WWW.MARIJUANAVENTURE.COM VOLUME 3 / ISSUE 2 M A R I J U A N A

THEVENTURE JOURNAL OF PROFESSIONAL CANNABIS GROWERS AND RETAILERS

HOLISTIC GARDEN Black Dog Acres thrives with an approach to satisfy the mind, body and soul HARVEST for

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Botany Unlimited Confidence Analytics Surna For Sale: Grow Operation Terpp features 50 DON’T CALL IT A KEURIG Former Keurig execs bring innovative new technology to the cannabis industry 56 THE BERNIE BILL What impact will initiative proposed by Bernie Sanders have on the 2016 election? 62 FORCE OF NATURE Q&A with Black Dog Acres owner and founder Toni Reita on commercially growing cannabis in Washington 72 HARVEST FOR HIRE Professional crews take the pain out of trimming while saving owners on labor costs

ABOUT THE COVER: Toni Reita, owner and found- er of Black Dog Acres, wades through a sea of giant cannabis plants at her farm in Eastern Washington. To read more about Reita and her business, see Page 62. Photo by Gary Delp.

MJVenture

6 | Marijuana Venture // February 2016 Hydrobuilder features 82 SUSPENDED BRANDS A look at one of the cannabis industry’s most impressive high- tech greenhouse operations 108 FRANKENWEED Who says a single plant is good for only one harvest? Author J.B. Haze explains a radically different approach to cultivation 122 SMART JARS Smarter Lids is bringing Mason jars into the 21st century with a new approach on a timeless design 126 SHELF LIFE Nick Mosely takes an academic approach to uncover the true shelf-life of cannabis

8 | Marijuana Venture // February 2016 Crew Consulting contents

30 114 132

LIVING THE DREAM 42 | Shawn DeNae 44 | Danielle Rosellison 44 | Shelby Talmadge BASICS 118 20 | Calendar 46 DEBT-BASED FINANCING 26 | Market Watch LONG ROAD TO RETAIL Scott Jordan gives an overview 40 | Blowing Smoke Rural location complicates insurance of the lending alternatives private 101 | P.O.V. matters for Colorado Leaf, as the team lenders are offering the cannabis 143 | Ad Directory tackles another unforeseen delay. industry.

PROFILES 90 132 28 | TJ’s Organic Provisions LEGAL PAGES HIGHER STANDARDS 30 | Natural Cannabis Company • Katie Podein looks at the implica- Dramatic changes loom over Ore- 32 | Walking Raven tions of California’s Medical Mari- gon’s testing regulations, which could juana Regulation and Safety Act set a standard for states to follow. SPOTLIGHTS • Lauren Rudick explains how to cre- 35 | Sidekick ate a legal trademark for cannabis GUEST COLUMNS 35 | The Essential Oil Maker’s companies 136 | Vicki Christophersen Handbook 138 | Cory Wray 36 | AEtrium-4 114 36 | GrowSpan IF YOU BUILD IT … OPINIONS 38 | HISIERRA With limited fire service in rural areas, 12 | Staff page 38 | EazeMD it helps to understand PPC ratings and 16 | Message from the Publisher 38 | Team Maryjane the impact they can have on insurance. 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.

10 | Marijuana Venture // February 2016 ViPova Staff

Greg James Garrett Rudolph Lisa Smith Aaron Greenreich Publisher Editor Sales Manager Account Executive Greg founded Topics Entertainment After eight years as a newspaper Lisa is a Seattle native who enjoys Aaron joined Marijuana Venture af- in 1990 and grew it to be the largest reporter, photographer and editor, traveling, yoga and spending time ter years of sales account manage- privately held consumer software Garrett helped launch Marijuana with her three children and dog. ment in the construction industry company. After graduating from Venture in March 2014. He’s an She loves working in the marijuana and management in the music busi- Bellevue High School in 1975, he avid golfer, IPA drinker, sports fan, industry and is a huge advocate. ness. He enjoys all things outdoors, enlisted in the Navy. He was honor- workaholic with a deep love-hate playing music and causing trouble ably discharged after serving from relationship with technology. [email protected] with his young sons. 1975 to 1979. He has four kids and enjoys skiing, hiking, scuba diving, [email protected] [email protected] sailing, biking and foreign travel.

[email protected]

Marijuana Venture CONTRIBUTORS – Marguerite Arnold Doug Banfelder Kenton Bradley Vicki Christophersen Gary Delp Scott Jordan Patrick Wagner Chloé Mehring Shelby Talmadge Nick Mosely Katie Podein Staff Writer Graphic Designer Marketing Resident avocado enthusiast and Chloe was born and raised in Wis- Shelby is CEO at Tahoma Growers, Rowshan Reordan Street Fighter II champion, Patrick consin, where she graduated from St. a family-owned producer/processor Lauren Rudick Wagner graduated from the Univer- Norbert College in Media Commu- in Goldendale, Washington. Like Thomas Valentine sity of Washington with a degree in nications and Graphic Design. In her most Pacific Northwest natives, she Cory Wray communications in 2014. When he free time, Chloé enjoys photography, enjoys hiking with her dog Juno, isn’t making snarky quips around woodworking, exploring the Pacific yoga and “product testing” for the the office, he works on editing, re- Northwest and making incredible farm. She studied history at the searching, writing and the concept grilled cheese sandwiches. University of Washington, a degree of compound modifiers. she has used but once.

[email protected] 12 | Marijuana Venture // February 2016 CCTV Green Thumb

A MESSAGE FROM THE PUBLISHER Pay to play? Not us! Marijuana Venture never takes the quid pro quo approach

’ve talked with sev- ness publication, and we will not run the Ieral company own- ads that make outrageous (and unproven) ers who have been medical claims, or that depict women as approached by some silly-looking sex objects. of the other marijuana In the old days of the CD-ROM busi- magazines about do- ness, there were big retailers that partici- ing a feature story on pated in the pay-to-play game. Remember their business. Appar- CompUSA? If you wanted to get a title ently, after a long and glowing discussion on its shelves, it required a $25,000 “slot- about how wonderful the article would be ting fee.” In other words, publishers paid and how much the magazine’s readership $25,000 for each title CompUSA took PUBLISHER would enjoy learning about the business, in, regardless of its track record, sales GREG JAMES it was stated that placing a full page ad potential or quality. I distinctly remem- [email protected] was a requirement to get the story pub- ber a long discussion with my sales team EDITOR lished. In other words, it was clearly a about why we’d never pay those fees. I GARRETT RUDOLPH “pay-to-play” proposition. explained that in the long run, the hunt [email protected] We will never do that for several rea- for slotting fees meant CompUSA buyers sons. First and foremost, it absolutely SALES MANAGER spent more time searching for ad dollars LISA SMITH undermines the integrity and credibility than they did evaluating the sales poten- [email protected] of the publication. If you’re a writer who tial of new titles. requires kick-backs to do a story, you’re ACCOUNT EXECUTIVE In my opinion, it was a strategy that AARON GREENREICH not a journalist — you’re a salesman. would eventually lead to consumers flee- Taking money to write supposedly ob- ing for stores with better selection and STAFF WRITERS jective articles on products for consumers better pricing, such as Best Buy, which CHRIS BAYLEY PATRICK WAGNER is clearly a slippery slope we don’t want never asked for slotting fees. It didn’t take to go down. Consumer Reports takes ob- long for CompUSA to suffer and eventu- GRAPHIC DESIGN jectivity to the extreme and accepts no ally go out of business. My guess is that CHLOÉ MEHRING ads whatsoever. Most of us are a bit more for CompUSA, the pay-to-play strategy MARKETING pragmatic, but draw the line at pay to was born out of desperation, but it was SHELBY TALMADGE play, and will not run a glowing story just obviously a doomed last-gasp effort for CONTRIBUTORS because someone buys a big ad. an already terminal retail giant. Marguerite Arnold Katie Podein When other magazines write articles Doug Banfelder Rowshan Reordan Let me again state the Marijuana Ven- Vicki Christophersen Lauren Rudick for people who buy ads, they’re no lon- ture policy: We write and publish articles Scott Jordan Thomas Valentine ger informative and objective — they’ve Nick Mosely Cory Wray that are relevant to the legal marijuana become a glorified sales catalog. That’s business community. We do not require not good if you want readers to take you an ad for an article to run, and we do not MARIJUANA VENTURE VOL. 3, ISSUE 2 seriously. take ad dollars in exchange for glowing Marijuana Venture (ISSN #2376-0710) is published monthly Where do you draw the line? I’ve by MJ Directions LLC. PO Box 1419, Renton, WA, 98057. reviews. If you have a newsworthy prod- Phone: (425)656-3621. Website: www.marijuanaventure. seen an awful lot of ads I’d call down- com. Copyright 2015 by Marijuana Venture. All rights re- uct or idea, send it to us. We will not hold served. Reprinting, in whole or in part, is expressly forbidden right cheesy in some of the magazines you hostage and demand a full page ad in without written permission from the publisher. that have a problem deciding if they’re a ADVERTISING exchange for running the article. For advertising rates, call (425)656-3621 or email Greg@ culture/lifestyle rag or a serious business MarijuanaVenture.com. publication. At Marijuana Venture, we’ve GREG JAMES SUBSCRIPTION SERVICES never had that dilemma. We are a busi- PUBLISHER For subscription services, please call (425)656-3621, visit www. marijuanaventure.com or email Editor@MarijuanaVenture. com. For change of address, please include the old address and new address, along with an address label from a recent issue, if possible. Please allow up to three weeks for address to be changed. If an address is not updated when the magazine is IF YOU’RE A WRITER WHO mailed, we are not responsible for delivery of your magazine. If the Post Office alerts us that your magazine is undeliverable, we will suspend our subscription until a correct address is received. REQUIRES KICK-BACKS TO DO A Marijuana Venture assumes no responsibility for any claims or representations contained in the magazine or in any adver- tisement. All materials contained are for educational purposes STORY, YOU’RE NOT A JOURNALIST and intended for the legal marijuana business where allowed by state law. Marijuana Venture does not encourage the illegal – YOU’RE A SALESMAN use of any of the products contained within. “16 | Marijuana Venture // February 2016 N2 Packaging THC Factory Cannaline

CANNABIS CALENDAR

Clockwise, starting from the top: International Cannabis Business Conference executive producer Alex Rogers (left) and keynote speaker Andrew Sullivan; past speakers have included travel guru Rick Steves (right) and U.S. Representative Dana Rohrabacher (left). Photos by Matt Emerich.

This year, the conference will focus California conference will on several key issues, including: Cali- fornia’s medical and recreational chang- es in 2016; Canada’s looming repeal of focus on education, politics prohibition; states that will most likely SAN FRANCISCO — The Interna- can go into our speaker room at any giv- legalize in 2016; and strategies for pitch- tional Cannabis Business Conference en time and there’ll be 500 people. That’s ing and maintaining a successful canna- (ICBC) will be holding its third annual unique in the cannabis industry.” bis venture. Rogers has also organized a show at the Hyatt Regency in San Fran- Rogers said one of the ways he main- celebrity interview with Tommy Chong, cisco on Feb. 13-14. ICBC executive pro- tains the conference’s unique appeal is by a keynote speech from Andrew Sullivan ducer Alex Rogers said the conference gatekeeping the number and types of ven- and a performance by Del the Funky Ho- stands apart in the crowded calendar for dors that are allowed to attend. mosapien that will kick off the after-party. delivering exactly what it promises — to “Every other cannabis business confer- “We just have to be bigger, badder ev- be a conference, not an expo. ence is an expo,” he said. “We do have ery year,” Rogers said. “Some of these “We really pride ourselves on our some exhibitors but it’s a boutique expo conferences you go to, you feel like speakers, our content and our ability to and it is limited by how many six-foot ta- you’re in Iowa at some real estate confer- hold a crowd,” Rogers said. “We have bles fit into the foyer outside of the speak- ence with a bunch of old rich white guys. one track and we are the only conference er room. So for the Hyatt Regency in San I guess there’s a place for that, but that’s that holds the crowd for two days. So you Francisco, that’s 26.” not our conference.”

20 | Marijuana Venture // February 2016 Imperious Cannabis Business Expo CANNABIS CALENDAR

The end result of Rogers’ effort is a vices. Tickets are available now. Expo will be at the Hilton Union Square “quirky, fun and different” conference More information: dispensaryexpo.com. in San Francisco on March 3-5. The three- where attendees may not learn all that day event will host workshops for infused much about penny stocks, but more Feb. 3-5: Women Grow 2016 Leader- products manufacturers, cultivators and about commerce, art, politics and activ- ship Summit will take place early Febru- dispensaries, round-table sessions, speak- ism. ary at the Curtis Hotel in Denver. The event ers, a job fair, a Shark Tank style pitch- “Who we really cater to, I think, is just will host a number of activities, including ing session and networking opportunities. your average Joe who has got a dispen- a networking breakfast and lighting talks The show will also host a number of ame- sary, or a grow, or an ancillary,” Rog- from cannabis experts. A sponsor job fair nities, including food service, after-par- ers said. “They are not trying to be the will be open to all ticket holders on Feb. 4. ties and guided tours of San Francisco. A Walmart of weed. They are just trying to More information: womengrow. variety of ticket and sponsorship packag- make an honest living and be good people com/2016-women-grow-conference. es are available now. and take care of their family.” More information: marijuanainvestor- More information: internationalcbc.com. Feb. 18-20: CannaCon will be returning summit.com. to Seattle’s Smith Cove Cruise Terminal MORE EVENTS at Pier 91 on Feb. 18-20. The third annual May 7-8: The CannaGrow Expo will Feb. 1-2: Dispensary Next will hit the show for growers, processers and retailers open in San Diego, California on May Red Lion Jantzen Beach in Portland, Ore- promises to be a global venue for network- 7-8 at the Paradise Point Hotel & Spa. gon on Feb. 1-2. The two-day educational ing, vendors, keynotes and innovation. The The expo will focus on education for event will focus on the next generation of three-day event has more than 300 booths cannabis growers, dispensary owners, industry standards, strategies, products and 30 seminars planned, in addition to a grow managers and enthusiasts who are and services for cannabis dispensaries. number of industry insiders giving advice looking for the newest and best in tech- The event will feature 17 educational ses- on everything from cultivation to retail. nology, tools and techniques. The expo sions exploring best practices in dispen- More information: cannacon.org. will feature 18 different educational sary management. Opportunities will be sessions hosted by expert growers. Sin- available for networking and for the latest March 3-5: The second annual Mar- gle-day access passes are available now in technology, tips, techniques and ser- ijuana Investor Summit and Business for $189 and two-day passes are avail-

PayQwick

CANNACON - Visit us at Booth 313

22 | Marijuana Venture // February 2016 Cannabis Business Conference CANNABIS CALENDAR able for $369. Los Angeles event for September 2016. space and tickets are available now. More information: cannagrowexpo.com. More information: cwcbexpo.com. More information: imperiousexpo.com.

May 12-13: The annual NCIA Lobby June 20-22: Coming June 20-22, the Sept. 22-23: Canncon, a scientific -or Days will return to Washington, D.C., on Cannabis Business Summit and Expo ganization dedicated exclusively to canna- May 12-13. The event invites NCIA mem- will be held at the Oakland Marriott City bis testing and research, will be holding a bers from across the country to hit Capitol Center in Oakland, California. The NCIA conference in Portland, Oregon on Sept. Hill to show the nation’s decision-makers show will include a network of 3,000 22-23. Not to be confused with the trade the face of legal cannabis. The NCIA wants growers, dispensary owners, senators, show of a similar name in Seattle, this two- members to lobby for the progression of the congressional representatives, processors day conference will bring testing experts recreational and medical cannabis indus- and NCIA members. The show will also together with attendees who are looking tries by telling their stories to representa- include more than 30 industry sessions, to learn more about testing processes, can- tives, urging them to fix the national issues Cannabis Carnival III and industry speak- nabis science and research. Topics will that have continued to plague the industry. ers. Tickets are available now with a spe- include sample preparation, chromatogra- The event is for NCIA members only. cial discount for NCIA members. phy, mass spectrometry, terpene profiling, More information: thecannabisindus- More information: cannabisbusiness- contamination analysis (pesticides, resid- try.org. summit.com. ual solvents, microorganisms and heavy metals), genetics/genomics, regulations, June 15-17: After a pair of successful July 20-21: The Imperious Expo will legalization, scientific methods/standards shows in 2015, the Cannabis World Con- be hosting its two-day event at the Taco- and medicinal cannabis. A venue for the gress and Business Expo will return to ma Dome in Tacoma, Washington on July event has yet to be announced. Registra- the Javits Center in New York City to kick 20-21. The show will be geared toward tion is available online now. off the beginning of summer. The expo the medical cannabis industry, including More information: canncon.org. is set for June 15-17 and plans to deliver everyone from start-ups to seasoned vet- business connections, workshops and ed- erans. The show will feature a number of To submit an event for inclusion in the ucational seminars. The show’s organizers industry specialists, exhibitors and key- Marijuana Venture calendar, email Edi- have also announced a follow-up to their note speakers. Sponsorships, exhibitor [email protected].

Maverick Label

24 | Marijuana Venture // February 2016 Bongjour MARKET WATCH POWERED BY A look at business metrics from the legal cannabis market, with information provided by FrontRunnerData.com

Top Selling Flower Package Size Last 12 Months Top selling flower package sizes in Washington in 2015

3.5 gram, 14% 2 gram, 19% 3 gram, 1.5 gram, 1% 1% 0.5 gram, 6%

14 gram, 1% Other, 7% 7 gram, 2%

4 gram, 2% 1 gram, 50%

1 Gram 2 Gram 3.5 Gram 0.5 Gram 4 Gram 7 Gram 3 Gram 1.5 Gram 14 Gram Top 10Top Selling 10 selling Strains strains in Washingon in Washington for Last in 12 2015 Months

Blue Dream

Dutch Treat

Golden Pineapple

Cinex Blue Dream is clearly the most common strain among Washington’s licensed producers. While Blue Dream Grape Ape accounted for more than double the next closest strain (Dutch Treat), it still only accounted for 4.02% of total Blueberry sales. The only four strains that accounted for more than 1% of sales were Blue Dream, Dutch Treat (1.79%), Headband Golden Pineapple (1.34%) and Cinex (1.15%). Confidence Analytics, a certified Washington testing lab, published the Super Lemon Haze top 10 strains it has tested the most of, with Blue Dream and Dutch Treat leading the pack in that category, as well. White Widow

Presidential OG Kush

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% Percent of Sales

Blue Dream looks to be the most popular strain in Washington. Records from Confidence Analytics show that Blue Dream was the most tested 26 | Marijuana Venture // February 2016 strain in 2015, followed by Dutch Treat. However, the trends in testing start to divert from sales statistics from there with Blueberry being the third most tested strain, followed by Headband (fourth), then Cinex (fifth). The final five most tested strains did not make it into the top ten sales chart, they are: OG Kush (sixth), Grapefruit (seventh), Northern Lights (eighth), Girl Scout Cookies (ninth) and Cherry Pie (tenth).

