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FLEXIBLE MERCHANT SERVICES FOR CANNABIS MARKETS
BY STACEY LOVETT
W
ith the nature of CBD and hemp being high risk products in the eyes of the financial world, finding stability and even options in merchant services has not always been an easy feat for retailers in the industry. Flex Payment Solutions offers a personal approach in their dedicated CBD merchant accounts as well as adaptability to business’ processing needs. A family owned company based outside of St. Louis, MO, Flex Payment Solutions offers credit & debit card processing, ACH, e-check, and fund-to-debit-card solutions while allow retailers a range of savings in both fees and time. Each merchant with Flex gets their own monitored account and ID, unlike many of the mainstream batch-model processors, which allows them individuality no susceptibility to any chargebacks and payment issues that commonly arise in aggregate accounts. This often leads to the entire portfolio being bounced by the bank and a resulting inconvenient disruption in business for the retailer. With this tendency, Flex encourages redundancy to merchants in this space. With a backup processor, they ensure a constant focus on their business. Flex places focus on the attention to intricacies in the industry, staying informed and transparent among the fluctuating state regulations and new laws. Strenuous pre-vetting and underwriting eliminates many potential issues in the groups they bring on. They understand the nature of the space of CBD and hemp historically and take into account the discord present in review structures throughout the processing spectrum. Compliance is key in both industry regulations and typical business operations. In their vetting process, Flex requires proof of valid licensing, lab testing, and COAs which make the underwriting process a lot longer for this industry but ensures proper observance to the legal standards on both sides. With financials, businesses must show a successful operation of a merchant account in the past and that bank accounts reflect activity and ability to pay their debts. Traditional ISOs are more widespread but come with more stringent guidelines on what products retailers can process through their services; many have policies against smokables, edibles or Delta 8. Flex Payment Solutions is all encompassing in regards to all hemp and CBD products outside of Delta 10 and HHC which require further education in legalities for banking institutions.
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The bulk of Flex’s current clientele are online retailers with a secondary pocket of wholesalers. They are open to helping all facets of the industry including farms, co-ops, and equipment companies as the primary or redundant processor which allows for cheaper pricing based on the specific business model as their commercial nature poses less of a risk than a high volume of daily retail or wholesale orders. Flex Payment Solutions began with the motivation to aid businesses in the more complex niche industries. They built up relationships with Native American tribes in online lending and business as their initial clientele and added in the branch of CBD not long after the Farm Bill passed as a continuation of their existing model of success that they’ve built. Alongside putting in the effort in vetting and compliance, they provide additional value in their intention, not just being a race to the price. Flex is conscientious on choosing industries where they can provide value with their services offered with a personal approach that has proved a big impact among users. They remain involved and invested in the industry participating in the US Hemp Roundtable and have grown to have a centralized focus in Texas specifically with a Flex representative based in Houston. With founding members and representation in the Texas Hemp Coalition they do their part to keep the industry as safe and profitable as they can. Flex Payment Solutions is always willing and available to help those looking to build long term, reliable relationships in their processing solutions and remain focused on growing their programs to meet the current landscape. More information and contacts can be found at www.flexpaymentsolutions.com.
RED, WHITE AND GREEN
BY DANIEL JONES
The fact that the Lonestar state is still vehemently anticannabis (at least in legislation at the state level) despite being surrounded by a sea of green is a true testament to the independent Texas spirit. It seems Texas is more likely to secede from the United States than it is to legalize recreational cannabis. America’s coalition of green – or proweed – states is vast, snaking from Washington state down the West Coast, then east to Arizona and New Mexico, up over the Texas panhandle into Oklahoma; and from Arkansas, it goes straight north to Canada and all the way along the Gulf of Mexico to Florida. And that’s not including several other Southwestern states, as well as most of the Mid-Atlantic and Northeastern states. As of this writing, a grand total of 18 U.S. states have legalized recreational cannabis for personal use, including our immediate neighbors Colorado and New Mexico; and three others, Arkansas, Oklahoma and Louisiana, are part of 18 states that allow only medical cannabis (and, therefore, have the infrastructure to fully legalize in the coming years.) The 12 states without some kind of cannabis industry, aside from hemp and CBD, are now the minority. We can’t blame it on politics either. Even blood-
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red states like Montana, Alaska, Alabama and West Virginia have some version of legalization. But don’t think Ol’ Big Red is bone-dry on the sticky-icky. Far from it. Consider these numbers: Given the likelihood of steady, easy transport of cannabis into Texas from these red-eyed neighbors (in addition to the cartel-sponsored black market already operating here), the state of about 30 million people likely has, at any time, more illegal cannabis than several other legal states. Just look at population alone: Less than 750,000 people live in both Alaska (legalized in 2014) and Vermont (2018); Montana’s (2020) population is just over 1 million. If that probability doesn’t convince you that Texas is one of the most weedheavy states, consider the average age of a Texan is just 34.6 years old, a Millennial; and Millennials love getting down on some ganja. A new Gallup survey says as
much as 20 percent of those belonging to my generation say they currently use cannabis. But that number doesn’t include much of the other 80 percent too stoned to complete the poll. Perhaps Texas is just being strategic in entering the country’s multi-billion-dollar legal cannabis market that is reported to reach $41 billion in annual sales by 2026. That means it could soon be about the size of the craft-beer market. In 2020 alone, legal sales across the U.S. hit a record $17.5 billion, up 46 percent from 2019. Colorado, one of the first to sell recreational cannabis, grew by 26 percent to hit $2.2 billion. California, America’s largest cannabis economy at $3.5 billion, increased sales by more than half a billion dollars. (Yet illicit cannabis sales, via the black market, are estimated at more than $100 billion every single year.) But here’s some relief: At least local governments are getting on board. Several of Texas’s most populated regions have decriminalized possession of cannabis, including the cities of Austin, Dallas, Cedar Park and El Paso, as well as major counties (Bexar, Harris, Travis and Williamson). Then there’s hemp, at least. Thanks to the 2018 Farm Bill, Texas politicians are embracing the hemp-derived CBD market, expected to reach $23.7 billion in 2023. And at least Gov. Abbot is starting to come around to this magical plant. When he’s not crusading to ban books from children, he’s doing what he can (but not all he can) to help Texans suffering from cancer and PTSD. In 2021 he very compassionately signed a bill into law that allows the increase of the current 0.5 percent THC cap on “medical cannabis” to a whopping 1 percent! Tax dollars well spent. If this legislation is any indication of cannabis progress in the Lonestar state, start saving your beer money for a trip to New Mexico or Colorado. Because it’s going to be a long while before legal weed comes to Texas.
