Corrective Action for Cannabis Businesses: Your Plan B Blueprint

Higher Yields Consulting Corrective Action: Your Plan B Blueprint

Every cannabis business runs into its fair share of unexpected problems that require corrective action. In the early stages, it might be construction and licensing problems. Down the road, it might be METRC compliance and branding issues.

Higher Yields Consulting Corrective Action: Your Plan B Blueprint

Knowing when to take corrective action can be challenging, and waiting too long can lead to escalated complications. It’s crucial that you pursue corrective action in your cannabis business as soon as you suspect that you have a problem. 

So how exactly do you pinpoint and address the issues that require corrective action? Read on for everything you need to know about taking corrective action in your cannabis business.       

Common Issues That Require Corrective Action

To mitigate your cannabis business’s need for corrective action, it helps to arm yourself with the knowledge of the most common issues that arise. When you know what problems to look out for, you can take preventative action to avoid them.

Here are four common issues that often require corrective action.

Licensing

A license application can range from 200-300 pages in length to as many as 1,600 pages or more, depending on the level of competition in your state. Your application will require detailed plans, procedures, and policies. If your answers are too brief or simply don’t cover the requirements, your license will be rejected.

When your license application is approved, remember – your proposed plan is a definite promise. Not a loose agenda. Your state will expect you to follow the precise plans that you submitted. If change your plans, you’ll need to submit a new report to reflect those changes. 

If your plans are not executed as promised, your business will need to take corrective action to get back on track and avoid further consequences.

To say the least, you put yourself at a huge disadvantage when you set out to complete the application on your own. For your greatest chance of success, consider hiring an architect, an accountant, a lawyer, and a consultant like HYC.

Construction & Building Design

Once your license has been approved and you’re ready to move forward with your plan, you will need a licensed architect and an engineer to satisfy state requirements. You will also need a plumber, an electrician, and an HVAC technician

You’ll need to pass inspections along the way to ensure your design and build match your original licensing plan. Any inconsistencies will halt your progress until they are addressed. 

Business owners often neglect to consider the various moving parts of a commercial construction project. Without a specific timeline, for example, an entire project can be pushed back for weeks or months.

Higher Yields Consulting Corrective Action: Your Plan B Blueprint

By taking immediate corrective action for construction and building design, you can rectify a problem in just four to five months. Seeking corrective action later in the process, on the other hand, requires recalibrating, rescheduling, and getting everyone on the same page. This process can take up to an entire year.

Branding 

There is an emotional layer to branding that may compel business owners to gamble a portion of their investments away. But if your branding is not aligned with your customer base, taking corrective action may, unfortunately, mean starting over. 

It’s essential to appeal to the needs of your customer. Even more important than a cool logo is an atmosphere and brand image that fit the market and draws in your intended customer.

If you don’t feel like you’re equipped to move forward with your branding, take a step back and evaluate why you’re not ready. It will save you hundreds of dollars on rebranding in the future. 

METRC

METRC is a tracking process that follows the life of a seed to its final purchase point. New entrepreneurs commonly face dilemmas with METRC because the system is perceived to be straightforward. However, without proper education on how it works, businesses can easily fall out of compliance with local and state regulations. 

When the appropriate methods are not followed, corrective action for METRC compliance can involve becoming compliant, retraining employees, and creating new oversight

When It’s Time for Corrective Action

Perhaps you’re concerned about exposing your data to a third party. Or maybe you fear repercussions that could result in trouble for you. Whatever the reason, putting off addressing your business’s problems will only lead to worse problems in the future that may be more costly to solve. 

HYC is not here to punish your business for not being compliant but rather to support you in becoming compliant so you aren’t fined or shut down. If you’re confused or unsure of your next steps, it’s time to take a step back and look at the big picture. 

What Corrective Action Looks Like 

There’s no single way to take corrective action. Depending on the problem, budget, and available resources, the process will look different for every cannabis business. Regardless of the problem, the process includes evaluating a problem and taking the steps to resolve it.

In Oklahoma, for example, all cannabis dispensaries will soon be required to use the METRC tracking system. As a result, many businesses are scrambling to take corrective action to learn and implement the system. That’s where we come in.

At HYC, our job is to support cannabis businesses in handling these common errors. Our team has the expertise to make sure that your business is following your licensing application and meeting all state and local regulations. 

To prevent painful and expensive errors and take corrective action for your cannabis business, schedule a  consultation today.

