Culture B2B Q3 2017 by Culture Magazine

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inside this

issue. contents:

Q3 2017

Editor-In-Chief Jamie Solis associate Editor Ashley Bennett Editorial Benjamin Adams coordinator Editorial Sheryll Alexander, Contributors David Branfman, Esq.,

16.

Worldwide Success China-based vaporizer company Transpring Technologies owes much of its international success to Factory Owner Frank Chen.

Hilary Bricken, Jasen T. Davis Bonni Goldstein, MD, Natasha Guimond, Emily Manke, Meital Manzuri, Nicole Potter, Addison Herron-Wheeler photographers Jon Gilhooley, Tonya Perme, Eric Stoner Art Director Steven Myrdahl Production Michelle Aguirre Manager Graphic Designer Nathan Hernandez

Lawless Leader

sales director Justin Olson

Morocco is the world’s largest cultivator of cannabis, despite its illegal status in the country.

Account Jon Bookatz, Alex Brizicky, Executives Eric Bulls, Kim Cook,

12.

Molly Clark, Beau Odom, Garry Stalling, Ryan Tripp, Vic Zaragoza

general Manager Iris Norsworthy

Social Success

28.

22.

Denver’s social cannabis consumption bill has finally passed in Colorado.

24.

Overwhelming Options

Determine which conferences and trade shows will provide the best opportunities for your business needs.

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Distribution Cruz Bobadilla Manager Publisher David Comden

Automation in Cultivation

As cannabis processing becomes more high-tech, it is key to consider the many ways automation is affecting the industry.

digital content David Edmundson manager

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n e w s

bytes

Poland’s Lower House Approves Medical Cannabis Hemp Building Company Receives $9.1 Million Contract from U.S. Department of Defense A New York-based hemp building material company, Ecovative Design, was awarded a $9.1 million contract from the United States Department of Defense to create eco-friendly building materials. The money came from Defense Advanced Research Projects Agency (DARPA) to develop more versatile and efficient biomaterials. For over 10 years, the company has made building supplies out of hemp, fungus and agricultural waste. “MycoBoard™ is powered by our mResin™ technology and is directly compatible

The First Day of Recreational Cannabis in Nevada Attracts Long Lines

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with existing presses. Loose particles, from hemp to conventional wood fibers, are then combined with our proprietary mycelium strains. The growth of the mycelium converts some of the particles into a natural and safe biological glue.” Ecovative Design’s MycoBoardTM can selfrepair when water leaks or holes appear, and the material can react to water and re-bond. The Department of Defense could benefit from such materials, especially in areas where importing building materials is difficult.

Forty-four dispensaries began selling recreational cannabis at 12:01 a.m. on July 1. Nevada State Senator Tick Segerbloom was among the first customers to legally buy cannabis at The Source dispensary in Las Vegas. “This shows that marijuana is a legally recognized form of entertainment and that’s what we do in Nevada, we are the entertainment capital of the world,” stated Segerbloom. The first four days of legal cannabis in Nevada, which fell during

Independence Day weekend, generated $3 million in sales revenue and about $500,000 in tax revenue. This sales figure was generated from Saturday, July 1 through Tuesday, July 4. Nevada’s tax rate is set between 33 and 38 percent, depending on local taxes. Last November, Nevada voters approved Ballot Question 2, which legalized recreational cannabis in the state. Nevada was one of four states to legalize cannabis in last November’s election.

Poland’s Lower House of Parliament overwhelmingly approved legalizing the consumption of medical cannabis, with a 440-2 vote. One House member withdrew from the vote. The law would allow doctors to prescribe medical cannabis to qualifying patients and allow imported cannabis products to be sold in pharmacies. The bill was introduced by former rapper Piotr Liroy-Marzec, who now serves in Poland’s Parliament. Liroy-Marzec believes that Poland’s typically sub-par cannabis crops could be grown better by the Institute of Natural Fibers and Medicinal Plants. “This change does not mean, however, that improvement will take place immediately—even if today passed the law on national crops, the standardization of our plant would take about two years,” Piotr LiroyMarzec said. “Therefore, our product appears anyway only for some time. I believe, and so we’re stuck with these crops, because imports will be dysfunctional.” In the neighboring country of the Czech Republic, medical cannabis has been available since 2013, and it is one place that Polish lawmakers considered importing raw cannabis from.

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2017 Cannabis Science Conference

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bytes

The world’s largest cannabis science conference is coming to Portland, Oregon, with over 60,000 square feet of exhibit space and 50,000 square feet of meeting space, which creates an epic and unforgettable experience. Sign up quickly, because last year’s event sold out very fast. Hosted by jCanna and Chalice Farms, the event will offer workshops on cultivation, extraction, sample preparation, analytical testing and edibles manufacturing. The expanded Canna Boot Camp features a new cultivation segment. Hear from renowned keynote speakers including Montel Williams, Dr. Sue Sisley M.D., Israeli David Meiri, PhD, Dr. Jack Henion and Uma V.A. Dhanabalan, MD, MPH, FAAFP. Plenty of registered nurses will also be on board to answer questions. Last year, over 750 attendees showed up for the event, and that number is expected to rise even more this year. WHEN: Mon, Aug. 28Wed, Aug. 30 WHERE: Oregon Convention Center, 777 NE Martin Luther King Jr Blvd., Portland, Oregon Website: cannabis scienceconference.com

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c o n t.

Colorado Issues First Cannabis Transporter Licenses The first companies to receive cannabis transporter licenses in Colorado will be Green Parcel Service and Colorado Logistics. The new class of licenses took effect on July 1, which

allows independent companies to provide logistics, distribution and storage services to the cannabis industry. Steve Fox, Director of VS Strategies, applauded the recent movement.

“This new license class is a major step forward for the cannabis industry in Colorado, as thirdparty transporters were previously only able to deliver marijuana and marijuana products directly from one licensed entity to another,” Fox stated. The new license allows transporters to temporarily store cannabis during emergencies and unexpected events. The distribution companies aren’t required to buy and sell the cannabis product in order to transport it. This cleanup legislation helps fill in the gaps of Colorado’s recreational cannabis industry, making the process more efficient and safe.