2021 TEXAS HEMP YEAR IN REVIEW The days seem to be flying by, and I can’t believe we’re embarking on 2022 already. But before we can plan for the new year, I want to take some time to reflect on what unfolded over the last year in the Texas Cannabis Industry, and kick off a 2021 Texas Hemp Year In Review. To set the tone, let me remind you that Texas is a two year legislative state, which means we go through the process to rely on our state legislature to perform a lawmaking function by researching, writing, and passing legislation that takes place every two years. This also means that we the people, can’t (unfortunately) just sign a petition and collect enough signatures to legalize weed. Believe me, as a born and raised Texan, I wish this aspect wasn’t true. But if you can just accept that politics is politics, and there is a process, you can start to understand and plan accordingly to how the industry is unfolding here. The reality is our Marijuana policy is a bit complicated. Recreational weed is still illegal in Texas, however we are seeing cannabis related prosecutions dropping, and more major cities (Austin, Dallas, and Houston) decriminalize cannabis. Part of the progress can be attributed to the legalization of hemp (cannabis that contains <0.3% THC dry weight basis) which was legalized in the state back in 2019, helping inch Texas’ cannabis program forward and backwards all at the same time.
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The Podcast for Cannabis Marketers with host Shayda Torabi
2021 was the year for our 87th Texas Legislative Session, and I bet you didn’t know that over 60 cannabis reformation related bills were filed. And out of all of those bills, only one was signed into law. We saw the TCUP (Texas Compassionate Use Program), Texas’ medical marijuana program, increase not only their legal limit of THC from 0.5% to 1%, but conditions expanded from epilepsy and incurable diseases to include cancer and PTSD. On the flip side, we saw two other bills dedicated to cannabis that got caught up in legislation: House Bill 2593 which would have decriminalized concentrates and reduced penalties, and House Bill 3948 which would increase the time hemp farmers had to test their hemp crops, and legalize hemp as animal feed. Part of the failure of those two bills in particular were related to the introduction of anti Delta 8 THC amendments that ultimately led to the bills going through so much back and forth that they ended up not passing at all. As if 2021 wasn’t busy in Texas enough navigating the legislative session, we also had a few key movements for our industry
happen through the regulatory body DSHS (Department of State Health Services) that we were also keeping up with. If you remember, towards the end of 2020 DSHS issued a smokable hemp ban going into effect August, 2020. That ban would get tied up in litigation after 4 companies sued the state saying the regulatory update was unlawful. Judge Livingston who was presiding over the case issued a pause on the ban until the hearing, which was to take place in March 2021. So we were able to sell up until that point, but the March hearing didn’t provide an update until late August 2021 when Livingston threw out the case allowing for the production, manufacturing, and sale of smokable hemp products. I don’t want to glaze over that because it was a massive win to see some concrete support for the industry get clarified. As you can imagine, with an emerging market, we’re still trying to figure out what road ways we can go down. And with ambiguity comes inconsistency which creates an environment of poor planning. Lots of businesses are stumbling trying to catch their footing as the laws and reg-
ulations begin to stabilize. When laws or regulations change, businesses have to react, no matter how big or small they are, and the repercussions are felt by the confused consumer. Just personally speaking, I remember the headache that came along with the smokable ban, having to repackage products and label “not for smokable”, and communicating to consumers who were already walking in with a stigma, around the nuances we were having to dance around for the sake of compliance as an industry. Nonetheless, we persisted this year and I truly believe that we’re stronger because of it. As with all new industries, there are going to be things that have to get adjusted, clarified, and tested. And this market we’re living through is no exception to that. Which leads me to my final point, the legal status of Delta 8 THC here in Texas. I probably don’t have enough space to articulate all the details, but as of writing this, there has been some back and forth, some lawsuits taken out, and a lot of confusion around what exactly is happening. I don’t know if we’ll enter the new year with a clear answer. I hope so, and believe we’ll just continue to
adjust and adapt. At least the ones who want to stick around in the industry will. And, I think it’s safe to say that we’re just getting started here in Texas. We’re entering our third official year operating various forms of cannabis legally in the state, and at a federal level we’re seeing more rapid
movement for legalization, better cannabis programs that focus on standardization, social equity, and bringing this powerful plant to the people. If you want to hear more ongoing musings, tune into @TOBEBLUNTPOD where I release new cannabis business podcasts weekly on Mondays .
JIM BELUSHI,
GANJA FARMER
BY DANIEL JONES
The way Jim Belushi tells the story, it was like a baptism. A spiritual transformation. A renewal of sorts. He was visiting a friend in southern Oregon who lived by the Rogue River. This was more than a decade ago, not too long after Belushi’s self-titled sitcom According to Jim had come to an end after eight strong seasons, his big-screen days of K-9 and Red Heat long behind him. At one point during his stay, the ac-
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tor dove right into the cold-as-hell river, naked. When he emerged, he thought to himself, “I belong here.” Soon thereafter, he acquired a 13-acre property near Eagle Point, a town that is about 40 miles north of the California border, later adding another 80 acres when a dear friend and neighbor passed away.
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Belushi’s favorite strain is “Cherry Pie,” which he calls “the Marriage Counselor” for its relaxing effects. The farm’s website lists his products at various dispensaries not only in Oregon, but ones in Colorado, Oklahoma and Illinois (Belushi’s home state) as well.
“Well, I had 93 acres all of a sudden, so what do you do with it?” Belushi, now 67, once told Newsweek. “And that year (2015), cannabis became legal for recreational use in Oregon. I thought, ‘What the hell?’ ”
A BUDDING ENTERPRISE It’s the weekend before Thanksgiving 2021, and harvest is fresh on his mind. “The greenhouse is bursting,” he says of his plants at Belushi’s Farm, the site of his legal cannabis grow operation in southern Oregon’s Banana Belt. The area gets nearly 300 days of sun a year, ideal for growing premium ganja. “Regarding the outdoor grow, we were very lucky. We harvested the day before the onslaught of rains.” Overall he’s pleased with his plants. And he takes extra-special care of them. A lover of music, Belushi has said publicly, many times, that he sings and plays the harmonica to his plants. He even gives them names. And right before the plants are harvested, he told Forbes in 2020, he showers them with gospel music “to let them know they are going to the heavens – they are going to have an afterlife helping people. It’s love, love, love, love, love.” The farm has a range of offerings: The Blues Brothers pack of pre-rolled joints; Chasing Magic (Jim’s Secret Stash, a line of flower that includes Black Diamond OG, Snowman Cookies, Afwreck, Nilla Wafers and other strains); and Captain Jack’s Gulzar Afghanica, (on Belushi’s site, it’s referred to as “The Smell of SNL,” because notorious cannabis breeder “Captain Jack” allegedly supplied the highly potent, hybrid strain to members of the sketch-comedy show.)