Medical Marijuana for High-Performance Athletes: Truths & Myths Exposed

Higher Yields Consulting Medical Marijuana & High-Performance Athletes

It may seem incongruous to speak of medical marijuana and high-performance athletes in the same breath. Cannabis is hardly the image one associates with an athlete, yet medical marijuana is used in all levels of athletics. It’s just not widely talked about. 

Many athletes use different forms of cannabis (either ingested into the body or absorbed by applying on the skin) to help ease anxiety, reduce muscle inflammation, and maintain their weight. 

Higher Yields Consulting Medical Marijuana & High-Performance Athletes

The stigma of marijuana (cannabis) use is still high in many parts of the world, but with the increase in legal marijuana states, public opinion is softening. Recreational and medical marijuana laws differ greatly. So, would it make sense for athletes to be granted legal access to cannabis? That’s my hope, but it’s not that simple. 

Here are the pros and cons of medical marijuana in athletics and my predictions for the future of cannabis in sports.

Pros & Cons of Medical Marijuana for Athletes 

As a competitive bikini bodybuilder, I’ve seen firsthand how much marijuana can help athletes. When I ran track and played soccer in college, I tried using western medicine to heal my injuries and help my anxiety, but nothing worked. 

It wasn’t until I started using marijuana medicinally that I found relief. I was once again able to train and compete in the physically and mentally demanding sports that I loved. My passion for the healing powers of marijuana led me to become a cannabis consultant. 

We’ve made much progress in eliminating the stigma of cannabis in sports, but we still have a long way to go. The path to wider acceptance of cannabis for athletes is similar to how medical marijuana fought for acceptance in health care in previous decades. 

The acceptance of the medical benefits of marijuana took many years to reach. In the 1980s amid the HIV/AIDS crisis, patients found ingesting marijuana to be the only remedy for their pain. 

In the 1990s, cannabis was found to provide relief from the side effects of chemotherapy for cancer treatments, such as nausea and loss of appetite. It also eased their pain, allowing them to rest. As we know, sleep is key to all healing. 

High-performing athletes live with and push through intense physical pain all the time. I know this all too well. I find cannabis helps to reduce lactic acid buildup caused by weight training so I’m not stopped by fatigued muscles. Cannabis also keeps my body lean, which is essential as a bikini bodybuilder.

I know of many athletes who use cannabis to ease the anxiety that often comes with the demands of being in a high-pressure career. Cannabis has 100% been the thing keeping me focused! 

Does Cannabis Use Support an Athlete’s Recovery? 

Is there any truth behind some common beliefs about the health benefits of medical marijuana for athletes? Here are some of the top health claims and their probability of truth: 

 

Health Benefits Claim                 Probability of Claim                              

Decreases muscle inflammation  High likelihood of truth. According to a 2018 study, “… [cannabis] does decrease inflammation when it’s rubbed on muscles as an ointment or taken orally.”
Reduces chronic pain High likelihood of truth. In a 2019 clinical trial, 79% of respondents said that using cannabis helped to relieve their chronic pain.  
Enhances weight loss Possibly some truth. Studies have shown that, “High amounts of cannabis appear to increase metabolism and reduce energy storage, resulting in a lower BMI.”
Helps cope with stress, anxiety, and depression Only anecdotal evidence of effectiveness. While CBD has shown to improve anxiety and depression in some patients, further testing is needed. 

Lingering Concerns of Cannabis Use 

The stigma of cannabis use is correlated to the level of punitive laws in a given country or region. BIPOC (black, Indigenous and people of color), especially, have faced overcriminalization and experienced higher prejudices than other racial groups, according to data from the American Civil Liberties Union.

However, even in areas where the law hasn’t relaxed around marijuana use, a more liberal attitude toward cannabis use and medical marijuana is spreading. 

Like any drug, cannabis can affect different people in different ways, especially regarding mental health. While some will experience relief from anxiety and depression, others may experience the opposite. As with anxiety, some report their sleep is hindered rather than helped by medical marijuana use. 

People with a family history of mental health challenges might find that cannabis use heightens those feelings. After all, cannabis is still a drug. You should definitely consult with your medical professional before using it.

Finally, there is concern about the possibility that medical marijuana use, particularly when inhaled, can reduce lung capacity. Any form of smoke, whether it be from cigarettes, burning wood, or marijuana, can harm the human lungs. 

According to the American Lung Association, though, “it’s not possible to establish whether these occur more frequently among marijuana smokers than the general population.”

In most cases, the risks parallel the amount of the substance consumed. Moderate usage of controlled amounts of medical marijuana seems to show limited damage to the lungs and other parts of the body. 