Elem•n•tal BUSINESS PROFILES

Clockwise, starting from the left: TJ’s owners James Orpeza, Travis Mackenzie and James Murphy; the exterior of the dispensary; and a sample of the company’s Purple Kush. TJ’s Organic Provisions Successful grow operation expands business ventures By Patrick Wagner EUGENE, Ore. — Seeking a closer Thus, TJ’s Organic Provisions opened connection with their clientele, three en- its doors in 2015. From the outside, the trepreneurs have parlayed successful cul- dispensary resembles a modern version of tivation endeavors into TJ’s Organic Pro- a boomtown drugstore. The interior cap- visions, a medical dispensary in Eugene, tures the same aesthetic with reclaimed consumers is that the focus of the grow Oregon. wood, high ceilings and an uncluttered re- operation has never been to earn money. “It’s what we always wanted to do,” tail space. But the dispensary’s success is He said it’s been amazing to look back at co-owner Jim Murphy said of the com- linked with that of TJ’s Organic Gardens, how many times the company has had to pany’s recent expansion. Eliminating the manager Stephanie Calderon said, pointing decide between one path that would make middle man from the equation allows the out the award-winning flowers that have more money and another that would be company to be “in touch with our real generated buzz through word of mouth. “the right thing to do.” customers,” he said. Today, the company has a hand in al- “We pride ourselves on doing the cor- Murphy and co-owner Travis MacK- most every angle of the cannabis indus- rect thing,” Murphy said. “We’ve made enzie first started growing cannabis as a try, ranging from cultivation and retail to really good decisions every step of the way to help MacKenzie’s wife, Cham, manufacturing edibles, concentrates and way. There is nothing in my rearview who suffered from debilitating migraines. even personal lubri- mirror that I am Murphy and MacKenzie had previously cants. ashamed of and that’s partnered together in an electrical con- “We looked at all Company: TJ’s Organic the way I want to tracting business. Shortly after, James the models out there Provisions keep it.” Orpeza joined the cannabis business and and we feel that ver- Location: Eugene, Oregon One communi- the trio sought out a larger location to be- tical integration is the ty-minded decision gin growing for other medical patients in only way that we get Owners: Travis Mackenzie, was the establishment Oregon. to talk directly to the Jim Murphy, James Orpeza of TJ’s Kids, which “When we started seeing the quality of end user,” Murphy Employees: 40+ provides CBD oil to flower that was out there — what every- said. “We wanted to Operations: Medical children who suffer body else was growing — we felt like we bring the product to from serious medical were onto something, so we started taking the market ourselves.” dispensary and indoor conditions in Oregon. on more patients and the feedback was Murphy said the grow facility, using soil for “It’s very active,” just incredible,” Murphy said. “So we main reason TJ’s the grow medium and high- Murphy said. “I think said, ‘You know what? Let’s see if we can Organic has earned pressure sodium lights we reach 40 kids, who make this go somewhere.’” high praise among we treat for free.”

28 | Marijuana Venture // February 2016 Kush Bottles BUSINESS PROFILES

A look at the expansive space at Organicann in Santa Rosa, California, one of the many businesses owned by Dona Frank (right).

we don’t grow our own and sell our own. Natural Cannabis Company We do have our own cultivation, but it is Three dispensaries eye global market only about 5% of our operation and about 95% of our operation is with the small By Patrick Wagner farmers of Northern California. We’ve OAKLAND, Calif. — Dona Frank was vorite businesses.” remained steadfast to that business plan introduced to the cannabis industry through Now with three dispensaries in Cali- for 10 years.” the Detroit chapter of the Hell’s Angels fornia — MendoCann, OrganiCann and With her businesses firmly embed- when she was just 15 years old. Since then, Oakland Organics — Frank said the main ded in California, Frank is waiting on a the industry has shifted away from the black reason she has remained a consistent change in federal legislation in order to market and Frank has moved from Motor member of California’s tumultuous can- capitalize on a national — and eventually City to sunny California. nabis industry is because of her transpar- global — market with her website. Today she is the founder and owner of ent business practices and dedication to “We’ve always been of the mind- the Natural Cannabis Company, which local farmers. By paying the IRS, social set that click-and-order will replace operates as the parent company of three security and worker’s compensation, as brick-and-mortar eventually,” she said. dispensaries and many other ventures. well as providing every employee with “Everybody is trying to get a license “My pride and joy is High Art,” she a payroll check, Frank has been able to in Maryland or a license in New York said of an international art competition ensure her companies remain on the right but I’m thinking, ‘Why? Why go to all she set up in collaboration with Juxtapoz side of the law. of these cities?’ … Magazine. “We just acted like a Eventually I would Frank has been successful at explor- legitimate business,” Companies: The Natural like to send out our ing the fringes of where pop culture and she said. “That’s how Cannabis Company, procurement team all cannabis meet ever since opening her first we stayed afloat and Organicann, Oakland over the world to take dispensary back in 2005. The key, she didn’t get the wrath a look at what canna- said, is treating her enterprises just like of the government. I Organics, Suspiciously bis is being grown. any other business. think also because I Delicious Edibles and more We’ve coined the “One of my icons and heroes is Steve honored the farmers term ‘global cannabis Jobs,” Frank said. “I really loved the way that we worked with. Owner: Dona Frank network’ and we’re that they (Apple) present their business, We are not vertically Employees: 60+ hoping to grow into and so I tried to emulate some of my fa- integrated, meaning those shoes.”

30 | Marijuana Venture // February 2016 West Coast Horticulture BUSINESS PROFILES

Budtenders Ann Christianson and Josh Reiss cheerfully pose for a photo-op.

side the store there are subtle cues to be Walking Raven found along the walls and on the shelves. Small dispensary embraces its community roots Walking Raven sits on a mile-long strip of South Broadway in Denver nicknamed By Patrick Wagner the “Green Mile” or “Broadsterdam.” DENVER — As companies expand been expanding their behind-the-scenes Walking Raven is one of the many dis- into new territories, they often begin to grow operations for the purpose of “keep- pensaries that makes up the highest con- lose touch with their roots and the com- ing our customers happy and keeping our centration of cannabis shops in Colorado. munities that helped launch their busi- store stocked and full,” Knight said. Knight said current zoning restrictions ness. Nick Paul and Luke Ramirez de- That project includes remodeling Walk- would never allow so many dispensaries cided they wanted to avoid that path for ing Raven’s two warehouse grow facili- to be located in the same relatively small Walking Raven, the dispensary they own ties, the first of which has been home to space. and operate on Denver’s Green Mile. Paul’s grow since he first became a li- “We have a lot of the tourists get off the Jessica Knight, marketing director for censed caregiver in 2002. plane and say, ‘We are going to Broad- Walking Raven, said the company’s de- “It’s going to be at least double in size sterdam. We are going to where we can cision to remain grounded was one of the compared to the one go to 20 dispensaries best things it could have done. Walking warehouse we have Company: Walking Raven at once,’” she said. Raven has focused on community out- right now,” Knight “We’ve been here reach events, such as inviting the public said. “We’re talking Location: Denver, for six years and we to “hit the green” for its annual Raven about putting a green- Colorado have a reputation for Charity Open golf tournament where house on top of that premium-grade flow- proceeds go directly to the Denver Col- warehouse.” Owners: Nick Paul and er,” Knight said. “You orado AIDS Project. The company also The dispensary was Luke Ramirez can shop wherever you contributes to Denver’s Green Team and named after Paul’s Employees: 25 want. But if you hear supports the Harm Reduction Action relative, Blue Raven, that a pizza place has Center. and the retail space Operation: Retail store; the best pizza, you’ll Paul and Ramirez have decided to pays homage to Paul’s 5,100-square-foot indoor go there and you might forego any lavish renovations to the Native American her- grow pass three other pizza 400-square-foot dispensary. They’ve itage. Inside and out- places on the way.”

32 | Marijuana Venture // February 2016 Bios CoolJarz PRODUCT SPOTLIGHT

The Essential Oil practical uses for oils of a wide variety of herbs and plants, including garlic, Maker’s Handbook lemon, dill, cinnamon, ginger, lavender Extracting essential oils from a wide and more. range of plants and herbs is an age-old Ever wanted to know how to make practice. your own shower gels and creams For those individuals looking to ex- using materials that were cultivated pand their knowledge base beyond from your own garden or pantry? “The cannabis and truly understand the Essential Oil Maker’s Handbook” fea- principles of extraction, “The Essen- tures more than 40 base recipes for tial Oil Maker’s Handbook” could be a personal care products — from bathing great resource. additives to perfumes — and aims to Written by Bettina Malle and Helge serve as a reference for both beginners Schmickl and translated by Paul Leh- and experts. mann, this book outlines effective More information: www.spikehorn- procedures, necessary equipment and press.com.

SideKick The SideKick is the newest vaporizer from 7th Floor, a worldwide manufactur- er of modern paraphernalia, including the Silver Surfer, Da Buddha and Life Saber. Portable, convenient and lightweight, the SideKick features an ergonomic de- sign with an anodized aluminum cover and batteries that are both recharge- able and replaceable. Each SideKick includes a set of batteries, USB charger, small screwdriver, cleaning brush, extra screen and more. “SideKick raises the bar compared to all the portable products on the mar- ket today,” said Steve Kelnhofer, 7th Floor president and founder. “Owners will enjoy the incredible convenience and the smooth, tasty draw that comes with every SideKick.” More information: 7thfloorvapes.com.

www.marijuanaventure.com | 35 PRODUCT SPOTLIGHT

AEtrium-4 AEssence Corporation recently unveiled its new and improved growth platform. The AEtrium-4 is a fully automated, turn-key, aero- ponic growing system designed to provide cultivators with the power to precisely and consistently maintain the perfect growing environment for plants. The pur- pose is to create exceptional harvests while maximiz- ing efficiency. The AEtrium-Application provides 24-hour-a-day monitoring and control, based on a user-designed growth plan and built-in system redundancies. Grow- ers can finally take a weekend away from the facility and rest assured their plants are safe. The AEtrium-4 features an aeroponic grow tub for up to 20 plants that is separated from the aqueous res- ervoir. The AEtrium Dosing Base (ADB), which slides underneath the grow tub, houses the pressurization pump and aqueous reservoir, and handles sensing of pH and total dissolved solids (TDS) and nutrient dosing. The ADB supplies the aeroponics for the tub above it, but can also supply additional tubs in a row. The AE- trium-4 can be scaled from one light to hundreds of lights to meet each grower’s needs. Preliminary testing indicates that the shallower growth tub requires less root mass than previous versions, translating into high- er yields. AEssense Corporation is a Silicon Valley developer and manufacturer dedicated to providing innovative solutions for plant growers worldwide by applying ad- vanced technologies to measure and control the plant environment. The company is a high-tech developer of hydroponic systems, wireless growth systems and greenhouse instruments dedicated to helping indoor commercial growers of all plants grown year-round. More information: www.aessensecorpgrows.com.

GrowSpan management. Cus- Growers Supply, a part of the ESAPCO tomers will be able family with nearly 40 years of experi- to find all of our ence and more than 14,000 greenhouse greenhouse struc- structures in the field, recently -an tures under one nounced the launch of GrowSpan, a new name, eliminating brand name for its line of manufactured any possible confu- greenhouse structures. The company sion. We are creat- said the new GrowSpan name and logo ing one face to the is a move to better position the Growers world, with even Supply greenhouse structures product more focus on our line under a single identity. growing customers “The advantages for our custom- and the develop- ers are clear,” marketing director Dinis ment of new green- Jablonski said. “It will be easier to find house structures and understand our greenhouse and and accessories. It’s exactly where our ny. These companies will continue to growing structures, there will be more focus needs to be.” provide innovative, custom greenhouse focused catalogues, consistent brand- The new brand identity utilizes ele- structures under GrowSpan. ing on our websites and we are going to ments from Growers Supply and Clear- More information: www.GrowersSup- invest more in our greenhouse product Span, another existing ESAPCO compa- ply.com.

36 | Marijuana Venture // February 2016 Forever Green PRODUCT SPOTLIGHT

goal was to create EazeMD the absolute best One of the leading marijuana product possible, delivery services in the nation considering every recently announced the release angle of concern. of its app that simplifies the Traditional packag- process of obtaining a medical ing offers no envi- recommendation. ronmental benefits. The EazeMD app can se- curely connect with physicians “Our factory uses seven days a week. The app 100% wind power is available for both iOS and for sustainable en- Android operating systems ergy in manufac- and can be downloaded from turing,” he added. iTunes or Google Play. “This means that “Since day one, our core both the HISIERRA mission has been to provide materials and the the easiest, quickest and manufacturing pro- most professional solution for cess are renewable medical marijuana patients,” Eaze CEO Keith McCarty said. and sustainable. I HISIERRA “Now patients can connect call this eco-responsible packaging.” with physicians anytime, any- In order to serve the cannabis industry Greenfield expects the customer base for with exit bags required by some states, In- where, from the palm of their the legal cannabis industry will continue hand — and have their med- tellipak USA has developed the HISIERRA to grow rapidly — as will those consumers ication delivered to them- al line of packaging. who are looking for businesses utilizing sus- most immediately.” The HISIERRA bags are child-resistant, tainable practices. Eaze technology helps dis- reclosable and easy to open, while also “The demographic data related to legal pensaries in California auto- being environmentally friendly. The HISI- cannabis consumers shows that environ- mate delivery logistics, re- ERRA material is a food-grade, high-barrier mental issues are important to them,” he al-time inventory and business pouch made with renewable and sustain- said. “At the same time, they have consider- intelligence insights. The San Francisco-based company was able resources like sugarcane. The packag- able discretionary income and expect a qual- founded in 2013, becoming the ing is manufactured in a facility using 100% ity product with quality packaging. Pack- first company to allow patients wind energy. aging and child safety is a very important to get medical marijuana from “I recognized a need for an eco-friend- aspect of the whole canna-business model. dispensaries on demand. ly package in such an exploding market,” I’ve hit all those points with HISIERRA bags.” More information: www. said Michael Greenfield of Intellipak. “My More information: www.hisierrabags.com. eazeup.com.

Team Maryjane A group of advertising, marketing experts have banded together to form Team Maryjane, a marketing agency serving companies in the cannabis in- dustry. “Team Maryjane is a one-stop market- ing shop for growers, dispensaries and anyone else in the cannabis industry,” CEO and co-founder Josh Whitaker said. “You run your company, we’ll run your lations, search engine optimization and companies that will thrive are the ones marketing. All of our team members web design, among other tasks. that deliver excellent products and ser- have a wealth of experience in their ar- “The rapid growth within the canna- vices — and do an outstanding job of eas of expertise. And collectively they bis industry has brought increased com- telling their stories to the public they offer an unmatched depth and range of petition,” Whitaker said. “Just opening serve. We help them tell their stories.” knowledge.” your door isn’t enough to be successful Team Maryjane is based in Denver, but The cooperative was designed to help anymore. Customers have more choic- works with clients throughout the U.S. cannabis professionals with content es than ever about where to buy. And More information: www.TeamMary- writing, marketing strategy, public re- they’ve become more discerning. The jane.com.

38 | Marijuana Venture // February 2016 VC999 “Our goal was clear: to ensure medical patients have access to the products they need. There will be more storefronts for patients going forward than are available today. In addition, qualified patients can grow their own or join a four-member cooperative.” Washington State Liquor and Cannabis Board director Rick Garza, on the announcement that 222 additional marijuana retail stores will be licensed, bringing the statewide total to 556. Source: Washington State Liquor and Cannabis Board.

“We must ensure there is an even distribution of stores so they are not unfairly concentrated in economically-distressed neighborhoods, and so that cannabis is accessible to medical patients throughout the city. This proposal balances both goals by giving retail owners a little more flexibility in where they can operate and creates new rules to require equitable dispersion of these stores throughout Seattle.” Seattle Mayor Ed Murray, introducing new land-use rules to accommodate the upcoming increase of state- licensed marijuana retail stores. Source: City of Seattle website.

“We have to understand that we cannot legislate and lock up everybody for everything they do.” Palm Beach County Commissioner Priscilla Taylor, after marijuana was decriminalized in West Palm Beach, Florida. Source: WPTV.com.

“If legalization happens, marijuana must be a controlled substance, and no one has more experience retailing controlled substances than the workers at the LCBO (Liquor Control Board of Ontario).” Ontario Premier Kathleen Wynne, on the possibility of commercial marijuana sales in Canada. Source: Headlines & Global News.

“It is abundantly clear to me that cannabis, while being much less harmful, should be treated the same as alcohol. The Cannabis Freedom Act is an outline on how to tax and regulate the sale of marijuana to adults 21 and older in Kentucky. It is time for this discussion in our commonwealth.” Kentucky Senator Perry B. Clark (D), after pre-filing a bill that would allow marijuana sales in the Bluegrass State. Source: WFIE.

“Indications on first year full rollout are $200 to $300 million in just tax revenue, not to mention all the additional job creation and income tax that’s going to be derived from those new jobs.” New Jersey Senator Nick Scutari (D), during a hearing on legalizing marijuana in New Jersey. Source: WBGO.org.

