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3 Concerns for California Cannabis Entrepreneurs prior to state regulations

January 26, 2017 | G. Takagawa

Last week, representatives who are tasked with a role in drafting California cannabis regulations highlighted concerns about the transition from our decades-old gray market to the new legal market under the MCRSA (medical) and Proposition 64 (adult use) laws.

 

Lori Ajax (Bureau of Medical Cannabis Regulation) and Amber Morris (CalCannabis Cultivation Licensing within the Department of Food and Agriculture) spoke at the California Growers Association policy summit on January 18.

 

Many of the points from the conference have been covered elsewhere:

 

 

Instead of recapping the same points, we’d like to highlight some concerns raised during the regulators’ presentations - and how they affect California cannabis entrepreneurs now:

 

1. Type 3 Cultivation Permits MUST be capped and criteria are not yet known

 

The MCRSA mandates that there must be a state-set limit to the number of type 3 (the largest) cultivation permits. CalCannabis is therefore preparing criteria that will determine who receives some of these limited permits.

(See end of post for details on the Type 3 cultivation license type.)

 

Local jurisdictions who are offering cultivation permits of equivalent size may not have the same criteria – because we don’t know what that criteria is yet.

 

As a result, anyone contemplating or actively applying for a local permit of Type 3 size is taking a business risk.

Some jurisdictions are offering permits that are even larger than the state’s proposed Type 3. This could also be a problem.

 

 

Can cultivators hold multiple cultivation licenses?

 

(Outside of the “3-1-4” model. See end of post for a description of this model.)

 

The answer from the regulators was “wait for regulations.”

 

In other words, do not assume cultivators will be able to hold multiple licenses.

 

 

2. How will the medical and adult use markets work?

 

We’ve seen in the 2017/2018 budget that California intends to unify the medical and adult use markets.

However, regulators are bound to implement current legislation. And the law as it stands mandates two separate systems.

 

There was some discussion of anticipating a system where the supply chain would be able to serve both markets. In other words, cultivators, manufacturers, distributors, testing labs and all variations thereof would be able to supply both the medical and the adult use markets.

 

As far dispensaries go, it seemed these licensees would be offered a choice – either medical, or adult use, or both.

However, it is again important to remember that all of these options are subject to local ordinance. If a local jurisdiction only allows commercial cannabis operations within the medical market, that may limit the marketing of the products.

In order to further this model, the intent is to have the same regulatory standards for both markets.

 

3. What impact will federal uncertainty and the selection of Jeff Sessions as Attorney General have? (Hint: a lot of concern about the adult use market)

 

We don’t know what the new federal administration will do.

 

Regulators and industry professionals alike raised the concern that even if medical cannabis markets are left alone, recreational markets may become targets. As a result, will unifying the medical and adult use markets expose medical cannabis business operators to greater risk?

 

While there are no clear answers here, it’s critical to consider the risks as entrepreneurs contemplate entering this industry.

 

 

Brief primer on Cultivation Types & the 3-1-4 model

 

The MCRSA and Proposition 64 share the following cultivation license types:

 

Tier 1: Specialty. Up to 5,000 sq ft of canopy.

  • License 1: Specialty Outdoor. Alternative size: up to 50 mature plants on noncontiguous plots.
  • No supplemental lighting.
  • License 1A: Specialty Indoor. Exclusively artificial lighting.
  • License 1B: Specialty Mixed-Light. Both natural and artificial lighting.

 

Tier 2: Small. Between 5,001 and 10,000 sq ft of canopy.

  • License 2: Small Outdoor. No supplemental lighting.
  • License 2A: Small Indoor. Exclusively artificial lighting.
  • License 2B: Small Mixed-Light. Both natural and artificial lighting.

 

Tier 3. Over 10,001 sq ft. Max size varies.

Total number will be limited (unclear how), and combining with other licenses.

  • License 3: Outdoor. 10,001 sq ft to one acre of canopy.
  • License 3A: Indoor. 10,001 to 22,000 sq ft of canopy. Exclusively artificial lighting.
  • License 3B: Mixed Light. 10,001 to 22,000 sq ft of canopy. Both natural and artificial lighting.

 

License 4: Nursery. Clones, immature plants, seeds; no mature plants.

 

Hezekiah Allen, the Executive Director of the California Growers Association, explained to event attendees that the canopy tiers were proposed to mirror federal law mandatory minimum sentencing thresholds. While federal law uses plant count and California uses canopy size, the proposed square footage is based around estimated space required for the plant counts under federal law.

 

Additional Licenses within the Medical Market

 

Cultivation License 1C: Cottage Cultivation: Thanks to advocate efforts and last year’s legislative session, the MCRSA was amended to include this micro craft growing option. Up to 25 mature plants outdoor, OR up to 500 sq ft of canopy indoor, OR up to 2,500 sq ft of mixed light canopy.