Medical Marijuana Use in Professional Sports 

In December 2020, the National Basketball Association (NBA) announced it wouldn’t test its players for marijuana use during the upcoming 2021 season. The move could be a precursor to eliminating marijuana testing altogether as other professional sports leagues have done in recent years. 

Drug testing in athletic programs is intended to eliminate the unfair advantage that anabolic steroids and other performance-enhancing drugs artificially make an athlete faster and stronger. Cannabis doesn’t have that effect on people.  

The NBA Players Association Executive Director Michele Roberts has said that “it is not necessary for us to know if players test positive for marijuana.” The inference helps build the case that marijuana is not a performance-enhancing drug. 

Here’s a breakdown of the latest stance the top professional sports have taken on cannabis use by its players and the current response to a positive test. 

League Response
NHL (National Hockey League) Cannabis is not a banned substance in the NHL. If a player is found to have “unusually high levels of THC” in their system, he will get substance abuse assistance. No fines or suspensions. 
MLB (Major League Baseball) Cannabis was removed from the official banned substances list in 2019. The MLB was among the first professional sports leagues to do so. 
NBA (National Basketball Association) As of 2020, cannabis has been temporarily suspended from the random drug testing program due to safety concerns around the COVID-19 pandemic. It’s undetermined whether it will be reinstated post-pandemic.  
NFL (National Football League)  In 2020, collective bargaining led to positive cannabis tests no longer resulting in suspension.  
USAA triathlon, Iron Man  CBD is fine to use, but THC is not. 
NCAA (National Collegiate Athletic Association) Cannabis continues to remain on the banned substances list. The threshold has increased from 15 to 35 nanograms and the penalty for testing positive reduced from a full to a half season.  
MLS (Major League Soccer) and FIFA (Fédération Internationale de Football Association) Cannabis use is still banned by the MLS and FIFA. 

 

Predictions for the Future of Cannabis in Sports

Athletes will still have to adhere to regulations for the safety of all players, and much of the onus will still be on players to make good decisions regarding their use of recreational or medical marijuana.

It’s important that athletes regulate and limit their substance use, but the fear that allowing cannabis will open the door to other, more addictive, drugs in sports is not realistic.

Everyone involved wants to see players reach their fullest potential. Rehabilitation, rather than punishment, will continue to be the focus in sports. Substance-abuse programs for athletes should take the lead over fines and suspensions. It may not happen in the near future, but I’m going to keep fighting for it. 

Finally, in my experience playing college elite sports, the NCAA is trailing professional sports leagues in their progressiveness toward marijuana use. I truly hope the growing acceptance of medical marijuana in sports will expand to NCAA college athletes, as well. Only time will tell. 

Want to learn more? Subscribe to our newsletter to keep up with the latest news and emerging opportunities in the cannabis industry.

CBD in Europe

CBD in Europe

In 1961, the Single Convention of Narcotic Drugs gave the cannabis plant a definition that classified it as a narcotic. CBD, or cannabidiol, is one of 113 known cannabinoid extracts from the cannabis plant. CBD has many therapeutic uses, such as pain and anxiety reduction. In recognition of its medicinal uses, the European Food Safety Authority (EFSA) classified CBD in Europe as a non-narcotic “novel food” in 2019. In this context, “novel” simply meaning it was not commonly consumed in most households prior to May 1997. This means that CBD, so long as it contains less then 0.2% THC (the active psychotropic ingredient in cannabis) and is approved by the governing nation, can be freely traded as a market good in many EU member countries. The codification of CBD as a novel food has been part of an attempt to increase regulation and ensure quality in production, because a largely unregulated market meant that many CBD products of questionable quality were available for sale online. 

CBD in Europe 

However, there are still a few countries that maintain outright bans on CBD products because they are derived from the cannabis plant, countries with typically conservative leaning social ideologies, like Slovakia and MoldovaSome countries like Malta also fall into a legal gray area, where CBD is technically only available with a prescription but many pharmacies sell it over the counter and local enforcement agencies tend to look the other way. On the opposite end of the spectrum, though, are the countries anticipating full legalization, such as Luxembourg. It is holped that these countries will cause a domino effect in the EU similar to the one seen in Canada and the US. A recent report by the Centre for Medical Cannabis estimated that between 8-11% of UK adults have tried CBD, which is approximately 4-6 million people. The CBD market size is also estimated to grow to 1.5 billion dollars by 2025. As the demand for CBD has steadily increased in recent years, growing to the second largest in the world behind North America, the market has been largely unregulated. 