Catalonia, Spain Legalizes the Consumption, Cultivation and Distribution of Cannabis The Catalan government legalized the consumption, cultivation and distribution of cannabis in July. The region operates autonomously and regulates cannabis separately from the rest of Spain. Cannabis clubs are common in Catalonia, which led 118 of Catalonia’s 127 ministers to vote in favor of regulating the clubs. “This law is a step

forward in regulating the activity of venues that have already established a clear regulatory framework that regulates the conditions, rights and obligations for membership. It regulates the documentation of associations, selfsufficiency, transportation and hygienic measures. It also urges the government to collaborate with other governments that are

interested in further drug policies that are based on risk prevention and harm reduction.” Approximately 67,500 Catalonia residents recently signed a petition, which forced the government to address the issue. Under the upcoming regulations, cannabis clubs will be limited to the production of 150 kilograms of cannabis per year.

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The amount of money, in thousands of dollars, that Nevada collected in recreational cannabis taxes during the first four days of recreational sales in July: (Source: CBS Seattle)

500

The percentage of medical cannabis patients in the U.S. who stated that they could decrease opioid use after using cannabis: (Source: University of California, Berkeley)

The amount of money, in millions of dollars, that cannabis advocate and attorney John Morgan announced that he plans to invest in Floridaâ&#x20AC;&#x2122;s cannabis industry: (Source: Miami Herald)

100

The numeric ranking of Ghana among countries with the highest percentage of cannabis consumption in the world: (Source:

Ghana Web)

The approximate amount of money, in millions of dollars, that Alaska has collected in cannabis sales taxes since retail cannabis sales began: (Source: Alaska Dispatch News)

The number of people who have applied for medical cannabis cultivator licenses in Ohio: (Source:

185

U.S. News)

The highest estimated number of part- and full-time jobs that have been created by the United States cannabis industry: (Source: Forbes)

230,000

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The amount of money, in millions of dollars, that Canadian firm iAnthus Capital Holdings Inc. bid for a medical cannabis license in New York: (Source:

17.3

Forbes)

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Hashish Kingdom

Illegality has not stopped Morocco from being the world’s largest cannabis producing country by Jasen T. Davis

orocco is a predominately Islamic country located in the west part of North Africa along the Atlantic Ocean and the Mediterranean Sea. Hosting a population of more than 33.8 million people, its major cities include Marrakesh and Casablanca. Officially known as “The Kingdom of Morocco,” this independent nation is also the world’s largest producer of cannabis resin, also known as hashish, on the planet according to the 2017 World Drug Report. This is ironic because, technically, it is illegal to grow or sell cannabis in Morocco. Despite the harsh penalties the government can impose on violators of the law, people throughout the country, especially in a northern area known as the Rif (a region infamous for supplying

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western Europe with hashish for decades), cultivate cannabis because the authorities often turn a blind eye to what‘s going on. “Travel around in some areas and you see the plants all over the place,” says Tom Blickman, Senior Project Officer of a research group known as the Transnational Institute. A regular speaker at the United Nations, Blickman specializes in studying drug markets, money laundering and organized crime, which is a big part of the cannabis industry in Morocco, where nearly one million people make a living cultivating the plant. The problem is that despite the fact Morocco produces nearly 38,000 tons of hashish a year, growers are forced to pay corrupted government officials exorbitant bribes to avoid prison. “Nearly 50,000 growers have arrest warrants hanging over their heads,” stated Mr. Blickman in a policy briefing for the U.N. entitled, “Morocco and

Without formal and credible studies, nobody has the right to say if legalization is good or not.

Cannabis: Reduction, Containment or Acceptance.” Since hashish production is the only viable alternative source for sustenance for people in the country, this puts them in a terrible position unless cannabis is legalized and cultivators are allowed to supply areas of the planet where cannabis is legal, like Amsterdam or America, without fear of persecution by the government. Charif Adardak is the president of the Association of Rif Senhaja Amazighs, an activist organization that seeks to protect the rights of cannabis growers throughout Morocco. Adardak’s organization fears that if the government did legalize cannabis, it would negatively complicate matters. “If the plantations are transferred to areas featuring better conditions, it will mean a million people will lose their livings,” Adardak said. This is probable, since Morocco is still offically ruled by a king that can change the law with a simple decree and has a military to back it up. The Association of Rif Senhaja Amazighs hopes that growers in the region can get a general amnesty and be allowed to cultivate cannabis without being criminalized, although Adardak admits that, “Without formal and credible studies, nobody has the right to say if legalization is good or not.” Although government crackdowns do occasionally happen, resulting in mass arrests and violent demonstrations, since 2013, the Moroccan parliament has openly debated regulating cannabis by legalizing it medicinally in a simliar way many states in America have. Cannabis cultivators have even been enticed by wellfunded government programs to grow other crops, but the fact is what they produce now makes more money than any other produce farmers could cultivate and sell legally on the open market. Time is running out for the land, however. Fifty years of constant cannabis cultivation has demolished local ecosystems, damaged forests and eroded the soil to the point of collapses. But as long as there is a European demand for Morrocan hashish, the estimated 90,000 families that grow cannabis for a living have nothing else to do to survive but cultivate and wait. c

WASHINGTON D.C. LEGAL CANNABIS MARKET Despite being at the forefront of cannabis legalization, congressional oversight has stifled industry growth in Washington D.C.

