Greener Futures Electric. “If growing they plan to do … and patience. perience of building out her indoor you can put multiple contractors on a “Architects, engineers and contractors are facility in a warehouse: project who have worked together be- very busy now,” Koster says. “Due to the fore, the project progresses much more construction boom, permitting, materi- “Basically, we chose what we smoothly.” al procurement and design/construction And some growers do like to help. De- schedules are all affected.”

74 | Marijuana Venture // January 2016 Dear Electric could find and then we made it work. Everything here has been adapt, This exhaust fan puts out 23,000 cubic-feet-per- adapt, adapt. That is why I call us the minute. It was found on ‘Craigslist of regulated growing,’ be- Craigslist for $250. cause we make things work instead of going and getting what we ‘need.’ There is seldom financing for what we ‘need.’

“Our landowner suggested an elec- trician that had done the wiring when the building was expanded a number of years ago, but the guy took nearly a month to work up an estimate, and it was so high, I about fainted when I saw it!

“I called three other local electric companies and went with the lowest bid we got, which was $14,000. The highest bid we got was the first one, for more than twice what we paid.

Interestingly enough, the landlord had advertised the property with 400 amps of power because he thought the PUD had increased the amount of power to the building when he had the addition done. For some reason, they did not. The electricians we hired determined that we actually needed 600 amps to get everything powered that we needed here, so he negotiated with the power company DESIGN FIRST ly in labor.” and got the service upgraded to 600 Even before you interview contractors, You can also cut costs by moving into a amps, and we did not have to pay you should develop adequate plans. Inex- facility that is already close to ready. for that portion of the wiring upgrade. perienced growers will sometimes bring “Finding a space with adequate pow- a general contractor a er (if possible) and with existing rooftop spitballed concept that units (RTUs) that can be repurposed will includes a spot for grow- greatly reduce your capital expense,” Por- ing and a spot for pro- ter says. “Having the ability to tap into WE MAKE THINGS cessing. That’s not good existing floor drains can greatly reduce enough, says contrac- costs as opposed to cutting new ones. WORK INSTEAD OF tor and consultant Jay Check with the power company prior to Czarkowski, of Canna buildout to ensure the space can be up- GOING AND GETTING Advisors in Colorado. graded for all future power needs.” WHAT WE ‘NEED’ Initial plans must in- In an indoor grow facility, you need to clude spaces for security, control your atmosphere, DeNae points decontamination and re- out. A warehouse with 30-foot ceilings re- tail-quality packaging. quires a lot of atmospheric control just to We did have to pay for everything When designing your facility, keep benefit the lowest 10 feet where the plants inside“ the building, and after every- your workflow in mind. Your product is grow. One solution, she says, is to build thing was said and done, it ended up going to go from mother plant to clone smaller rooms within the warehouse. costing just under $20,000, because to veg, flower, trim, drying and finally, “Smaller rooms are much easier to cli- they put in our alarm system as well. packaging, so lay that process out almost mate-control. And you want to keep your like a conveyor belt. rooms separate so that if you get an infes- “I did as much research as possible “This will reduce the cost of labor in tation, it doesn’t go through your entire to source every single item as eco- moving product around the facility,” says crop.” nomically as possible because we Murfitt. “Also, bathrooms should be in a You can even build out in phases, says had so little capital to work with.” centralized location. Having employees Koster: “Start with phase one, turn a prof- walk 500 feet to use the restroom is cost- it, then continue to build.”

76 | Marijuana Venture // January 2016 Zwart

WS Packaging Susy Wilson and her team built the FINDING YOUR SPOT wooden framework and installed Location is crucial for Hifi Farms — its all of their own outlets before the property comes with water rights that al- electricians arrived on-site. low crop irrigation. They’ll be using that water to set up a liquid-to-liquid system that will be much cheaper to operate than conventional air conditioning. But whether you’re building a greenhouse on farmland or infilling warehouse space, experts say your biggest challenge will be building codes. “Often building codes don’t work in favor of cannabis plant needs, spe- cifically emergency lighting in flower rooms and fresh air requirements versus desired CO2 levels,” Porter says. “We have a build- ing code in Boulder that requires doors must be unlocked during business hours, while we have a cannabis code that says doors must be locked at all times.” Porter also says a standalone facility far away from other growers is crucial in the war against pests and disease. Rooftop HVAC systems could potentially spread both.

SHOP AROUND Finally, make educated decisions on there is a product out there that is every bit “Don’t be in a rush to get into the in- grow equipment. “Before purchasing as good but at a much lower cost.” dustry,” says DeNae. “Just take the time equipment that is the most expensive, look Just make sure the bargain equipment is to do the work before you start spending around,” says Murfitt. “In all likelihood listed by Underwriters Laboratories (UL). money.” CUT YOUR UTILITY BILLS!

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WOMEN in SCIENCE

Science and cannabis — two sectors that have traditionally been dominated by men — are benefiting from the rise of female leaders ― ― ― By SUE VORENBERG

owshan Reordan found herself in an uncom- fortable position when she joined the sub- committee on testing for House Bill 3460, a 2013 medical marijuana bill in Oregon. As the Green Leaf Lab founder scanned the conference room, she realized she was the only woman — and that many of her male peers were Rstaring at her, as if questioning why she was there.

80 | Marijuana Venture // January 2016 Dr. Michelle Sexton at the People’s Park in Berkley, California. www.marijuanaventure.com | 81 Clockwise starting from the top left: Daniela Vergara, Bethany Sherman, Rowshan Reordan and Suzanne Sisley.

82 | Marijuana Venture // January 2016 “That was a bit of a hostile Sometimes they don’t know environment,” Reordan said. how to be more inclusive and “Being a woman in the industry Dr. Sexton displays progressive. Sometimes they has certainly been an interest- her backyard medical crop. don’t realize how to empower ing process.” their peers, and I think we need Like many women working to help them open their eyes.” in areas of cannabis science, Part of the reason she found- Reordan has had to fight against ed the Agricultural Genomics what started out as a mostly Foundation in 2014 was to ex- male-dominated industry. pand her research on her own But in just a few years, per- terms. The foundation’s goals ceptions have started to change, are to create a repository of ge- thanks in part to women’s net- netic information and images working groups and a growing of various cannabis strains that influx of scientific women who can be used by growers and are joining a sector that is very others in the industry. much still a work in progress Dr. Michelle Sexton, an as- — one where glass ceilings are sistant research scientist at Ba- easily shattered as new busi- styr Research Institute in Seat- nesses are founded. tle, worked as a midwife for 10 The bill Reordan worked on in 2013 between them. years before returning to school at the age passed and was made law. And the next “Down the road our research could of 40 to pursue a degree in horticulture time she provided testing and technical lead to many tools that are available in and a doctorate in naturopathic medicine advice to a government agency — this other agricultural crops,” she said. “For at Bastyr University. time the Oregon Liquor Control Com- instance, we could use the information to After the state of Washington passed mission — she found herself in a much create plants that are purple, that flower I-502, Sexton was solicited to help the more supportive environment, where she early, or that smell like lemon.” state with its rulemaking. wasn’t the only woman and her comments She’s also interested in looking at orig- “I got a called within a month of that were taken far more seriously, she said. inal cannabis landrace strains to deter- and was asked to be an unofficial advisor “Things have been evolving quickly,” to the department for developing quality Reordan said. “There are so many amaz- control,” she said. ing women in the industry now. More join At that time Sexton was working with every day. And networking groups like BEING A Roy Upton, who was the executive direc- Women Grow have been a huge help.” tor of the American Herbal Pharmacopeia, Women Grow, a for-profit national WOMAN IN to put together the cannabis monograph. networking group open to both men and After she put Upton in touch with the li- women, has expanded rapidly since it was ACADEMIA IS quor and cannabis board, the monograph founded in Denver in 2014. In just a year, she had been working on was adopted the group has expanded well beyond Col- NOT EASY. BUT as the official guide for cannabis quality orado’s borders, with events and speaker control. Cannabis was originally removed series in more than 30 cities in the United I FOUND A LOT from the U.S. pharmacopeia in 1932 until States and Canada. later reinstating it for use in Washington. One of the group’s goals is to help “OF SUPPORT “It was a really formal step for this found more than 1,000 women-owned plant to be adopted back in and to have businesses in the cannabis industry. this document available to guide govern- Daniela Vergara, founder of the Ag- FROM WOMEN ments and practitioners,” she said. ricultural Genomics Foundation and a For the purpose of quality control, Up- post-doctoral researcher at the Universi- GROW ton split the monograph into two parts, ty of Colorado in Boulder, said she also mine how they were interbred to create the first being an inside look at manufac- found a strong encouraging community in the modern proliferation of hundreds of turing, growing and quality control; the the networking group. strains on the market. second part later became the therapeutic “For all of us, women in any scientific In academia, Vergara said she still often compendium. field is hard,” Vergara said. “Being a wom- encounters the “old boys’ club” in higher “That was a huge contribution,” Sexton an in academia is not easy. But I found a positions of authority. It’s a problem that said. “I was a participant in the canna- lot of support from Women Grow. They’ve should be met with more education, she bis industry at large. I was an editor and done great work connecting people.” said. technical advisor on both of those docu- Vergara’s work involves comparing ge- “Men do not realize that they have the ments.” nomic regions of cannabis plant strains, power,” Vergara said. “Sometimes they Sexton worked on two other canna- looking for differences and similarities fail to realize the other side of the coin. bis-related research articles as part of her