40 | Marijuana Venture // February 2016 Dear Electric 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. There was huge paranoia with the launch me. I rediscovered cannabis and dove into Washington Bud Company of the Crime Stoppers program on July 24, understanding why it was medically useful. 1987 specifically targeting marijuana. Un- It came full circle when I decided to enter beknownst to us, our babysitter had smelled the cannabis community again as growers SHAWN DENAE our last harvest and told her mom, who and advocates for change in 2012. Snohomish, Washington promptly called the newly-established rat- If I had the opportunity to advise my on-your-neighbor number. I went home for younger self, I would say, “Understand lunch one day to find the sheriff talking with why you feel better with cannabis. Do not my husband, while deputies hauled plants allow fear to rule the day at the detriment out our backdoor. to your health. Change will come faster We were never charged. The evidence got with your help.” thrown out of court due to a bad search war- rant, and prosecutors could not prove intent to distribute. Luckily, we escaped without Shawn DeNae is CEO of Washington serving any time. Bud Company, an aspiring applicant for a After moving to Washington, we set up producer/processor license. She is one of another closet grow so we didn’t have to the founding members of the Marijuana seek a local dealer. In the early 1990s, the Business Association Women’s Alliance. Just Say No program was in full swing. One day our fifth-grader am certainly older and wiser (I hope) came home and an- in my 55th year on this planet. I would nounced that the cop never wish to relive my late teens and at school — “the one Itwenties, but I surely could have used some with the gun” — told sage advice to set me up for a more enjoy- him that he had to turn able life in my thirties and forties. I came of us in because we were age in the mid-1970s, right after President criminals. We shut Richard Nixon put cannabis on the list of down that garden and Schedule 1 drugs. Weed made me feel bet- left the whole canna- ter, and I sought it constantly, despite — and bis scene. People were often in the face of — authoritarians. losing their children. It I discovered marijuana after a gymnastics was frightening. injury to my right hip. These were the days I then went into two before physical therapy and I was told not to stressed-out decades move for two months. I was lonely and in of seeking alternative excruciating pain when my girlfriends came forms of pain relief, to me with a promise of something that going to Mexico or would make me feel better. They gingerly Canada for prescrip- carried me to the car and we drove for miles tion drugs when I had into the prairie before pulling over and light- to. I was often miser- ing up a joint. Before I realized it, I was hap- able with unexplained py, and a voice inside my head was telling pain. Without fully me that I must move to heal. I pulled myself understanding it, I out of the back seat and began to do slight had been using canna- squats. I returned to school long before the bis as pain and stress eight weeks of mandatory bed rest. management all those By the mid-1980s, I was married with two years. young sons, and my husband and I decid- Hempfest of 2010 ed it was safer to grow our own marijuana. was eye opening to A front page story of the Gillette News-Record from July 30, 1987 details a police raid that netted 30 illegal marijuana 42 | Marijuana Venture // February 2016 plants. No charges were filed in relation to the bust. CannaSol do should be with the idea of going global under-communication should be a thing of Trail Blazin’ Productions in mind. the past. The small town of Goldendale, 14. Always remember why you’re do- Washington has battled the information age ing this. by building limited cell phone and Internet DANIELLE ROSELLISON 15. And finally, never forget: “You towers. Create a system of communication Bellingham, Washington have no problems, only solutions.” Now from the very beginning that won’t leave go get ‘em, girl! room for misinterpretation. By selecting a With love, 2016 Danielle. point person who is well-organized and pro- ficient with traceability systems, miscom- Danielle Rosellison is part of the collabo- munication can be largely avoided. rative work group to form the Washington • Core values: Outline your core val- Cannabis Commission. You can learn more ues and stick to them, no matter what. It about the Washington Cannabis Commis- gets competitive out there, and you can’t sion Formation Project at http://wacanna- always offer the same services as a farm biscommission-4486396.onsimplybuilt.com. with deeper pockets. This will happen, and when it does, just go back to these core values. They’ll prevent you from harbor- ing any resentment that naturally creeps Tahoma Growers into a competitive atmosphere. They’ll re- mind you that there’s a market for every grower. This is a win-win industry. ear 2013 Danielle, SHELBY TALMADGE • Tenacity: I’m pretty sure that every If you’re reading this then Goldendale, Washington farm has had their share of obstacles. Moth- time travel has finally come to er Nature gave us several obstacles, includ- Dfruition. With any luck, you’ve received ing starting a fire about 10 yards away from this via the DeLorean. Regardless of how our garden, breaking our fence and provid- you’re receiving this message, here are a ing ground that was almost impossible to few tidbits of advice I would recommend in dig in. In the end, she also gave us high-po- an effort to make your life as easy as possi- tency, sun-grown cannabis, but not without ble as you embark on this cannabis journey: teaching us something about tenacity first. 1. Obtain three times the amount of money you think you need. You will need Shelby Talmadge is a co-owner of Taho- it sooner or later. ma Growers, a family-owned producer of 2. Get your city council and govern- all-natural, eco-friendly cannabis in Gol- ment officials on speed dial. dendale, Washington. She also handles 3. Heed the advice of experienced marketing for Marijuana Venture. business people; they have been there and done this. There is no reason to reinvent the wheel! ahoma Growers has a grand total 4. Don’t get your LLC agreement from of six employees. Four of us are the Internet. related, and three of us live togeth- 5. Assume the lowest sales price and the Ter. “Eclectic” is a good word to describe our highest overhead, no matter how sure you group of two accountants, an electrician, a are that it’ll be the exact opposite. grower, a mason and a salesman. When we 6. Take a deep, intimate look at the char- started, only one of us was a farmer; today acter of people you’re doing business with. I can proudly say we all are. 7. Sleep and eat as much as you can right I often reflect on the starry eyes we had now. There will be no time to do either soon. a year and a half ago, and laugh at our 8. Don’t underestimate the height of naiveté. How could we know that some- the mountain that is the federally illegal thing as basic as electricity was going to cannabis industry. take six months longer than expected? 9. Listen to your gut. Always. Our phrase of the year has been “trial 10. Start two companies. One to exe- and error.” And I don’t think we’re alone cute all the requirements of the licensed on that. If I could go back to the begin- cannabis protocol. The other to do EV- ning, I would focus on three areas to en- ERYTHING else. sure the success of our business. 11. Don’t hire friends. • Communication: How can communica- 12. Go for high margin and low overhead. tion even be an issue? Between cell phones, 13. Think big picture. Everything you email, Facebook, Twitter, Instagram, etc., Mother Nature brings in several feet of snow in winter. 44 | Marijuana Venture // February 2016 Helderpad LONG ROAD TO RETAIL Chapter 7: Insurance complications By Garrett Rudolph and Patrick Wagner

olorado Leaf continues to inch ever closer to the veg house and some last-minute details on the stage two flower house. putting product on the shelves of cannabis re- But one impediment continues to linger tailers throughout the state, but for every obsta- over Colorado Leaf: insurance. cle hurdled, another proves to be more than just The rural location of the Colorado Leaf farm has made it nearly impossible to find a passing challenge. the insurance coverage needed. On Nov. 15, 2015, the Spraus received a letter from the CIn early January, the company went Leaf is producing its first crop in the midst local Red Creek Volunteer Fire & Rescue through the massive task of cutting 2,000 of winter in Pueblo, the team has had to stating that the department is not equipped clones from the 400 mother plants that had contend with single-digit temperatures or trained to fight fires that could occur at been growing for the previous six weeks. at night. The Sprau brothers have had to a commercial or industrial structure (for That effort will be enough for the compa- learn how to ration diesel for the genera- more on how insurance carriers rate rural ny’s first veg and flower phases, owner and tors during snowstorms, as well as famil- locations for fire safety, see Page 114). founder Keith Sprau said. iarizing themselves with the Wadsworth The volunteer fire department has said Ultimately, the company will need to control system that maintains the green- it would require a donation of $172,000 in bring its total to 3,200 mature plants and house environment. order to bring its services up to snuff to 400 clones in order to petition the state’s The majority of greenhouse construc- protect commercial buildings. Marijuana Enforcement Division for an tion has been finished, with the team eye- “In short, we are willing, but not able,” increased plant count. Because Colorado ing a mid-January date of completion for Red Creek Volunteer Fire & Rescue chief

46 | Marijuana Venture // February 2016 High Caliper Growing System Cannabis cultivator, Joe Dyjak wrote to the cannabis cultivators I am writing to advise you that the current protocol of Red Creek Volun- in that part of Pueblo (see sidebar). teer Fire & Rescue limits our ability to protect your property in the event of The Sprau brothers felt like they were a fire. This letter is intended to inform you of the current policies and limita- being held for ransom over the six-figure tions of our department. cost of upgraded fire equipment, Brett said. As Fire Chief, I have fielded numerous phone calls from insurance com- “Six months ago when we started this, panies regarding the availability of fire services in your coverage area. In I went and sat down and told them that order to answer these questions, this official policy is being added to our we’re going to put a hook-up for you so SOPs (Standard Operating Procedures). your trucks can come right up to it and you Our small, rural fire department was created to serve a residential ranching can empty that 7,000 gallons in four min- community with basic emergency response for the primary threat of wildland utes and go fight the fire,” Brett said. fire. We also provide CPR/First Aid medical response to assist AMR (ambulance Keith thinks the changing attitude has responder) and/or Flight for Life (helicopter responder). On the limited occasion, to do with local residents seeing so many we provide “exterior attack only” structure protection on traditionally-built resi- marijuana grow facilities popping up dential and agricultural buildings, meaning we do not gain entry into a structure. throughout the region. It’s almost an im- Our department is no equipped or trained to combat the hazardous structure pression of “there goes the neighborhood.” fires that commercial and/or industrial buildings generate. First and foremost, Keith said Colorado Leaf was the first we lack the basic equipment that would allow our department to make a safe grow operation on their road. Now, there and effective initial attack on high-risk structures, which inherently contain more are about 10 growers on that road alone, toxic compounds: plastic greenhouses, high-voltage electrical systems, large with several massive, 100,000-square-foot insulated metal buildings, etc. greenhouses going in nearby, which will In order to ensure the safety of my volunteers, our official policy regarding bring even more growers to town. commercial and/or industrial buildings, such as those on your property, is “Hopefully, if anything, Pueblo realizes as follows: they’ll have to slow things down at some 1. If responding to a structure fire (or close proximity wildfire), RCVF&R will point,” Keith said. “They can’t just keep take no suppressive action. giving out licenses the way they have been.” 2. RCVF&R’s equipment and personnel will “hold at the road” and call for Brett said he was also dismayed by the mutual aid, which is approximately forty-five minutes away. seemingly arbitrary target on commercial 3. RCVF&R will provide suppression support, when safe to do so, for sur- facilities. rounding properties and improvements. “Our building is 99% steel,” he said. In order to provide the advanced services required by commercial and/ “The only thing that’ll actually burn is the or industrial structures, a substantial upgrade of infrastructure is required, roof, and once it burns off nothing is going which includes the following: to burn.” - Dual-role brush truck (older model): $125,000 The greenhouse, he said, uses steel, con- crete, drywall, metal studs and a polycar- - SCBAs (self-contained breathing apparatus): $12,000 bonate roof. - PPE (personal protective equipment): $15,000 “It’s structurally more safe than a house - Training (on structure fires): $10,000 — especially a cabin,” he said. - Modifications to existing equipment: $10,000 Regardless, there’s not a lot Colorado Leaf TOTAL: $172,000 can do. Keith and Brett have been consider- RCVF&R currently operates on less than $200 per year, which is derived from ing quotes from different insurance carriers, donations. Our department receives no federal, state or local funding and relies working in conjunction with the non-volun- exclusively on the generosity of our community, as we are a 501(c)(3) public teer Pueblo Fire Department (which is far- charity. Sincerely speaking, generating the necessary funding to address the ther away from the property than the volun- needs of commercial and/or industrial buildings, is quite improbable. teers) and looking at other options to make Having state the above, it should be noted that I will be circulating our updated the farm better equipped to handle a fire. SOPs to all respective insurance companies on January 1, 2016. I must ensure that they understand RCVF&R’s current capabilities and limitations, as I am un- der the legal obligation to do so. I apologize, in advance, for any inconvenience Marijuana Venture is following and additional cost/penalty our policies may provoke. Colorado Leaf as it undergoes the first Please note that it is not a lack of desire to serve hemp and/or marijuana year of being a licensed wholesale cultivators, it’s unfortunately a lack of basic safety equipment and infrastruc- grower in Colorado, from facility ture, which is funding-dependent. Should RCVF&R obtain the necessary fund- construction to putting product on ing, through the active and collaborative participation of our newest community retail store shelves. members, we should immediately obtain the critical equipment and begin train- Clarification: ing our department. In short, we are willing, but not able. Previous issues of Marijuana Venture have misrepresented the roles within Sincerely, Colorado Leaf. Keith Sprau is the Joe Dyjak owner and founder; Brett Sprau is the Red Creek Volunteer Fire & Rescue head of sales.

48 | Marijuana Venture // February 2016 Nexus Greenhouse Don’t call it a KEURIG CannaKorp aims to bring the world’s first single-use, pod-based vaporizer to cannabis consumers by fall of 2016 ― ― ― By GARRETT RUDOLPH

hen Keurig introduced its single-serve But convenience came with an addi- tional cost. In 2012, the New York Times coffee brewers to the American public, reported that many of the popular coffee an entirely new category of consumer pods cost the equivalent of $50 a pound products was born.. or more — a steeper price tag than even small-batch, artisanal cups of joe that are Keurig brewers and the now-ubiqui- typically only enjoyed by well-to-do Ja- tous K-Cups brought a level of speed vaphiles. Yet, consumers have been more than and convenience previously unmatched by traditional willing to pay the price. coffeeW makers and single-serving predecessors. It is estimated that one-quarter of

50 | Marijuana Venture // February 2016 O2 Vape American households have a Keurig. The company will initially be marketed The CannaKorp team In 2014, parent company Keurig Green toward states where medical marijuana is Mountain generated more than $800 mil- legal, but Manly said he expects consum- lion in sales from brewers and accesso- ers in recreational markets will also be ries, while the higher-margin K-Cups ac- interested in the CannaCloud. counted for about $3.6 billion in revenue. Manly said the concept originated According to Bloomberg, Keurig estimat- from consumer experience — “just like ed in early 2015 it had sold about 20 mil- all great products,” he added. Accord- lion of its brewers in the U.S. ing to Manly, one of the company’s “In the coffee business, making a cup of co-founders was told by his doctor that coffee with a K-Cup is three times more medical marijuana might help with an expensive than making it out of a tin can, ailment he was experiencing. At the but people are willing to pay for it all day time, there weren’t medical marijuana long,” said Dave Manly, a former senior dispensaries in Massachusetts, so he had vice president at Keurig Green Mountain. to do what millions of others have done ave Manly has more than 35 years of Manly retired from Keurig in 2014, Dbusiness experience, including stints in prohibition states — he went out and working for Boston Whaler, Proctor & but expects his latest venture to have the bought weed off the street. Gamble and LoJack. He leads the small, same impact on cannabis consumers as But when he got home, he didn’t really but impressive start-up team at Canna- the revolutionary K-Cup did in the coffee know what to do next. How much should Korp that includes several former Keurig world nearly 10 years ago. He is now the be taken? How should it be consumed? employees. chief executive of Massachusetts-based Unlike traditional prescriptions for phar- • James Winokur: The co-founder and start-up CannaKorp, which plans to bring maceuticals, marijuana doesn’t come chief operating officer of CannaKorp, an entirely new type of vaporizer to the with instructions or dosage information. spent the past decade as the senior market in the fall of 2016. Not only will the CannaCloud simplify director of marketing and business the process of using medical marijuana, it’s development at PTC, a global software CANNACLOUD also a more modern, mainstream approach technology company. Manly and his team at CannaKorp have than the bongs of yesteryear. Pre-packaged • Ian Tinkler: Former vice president at embraced the challenge of reinventing the doses make it easier to pinpoint the exact Keurig Green Mountain, Tinkler has more vaporizer and changing the way consum- amount of cannabis needed. than 35 years of engineering experience ers use marijuana. in designing products for the commercial, aerospace and consumer markets. As The CannaCloud chief technology officer of CannaKorp, he is being billed as I THINK IT’S GOING TO BE leads the team responsible for bringing “the world’s first the CannaCloud system to market. single-use, pod- REVOLUTIONARY, BASED • Michael Bourque: Co-founder and based cannabis va- inventor of the CannaCloud system porizer system.” ON THE TECHNOLOGY AND Bourque oversees all future innovations It was designed to for CannaKorp. He started his career look just like a home path as a machinist for MIT’s Lincoln appliance. The sleek HOW MUCH CONSUMERS Laboratory. curves and subtle • Greg James: James is CannaKorp’s color scheme won’t LOVE IT SO FAR vice president of sales and marketing. He look out of place in a high-end kitchen or CannaKorp began promoting the new- brings more than 20 years of marketing on a living room end“ table. age vaporizer at a Las Vegas trade show experience to the cannabis industry. He “At Keurig, our customer profile was in November. The response, so far, has previously co-founded Synchronal Corpo- that both males and females used the prod- been fantastic, Manly said. ration, a cloud-based software start-up. uct, but females bought it,” Manly said. “I think it’s going to be revolutionary, • Jeremy Krause: One of the co-found- With that demographic in mind, Man- based on the technology and how much ers of CannaKorp, Krause was previously ly said the CannKorp team recognized consumers love it so far,” he said. the team lead for Redfin, managing direc- tor for Business Development Consul- the importance of catering to both men CannaKorp will build the vaporizers, tants and a commodity broker for Barkley and women. It was imperative to make but will never touch the cannabis plant Financial. He is currently CannaKorp’s the CannaCloud “something women itself. Instead, the company will partner vice president of business development. would not be embarrassed to have in their with licensed growers in states where • Basi Karanikos: Contracted for his house,” he said. marijuana is legal to manufacture the packaging expertise, Karanikos is the But it’s not just the look that makes it CannaCups. The first units could be ready former vice president of packaging for a game-changer. The patent-pending sys- for sale by September 2016. Keurig Green Mountain. He also worked tem incorporates individual pods (called “Eventually, we’d like to be able to sell at Solo Cup Company for 20 years as CannaCups) that contain a pre-measured the CannaCloud vaporizer on our web- an engineer manager and director of amount of marijuana, to give consumers a site,” Manly said. “It will depend on how equipment systems. consistent experience. the laws evolve.”

52 | Marijuana Venture // February 2016 Empire ly said CannaKorp is in “extreme start-up mode,” with seven employees who are all OUR PRODUCT WILL SPEAK FOR currently working for free. Within the coffee industry, Keurig cre- ITSELF NO MATTER WHERE IT IS ated the footprint for the CannaCloud to follow in legal marijuana. Keurig, which Because of federal restrictions, the pods ing up the margin per gram of marijuana was recently sold to a private-equity firm will be produced in the same state where produced, he said. for $14 billion, proved that consumers they are sold, so marijuana does not have When asked if he felt like he was tak- are willing to pay for speed, simplicity to cross state lines. CannaKorp will in- ing a crash course in cannabis econom- and an unlimited number of individual stall equipment that makes the pods at the ics, Manly said there is a bit of a learning offerings. facilities of licensed processors through- curve. “That really applies from coffee over to out the country. “The good news is in the 1970s, when cannabis,” Manly said. ““We are in the process of signing part- I was in college, I learned a lot about the It took years for Keurig to convince ners and agents,” Manly said. “We’re product,” he joked. “I haven’t been that people that a K-Cup could make a great meeting producers and growers around close to it in the ensuing 35-40 years, but cup of coffee, Manly said. But now that North America to get them on board.” I would say not much has changed.” people are willing to accept single-serv- Packaging and labeling will be im- ing coffee, it’s opened the door for oth- portant, just as they are for all consumer THE KEURIG OF CANNABIS er products to capitalize on the market products, Manly said. He envisions a va- Manly acknowledges the parallels be- Keurig has created. riety of color-coded CannaCups based on tween Keurig and CannaKorp, but he’s While CannaKorp’s Massachusetts potency. quick to point out that the products are en- headquarters might be a long distance “The key is to make it real simple,” tirely different and completely separate. from the hot-bed cannabis states of the Manly said. However, the comparisons are impossi- West Coast, Manly said having a great He believes consumers will be willing ble to ignore. product matters a lot more than location. to pay a premium for convenience, just as Aside from the obvious similarities, “You can be in Timbuktu and people they’ve done when buying coffee. There- both companies have New England roots, will find a way to your product,” Manly fore, the CannaCloud will increase the and several members of the CannaKorp said. “Our product will speak for itself no total value chain for cannabis, while driv- team previously worked for Keurig. Man- matter where it is.”