While the CBD market is poised for exponential growth, there are a few stumbling blocks in the way, namely the social stigma attached to cannabis and the lack of regulation. Not only has the scheduling of cannabis as a narcotic engendered decades of imputation surrounding its use, medicinal or otherwise, it has also caused some investors to hesitate when investing time and money into hemp byproducts. Investors fear the association of their brand with a product that is still considered a byproduct of an illicit substance, and little to no regulation introduces the possibility of unknowingly investing in a less than quality good.  

When it comes to addressing these issues, education and increased regulation are key to increasing interest in CBD. People generally are unaware of the difference between hemp and marijuana, and of the benefits of CBD products. Hemp and marijuana are both cannabis plants, however hemp is any plant with a THC content lower than .2%. CBD is therefore a hemp byproduct, as it is legally required to contain less than 0.2% THC content. When it comes to the purported benefits of CBD, there are many. Most famously it has recently been found to aid in some seizure disorders that don’t typically respond to medication, such as Dravet Syndrome and Lennox-Gastaut Syndrome. Several studies have shown that the number of seizures was greatly reduced, or even stopped altogether. Additionally, CBD offers aid for anxiety, insomnia, and chronic pain. Increased regulation will also help mend the public perception of CBD as questionable and possibly illicit, as it will ensure that products are safe and similar to any regulated and taxable good, such as alcohol. Stricter laws will also help investors feel more comfortable with the quality of product that they are putting money into, further boosting market growth.  

Overall, the European CBD market is extremely promising. Hopefully through increased regulation, education, and exposure a new era for cannabis in Europe can be ushered in, possibly paving the way for eventual total legalization.  Contact us for a free consult if you have questions about the business opportunities for CBD in Europe. 

Cannabis Legalization: Defining the Language of Legalization and Decriminalization

cannabis legalization

Cannabis Legalization: Defining the Language of Legalization and Decriminalization

Why Define Cannabis Legalization Terms?

So what is the difference between cannabis legalization and decriminalization? What is rescheduling, is it similar to de-scheduling cannabis? Read on to learn more about framing cannabis legalization initiatives and what these terms actually mean.

All too often discussions inevitably occur with individuals who are not as familiar with terms and jargon that become an understood language within an industry or occupation. The goal of this report defines terms important to the cannabis legalization movement and the markets its successes have created. This report is designed to serve as a tool to illustrate how these terms impact state and federal laws, consumers, and stakeholders in the Cannabis Industry. Each of the terms defined has an impact on our understanding of the goals and progress of the cannabis legalization movement, those who support it, and those who benefit from it.

While this will not be a comprehensive list of terms it explores the terms that most impact legal access to cannabis. The following will be discussed in this report: Decriminalization, Rescheduling & De-scheduling, Compassionate Care and Medical Cannabis laws, Adult-Use Legalization, and Amended Scheduling.

What is Cannabis Legalization?

So what is cannabis legalization? Cannabis legalization or what is often referred to as adult-use cannabis legalization refers to states that have expanded access to adults 21 years of age and older. Possession within states’ legal limits is not subject to a criminal or civil penalty. Many of these laws were passed via ballot initiatives that promoted regulating cannabis similarly to alcohol, taxing sales at a higher rate than medical cannabis, and utilizing tax revenue to help fund state budgetary items like education. Possession limits for Adult-Use, or recreational cannabis as it is also known, are typically set lower than for medical patients. Products in adult-use markets also tend to have caps on the amount of THC that can be present in infused products such as edibles or concentrated products like vape pens or concentrates.

There are currently 11 states with Adult-Use markets with evolving regulations and requirements to address concerns including social equity and 4 with initiatives on the ballot for legalization in 2020. Now that we’ve covered what cannabis legalization is let’s move onto decriminalization.

Cannabis Decriminalization

The simplest definition of cannabis decriminalization is a law that reduces or removes the criminal penalties related to low-level cannabis possession. It is widely understood to mean that criminal penalties are not applied to possession of cannabis in amounts defined by law to fall within possession for personal use. In reality, the possession limits defined in these laws can vary from less than 10 grams to as much as 3.5 ounces. Additionally, possession that goes beyond these limits may still be subject to criminal prosecution.

Decriminalization laws at the state level are a big step forward for consumers in possession of small amounts of cannabis because criminal prosecution for this type of possession becomes a low priority for the state criminal justice system. This does not affect federal prosecution as there are no federal decriminalization laws with respect to cannabis at this time.

Federal cannabis decriminalization, were it happen anytime soon, would protect consumers but it would not protect state-legal cannabis markets unless specifically stated in the legislation. At this point any federal legislation that decriminalizes cannabis possession, but does not address the state legal markets that currently exist, would keep
the compliant stakeholders that operate within these markets in a legal grey area that is still at risk for criminal prosecution. Without expressed permission to banking institutions among other traditional business services, services to these stakeholders would continue to pose a risk to their continued operations.