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‘I’M REALLY LOVING THIS’
“We have a love of new cultivars,” Belushi says. “I just walked through the greenhouse of Mothership 1, and we have all these landrace sativas that have gone crazy. Crazy! They are tall and [have] long, huge elbows of flowers. These strains are going to be the stars this year for us.” The flower his farm grows has complex blends of terpenes and THC, creating a medicinal effect that encourages healing.
Belushi has truly, deeply plunged himself into his business, spending more than 200 days on the farm, working the land and tending to his plants. He does what he can to ensure quality, whether it’s testing PH levels, making sure the soil is the right temperature, curing, smelling and, of course, sampling his flower. A cannabis user since his teenage years, Belushi mostly takes it a bit easy on the ganja these days. He considers himself a microdoser, enjoying a mere 2.5 to 5 mg cannabis-infused chocolate at night to help him sleep. “I haven’t been really ripped in a long time. Well … that’s not true. I went to see the
Grateful Dead a few months ago. I thought I would take one and half rips of Captain Jack’s, and holy shit! I don’t know if it was the Dead or Captain Jack’s, but I was tripping! Wow. I haven’t had Captain Jack’s since, I was so scared of it.” His experience on the farm is documented in Discovery’s Growing Belushi. The unscripted, reality TV show first aired in 2020 and follows Belushi and his staff as they navigate cannabis farm life. (He just completed filming the second season; the airing date has yet to be announced.) “It’s a big investment – but I didn’t do it for the money. I didn’t do it for the money. I didn’t do it for the money,” Belushi said early in the first episode. “I did it to feel purposeful in my life. The joy is being successful at something. And this is an opportunity to be successful with something that is human.”
more understanding and knowledge of this world of cannabis. I’m really loving this – I’m loving the farming, I’m loving the relationship with this gorgeous plant, I’m loving this community that it’s bringing me into … full of real and grounded people with beautiful purpose. I love seeing the veterans and the people who have suffered starting to feel better.”
ON THE HORIZON In an April 2021 techcrunch.com article, Belushi said he has turned down a movie role because filming for it took place during harvest time. His agent didn’t quite approve. Belushi doesn’t seem to mind. “That purpose has grown stronger in my heart and mind since I first said it,” he tells me. “It’s flushing out as I retain
Belushi has a lot to look forward to. Currently he’s examining grows in Massachusetts, New York, Pennsylvania, Michigan, Illinois and Arizona, searching to find the right partnerships with those who share similar philosophies about cannabis’s medicinal powers, he says. “I see us being in many states in the next two quarters.” He’s looking to bring Bhang Chocolates (his nightcap edible) and Glazed premium edibles to other partner states. With the help of chef David Yusefzadeh, he is about to release a Blues Brothers THC-infused ice cream in Massachusetts. There are talks of expanding into highend gummies, also the release of Captain Jack’s and Blues Brothers concentrates and hashish. And even though he’s managing a busy business in a lucrative, competitive industry, Belushi never gets sidetracked from his true mission: “I realized the other day that my whole life has been acting and singing. The purpose was to make people feel good. And in that process, I would feel good. I’ve found the same magic here. This plant makes people feel good, feel better. And I feel good and better for being part of it. I love the magic of this plant. I’ve always been chasing the magic.”
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CALL TO ACTION:
Demand Micro-Grower Licenses in Texas Now! Before it is Too Late. BY MICHAEL JOHN WESTERMAN, ESQ.
Micro-Grower Licenses Will Allow Texas Citizens to Capitalize on Cannabis Recreational cannabis will eventually be federally legal and a recreational market in Texas will be established, looking past the debacle over Delta 8 which from the outset, as communicated in my Cannabis Law Journal article titled “The Detriment of Delta 8”, I have noted is federally illegal, and quite shady. To ensure our eventual recreational cannabis market presents the consumer with broad product choice, competitive pricing, and the opportunity to get involved through individual business ownership, we must ensure there is a micro grower license option. Demand the ability to grow your own cannabis in Texas, and if it is good enough, to gain ready access to an affordable license to try and sell it to others. While cannabis has not yet truly arrived in Texas, it is time that we, as cannabis advocates collectively, begin demanding the ability to grow our own cannabis alongside access to micro grower licenses from our representatives, and hope that the cannabis lobby in Texas does the same. Given that lobbyists are generally paid by large corporations, or associations funded by out-of-state law firms paid by out-of-state companies, don’t expect that without significant numbers of individual voters’ voices demanding micro grower licenses in TX that they will happen.
Corporations Lobby Against Micro-Producer Licenses, So Texans Must Demand Them! The influence of lobby money is meant to overcome the individual voice of the voter by cutting through the in-between layers and buying the time and opinion of politicians through targeted education, and financial contributions. This is why the outcome of votes are often the opposite of voter opinion, or even against the well-being of the general voting population, because a well-funded lobby turned political tides in favor of what the corporations funding them preferred. Generally, that preference involves the corporation generating ever greater profit, regardless of the impact it might have upon individual citizens. A successful micro-producer segment of an industry challenges the power, and profit, of the corporations that fund lobbyists.
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Example: The Massachusetts Craft Beer Industry Was Done Well. MA Cannabis? Not So Well I love craft beer. My favorite craft beer is produced by Treehouse Brewing Company in the Commonwealth of Massachusetts, which began as an athome brewthusiast hobby, grew into a micro-brewery which cultivated such demand that customers waiting in line for hours were limited to 1-4 cans of each beer flavor released daily, then exploded into a number of breweries and on-site consumption sites in the coming years. Treehouse and breweries like it stoked the flames of a national craft beer movement that spread at a pace that would shame this year’s California wildfires and leave Smokey the Bear totally in awe. Craft breweries are generally owned by locals, and employ locals, benefitting the, you guessed it, local community.