LEGALIZATION 1998

24%

2014

MEDICAL

PERCENTAGE OF 21+ ADULTS WHO CONSUMED CANNABIS IN THE PAST YEAR

ADULT-USE

MEDICAL MARKET 4,995

REGISTERED PATIENTS

294

PARTICIPATING PHYSICIANS

DISPENSARIES

PRODUCERS

$17.8 MILLION

$33.9 MILLION

2017 MEDICAL DISPENSARY SALES

2020 MEDICAL DISPENSARY SALES

MEDICAL PATIENT RECIPROCITY

ADULT-USE MARKET LAWS NO

21+

CONSUMPTION AGE

CONSUMPTION IN PUBLIC

UP TO

2 ounces POSESSION

UP TO

6 PLANTS

HOME CULTIVATION

CANNABIS SALES

Only three of which are mature at any time

CANNABIS DONATIONS Source: New Frontier Data, Substance Abuse and Mental Health Services Administration, Washington D.C. Department of Health

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International Tycoon

Frank Chen overcomes the nuances of running an international vaporizer manufacturing business by Benjamin M. Adams 16

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We are very optimistic about the future of the cannabis oil business in the United States because [medical cannabis] really does improve peoples’ health. I would urge business owners to research what is allowed and what isn’t and to obey the law.

he United States’ cannabis industry has been at the forefront of the scene for decades. While other countries are beginning to catch on to the rise of cannabis, one particular part of the world is having an impact on the cannabis industry too—even though it’s not necessarily legal there. Originally based in Shenzhen, China, Transpring Technologies is a vaporizer manufacturing business that has advanced the technology

for vaporizer pens, batteries and cartridges, all of which are widely distributed in the American cannabis industry. Since 2004, some of Transpring’s groundbreaking designs have included the A3 cartridge, A4 cartridge, L0 battery and the DP3 disposable vape pen. According to Alibaba, Transpring has a production line capacity of 1.2 million atomizer pieces per month, and 500,000 batteries per month. It is also reported that 75 percent of the company’s total revenue comes from sales in Northern America, with 20 percent from domestic sales and an additional five percent coming from Western Europe. The company employs over 300 individuals under multiple production lines and serves millions of clients worldwide. In 2015, Transpring’s American branch, Transpring USA, was established in California. With branches in China and California, managing an international vaporizer manufacturing business comes with a unique set of challenges. For General Manager and Factory Owner of Transpring Technologies, Frank Chen, overcoming obstacles is something he has become familiar with over the years. “The first challenge is that cannabis is only legal in certain states in the U.S. and not the entire country,” Chen told CULTUREB2B while at his office in China. “Policy-wise, it’s not a very stable environment. We have to be extremely careful. If not, it’s very easy for us to get into trouble with the law. The second challenge is the competition.” Chen estimated that there are currently about a dozen similar companies in China. >> CULTUREB2B.com

I think Transpring has made several contributions to the cannabis industry in the U.S.

Though business owners know all too well how unpredictable the cannabis industry can be, Chen is ambitious and plans to expand the company in Los Angeles, California. Currently, Transpring is in the process of buying permits to receive permission to enter the cannabis oil business, so that more formal testing and analysis can be done legally in the U.S. In China, the company is forbidden from handling any form of cannabis, which forces Transpring to use a substitute oil for lab testing. Expanding its business operations in California will open many doors for Transpring. Vaporizer pen and concentrate companies around the world use Transpring’s products and add their own labels and branding to them. Transpring’s clients are from many different countries including the United States, Canada and Spain. However, finding clients that span across the globe is no easy task for Chen. “There are several ways in which we acquire overseas customers,” Chen explained. “First we went through Alibaba, in the very beginning. Also, we reach out to new clients and get referrals from existing clients. Sometimes customers will be in touch with us directly through advertisements in magazines and electronic media.” The rising number of outlets that are willing to let cannabis-related companies advertise has grown to unprecedented levels in the United States, which has given Transpring a variety of outlets to acquire new customers. Serving millions of customers proves that cannabis support is at an all time high. Chen believes that cannabis is not only good for consumers’ health, but it’s also not an addictive substance. He expressed how hopeful he is about the future of the vapor industry and the cannabis oil industry. “We are very optimistic about the future of the cannabis oil business in the United States because [medical cannabis] really does improve peoples’ health.” Although China tends to regard cannabis as an addictive substance no different than hard drugs, Chen believes otherwise. “I now know that cannabis products are not addictive because a friend of mine traveled to the U.S. and consumed it for about a month. I asked him how he felt after quitting, and he said he was totally fine, but he is addicted to smoking cigarettes. What I’ve found is that if people want to use cannabis products, they should be free to use it.” CULTUREB2B also asked Chen what he would attribute his success in the business world to. “Several

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reasons,” Chen quipped. “But first is the overall growth of the cannabis market in the United States. Our company is the earliest company in China to be in the e-cigarette business and also the first to be in the cannabis vaporizer business. The O.penVAPE business has been good for our development and growth. In 2011, we recommended their product.” Transpring’s influence on the vapor industry is evident everywhere you look. Chen for one is glad to have brought reliable cannabis products to Transpring’s customers in the U.S. “I think Transpring has made several contributions to the cannabis industry in the U.S.,” Chen said. “One is our technology. For instance, there was no vapor at the beginning of vaping, due to extreme weather. Our technology, through working on the battery, resolved this issue.” Transpring perfected the pre-heating technology that heats up the cannabis oil as well as the cartridge. The company has also perfected its cartridge designs to ensure a better consumer experience. The natural state of cannabis oil can differ from one batch to the next, so Transpring adjusted the structure inside the cartridge to accommodate various oil consistencies in order to prevent leakage. By overcoming various challenges and focusing on perfecting vaporization technology, Chen foresees great potential for Transpring to continue its worldwide growth. c

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The Future is Now

Automation brings an increase of profitability and safety to cannabis cultivation by Emily Manke

ince the dawn of the Industrial Revolution, it has been apparent that automation technology has the ability to make production more efficient, seemingly by the minute. So where does cannabis cultivation fit into this? Of course cannabis cultivation can, and already does, benefit from automation. Irrigation, feeding, monitoring and adjusting humidity and pH levels are all processes that can be automated. Automation in the cannabis industry grew in popularity around 2013. The Triminator by Hydrobuilder is a fine example of the rising dependence of automation in cultivation. Seedo, a personal automatic hydroponic machine, and LEAF, which is operated by smartphone, are examples of selfcontained cultivation systems that are completely automated. Wadsworth Control Systems offers remote control-guided systems, which makes long distance cultivation possible. The Cannabis Business Timesâ&#x20AC;&#x2122; 2017 State of the Industry Report attempts to answer the question of who is utilizing this technology in the cannabis industry. The report is based on answers from 237 research participants involved in cannabis cultivation throughout North America, in January and February of 2017. Some interesting facts were revealed.