DCG

54 | Marijuana Venture // February 2016 Flying Skull Photo by Gage Skidmore. SANDERS BRINGS CANNABIS TO POLITICAL FOREFRONT

Ending Federal Marijuana Prohibition Act would remove marijuana from Schedule 1 ― ― ― By MARGUERITE ARNOLD and GARRETT RUDOLPH

hen Vermont senator and presidential datory drug testing of federal employees in 1998 and his sponsorship of the States’ candidate Bernie Sanders introduced Rights to Medical Marijuana Act in 2001. the Ending Federal Marijuana Prohi- That’s why Murét has thrown his full support behind Sanders, once considered bition Act to Congress during the fall a long shot to win the presidency, but ris- of 2015, he firmly put cannabis in the ing steadily closer to front-runner Hillary spotlight of national politics. He also Clinton in the polls. Murét started Can- nabis Reformers for Bernie (www.yeshe- opened the passageway for marijuana legalization to cann.com) to build a network of cannabis becomeW a major issue in every state primary where le- and drug reform activists and galvanize them to get out and vote. galization holds a flicker of hope. “I believe the mainstream press and major party establishments have serious- The proposed legislation is the center- David Murét, co-founder of Viridian ly underestimated the impact cannabis piece of why many in the cannabis in- Staffing, says Sanders’ progressive ap- reform is going to have on this election dustry are “feeling the Bern” in 2016 and proach to cannabis dates back more than cycle, seeing as it spans so many hot-but- backing Sanders for president. 15 years, including his opposition to man- ton issues (like mass-incarceration) that

56 | Marijuana Venture // February 2016 RX Green Solutions transcend traditional left-right political ideologies,” Murét says. “In the most re- cent Gallup poll, 58% of Americans are in favor of legalizing marijuana, and even a majority of self-identified Republican millennials favor ending prohibition.” “The fact is that public opinion on cannabis has changed, and this new bill reflects our new reality,” adds Aaron Lo- Cascio, CEO of Vapeworld, a parapherna- lia distributor. “It’s encouraging to see a seasoned politician taking the stance that younger politicians have been pushing for years, especially on the national stage.” The Ending Federal Marijuana Prohi- bition Act would remove marijuana from the federal government’s list of Schedule I drugs, which is currently one of the big- gest impediments to further development Bernie Sanders has become the of the legal cannabis industry, including top presidential candidate among much-needed banking reform. The bill those in the cannabis industry. would repeal all federal penalties for Photo by Gage Skidmore. possessing and growing marijuana, there- by allowing states to establish their own marijuana laws. to address banking or 280E because pro- ready begun,” Murét says. Doing so would address the compli- ducing, processing or selling (marijuana) “The political tides in the United States cations of IRC 280E, give investors the would remain a felony.” towards legalization of cannabis have peace of mind to invest in the cannabis However, the bill does not touch the shifted permanently, and Sen. Sanders businesses and lift barriers to much-need- bigger issues that surround legalization, is leading that shift. For the first time ed research and innovation, Murét says. and leaves federal penalties of up to a year ever, a nationally-prominent and lead- This is critical because the federal gov- in jail for transporting cannabis across ing presidential candidate has officially ernment’s current hands-off approach state lines. Some say the biggest victory endorsed the repeal of cannabis prohibi- toward state-legal cannabis businesses is implicit in the language of the bill is that tion,” says Eddie Miller, chief strategy a matter of policy, not law. That policy although states would still be allowed to officer of GreenRush, an online cannabis ban the drug (much like alcohol), the fed- delivery service. “In Canada, the victory eral government would no longer be able by the Liberals and Justin Trudeau can to levy any penalties for sale or posses- very much be attributed to the vote of the PUBLIC OPINION sion except in the transfer of product be- younger generations who overwhelming- tween states. ly support cannabis legalization. Sanders ON CANNABIS HAS Throughout the course of the election has taken a lesson from our friends in the season, the political impact of the bill north and will have America’s young peo- CHANGED, AND could be much larger than its legislative ple behind him in no time.” success. In terms of the cannabis industry’s THIS NEW BILL It turns every state where marijuana re- view, Sanders’ support of legalization form is a central focus into a battleground places him ahead of Clinton, who has sat REFLECTS OUR state for Democrats seeking the party’s on the issue for more than a quarter centu- nomination, and it also puts pressure on ry of her highly visible national political NEW REALITY Republican candidates to respond. Thus life. “ far, Rand Paul is the only Republican to These same voters also believe that could easily be reversed by a new presi- dent or attorney general. openly take a stand in favor of decrimi- Sanders can overcome Clinton’s early “Removing marijuana from the Con- nalization. lead. The issue of marijuana legaliza- trolled Substances Act would take the “While I’m sure the party famous for tion is just one facet of the election that issue off the table entirely as far as the stubborn foot-dragging will continue to is gaining traction. Further, because so federal government is concerned,” Murét showcase some vocal hold-outs, their top many other issues are wrapped up in le- says. “This is in stark contrast to Sec- political strategists have to realize that galization, it is likely to become a potent retary Clinton’s position, which would they’re now fighting an uphill battle and wedge issue in many of the upcoming merely move cannabis from Schedule 1 this is now a wedge issue that is more state primaries. to Schedule 2, next to cocaine and meth- likely to hurt than help them if they don’t Murét says more than 80% of residents amphetamine, which would do nothing change their tune, and that process has al- in critical swing-states Ohio, Pennsyl-

58 | Marijuana Venture // February 2016 Hydrologic vania and Florida now support medical marijuana, and a thin majority favor de- criminalization of possession and adult use laws. “If people who care about this issue — particularly millennials, who now outnumber the baby boomers — feel strongly enough about these issues to get out and vote, it could very well help determine the outcome of both the pri- maries and the general election, giving an edge to those who take the boldest stance,” Murét says. THE FIRST BIG Good Earth FIGHT IS LIKELY Organics TO BE OHIO The first big fight is likely to be Ohio, where Issue 3 was rejected by voters last fall, largely due to the language of the bill that would have granted a monopoly to a handful of wealthy investors. “In Iowa, there is also significant sup- port for medical legalization. The state has been slowly moving forward on plans to reschedule the drug, and more than 70% of residents believe medicinal use of marijuana should be legal, according to the Des Moines Register. In California, which is gearing up for its own recreational legalization initia- tive, Sanders will likely pick up pow- erful support from people who not only support further reform, but are tired of the intrusion of the federal government, particularly on this issue. Sanders also could pick up support in states like Illinois, Georgia, North Caroli- na, South Carolina and Florida, where the issue of legalization has crossed over into the mainstream. In Texas, advocates are even using the issue to target local candidates running for office. In an otherwise conservative state like Nevada, the impetus to legalize recreational marijuana might pick up ex- tra points for Sanders in a newly import- ant western bellwether. From both a business and advocacy perspective, the issue has now become mainstream at the ballot box throughout the country. There’s no doubt that 2016 is shaping up to be the breakthrough year the cannabis industry needs to gain true legitimacy.

60 | Marijuana Venture // February 2016 Empire A force of

62 | Marijuana Venture // February 2016 NATURE In an industry full of eclectic personalities, Black Dog Acres owner and founder Toni Reita is one of a kind

INTERVIEW BY GREG JAMES | PHOTOS BY GARY DELP

www.marijuanaventure.com | 63 64 | Marijuana Venture // February 2016 ne of the benefits of writing about marijuana flowers, and gets a real kick marijuana businesses is meeting and out of combining her love of nature and interviewing a wide variety of people. gardening with her long-time attraction From lawyers who are cultivating can- to the medicinal properties of cannabis. Onabis as a side project, to pure investors, to To say that Toni is a happy camper in this long-time growers who see it as vindication business would be an understatement. and the ability to practice what they love, She positively loves doing what she is the cultivation industry is overflowing with now legally allowed to do. fascinating people. Many have interesting My interview with Toni was both fun histories of traveling down a meandering and enlightening. path that ended up in the middle of a large patch of thriving, legally-grown cannabis. Toni Reita, the owner and founder of Black Dog Acres, would rank high on Marijuana Venture: Why did you decide to get into com- anyone’s list of “fascinating people,” if mercial marijuana cultivation? for no other reason than how much she’s done in her life. She’s truly taken a zig- zag course punctuated with many diverse Who could resist life experiences, professions and practices. Toni Reita: the temptation of Along with owning a Tier 2 commercial- being a pioneer and knowing that we’re ly-licensed marijuana farm, she’s also the honored with making history? Wow, that founder and owner of a Rottweiler rescue alone is staggering! I took it one step at a facility. She’s also a practicing Reiki mas- time, and vowed that as long as the doors ter, who is trained in naturopathy, feng shui kept opening I would continue through and herbology. And that’s just for starters! them, and if they slammed shut, I’d adjust In addition, Toni enjoys growing fine my direction.

www.marijuanaventure.com | 65 How long did it take for you to MV: get your license?

Within one hour of the opening bell TR: on Nov. 18, 2013, I had my hand on the phone. My goal was to get approved as quickly and cleanly as possible before ‘they’ changed their minds. I had many questions. Over the years I’ve started many businesses, including a pony/cart rental ser- vice when I was 8 years old. Other endeav- ors/professions included starting a travel agency, remodeling homes, log home con- struction, real estate broker, naturopathy and my Rottweiler rescue sanctuary. I was born with an entrepreneurial spir- it, and I hoped it would help with the pro- cess. Little did I realize that this business would be so different from any other I’ve been involved in. For example, when a simple word was changed on my 80-page DocuSign application from ‘untouched’ to ‘undisturbed,’ it required that the applica- tion be completely redone, and then took several weeks to be reviewed by my exam- iner. The lack of control was grueling, and the whole process seemed so inefficient. As much as I liked the people who worked for the state in the licensing process, they were not business people themselves, and what could have taken one hour dragged on for seven months.

Do you think being a woman in this MV: business has helped or hurt you? As an only child, my female gender TR: has been the only one with which I’m familiar. I grew up on a farm with horses and other large animals, so today I might facetiously claim to be trans-species! Seriously though, I was lucky enough to es- cape the self-imposed boundaries of which genders may or may not excel at specific things. To me, ‘traditional homemaker’ meant building log homes, not making cookies. A fel- low home builder once said to me, ‘Toni, just how many blonde female log home builders who drive Mercedes do you think there are?’ Being a woman often helped in the home construction industry because I had a woman’s sense of how best to orga- nize space for a female. And, as any builder knows, it’s usually the wife who makes the final decision in a home purchase. To be honest, until I looked, I was un- aware of how male-dominated the canna- bis industry was. Not that it matters. I’ve never given a moment’s thought to wheth-

66 | Marijuana Venture // February 2016 TraceWeed er a female or male might do better in the natural plant, and a gift from our creator. were in office. When that happens, we’ll all business. I just play the cards I’m dealt, My personal belief, which I’m convinced be allowed to enjoy it in a manner similar to treat everyone equally and firmly believe will eventually be proven, is that all our how alcohol is now consumed. in karma. disorders are born from cannabinoid defi- ciencies. All mammals have cannabinoid What tips do you have for out- Are you a regular user of marijua- receptors in all their organs. MV: door growers? MV: na, and has it helped you? The same players who took it from us 75 years ago and made it the ‘devil’s weed’ If they’ve grown before, they Why do people ask if we ‘use?’ Do are the same ones who made huge profits TR: probably have information they TR: I use chocolate or coconut water? from it being illegal. At some time in the can share with others. If not, don’t be shy Do I use food? Of course. Cannabis — near future, I predict cannabis will regain about reaching out and asking questions. in many forms — is part of my daily re- its rightful place in American culture, and Do your research. Different strains like quirement. It’s also a daily part of some enjoy the same respect as when presidents different environments. Personally, my of my animals’ lives. It’s a wonderful, George Washington and Thomas Jefferson plants are tough girls. This year’s crop

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Bulk loads shipped weekly throughout Washington, Oregon and Colorado 88 800-591-5925 MillerSoilsLLC.com [email protected] 70 | Marijuana Venture // February 2016 (2015) easily handled highs in the 100s during the summer, and mid-30s at night late in the fall. They’re pest-free, and grew up strong and healthy. I have my own personal blend of nutrients, soils and a couple of other tricks up my sleeve. Next season my energies will be going into perfecting outdoor light-deprivation techniques.

How has the local community MV: reacted to your business?

This is a small rural community TR: with on-again, off-again mora- toriums. I had zero problems with local officials because I avoided anything re- quiring their attention. That said, some- times when I mention I grow cannabis, I get a stare that translates to, ‘but you look so normal,’ and other times pillars of the community will admit their own personal fondness for the plant. My belief is that we shouldn’t hesitate to disclose our legal business interests. Plus, I’ve known the local sheriff for about 15 years, and he knows I’d never do anything illegal. Ever.

What strains did you grow, and MV: how much are you going to har- vest?

I started with about 100, but whit- TR: tled it down to around 60. Some of my more popular ones are Blue Dream, Green Crack, Vanilla Kush, Cantaloupe Kush, Raspberry and Las Vegas Purple. I’d love to find Acapulco Gold to go with my Maui Wowie to create a blast from the past! On total harvest, my guess is that it will come down to about 1,500 pounds, which I think is pretty darn good for a Tier 2 grow.

When asked for a parting comment or thought, Toni recited her favorite poem: God is perfect, man is not. Man made whiskey, God made pot! Amen.

www.marijuanaventure.com | 71 Harvest for Hire

Professional trimming crews can help producers and processors limit labor costs, one of the biggest operating expenses for a commercial facility ― ― ― By GARRETT RUDOLPH

ost people in the cannabis industry would MANPOWER In 2010, Susan Chicovsky was explor- agree: Trimming sucks. ing avenues to get into Colorado’s can- It’s sticky, tedious and time-consuming. nabis industry. A serial entrepreneur and It’s exhausting, both physically and men- self-proclaimed healer, she originally considered opening a dispensary. tally, and it’s a race against the clock as But dispensaries and grow facilities one of the last major tasks required be- were popping up everywhere, and Chi- fore sending finished product to the market. covsky elected not to follow the crowd. M Instead, she launched Green Mountain For growers, the trimming process can matures, more and more companies are Harvest to provide trimming and consult- be one of the single biggest profit-killers. looking at specialization as a way to cut ing services to rapidly expanding com- Commercial operations typically require costs and run a tighter ship. Outsourc- mercial growers. an awful lot of manpower or horsepower ing can allow growers to focus more of And business has been booming. to get the job done efficiently. their energy on growing their bottom The need for efficient trimming -ser But as the legal cannabis industry line. vices was recognized quickly by the

72 | Marijuana Venture // February 2016 A trimming scissor sits atop a pile of stems and stalks at The Happy Crowd in Cheney, Washington. Photo by Ken Pedevilla.

Colorado cannabis industry, and Green covsky says. “We have people around the While Chicovsky prefers dry trimming, Mountain Harvest has been expanding to country interested in becoming part of our she says her customers are split 50-50 be- Washington, Oregon, California and Ne- organization.” tween wet and dry. vada. It could be national or even inter- Grow operations hire Green Mountain Trimmers are required to finish one national within a couple years, Chicovsky to provide professionally-trained trim- pound (453 grams) of dried cannabis per predicts. mers, whether they need a couple extra day or 3,000 grams of wet. Many trim- Green Mountain Harvest generated hands at a particular time during harvest mers are capable of finishing 5,000 to about $250,000 in revenue in its first year or an entire crew for a perpetual cycle. 7,000 grams of wet cannabis per day, of operation, and the company has dou- Green Mountain tailors its services Chicovsky says. The estimated cost to bled that almost each year following. to the needs of its clients. Trimmers are the grower is between $150 and $225 per What started as Chicovsky and four available seven days a week, and they pound, she says. trimmers has ballooned into a 96-person all wear gloves and clean clothes, bring Green Mountain employees can also staff. an OSHA-cleared tool box and have the provide any other support services the “The only downside for me as a healer paperwork to back up the company’s es- growers might need, ranging from clean- is that we’ve had to become a bit more tablished best practices. Employees are up to joint rolling. corporate than I ever anticipated,” Chi- trained for both wet and dry trimming. It’s kind of a one-stop shop for any-

www.marijuanaventure.com | 73 The aftermath of a completed batch at Tahoma Growers. THE FINAL STEP: Photo by Kristen Angelo . Post-harvest clean-up

By THOMAS VALENTINE

o you’ve harvested your crop and you’re enjoying the fruits of Syour labor. While your plants are drying, you’re thinking about mak- ing concentrates or edibles. One thing you can’t overlook is the mess in your growing areas. Keeping your facility clean during the cultivation process will negate the need to use harsh chemicals to combat molds, spores, fungi and various bacteria. A clean environ- ment can help deter unwanted critters such as aphids and spider mites, as well. body in the marijuana world who needs capable of trimming more than 100 The thing you should do is pick up workers. pounds of cannabis per day. any loose plant matter or soil that’s “We really run a professional compa- The Spokane, Washington-based en- been left behind. The next step de- ny that’s reliable,” Chicovsky says. trepreneur was the first person in the pends on your growing set-up. The company has grown so fast be- state to get a marijuana business license. Recycled paper mesh pots should cause all growers need to trim, and it’s His company, Kouchlock Productions, not be reused. Hydroponic equip- such a time-consuming part of the oper- received a Tier 3 producer/processor li- ment can be reused, but it’s impera- ation, Chicovsky says. cense in March of 2014. tive that everything is properly steril- Most growers start with their own ized. No matter how gentle you are, in-house trim crews, but they get tired there will always be some organic of dealing with personnel issues and FROM THE material left behind in the growing the additional costs of having more medium and containers. If using a on-staff employees. Green Mountain growing medium like pea gravel, it’s eliminates some of the hassles by han- DAY YOU important to sterilize it with a mixture dling all the hiring, firing, payroll, of 20% bleach and 80% water. Fill accounting and supervision. The com- CUT A PLANT the reservoir with the bleach/water pany only hires trimmers with at least mixture and leave the solution in the growing container overnight. six months of experience working in DOWN, IT a commercial facility, which ensures The next day, drain the reservoir the clients aren’t paying for a learning STARTS TO and flush it with pure water a couple curve. of times. Chicovsky has had to learn how to DEGRADE Moving on to the rest of your facility, “ bid a job, to make sure it’s both cost-ef- make sure every tool and surface fective for the client and profitable for The idea for Everything Harvest are cleaned with the bleach solution. her business. evolved directly from the processing Bleach has a strong odor that many To that end, she also has a simple rule needs of Kouchlock. people find unpleasant, so following for her trimmers: You talk while you “I had a whole bunch of pot to trim,” up with another cleaner might be necessary to remove the smell. trim, or you don’t talk at all. Green says, “and I figured everybody else did too.” Areas that lack proper air circulation HORSEPOWER Everything Harvest puts a premium will require extra attention. The stag- Sean Green started a similar business on speed and efficiency. nant air can allow dust accumulation with a different approach. “From the day you cut a plant down, or pathogens to settle into growing areas. Wash these areas thorough- In 2015, he launched Everything it starts to degrade,” Green says. ly with the bleach solution. Most Harvest, a company that provides com- Using multiple trimming machines and people will want to use a HEPA filter mercial trimming services to large- well-trained operators allow growers to or another method of purification scale growers on the West Coast. When have salable product much faster. Green to remove any airborne pollutants Green shows up at a grow site, he brings says he’s trimmed up to 175 pounds in before they become a problem. a crew and a small army of machines one day using three machines.