The Micro-Brewer License Elevated Craft Beer to Heavenly Heights Craft beer exists with fervor in Massachusetts because the government made the well-informed decision to establish the micro grower license as an inroad to the beer industry. Individuals with a passion for creating the kind of beer massive breweries simply cannot given their scale and distribution model pushed novel concepts onto the market like the now ubiquitous hazy New England India Pale Ale, or one of the endless iterations of wildly fermented, bottle-conditioned sour ales, or the increasingly diversified line of flavor-infused imperial stouts. The micro grower license in craft beer led to great innovation, outstanding options, and created substantial wealth in the community through locally owned businesses paying local citizens living wages. When a craft brewery charging premium prices was found out to not be paying their employees well, as was the case with Trillium Brewing, the consumers demanded change, the employees were given a better wage, and the company publicly apologized. I appreciate accountability. The Massachusetts cannabis industry went in the opposite direction, with out-of-state cannabis companies represented by out-of-state lawyers lobbying the government and regulatory agencies towards a system that resulted in industrial-sized grow-ops and a stuffy and sterile commercial market with grossly inflated prices. The black market persisted largely unaffected, the state missed out on billions in taxable revenue, and small business owners/micro-growers were effectively prevented from participating in the retail recreational market.
Craft Cannabis Requires Micro-Grower Licenses and the Opportunity to Grow Your Own The development of a craft requires that individual artisans have the time to develop their skills, and to then have a market that sufficiently compensates them to be incentivized to continue operating. Offering the licenses on an ongoing basis and not just at the outset of the industry is essential to this end, as is allowing private citizens to grow their own cannabis in pursuit of honing their craft before starting a business. Before there were micro-breweries there was Bud, Coors, Miller, and maybe some Corona or Heineken hiding in a corner somewhere at most beer stores. Without micro-breweries there would still be largely only Ales and Lagers on the market. Being able to brew beer for personal consumption supported the development of the craft brewer’s skill set, and the emergence of craft brewer licenses facilitated the establishment of the craft beer market. When reactional cannabis stores come to TX, do you want to decide between indica, sativa, or hybrid alone, or do you want to have endless choices ranging from the classics like sour diesel or northern lights to more modern genetic innovations like gorilla glue OG or wedding cake?
On-Site Consumption Smoke Bars Support Community and Create a New Industry If you want affordable choice you want micro-growers, and if you want places to go to enjoy the community and to consume the cannabis alongside it, you want smoke bars. Offering an alternative intoxicant to alcohol, smoke bars would create job opportunities for
the community, plus licensing and tax revenue for the government, everywhere they pop up. Win-win. Legal recreational cannabis has yet to arrive in Texas, but by priming your public officials, agency directors, and industry stakeholders with your demand for a craft cannabis market which includes micro-grower licenses and on-site consumption smoke bars, we can help to shape the reality that will eventually emerge from the dream.
Micro-Grower Licenses = A Craft Cannabis Industry. Demand Them Now Before It’s Too Late The Fed could legalize a national recreational cannabis market in 2022, or 2023, or tomorrow, and Texas and other states that have been lagging behind will be quick to get involved to gain access to the green. By the time the issue comes to public meetings and into the public discourse, the proposed legislation will likely have already been written through the influence of the lobby, and it may be too late for the concept of micro-grower licenses to gain sufficient momentum to make it in. If the Texan cannabis community educates their legislators now on the importance of self-cultivation, a micro-grower license, and also the incredible economic and employment boom that would accompany on-site consumption smoke bars, we just might live the Amsterdam dream in Texas, and the Texan government would enjoy windfall revenues as a result. Let’s make sure they know this. By, Michael John Westerman, Esq. www.mjwestermanlaw.com Landlord-Tenant Attorney & Cannabiz Consultant.
JACK HERER: REMEMBERING THE CANNABIS CRUSADER BY DANIEL JONES
For the late, great Jack Herer, cannabis wasn’t just an indulgence, an escape from life, or about having a good time. Of course a heady buzz is always a great time. But for him (just like it is for so many of us), it was so much more. He thought it could literally save the world, his son, Dan Herer, told us recently on the Texas Hemp Reporter podcast. Jack died 12 years ago this April at the age of 70. If he were alive today, Dan said, he would of course be quite pleased with the state of legal cannabis (18 total U.S. states have legalized recreational cannabis for personal use, with several others opening doors with medical cannabis programs; plus hemp possession and cultivation is legal on the federal level). Jack worked tirelessly for most of his adult life to advocate legalization for this wonderful plant: cannabis for personal recreation and health, and hemp for industrial purposes and environmental benefit. Sharing the magic in the cannabis plant was his life’s work. Dan said his father had a strong conviction that, by growing it “and using it to its full utility, at scale, the narrative of this climate crisis that we have today … literally could be greatly altered by embracing this plant.” Yet Dan says his father would fight against the hypocrisy, that despite widespread legalization, there are so many people still incarcerated for having, selling and growing this plant.
IGNITING THE CANNABIS AND HEMP MOVEMENT
Jack dropped out of high school and served in Korea. He later became a Goldwater republican, and was opposed to the hippie movement.
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And it wasn’t until he was 30 years old that he smoked his first joint and eventually saw what he had been missing all that time. He finally understood what all the fuss was about. “In the next forty years,” Dan said, “he helped change the narrative and the course of the world with regards to its understanding of cannabis and hemp.” Jack gave people the courage to talk about the plant and further advocate for its legalization. He fought to rid America of the stigma it had about cannabis, one that began with the 1936 propaganda film Reefer Madness. Later he wrote the famous book The Emperor Wears No Clothes, which would ignite the modern cannabis legalization movement. Dan said about his father’s legacy: “[Through writing the book], it was finally indisputable that the information throughout history was that this plant not only helped to save this country in World War II and saved the world from the Germans and the Japanese, but it was the most important plant for all nations around the world for thousands and thousands of years.” For example, the book mentions how, in 1942, following the Japanese invasion of the Philippines that cut off the supply of Manila hemp, the U.S. government distributed 400,000 pounds of cannabis seeds to
American farmers; in turn they produced 42,000 tons of hemp fiber annually until 1946 when the war ended. More than 600,000 copies of the book have been sold (a free, online version is available at jackherer.com), and any profits from his books, tapes, CDS and films Jack used to progress and market the movement. He was regarded as the most well-known hemp activist in the world, racking up hundreds of thousands of miles driving across the country for 40 years to campaign for the hemp plant to re-enter American agriculture.