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Only 22 percent of cannabis cultivation operations reported using no automation technology. One of the processes of cultivation that was reported as the most heavily automated was environmental control (lights, air conditioning, dehumidifiers etc.), which 58 percent of cannabis growers have automated. Irrigation was reported to be automated by 50 percent of cultivators. About one-third (33 percent) of cultivation facilities were reported to automate fertilization. Light deprivation was reported to be automated by 31 percent of cannabis cultivation facilities. Just under one-quarter (24 percent) of cannabis cultivation facilities were reported to use automation for pH control.

“When you think about robotics, you think about employment,” Gowa said. “Our solution really isn’t fully automated. You still have employees loading and unloading the machines. It works alongside people as opposed to replacing them. It also gives those employees the opportunity to work with robotics, as opposed to just performing routine manual labor.” While it still remains to be seen whether Bloom Automation’s trimming robot will be effective enough to replace human trimmers once and for all, it will likely happen within the next few years either way. Bloom Automation

Our solution really isn’t fullyautomated. You still have employees loading and unloading the machines. It works alongside people as opposed to replacing them. recently graduated from a cannabis startup accelerator program ran by Canopy Boulder—a cannabis technology business accelerator and investment firm. With millions upon millions of dollars currently being invested in cannabis technologies, it’s unlikely this influx of automation technology is going to slow down anytime soon. c

Decode the latest California cannabis laws at this year’s State of Marijuana Expo. Speakers include Fiona Ma, Rob Kampia, Allison Margolin, and Cole Memo co-author John Vardaman, as well as many more speakers. A panel will discuss the differences between federal and state law surrounding cannabis. Another panel will discuss R&D innovations in the global medical cannabis industry. Multiple workshops will cover intellectual property, security, the endocannabinoid system, testing, hemp and much more. If you need a break, head over to the Lego Lounge to relax for an afternoon break. Several presentations will look into the future of medical cannabis. Arrive early and save on the registration fees with the Early Bird discounts.

State of Marijuana EXPO

With such a significant amount of automation already utilized in cannabis cultivation, the future will only see these numbers increasing. This leads to a growing fear that automation will lead to a loss of jobs. CULTUREB2B connected with Founder and CEO of Bloom Automation, Jon Gowa. Based in Boulder, Colorado, Gowa explained how increasing automation in the cannabis cultivation process holds greater benefits than disadvantages. Bloom Automation is currently developing a highly accurate and effective cannabis trimming robot. While automation in cannabis cultivation may lead to a slight loss of jobs, the jobs that are at-risk often are associated with low wages and grueling, physical labor. “At Bloom Automation, we’re helping automate tedious processes within cannabis cultivation. Specifically, the first task we’re looking to automate, is trimming,” Gowa said. “Right now there is a lot of hand labor involved in processing cannabis, and it’s pretty arduous labor, so we’re looking to automate that mainly using robotics and cameras.” “The pros are certainly that it reduces this arduous task, which is really prone to, if you continue to do tasks like this, things like carpal tunnel [syndrome] and other symptoms of repetitive motion. So alleviating that from human hands and manual labor, there’s certainly a benefit there.” Further, Gowa explained that automation helps cultivators by making a process like trimming a full-time labor, whereas before the process may not have been done on a daily basis. Automating an arduous task like trimming would lead to a more efficient process that could in turn increase profit margins. Eliminating jobs does not mean that human workers will become obsolete. Instead, employees will focus on less risky, labor-intensive tasks.

WHEN: Sat, Aug. 26-Sun, Aug. 27 WHERE: Cross Campus Downtown Los Angeles, 800 Wilshire Blvd., Los Angeles, California website: stateofmarijuana. com

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Emerging Events Market DRIVEN

There are tons of trade shows out there, and it’s important to research expected attendance and what is included with the price of booth registration. The first step is to consider what type of event or trade show best fits your business, and ask yourself why you want to attend. Meghan Larson, CEO and Co-Founder of Adistry ad agency proposed a few questions business leaders should consider. “Is it to build

he cannabis industry is undoubtedly full of competition. One way that many entrepreneurs and business professionals get ahead is by attending industry trade shows. These events are great for networking, catching up on the latest products and tips, sitting in on educational seminars led by industry experts and expanding a customer base. But with such a large number of trade shows that are currently offered, it is not feasible to attend every single one. Here are a few tips for choosing the right show to put your business on the map and make an impact.

comes to trade shows, so much so that many shows have become household names in the industry. A well-known and respected show means you can count on professionally organized events with strong attendance. “We typically skip new trade shows that do not have a track record,” explained Andy Yashar, founder of the Daily Leaf and partner with Fore Twenty Sports, who puts on their own cannabis and athletics trade show. “We

When I go to trade shows I look for ones that are aligned with my business interests. up our customer base and meet with existing clientele?” asked Larson. “Network with investors? Learn from other leaders in the industry?”

ATTENDANCE Counts Reputation matters when it 24

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feel that new ones pop up all the time and that a good reputation is what brings out the major companies,” added Yashar. It’s a good idea to look for names and brands you trust, to ensure that your company’s viewability and customer attention is increased. >>

GrowX Modern Growing Conference + Expo

Navigating through the plethora of cannabis trade shows

by Addison Herron-Wheeler

Learn about the latest gadgets and technology in the cultivation world. See the best hydroponics systems available, all while finding better growing practices and looking into a grand selection of nutrients and additives. Attend seminars on insurance and financing and all other business-related topics. This event is useful for both commercial growers and hobby growers. Network with other cannabis cultivators to share best practices, and get your name out there. The Networking Lounge is in the center of the expo like a communal area, making socializing easy. According to the expo’s floorplan, a designated food and drink area is provided as well. WHEN: Sat. Sept. 30- Sun. Oct. 1 WHERE: Cobo Center, 1 Washington Blvd., Detroit, Michigan WEBSITE: mygrowx.com/detroit

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SIZE AND Frequency One sure way to tell if trade shows are worth your time is to simply check out how many times the show has been held before. If it brings in big crowds, that automatically means getting your name or brand in front of a lot of people. It’s also a good idea to check how frequently the show occurs each year and in which cities. “Most trade shows are produced at multiple locations throughout the year,” Taylor explained. “I like to pick the one with the largest registered attendance and skip the rest.”