www.marijuanaventure.com | 83 post-doctoral fellowship with the Uni- Arizona studying cannabis as a treatment approval for the study from the National versity of Washington, including one that for post-traumatic stress disorder. Institute on Drug Abuse, a notoriously addressed cannabis use by patients with “The tough thing for women, the big- difficult process for researchers to navi- multiple sclerosis. gest challenge, is that activism and con- gate. Today, Sexton is busy compiling the troversy aren’t roles that women are of- In the wake of the university decision, research she’s gathered from Bastyr’s Sisley decided to strike out on her own. cannabis use survey, a collaboration with She is still working on the study, with the her affiliates at the Center for Cannabis ACTIVISM AND help of California’s Multidisciplinary As- and Social Policy. The survey’s scope is sociation for Psychedelic Studies (MAPS) broad, covering who cannabis users are, and other scientific research groups. what their beliefs about cannabis are, CONTROVERSY “Being fired, for me, was actually the their use patterns, side effects and the best comeback,” Sisley said. “I’ve gotten therapeutic benefits the users experience. AREN’T ROLES grants to do the work on my own, and I “At this point it is really the largest sur- proved to these people that I don’t need vey on cannabis to date,” she said. THAT WOMEN the university to conduct my research. Sexton said the disparity between men I’m happily independent.” and women in the field of science has ARE OFTEN She’s now in phase two drug trials been changing rapidly in recent years. looking at whole-plant marijuana for Her daughter recently received her Ph.D. “COMFORTABLE combat veterans with treatment-resistant working in a lab that included more than a PTSD, although getting the strain-spe- dozen women and just two men. WITH cific marijuana samples she needs from “It is changing in that generation but in NIDA has become a long, drawn-out pro- my generation it’s still very male domi- ten comfortable with,” Sisley said. “It’s cess, she said. nated for my age group in science,” she something I had to learn.” “It takes them 17 months to get us the said. Sisley made national headlines when samples we need,” Sisley said. “Obvious- One of the issues women in the indus- she was fired from the University of Ari- ly we’re going to persevere, but that’s de- try face is that the stigma around marijua- zona after her research and activism drew layed the study for over a year.” na often pushes them out of their comfort unwanted attention to the school — de- Sexton emphasized that funding is the zone, said Suzanne Sisley, a researcher in spite the fact that Sisley had received biggest issue for scientific research into

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84 | Marijuana Venture // January 2016 cannabis, not gender discrimination. As more women have founded and built businesses within the cannabis in- THIS IS A BRAND NEW ECONOMY, dustry, job opportunities for women in cannabis science have also started to ex- AND WE HAVE THE OPPORTUNITY pand, said Bethany Sherman, founder and president of Oregon Growers Analytical, TO BUILD IT FROM THE GROUND UP a testing lab. “Cannabis testing is really so new,” “From the beginning it was sort of a of 2015, Women Leaders of Cannabis Sherman said. “There’s so much buzz, ex- mixed bag,” Sherman said. “It’s been a collected and donated food and gift bas- citement and opportunity in the cannabis male-dominated industry, but women are kets for families in need. Although the industry. I’d say there’s probably just as on the rise. It started with men not being donations were originally rejected by the many women applying for our technical all that supportive, but it’s really evolved state Department of Health and Human positions as men now.” “quite a bit in just a few years.” Services, Women Leaders of Cannabis She got into the testing business after Sherman has also founded a new net- eventually found a thankful recipient in her mother was diagnosed with multiple working group called Women Leaders Autism Rocks. sclerosis. When she looked into cannabis in Cannabis. The group is small and just The group is planning to continue more as a treatment option she noticed there starting out, but the goal is fairly different community outreach, such as gathering were significant issues with pesticides from other networking groups. Women coats for underprivileged children. that could be very harmful to patients. Leaders in Cannabis is non-profit and re- “This is an opportunity to show the “At the time there were just two labs stricted to women only. community that the cannabis industry in Oregon, and neither was working on Sherman said one of the core goals is isn’t just a bunch of stoners,” she said. consumer safety, so it was, for me, a pret- philanthropy. “We’re real community members. This is ty obvious gap that needed to be filled,” “We want to give back to the commu- a brand new economy, and we have the Sherman said. nity and help women connect,” she said. opportunity to build it from the ground She founded the lab in 2013 — in an in- One of the objectives is to show that up. And because it’s so new, it has the po- dustry she noticed was mostly comprised cannabis businesses can integrate with tential to help women exceed or shatter of men. But that’s not so much the case other industries and with communities to the glass ceiling that exists in so many anymore, she said. be helpful corporate citizens. In the fall other industries.”

Maverick Label

www.marijuanaventure.com | 85 NASAWhat if WEED?grew

It might look a lot like Ceres, which utilizes deep-water aquaponics, LEDs and highly efficient systems of automation ― ― ― Story by GREG JAMES Photos by KRISTEN ANGELO

ontrolled environment agriculture (CEA), like so many other high-tech industries, has jumped for- ward by leaps and bounds in the last few decades. In Bellevue, Washington, the partners at the Ce- Cres indoor grow facility made note of those advances, and decided to pursue a technology-driven, non-tradi- tional approach to the cultivation of cannabis.

86 | Marijuana Venture // January 2016 www.marijuanaventure.com | 87 Neatly formed rows of deep- water aquaponics units. Below: A sample of what’s inside each container.

As a result, the company is producing and feel of something dreamed up by NASA high-quality recreational marijuana at to supply its astronauts with high-quality bud cost-efficient prices by leveraging- cur while drifting through the heavens. rently available equipment and tech- It’s that cool. niques in an impressive facility with nu- merous unique features. A LOOK INSIDE One of the great things about writing The Ceres indoor grow farm was never for a marijuana business publication is the intended to be a fanciful dream cooked up opportunity to visit some of the most im- by a wistful tech millionaire. Not by any pressive marijuana cultivation facilities on stretch of the imagination. In fact, when the the planet. I can imagine it’s a bit like the founders thought about the likely oppor- writer for a car magazine test driving all tunities that would unfold with the legal- sorts of automobiles that exhibit vastly dif- ization of marijuana, they spent long hours ferent styles and driving experiences, and researching the myriad ways that cannabis for vastly different applications — think could be cultivated on a commercial scale. big pickup truck vs. Ferrari vs. Prius. They carefully considered a number of fac- That said, if I were to draw a parallel to tors: carbon footprint, plant growth rates, automobiles, then Ceres would have to be a maintenance costs, utility costs, ROI on Tesla. As with the Tesla, which combines the equipment, scalability, product quality and carbon footprint of a Prius with the high-tech dozens of other variables. performance of a Ferrari, Ceres represents the They did this because they knew they pinnacle of CEA technology while producing had to be profitable, and because they also beautiful product reliably and efficiently. understood that technology is only valu- From the 100% LED lighting used during able if it works in practical applications the vegetative stage, to the state-of-the-art, and affords an advantage over its competi- computer-controlled deep-water aquaponic tors. The many hours of research ultimate- (DWA) grow system, Ceres is about as “gee ly resulted in a facility design that was whiz” as any facility can be. It has the look both unique and purposeful.

88 | Marijuana Venture // January 2016 Above: A healthy young seedling thrives at Ceres (left); A flowering Fire Alien White strain (right); Below: Mike Cadwell, head of gardens at Ceres.

VERTICAL VS. HORIZONTAL The minute people walk through the door of the Ceres facility, they know they’re witnessing something special. The ID system for visitor check-in is the same type used by many software com- panies to create visitor badges. It utilizes automatic photo-capturing technology and instant printing. The main doors open to a warehouse that forgoes the typical horizontal orientation in favor of one that extends vertically. An advanced racking system creates a three-level design that takes advantage of the 35-foot ceiling height, and holds plants in various stages of development. The facility manager explained why: “Warehouse space is expensive in the suburbs of Seattle, and that presented a dilemma for us. We wanted to have a place close to our homes and families, but also required a good-sized facility that we could expand as needed. It was difficult finding both. In the end we decided that by utilizing vertical space efficiently, we could use a smaller warehouse than we initially thought, be close to our families, and grow up instead of out.”

www.marijuanaventure.com | 89 Just the FACTS – LOCATION: Bellevue, Washington

NUMBER OF EMPLOYEES: 15

PRODUCTION: 3,000-plus pounds of top-shelf bud per year

BUILD COST: Millions! DEEP-WATER AQUAPONICS Once the space issue was settled, the partners went about designing GROW STYLE: the actual grow systems. They enjoyed reading about the latest advances LED/Deep Water in CEA, and set about making Ceres a facility like no other. After much Aquaponics research and discussion, they decided to go with a DWA grow system of their own design. The primary driver behind the DWA decision was SIZE: fairly simple — when done correctly, it can double the growth rate of 21,000 square feet plants compared to more traditional methods. However, they soon realized that while DWA is a proven growing tech- GOAL: nique, there are very few companies that actually manufacture the equipment To be a broad based used to make it a reality. This presented the partners with a major challenge. consumer products company. “Once we decided to go with DWA, we had to figure out how to build it,” the facility’s operations manager explained. “We quickly discovered CONTACT: that there were no commercially available systems that could scale to 206-303-0176 the size we required. This forced us to manufacture a lot of the equip- ment ourselves in China, Canada and Europe.”

90 | Marijuana Venture // January 2016

WAREHOUSE SPACE IS EXPENSIVE ... AND THAT PRESENTED A “DILEMMA FOR US Because of the exhaustive list of con- trol variables and super tight tolerances, standard plumbing equipment was not going to work. “DWA is an amazing way to grow plants, but it’s incredibly exacting,” the operations manager said. “One mistake and you can a dozen years of running her own business, lose everything. For example, the water has Kathleen is nationally respected as an au- to be constantly within 5 degrees of 64 de- thority on the latest in CEA lighting tech- grees Fahrenheit. It also has to be sterile, and nology. She was immediately impressed the pH must be just right.” with the Ceres team’s knowledge. A lot of the initial set-up cost went into “The management was incredibly manufacturing proprietary products that well-informed on all aspects of indoor were fabricated to medical equipment growing, and had obviously done their standards. homework. That made my job fairly easy, “It added cost, but also gave us a much and I recommended the latest Vivid Gro-V1 higher comfort level, and reduced the LED fixture from Lighting Science,” Kath- chances that we might experience a cat- leen said. “It’s a top-rated horticultural astrophic failure.” light, and was designed by former NASA So far, it’s worked like a charm. engineer Robert Soler. It’s also extremely efficient, and suited them perfectly. LIGHTING “We installed 469 LED fixtures, which The next big decision came down to are primarily used in the vegetative horticultural lighting. growth state, and they’ve worked flaw- Management — already leaning toward lessly.” LEDs — turned to Kathleen Sullivan at When asked why they went with LED Forever Green Indoors for her thoughts on for the plants’ growth period, and high-in- the latest indoor horticultural light systems. tensity discharge (HID) for flowering, the As an industry veteran with more than 75 answer made perfect sense. commercial installations under her belt and “This project was made possible by a grant from Puget Sound Energy due to the massive electricity savings of LED in the vegetative stage. We are big believ- ers in LED technology, and love how fast the industry is evolving,” the Ceres team Forever Green Indoors CEO Kevin Sullivan measures the PAR output using a LiCor said. “Also, when it comes to the flower- quantum sensor. PAR is the measurement of light that plants need to grow under. This type of sensor is only for grow lighting, because most light meters measure lumens, which are what humans need to see.