74 | Marijuana Venture // February 2016 Groco By speeding up the trimming process, MAN VERSUS MACHINE breaks,” Green says. indoor growers require less time to transi- There’s a significant debate within the He remembers the days of locking him- tion from harvest to market. For outdoor cannabis industry about the merits of self in a house for three weeks at a time growers, trimming services might be even hand-trimming versus machine-trimming. and going to town on a freshly-harvested more valuable by giving them the ability As one would imagine, Susan Chi- crop with a pair of scissors. to put product on shelves before the sea- covsky and Sean Green have opposing “It was the most excruciating thing I’ve sonal price drop takes effect. views on the subject. ever done,” he says. “Somehow through Green’s crew is full independent; they Green favors the efficiency of ma- all that, I became a professional trimmer, bring a generator and all the necessary as it were, and came to enjoy the process equipment to work from the middle of a of efficiency.” field, if necessary. MY MACHINES Meanwhile, Chicovsky believes the Everything Harvest serves clients in quality of the finished product is much Washington, Oregon and California, and DON’T TAKE higher when hand-trimmed. the clients receive 100% of the product, She says there are times when a ma- which avoids problems with traceability chine is valuable and makes sense from a requirements. LUNCH BREAKS financial perspective. Just like other trimming services, Ev- chine-trimming. It’s about the sheer num- But the human touch allows trimmers to erything Harvest helps reduce the need bers: In order to trim 100 pounds of marijua- cater more to the wants of growers. Some for growers to keep a large full-time staff. na in one day, you’ll either need 100 people growers want each strain to be trimmed Green says he brings $40,000 worth of or you’ll need a couple machines. Green differently, requiring a level of precision equipment to job sites, so growers can says any initial hesitation he’s encountered machines simply can’t match, she says. also avoid the capital investment of mul-“from growers has evaporated once they re- Green says there’s more of a learning tiple trimming machines and the labor alize how much time can be saved. curve than people realize when it comes hours required to learn how to operate the Machines need to be cleaned regularly, to operating trimming machines. Quality machines. but they don’t lose energy throughout the and efficiency are directly related to how Green is also planning on setting up a day. They don’t require a minimum wage, well-maintained the machine is and how Harvest Everything retail store that will unemployment insurance or workers’ experienced the operator is. sell and lease equipment, in addition to compensation. “If you used a machine once, you didn’t providing trimming services. Plus, “my machines don’t take lunch know how to use it,” he says. “It takes a

Honu

76 | Marijuana Venture // February 2016 Twister Trimmer few days of running one of these machines to know the sounds, the tweaks, the tunes, when to clean it, why to clean it.” The quality and consistency also varies from machine to machine. Some are cer- tainly better than others, Green says. It remains to be seen what role con- sumer preference will play in the man versus machine argument when it comes to trimming. Most say they want the per- fectly manicured buds associated with hand-trimming, and many wholesale buy- ers say well-trimmed product is essential when they’re looking at bringing a new vendor into the fold (see the December is- sue of Marijuana Venture for more details). But can anybody actually tell the dif- ference between the two methods? And if consumers can save a few bucks per gram on machine-trimmed product, will that sway their selection?

TRAINING Getting a job in the cannabis industry can be challenging. A crew member at The Happy It’s the classic conundrum that makes Crowd in Eastern Washington nearly every job hunter cringe: In order to works on trimming a flower. get a job, you need experience; in order to Photo by Ken Pedevilla. get experience, you need a job.

Tamisum Extractors

78 | Marijuana Venture // February 2016 Daily Extractions The trimming crew from Green Mountain Harvest finishes a job for a grow operation in Colorado. The company not only trains each trimmer, but also supplies different sizes of crews for the processing needs of each client. Photo courtesy Green Mountain Harvest.

Below: Harvested branches get a final trim from a Green Mountain Harvest team. Photo ence. That prompted Green Mountain to ly-taxed legal realm. courtesy Green Mountain Harvest. start a trimmer training school. Dan S. Kennedy, author of “No B.S. The training program is designed to Ruthless Management of People & Prof- teach people the finer points of working its,” wrote that a $12 an hour employee in a commercial cultivation facility, in- truly costs a company almost $16 an hour cluding techniques for both wet and dry when taxes, Social Security, unemploy- trimming and best practices for working ment insurance and workers’ compensa- in a grow environment. tion are factored into the equation. In addition, Green Mountain Harvest of- In an excerpt published by Entrepre- fers on-site training courses, where the com- neur, Kennedy tallied all the ancillary pany brings its expertise directly to growers costs of employees: hiring and firing, throughout the country. Upon completion, training, internal theft, mistakes that cost trainees receive a certificate to prove they’ve the company money, health care cover- been taught the necessary skills. age, retirement packages, bonuses and necessary equipment. MONEY MATTERS In his hypothetical circumstance, he Employee costs can easily be one of the conceived that $12 an hour workers could most overlooked expenses for any com- cost their employers more than $36 an pany. hour. That’s where outsourcing a task like It’s not just the repetitive and time-con- trimming could be advantageous for a suming act of clipping away excess fan commercial operation. leaves with scissors that makes trimming Chicovsky says the cost to hire Green so expensive for commercial grow op- Mountain Harvest is slightly higher than erations. Marijuana the wages an opera- Cannabis retail stores and grow oper- trimmers — just like tion would pay for ations often get hundreds of applicants employees of tra- THE TIME its own employees. when they have openings for budtenders ditional businesses “However, the or trimmers, which allows them to be — come with a mul- SAVINGS ARE time savings are tre- highly selective. Even Green Mountain titude of additional mendous,” she says, Harvest requires six months of commer- costs for companies. when taking into ac- cial trimming experience to be considered These extra ex- TREMENDOUS count additional ex- for its full-time team. penses can be particularly shocking for penses, opportunity costs and the energy Chicovsky says about two years ago those transitioning from the black market dedicated to human resources. she started seeing an influx of people who — where employees were often paid in “Plus, most people don’t want the job,” wanted to be trimmers but had no experi- trade — to the highly-regulated, high- Green adds regarding trimming. 80 | Marijuana Venture // February 2016 “ Apeks TECHNOLOGY

82 | Marijuana Venture // February 2016 TECHNOLOGY The of Technology

Suspended Brands spared no expense in developing one of the most impressive cannabis greenhouses in the world ― ― ― Story by GREG JAMES Photos by KENTON BRADLEY

n typical agricultural production, the most efficient and cost-effec- tive way to grow a crop commer- cially has been refined over many decades. Lettuce, cherries, corn, tomatoes and most other agricul- tural products are grown in climates Ithat address their specific needs, and in a manner that has been proven ef- fective. Nothing is left to chance, and the relentless drive for profits in a cap- italist system that rewards quick stud- ies almost guarantees careless farmers will last about as long as the proverbial snowflake in hell.

www.marijuanaventure.com | 83 Just the FACTS – NAME: Suspended Brands

LOCATION: Belfair, Washington

FACILITY: Hybrid greenhouse/ indoor

EMPLOYEES: When Suspended Brands’ 35 full-time light deprivation system is closed, the interior of the NUMBER OF PLANTS: greenhouse is pitch black. 12-15,000 in perpetual grow, 5.5 cycles/year One of the fascinating things about environments. Others choose a far dif- the new, legal marijuana trade is that ferent path, and utilize Mother Nature, REVENUE: proven techniques and styles that en- natural sunlight and native soils. $150,000 PER MONTH sure success or failure in most agricul- Is there a right or wrong way to grow tural crops are all but absent. In other commercial marijuana? Not yet. PROJECTIONS: words, with legal commercial marijua- Right now, everybody is a pioneer in Predicted to increase na production still in its infancy, the a new business. Like all pioneers, they revenue to perfect production model doesn’t yet are blazing a trail for others to follow or $450,000/month exist. Or if it does, it hasn’t had enough abandon, depending on where the trail in 2016 time to become accepted and widely leads. practiced. Currently, growers are experiment- THE CUTTING EDGE RETAIL PARTNERS: ing with numerous different styles Nenad and Fadi Yashruti are pio- 40-plus and techniques. Some choose to create neers. Like so many in the cannabis high-tech indoor facilities that rely on industry, the two brothers are experi- MOST POPULAR STRAINS: modern, manmade equipment and elec- menting, refining their techniques and Kraken and Friesland tric lights to create perfectly balanced gathering data. Their company, Sus-

84 | Marijuana Venture // February 2016 Dyna-Gro pended Brands, utilizes a state-of-the-art greenhouse in Belfair, Washington, locat- ed on the west side of the Cascade Moun- tains. It gets less sun and more rain than Eastern Washington, where the majority of the state’s traditional agriculture takes place. Why, then, did they decide to erect a greenhouse where the climate was less sunny? “Early on, we went back and forth on location quite a bit,” said Nenad, the younger of the two brothers. “We knew that traditionally greenhouses are seen as more efficient where there is an abun- dance of sun, but we considered things like the political environment of different communities, as well as the type of green- house we wanted to build. We consulted with a lot of people, and ultimately decid- ed on a great plot of land in Mason Coun- ty that already had a small greenhouse Clockwise, starting at the top: Will Hashagen located on it. Mason County is marijuana manicures plants at the Suspended Brands friendly, and our design was going to be a facility; Raven Paulino displays a young little less sun-dependent than a traditional cannabis plant; Suspended Brands utilizes set up.” a fully-automated greenhouse; one of Suspended Brands’ beautiful buds. At 17,000 square feet, it’s a large facili- ty, but what exactly made it unique? “What we basically did was create a re- ally advanced hybrid facility,” Nenad said. “You could say it’s both a greenhouse and an indoor facility in one. To start with, we have a computer that controls everything. It’s tied into a series of weather stations that monitor temperature, humidity, wind and sunlight. “Depending on how it’s set, the system will make rapid adjustments in any number of ways to ensure the plants are always growing under optimum con- ditions.” Just how advanced and well-controlled the environment can be inside the Sus- pended Brands facility is nothing short of amazing. For example, the entire 17,000-square-foot layout can be com- pletely purged of all air in 30-45 seconds, and the temperature can be raised from 30 degrees to 85 in just 7.5 minutes! The facility also features a full light deprivation system, as well as 250 dou- ble-ended, 1,000-watt high-pressure sodi- um grow lights that are tied into the com- puter and its light sensors. “When it gets cloudy, the lights come on automatically to fill in extra PAR ra- diation as needed,” Nenad said. “This way we get the perfect balance of natural and artificial light hitting the plants at all times.” The computerized system also controls

86 | Marijuana Venture // February 2016 UrbanGro Kraken is one of Suspended Brands’ top strains

88 | Marijuana Venture // February 2016 Clockwise, starting at the top: Raven Paulino tends to plants in the garden; the greenhouse is capable of raising the temperature 55 degrees in less than eight minute; Roy Trevino does his Superman impression to reveal the company clothing.

the light deprivation shades, and is able “We started out with 78 strains, and prietary new refined product called Bare, to turn the whole space dark in a matter quickly discovered that some just seem to which is expected to be released soon. of minutes. In practical terms, this adds be more at home in a greenhouse environ- “It’s a bit early for me to talk openly about up to a modern grow facility with com- ment than others,” Jesse said. “For what- it, but let’s just say we believe it will be puter systems and engineering that allow ever reason, the purest and it to operate as efficiently as a traditional certain variet- cleanest form of greenhouse, but with the environmental ies of cannabis CERTAIN VARIETIES refined oil on the controls of an indoor facility. seem to exhibit market,” Nenad When it comes to grow mediums, Sus- more vigor in OF CANNABIS SEEM said. “So far, pended Brands’ preferred method is a our hybrid fa- our tests have soil-less hydroponic system. The nutri- cility, and that TO EXHIBIT MORE shown us that ents employed are all organic and tested led us to whit- Bare is going for purity. The Suspended Brands flowers tle the original to be a big hit, consistently check out high in THC, and 78 down to 30 VIGOR IN OUR and something extremely low in contaminants like mold, core strains that unique to Sus- bacteria or pesticides. now make up HYBRID FACILITY pended Brands.” the mainstay of our stock.” In an industry populated by pioneers, STRAINS While many producers“ have migrated to- new and exciting grow methods are be- One thing the Yashruti brothers and ward multi-product offerings that include ing developed and rolled out at a dizzying operations manager Jesse Zaragoza came oil, flower, pre-rolled joints and pressed pace. The hybrid greenhouse/indoor facility to realize was that marijuana varieties — hash, the Suspended Brands offerings are developed and built by Suspended Brands just as with other plants — can be partic- currently limited to top-shelf flower. How- represents an interesting synthesis of exist- ular to certain environments. ever, the company is working on a pro- ing technologies and foresight.

www.marijuanaventure.com | 89 WILL THE

BE TAMED?

90 | Marijuana Venture // February 2016 What type of impact will the Medical Marijuana Regulation and Safety Act have on California’s cannabis industry? ― ― ― By KATIE PODEIN

s the first state in the nation to legalize medical mari- juana with Proposition 215 in 1996, California helped pioneer the “green frontier” movement. Prop 215, also known as the Compassionate Use Act, legalized the possession and cultivation of marijuana by patients andA their designated primary caregivers for medical use upon approval by a California-licensed physician.

Even though the state Legislature attempted to clarify the scope of Prop 215 with the passage cal marijuana industry to rapidly develop new of Senate Bill 420 in 2003, the medical mar businesses and products. Current estimates ijuana industry was still left with little to no- indicate as many as 2,000 dispensaries are guidance in terms of a regulatory framework operating in California. Although illegal, it is on the state level. not uncommon for a California-licensed doc- tor to hand out a medical marijuana recom- THE END OF LAISSEZ-FAIRE mendation to a one-time patient after a curso- Under Prop 215 and Senate Bill 420, regula- ry 15-minute examination. Delivery services tion was left up to individual cities and coun- operating from unknown locations have risen ties, which meant the laws varied greatly in rapidly in popularity, especially in cities with each jurisdiction. Nineteen years later, some expensive real estate like Los Angeles and localities have even left their municipal codes San Diego. noticeably void of any regulation, thus allow- However, with the recent passage of the ing the medical marijuana community to de- Medical Marijuana Regulation and Safety Act velop self-imposed standards. (MMRSA), these questionable activities will As a result, patient demand led the medi- soon be controlled or eliminated as the state attempts to tame the “Wild West of Weed.”

www.marijuanaventure.com | 91 NEW SHERIFF IN TOWN and one each for testing, distribution and CULTIVATION LICENSES The MMRSA was signed into law by transportation. Governor Jerry Brown on Oct. 9, 2015, with The BMMR will only grant a state license California’s new regulatory structure for an effective date of Jan. 1, 2016. It is com- in up to two separate categories, and will the medical marijuana industry will include prised of three bills that provide regulations permit only certain combinations of licens- 17 different licenses. Ten of the licenses, listed below, are for various forms of culti- for different areas of the medical marijuana es. These regulations limit vertical integra- vation. The other licenses include manu- industry, while simultaneously establishing tion, with one very specific exception. If a facturing, testing, dispensaries, distribution a comprehensive system for control. licensee’s city or county has an ordinance and transportation. The Bureau of Medical Marijuana Regu- that permits vertical integration, and the • Type 1: “Specialty outdoor” cultiva- lation (BMMR) is the newly created entity licensee’s business was vertically integrat- tion using no artificial lighting and a total that will develop and implement all rules ed before July 1, 2015, and the licensee has canopy of 5,000 square feet or less at necessary to enforce the new regulations, been continuously operating and registered one location, or up to 50 mature plants on including the oversight of state licensing for with the Board of Equalization, then that noncontiguous plots. and regulation of dispensaries, distributors person may keep the business vertically in- • Type 1A: “Specialty indoor” culti- and transporters. The BMMR — cleverly tegrated until Jan. 1, 2026. All vertical inte- vation using exclusively artificial light- nicknamed “Bummer” by the cannabis in- gration will be repealed thereafter. ing and a total canopy of up to 5,000 square feet on one premises. dustry — is a branch of the Department of • Type 1B: “Specialty mixed-light” Consumer Affairs. The state will also estab- PREPARING FOR cultivation using a combination of natural lish a comprehensive database of licensees PRIORITY LICENSING and supplemental artificial lighting at a and to report the movement of commer- Priority licensing was permitted to be- maximum threshold to be determined by cial cannabis and cannabis products (also gin as early as Jan. 1, 2016. A commercial the licensing authority, with a total canopy of known as a “track and trace” program). cannabis business that can demonstrate to 5,000 square feet or less on one premises. Additionally, the Department of Food and the state’s satisfaction that it was “in oper- • Type 2: Small outdoor cultivation Agriculture and the Department of Pub- ation and in good standing” with its local using no artificial lighting with a total lic Health have the jurisdiction by Jan. canopy of 5,001 to 10,000 square feet on power to promulgate 1, 2016 will receive one premises. and pass any rules EVERY PERSON priority licensing • Type 2A: Small indoor cultivation necessary to imple- by the state. A facil- using exclusively artificial lighting with a total canopy of 5,001 to 10,000 square ment the MMRSA ENGAGED IN ity or entity that is feet on one premises. as it applies to cul- operating in com- • Type 2B: “Small mixed-light” cultivation tivators and testing COMMERCIAL pliance with local using a combination of natural and sup- facilities. zoning ordinances plemental artificial lighting at a maximum Keep in mind CANNABIS and other state and threshold to be determined by the licensing that cities and coun- local requirements authority, with a total canopy of 5,001 to ties are allowed ACTIVITY IS NOW on or before Jan. 1, 10,000 square feet on one premises. to impose stricter 2018, may continue • Type 3: Outdoor cultivation using standards for com- its operations until no artificial lighting with a total canopy mercial cannabis“ REQUIRED TO its application for a of 10,001 square feet to one acre on businesses and are license is approved one premises. The Department of Food OBTAIN A STATE and Agriculture shall limit the number of even allowed to ban or denied. (To have licenses allowed of this type. all commercial can- a shot at priority li- • Type 3A: Indoor cultivation using nabis activity with- LICENSE censing, business exclusively artificial lighting with a total in their borders. Cities and counties are owners should complete a criminal back- canopy of 10,001 to 22,000 square feet on also granted the power to tax and assess ground check on all employees, make sure one premises. The Department of Food fees against these businesses. their businesses are compliant with all local and Agriculture shall limit the number of laws, and have their taxes squared away licenses allowed of this type. LASSOING THE with the Board of Equalization, including • Type 3B: “Mixed-light” cultivation using MARIJUANA INDUSTRY all local, state and federal taxes.) a combination of natural and supplemental The MMRSA creates a new, strict li- artificial lighting at a maximum threshold to censing structure for the medical mar- NEW LAWS OF THE LAND be determined by the licensing authority, with a total canopy of 10,001 to 22,000 ijuana industry. Every person engaged Although all of the new rules and reg- square feet on one premises. The Depart- in commercial cannabis activity is now ulations are too lengthy to list, the high- ment of Food and Agriculture shall limit the required to obtain a state license, as well lights are as follows: number of licenses allowed of this type. as any local licenses or permits required • Track and Trace: The Department of • Type 4: The “nursery” license is for by each city or county. Under the new Food and Agriculture will implement a cultivation of medical cannabis solely as legislation, there are 17 different types unique identification program for all mar- a nursery. Type 4 licensees may trans- of medical marijuana operational licens- ijuana plants at a cultivation site, requir- port live plants. es — 10 licenses for cultivation, two ing a tamper-proof tag be attached at the for manufacturing, two for dispensaries, base of each plant. This allows the state Source: California Legislature website.