Similarly, such a narrow view of decriminalization would not change the enforcement of tax codes like IRS 280E which impacts cannabis companies significantly by excluding many business expenses that are standard operating deductions for most companies, limiting cannabis company tax deductions to cost of goods sold (COGS). At this time there are currently 14 states with decriminalization provisions in their laws.

Rescheduling and De-scheduling Cannabis

Rescheduling and De-scheduling cannabis refer to the Controlled Substances Act of 1970 which contains five schedules under which a substance can be placed depending on its medical use, the potential for abuse, and safety or dependence. Cannabis is currently placed under Schedule I, which is reserved for substances with no known medical value that has a high potential for abuse and dependence. This scheduling limits opportunities for research on a substance, though it is becoming clearer that cannabis should not be placed at the schedule it currently resides under.

Rescheduling Cannabis means it would be placed under a less restrictive Schedule and potentially become eligible for greater research and medical use, though it could be potentially damaging to the Adult-Use markets as well as create new hurdles that current cannabis business operators may not be equipped for.

De-scheduling would remove cannabis from the CSA list entirely. While this action would remove many of the barriers currently in place for more efficient cannabis business operations, for instance, banking and the 280E hurdles could be eliminated, it would also open the markets up to more traditional businesses that are currently impacted by the legalization of cannabis such as alcohol, tobacco, and the pharmaceutical industries to name a few. This option may present a mixed blessing for consumers as it could radically reshape the cannabis industry as we know it.

marijuana legalization

Compassionate Care and Medical Cannabis Laws

Compassionate Care cannabis legalization refers to states that have very limited medical cannabis/medical marijuana programs where the list of qualifying conditions is very small. Qualifying conditions for these programs could be as limited as only allowing patients who are terminally ill to participate. Compassionate Care legalization can also refer to medical cannabis programs that severely limit the amount of THC products can contain. Sometimes states that have these programs are referred to as Low-High states, these programs tend to favor products that contain low percentages of THC (tetrahydrocannabinol) and high percentages of CBD (cannabidiol) for the perceived higher therapeutic value and lower potential for dependence.

Compassionate Care cannabis legalization refers to states that have very limited medical cannabis/medical marijuana programs where the list of qualifying conditions is very small. Qualifying conditions for these programs could be as limited as only allowing patients who are terminally ill to participate. Compassionate Care legalization can also refer to medical cannabis programs that severely limit the amount of THC products can contain. Sometimes states that have these programs are referred to as Low-High states, these programs tend to favor products which contain low percentages of THC (tetrahydrocannabinol) and high percentages of CBD (cannabidiol) for the perceived higher therapeutic value and lower potential for dependence.

Medical Cannabis or Medical Marijuana programs provide greater patient access through a larger list of qualifying conditions. These lists of conditions can be added to after medical cannabis has been legalized. Possession within a state’s legal limits is not subject to criminal or civil penalty.

Products available in these markets are regulated by state agencies and business licenses are limited to those who can meet ownership requirements. Early markets did not account for social equity, though state laws are evolving on this issue.

There are currently 33 states, 3 U.S. Territories, and Washington D.C. where medical cannabis is legal at every level except federal where municipalities choose to allow it. This does not mean that every city or town in a state that has legalized has to allow cannabis business in their jurisdiction. For example, in California where medical cannabis has been state-legal since 1996 and the Adult-Use market has been state-legal and operational since 2018, many cities and counties still do not allow cannabis businesses to operate within their limits. Currently, every state that now has Adult-Use cannabis laws also has medical cannabis laws. There are currently 3 states with ballot initiatives to legalize cannabis for medical use in 2020.

Amended Scheduling – The STATES Act

Full federal legalization of cannabis has been a hotly debated subject that has been gaining momentum since 2016. The closest the legalization movement has gotten so far in safeguarding state-legal markets has been the Cole Memo which lowered federal enforcement of cannabis law priorities in states with regulated medical cannabis programs and the Rohrabacher-Farr/Rohrabacher-Blumenauer Amendment, which prohibits the Justice Department from spending funds to interfere with state-regulated medical cannabis programs.