DWA IS AN AMAZING WAY TO GROW PLANTS, BUT IT’S INCREDIBLY

EXACTING Warehouse racking makes a perfect “ mount for hundreds of LED lights and gives Ceres the ability to grow vertically.

www.marijuanaventure.com | 91 McClain Potter checks on the plants ing period, the industry standard high-pressure with the assistance sodium (HPS) works beautifully with the stron- of a scissor lift. ger plants created by LED in the veg cycle. The Below: A beautiful newer LED fixtures for flowering are scheduled example of Kimbo for the next phase of development for this proj- Kush. ect.” For now, it makes perfect sense: the compa- ny will use LEDs when the requirements are for lower heat and PAR delivery to shorter, hori- zontally-oriented plants in the growth stage, and HPS when those same plants are 2-3 feet tall, flowering, and benefit from PAR delivered in the more vertical manner consistent with HPS. It’s easy to be impressed with how well- thought-out the entire business seemed. Em- ployee count is held to a minimum because of the automated systems of the DWA grow. Ac- cording to the facility manager, all 6,000 plants are tended by four people, who are able to deliv- er nutrients, manage automatic pest controls and otherwise run the entire facility by themselves. “It wouldn’t happen without the automation and a lot of advanced planning.”

CONSISTENCY, PROMOTION, PRESENTATION One word used repeatedly by the Ceres team is “consistency.” At Ceres, it’s practically a reli- gion, and the entire operation is designed to fa- cilitate the creation of a consistent, predictable, and always excellent product. With an advanced DWA grow system, every conceivable variable is tightly controlled. This creates an environment where production is as predictable as the sun ris- ing in the morning. It also allows for 12 harvests per annum, which equates to a steady flow of product with few in- terruptions for the retail customers that Ceres ulti- mately depends upon. “Many of our retail partners have come to expect a continuous output of product and have commented on how reliable we are. We love that,” said the company’s marketing director. “We also spend a lot of time on promotion and presenta- tion. Our sales staff work with budtenders every day, and we go to great lengths to create a lasting impression with the folks who work at the retail stores that carry our product lines. This, in turn, results in those budtenders becoming our own brand ambassadors with the public.” One of the fascinating things about the rapidly evolving recreational marijuana industry is just how varied the approaches are, and how quickly businesses are finding niches. If the U.S. govern- ment is ever in need of an experienced company to advise them on the creation of an advanced space-age automated farm, I have no doubt their search will lead them to Bellevue, Washington. In the meantime, the great products of Ceres can be found here on earth in plenty of retail locations.

92 | Marijuana Venture // January 2016

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Weed Uncle Buds took a low-tech approach and found success by using the fertile native soil of Eastern Washington ― ― ― Story by GREG JAMES Photos by KEN PEDEVILLA and GREG JAMES

irt weed” is not ordinarily a name associated with high-quality mar- ijuana. In fact, if you asked most people familiar with the term, they’d say it was mostly used in the past to describe the least desirable grade of Mexican pot ‘Dthat was widely available in the 1970s.

94 | Marijuana Venture // January 2016 Nearing the end of the vegetative stage, Uncle Buds featured a jungle of healthy green plants. www.marijuanaventure.com | 95 Sold at $10 a lid (roughly an ounce), others, he got a relatively late start to the ideal and had a much higher sand con- dirt weed was low potency, poorly cured, spring planting season. After some serious tent than most cannabis growers would often moldy mixed-field cannabis from soul-searching, Byron decided he’d scale prefer, Byron knew that farmers man- Central Mexico. back his original plans and see what he aged to produce some great orchard fruit Dirt weed as used in this article is ac- could do using mostly native soil, limited and corn in the same area. Besides, he tually the opposite — a well-tended crop cash and a smaller crop. thought, the native bunchgrass, bitter- of good quality marijuana grown in the In early June 2015, Byron and several brush and sage already grew well on his native soil of the Okanogan Valley a few friends spent a week tilling and digging, plot of land. The trick, he reckoned, was miles north of Omak, Washington. tilling and digging, and tilling and dig- to make sure the existing soil was prop- Byron Miller, the owner of Uncle Buds, ging some more. In the end, they man- erly prepared. Byron planted 800 female had two major challenges when he planted aged to do a good job of turning and starts of various sizes on June 6, with this past spring. He had limited capital and aerating close to an acre of native soil the vast majority either planted straight lacked the resources to plant in expensive in an area on the west side of the Okan- into the existing soil, or in fabric pots pre-mixed potting soil. And, like so many ogan River. While the soil didn’t look that were mostly native soil with some

96 | Marijuana Venture // January 2016 Jerromey Harris (left) and Byron Miller take a moment to survey the landscape. MANY OF MY ORIGINAL IDEAS AND PLANS HAD TO BE MODIFIED, ALTERED AND SCALED “BACK ALONG THE WAY

Byron Miller adds nutrients to the farm’s water tank. Above: A flower from Uncle Buds’ Jack White strain (a cross between Jack Herer and White Widow). higher quality potting soil on the bottom to act as a stabilizer and moisture reten- tion agent. Byron’s choice of strains included many of the usual suspects: Girl Scout Cookies, Blueberry Kush, Dutch Treat, Pineapple Kush, Blue Dream, Juicy Fruit and Purps, to name a few. When the ini- tial planting was done, Byron installed a drip system for irrigation and nutrient delivery. He used a relatively simple de- sign that utilized a standard stock tank with gravity-fed hoses and drip lines. The drip lines were manually controlled,

www.marijuanaventure.com | 97 Just the FACTS – COMPANY: Uncle Buds

OWNER: Byron Miller

LOCATION: Omak, Washington

LICENSE: Tier 3 producer/processor From left to right, Eric Cooper of Monkey but effective. Since money was tight, Grass Farms, Lynette Key and Byron EMPLOYEES: and ingenuity had to be substituted Miller of Uncle Buds and Lisa Smith from 3 for capital, most of the equipment was Marijuana Venture gather at the farm bought at Home Depot and the local north of Omak, Washington. LIGHTING: ranch supply store. Sunshine Byron, who was originally from the medical cannabis at the location, and Seattle area, sees his situation as typi- many of those test plants produced more cal among some business owners in the GROW MEDIUM: than four pounds of flower in 2014. cannabis space: “I initially figured this Native soil from the Some of their biggest producers were would be a relatively simple process, but Okanogan Valley planted in the local native soil. many of my original ideas and plans had Lynette has her own ideas why. to be modified, altered and scaled back CROP: “Ideally all growers would love to along the way,” he said. “A lot of the plant in a specially mixed, high-quali- About 800 plants problems I encountered would not have ty potting soil,” she said. “Sometimes, happened if the licensing process moved EXPECTED YIELD: along faster. though, if you don’t have the cash, you 600 lbs “Like a lot of people, I thought we’d go with what you have, and make do. I get things going last summer, but what knew that this area had soil that would TOP STRAINS: turned out to be the most vexing issue work because of all the orchards around Girl Scout Cookies, was not the actual process of getting the us. They use native soil and produce lots of fruit. We decided to test it and see Blueberry Kush, grow license, but finding the right place to set up shop, and a land owner who what would happen. Dutch Treat, Pineapple Kush, “We also knew we were not going to Blue Dream, was friendly and open-minded when it came to the new cannabis industry.” have the money of the big, well-financed Juicy Fruit, Purps, It wasn’t easy. One promising location growers and decided to embark on a dif- Jack White was nixed because of an infestation of ferent path that substituted hard work mites among some local hop growers and sweat for capital expenditures.” (hops are notorious mite nurseries). An- It worked. other was passed over because of com- Meanwhile, Byron is a pragmatist: [WE] DECIDED TO munity opposition. “Without a lot of money and big finan- EMBARK ON A “In the end, I settled on a plot just cial backers, I knew I wasn’t going to north of Omak that had proven itself as produce a lot of AAA, top-shelf bud, so DIFFERENT PATH a successful medical grow site,” Byron my goal and business model morphed THAT SUBSTITUTED said. He connected with Lynette Key, into something a bit more realistic; I de- HARD WORK AND who — along with Richard “Bud” Vest cided that I’d mostly produce for the oil — was eager to get a state-licensed fa- and hash market, and sell off the crop to “SWEAT FOR CAPITAL cility up and operational on Bud’s land. a processor who could then create other EXPENDITURES Bud and Lynette grew several strains of value-add products with a good supply

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Bulk loads shipped weekly throughout Washington, Oregon and Colorado 88 800-591-5925 MillerSoilsLLC.com [email protected] of flower and relatively high-THC, sun- “Bud never used marijuana, but he grown cannabis.” was always an open-minded guy, and When the first early maturing strains thought that pot was probably no worse were harvested in mid-September, Byron than the whiskey so many of his friends and Lynette were pleasantly surprised. consumed,” she said. “Back in 2013, “I was blown away,” Byron said. “Our when word spread that he was going to Juicy Fruit came in at 27% THC, and allow a marijuana farm on his property, turned out to be quite good. It wasn’t the lots of his old friends shunned him. But stuff of legends, but I’ll take 27% THC he shrugged it off, and said they probably any day, and for the cost per gram that I weren’t real friends anyway.” produced it for, I consider it to be a big Lynette’s words speak volumes about a success.” wonderful, friendly man who lived a full Later harvests also proved to be over- life and loved having visitors at his little achievers and consistently came in at 22- ranch just off Highway 97 near Omak. 27% THC. Together, Byron and Lynette have de- Clockwise, starting from the top left: Byron and Lynette are justifiably proud fied the odds. On a shoestring budget, they A taste of humor on Monkey Grass of the farm they named Uncle Buds in hon- managed to grow a big field of cannabis Road; Juicy colas peak over the fences or of Bud, who passed away in the spring that turned out to be much better than the at Uncle Buds; Another sample of the of 2015 at the ripe old age of 89. Lynette is naysayers predicted. And, in the process, Jack White from Uncle Buds. certain Bud would be proud of their crop. they kept alive a promise made to Bud.