Budget Minded Spending money may be of little concern when you first start to plan for a trade show. However, booth rental, extra fees, transportation, food and hotel rooms can all add up. It is wise to take costs into consideration when planning out which trade shows and expos are worth attending. “As a self-funded business we have to be pretty careful with our marketing dollars,” said Kenia Taylor, Marketing Director at a CannaSmack, a company that makes infused lip balm and other products and frequently attends trade shows. “I appreciate events that keep the cost of the booth affordable, $1,500 or less, especially considering booth design, shipping, lodging and employee expenses, since things add up quickly.”

Educational Opportunities Often, one of the most overlooked parts of trade shows can be the educational elements. Many plan to attend shows only based on their reputation, attendance rates and who will be there. But one major benefit of trade shows is the wonderful educational programming that can offer a major boost to businesses. “[The National Cannabis Industry Association] show agendas are curated through a peer-review process so that our members and community are getting the most valuable information possible—not pay-to-play content,” explained Taylor West, deputy director of NCIA.

Collaborative Environments Last but not least, it is important to look for trade shows that are going to offer you a valuable experience involving educational seminars and a chance to boost your brand. Don’t be fooled by the conferences that are really just feeding you a sales pitch from the moment you walk in the door. “When I go to trade shows I look for ones that are aligned with my business interests,” explained Cassandra Farrington, CEO and Co-Founder of Marijuana Business Daily and one of the producers of MJBizCon. “It’s important to look at how much coordination happens between the exhibitors and presenters and look for a trade show with a cohesive theme.” c 26

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Tips to Prepare for Expos and Trade Shows: 1

Floor Plan Savvy

It’s a good idea to have the lay of the land figured out before you get in there and explore. Pick up a map or download the trade show’s app on your phone so you can figure out locations of the booths you’d like to visit and the best strategy for spreading your message.

Choose Workshops and Presentations to Attend

There’s nothing wrong with a few spontaneous, last-minute choices, but overall it’s a good strategy to know which workshops and presentations you cannot miss. This will help you organize around the scheduled times to make sure you are not planning meetings that will cause you to miss great opportunities for growth.

Meet and Greet

While you’re there, try and schedule some

one-on-one meeting times with companies or people you want to work with. This can be a great opportunity to expand your network and connect to those who will bring fresh insight to your business.

Business Casual

Beauty of Business Cards

Events like this may seem like the perfect place to show off your brand-new dress shoes, but be realistic; you’ll be on your feet all day working a booth or walking around. Be sure to look professional, but wear clothes and shoes you can move and feel comfortable in.

You may not have time to speak to every single person you’d like to, and that’s OK! Just make sure to grab a card from each booth, and leave your contact information behind as well.

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consumption locations for now will just be on-site consumption areas where patrons can bring their own cannabis. These businesses cannot already sell cannabis, meaning dispensaries cannot simply convert into smoking lounges, and smoking lounges where cannabis can be purchased won’t be permitted to open. Establishments that sell alcohol also will not be able to allow social cannabis consumption, meaning that for now there will be no joint cannabis and liquor bars or cannabis-friendly drinking spots. However, despite the regulations imposed by the pilot program, this is still the most progress any legal state has made so far towards regulating social use. Such a huge step is prompting the entire industry to begin drafting plans on what these spaces will look like. CULTUREB2B spoke to some experts and hopeful smoking lounge entrepreneurs who can already envision a very bright future for social consumption.

Steady Start

Denver is preparing for a fruitful future with social consumption by Addison Herron-Wheeler

he “missing link” of legal cannabis in Colorado is social consumption. Residents and tourists in recreational cannabis states like Colorado are greeted with plenty of cannabis products to consume, but are still left with no designated and permitted places to consume them. Legislators have been wrestling with the intricacy of social consumption regulations since legalization first became accepted. On June 30, Denver, Colorado made history as the city and county’s Department of Excise and Licenses adopted “Rules Governing Marijuana Designated Consumption

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Areas,” which then went into effect July 1. City officials created a fouryear pilot, as directed by Initiative 300, which was passed by voters in November 2016. Unlike the current system, where individuals and companies can apply for a special license to have cannabis consumption at an event, this would allow for year-round social consumption lounges. In Denver, cannabis consumption businesses will be able to open up as early as fall of 2017, but not without going through an extensive permitting process first. They will need to receive approval from the city and also support or “nonopposition” from the neighborhoods where these businesses plan to open. Additionally, permitted

B.Y.O.C. Locations Businesses like coffee shops and art galleries that are similar to the famous lounges in Amsterdam appear to be the direction cannabis lounges will be taking in Denver, at least for the time being under the pilot program. Those who obtain a proper zone use permit will be considered Cannabis Consumption Business Locations, and locations will allow adults to bring their own cannabis. “This will affect the entire industry very positively by providing consumers, including local residents and tourists with more access to cannabis consumption areas and encouraging responsible use,” said Emmett Reistroffer of Denver Relief Counseling, who is currently counseling cannabis enthusiasts about starting public use spaces and considering starting one of his own. Restroffer shared a concern, however, that smaller coffee shops and art galleries may have a difficult time acquiring the funds necessary to pay permit fees, installing proper ventilation systems and employing full-time security staff. >>

Downfall for Dispensaries Currently existing businesses that sell or cultivate cannabis in Denver are ineligible to apply for consumption permits, however many dispensaries are hopeful that this rule will change. Existing cannabis businesses that sell or cultivate cannabis would like the opportunity to offer customers a chance to consume their product in attached smoking lounges. “If they allow these shops to sell flower, edibles and oils, why would a tourist go to a dispensary?” asked Brendan Gillis, CEO of vape pen company Vapor Slide. “I think it is important for the industry to separate retail from consumption so it does not affect the dispensaries’ bottom line. The ideal location would be a dispensary attached to a lounge, so there is big

opportunity for dispensaries to expand if they already have the right location.”