These measures limited enforcement but still did not address the lack of available banking, which is both an economic and safety issue for cannabis businesses; or IRS 280E, which as stated above, prevents cannabis businesses from deducting many standard costs associated with running a business beyond the allowed cost of goods sold (COGS) resulting in a much higher tax bill, often greater scrutiny of returns, and a high chance for audits. A 2015 white paper issued by the National Cannabis Industry Association on the topic of 280E reported that some cannabis companies were being taxed at an effective tax rate of 70% or more because of the inability to deduct typical business expenses from their gross income. This issue has not changed much if at all in the years since the white paper was published.

The STATES Act, unlike Decriminalization or legalization at either Medical or full Adult-Use, does not establish possession limits or establish regulations regarding cannabis. It doesn’t Reschedule or De- schedule Cannabis on the CSA, it Amends it. When/if the STATES Act passes it will amend the CSA to state that the provisions of the title on cannabis shall not apply to state-regulated cannabis markets or any person acting in compliance with state cannabis regulations. This exception would also apply to persons acting in compliance with tribal cannabis laws. This not only reinforces a state’s right to legislate the issue of cannabis in accordance with the wishes of its population, it also states that the proceeds from state-legal cannabis transactions shall not be deemed unlawful. This appears to mean that IRS 280E would not apply to compliant state-licensed cannabis businesses.

Cannabis USA

Conclusion:  Opportunities for Bi-Partisan Collaboration

Now, more than any time in American history since the establishment of the CSA, we have an opportunity to collaborate with current representatives and aspiring political leaders to build a framework for cannabis legalization. Doing so presents an unprecedented chance to address issues of social inequality that are a byproduct of the War on Drugs as well as identifying potential revenue streams through legalization that have not been available before.

The goals of each of the terms discussed in this report aim to lessen the social, economic, and criminal ramifications tied to cannabis laws currently in effect. Decriminalization, trading criminal penalties for civil, is an important first step for many states. It is far from perfect and can be unequally enforced, but its a start none-the-less.

The debate over CSA Rescheduling or De-scheduling of cannabis calls into question the decision to place it among substances that have been found to be harmful and highly addictive in the first place. This is especially true as America faces an opioid epidemic impacting citizens from a variety of walks of life.

Legalization, whether for Medical or Adult-Use, is about freedom of choice, developing and evolving industries, and providing safer options than the illicit market while providing much-needed revenue to states. Amended Scheduling places trust in the states to enact laws and regulations that make sense for their citizens while reserving federal authority to enforce existing laws against the illicit market, and potentially providing much-needed relief for heavily taxed cannabis businesses.

The goals of each of the terms discussed in this report aim to lessen the social, economic, and criminal ramifications tied to cannabis laws currently in effect.

  • Decriminalization, trading criminal penalties for civil, is an important first step for many states. It is far from perfect, and can be unequally enforced, but its a start none-the-less.
  • The debate over CSA Rescheduling or De-scheduling of cannabis calls into question the decision to place it among substances that have been found to be harmful and highly addictive in the first place. This is especially true as America faces an opioid epidemic impacting citizens from a variety of walks of life.
  • Legalization, whether for Medical or Adult-Use, is about freedom of choice, developing and evolving industries, and providing safer options than the illicit market while providing much-needed revenue to states.
  • Amended Scheduling places trust in the states to enact laws and regulations that make sense for their citizens while reserving federal authority to enforce existing laws against the illicit market, and potentially providing much-needed relief for heavily taxed cannabis businesses.

Share this Article

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Stephanie Till - Green Rush Indexed Data

Stephanie Till - Green Rush Indexed Data

This article was written by Stephanie Till of Green Rush Indexed Data with data compiled and provided by Bridge West CPAs. Stephanie is a Compliance Expert as well as a Historian who is currently archiving the Green Rush of the cannabis industry. The mission of her company is help clients by providing quality research services, custom tailored cannabis compliance consulting, dynamic training materials and exceptional customer service for those in the young cannabis industry.

Learn More About Green Rush Indexed Data

The Latest from our cannabis consulting blog

How Cannabis Businesses Can Overcome Stigma & Backlash

cannabis-stigma

Despite a wave of legalization, there’s still plenty of stigma that surrounds the cannabis industry. Many cannabis businesses and their employees even face intense backlash and harsh criticism for their involvement in the industry. Here’s everything you need to know about overcoming the stigma surrounding cannabis businesses.

Continue reading

Government Collaborations for a More Cannabis-Friendly Community

cannabis government outreach

The government and the cannabis industry have been bitter rivals for decades. Since the days of Woodstock through to the era of CBD-everything, it seems that we’ve encountered increasing instances of opposition, legal strife, and logistical nightmares caused by the tension between these two over time. Now, like Jim and Dwight, the cannabis-friendly town of Edgewater is proving that long-time rivals can become cooperative friends. Hear from the man himself, Kris Teegardin, and pick up his tips for finding harmony in hardship.