THE JACK HERER FOUNDATION
After his father’s death, Dan wanted to sustain what his father fought so hard for. So he founded the Jack Herer Foundation and Herer Group, where he is conducting research, developing products and producing cannabis. The Santa Cruz, California-based Herer Group is a corporate umbrella overseeing vertically integrated companies in the California cannabis market. Dan said the company lives by the philosophy that “hemp can save the world. It’s the only thing that can.” For more information, jackhererfoundation.org.
New Mexico moving forward with Cannabis Program in 2022. BY DANIEL JONES
New Mexico last summer legalized recreational cannabis for adults 21 years or older, but sales won’t commence until this spring. We spoke with Superintendent Linda Trujillo, head of the state’s Regulation and Licensing Department, which oversees and manages the new industry. TEXAS HEMP REPORTER: You said on the New Mexico Regulation & Licensing Department’s website that the state’s new recreational cannabis model not only creates a regulated industry but also protects “our public health, road safety and the well-being of our youth.” Can you elaborate on these benefits, please? LINDA TRUJILLO: In New Mexico, we are very fortunate that the Legislature and the Governor made public safety a priority in legalizing adult-use cannabis. Specifically, the Cannabis Regulation Act calls for careful testing and labeling of cannabis products to ensure consumer safety and thoughtfully limits young people’s access to cannabis products. The Legislature also appropriated $750,000 to the Department of Public Safety to train law enforcement officers to identify and address impaired driving. By taking a holistic approach to cannabis legalization and sales, New Mexico is standing up a thriving cannabis industry that prioritizes economic development, public safety and New Mexico values. THR: Other states are definitely profiting from legalizing cannabis. Some like Colorado have legal sales in the billions of dollars. What are some annual projections for sales in New Mexico? What programs and services will this influx of tax dollars benefit? LT: The adult-use cannabis industry is an exciting opportunity to diversify and enrich New Mexico’s economy. Studies project that the industry will create more than 11,000 new jobs, $300 million in annual sales, and $50 million in new revenue to the state budget in the first year alone. A large portion, about
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two-thirds, of the tax revenue generated will go directly to local communities. The other third will go to the state’s budget, and the Legislature can invest it in education, workforce development and other programs that will move our state forward. THR: You’re a big advocate of education. How will cannabis legalization directly influence the lives of students across the state? LT: As the first person in my family to go to college, I understand personally how transformational education can be. I’ve served on the Santa Fe Public Schools Board of Education and I started my career as a Head Start instructor. It’s important to note that medical cannabis has been legal in New Mexico since 2007. As mentioned above, the Legislature and Governor Lujan Grisham take child safety very seriously, and that commitment is reflected in the Cannabis Regulation Act and Regulation and Licensing Department rules. For example, the most recent proposed rules, which are currently out for public comment, reflect a requirement for cannabis products to be sold in re-sealable child resistant packaging; and advertising is prohibited from being appealing to children. I’ve also met with child-advocacy groups and government agencies that support families to discuss child safety, and will continue those relationships. Finally, the Legislature will determine where to appropriate the revenue from adult-use cannabis sales, which will likely include increasing substance abuse and mental health resources. THR: Are there any plans in place for postsecondary educational programs that will
LINDA M. TRUJILLO: New Mexico’s Head of (Legal) Cannabis prepare students in New Mexico to work in the state’s cannabis industry, sort of like how Washington state colleges have programs that help students develop skills for work in the wine industry? LT: New Mexico’s colleges and universities are really stepping up to support their students and the industry. Northern New Mexico College and University of New Mexico Continuing Education are already launching cannabis workforce programs that will help the industry thrive and provide good-paying jobs for homegrown workers. THR: Speaking of Washington state, where you once studied and taught, will New Mexico be doing anything specifically to replicate the state’s approach to legal cannabis ? LT: New Mexico is grateful to have several strong models around the country to help us develop our cannabis industry. Washington’s approach certainly includes a lot of best practices that inform how we’re creating policy. However, New Mexico is a unique place with a special set of expectations and needs. Our model will take what makes sense from the great examples we have from around the country, and it will incorporate New Mexico’s values. As an example, New Mexico is prioritizing social equity in the cannabis industry to ensure that communities disproportionately impacted by previous law enforcement practices can be made whole and share in the prosperity the industry can provide. THR: Thank you for your time, and good luck to you.
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‘HEMP FOR ALL’:
Industrial Hemp Breeding Program at Texas A&M University
Texas A&M University’s industrial hemp breeding program was initiated in 2020 and has since made significant progress towards improving the crop for cannabinoid, fiber, grain, and bioproduct markets. Specific goals have included improved plant materials, plant breeding methods, and enabling technologies to streamline chemotyping. TRIPLOID CBD HEMP
HEMP CONVERSION PROGRAM
Developing ‘triploid’ hemp cultivars with three genome copies—akin to seedless watermelons, grapes, bananas—will allow producers to cultivate crops and have plants that will never produce seed even if unintentionally pollinated. This could maximize cannabinoid yield in flowers, and our program will have its first populations of triploid hemp for field evaluations in spring 2022.
The Hemp Conversion Program (HCP) is a novel, rapid, public germplasm development program initiating and utilizing miniscule (< 0.1 mg) donated pollen samples from single flowers of C. sativa, C.
INBRED LINES Hemp is an outcrossing crop with undesired variation across populations, and traditional breeding methods only partially increase uniformity in currently available cultivars. We have developed methods to transition both male and female plants into hermaphrodites to enable self-hybridization, as well as constructed pollen isolation tents. Up to 100% inbred lines will be possible after 5-6 generations, and the program will have true F1 hybrids from paired inbred line parents by 2023. indica, or C. ruderalis, F2 hybrid screening for cannabinoid compliance, and open-source public release of all derived hemp accessions. Activities launch in 2021, and 12 donations have been received and enrolled to date. Participation from all interested parties is welcome. More information can be found via LinkedIn: http s : / / w w w. l i n ke d i n . c om / fe e d / up d ate / u r n : l i : a c t iv i ty:6802664370938769408 or Instagram: (@tamuhemp).