 

Advocates are seeking to bring this model into the adult use market as well.

 

Additional Licenses within the Adult Use Market

 

Cultivation Tier 5: Proposition 64 includes a “sunrise clause” to add in large-scale, unlimited size cultivation starting in 2023. This proposed license type is intended for post-federal legalization and legal interstate commerce.

Microbusiness License 12: Proposition 64 creates a vertically integrated option allowing up to 10,000 sq ft of cultivation, distribution, non-volatile manufacturing, and retailing.

 

* Note: License 12 in the MCRSA is for Transportation, a license type that does not exist in the Adult Use proposition.

Advocates hope to bring the microbusiness model into the medical market as well.

 

The 3-1-4 model: Vertical integration under the MCRSA

 

While creating the MCRSA, there was a strong emphasis on keeping small players in the industry. That led to limits on vertical integration.

 

Industry members pushed back, seeking a way to be vertically integrated. Legislators included the 3-1-4 model as a test to see if limited vertical integration would be feasible within the intent of keeping small players in the industry.

 

The 3-1-4 refers to the types of licenses it allows to hold together:

  • 3 retail licenses (Type 10A)
  • 1 manufacturing license
  • 4 cultivation licenses

 

This model sunsets (ends) in 2026, unless extended by the legislature.

 

Long-time operators

 

Note: there is an additional c(1) exemption for folks who were continuously operating (with all of cultivation, manufacturing and dispensary) and compliant with a local ordinance since at least July 1, 2015. This special case only applies to a few operators. If you believe you may meet the requirements and would like to discuss further, contact Green Rush Consulting at services@greenrushconsulting.com.

 

 

Advocacy First, Industry Second

December 22, 2016 | G Takagawa

Green Rush Consulting COO Sarah Ceti presents Drug Policy Alliance representative Amanda Reiman at the East Bay Canna Community First Friday.

 

As the cannabis industry grows, many of our members are trying to create a balance between its social justice roots and the profit potential of this newly legalized plant. However, the industry’s rapid growth is exacerbating tension between long-time cannabis advocates and newcomers capitalizing on new laws without appreciating the industry’s difficult history.

 

For this reason, we remind all of our clients: By joining the cannabis industry, you are also an advocate.

 

We see three key areas that our industry should continue to support: patients, social justice, and the environment. We also recommend looking for ways to make a difference within your local community.

 

In the context of continued federal prohibition and in the current uncertain political climate, particularly with the appointment of Jeff Sessions as Attorney General, we suggest revisiting our industry’s advocacy roots, and finding a way to give back and move forward.

 

At Green Rush Consulting, we have spent 2016 setting the foundation for our own local actions. In 2017, we are supporting the launch of Green Room Oakland, a project by the East Bay Cannabis Community. This new community center will host local cannabis non-profit groups, with an emphasis on supporting underserved communities and promoting social justice.

 

Interested in helping the East Bay Cannabis Community? Reach out to eastbaycanna@gmail.com.

 

How will you support the advocacy roots of the cannabis industry? Tell us in the comments!

 

Some ideas include:

 

Support for Patients

 

Americans for Safe Access (ASA) is the largest national member-based organization of patients, medical professionals, scientists and concerned citizens promoting safe and legal access to cannabis for therapeutic use and research. Donate or become a member today.

 

The ASA promotes the rights of cannabis patients. Their Patient Focused Certification is a third-party certification program and professional training that promotes the adoption of safe and reasonable industry standards from seed to consumption. Consider seeking certification for your business.

 

Founded in 1986, the Multidisciplinary Association for Psychedelic Studies is a non-profit research and educational organization that develops medical, legal, and cultural contexts for people to benefit from the careful uses of psychedelics and marijuana. Donate today and sign up for their updates.

 

 

Support for Social Justice

 

The American Civil Liberties Union (ACLU) has been working for nearly 100 years to protect and expand civil liberties through legal action, legislative advocacy, and public education. With the new administration, their work is even more important this season. Donate or become a member today.

 

Another opportunity to continue to bring fruit to the social justice roots of the cannabis industry is to help to improve the lives of abused and neglected children.  The National Court Appointed Special Advocate Association (CASA) and its state and local member programs advocate for abused and neglected children. Donating to this organization will help provide safe, and permanent homes for so many children that deserve a second chance at a good life.

 

Support for the Environment

 

Think Global, Act local. Whatever State you hope to operate in, identify environmental groups working locally to help maintain a healthy balance between industry and ecology. You can donate to them or you may even decide to make them a part of your business’s charitable giving program.

 

For cultivators, take the time to research third-party certification groups, such as Clean Green or the Cannabis Conservancy. Learn about biodynamics and integrated pest management.