100 | Marijuana Venture // January 2016 Forever FLowering

Eden Labs Seven Winters in AMAICA

American tourist remembers her time spent at one of Jamaica’s secret gardens more than three decades ago ― ― ― J By PATRICK WAGNER

By 1983, Leslie Sherman was welcomed into the inner circle of Jamaican locals.

102 | Marijuana Venture // January 2016 Sherman and Royland regularly exchanged gifts during her visits to Jamaica.

annabis has long been a central element of Ja- possession of up to two ounces. However, in the late 1970s and early 1980s, Jamaica maica’s culture, but only recent amendments was a vastly different place. to the Caribbean nation’s drug laws have de- By the third time Sherman and her criminalized possession of small quantities of friends visited Jamaica, they were becom- ing familiar faces to the locals, she said. marijuana. One local man in particular was named Royland, but he went by the nickname, CThe long-awaited overhaul has opened ly 20s at the time. She thoroughly enjoyed “Skunky.” the door to a lawful medical marijuana the cannabis that was openly sold by just “He was a marijuana farmer and really a industry in Jamaica, as well as provided about everyone in the vicinity of Negril nice guy, very interesting to talk to,” Sher- Rastafari adults the green light to use mar- Beach Village Resort, she said. man said. ijuana for sacramental purposes. The pol- “I think it took about two weeks for Over the next few years, Sherman be- icy changes, implemented in spring 2015, it to get out of my system. They would gan corresponding with Royland by mail also unearthed fond memories for one make fun of me at the resort because I to let him know when she and her friends American who was welcomed behind the would do everything with a spliff in one were planning to visit. Knowing that the scenes of Jamaica’s cannabis industry as a hand; I’d play volleyball, rode horses,” government had placed restrictions on tourist about three decades ago. she says with a laugh. “It was illegal, but what Jamaicans could purchase, Sherman “We used to go to Jamaica every year on the compound, the resort, no one did would bring everything from batteries to to get the heck out of Chicago,” Leslie anything. Lots of people were smoking Converse tennis shoes for the locals. Sherman said, recalling the change of at- there.” In exchange for Sherman’s gifts, Roy- mosphere from the Windy City’s brutal In 2015, the Jamaican Parliament de- land traded a bag of locally-grown — winters to Jamaica’s tropical beaches. criminalized cannabis. Adults are now an amount no human could consume in two Sherman was a court reporter in her ear- allowed up to five plants per home and weeks, she said. These exchanges led to an

www.marijuanaventure.com | 103 “ ” Royland prepares a spliff while touring his farm with Sherman.

invitation for Sherman and her friends to bulls don’t approach us. know or they’ll stop you,” Sherman said. visit Royland’s farm. While tourists could “We had to cross a big area that was “You’re not just going to be able to wan- easily buy marijuana, few had the oppor- very muddy and Royland would be tell- der in there.” tunity to see where it was grown and the ing us to step on the base of the plants so In the big open area at the base of the steps that were taken to cultivate the local- we don’t sink in the mud,” she said. “The farm were the remains of airplane taxis ly-beloved herb. edges of the grass were really sharp and that had crashed across the island. Roy- Just getting to the farm was an endeav- you’d end up getting little micro-cuts all land and his fellow farmers had scav- or in itself, an arduous journey that took over your legs.” enged the airplanes and converted various several hours to complete, Sherman said. While traveling through the area, Sher- parts to be used for drying racks and other “We ended up crossing a body of water man said Royland would make noises growing equipment. in a dug-out canoe,” Sherman said. “We into the bush and hidden people in the “He really knew what he was doing. It crossed this field with bulls in them and distance would make noises in response. was a lot of work,” she said. “He made he picked up this big stick and yells at “There were people out there keeping sure it was irrigated, and pruned the them while we’re crossing this field so the guard and you’d have to be someone they plants. I mean he really did know what he

104 | Marijuana Venture // January 2016 HE TOLD US ABOUT THE GOVERNMENT AND IT ALL SOUNDED VERY SAD AND RESTRICTIVE was“ doing and his stuff was wonderful.” strictive country. The Jamaican govern- She remembers Royland’s house being ment eventually closed off many beach- very small, and he kept a couple large, es to segregate the local residents from heavy cardboard drums from which he’d tourists. pull out giant handfuls of untrimmed “(Royland) told us about the govern- cannabis. ment and it all sounded very sad and re- “It was so sticky that it would stick strictive and so limited,” Sherman said. to your fingers as you’re cutting it and “I remember coming home the first separating it,” Sherman said. “They had time and passing through immigration really sticky stuff. I loved it.” and the guy looks at me and he says, Sherman only recalls fond memories ‘Did anyone offer to sell you pot while of her time in Jamaica. But she was as you were there?’” Sherman said. “I surprised as anybody that the laws would looked him right in the eye and I said, shift in favor of legalization in such a re- ‘Everyone!’”

A pair of bulls stand guard outside of Royland’s farm.

www.marijuanaventure.com | 105 CannaCon

LEGAL PAGES

cal governments enact commercial mar- ijuana laws that implement a strong and Many questions remain for effective regulatory system to address the threats to public safety, health, etc. A regulatory scheme must not only be com- Indian Country cannabis prehensive on paper, but also in practice. Tribal leaders should take caution before diving into industry When determining whether to engage in this market, tribal leaders must draft, By Jana Weltzin approve, and most importantly, enforce here’s been a lot tles to which have not been extinguished, a solid regulatory scheme to control and Tof recent activity including rights of way running through manage commercial cannabis operations regarding the involve- the same. on their land. ment of Indian nations If the land in question meets one of Tribes must also consider the potential in the emerging canna- these three categories to be considered upsides before jumping head-first into the bis market. The murky Indian Country, the next factor to con- cannabis industry. Revenue generation? waters of tribal enter- sider is the law regarding commercial Economic growth? Market advantage? prises swirl with unan- sale of marijuana in the state where the Cultural impact — either positive or swered questions and faulty assumptions. property is located. States cannot regu- negative? Many of the answers to these Will the Feds shut down tribal busi- late an industry activity on tribal lands if questions will depend on the particular nesses? Do they have to deal with IRC state law permits such activity, according tribe, surrounding communities and de- 280E? Do they have to pay federal tax- to the Cabazon decision by the U.S. Su- mographic of the tribal members. es at all? What about state and excise preme Court in 1987 (California v. Caba- However, it’s clear that with the right taxes? What state laws are applicable? zon Band of Mission Indians). The court actors, structure and regulatory scheme, With the federal government refusing to determined that since some form of gam- an Indian tribe engaging in the cannabis provide anything other than conditioned ing was allowed under state law, the state industry has an incredible tax advantage guidance, tribal leaders get stuck in yet could not prohibit or control the activity over the rest of the industry. another legal conundrum. on tribal land. Income derived from Indian Country To begin our analysis of when and how Generally speaking, primary jurisdic- by tribal members is typically not sub- an Indian nation may engage in the can- tion over Indian Country rests with the ject to state or federal taxation, unless federal government and the Indian tribe otherwise indicated by Congress. Tribes inhabiting it, and not with the states. In that meet the qualifications may conduct FEDERAL INDIAN states where the sale and production of commercialized marijuana production cannabis remains illegal, tribes are on and sales without paying state excise and LAW IS A TRICKY dicey grounds if they attempt to assert retail taxes or federal income tax. sovereignty and move forward with a Although this sounds like an amazing tribally-sanctioned cannabis operation. opportunity for Indian communities to SUBJECT MATTER On Oct. 28, 2014, the U.S. Depart- engage in further economic development, nabis industry, we need to start with the ment of Justice issued a memorandum they must tread with caution. Federal In- initial question — what is Indian Country? that gave conditioned guidance to tribal dian law is a tricky subject matter due to Indian Country is the phrase often used entities, while reiterating the Cole Mem- the numerous and ever-changing laws. by courts to determine the limits of a orandum priorities as guiding principles. How the land is titled, transferred and re- state’s power over an Indian communi- The Department of Justice’s third en- stricted plays a huge role in determining “ty. There are three categories of Indian forcement priority — “preventing the di- whether you are dealing with true Indian Country, according to federal law: version of marijuana from states where it Country or simple fee title land. Employ • All lands within the limits of an In- is legal under state law in some form to an expert to help navigate this area — and dian reservation under the jurisdiction of other states” — is particularly relevant to understand that this is a legal gray area so the United States government, notwith- tribal operations. the answers to some questions are yet to standing the issuance of any patent, and In states where marijuana production be determined. including rights of way running through and sale remains illegal, a tribal nation the reservation; would be unwise to sanction operations Jana Weltzin is a member of Rose Law • All dependent Indian communities on its land. The Cabazon decision per- Group’s medical marijuana and zoning/ within the borders of the United States mits activities on tribal land and exempts land use departments. She advises clients whether within the original or subse- the same from state regulation only if the in the cannabis industry in Arizona and quently acquired territory thereof, and state allows some form of that activity. Alaska. Rose Law Group assists clients whether within or without the limits of a Additionally, the Department of Jus- with business structure, compliance with state; and tice memorandum noted that its guidance state and local laws, zoning approval, site • All Indian allotments, the Indian ti- rests on the expectation that state and lo- selection and product regulations.