Intermingle with Events and the Industry Permits will also still be issued for short-term events called “Cannabis Consumption Special Event Locations.” It will now be even easier for events like cannabis rallies, LGBTQ Pride parties and other shindigs to allow for legal public consumption. “I think we will see cannabis become more integrated into mainstream society, as we slowly move to overcome the stigma and prejudice that still affects cannabis consumers,” explained Reistroffer.

Full Bar Flash Forward Of course, while current social use promises a safe place to smoke and a boom

for the legal industry, it is fun to envision an even more distant future where public use will be more like the final episodes of the 2005 TV show Weeds, where cannabis is sold like alcohol, from stocked bars. “The future of social use looks very much like the bars and nightclubs that we have today for alcohol consumption,” said Krista Whitley of Social Media Unicorn, a group tasked with branding for the cannabis industry, including imagining a future where the industry will have grown even more. However, as fun as longterm dreaming is, the reality is that social use is here today, but will need to start off slow in order to prove that it can be regulated responsibly. “The current rules prohibit combining

cannabis and alcohol, which makes nearly all bars and restaurants ineligible from applying,” Reistroffer told CULTUREB2B. In Denver, where plans are now underway for a social use structure, full-scale cannabis bars are not yet a reality. c

This will affect the entire industry very positively by providing consumers, including local residents and tourists with more access to cannabis consumption areas and encouraging responsible use.

REASONS WHY PEOPLE CONSUME CANNABIS 55%

40%

39%

The #1 reason people use cannabis is for relaxation.

Of people want to relieve stress or enjoy social experiences.

Of people want to reduce anxiety.

29%

Want to improve Sleep

26%

Use Cannabis for Pain Management

16%

Want to Stimulate Creativity

15%

Want to Treat a Medical Condition

differences by gender 37% 25% 23% 25% 6%

45% Reduce Anxiety 38% Pain Management 31% Improve Sleep Quality 35% Nausea 14% Suppression Stress Relief

Source: New Frontier Data

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LEGAL

Trademark Wars Cannabis-related trademarks continue to face scrutiny

by David P. Branfman, Attorney

recent binding decision in June of this year by the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB) confirms an important rule of law that applies to trademarks and brands that cannabis entrepreneurs can’t afford to ignore. The decision involved this trademark (brand name) and its sister trademark PharmaCann. The decision came down to this—The United States Patent and Trademark Office (USPTO) was correct in its refusal to register PharmaCann and PharmaCannis for “Retail store services featuring medical marijuana” and for “Dispensing of pharmaceuticals featuring medical marijuana” since the services the applicant was trying to cover are prohibited by federal statute under the Controlled Substances Act (CSA). Additionally, it did not matter that Congress has forbidden the Department of Justice from spending

any money to prosecute cannabis activity (except in several limited circumstances) in those states that have legalized medical cannabis and that the Justice Department has issued a similar directive known as The Cole Memorandum. Why? Because the federal prohibition is temporary and the law could be changed at any time. (Speaking of the potentially temporary nature of the federal enforcement prohibition, the PharmaCann/ PharmaCannis decision was handed down shortly after Attorney General Jeff Sessions wrote Congress and urged it to either revoke that prohibition—the RohrabacherBlumenauer Amendment—or not re-authorize it the next time it comes up for renewal.) The TTAB also held that the Cole Memorandum did not have the force and effect of law—it is simply an advisory opinion. Although more than half of the states have decriminalized the possession and sale of cannabis for medical or adult-use purposes, the TTAB held that no state law “legalizes” the possession, distribution or manufacture of cannabis since under the Supremacy Clause of the U.S. Constitution, state laws can’t permit something that is prohibited by federal law. In other words, state laws can’t override federal law since the CSA is still federal law. The TTAB did mention that although Congress might eventually decide to reclassify cannabis to a status that would make cannabis legal under federal law, that’s not the law currently.

Why is this important? Because the PharmaCann/ PharmaCannis decision is considered “precedential,” the USPTO now has complete authority to reject any U.S. trademark application for dispensary and/or retail store services. We also 30

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know from actions taken by the USPTO over the last year that it is highly likely to reject a trademark application for any product or service that touches cannabis and/or violates the CSA. For example, late last year the TTAB

affirmed the USPTO’s refusal to register the trademark ULTRA TRIMMER for “a trimming machine for trimming leaves, plants, flowers and seeds” because the machine was illegal drug paraphernalia under the CSA. >>

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The USPTO will look at the applicant’s website to see if the goods or services applied for violate the CSA even if the trademark application itself doesn’t explicitly mention cannabis or cannabis. For example, that is what happened in the ULTRA TRIMMER case. At the time, the USPTO examiner who reviewed the application looked at the ULTRA TRIMMER website and saw pictures of the device being used to trim cannabis. The examiner then used those pictures to support rejection of the application. The use of the suffix “cann” and the green cross graphic in the PharmaCann trademark had nothing to do with the refusal of the trademark applications.

Why? Because there is nothing in the law that prohibits the use of words like “cannabis,” “marijuana,” etc., or graphical/visual representations of cannabis. It’s all about whether the USPTO believes the goods or services that are applied for violate the CSA. However, using those kinds of words or images in a trademark is likely to cause a USPTO examiner reviewing a trademark application to look very closely at it. Finally, and perhaps most importantly, this decision once again shows that it’s critically important to carefully plan a “work around” trademark application strategy before filing any applications. By “work around” we mean seeking trademark

registrations for goods and services that don’t violate the CSA and thereby laying the foundation for obtaining additional trademark registrations in the future for cannabis-related goods and services if and when cannabis is re-classified. That strategy can also include obtaining trademark registrations in states that do allow trademark registrations for cannabisrelated goods and services and copyright registrations for collateral materials such as graphicallyrich logos, photos, drawings and illustrations. Spoiler alert—the U.S. Copyright Office doesn’t reject copyright applications because of potential violations of the CSA. c

cannabis taxes—state by state State recreational cannabis excise tax rates 15% Excise Tax 8% Sales Tax 37% Sales Tax 10% Sales Tax 17% Sales Tax *

15% Excise Tax on Wholesale 10% Retail Excise Tax

† *

15% Excise Tax $9.25/oz Flowers & $2.75/oz Leaves of Cultivation Tax

3.75% Excise Tax 6.25% Sales Tax 2% Local Tax (Optional)

$50.00/oz

Note: (*) California, Maine, and Massachusetts will not begin recreational cannabis sales until 2018. D.C. voters approved legalization and purchase of marijuana in 2014 but federal law prohibits any action to implement it. Alabama, Georga, Idaho, Indiana, Iowa, Kansas, Kentucky, Lousiana, Minnesota, Nebraska, Oklahoma, Rhode Island, Tennessee, and Wisconsin impose a controlled substance tax on the purchase of Schedule I products.