Continue reading

Minorities in Cannabis: Social Equity During a Racial Pandemic

cannabis social equity

In any industry, life is more difficult for people of color, women, and other minorities. The cannabis industry is no different. In fact, there’s been an obvious lack of representation of communities of color since the inception of legal cannabis. Here’s everything you need to know about minorities in cannabis fighting for social equity.

Continue reading

The Effects of COVID-19 on Cannabis Legalization & Legislation

Cannabis Legalization

As the U.S. continues to wrestle with an epic health crisis there is no “business as usual.” COVID-19 has taken the steering wheel and health experts are riding shotgun in an attempt to grab it back as we try to keep the economy alive. Meanwhile, those with an interest in cannabis legislation and legalization are keeping their eyes on the road ahead. We have insights from a seasoned cannabis industry CPA, a marketing strategist, and a cannabis industry archivist/data analyst to help shed some light on the current situation and what the future may hold.

Continue reading

Emerging Cannabis States: Michigan, Oklahoma, Massachusetts, and Colorado

Emerging Cannabis States: Michigan, Oklahoma, Massachusetts, and Colorado

This month our focus is on Colorado, Massachusetts, Michigan, and Oklahoma. For Colorado and Massachusetts, Social Equity has been a subject of contention. Michigan opened a licensing opportunity in May and Oklahoma has opted to test breathalyzer technology to find tools to better determine whether a driver is impaired.

Oklahoma Cannabis Market

Scott Fegatter, a Republican Oklahoma State representative, has proposed expanding access through full adult-use cannabis legalization in order to generate tax revenue for the state budget, up to $100 million annually. His proposal is just one measure to alleviate the $250 million deficit anticipated for 2021 due to the pandemic. Oklahoma had a ballot initiative effort in the form of a petition prior to March 15, however that was before the shut down when the governor declared a State of Emergency due to COVID-19. There is however, concern that there is not enough support within the state legislature to legalize cannabis.

Something that might aid in decreasing opposition to expanding access to cannabis to full Adult-use is the pilot program for a cannabis breathalyzer which has recently been approved. The bill, approved in May, would require the Department of Public Safety to spend $300,000 on creating a pilot program for testing breathalyzers designed to detect cannabis impairment, the results of the test would not be admissible in court. This could really alleviate some issues with cannabis use and DUI laws for determining impairment. This is one of the first programs to make sure that the breathalyzer system can work to solve the problem of identifying drivers who are actually impaired due to cannabis use as

Michigan Cannabis

In early March 2020 Michigan began phasing out caregivers’ ability to sell cannabis to adult-use cannabis companies and are scrapping the ability to for caregivers to supply the Adult-use market entirely. Medical cannabis dispensaries may still obtain products from licensed caregivers, but the Adult-use market cannot. This opens up opportunities for licensed cultivators and producers to ramp up production and be able to meet demand within the privileged licensee supply chain.

In a move that might prompt employees to vote themselves into a union, an update has been made to Michigan’s cannabis industry regulations to no longer require operators to maintain labor peace agreements. This can be seen as controversial as there are many states that are starting to require labor peace agreements to protect both the industry and its workers. Considering unfolding events in Massachusetts where reactions to the pandemic are prompting employees to vote to go union, it will be interesting to see if the same would happen in Michigan and other states.

emerging cannabis states

Colorado Cannabis Market

This year Colorado has taken another step towards greater social equity by passing and signing into law HB1424 changing the Accelerator Program to a Social Equity Program by more clearly defining what the state is looking for in terms of social equity applicants. The legislation also allows for a social equity applicant to own a marijuana store or dispensary this is a change from the original Accelerator Program, which only allowed social equity licenses for manufacturing and cultivation. According to the law an Accelerator Endorsed Licensee is a retail marijuana cultivation, production, or store who has, pursuant to the rules, been endorsed to host and offer technical and capital support to a Social Equity Licensee. These Accelerator Endorsed Licensees may qualify for incentives such as reduced application or licensing fees. A Social Equity licensee is considered a natural person who meets criteria is established in section 44-10-308 (4). A Disproportionately Impacted Area will be defined to the extent relevant State of Colorado data exists or is available and is used for the purpose of determining eligibility, which means that depending on the data sets that are available to determine the areas that have been disproportionately affected by the war on drugs, Colorado will set guidelines. There are requirements for social equity licensees for operating in the same licensed premises or on a separate premise possessed by an Accelerator Endorsed Licensee. Accelerator Endorsed Licensees are not required to exercise the privileges of their license on the premises where a social equity license he operates. The implementation deadline has been moved from July 1, 2020 to  July 1, 2021.