108 | Marijuana Venture // January 2016 Honu

DCG LEGAL PAGES

marijuana to patients who qualify; and lawmakers openly acknowledge that the Northeast represents fertile Compassionate Care Act bears no resem- blance to the patient-friendly program the people originally sought. Further liberal- ground for expansion ization seems inevitable. Emergency program could kick-start New York opportunities If you have been deterred by regulation, keep an eye on it — regulations change By Lauren Rudick quickly. And as shown in New York, ast November, and patient advocates. With any luck, the changes may foster expansion opportuni- Lwhile top industry applicants who won New York’s five cov- ties. In New York, the emergency access professionals gathered eted licenses won’t be discouraged by out- program gave the Department of Health for the Marijuana Busi- of-state competition. And hopefully, the 38 discretion to waive or modify certain strin- ness Conference in Las applicants who did not win licenses will gent requirements of the Compassionate Vegas, word spread not litigate the process by which emergen- Care Act. While the CCA called for the is- that New York had cy licenses were granted. Such litigation suance of only five licenses to produce and passed an emergency would delay the administration of medical distribute medical marijuana in New York, medical marijuana access program to give marijuana — a scenario the emergency the emergency access program would al- critically ill patients immediate access to program was designed to avoid. Similar low an unspecified number of new licenses. cannabis, before the previously-enacted circumstances delayed the implementation Under the CCA, cannabis must be New Compassionate Care Act becomes opera- of Massachusetts’ medical marijuana pro- York-grown, in compliance with stringent tional. As of this writing, no legal medical gram for two years. time frames and requirements; the emer- marijuana has been sold in New York and That out-of-state licensees were invited gency program may allow out-of-state ap- licensees have been struggling to meet the to do business in New York begs an im- plicants to be licensed, and preference may regulatory January deadline. portant industry question: What are your be afforded to those positioned to supply Under the emergency program, out-of- expansion opportunities in New York and medical marijuana more expeditiously than state licensees were invited to participate, the rest of the Northeast? The key to can- the state’s current licensees. causing questions to fly. From where will nabis business expansion depends upon en- With new licenses in New York, addi- “emergency medicine” be obtained? How trepreneurs’ ability to target states ripe for tional dispensaries are expected. When opportunity, while adapting to the evolving approving the emergency program, Gov- regulatory landscape. ernor Andrew Cuomo directed the health ADDITIONAL The Northeast is seeing more industry department to conduct an assessment of investors, many of whom have learned population and medical data to ensure the DISPENSARIES from Colorado and California to see be- 20 planned dispensaries would “satisfy yond regulatory red tape. Kevin Murphy, patient need.” With only four dispensa- ARE EXPECTED of High Street Capital Partners, a fund ries slated to open in New York City’s five with multiple cannabis holdings in the boroughs — none in Brooklyn or Staten will distribution be accelerated? Was an Northeast, cautions that New England spe- Island — and the remaining 16 scattered avenue created to import cannabis into cifically is a highly regulated region for across the state, patient satisfaction is New York? Only one thing was clear: medical cannabis. But, Murphy says, that unlikely. The state is also expected to New business opportunities were on their same “strict state government oversight” expand qualifying conditions to include way to populous New York. has built substantial credibility for the use PTSD, Alzheimer’s, muscular dystrophy, “To whom the emergency licenses will of cannabis as treatment. dystonia and rheumatoid arthritis, which be issued and the process by which pa- To date, there are more than 55,000 would stretch the developing cannabis tients will obtain emergency medication registered patients in the Northeast, in- resources thin. Until recently, industry should be resolved by the time this article cluding New York. Voters in Maine and experts have not regarded New York as is published, since the interim nature of Massachusetts will consider legalization “investible.” But with changes coming, the program will expire. Attention should in 2016. Also in 2016, Vermont and Rhode the Northeast is ready to bloom. be paid to the method by which cannabis Island will likely implement adult-use rec- is distributed, as the urgency that precipi- reational programs, while Connecticut, Lauren Rudick represents investors and tated the program’s enactment apparently New Hampshire and New Jersey law- startup organizations in all aspects of busi- did not create a mechanism to import mar- makers will openly consider it. That said, ness and intellectual property law, special- ijuana into New York. the biggest prize is New York, the fourth izing in cannabis, media and technology. Further, the U.S. Department of Justice most populous state in the nation. The Her law firm, Hiller, PC, is a white-shoe concluded that such a mechanism would vast majority of residents support medical boutique firm with a track record for suc- violate federal law, an interpretation hotly marijuana; physicians are being urged by cess, handling sophisticated legal matters challenged by the the Department of Health to recommend including business and corporate law.

110 | Marijuana Venture // January 2016 FarmTek

GrowLights.net LEGAL PAGES SUBSCRIBE Get ahead of the curve, and save 50%! prepare now for regulations MARIJUANA Track record of compliance key to getting licensed VENTURE By Ben Adams WWW.MARIJUANAVENTURE.COM or almost 20 years more important than ever. If you are a grow- M A R I J U A N A VOLUME 2 / ISSUE 8 Fthe massive Cali- er and you don’t know a dispensary owner THEVENTURE JOURNAL OF PROFESSIONAL CANNABIS GROWERS AND RETAILERS fornia medical canna- or manufacturer, you should get to know CALIFORNIA bis industry has been one now. Growers should consider deliver- PLANT HAPPINESS DREAMIN’ World’s largest cannabis Understanding economy braces for the science behind largely unregulated. A ing excess medicine, with the proper paper- soil and nutrients major changes

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112 | Marijuana Venture // January 2016 Coast of Maine

Bud Bar KES Science

Hort Services P.O.V. is a new monthly section in Marijuana Venture showing images of operational cannabis businesses through- out the United States and Canada. P.O.V. To submit photos for consideration in future issues email: [email protected].

Samir Husni, of the University of Mississippi’s Center for Magazine Innovation, poses with Marijuana Venture editor Garrett Rudolph at the Media Industry Newsletter awards banquet in New York. Marijuana Venture was one of 30 publications across the country to receive the Hottest Launch of 2015 award.

Marijuana Venture’s award; Patrick Wagner’s abs. Photo by Garrett Rudolph. Casey Welton provides the opening address at the recent Media Industry Newsletter awards banquet in New York. Photo by Garrett Rudolph.

www.marijuanaventure.com | 115 P.O.V.

The Rio All-Suite Hotel & Casino show floor during the Marijuana Business Conference in Las Vegas. Photo by Greg James.

Marketing guru Scott Kuzdzal, of Shimadzu, Northwesterners Lisa Smith (Marijuana Venture), Phil Mc- meets Julian Marley, the son of famed musi- Cutcheon (Kush Bottles) and Tera Martin (Green Theory) feel cian Bob Marley. Photo by Greg James. at home in Sin City. Photo by Greg James.

116 | Marijuana Venture // January 2016 The Shimadzu team enjoys a light-hearted moment in Las Vegas. From left are Will Bankert, David Yazdi, Drew Abrams, Anthony Davis and Anna Mascio enjoy a Annie Ma and Chelsea Jaster. Photo by Scott Kuzdzal. networking event after the Marijuana Busi- ness Conference. Photo by Greg James.

Waters Corporation featured an impressive display for a variety of high-tech products for the cannabis industry. Photo by Greg James.

www.marijuanaventure.com | 117 P.O.V.

More of the Grape Lime Ricky strain Joann Soland, of Hitz Cannabis, stands amid a giant grown in Oregon. Photo by Michael Caley. field of sun-grown marijuana in Washington. Photo courtesy Hitz Cannabis.

Jonathan Nielson, the head grower at Rx Green Solutions’ research and development facility, stands neck-deep in an indoor jungle of cannabis. Photo courtesy Rx Green Solutions.

118 | Marijuana Venture // January 2016 Tamisum Extractors

NW Garden

www.marijuanaventure.com | 119 An inside look at the Suspended Brands greenhouse in Washington. Photo by Kenton Bradley.

ARTIFICIAL ENVIRONMENTS

Take control of your grow operation: Maintaining proper temperature and humidity is a complex, but vital process when designing a grow facility ― ― ― By CHRIS BAYLEY

n artificial environment is something all in- it was the shade created by the mountain itself that caused the different climate. door growers must create, and this applies Cannabis adapts to almost any climate, to greenhouse growing as well. Even those especially through breeding programs. The plant’s reaction to the ever-chang- growing outdoors have some ability to ma- ing outdoor climate is responsible for nipulate the environment immediately sur- bringing out subtleties in cannabinoid and terpene profiles that can’t be dupli- rounding their plants and farm. cated in artificial environments (AE). In- door growing has an upside though, and AThese differing conditions are com- tain. The same mountain can have differ- that’s the ability to duplicate consistent monly referred to as micro-climates, and ent ecological systems because of direct environmental conditions. This ability to they naturally occur everywhere. A good sunlight, and it’s a good example that create optimal conditions must be taken micro-climate analogy is comparing the demonstrates the many different variables advantage of for indoor-grown plants to northern and southern slopes of a moun- that can influence the climate. In this case, reach full potential.

120 | Marijuana Venture // January 2016 Confidence Analytics REVERSE-ENGINEERING AE Technology has caused a storm of ex- citement when it pertains to controlled atmospheric growing environments (CAGE). The ability to dial in your CAGE, even compared to 10 years ago, means your grow room can sustain envi- ronmental conditions anywhere between Northern California and Thailand. Although all CAGE will use the same equipment to maintain control, when designing your grow room, the Wadsworth process begins by learning what your plant’s environmental set-point is. This is important because if your focus is on growing sativas, like a Thai varietal that has adapted to humid, sweltering condi- tions, then maintaining 65 degrees and 30% humidity will not make the plants happy. So when you’re in the design phase of your operation, kick-start the whole HVAC conversation by first determin- ing what environmental conditions need to be achieved. Deciding on the number of varietals to grow makes this process more straight forward. One option more growers are taking is designing individu- al flowering rooms or whole greenhous- es dedicated to one strain or one envi- ronmental set-point. Doing this reduces the complications of making multiple varietals happy in one space. It also re- duces the resources needed to condition different areas of one grow facility. This philosophy will apply particularly to the drying and curing areas, but also to the cloning chamber, vegetative and flower- ing rooms. All these individual environ- ments will require different mechanical inputs to achieve the desired results.