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Source: Tax Foundation, “Marijuana Legalization & Taxes: Lessons for Other States from Colorado and Washington” (2016); state statutes; Bloomberg BNA.

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LEGAL

Buyer Beware Avoid falling for these trending scams in the cannabis industry by Hilary Bricken, Attorney

annabis business attorneys tend to see and hear more than their fair share of kooky and downright bad business pitches. Bad business ideas are one thing, but total scams and rip-offs are another. Unfortunately, like any new and high growth industry with complicated and constantly changing rules and regulations, the cannabis industry is chock-full of scammers and con artists.

The following six trending cannabis scams are some of the most recently alarming. Cannabis Penny Stocks Stay away from most cannabis penny stocks. As the U.S. Securities and Exchange Commission (SEC) has pointed out, many (but not all) publicly traded cannabis companies are vehicles for investor fraud. It almost seems that publicly-traded 34

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stock companies are more focused on selling their stocks than on competing in the market. The herd mentality of investors seems to encourage this. Here’s how that basic logic works: Cannabis is booming. Therefore, cannabis businesses must be booming. In turn, all cannabis businesses must be booming, leading investors to assume that they should invest in a cannabis business. The only way they can easily invest in a cannabis business is to buy the stock in a publicly traded cannabis business. And so the stocks just keep booming. All of which leads to pump-anddump scams where the group behind the scam increases the demand for and trading volume in the stock, and this new inflow of investors generates a sharp rise in its price. Once the price rises high enough, the group will sell its position to make a large short-term gain.

Reverse Merger Cannabis Stocks In the typical reverse merger transaction, a privately operating company seeks to acquire controlling

shares in an already publicly traded company with the goal of acquiring the public company’s listing. Reverse mergers are a relatively fast, cheap and easy way for a private company to “go public” without having to go through all the SEC reporting, disclosure and registration requirements of a standard initial public offering. In a reverse merger scam, the underlying publicly traded company is usually just a shell company with little or no assets or positive business history. Because the underlying publicly traded shell has no assets, no real management base and oftentimes no business at all, the whole point of these scams is to acquire investors and raise capital based on pumped-up stock statistics, prices and claims before everything eventually goes bust. If you’re looking at acquiring stock in a reverse merger company, do your due diligence and know the red flags.

Cannabis Franchises Most cannabis franchise “offers” are just plain garbage because they

fail to account for federal and state franchise law reporting, registration and disclosure requirements. Franchising is governed by The Federal Trade Commission and various state agency rules. Because of the state and federal law conflict with cannabis, franchising a cannabis business is a very risky proposition, most cannabis “franchisors” are not providing their potential “franchisees” with nearly enough risk disclosures.

Some Cannabis Trademark Licensing Structures Far too many cannabis companies offer trademark and intellectual property (IP) licensing agreements to cannabis cultivators, manufacturers and retailers in an effort to spread their brand (as opposed to their products) over state lines. Though definitely a

for crowdfunding advertising are incredibly strict, and some cannabis companies are seeking to skirt these new rules to the detriment of investors.

viable legal and business approach, many of the licensing agreements in these deals are being drafted by lawyers who know little to nothing about either the cannabis industry or intellectual property and IP licensing laws. This leads to licensing that fail to transfer any protectable IP assets or even lead to their forfeiture.

State-Illegal Cannabis Companies Not all cannabis companies are lawful under state or local cannabis laws, even in cannabis-legal states. Some blatantly illegal cannabis companies seeking investors and raising funds. Many states outlaw cannabis delivery services, online sales and distributor companies, cannabis telemedicine, cannabis consumption lounges and cannabis-related events where cannabis is provided by the venue. Make sure you know what is lawful under state and local law before putting your hard-earned funds or time into a company that’s only going to get shut down or be prosecuted shortly thereafter. c

Cannabis “Crowdfunding” In May of this year, the SEC released new crowdfunding rules designed to let the small fry swim with the sharks. As of May 16, 2016, companies can solicit $2,000 from anyone (and more in many cases) in exchange for an equity stake in their business. Companies can raise up to $1 million annually through these offerings, which fall under Title III of the 2012 JOBS Act. The SEC does not care whether your business is a cannabis business, so long as you follow its offerings rules, but its rules

the generational dividE SUPPORT CANNABIS BEING LEGALIZED, REGULATED AND TAXED LIKE CIGARETTES & ALCOHOL.

62%

53%

Ages 18 to 34

Ages 35 and up

Age demographics are a major factor in support for legalization. Adults aged 18 to 34 are significantly more likely to support full legalization than older adults.

OVERALL

55%

Of the adults surveyed believe it should be legalized,regulated and taxed like cigarettes and alcohol

ONLY

Believe cannabis should remain legal

HOW COMFORTABLE ARE YOU WITH.... People growing cannabis for personal reasons

49%

39%

Cannabis being available for sale online

45%

36%

49% 52%

37% 39%

A cannabis delivery service operating in your neighborhood A shop that sells cannabis opening in your neighborhood

Ages 18 to 34

Ages 35 and up

Source: New Frontier Data

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TRENDS

Optimizing the Internet

Tips and tricks to maximizing your business through SEO

by David Edmundson

annabis is becoming an increasingly crowded niche on the internet. Thriving companies are putting a lot of time and effort into optimizing their websites and social media platforms to ensure that they are reaching the broadest audience possible for the smallest investment. Beginners and novices make the mistake of thinking that the internet is a rigid mechanism that they have little to

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no control over, while the big guys are manipulating the inner workings of the World Wide Web like the puppet masters they are. Search Engine Optimization (SEO) doesnâ&#x20AC;&#x2122;t have to cost you an arm and a leg. There are a lot of things you can do at the beginning, which will not cost you a lot of money, and they will set a solid foundation for when you pull the trigger and bring in a digital expert to take your business to the next level.