92 | Marijuana Venture // February 2016 NanoLux to track the cannabis product from the keep this date in mind!) of Food and Agriculture and the Depart- cultivation site to the transaction with the • Home grow: The new cultivation reg- ment of Pesticide Regulation will estab- consumer. Cultivators who fail to abide ulations do not apply to qualifying patients lish pesticide standards, and work with by the traceability program face civil and engaged in personal cultivation if the grow other state agencies to regulate water use. criminal penalties and fines for each vi- area does not exceed 100 square feet and if The Department of Food and Agriculture olation. will make organic certification available • Testing: All cannabis shall be tested by Jan. 1, 2020. prior to delivery to dispensaries or oth- ALL PRODUCTS • Manufacturing: All manufacturers of er businesses. The Department of Public cannabis products are to be licensed by the Health will specify how such testing must SHALL BE Department of Public Health. The number be conducted. Testing should be in accor- of licenses will be limited for manufactur- dance with methods established by the In- LABELED IN ers that use volatile solvents to produce ternational Organization for Standardiza- concentrates. All products shall be labeled tion, in addition to any regulations enacted TAMPER-EVIDENT in tamper-evident packages with specific by the Department of Public Health. The warning statements and information. cost of testing shall be paid by cultivators. • Distribution: All cultivators and Testing licensees may not hold any other PACKAGES manufacturers are required to send their type of license. the qualifying patient does not sell, distrib- products to a distributor for inspection • Cultivation: Growers must abide by a“ ute, donate or otherwise provide marijuana before they are passed to the next stage of series of size limitations, the maximum of to any other person or entity. manufacturing or for retail. The distribu- which are 22,000 square feet indoors or Designated primary caregivers are also tor transports a sample of the product to a one acre (43,560 square feet) outdoors. The exempt from the new regulations provided licensed laboratory for batch testing and number of cultivators who will receive a they meet three criteria: the cultivation area certification. The sample then returns to license to grow the maximum amount will does not exceed 500 square feet; marijuana the distributor for final inspection and ex- be limited by the Department of Food and is grown exclusively for personal medical ecution of the contract between the differ- Agriculture. Cities and counties must have use for no more than five specified, qualified ent entities along the supply chain, from a cultivation ordinance in place by March patients; and the grower does not receive re- cultivator to manufacturer to dispensary. 1, 2016 or state law will be imposed as the muneration for these activities. The distributor has the duty to charge a sole authority for regulation. (Cultivators, • Growing standards: The Department fee that covers the cost of testing and any

Gualala Robotics - LightRail

94 | Marijuana Venture // February 2016 NanoLux collectives must obtain a dispensary or PREPARE NOW THE MMRSA cultivation license except for individual What do the new laws mean for medi- patient and caregiver gardens serving no cal marijuana in California? By the looks MIGHT BE A more than five patients. of it, the implementation of the MMRSA • For-profit entities: The MMRSA al- might be a bummer for the cannabis busi- BUMMER FOR lows marijuana businesses to be organized ness. For this reason it is imperative that as for-profit entities, such as an LLC, LLP businesses immediately take steps to come THE CANNABIS or a corporation. This is a major change into compliance to ensure uninterrupted from previous legislation that required busi- operation during this transitional time for ness entities to operate as nonprofits. This is medical marijuana in California. In other BUSINESS good news for existing marijuana business- words, you should check to see if you are applicable taxes. Distributors cannot hold es that have had to be creative to comply compliant with all local laws and zoning, “any other license. with the strict rules to maintain non-profit select your new for-profit entity type, im- • Delivery: Delivery services may con- status as a 501(c)3 or 501(c)4. plement a meticulous record-keeping sys- tinue under the new laws. However, deliv- • Physicians: The MMRSA clarifies the tem and register with the Board of Equal- ery services are only allowed by licensed duties of physicians who recommend med- ization — just to name a few tasks to get dispensaries in cities and counties where ical marijuana. The board shall have the your business ready for a more tightly reg- delivery is not prohibited by local ordi- power to investigate any physician who ulated business landscape. nance. All deliveries must be documented. over-recommends medical marijuana to Products can only be delivered to quali- patients, including “repeated acts of clear- California Cannabis Law Group is a bou- fied patients. Municipalities cannot ban ly excessive recommending of cannabis tique law firm comprised of attorneys who delivered products from being transported for medical purposes, or repeated acts of have represented government entities in all through their territories. recommending without a good faith prior matters related to cannabis enforcement in • Collectives and cooperatives: All pa- exam.” The MMRSA also reiterates that it California for over 10 years. Katie Podein is tient collectives and cooperatives, as pre- is unlawful for physicians who recommend an attorney with the firm who assists clients viously afforded legal protection in 2003, medical marijuana to accept, solicit or offer in building successful businesses in Cali- will sunset one year after the BMMR posts remuneration to or from a licensed facility fornia’s rapidly-evolving cannabis industry. a notice on its website that the issuance of in which they or a family member have a fi- The California Cannabis Law Group can be licenses has commenced. Thereafter, all nancial interest. contacted at [email protected].

Heliospectra

96 | Marijuana Venture // February 2016 For Sale: T-1 LEGAL PAGES

mark owners may utilize the ® symbol, as opposed to the TM symbol, signifying an Legally creating brand investment and commitment to brand de- velopment and protection. awareness in an illegal market Registration further provides national protection, and precludes competitors from Federal law complicates trademark protections asserting “good faith” adoption of your trademark in defense to alleged infringe- By Lauren Rudick ment. Registration also constitutes presump- ne of the hottest od, breeding, sustainable practices, use of tive evidence of validity and exclusiveness Oancillary busi- “organic” growth supplements, celebrity — which may become “incontestable” after nesses in the cannabis affiliation, etc.), the possibilities to set your five years — providing trademark owners industry is branding. brand apart are limitless. with an effective means of avoiding expen- Cannabis businesses Next, secure state registration of your sive, protracted litigation. that are enjoying early trademark. While a state-registered trade- Cannabis businesses do not have un- market success in their mark may not be enforceable nationally, the fettered access to the USPTO. Until re- home states are seeking efforts you employ to protect your brand on cently, applicants touching the cannabis multi-state and national expansion opportu- a state level could resolve intra-state compe- plant have been routinely rejected (even nities. New businesses that specialize in ele- tition disputes, and eventually serve as prec- Cannabis Basics’ registration only covers vating brand awareness have found a profit- edent for national protection. CBD products). able niche supporting these enterprises. Always utilize a well-written canna- Examiners at the USPTO are prohibited In September 2015, the United States bis-specific license agreement. Traditional from approving trademarks for registrations Patent and Trademark Office (USPTO) license agreements provide royalty pay- that are deemed immoral or scandalous, or issued the first federal trademark regis- ments to the trademark owner. But royalty not “used in commerce” across state lines. tration to a company that sells cannabis payments constitute profit sharing, and those Given recent state legalization efforts, products, Cannabis Basics. entities collecting cannabis profits must re- advances in medicine and legalization ini- Brand recognition presents a unique set port to the same state licensing agencies re- tiatives in Canada and Mexico, it is increas- of business challenges for cannabis profes- sponsible for assuring compliance with res- ingly absurd to malign cannabis products sionals. Brand strength typically derives idency requirements. This is not an issue in as “immoral” or “scandalous.” But the re- from “use” of a trademark. But with canna- states like New York and Maryland that do quirement that a trademark be “used in com- bis, the only state-legal industry operating not have residency requirements. But to be merce” is fatal to any application involving in violation of federal law, “use” remains safe, consider charging a “consulting fee” in a THC-based product. illegal and products containing THC cannot lieu of royalty payments, to assure products Applications for registration typically qualify for trademark registration. Mistakes developed under your brand are of a consis- require owner declarations about use of a in brand development could subject busi- tent quality. A uniform license agreement product or service in interstate commerce. nesses (and their attorneys) to criminal and will also protect against policing compli- Such “use declarations” must be sworn regulatory sanctions. Given the industry’s cations that would inevitably arise under a under penalties of perjury. It is inadvisable novelty, we cannot predict the resolution of bifurcated licensing scheme. to declare that you are using a THC prod- disputes between confusingly similar can- If available, seek federal registration for uct in commerce; such a declaration could nabis brands. The tools upon which typical those branded products that do not contain easily be used against you in a federal pro- businesses rely to prevent customer confu- THC, including CBD products, clothing, ceeding. It is also inadvisable to lie about sion are simply unavailable in the cannabis non-infused treats, vaporizers and other ac- use on a sworn declaration, as such would industry. Because the federal government cessories. Using carefully-written company be illegal, subjecting you and your attor- still regards cannabis as a Schedule I drug, organizational documents, such as operat- ney to criminal charges and disciplinary alternate methods of trademark protection ing agreements and bylaws, insulate those proceedings. Accordingly, brands of prod- should be pursued. aspects of your company involving the cul- ucts containing THC will need to wait until First, choose your brand name wisely. tivation, distribution and retail of products cannabis is delisted as a Schedule I drug Steer away from terms that are generic to containing THC from those that do not. The before seeking trademark registration. the industry, including strains and slang reason to separate branded products with terms (such as indica, ganja or Mary Jane) THC from those that do not is that sale of Lauren Rudick represents investors and and terms that are merely descriptive of cannabis remains illegal under federal law; startup organizations in all aspects of busi- your product (like organic herb), and se- therefore, obtaining trademark registration ness and intellectual property law, specializ- lect a brand name that is distinctive. The for products that are legal under federal law ing in cannabis, media and technology. Her more distinctive your trademark, the more serves multiple purposes. law firm, Hiller, PC, is a white-shoe bou- protectable it is. Given the many variables The mere existence of the federal reg- tique firm with a track record for success, that influence the sale of cannabis prod- istry discourages creation of confusingly handling sophisticated legal matters includ- ucts (growing technique, extraction meth- similar trademarks. Once registered, trade- ing business and corporate law.

98 | Marijuana Venture // February 2016 Clarity Farms Shimadzu Scalable Solutions for Cannabis Laboratory Testing Whether you are a cannabis expert or a novice, there’s never been a better time to get into cannabis laboratory testing. We can even assist with laboratory setup and fi nancing! From seed to sale, Shimadzu can provide you with reliable laboratory instruments. We deliver total cannabis lab testing solutions for: Potency Testing Terpene Profi ling Pesticide Screening Residual Solvents Heavy Metals Moisture Content Grow Your Lab with the Cannabis Testing Instrumentation Experts Learn more at www.GrowYourLab.com

Shimadzu Scientifi c Instruments, 7102 Riverwood Drive, Columbia, MD 21046; Phone: 800-477-1227

GrowLights.net P.O.V. is a monthly section in Marijuana Venture showing images of operational cannabis businesses throughout the U.S. and Canada. P.O.V. To submit photos for consideration in future issues email: [email protected].

An Orange Kush flower caked in crystals. Photo courtesy Green Apple Farms. A fully-loaded wheelbarrow full of harvested cannabis. Photo courtesy Uncle Buds.

Marijuana Venture publisher Greg James shows a recent issue of Marijuana Venture to actor Tom Skerritt (left), who stopped by the MV offices recently. Perhaps best known for his role as Viper in Top Gun, Skerritt also ap- peared alongside Cheech and Chong in the stoner classic Up In Smoke. Photo by Garrett Rudolph.

www.marijuanaventure.com | 101 P.O.V.

The grounds at Lazy Bee Cannabis in Washington’s Methow Valley become a winter wonderland. Photo by Matthew Frigone.

Zion Botanicals gets completely snowed in for the winter. Photo by Ryan Schmitten.

102 | Marijuana Venture // February 2016 A before and after look at Lazy Bee Gardens — summer brings perfect weather for cannabis, while winter blankets the property with several feet of fluffy white snow. Photo by Matthew Frigone.

www.marijuanaventure.com | 103 P.O.V.

Antonio Sandoval, of GreenLight Gardens and Jollybee Extracts, stands proudly next to a tree- sized cannabis plant in Southern Oregon. Photo by Antonio Melendez.

Cannabis and Morning Glory make for a beautiful photo. Photo by Randy Carey.

104 | Marijuana Venture // February 2016 Precision Extraction CannaCon

FRANKENWEED

Can cannabis plants be brought back to life for a second or third harvest? ― ― ― By GARRETT RUDOLPH

uthor J.B. Haze, a long-time cannabis grower, believes regeneration should be a propagation tool used in con- junction with cloning and seeds. Although the system might not be feasible for commercial growers, it’s a compelling concept. HazeA has concentrated on techniques to maximize indoor produc- tion, with space, time and money being some of his primary con- cerns. What he’s developed is a system that could be described as half Mary Shelley’s “Frankenstein” and half basic botany. He calls it the Marijuana Regeneration System (MRS), and it’s the basis of his new book, “Cannabis Regeneration: A Multiple Harvest Method for Greater Yields,” published by Green Candy Press. For several reasons — some legal and some private — Haze doesn’t like to talk about himself. “It’s the work that matters,” he says. “The author is along for the The first regenerated shoot sprouts ride, recording the details for posterity. Then he should get out like magic. Photos by J.B. Haze. of the way.”

108 | Marijuana Venture // February 2016 Marijuana Venture: Without giving away all the secrets in your book, can you explain the MRS — what is it, how does it work and what are the benefits?

The most important thing J.B. Haze: to understand is that can- nabis regeneration is not weird science, or any type of mumbo-jumbo or marketing hype. I’ve taken existing knowledge — the idea that you can regenerate a plant with a trick of the light — and applied it system- atically. In the process, I’ve attempted to re- move the guesswork, and to then apply good gardening technique to maximize results. If you look at virtually any grow book, you’ll see regeneration briefly mentioned. … In every grow book I could find over the years, regeneration (or re-greening) was pre- sented as a last-ditch effort, something hit or miss. Never was it presented as a systematic approach to growing on a daily basis. It seemed to me that such an amazing occurrence — a plant coaxed to grow and produce bud all over again — deserved a more thorough examination. Why is it hit or miss? Can the hits be increased, the misses minimized? If so, how do you best grow a plant the second time around? And, are there advantages to the way a regenerated plant grows that can be further exploited? It turns out, that with the correct trick of the light and nutrient regime, you can coax a cannabis plant to regrow from nothing more than a stump with one or two buds left on it. This is a vast improvement over previous instruction in grow books where you were told to leave 20-30% of the buds and foliage behind to encourage regeneration to occur. I always found this wasteful. … In fact, it dis- couraged me from experimenting for years. … The MRS allows a full and standard har- vest, one where you lop the entire plant and hang it upside-down to dry, old-school style. It’s now, after this harvest, that the real magic begins. From the remaining stump and one or two buds, you regenerate up to 100 new grow shoots over the next 38 days. It’s amazing to watch these buds ‘flurry’ with so many new grow shoots. By training these shoots towards the edges of your pot you create a flat-topped growing surface that integrates perfectly with cost-effective LED lighting. It’s a combination of photoperiod manipulation, nutrient control and a little trimming trick that results in a 90% success rate in regenerating your plants. Truly vig-

www.marijuanaventure.com | 109 JB Haze Q&A (3/4) Regenerated buds in full flower. orous F1 hybrids almost regenerate them- with regeneration. Instead of training out the (or more) of cannabis grown as a sin- selves. All up, with MRS you save on space regenerated grow tips towards the edge of gle-crop, annual plant? (so many growing shoots in the one pot) and the pot, ready for budding, they are instead power (integrating the resulting flat-top with allowed to grow wild. After two to three That’s a great question, and I’m low-cost LED lighting). … Bottom line — weeks, your regenerated stump will have a Haze: glad I have the chance to answer you save money. dozen or more regrown shoots. Each will it. There are, I believe, two answers. The What’s more, the now regenerated plant be a good eight inches in length, ready to be first involves the evolution of the plant. The can be harvested for the second time, at the taken for cloning. You can’t get that many second, the evolution of the grower. end of a regular flowering cycle, and the cloneable shoots from seed in just three Cannabis, since it first evolved eons ago process is then repeated yet again. One-hun- weeks. in the carbon-rich atmosphere it still desires, dred or so buds per 12-inch pot, over and has always grown outdoors. Because of this, over, under cost-effective LED lighting — You’ve talked about the pros of us- regeneration was rarely, if ever, observed. lovely. Ideal for the small-time grower or the MV: ing the MRS, but what are some of And here’s why: Outdoors, you are harvest- medicinal patient/grower. the cons of this method? ing during the very short days — those with Like cloning, regeneration allows you to 12 hours of light or less. Regeneration, if it is maintain a consistent stock of favored bud The only downside I can imagine to trigger, requires at least 18 hours of light over a long period. In fact, in my book, I Haze: is that gardening via regeneration per day (and preferably continuous light urge regeneration to be treated as a ‘third is a fully hands-on approach. Regeneration for consistent results). This sudden length- path,’ one that complements growing from demands your time and attention. ening of the day does not occur in the out- seed and clone. They are all important dis- You can’t execute the trick and walk door environment. … The photoperiod can ciplines. You always start with great seed. away. Your plants will need you every other only be manipulated to achieve an instantly Once you have a great plant grown from day to carefully train out the many growing stretched day indoors, with the appropriate seed you can enhance your garden by tak- tips. This very specific training leads to the lighting system. It’s only very, very recently ing clones, or by using regeneration. Or by mass of buds and the correct interaction with in the cannabis plant’s evolution that she’s combining both. your lights. If you love growing plants, love encountered indoor lighting. Could this Regeneration can also be used to enhance your garden, enjoy caressing and talking to fact — regeneration not being encountered seed production. The massive array of even- your babies, then you’ll be very good with outside — be the reason the concept has re- ly-sized buds produced by the MRS forms a regeneration. Great relationships between mained unexplored? perfect fertilization bed, all the buds lined up growers and plants have always produced From the point of view of the grower, I’d neatly, side by side. By shielding individual wonderful results. It’s actually hard to see suggest we’ve simply not had the time or in- buds with water-dowsed cones of tissue pa- this as a downside. clination to explore the idea in a systematic per, it is possible to selectively pollinate with way. … The purpose of my book is to ask many different males. Why doesn’t everybody use re- the question, and to supply some answers. Clone production can also be enhanced MV: generation already? Why is 99% 110 | Marijuana Venture // February 2016 Subcooled Air

OBC Northwest flowers and buds, ever. Whether growing from seed, clone, or using regeneration, I always inoculate my plants as described. I haven’t had any pest problems for years.