STRUCTURAL RESISTANCE Now that we understand the impor- tance of creating an AE, let’s look at the considerations for controlling the envi- ronment. To begin, growers need a prop- erly constructed facility to handle the rigorous demands of an enclosed growing environment. Greenhouses get two green thumbs up because of their inert construc- tion materials. Metal building materials can better tolerate the corrosive nature of an enclosed growing environment. The bottom line is that you cannot over-build when it comes to withstanding an indoor growing environment. When constructing an indoor facility,

122 | Marijuana Venture // January 2016 KNOWLEDGE –––––––– is –––––––– POWER Front Runner Front Runner is Washington’s premier i502 business intelligence website for recreational marijuana data

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www.frontrunnerdata.com build the bones out of metal, or at least consider framing the exterior walls of your growing facility out of metal studs. – Subscribe to – The shell of your building is the next item for consideration, and metal siding is a great choice here. With modern building techniques and materials, the building’s envelope needs to be built to create a ther- mal break. A thermal break means your insulated walls don’t allow temperatures MARIJUANA to transfer back and forth. When tempera- tures pass back and forth between walls, Several key measurements can tell a lot about a facility’s there is a higher probability that moisture environmental control requirements will form within the wall cavity, especial- ly when accompanied by higher humidity. ― ― ― If you construct your facility with wood By TOM DILLON walls and don’t create a thermal break, it’ll be just a matter of time before mold rowers understand the hu- point to the dew points of the begins to form. midity requirements of can- air conditioner and dehumidifier The interior of your grow room walls nabis plants, but achieving supply air. Since the air condition- should be tackled next. The material you VENTURE and maintaining that ideal er moves large air volumes, even choose, and how you apply it, is very level can be a challenge, a small difference in dew point important. Sheetrock will work, but Gparticularly during and after the temperature results in significant make sure you seal it with a water- and flowering stage. moisture removal. Dehumidifiers mold-resistant material. Even if you plan move smaller quantities of air and and save 50%! When humidity becomes a prob- to cover the wall with a reflective mate- depress dew point more than air lem, a few simple measurements WWW.MARIJUANAVENTURE.COM will help determine where atten- conditioners to deliver their mois- ture removal capacity. • The fastest growing M A R I J U A N A tion is needed. Sampling tem- EVEN IF YOU VOLUME 2 / ISSUE 8 perature and humidity in a few key Just knowing that dehumidifier magazine for the legal places will help facility managers air is hot and has a low relative PLAN TO COVER THEVENTURE JOURNAL OF PROFESSIONAL CANNABIS GROWERS AND RETAILERS adjust their HVAC and dehumidifi- humidity is not enough information marijuana industry er equipment, both of which affect for an accurate assessment. For humidity. These measurements example, supply air of 100 de- THE WALL WITH can be used to analyze how well grees Fahrenheit at 25% relative • Articles and ads that focus CALIFORNIA A REFLECTIVE PLANT equipment is working. If all equip- humidity has a dew point tempera- HAPPINESS DREAMIN’ on the business side of the World’s largest cannabis ment is performing as designed ture of 58 degrees. 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www.MarijuanaVenture.com | 425.656.3621 | [email protected] and humidity conditions. moving moisture. This heat can be will close in order to preserve water and Daylight humidity control can be a nuisance for cool, night room con- transpiration slows to a halt. accomplished by using standard air ditions, so some growers will need This can become hyper-critical if you conditioners if desired room condi- to run the air conditioner at night employ any techniques that override your tions are higher than 55% relative to counter this heat. A split-system plant’s normal stomata response factors. humidity. Some larger package dehumidifier provides cool to warm Trichome production is another area that air conditioners allow leaving air leaving air, providing some tem- suffers from too much heat. This can be perature control to the room. temperature to be lowered (leaving caused by direct heat, such as the lamps air is that which is supplied to the Dehumidifier water removal being too close, or overall ambient tem- room from the equipment). This is typically rated based on 80 peratures being too high. lowers dew point temperature of degrees at 50% relative humid- The considerations for controlling supply air (while also lowering ac- ity inlet (room) air. If cool night heat begin with the type of grow room tual temperature of the air). Some conditions are desired (for exam- you’re designing. The majority of grow facilities run air conditioners at ple, 70 degrees at 50% relative rooms rely on a transfer of fresh air. Old night for humidity control and use humidity) water removal rates fall air is exhausted as fresh air is brought in by up to 70%. Don’t blame the some form of electric or refrigerant to replace it. These systems are generally hot-gas reheat to raise the supply dehumidifier. Cooler air carries controlled by a thermostat. It’s a simple, air temperature. This procedure less water vapor (lower dew point cost-effective method for controlling is not an energy-efficient solution temperature) meaning there’s heat. and does not provide low relative less moisture passing through the humidity in cool rooms — howev- evaporator coil, so less water is Meanwhile, closed-loop systems call er, it does allow growers to avoid condensed and removed. Desired for zero air exchange. These systems purchasing dehumidifiers. night room temperature plays a are more complex and finicky to oper- critical role in sizing dehumidifiers. ate, and really could fall into the catego- Achieving 50% relative humid- The bottom line is that existing ry of being clean rooms. There are two ity in a sealed, commercial grow climate control systems must be common approaches to handling the is- facility generally requires dehu- enhanced if additional humidity sue of heat load, whether you’re directly midifiers. Refrigerant dehumidifi- removal is required. exchanging air out of the room or not. ers remove more water in warm, The decision that has to be made from a humid rooms than they do under Tom Dillon is the general cooler, drier conditions. At night, design standpoint is whether to remove manager of Subcooled Air. For when sized properly, dehumidifiers the heat from the source (light bulbs), or the past 15 years, he has engi- can control room relative humidity. concentrate on removing the heat from neered humidity control solutions Short-term relative humidity spikes the room. for industrial customers, including are normal when lights are turned • Humidity: Water is responsible for food manufacturing, shipyards, off if the room is allowed to cool sustaining life. However, water can horticulture, power plants and at night. A properly sized system wreak havoc in an enclosed space if more. Subcooled Air has devel- will regain humidity control in less you haven’t designed your facility and oped a dehumidifier line designed HVAC correctly. Organic building ma- than an hour. for commercial indoor cannabis Self-contained plug-in dehumid- growers that require removal of at terials coupled with too much humidity ifiers generate heat along with re- least 600 pints per day. can lead to destructive mold in several seasons. To pile insult on top of inju- ry, while the facility is breaking down, there’s a good chance that molds and mildews have also infiltrated your crop. It’s the big double whammy! The irony of humidity is that those same conditions that will ruin your struc- ture and make pathogens feel at home are the same conditions that plants thrive in. This conundrum is dealt with head-on by building a properly constructed facility, and then equipping it to manage the envi- ronment correctly. No indoor grow room should be without dehumidification, and it’s truly the only possible way to main- tain the proper ambient humidity. These systems are rated by pints of water removed from the atmosphere per hour. Bigger is definitely better when it comes to dehumidifiers. The catch is that

126 | Marijuana Venture // January 2016 Norml their ability to remove water is tied to — they will need a drawing with dimen- charge lamps. temperature, which is usually around 85 sions to do this. The filter box will need Another method for removing heat degrees. So a machine that’ll remove 150 to be designed with installation param- from the source is by using ventilated pints of water a day at 85 degrees begins eters and filtration needs in mind. With hoods. Most vented hoods use in-line fans to lose its water-removing capacity as the filters, you’ll need to size them proper- to evacuate heat from the room. Some temperature drops. Commercial systems ly to handle the air flow. Filters are de- use water-cooled jackets, either alone or are made to operate in slightly cooler signed by the area of their medium, so in conjunction with vented hoods. These temperatures, so consider your room’s choose pleated filters, which allow for water-cooled venting systems attach to operating temperature when figuring out more air flow per square inch. High-ef- the exit end of a vented hood and recir- which system best suits your needs. ficiency particulate air (HEPA) filters are culate water back and forth from your • Air quality: Indoor growing facilities preferable, and capture 99.97% of all air mini-split heating and cooling system. need to be treated like clean rooms, es- particulates. This removes a big percentage of heat and pecially in relation to air quality, so the The most overlooked aspect of indoor reduces the direct AC requirements. air inside the growing room will have to air quality is the use of sterilization sys- be conditioned. Conditioning air means tems and recirculating filtration boxes. TARGETED ENVIRONMENTAL manipulating the temperature, humidity, Once the air enters the grow room, it CONTROL CO2 levels and cleanliness. The biggest should be continuously scrubbed and Prior to legalization, cannabis produc- difference concerning fresh-air systems sterilized in either fresh-air or closed- tion was truly a low-tech endeavor. Can- and closed-loop systems is the CO2. In loop systems. There are great products nabis growers didn’t have access to HVAC closed-loop systems the ambient CO2 on the market to handle these scenarios, professionals and other mechanical con- level will have to be maintained; with so do some research, and figure out what tractors pre-legalization, so most HVAC fresh-air systems, it’s handled naturally, will work best for your situation. needs have been handled via fresh-air in- and it’s very important for the incoming take venting and focused on whole-room air to be filtered really well. LIGHTING air conditioning. With this new access These air intake systems can be de- This is a very broad subject, but light- comes the ability and resources to design signed and installed by licensed HVAC ing is an integral part of the environment and build proper growing facilities. installers; however, if you’re inclined in its relation to heat. Lighting is respon- A concept that’s used in other indus- to build these filtering systems your- sible for at least 80% of the heat load cre- tries, and only recently being focused on self, here are some tips: Have the metal ated in a grow room. This figure drops if cannabis production, is targeted environ- filtration boxes made by a professional you choose LEDs over high-intensity dis- mental control (TEC). The idea is to con- centrate heating and cooling right where you need them, as opposed to controlling an entire room. This saves tremendous re- sources while providing a superior envi- ronment for the plants — that’s a win-win all the way around.

QUALITY OVER QUANTITY This age-old philosophy should defi- nitely apply to cannabis stewards in ev- ery aspect of their operation. If your goal is to grow truly great cannabis, then cre- GreenBroz ating an ideal environment is top priori- ty. Unfortunately, in the quest for yield, budgets are often consumed by building out larger cultivation areas and limiting the resources to properly equip them. Doing so will always lead to a lower quality product. In the end, always build out to your means, and grow to where you want to be. Until next time, remember, “Stay fo- cused, and let it grow.”