Content is King

Educate Yourself Sure it may sound like the worst weekend ever, reading over countless blog posts and watching videos about SEO, but you can gain a lot of free information out of them. A cursory internet search should yield you a number of responses. Just make sure the blog posts and videos are dated within the last couple of months. Keep in mind that what might have worked a year ago may not be a valid course of action today. Of course, if reading isn’t your bag, you can find countless videos, podcasts and other sources that will spoon feed you the information.

Know Your Audience Don’t undersell the importance of social media when trying to increase your online presence. You should be using them all—Facebook, Twitter, Instagram, etc. Above and beyond that, most social media platforms have groups that allow you to share your content with like-minded individuals who can in turn follow you on social media in addition to sharing your content. Also, when it comes to things you post on social media, ask yourself this question: “Would I share this on my personal feed?” If the answer to the question is “no,” then you need to re-approach it. Companies often post copies of their ads or dump uninteresting content into their feed, because they expect the almighty

Facebook gods will make the posts go viral. Not only will this kill the reach of your postings, but if you consistently post uninteresting content, you will begin to be less prioritized in your followers’ feeds, and your engagement will disappear.

Add an SEO Plugin to Your Site If you are running your site off of WordPress or one of the other numerous web-publishing platforms, you can add plugins to your site that allow you to do everything from adding social sharing to the bottom of your page (another must) to monitoring the SEO strength of your post or page. Just head to the plugin store, search for “SEO” and find one that fits your needs. Once activated, the plugin will let you know the strength of your post and how to improve it. It becomes a fun game— how can I maximize my SEO score? See, SEO can be fun.

Keep in mind that what might have worked a year ago may not be a valid course of action today.

Hire a Digital Expert Eventually you will grow to the point where SEO and social media can no longer fall onto someone as a side project. When that day comes, you will eventually need to invest in someone who knows everything there is to know about SEO, so you don’t ever have to read another forum post titled “10 Ways to Boost Your Engagement.” Hiring someone who is proficient in the constant movement of trends of SEO can only be a step forward for any growing company. c

Think you have a green thumb and or a knack for casual growing? Attend one of the best grow expos around. The CannaGrow Expo will host 25 concurrent educational sections that focus on the many facets of cannabis cultivation. Informative panel discussions will discuss Genetics & Breeding and The Future of Sustainable Cannabis Cultivation. Head over to the open bar and grab some hors d’oeuvres. After day one, the CannaConnections Evening Reception will take place at the Atrium Bar inside Crowne Plaza. Register early to take advantage of discounted Early Bird passes. Get a TwoDay All Access Pass, which is available in limited quantities, and receive two session recordings of your choice, which will be delivered after the event. A Sessions Slides & Audio Package is also available for purchase after the event.

CannaGrow Expo

The only absolute in SEO is that you need to have amazing, original content that people are interested in. If your content is boring, unimaginative or uninspired, no amount of SEO will sustain you for long. You want your SEO to bring people to your site, and have your content keep them there and coming back for more. Search engines want to point their visitors to the right spot, so well written articles of a good length (300 words or more is the general standard) with proper keyword placement and relevant links to both external and internal content will attract traffic. Be sure to share your content across all social media platforms and optimize it!

WHEN: Sat, Oct. 28Sun, Oct. 29 WHERE: Crowne Plaza Denver Airport, 15500 E 40th Ave., Denver, Colorado INFO: cannagrowexpo. com

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EVENT listings

IT’S BUSINESS TIME Cannabis Queens, Aug. 24-27 This “Cannabis Women’s Retreat” mixes the natural beauty of Colorado with cannabis-infused glamping. Bond with fellow female business professionals in this getaway that offers Ganjasana yoga, hiking, swimming and a number of relaxing activities. Pagosa Springs, Colorado www.greengatehealth.com

ICACO, Sept. 5-7 This prestigious international cannabis conference is inviting all industry professionals who want to continue their never-ending education about cannabis. Learn from industry professionals such as Steve DeAngelo, Dr. Kurt Blaas, Aaron Smith and Professor Raphael Mechoulam.

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Vienna, Austria www.cannabis-conference. com/en

Montana State Hemp and Cannabis Festival, Sept. 8-10 This cannabis festival combines the best of cannabis education and camaraderie with the great outdoors. Not only is camping encouraged, but the event is also hosting Tribal Seeds as its live music headliner as well. Lolo Hot Springs, Montana montanastatehempfest.com

4th Annual Cannabis World Congress and Business Exposition, Sept. 13-15 Cannabis business owners would be hard pressed to find a better place to network,

connect and learn about the newest cannabis products on the market. Join like-minded individuals and explore countless vendors that specialize in legal services, vaping tools, seed banks, cultivation lights and so much more. Los Angeles, California www.cwcbexpo.com

CHAMPS Trade Shows, Sept. 18-20 Claiming to be one of the longest running cannabis B2B tradeshows since 1999, CHAMPS is well-known for offering variety of vendors and opportunities. Make this the setting for your newest business deals and partnerships. Denver, Colorado www.champstradeshows.com

California Cannabis Business Conference, Sept. 21-22 California is poised to become the world’s largest adult-use cannabis market, and the

California Cannabis Business Conference will be taking place right in the heart of the industry. Attendees will find over 70 speakers, 20,000 squarefootage on the show floor and well over 2,000 like-minded business owners and industry leaders to connect with. Anaheim, California www.californiacannabisbusinessconference.com

Southwest Cannabis Conference, Oct. 12-14 This particular conference is medical cannabis specific and aims to bring together all industry entrepreneurs, local leaders, job seekers and more. Every year the conference has a new theme, and this year it is highlighting “the potential transitions and changes coming to marijuana and cannabis policy in 2017 and 2018,” with a keynote speech from Vicente Fox Phoenix, Arizona swccexpo.com

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