In the grand scheme of things, do MV: you think the MRS is an example of how much we still have to learn about cannabis?

No. I think it’s an example of Haze: something that’s been under our noses for decades, pigeon-holed, not recognized for what it can be. It’s no one’s fault. For decades we’ve paid little attention. However, I do think that now is the time for the systematic use of regeneration to be ex- plored, and here’s why: The move indoors forced the study of the photoperiod (how the length of the day affects growth patterns) in detail. It has led to better lights, refined nutrients, superior water delivery systems, consideration of the effects of humidity, temperature, root health and so much more. These intricacies were not well understood until the move indoors forced dedicated cul- tivators to do the research. By understanding the details, we can bet- ter look after our plants and explore new possibilities. Due to the knowledge gener- Lush, regenerated ated by being forced indoors, we are now growth ready to begin flowering. growing better gardens. We have seen a revolution, not only in lighting efficiencies/technologies and the A lot of the book seems to detail bis prefers a fairly dry and airy medium. understanding of the plant’s biology/be- MV: good gardening practices, regard- Too moist and you’ll stunt root growth. You havior, but also in the tools and equipment less of whether the grower will ultimately increase root mass by allowing the roots to required to grow successfully. Consider the use the MRS or go with more tradition- search for water and food. Whether grow- vast array of grow tents, watering systems, al methods. What are some of these tips ing from seed, clone or using regeneration, clone propagation units, automated tim- you see as most important for producing a healthy root development is always the key ers, CO2 delivery systems and the like that successful crop, with or without the MRS? to a great harvest. are now available. Entire industries have Pests can be a real problem for indoor grown from the new knowledge base. And Good gardening, like good hy- growers. Once presented to the closed envi- grow books? Well, prior to prohibition, you Haze: giene, shows that you give a ronment of the grow room they can wreak could count them on the fingers of one hand. damn. Gardening practices are, for me, cen- havoc. So it’s best they’re not introduced Nowadays there are dozens upon dozens tered around spending time with my plants. in the first place. I am a big fan of neem of books dealing with the botany and won- Looking, smelling, touching, caring. You oil. This is a vegetable oil pressed from the der of the cannabis plant. … The MRS has have to develop a relationship with your seeds of the Azadirachta indica. Endem- grown out of this new, ever-evolving pool of plants so that you may dance together. Keep ic to India, neem oil has been used in the information (and today’s ease of access to her happy by ensuring good pH, the absence cosmetics industry, medicinally and as a the appropriate tools/supplies). of pests and lots of light. bio-pesticide for generations. It’s rather ex- If you already know how to grow a great I like to hold my pH at 6.0 as I grow in pensive, but you can dilute it quite heavily garden — potent and healthy — then transi- perlite. Your requirements may be different, with water. … I’ve found that this seems to tioning to the MRS will be pain-free and fun. but whatever they are, ensure they are cor- insulate the plant; pests are ruled out long The better the grower you are, the better the rect, otherwise your plants will be robbed of before flowering and budding has begun. results from the MRS will be. … You may the opportunities to absorb all the goodness This treatment, during the vegetative phase never have believed that cannabis could re- from your nutrients. Keep your waterings only, seems to hold the plants over, pest- generate once, let alone the two or more between feedings at the correct pH, too. free, throughout flowering. times that I intend to show you in my book. And, be careful not to over-water. Canna- Never spray anything on your developing It is possible, and it’s just the beginning.

112 | Marijuana Venture // February 2016

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If you build it WILL THEY COME?

Photo courtesy Forever Flowering Greenhouses.

114 | Marijuana Venture // February 2016 Limited fire service in rural areas makes it tough to insure greenhouses and other commercial buildings ― ― ― By DOUG BANFELDER

You’ve found the perfect property for your grow ing needed to combat large structural fires possible at commercial grows. (See side- operation — a great micro-climate, enough bar on Page 48 for a letter from a rural de- room for future expansion and a good price. Do partment’s fire chief discussing these lim- itations — and his suggested solution.) the deal, build out your facility and start grow- Farm or ranch properties with homes ing, right? may receive a “split code,” with a lower code for the residence and a higher code YNot so fast. Do you know what the WHAT RATINGS MEAN for the commercial structures on site. site’s PPC code is? It is important to PPC ratings use a scale of 1-10, with low- The reason for this is simple: Home find out before you buy, and here’s why: er numbers indicating higher levels of ser- fires aren’t generally of the same size or PPC stands for Public Protection Classi- vice. Metropolitan areas are generally rated scope as those occurring in commercial fication, and these codes are used by the PPC 1-3 due to their professional, full-time operations, and thus require less equip- vast majority of insurance underwriters fire departments with a wide array of equip- ment and pose a smaller degree of risk to not only to set rates, but even to decide ment and extensive firefighter training. firefighters. While a property’s residential whether or not their carrier will insure By contrast, many rural and agricultural building may be eligible for fire insur- your buildings and equipment against fire areas are rated PPC 9 or 10, meaning the ance, a commercial structure on the same or theft. nearest fire services are at least five miles premises may not. (In any event, the var- The PPC codes are determined by the away by road, without a nearby or on-site ious structures will likely be insured by Insurance Services Office (ISO), which water source of sufficient size and pressure. different carriers.) is the insurance industry’s primary rat- This makes knowing your intended PPC ratings are a big issue for those ing bureau. ISO rates the availability and site’s PPC a must-ask line of questioning near protected forests too, because local sufficiency of local emergency services for your realtor, insurance agent and local fire departments in such areas generally in nearly every state in the nation. How- fire department. And, as suggested above, emphasize wildfire preparedness, a pri- ever, your state may have its own rating the PPC can also be a strong indicator of ority driven by the increasing number of bureau — for example, Washington has local law enforcement response times, homes being built along what are known the Washington Survey and Rating Board which is vitally important in the event of as Wildland-Urban Interfaces. (WSRB). Idaho and Mississippi also have an emergency. The bottom line is that a lack of fire pro- their own rating agencies. While there may be some emergency tection and subsequent PPC 9 or 10 rating Whether it’s determined by ISO or a services nearby, small-town fire depart- is problematic for anyone wishing to obtain state agency, the PPC rating is key. ments often lack the equipment and train- full property coverage in a rural location.

www.marijuanaventure.com | 115 POSSIBLE SOLUTIONS The availability of timely police re- Resources: In some locations, an automatic aid sponses is another practical consideration, Use the QR code reader on your smart agreement may be possible. These agree- but not one rated by ISO. However, the phone or visit the websites below to access ments provide subscription-based ser- PPC is used by underwriters to determine more information on PPC ratings and the vices in which a fire department will if a given property qualifies for theft pro- Washington State Ratings Board. protect properties outside its boundaries tection. for those who pay an annual fee. ISO Whether you already own or are look- may then review and change its rating of ing to purchase a grow site in a rural area, Insurance Services Office you need to know and understand the a given location after evaluating such an www.isomitigation.com/ agreement. property’s PPC. Your realtor, local fire index.php/about-iso For those businesses in a PPC 10 loca- department or insurance agent will either tion, there is another possible answer. ISO know or be able to find out for you. recently developed a new code, PPC 10W, If your dream property has been rated which recognizes the reduced fire risk that by ISO or a state bureau as a PPC 9 or comes with having a large, accessible wa- 10, or if your carrier has revised its under- Washington State Rating Board ter supply on one’s property. writing rules and is balking at providing www.wsrb.com It is important to note that such a rating the property coverage it has in the past, is property-specific and requires that the ask your insurance agent to approach his site be between five and seven road miles or her underwriters to see if they are able from a fire department. It also requires to secure fire coverage under any of the PPC Ratings: “creditable water supplies” to be located scenarios discussed here. According to the Insurance Services within 1,000 feet of the structures. Many Office, several factors affect a com- munity’s PPC rating: rural cannabis cultivation properties may Doug Banfelder founded Premier Dis- • Emergency communications meet these criteria. pensary Insurance (www.premierdispen- systems, including staffing, training, To find out if your property qualifies for saryinsurance.com) in 2010 to support certification of telecommunicators the new 10W PPC rating, you will need an those participating in Arizona’s Medical and facilities for dispatching; ISO (or state fire rating bureau) inspection Marijuana Act. Today the agency is a • The fire department, including to review the location and size of your leading industry provider, serving clients equipment, staffing, training and geo- water supply, as well as the equipment nationwide with policies for the full range graphic deployment; available to get that water to the fire. of cannabis business operations. • The water supply system, including the inspection and flow testing of hy- drants and an evaluation of the amount of available water compared with the amount needed to suppress fires; • Community efforts to reduce the risk of fire, including fire prevention codes and enforcement, public fire safety education and fire investigation programs.

Class 10W: PDI ISO created a water class based on research and loss experience within the PPC program. Data shows risks located between five and seven miles by road from a responding fire station with a creditable water source within 1,000 feet had better loss experience than those farther than five road miles from a responding fire station with no creditable water source. Class 10W recognizes the reduced loss potential of such properties. Class 10W is property-specific. Water supplies may include fire protection systems using hauled water provided they meet ISO’s minimum criteria for mobile water supplies in the non-hy- dranted areas.

116 | Marijuana Venture // February 2016 FarmTek

Cannasure Debt-based financing plays a new role in cannabis industry

In lieu of traditional lending, private investors are stepping in with a wide range of options ― ― ― By SCOTT JORDAN

ccessing bank financing or traditional lend- and procurement of real estate has been an uphill battle for many. ing has been an ongoing challenge for mari- According to the Wall Street Journal, juana business owners. Financial institutions the cost to purchase warehouse space in have steered clear of businesses involved Colorado has doubled since the beginning of 2014. in the cannabis industry. Filling this void in Private lending is proving to be a win- today’s marketplace, private investors have win scenario for marijuana business own- ers and investors looking to obtain a bet- stepped in as a willing source of capital for the needs of ter-than-average return on their money. growingA cannabis businesses. There are several types of real estate lend- ing options that have become available There is rising interest from private financing remains unavailable, and other to the industry, including privately lent financiers to provide various forms of traditional resources such as the Small money and non-bank-related mortgag- debt-based financing options in several Business Administration or the U.S. De- es, which may include long-term, fixed- states. Some lenders have been willing partment of Agriculture loans are inac- rate, fully amortized loans or hard money to provide resources for working capital, cessible for marijuana business owners loans. These loans generally require a 35- equipment financing and now real estate looking to build or improve cultivation 40% down payment with a good financial without requiring business owners to give facilities or expand retail locations. In profile to qualify. up equity in their companies. addition, rent has escalated dramatically Working capital loans can be used for The private lending option is a wel- and traditional mortgages or securitized a variety of operational expenses, includ- come addition to the marketplace as bank loans are not viable options. The search ing the build-out of stores and coverage

118 | Marijuana Venture // February 2016 Zwart

Viridian Staffing CANNABIS BUSINESS OWNERS NOW HAVE ACCESS TO ADDITIONAL CAPITAL THAT DOES NOT DILUTE THEIR EQUITY IN THE BUSINESS of other non-asset based items. They are 4-6% cap rate an owner would get on a identify high-quality borrowers to deliver available short-term at 12-24 months with real estate investment for a non-marijua- higher rates of return on their money than rates varying from the mid-teens to high- na property. the market is currently providing. er than 20%, depending on the financial SPARC, a marijuana collective in San As more states legalize some form of profile of the borrower and the lender’s Francisco, wanted to expand operations marijuana use and cannabis continues to tolerance“ for risk. and build out its grow facility from 10,000 be the fastest-growing industry in Amer- We’ve seen recent examples of friendly to 25,000 square feet. By working with ica, there is unlimited opportunity in this investors purchasing properties that were a capital partner, it was able to secure a emerging business sector, as evidenced identified by the marijuana business own- $430,000 three-year lease on equipment by the influx of private investor dollars ers themselves, then leasing the spaces for its grow facility. opening the door to a new frontier of pos- back to the businesses. The investor may Through private lending sources, can- sibilities. even be willing to provide financing for nabis business owners now have access to tenant improvements and purchase equip- additional capital that does not dilute their Scott Jordan is the director of business ment for the marijuana business. In some equity in the business. While interest rates development for Dynamic Alternative Fi- cases, these mortgages become assum- may be slightly higher than in standard nance. He has arranged more than $15.5 able, which allows the business owner to industries, businesses have new access to million in loans and equipment leases for purchase the real estate from the original financing and growth capital to operate the cannabis industry and other business- investor and grow the long-term value of and expand, while protecting company es this past year. He is an author, speaker the asset. assets, such as intellectual property, and and advocate for bringing more financing In Denver, we’re seeing cannabis-relat- preserving their own working capital. opportunities and education to alterna- ed real estate assets receiving a 13-15% At the same time, this scenario pro- tive business owners. He can be reached capitalization rate — far higher than the vides an opportunity for private lenders to by email at [email protected].

GSB Law

120 | Marijuana Venture // February 2016 Titan Clearinghouse

Forever FLowering Mason jars get SMART New technology brings canning jars into the digital age ― ― ― By GARRETT RUDOLPH

ike paper clips and mouse traps, the Mason jar officer Maher Pedersoli, a computer engi- neer with 18 years of experience building is an icon of timelessness. The simple design of consumer technologies. a glass jar and hermetically-sealed metal lid has The co-founders of Smarter Lids are been largely unchanged since its invention more also working on developing a commer- cial version, which would collect a data- than 150 years ago. Until now. base of information with sensors for hu- midity and other factors. Growers would LA startup company based out of Arizo- corporates a digital scale and an app so be able to use the lids during the curing na is in the process of launching its line consumers can better understand their stage to track details of successful har- of Smart Mason lids — one of the most usage patterns, spending habits and the vests. exciting changes to canning jars in more medicinal effects of the products they “It would allow a grower to monitor the than a century. buy. entire curing cycle for a specific quanti- The company, Smarter Lids, has filed Smarter Lids is the brainchild of chief ty being cured within a Mason jar,” Ost a non-provisional patent application for executive Isaac Ost, a student at the Uni- said. “It can measure the humidity levels its Smart Mason lid invention, which in- versity of Arizona, and chief technology and notify you when it needs to be aired

122 | Marijuana Venture // February 2016 Tokenworks

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www.MarijuanaVenture.com | 425.656.3621 | [email protected] out. Over time, we will be able to collect a large database of information telling us how different variables are influencing the outcome of the curing process. For exam- ple, our data may show that certain humid- ity levels and quantities result in a better product, or certain methods may lead to shorter curing cycles or larger yields, etc.” Smarter Lids launched a crowdfund- ing campaign in January seeking at least $45,000 in capital. If it raises the neces- sary funds, the founders expect to start shipping devices within eight months. “We are currently talking with man- ufacturers to figure out the exact details of the development and production time- line,” Ost said. “We will also need to fo- cus a lot of resources on the development of our mobile application, which is only in alpha stage at the moment.” Smarter Lids co-founder Maher The technology being used is not new, Pedersoli assembles the prototype lid that is expected to be the Ost said. The company is taking an exist- company’s initial offering; Below: ing smart digital scale and fitting it into Pedersoli and Isaac Ost collaborate the lid of a container. The idea was de- on product development. veloped for people who use Mason jars to prepare and store meals and drinks, be- fore the founders expanded to include the realm of medical marijuana. “I also think that legal cannabis users deserve to have a wide range of technol- ogy available for them, and this type of technology can really change the way peo- ple engage with their cannabis and the dis- pensaries that provide it to them,” Ost said. Smart Lids will launch two versions of its consumer model first. The Standard model will measure from one gram up to two kilograms for recipe and nutrition tracking. These users would place the lid underneath their Mason jar to measure each ingredient as they’re added. Based on weight, the calories and nutrients are calculated as the jar is filled. The Precision model unlocks the mari- juana features on the Smart Mason app. It can measure between 0.1 grams and one kilogram of cannabis, and users can in- put details about the strain, price and de- sired effects. Occasional surveys will let consumers track the efficacy of different products. The lids can be made to fit any size or type of container. “They can also include many different sensors, in addition to just load sensors (for weight),” Ost said. “Therefore, in the future, you will be seeing many different versions of the Smart Lid, outfitted for containers outside of the Mason jar.”

www.marijuanaventure.com | 125 Photo by Ping Photography, courtesy 7 Leaf Collective.