 

For other cannabis businesses, talk to contacts in your supply chain about their environmental practices. We’ve seen a lot of environmental degradation as a result of the underground nature of the cannabis industry, and we continue to see pesticide use that harms patients. How can we do better?

 

 

Support in your local community

 

Closer to home, showing up for local city council meetings and sharing your needs and concerns while hearing other people’s perspectives is important and crucial in order to draft regulations that make sense for everyone.

 

Join your local chamber of commerce and get to know other business owners in your community. In some states and local municipalities special cannabis chambers of commerce have been formed.

Examples include:

 

 

 

If you don’t find one in your area you can join the National Cannabis Chamber of Commerce.

http://nationalcannabischamberofcommerce.com/

 

Meeting others who are working in the industry is priceless. You can learn so much from each other save yourself time and money learning from other’s mistakes.

 

Women Grow is one powerful networking resource that has helped many, and not just women, do just that.

 

 

Start conversations.

Ask questions.

Learn and share. 

Give back.

 

 

Cannabis Is Community: Profile of Terryn Buxton

September 28, 2016 | G Takagawa

 

 

  • Co-Chair of OAKDECC (The Oakland Diversity and Equity Cannabis Coalition)

 

  • Works with Oakland Extracts & Operation Evac

 

A few months ago, the East Bay Cannabis Community First Friday events launched a new initiative to share the love for our community.

Each month, we showcase three groups:

 

1. A local charity from outside the cannabis space. This allows us to broaden our outreach efforts and demonstrate to everyone that our cannabis community cares.
2. A cannabis advocate. We have many passion projects, and many ways of fighting against prohibition and its countless negative impacts. Creating this space allows us all to broaden our contribution.

 

3. A local cannabis industry member. This allows us to learn more about the innovative business models and individuals who are changing lives through their approach to cannabis.

 

Terryn Buxton was one of the individuals we highlighted through this initiative, and I am thrilled that he agreed to allow me to share some of his story in this second forum.

 

Terryn Buxton speaks at the First Friday Cannabis Social in August 2016

 

Terryn is an Oakland native, born and raised. That one fact infuses all of his contributions because he deeply cares not only about access to cannabis, but also about how the rollout of regulations impacts his community.

 

As a member of Oakland’s community, Terryn became involved in the conversations at City Hall about Measure Z clubs. He spoke passionately, and ultimately was appointed to what is now the Oakland Cannabis Regulatory Commission.

 

“Once I realized that your voice could be heard, I became involved to ensure that cannabis regulations supported Oakland as a community – that community interests took priority over business. The cannabis industry has all these well-meaning folks, but they’re not from here. As an Oakland native, I am invested in what is happening on the streets.”

 

With Oakland’s adoption of Desley Brooks’ equity provision and the creation of the new Equity Permit Program for Oakland cannabis business permits, Terryn joined an emboldened community to help create OAKDECC, the Oakland Diversity and Equity Cannabis Coalition.

 

The group formed in part as a response to Council Member Brooks’ challenge that the cannabis community and regulators have not pushed enough to ensure equitable access for victims of the drug war who want to join the industry. It held its first membership meeting on September 22, and is poised to make a major impact in blazing the trail for Oakland residents to step up as entrepreneurs, employees, and participants in the growing Oakland cannabis industry.

 

Terryn also works with businesses in the cannabis industry directly. He’s been involved with Oakland Extracts, a local concentrates company that works with local small farmers. He also helped Ryan Miller, a former Marine, to launch Operation Evac. This organization (pending 501(c)(19) status) offers support groups for veterans in the Bay Area, along with facilitating veterans to become self-sufficient through roles in the cannabis industry.

 

Internally at GRC this month, we have been talking about how #CannabisIsCommitment. Committing to the values that have shaped cannabis advocacy. Committing to the community you are in, and showing up in political forums to represent the cannabis industry. Committing to creating a cannabis industry that best serves patients and entrepreneurs.

 

Terryn showcases the #CannabisIsCommitment approach to this industry and our East Bay community.

Green Rush Consulting Offers Pennsylvania Cannabis Entrepreneurs Private Consultations in Philadelphia

September 8, 2016 | Chris Jones

As Pennsylvania prepares to open up the application process for medical cannabis licenses, entrepreneurs who want to get in on the ground floor of the industry need to start making plans now.

 

Green Rush Consulting (GRC) is offering individuals who want to gain a better understanding of Pennsylvania's competitive application process the opportunity to book a private consultation this month in Philadelphia. GRC co-founders Zeta Ceti and Sarah Cross will be available for consultations on September 23rd, 24th, and 25th to provide key strategic advice on the application process, and answer questions on how to best prepare for it.

 

"Pennsylvania will be an excellent market to set up a medical cannabis business. The state is allowing for a large number of licenses and we expect a robust patient population," says Ceti.