Chris Bayley is a cannabis enthusiast and production specialist. He operates Hortistructure, Inc. and Elemental Gar- dener out of Tonasket, Washington. He can be reached at [email protected].

128 | Marijuana Venture // January 2016 Shirreff GTH Law Insurance

Gualala Robotics - LightRail CASH and E-COMMERCE

Maverick Labels has added cash payment option for online purchases ― ― ― By GARRETT RUDOLPH

ue to the widespread banking restrictions in the Maverick’s e-commerce site recently began accepting cash as a payment option cannabis industry, many businesses are unable to by allowing customers to make deposits take advantage of the “Internet economy.” directly into accounts set up on the la- D bel-maker’s behalf at Chase, Wells Fargo Without the use of credit cards and won’t be able to shop for the best value or and Bank of America. checking accounts, the cash-only nature take advantage of the breadth of products “It’s a really clean system for dealing of canna-business limits online purchas- available online. with what is admittedly going to be a tem- es of equipment, ancillary products and However, Maverick Labels president porary problem,” said Kent, who pointed basic supplies. Some necessities — like Rick Kent believes he’s come up with a out that federal reform needs to happen to labels and packaging — might be avail- solution so simple, it’s hard to believe no- open the door to more traditional bank- able from a local vendor, but businesses body’s done it before. ing. “I’m sure the Feds are going to come

130 | Marijuana Venture // January 2016 IT’S A REALLY CLEAN SYSTEM FOR DEALING WITH WHAT IS ADMITTEDLY GOING

TO BE A TEMPORARY

PROBLEM

“TO BE A TEMPORARY IS ADMITTEDLY GOING

around, but the Feds are slow. In the whether they’re buying labels for a can- meantime, this lets (businesses) take ad- nabis-related business or something far vantage of the Internet economy.” less controversial. The way it works is simple. Maver- “For the most part, most orders are de- ick Labels operates like the Amazon of signed without requiring a lot of customer stickers. Orders get placed through the service,” said Kent, who refers to himself website of Washington-based Maverick as “the world’s Labels, but in many cases the order is ful- most highly- and filled by various label-makers throughout inappropriately-ed- the country. The system allows Maverick ucated sticker-mak- to provide customers with an enormous er.” The Maverick selection of products at low prices. After Label founder has customers decide on the product and up- a bachelor’s degree load their artwork, they can select from from Stanford, a any of the typical payment options, in- master’s degree cluding “advance cash deposit.” from the University By selecting the cash option, the site will of Texas, an M.D. provide a completed deposit slip for the from Baylor Col- bank of choice. The business completes lege of Medicine the transaction by bringing the deposit slip and an MBA from and payment to the nearest Chase, Wells the University of Fargo or Bank of America branch. Washington. Kent said that by using three of the Like many in- most prominent bank chains in the coun- volved in some as- try, most customers are within about a pect of the canna- mile of finalizing the payment, making bis industry, Kent it a relatively quick process no matter believes California where they’re located. could be the tipping To simplify the purchase, Maverick point for the entire also rounds down the final cost to the nation. It could be Maverick’s simple solution nearest $5. the impetus for change at the federal level. to a complicated problem. Once Maverick has been notified of the “Once California goes, it’s going to deposit, it releases the order for produc- sweep across the country like a tidal tion and shipping. wave,” he said. “It’s going to bring in so The service is available to anybody much money and save so much on penal who uses the Maverick Labels website, systems and enforcement.”

www.marijuanaventure.com | 131 Next-generation BREEDING

Deeper research needed to quickly and inexpensively identify plant genomes ― ― ― By C.J. SCHWARTZ

raditional breeding in plants and animals depends on the identi- fication of individual subjects with superior performance or traits. These plant qualities are referred to as the organism’s pheno- type. Individuals with desired phenotypes are selected for addi- tional cycles of breeding, thereby stabilizing the genetic archi- tecture (inbreeding) and producing consistent offspring with the properties of interest. While traditional breeding relies on phenotype alone, Tmarker-assisted breeding also uses genetic information — the genotype of the plant — to identify the genes that confer the specific phenotype, allowing for a vast acceleration in the development of desirable cultivars.

132 | Marijuana Venture // January 2016 NOT JUST POT 46 years experience Reid Jeffsolving Steinborn a wide variety of legal problems in Instruments administrative,Law state and federal courts, including appeals.

BREEDING LAW OFFICE OF JEFFREY STEINBORN 206-622-5117 [email protected] www.steinbornlaw.com

Hortistructure To perform successful marker-assisted the parents. The progeny from this cross additional traits of interest, such as pest breeding, two strains with differing pheno- (BC1) will have 75% of its genes from resistance, drought resistance or nutrient types are crossed for the purpose of com- one parent and 25% from the other parent. requirements. paring genetic differences or similarities For marijuana, cannabinoid and ter- that allow identification of a correlation pene composition are the most important between phenotypes and genotype (genes). DEVELOPMENTS traits of interest. For example, a strain The progeny of this cross is the F1 gener- may have a very active THC synthase, but ation. F1 plants often display hybrid vigor, IN RECENT only produces 10% THC. Marker-assisted which means the progeny’s phenotype is breeding can be used to identify, follow improved compared to either parent. YEARS HAVE LED and retain the active THC synthase, while For some crops, F1 plants are the goal identifying additional genes that lead to an and are propagated in the field. When F1 TO A MASSIVE increase in THC, such as CBG synthase. plants undergo sexual reproduction, the CBG () is the precursor to resulting progeny (F2 generation) will dis- INCREASE IN THC. Increasing the substrate concentra- play a wide range of phenotypes between THE USE OF DNA tion for THC synthase can result in more those of the original parents. For example, “ THC being produced. if the mother plant flowered at 45 days In this scenario, we need to track the two and the father plant flowered at 65 days, SEQUENCING genes using DNA sequence differences be- the F2 plants might flower at 45, 47, 53, This substantially decreases the genetic tween the maternal genes and the paternal 60 or 65 days — a continuous distribution. variability of the resulting progeny, thus gene. If three genes are being tracked, only To identify the gene or genes underlying increasing the probability of identifying 1.5% of the plants will have the desired the flowering time differences, the two ex- the genes of interest. combination, underlying the reason why treme classes are genotyped to identify a Once a gene is identified as being im- using DNA changes (genetic markers) correlation between the genes and the phe- portant for a trait, the specific difference can vastly accelerate breeding programs. notype. Different genes will likely be iden- identified in the DNA sequence can be Instead of growing 200 plants to maturity tified when using different parents. Addi- used to track the maintenance of that ver- and phenotyping them, only three plants tional crosses may be required to assist in sion of the gene during additional gen- need to be retained, phenotypically veri- gene identification, including a backcross, erations. This is required to stabilize the fied and propagated. which is crossing F1 plants back to one of strain and also allows further selection for Developments in recent years have led

BC1

F1 Generation

F2 Generation

134 | Marijuana Venture // January 2016 to a massive increase in the use of DNA sequencing. Before, only hundreds of DNA base pairs (identified by ACGT) could be determined. With next-genera- tion DNA sequencing, we can get information about millions of DNA base pairs, allowing whole plant genomes to be de- termined cheaply and rapidly. With the generation of so much in- formation comes the need for pow- erful computers, complex software for genetic analysis, and skilled personnel trained in bioinformatics. In addition to breeding, DNA information can be used to unambiguously identify a single plant/strain. Marigene and Dr. Nolan Kane at University of Colo- rado Boulder are collaborating to develop a database recording the DNA differences in different cannabis strains. This database catalogs the natural variation present in modern-day canna- bis strains. This DNA infor- mation can also establish the heredity of a strain, identical to what 23andMe and Ances- tory.com do for humans. The overall goal is to provide transparency to the cannabis in- dustry. For medicinal purposes, patients should expect consistent medicine, and in the future, both hu- man genotypes and plant genotypes can be used to provide the most effective and specific medicine for an individual. For the development of hemp cultivars, strains need to be identified and developed for optimal growth in varying environments, including at different latitudes where tim- ing of flowering is paramount for seed and/or fiber production. The next decade will be one of mon- umental change in the cannabis industry, driven by increased re- liance and skillful exploitation of DNA information.

C.J. Schwartz is the CEO and chief science officer of Marigene and Hemp- gene, two companies specializing in can- nabis genetics. He has more than 15 years of experience in plant molecular genetics and has published in multiple peer-reviewed scientific journals. He can be reached at [email protected].

www.marijuanaventure.com | 135 GUEST COLUMN

then see what happens at the sales counter. If the customer is happy, are you really Penny-pinching processing doing a disservice to them or your product? Trimming and packaging cause bottlenecks for growers By Alen Nguyen PACKAGING ’ll preface this ar- premium can be charged for hand-trimmed We’ve seen many people who focus on ticle by saying that versus machine-trimmed cannabis from a the unit cost of packaging, and driving I’m not a grower. In commercial operation? that price down as low as possible. This is I a good way of controlling expenses, but I fact, I’ve never grown I’m probably going to catch a lot of flak any kind of plant suc- for this, but if that price premium is less recommend looking at the packaging pro- cessfully in my life, but than what you would be saving on ma- cess as a system, and not just the unit cost I do have experience chine trimming, then it doesn’t really make of the packaging. in business and opera- financial sense to hand-trim as long as When I say system, I mean the total labor tions, so I’ll stick to those avenues. your sales stay consistent. A large number and material cost for the packaging. Some- Given that it was Croptober not that long of my customers prefer to hand-trim their times the cheapest piece of packaging isn’t ago, it’s probably safe to assume there is a product, which makes for great-looking the cheapest total cost. The labor cost can equal or exceed the packaging material itself. whole lot of processing and packaging go- bud, but I’ve also seen some impressive For some businesses, time studies have ing on at cannabis farms across the country trimming machines out there. been conducted on the packaging they are right now. This is really a bottleneck area I’ve recommended that people run a using. How long does it take to package for everyone. Adding regulation to the mix batch of product through a rented trimming your product in one type of packaging slows that process down even more. So machine and have another batch of the versus another? Using the time study, how can we improve trimming and pack- same product hand-trimmed and packaged. you’ll be able to see how much labor is aging to reduce cost and time to market? Sell them under different labels so as not involved with different types of packag- to change the existing product at all, and ing and then make a decision based on the TRIMMING don’t mention anything about the trimming total cost of the process. Growers take great pride in their work process. Discount the machine-trimmed In some medical markets, where many and want their product to show its best, product just slightly based on some of the of the recreational growers came from, but do we understand what kind of price efficiency you gained by using the trimmer, there wasn’t as much regulation and taxa- tion built into the product. This allowed for higher profit margins and didn’t require as much scrutiny on cost in order to make a healthy profit. In a heavily regulated and taxed market, higher profit margins are get- ting chopped away by taxation. If the goal is to eradicate the black market through legal- ization, retail prices need to be comparable to that of the black market.