126 | Marijuana Venture // February 2016 HOW LONG DOES CANNABIS LAST? An experiment on the shelf stability of cannabis flowers ― ― ― By NICK MOSELY

lytics, are completely dried in a desiccator ike any agricultural commodity, marijuana has a and homogenized into a fine powder before shelf life. subsamples are drawn for various microbi- There must be some period of time after which ological and analytical chemistry assays. Most of the homogenized sample remains the product has lost its optimum flavor or effect or unused and is stored in an individual plas- is no longer fit for human consumption. In other tic bag, sealed with a zip-lock, and kept in words, at some point the cannabis is no longer repre- a cool, dry, dark environment. L For this experiment, flower samples sentative of the quality advertised by the producer. from 135 lots were selected semi-randomly from the pool of samples tested in the pre- Unlike other agricultural commodities, When should marijuana expire? Should it vious 125 days. Samples were intentional- standards do not exist in the cannabis mar- ever? Does it have a “best by” date? How ly selected to cover a wide range of storage ket that specify how long a product should should it be stored prior to packaging? How duration and original microbiological con- remain on the shelf or if/when it should do different storage methods affect the rate tamination values. expire. of change to the marijuana’s quality? What These samples had all been initially test- Recently, the Washington State Liquor is the best way to package it, and why? ed for microbial bioburden and/or cannabi- and Cannabis Board proposed rule chang- How do we know these things? These are noid content immediately prior to storage. es that would begin to define shelf life of complex questions with complex answers, The initial test values were compared marijuana, particularly as it relates to the and they warrant our attention. to values obtained after post-storage reex- length of time that analytical test results This article will examine one method of amination, representing a change in value remain valid representations of the quality storage and investigate the rate of change over time. of that lot. The Liquor and Cannabis Board in analytical test values over time as the has proposed that the results of the initial product experiences consistent storage THE RESULTS analysis of a flower lot are no longer valid conditions. Microbiological contamination values after 30 days; therefore, the results have ex- for all three contaminants of interest (aero- pired and the lot needs to be retested if any THE EXPERIMENT bic, fungal and enterobac) observed under material has not yet been sold at wholesale. Producers and processors of useable these storage conditions demonstrated a This proposed rule, if put into effect, marijuana continuously submit samples decrease in viable colonies over time. The would have some profound consequences of flower for quality assurance testing, ei- downward trend was statistically signifi- for many stakeholders in the cannabis in- ther as a state-mandated requirement prior cant at 45 days for aerobic (p-value=0.012) dustry. One potential positive outcome may to sale, or for their own research and de- and fungal (p-value=0.035), but not en- be that it prompts a discussion about shelf velopment purposes. Samples of cannabis terobac (p-value=0.444). The decreasing stability, so stakeholders can begin to ask: flower, upon receipt by Confidence Ana- trend was consistent for all three time com-

www.marijuanaventure.com | 127 About the Research Methods ― ― ― ollowing a proposed change to quality assurance stan- F dards in Washington, Con- parisons. None of the samples in this contamination and THCA content over fidence Analytics conducted a experiment changed from passing mi- time. While the downward trends for research experiment to learn more crobial contamination values to failing both are statistically significant, only the about the shelf life of cannabis. after storage, and one sample changed from failing to passing. The pool of samples examined in Decarboxylation of THCA result- THE RATE OF this experiment was selected out of ed in a statistically significant linear convenience; Confidence Analytics, decrease in the concentration of that THCA LOSS a state-certified cannabis testing molecule over time, with the average laboratory, stores samples for sample losing 0.0167% of its THCA OVER 125 DAYS IS several months before destroying content per day (95% confidence in- terval=0.0113-0.0221; p=2.91e-8). them, which allowed its scientists This amounts to a loss of 0.5% of INSUBSTANTIAL to retest some samples to evaluate THCA in 30 days. If we assume that change in microbial contamination is par- trends over time as the material degradation of THCA through de- ticularly meaningful at this time scale. decays. The company investigated carboxylation follows this pattern of With a predicted half-life of nearly a de- changes in viable microbial biobur- decay, we’d predict the half-life of“ cade, the rate of THCA loss over 125 days den and cannabinoid content over a THCA under these storage conditions is insubstantial, even if it is statistically period of 125 days. to be somewhere in the range of eight significant, and an accurate decay curve to nine years. would be better demonstrated by a study Microbiological analysis was of longer duration. It was observed that performed using routine methods CONCLUSION microbial contaminants in cannabis flow- of microbial enumeration via plate The storage conditions examined er lose viability over time when stored at count as described by the Food and in this experiment demonstrate a de- desiccated conditions, and the implica- Drug Administration’s Bacterial An- crease in both viable microbiological tions of this finding to the marijuana in-

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alytical Manual. Endpoints includ- ed colony-forming units per gram (CFU/g) of total aerobic bacterial (or just aerobic), total fungal (or just fungal) and total bile-tolerant gram-negative bacterial (or just enterobac). Three groups of sam- ples representing storage dura- tions of 45 days (sample size=22), 60 days (sample size =21) and 90 days (sample size =11) were each examined to compare initial versus final microbial bioburden using a paired t-test with two tails. Microbiological results were also assessed in comparison to Wash- ington state’s quality assurance failure thresholds for microbial contamination (100,000 CFU/g for aerobic; 10,000 CFU/g for fungal; 1,000 CFU/g for enterobac).

Cannabinoid content analysis (sample size=81) was performed

using high-pressure liquid chro- Change in average microbial values over a period of 45 days. matography separation and diode Change in average microbial values over a period of 45 days. array detection as described by the American Herbal Pharmaco- poeia (Cannabis Inflorescence and Leaf), with individual reference standards for each analyte. End- points described in this publication include quantifications of both the acidic (THCA) and decarboxylate (THCd) forms of the main psycho- active cannabinoid ∆-9-tetrahydro- cannabinol over a continuous date range of one to 125 days from the initial test. Trends in the decarbox- ylation rate were examined with an equation to compute the percent- age loss of THCA as it converts to THCd through the process of decarboxylation.

In all calculations, a conversion factor of 0.877 was used to ac- count for the molecular weight dif- ference between THCA and THCd; the measured value of THCA was multiplied by the conversion factor for all calculations in this publica- tion. Relative decarboxylation was fit to a linear regression for statisti-

cal analysis. A p-value of less than Change Changein in THCA THCA content content over over time time normalized normalized to to a flower a sample flower with sample a starting with value a starting value of 15% by weight. 0.05 was interpreted as statistically of 15% by weight. The solid line represents the slope estimate, while the dotted lines The solid line represents the slope estimate, while the dotted lines represent a 95% confidence interval. significant for all statistical tests. represent a 95% confidence interval.

130 | Marijuana Venture // February 2016

dustry could be profound. A very important point to consider as FOR CONSUMERS: a caveat to any conclusions drawn from these data is that the trends observed here are true only for the storage conditions de- scribed. Certainly, most producers and pro- cessors of useable marijuana do not store ‘DRY BUDS SUCK’ their flowers completely dried, as was done in this experiment. From anecdotal expe- rience, this author can confirm that even says one entrepreneur when modest amounts of moisture are present in the container, marijuana flowers can grow mold in the packaging. A very wide variety of storage methods exist in the cannabis do- main, some of which (such as pack- ing with inert gas) might outperform the results of this study in terms of product stability over time. Other forms of storage, particularly when high levels of heat or moisture are pres- ent, will certainly perform less well. Perhaps the most important conclusion to be drawn from these results is the re- alization that there is much more to learn about the shelf stability of cannabis. Stud- ies such as this can be highly informative to manufacturing processes and legisla- tive decisions, especially in such a young industry. With similar methods to those described here, it should be possible to validate relatively long periods of shelf sta- resh 420 could be the cheapest, safest and most effective method bility. To that end, we encourage manufac- for consumers to keep their cannabis as fresh and potent as pos- turers of marijuana products to partner with F sible. Fresh 420 is a marijuana humidifier that comes in individual packets designed to raise the moisture level inside a container, allowing buds to maintain their maximum potential. THERE IS MUCH Marijuana that has not been cured properly will lack potency, while tast- ing harsh and acidic, Fresh 420 owner David Currier said. In less than a MORE TO LEARN week, Fresh 420 will raise the moisture level inside a jar to the desired 62-68% range. Since moisture content is a matter of personal prefer- ABOUT THE ence, the Fresh 420 packets should be removed from the jar once opti- mum humidity is achieved. SHELF STABILITY The directions are simple: Dip the absorbent Fresh 420 pad in distilled water for 10-15 seconds to activate; place it back in the package and seal; place OF CANNABIS the package into a container with marijuana and let the product go to work. their analytical labs to further the science Fresh 420 also gives consumers the ability to change the flavor of their buds. of this commodity and enhance the profes- “ “We soak our Fresh 420 in grape Kool-Aid before placing in our jars, and sionalism of their craft. the results are amazing,” Currier said. Nick Mosely is the scientific director Private labeling is available for marijuana business owners in search of and part owner of Confidence Analytics, a a promotional tool to increase their brand awareness. Fresh 420 can be state-certified cannabis quality assurance used by dispensaries to prevent products from losing aroma, color, flavor laboratory serving producers, processors and potency, while also being used as a promotional giveaway. and collectives throughout Washington “While most companies strive to think outside the box, our only focus is state. Confidence Analytics can be reached to think inside the jar,” Currier said. by email at [email protected]. More information: www.drybudsucks.com.

www.marijuanaventure.com | 131 Higher Standards

Oregon’s testing labs transition from a free-for-all to a heavily-regulated industry ― ― ― By ROWSHAN REORDAN

he era of loosely-regulated cannabis testing In order for cannabis labs to be licensed in Oregon, they must also meet specific ac- in Oregon is nearing the end. creditation standards. The Oregon Environ- Oregon finally remedied a serious lack of over- mental Laboratory Accreditation Program sight during the 2015 legislative session. New (ORELAP) is the agency that will be tasked with accrediting cannabis analytical labora- standards for both the recreational and medical tories according to national standards set by marijuana markets are going to make Oregon the NELAC Institute. Although the international standards for one of the leaders in the nation when it comes to cannabis testing (ISO 17025) are commonly used Ttesting. Rather than simply licensing testing laboratories, throughout the world, Oregon follows the Oregon will require a two-tiered system of licensing and national standards, which are comprised of an even more extensive set of rules. accreditation to ensure quality cannabis analytics. The standards will require cannabis test- ing laboratories to prove their testing meth- The era of loosely-regulated cannabis tories, Oregon will require a two-tiered sys- ods are valid and reproducible. This will testing in Oregon is nearing the end. tem of licensing and accreditation to ensure help create an even playing field for canna- Oregon finally remedied a serious lack of quality cannabis analytics. bis analytical laboratories, while building oversight during the 2015 legislative ses- Licensing for cannabis labs will include trust for industry stakeholders in the current sion. New standards for both the recreation- oversight from the Oregon Liquor Control broken system. al and medical marijuana markets are going Commission and the Oregon Health Au- Oregon is requiring more stringent stan- to make Oregon one of the leaders in the thority, with many of the rules being similar dards for laboratories, but it will also spec- nation when it comes to cannabis testing. to those governing labs in other states in the ify what types and levels of pesticides and Rather than simply licensing testing labora- recreational and medical markets. residual solvents will fail under the new

132 | Marijuana Venture // February 2016 PARC GreenBroz

Pension Builders rules. Different than Washington and Colorado’s pesticide testing require- ments, Oregon labs must be accredited to test for more than 50 pesticides. If the listed pesticides are found to exceed the specified limits, the product will fail. Oregon’s residual solvent analysis, with more than 40 solvents that are required to be tested for, is also more extensive than in Washington and Colorado. Cannabis testing in Oregon has been tumultuous from the very start. Starting March 1, 2014, licensed medical dispensaries were required to have their products tested to ensure that safety standards were met before dispensing medical marijuana to patients. What the state failed to address was proper oversight for cannabis testing laboratories. Thus, the bedlam of cannabis testing in Oregon began. Once people learned that testing laboratories had no oversight, Oregon saw a plethora of cannabis labs open for business. The only elements needed were a comput- er, a printer, a “chemist” and an “instrument.” There was no entity to ensure that the standards required by law were being followed by the laboratories. However, the testing side of the cannabis industry is changing signifi- cantly. Instead of a free-for-all for cannabis analytical laboratories, Oregon will set the standard for both licensing requirements and national accred- itation. The lessons Oregon has learned about cannabis testing should provide legislators in other cannabis-friendly states with a blueprint of what to avoid so history is not repeated.

Rowshan Reordan is the founder of Green Leaf Lab, Oregon’s largest cannabis analytical laboratory, with four locations (www.greenleaflab. org). She was one of the first women to open a cannabis laboratory in the nation, and has spearheaded the standardization and legitimization of can- nabis safety testing for both the medical and recreational sectors.

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KES Science GUEST COLUMN Ohio failure provides context for future policies Commitment to safety key for continued support Canna By Vicki Christophersen ast summer, a pacting local and national conversations Quinnipiac Uni- about cannabis policy. Safety Lversity survey In Washington, we know the state’s of registered voters in leaders are watching competition from Ohio found that the their Pacific Northwest neighbors, as well majority would sup- as the developments in California, to see port an initiative to how the industry behaves during this ma- allow residents “to le- jor public conversation. gally possess small amounts of marijuana From New York Times stories high- for personal use.” Yet, in November 2015, lighting innovative new ways to market 64% of Ohio voters cast their ballots cannabis, to real-world concerns about against a measure that would have creat- consumer safety, the cannabis industry’s ed a legal cannabis marketplace. Pundits actions are under a microscope. For bet- across the political spectrum have opined ter or worse, the actions of a few can that it was a flawed regulatory system, be- influence the business environment for cause it would have created a monopoly many. to the detriment of consumer protection This type of scrutiny is not a bad concerns. thing — it’s an opportunity. As leaders But here are the facts. A supportive in our communities, our interactions environment in the spring evolved into a with elected leaders, consumers and “no” vote in the fall. Despite running a our fellow business owners are oppor- well-financed campaign, the legalization tunities to display our commitment to measure did not earn the support of any safety and regulations that protect these significant Ohio media outlets and was values in a legal cannabis marketplace. opposed by a broad spectrum of elected More than ever, this is a time to display officials, major organizations and civic our industry’s partnership with the pub- leaders. The message should be clear to lic, rather than reinforcing stereotypes our industry as we work in our own states about marijuana sellers or antiquated and at the federal level: We cannot take impressions about marijuana users. In public support or any success in the regu- 2016, as professionals and community latory arena for granted. We must demon- members, consider reaching out to busi- strate in every interaction that we are ness leaders in the cannabis industry to committed to supporting a safe, well-reg- remind them how fragile our new mar- ulated marketplace. ketplace really is. The path forward will Whether it’s restrictive rules for inves- be anything but a straight line. While we tors, limits on researching new products acknowledge that a majority of Ameri- or the ongoing public debate about mar- cans continue to support marijuana le- ijuana in general, the industry must con- galization — an October 2015 Gallup tinue to partner with our communities by Poll showed support at 58% — we also focusing on producing and selling qual- must keep a clear eye on real-world pol- ity-controlled products that are effective icy discussions that affect our industry for patients and safe for consumers. but do not always take place in arenas The public is continuously examining with similar support. The evolution of the benefits of a regulated marketplace the cannabis industry has begun, but the for marijuana. And the debate is far from work is far from over. over. Ohio’s setback, Oregon’s newly legal Vicki Christophersen is the executive marketplace and the upcoming 2016 le- director of the Washington CannaBusi- galization measure in California are im- ness Association.

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138 | Marijuana Venture // February 2016 HempStaff AT Foam

02 Grow A LETTER FROM THE EDITOR

develops and gains acceptance in more states. New consumers are an untapped Panic-control could be demographic that could be pivotal to le- gal marijuana’s success. One of the first things I thought about important for industry when I heard of CannaRelief was Mau- Over-consumption can easily ruin a newbie’s experience reen Dowd’s now-infamous column in By Garrett Rudolph the New York Times, “Don’t Harsh Our rinding flowers put the user at a higher risk for a heart Mellow, Dude.” Gand rolling joints attack or stroke. In June of 2014, Dowd published a will always have a But that doesn’t mean you can’t have a first-hand account of eating a canna- certain appeal for mil- terrible, horrible, no good, very bad night bis-infused candy bar that made her con- lions of cannabis con- by taking one bite too many. vinced she had died. Alas, she awoke the sumers. But ultimate- We’ve all been there before (or at least next morning in perfect health, with no ly, smokable products most of us have): You take a couple puffs lingering ill effects. are only going to too many or eat a cookie that I don’t want to undermine reach a fraction of the potential market. might be a bit stronger than Dowd’s own culpability, or Teas, sodas, baked goods, candies and you’re accustomed to, and ignore the possibility that tinctures have the potential to reach a the next thing you know, the product she consumed broader audience and gain widespread you’re huddled beneath a was woefully under-la- acceptance. blanket trying to ride out a beled. Yet, these situations The same concept applies to potency. miniature freak-out. are likely to become com- Only a relatively small percentage of For this reason, I be- mon occurrences in the the population is looking for the strongest lieve a product like new world of over- of the strong. I think it’s tough, some- CannaRelief could the-counter canna- times, for people in the cannabis industry be important for the bis (although, let’s to remember that many of their custom- legal cannabis in- hope, not by people ers are not regular users — in fact, legal- dustry. It’s designed that work for the ization will bring many first-time users to alleviate the anx- national newspaper into retail stores, as well as those who iety that comes with of record, and not to haven’t consumed marijuana in decades. over-consumption. the extent that Ms. The entire industry is relying on those The founder of Dowd experienced). the company uses people to have a great experience. If they And if a product like don’t — if their first connection to canna- a cannabis concen- CannaRelief can bis in years is a panic-filled, heart-pound- trate to help with his genuinely reduce — ing, sweat-inducing roller coaster — own fibromyalgia, or better yet, elim- they’ll probably never give it a second try. but finds it challeng- inate — these mis- Even worse, they’ll probably tell all their ing to pinpoint the erable, panic-laden correct dose. He de- experiences, it will veloped CannaRe- LEGALIZATION lief by blending be a much-needed Vitamins B and C life raft for the can- WILL BRING with 20 milligrams nabis industry. of pure-hemp CBD, But in an era of MANY FIRST-TIME and uses it when he eye-popping THC goes a little over- levels (in both flow- USERS INTO board looking for a ers and concen- good night of sleep. trates), it’s unusu- RETAIL STORES While it doesn’t al and somewhat eliminate the high, it does take the edge refreshing to see somebody making a friends about the regretful experience. off, he said. product designed to stop people from get- “People say you can’t overdose on can- I haven’t tried it yet, so I can’t vouch ting too high, rather than the other way nabis. for its effectiveness. And it’s likely that around. This seems to be accurate in the sense results will vary for different people. that you’re not going to die from eating But I think the idea of products that an overly-potent brownie, provided there look beyond the inner circle of cannabis GARRETT RUDOLPH aren’t underlying conditions that would consumers will be vital as the industry EDITOR

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