 

This legislation also has created an exception to the felony restriction for social equity applicants. A marijuana conviction shall not be the sole basis for a license denial. Effective January 1, 2021 a social equity applicant may apply for a license and the qualifications for a social equity licensee are as follows:

  • The applicant must be a Colorado resident
  • They may not be a beneficial owner of a license subject to legal action
  • They must demonstrate the following
    • Residence in Colorado for at least 15 years between 1980 and 2010 in any census tract designated by the office of economic development and international trade as an opportunity zone or designated as a disproportionately impacted area as defined by section 44-10-203 (1)(j).
    • They have a parent, legal guardian, sibling, spouse, child, or minor in their guardianship that was arrested for a marijuana offense or was subject to civil asset forfeiture related to a marijuana investigation.
    • Having a qualifying household income can also be a determining factor
  • Applicant must hold 51% or more of the beneficial ownership of the company applying for a social equity license.

 

State licensing for marijuana Accelerator store licenses is scheduled to begin on January 1, 2021.

Massachusetts Cannabis

Massachusetts Cannabis Market

Massachusetts intends to speed up cannabis license there cannabis licensing process from application applicants having to wait 121 business days down to only 60, that is if COVID-19 hasn’t ruined the chances for that in the budget. The Governor of Massachusetts deemed adult-use dispensaries as non-essential over concerns that adult-use cannabis dispensaries attract clientele from neighboring states and closed them only weeks after the market’s opening, jump-starting a considerable fight over whether or not Adult-use dispensaries should remain closed. A judge ruled in favor of the governor’s position and Adult-use dispensaries were eventually reopened on May 26 along with other businesses.

Whether or not to determine Adult-use cannabis dispensaries as essential hasn’t been the only controversy in Cannabis licensing. Cannabis activists are currently in opposition to Massachusetts changes to Social Equity guidelines. This was due in large part to regulatory change that decreased the percentage of the ownership percentage from 51% down to 10% of minority ownership. There is currently a petition to revise it. The drop down to 10% does directly conflict with many city and town ordinances that require 51% ownership for social equity applicants. Cambridge Massachusetts is also dealing with a social equity issue. The municipality chose to only allow social equity applicants for the first stage of license applications and is being sued by a current medical marijuana licensee That is demanding to have the opportunity to have a co-located adult-use facility. The city appears to have established the special licensing for social equity applicants in an attempt to provide social equity licensees an opportunity to establish market share before non-social equity applicants are able to dominate the market. Massachusetts also began accepting business license applications for cannabis delivery on May 28 though it is unclear as to whether or not an application period is currently open.

In a move to protect employee interests, Massachusetts Mayflower Medicinals employees have voted to join the United Food and Commercial Workers Union Local 1445. The employees chose to join the union due to Coronavirus related issues such as a lack of consistent treatment from management, inadequate

healthcare coverage, and slow responses to the pandemic. They are obviously not the first in Massachusetts to choose a union, however, it is a trend that is worth watching because it’s occurring in multiple states not just Massachusetts

Conclusion

While none of the states in this report have legalization efforts in their legislatures or on the ballot there are developments occurring that have implications for the cannabis industry as a whole. Social Equity programs are becoming more than token efforts to address the cannabis industry’s issue with diversity while the continued efforts of labor unions to unionize the Industry’s labor force showcase a need in some markets to address labor concerns and management practices.

Share this Article

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Stephanie Till - Green Rush Indexed Data

Stephanie Till - Green Rush Indexed Data

This article was written by Stephanie Till of Green Rush Indexed Data with data compiled and provided by Bridge West CPAs. Stephanie is a Compliance Expert as well as a Historian who is currently archiving the Green Rush of the cannabis industry. The mission of her company is help clients by providing quality research services, custom tailored cannabis compliance consulting, dynamic training materials and exceptional customer service for those in the young cannabis industry.

Learn More About Green Rush Indexed Data

The Latest from our cannabis consulting blog

Hemp CBD: A Current Look at the Industry

hemp cbd consultants

On October 29, 2019, the United States Department of Agriculture (USDA) issued a rule establishing the U.S. Domestic Hemp Production Program. States and Indian tribes must submit plans to the agency for approval to regulate hemp production in their areas through this new program. Additionally, the U.S. Domestic Hemp Production Program provides a federal plan for producers in states or territories without their own policies. We have some tips to help you navigate the emerging hemp CBD market.

Continue reading