An expected 20-24 cultivars will be included in the 2022 trials, and multiple-year summary publications allowing producers to gauge performance will follow.
DUAL-USE GRAIN: FIBER HEMP Development of hemp with combined fiber fractions on lower stalks and seed production on upper branches is underway towards providing a dual-use alternative crop for Texas producers. Additional efforts to also completely remove cannabinoid production are being made, and when achieved this will ensure THC compliance irregardless of crop maturity. Cannabinoid free hemp is referred to as ‘Type V’ hemp, compared to Type I (high THC), Type II (moderate THC & CBD), Type III (high CBD), and Type IV (high CBG) cannabis. Type V hemp can theoretically be achieved via both traditional breeding and gene editing approaches. However, there are currently no Type V hemp cultivars commercially available.
STATEWIDE FIELD TRIALS Field trials of CBD hemp trials have been conducted at five Texas A&M AgriLife research and extension centers (Amarillo, Vernon, College Station, Uvalde, Corpus Christi) representing distinct ecoregions in 2020 (6 cultivars) and 2021 (16 cultivars).
NIRS SCREENING Testing the potential of handheld NIR spectrometers to scan all samples prior to shipment for laboratory cannabinoid/terpene profiling is also underway. Following modeling, a 98% accuracy was confirmed for CBD in the project’s 2020 trials. Larger and more diverse (cannabinoids and terpenes) data sets in 2021 and the future will enable highly accurate predictions, providing rapid, non-destructive testing (farmers, dispensaries, regulators, etc.) in lower cost, open-source alternatives to the existing, patented GemmaCert and LilPurple platforms or more expensive Raman laser platforms.
COLLABORATION & CONTACT Significant support for research has been provided by Rare Earth Genomics via partnership with the university. Further education and outreach support has been provided by the Jack Herer Foundation. For more information please contact: Russell Jessup, Associate Professor of Perennial Grass & Industrial Hemp Breeding, Dept. Of Soil & Crop Sci., Texas A&M University, rjessup@tamu.edu, 979-341-0999, https://soilcrop.tamu.edu/people/jessup-russell-w/
A GENERATIONAL GUIDE TO CANNABIS CULTURE
BY RACHEL NELSON
men to snuff out hemp farming because they had financial interests in competing products (like nylon). With many people jaded post-war and wanting to live peaceful lives, there were less activists willing to make waves about issues like marijuana laws (hence the name “The Silent Generation”).
Baby Boomer Generation — Born 1946-1964 As the Vietnam war heated up, Bob Dylan began passing his poetic peace pipe across American radio waves in the early 1960s. With the world-famous Woodstock festival taking place by the end of the decade, recreational marijuana use became much more mainstream for Baby Boomers. For the free-spirited hippies of the day, the vibe was fun-loving and carefree. (In fact, just hearing the word “Woodstock ‘’ conjures up a mental image of a hippy chick wearing a flower wreath in her hair and smoking a fatty. Wouldn’t you agree?)
It’s no secret that cannabis flower has been used since ancient times for medicinal, recreational and ceremonial purposes. At the same time, the cannabis plant provides strong fibers that are ideal for industrial uses like making rope. Its versatility has Generation X — Born 1965-1980 Recreational pot use was alive and earned the cannabis plant worldwide notoriety, but the United well in the 70s, which is evidenced by the popular film Dazed & Confused that States has had a rocky relationship with reefer. While it’s unclear if George Washington and the founding fathers were actually toking up, hemp farming was the norm in the late 1700s. In fact, the industry helped propel the U.S. into self-sufficiency. At one point, farmers in colonial America were mandated by the government to grow it. So how did the country move out of a hemp heyday and into decades of prohibition? The acceptance of cannabis has seen its ups and downs in the past 100 years, and pop culture has played an essential role in the evolution of attitudes toward it. Let’s explore some of the marijuana milestones that set each American generation apart, dating back to the 1920s.
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The Silent Generation — Born 1928-1945 This generation fell victim to propaganda such as Reefer Madness, a widely-spread 1936 film that intertwines elements of horror into a scary (and fabricated) reefer reality. The next year, The Marijuana Tax Act of 1937 was passed and was the first federal law to criminalize marijuana nationwide. It imposed an excise tax on the sale, possession or transfer of all hemp products. Why did the U.S. government have a change of heart about cannabis? Many speculate that excessive taxation was a move sponsored by wealthy business-
features high school kids smoking their way through an epic summer in 1976. While the movie wasn’t made until the 90s, generation X saw its fair share of pro-cannabis messaging seep into the media. As Willie Nelson was bridging the gap between hippies and rednecks, Pink Floyd was making hits like “Dark Side of The Moon,” and Bob Marley was spreading his Rastafarian, pro-cannabis philosophy. Cheech & Chong, everyone’s favorite weed-smoking comedy duo, gained massive popularity with the release of their 1978 cult classic Up in Smoke, which raked in $44 million at the box office. Back then, the weed was also laced with a hint of rebellion. Hunter S. Thompson’s
1971 fictional autobiography, Fear and Loathing in Las Vegas, promoted the use of cannabis and a slew of other drugs. In the early 80s, Gen X-er “Dimebag” Darrell Abbott arrived on the scene shredding guitar solos with Heavy Metal Band Pantera. With so many diverse personalities promoting pot, it’s difficult to find a social demographic cannabis hasn’t touched. At the same time cannabis culture was revving up, the government was working tirelessly to dim its shine. In 1971, the Controlled Substances classified marijuana as a schedule one controlled substance, lumping it in with LSD and heroin.
Generation Y (Millennials) — Born 1981-1996 In the 80s, First Lady Nancy Reagan pioneered the “Just Say No” campaign that encouraged kids to refrain from illegal recreational drug use. The program remained popular into the 90s. Still, Millennials are the type of people who celebrate 4/20 by watching a marathon of That 70s Show or Weeds. They know and love Snoop Dogg, the rapper who encouraged them to “smoke weed everyday.” They remember when Olympic gold medalist Michael Phelps
was shamed for his love affair with the green goddess. Many from this era were also coming of age when well-known pothead Seth Rogen was putting out legendary movies like Pineapple Express. The rise of the Internet enabled mass communication among cannabis enthusiasts, and many pot-related forums were born. Aided by the world wide web, millennials witnessed unprecedented growth in regard to cannabis culture. In addition to posters from High Times Magazine being plastered on the walls of stoners everywhere, marijuana legislation came to the forefront. In 1996, California was the first state to legalize medical marijuana, and most states followed suit by 2016.