BOTTOM LINE I am not saying you have to run your grow like a high-output production facility that sacrifices quality, and I would never want that for our industry. However, if you want to stay in business doing what you love, you must be able to thrive. And that means look- ing at how to improve your bottom line.

Alen Nguyen is the CEO of Green Thumb Industries, a B2B distribution company for the cannabis industry. He holds a bachelor’s degree in electrical engineering from the University of Wash- The Happy Crowd puts four double- ington and a master’s degree in business barreled trimmers to use at its giant grow complex in Eastern Washington. administration from Embry-Riddle Aero- Photo by Ken Pedevilla. nautical University. He can be reached at [email protected]

136 | Marijuana Venture // January 2016 Blue Roots HempStaff

Titan Clearinghouse GUEST COLUMN

programs, scholarship opportunities, job training, nutrition support and access to Social issues need to remain free medical cannabis are all ways that those on the forefront of the industry can at industry forefront lead by example. Opponents of marijuana legalization Racial disparity of arrests leads to one-sided business often make the claim that the industry By Amanda Reiman will become as callous and impersonal as tobacco and alcohol. Even those who sup- recently attend- Another barrier is the large amount of ed the Marijuana capital needed to enter most marijuana port marijuana legalization tend to look at Business Confer- markets. From licensing fees to securing their involvement with their communities I with an “I won’t bother you if you don’t ence in Las Vegas. a location, the combination of capital- More than 5,000 peo- ism-as-usual and past criminal charges bother me” attitude. ple convened in Sin threatens to create a marijuana industry However, marijuana businesses that City to discuss the that mirrors every other American indus- have formed positive relationships with fastest growing indus- try — at least in the context of racial dis- their communities have enjoyed a level try in America — marijuana. A welcomed crimination. of protection that has surely assisted their exception to the demographic make-up of As a movement, we have a responsibil- sustainability. Berkeley Patients Group, most business conferences, women were ity to do better and to be better. There are for example, has been a vibrant member well-represented by groups such as Wom- two approaches to ensuring racial equity of the local community since opening en Grow, and were much more likely to in the marijuana industry and repairing more than a decade ago. Its work with be seen in suits than booth babe attire. damage caused by the War on Drugs. local organizations such as the Wom- This is a huge improvement from mar- First, those creating marijuana policies en’s Cancer Resource Center, financial ijuana expos in the past and a sign that must advocate for a pathway to inclusion support of the local libraries and fire sta- this industry has the ability to define itself tions, and a program granting access to as being more socially evolved than most free medicine for low-income individuals other industries. THERE ARE have helped it stand out as an asset to the However, there are other groups rarely community. And, sure enough, when the represented in the dynamic world of start- OTHER GROUPS federal government tried to interfere, the ups. The marijuana business is still large- city of Berkeley came to its defense, en- ly a white person’s affair. The absence of RARELY gaging in a lawsuit with the Feds in order racial minorities can be tied to the larger to keep Berkeley Patients Group open. War on Drugs and the mass incarceration REPRESENTED The tide is starting to turn. Marijuana that has plagued this society for genera- prohibition is falling and states like Colo- tions. IN THE DYNAMIC rado, Washington and Oregon are experi- Even if this disparity isn’t a reflection encing a world free from petty marijuana of the hearts and minds of those involved WORLD OF criminalization. However, there are many in the industry, it does require serious“ more states where prosecution continues. change at the systemic level. STARTUPS In states like Louisiana, Virginia and Ala- In the United States, African Americans bama, marijuana prohibition is very real, are 3.73 times more likely to be arrested for those with criminal histories, partic- very racist and ruins countless lives. The for marijuana than whites, according to ularly those who have been convicted of fight is far from over. The nation is still a report from the ACLU; Latinos are 2.5 drug-related crimes. Drug policies in the drowning in a sea of marijuana prohibi- times more likely. The collateral sanc- U.S. are partly responsible for the deci- tion. And, while the lifeboats have started tions associated with a marijuana arrest mation of entire communities and gener- hauling people to safety, we have a re- set forth a chain of events that threaten to ations of families due to mass incarcer- sponsibility to keep sending those boats institutionalize racial discrimination into ation, hefty mandatory minimums and back. Until everyone is out of the water, the marijuana industry. post-incarceration sanctions. These indi- we cannot start the party on the shore. For example, rules about criminal viduals deserve an opportunity in the new histories being barriers to entry into the industry. Marijuana regulations should Amanda Reiman is the manager of mari- marijuana industry are continuing this not bar those with criminal histories. juana law and policy at the Drug Policy Al- discrimination by moving it from the Second, those involved in the indus- liance, where she works to develop the non- criminal justice world to the business try must engage in community reinvest- profit’s campaign strategy, policy advocacy, world. In several legal marijuana states, ment. Holes in the community caused media relations, fundraising and public ed- regulations bar those with drug-related by drug policies can be filled with the ucation. Reiman, who has a Ph.D. in social felonies from obtaining licensure for mar- philanthropic commerce that arises from welfare, is also a lecturer at the University ijuana businesses. the marijuana industry. Apprenticeship of California, Berkeley.

138 | Marijuana Venture // January 2016 Cannabis business law advisors for Michigan Cannabis Counsel Clean Green Certified

GSB Law A LETTER FROM THE EDITOR

Venture was to write my own personal mission statement — a rundown of what Building a better magazine I wanted to do and how we could launch a first-rate marijuana business magazine. At that time, the company itself didn’t remains top priority even officially exist, and we were ten- Why futz around with losing weight and saving money? tatively calling our future publication By Garrett Rudolph “Reefer Business.” “My vision is to develop the first — For those of us (now referred to as the “collector’s edi- and best — trade magazine dedicated to who make them, New tion”) was an eight-page black-and-white the legal marijuana industry in Washing- Year’s resolutions are newsletter that didn’t even have staples. the public announce- In less than two years, our page count ton and Colorado, and expanding as other ments of all the prom- has grown by 20 times. It’s been a hec- states get closer to legalization,” I wrote ises we probably won’t tic roller coaster, but I couldn’t be more to Greg James, who would take on the keep over the course proud of what our tiny little team has role as publisher. of our next 365 days achieved. However, my expectations for “Reefer Business” was nixed in the around the sun. 2016 remain sky-high. We won’t keep early going — thankfully, in retrospect Let’s just be honest … we may have all putting out the same magazine month — but I’m happy to be able to say we’ve had a little too much Champagne prior after month after month. We will be the never swayed from our original game to deciding 2016 would be the year of re- publication that is continually improving plan. gaining a chiseled physique, saving more its look and content. • Expand our reach: For every person money, planning for retirement, learn- • Spend more time visiting: It’s a tough out there reading Marijuana Venture, I ing a second language, breaking 80 on job, but somebody has to visit as many believe there are three or four others who the golf course and finally reading Don should be reading it. When we launched Quixote. the magazine, we were focused solely on So rather than proclaiming I’ll be a I’M HAPPY TO business owners in Washington. Within better, healthier, smarter and sexier ver- a year and a half, we rapidly expanded sion of myself, I thought I’d take this page into every other state with some form of to present 10 New Year’s resolutions for BE ABLE TO SAY legal cannabis, and are now distributed Marijuana Venture. by major retail chains like Barnes & No- I hope our readers will enjoy a glimpse WE’VE NEVER ble, Books-A-Million, Hastings and Fred into our future, and I believe some of Meyer, among a variety of other shops these aspirations will be the driving forc- SWAYED FROM and independent book stores. es that keep us a leader in cannabis in- While business owners and manag- dustry news and information. OUR ORIGINAL ers will continue to be our target demo- • Explore uncharted territory: Our graphic, I think we’ll also gain more and readers and advertisers probably know “GAME PLAN more traction among potential investors, we’ve focused almost all our energy on the former black market operators who the print edition of Marijuana Venture, grow operations and retail stores as hu- want to stop looking for helicopters in the often to the detriment of MarijuanaVen- manly possible. In the 21st century, many sky and cannabis enthusiasts looking for ture.com. We believe there’s a great deal journalists find it tough to balance time something more substantial than “Five of value in print. While some might look spent plugging away at stories, emails and reasons to vape” or “10 strains that will at it as an old-school approach in a digital surfing the web with real, face-to-face in- make your mouth water.” age, we see it as a key reason we’re dif- teractions and news gathering. The business owners of tomorrow will ferent than the dozens of run-of-the-mill Some days I spend eight hours in the be following the paths of Marijuana Ven- news aggregators flooding the Internet. office (and usually a couple more at ture readers today. But now that we’re approaching our home) doing nothing but sending and re- second anniversary, the time has come to sponding to emails. It’s a fact of life, but make more of a push at developing our it takes away from the important work GARRETT RUDOLPH website and digital content. I’m not yet of getting your hands dirty and digging EDITOR sure what it will look like, but you can to find the stories that matter. Perhaps I expect big changes on the horizon. miss the simpler days of playing in sand- Correction • Build a better magazine: Marijuana boxes, but I’d like to make it an emphasis A name from the December 2015 Venture didn’t come out of the box as a to step away from the laptop a bit more issue of Marijuana Venture was polished, well-thought-out product. It’s often. incorrect. The wife of Uncle Ike’s taken a lot of hours and a lot of wrong • Stick to the mission: My first assign- owner Ian Eisenberg is Linda (p. 60). turns to get where we are. Our first issue ment upon being hired by Marijuana

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