 

The Pennsylvania medical cannabis applications are expected to be released in December, with a deadline in January 2017. Because of the high number of patient qualifying conditions the state is allowing, Pennsylvania is expected to be one of the biggest medical cannabis markets on the East Coast.

 

GRC has a seasoned team of industry professionals with extensive experience developing applications for medical cannabis licenses, and recently helped clients in Maryland secure two cannabis manufacturing licenses.

 

"We have worked with clients in states across the U.S. over the last decade, and we have a unique insight and understanding on what it takes to win," says Ceti. "In our experience, early preparation and detailed project planning are key components to success."

 

Pennsylvania will award 25 grower/processor licenses, five of which will allow holders to open up to three dispensaries each, and 50 dispensing licenses, which also permit up to three dispensaries each.

 

Interested parties should reserve their space in advance for these exclusive and informative consultations to be held in downtown Philadelphia. Consultations include a one-hour meeting with Ceti and Cross, who will provide an overview of the Pennsylvania licensing opportunities and strategies for success.

 

Individuals who book a consultation in Philadelphia can also take advantage of GRC's earlybird discount on a state license application.

 

GRC recently opened an East Bay cannabis community center in its home base of Oakland, and a percentage of every consultation sale will go towards the center, and supporting individuals impacted by the War on Drugs.

 

Book your consultation by calling Green Rush at 510-479-7327 or by emailing services@greenrushconsulting.com.

 

Green Rush Consulting, LLC is a cannabis consulting firm with more than 10 years of experience in the medical cannabis industry, and has helped entrepreneurial groups win cultivation and dispensary licenses in Arizona, California, Connecticut,Illinois, Nevada, New Jersey, Oregon, and Washington D.C., and most recently the first manufacturing licenses in Maryland.

 

 

Touchy Feely at First Friday

July 28, 2016 | J Stebner

 

Thank you Mike Rosati for photographing July's First Friday event!

 

I just Googled ‘touchy feely.’ Reason being that I am writing about our First Friday event from a new perspective. Usually I’m writing from the perspective of someone walking around, looking for an interesting conversation to listen to and maybe join in on. Or someone who just gravitates towards those they know and are familiar and comfortable with to catch up.

 

But last First Friday I brought my massage chair and stayed planted in pretty much one spot for doing the same thing for 4 hours. Massaging. Touching and talking. I loved it. I learned so much.

 

So I Googled ‘touchy feely’: “openly expressing affection or other emotions, especially through physical contact."

 

That sounds nice. I like that. I grew up in a very large, very loud and very ‘touchy feely’ Italian immigrant household. This behavior makes sense to me. Sadly, I learned very soon that our American culture doesn’t take too kindly to physical contact. A fact further enforced by Google’s assertion that this word, whose phonetic pronunciation is təCHēˈfēlē/, is also ‘adjective: informal derogatory.’ Sheesh. I won’t even go into the characteristics of or relating to touchy feely behavior.

 

At First Friday, people were lined up for some touchy feely. They were so happy to be next.

 

One poor guy came up and seemed distraught and not a little bit stressed out. I was almost done with another person and as the massage ended, this sweet guy came up and said sheepishly, “I haven’t been touched in Forever. Can I please get a massage?”

 

Have you ever heard the stories about babies in orphanages who despite being given enough food and water, warmth and relative safety, still wither and die because there were not enough humans around to give them the tactile stimulation so critical for growth and development? Why should it be so different for grown-ups? Granted we may not die from tactile deprivation as adults but extreme loneliness and isolation can make people wish they would sometimes.

 

People learn so much about themselves when they get a massage. After practicing for over 15 years now I can’t tell you how many times I’ve heard people say “Wow! I forgot about that!” as I worked on an area that they had neglected to mention as a trouble spot for them. “I didn’t even know I was tight there.”

 

I often asked massage clients to make a fist and squeeze it tight. I ask them, if you walked around all day without releasing your grip, how would that feel? They usually grimace and acknowledge that doesn’t sound like fun. With approximately 640 muscles in the human body and many of them holding various amounts of tension at any given time it’s no wonder people often feel exhausted without any evidence of overtly physical behavior. Sitting at a desk all day can exhaust some people. It’s tension.

 

Tension takes up energy, vital energy, that can be freed up and put to good by getting a massage.

 

Hugs work great too. Remember to hug people a lot. It is so healthy for everyone involved. And if people react as if it’s weird - remember it’s their problem. Give them a silent blessing and continue to spread the love.

And on a side note. The synchronicity thread from last month is still weaving it’s way through the experience. When I Googled ‘touchy feely’ the second thing that popped up was a movie that came out in 2013 called ‘Touchy Feely’ about a massage therapist who suddenly and mysteriously develops an aversion to bodily contact. Sounds like she needs a massage.