Generation Z — Born 1997-2012 Most Gen Z-ers could likely tell you what the health benefits of cannabis-derived cannabidiol are. That’s because CBD dispensaries are common in most urban areas these days. This is also the generation of memes, and there are plenty of weed trends circling the Internet. Podcasts are another marker of Gen Z, and popular programs like The Texas
Hemp Show, The Dr. Greenthumb Podcast and The Joe Rogan Experience openly discuss all aspects of cannabis. Along with the rest of the world, many Gen Z-ers will never forget seeing Socialite Kim Kardashian fight for marijuana reform alongside President Donald Trump at the White House in 2018.
Generation Alpha — Born 2013-2025 To grasp where we are, it helps to understand where we’ve been. But where are we going? What will cannabis culture be like for the 8-year-olds of the world? With more states moving toward legal recreational use, this age group is likely to grow up seeing cannabis as just a regular part of life. Alongside Gen Z, they will reap the long-term benefits of legalized hemp farming as resources become more widespread. A nation that once heavily relied on hemp later transformed into a place that imprisoned its citizens for possessing it. In modern times, states have been slowly inching their way out of cannabis criminalization. Some might say the situation is even more twisted than a doobie. This historical roller coaster really begs the question, “Can’t we all just get a bong?
PROFILES IN HEMP FARMING BY MISTY CONTRERAS
4K PHARM TAYLOR KIRK, OWNER GIDDINGS, TX 4KPHARM.COM
Texas Hemp Reporter: Where are you located? Taylor Kirk: My homestead and farm are in Giddings, Tx. Me and my family and the “4 Kirks”. That’s the inception of the name- we’re the 4Ks. THR: When did you begin farming? TK: I’ve been growing cannabis for a while. I started farming hemp last year. I got my license from the Texas Dept of Agriculture in May, purpose-built my facility last summer, and was operational by September. THR: Is hemp your primary crop? TK: Yes, hemp is my only crop right now. THR: What do you produce (pulp, CBD, textiles)? TK: Primarily premium flower. I identify as a craft hemp farmer.
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THR: Do you offer any specialty products you would like to talk about (organic body care, construction materials)? TK: I have a branded premium hemp balm that I make in-house. There are two different formulations of that, one is a CBD and the other is a CBG. Most people are utilizing it for localized pain or inflammation, muscle aches or pains, neck pain, joint pain, also arthritis and skin conditions such as psoriasis. And I work with a local processor to extract our flower to make tinctures and oils. The balm and the tinctures are both available at Custom Botanical Dispensary on East 5th Street in Austin, and also on my e-commerce store on my website. I sell wholesale flower to other retailers in Texas that might re-brand them. I also do direct-to-consumer sales through popup events and farmers’ markets. I participate in the Brenham Farmers’ Market, which is the first Friday of every month.
THR: Can you describe your growing/ processing operation? TK: Basically, I have a purpose-built farm with a light depravation greenhouse with living soil, organic raised beds and automated irrigation. I also have an indoor shop where I do propagation, vegetation and cultivation. I push plants from greenhouse to flower. I also do my drying and curing and manufacturing. I make prerolls and package flower and make my balm. So, it’s a space dedicated to all of that. THR: What are your hopes or expectations for the future of hemp farming? TK: I hope that more people gain knowledge of hemp and the value of hemp. We see more and more consumers coming to the market that are going to generate more revenue for the farmers and keep everybody in business. I look for new innovation and novel genetics and look to be a part of that
effort. I’m a plant breeder. I’ve bred cannabis before for a medical cannabis company I used to work for. I have a passion for that, and look forward to getting involved with genetics. THR: How have the challenges you encounter every day helped you become a better farmer? TK: A lot of farming is problem-solving and not knowing what challenges you are going to be faced with but it’s how you react to them that’s important. I’ve been working with cannabis for a long time, so there’s not been a lot of challenges with cultivating that I haven’t dealt with before and dealt with in my other job as a cannabis grower’s consultant. Luckily for me, I’m very confident in that craft, the cultivation aspect. Since this is an entrepreneurial endeavor, this is the first time I’ve ever had my own business, more along the sales side and some of the other aspects, the other hats that I have to wear, if you will, that maybe I’m not as experienced with, that’s probably been the biggest challenge. And then just balancing time. This has been a side hustle for me, having a full-time job on top of being a full-time farmer, it’s like burning at both ends and trying to manage a work/ life balance.
HERRING BANK BY STACEY LOVETT
While the legalization and participation in the hemp industry is growing in the US, the lack of banking support with funding these businesses remain a national issue. Herring Bank is making strides right here in Texas to change that narrative with their CBD & Hemp Banking Program.
H
erring Bank is a FDIC insured institution that must adhere with federal, as well as state regulatory requirements. In banking the Marijuana Related Businesses, Related Entities, Hemp and Hemp Derivative businesses, Herring Bank, if not in compliance with federal and state regulatory requirements, faces the potential of severe penalties. The bank began serving the Marijuana Related Business, Related Entities, Hemp and Hemp Derivatives industry in April 2019 and has since built a multi-state program that now services over 20 states. Headquartered in Amarillo, Texas, Herring Bank has branch locations in Texas, including Grand Prairie, Vernon, Azle, Clarendon, Seymour, in Colorado (Colorado Springs) and in Oklahoma (Altus). Herring Bank has also grown outside of their branch footprint to other Texas cities such as Dallas, Houston, Austin, San Antonio, and McAllen in which to serve the hemp and hemp derivative industry. Herring Bank’s Marijuana Related Business, Related Entities, Hemp and Hemp derivatives strategy has positioned the Bank to take advantage of opportunities that may be available with the passing of any future cannabis legislation. Andrew Escamilla is Herring Bank’s Hemp and Hemp Derivative Product Manager. With nearly 15 years banking experience behind him, Mr. Escamilla has the knowledge and excitement to assist businesses in obtaining banking services. Herring Bank has, and continues to, learn about and reach
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out to the industry. Mr. Escamilla explained that the regulatory/legal environment and the required resources and infrastructure required to support a compliant program. Mr. Escamilla explained that it is important for a bank to understand the industry to know the challenges experienced by industry businesses and individuals, to ascertain the importance of providing a banking service solution as well as identifying the various state compliance requirements the industry must adhere with. Mr. Escamilla explained that industry clients must provide certain information to the Bank in order to receive access to banking services. The information provided to the Bank is carefully reviewed by the Bank prior to providing any banking service to a potential client. The submission of the information is important to ensure that Herring Bank meets its federal and state compliance requirements as well as it allows the Bank to monitor the respective client’s adherence with its applicable state’s compliance requirements. Mr. Escamilla explained that information prospective clients must submit, includes such things as, information about their respective location(s), the intent of business, type of products being sold, the business structure, business ownership details, supporting documentation such as lab reports on crops, state licensing, etc. Mr. Escamilla explained that the Banks willingness to Bank the entire spectrum of cannabis related businesses, of all sizes and types. Mr. Escamilla enjoys working with
and assisting, potential and existing hemp and hemp derivative clients with their banking needs. Mr. Escamilla believes in staying up to date with what is occurring in the industry and continuing to learn as much as he can about the industry, including the associated federal and state laws that impact the industry. Escamilla has seen many customers come in who have been closed out 2-3 times by banks before they get to him, just trying to operate but encounter limited tolerance of the industry or simplistic pilot programs that cannot fully support their needs. Herring Bank paves the way in cannabis related product banking to help the industry. Herring Bank’s moto is “Building Relationship for a Lifetime”, which is something the Bank lives every day. Herring Bank would like to establish a relationship with everyone in the hemp and CBD industry. Mr. Escamilla would love to meet you and discuss what Herring Bank can offer you.
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BEHIND THE BAD ASS COWBOY, a look at Cosmic Cowboy Extractions with owner Ron Theis. BY JESSE WILLIAMS
Perhaps you’ve heard of Bad Ass Cowboy BBQ sauce, the sauce created using Sid Millers CBGenious Lone Oak Farms 2021 hemp crop by Cosmic Cowboy Extractions. Now it’s time to take a look at the company behind it. The History Cosmic Cowboy Extractions (CCE) as a company was created in 2019. The idea for owner Ron Theis to start CCE came though well before that in 2015. Theis was a contracted software developer working in the oil industry when he started seeing his pay decline with others undercutting him on jobs. Ron then decided that he needed to find another sustainable method of income that was not going to be dependent on others’ work. Ron started looking into the emerging cannabis industry and found that the only place with no giant barriers to entry was the supply chain. He discovered that if you come up with better and more reliable products, one can chisel out a piece of the space for themselves. He then researched further into issues products may be facing in the industry and how to go from there to make his own unique space in the industry. CCE just wants be their own thing and not try to be in competition with anyone Ron’s extended family that lived out in the Corpus Christi area was welcoming to the idea as he told them that he realized he had figured out the issue of typical distillate final products. The problem though was that he didn’t have a solution. Then in 2018 a cousin in the family showed him another method that became what CCE uses today, ice water bubble hash method.
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The Method and the Product Cosmic Cowboy Extractions (CCE) creates a chemical free CBD - gold dust hash. What does that mean though? Don’t be afraid of the word hash. It’s just short for hashish and that means that the product was made by mechanical means along with compression at times upon the plant matter. No chemicals are used, by definition, to make hashish. So yes, chemical free indeed. This also allows the product to be more of a full spectrum product than chemical products that tend to isolate one cannabinoid over another as such with distillate products. Given that it’s a hemp plant, there isn’t the big scary marijuana issue to worry about as a Texas resident. And since the entire raw material plant can be used in the production, less of the plant goes to waste and cuts down the cost. This practice also cuts down on the by-products found in chemical extractions. Cut down to zero because there are no chemical processes involved to extract the cannabinoids from the plant. CCE created their hemp product base from a specific type of hash called bubble hash. Bubble hash is when the cannabinoids have
been separated by means of an ice water wash. The plant is positioned to become super cold and freeze the trichomes off the plant and into a filter. In 2019 Ron invented his own patented machine to perform this process on a large scale to perform a slow bubble hash ice wash. He made the initial prototype for roughly $120k, made it modular and took the machine on tour to Oregon under the newly created business name of Cosmic Cowboy Extractions. Beyond that the other component of the industry he saw growing and in need was the edibles field. Less people were making and the edible market was seeing a roughly 40% increase in consumption every year from 2015 moving forward. He needed to find out the best method for infusing products and continues to do so every day with the different products he works with to create consistent products. Because his product doesn’t involve heat in the process of extraction, there is never any decarboxylation of the product until it is desired to do so at the final stage before being mixed with the rest of the product to be sold. The benefit of this is that the final products come out as more effective than products created through typical chemical means. Usually this results in an effectiveness of 92-94 percent compared to the standard of 46 percent effectiveness. Testimonies in the industry among creators and users of the products have shown that about ⅓ of the product typically created by other methods needs to be used to achieve this effectiveness. Ron states that
people are consistently telling him that other products they bought online have lost their effectiveness, but products created using this method don’t get used up as quickly as before and maintain their effectiveness over time. Theis says that with his design he can icewater wash 200 lbs a wash cycle. During an 8 hour shift this method can produce 12k grams a day and a typical wash time is a 4 hour wash. Theis considers these numbers to be on the conservative side of things with the product amount created. This is a constant slow wash method in a closed system using freezing water and vibrations to create the hash. In the end the result is a separation of 24 percent plant matter and 76 percent cannabinoids, so it is still a concentrate. From there they will double boil the leaf matter into the carrier oil to extract more cannabinoids out and squeeze the oil out of the leaf with a press. The rest is dust used to make bricks or paper. CCE is using 100% of the plant and nothing goes to waste.
Bad Ass Cowboy BBQ Sauce Sid Miller, Texas’ current Texas Department of Agriculture Commissioner, owns and operates an 8th generation family farm in Texas. After the Texas hemp bill passed in 2019, Sid decided the farm would grow some hemp and went with a few acres to try it out. Sid had two strands that grew from the harvest. Page 36 • www.TexasHempReporter.com
One strand being Sweet Wife. Theis says that it was a good grow but that it is too tacky and sticky for bubble hash. It’s a restriction in a bubble hash and it will clog up the machine and become inefficient. It would be way less efficient than the other strand, CBGenius, that Sid grew which was wind up yielding a whopping 72 grams of hash per pound of plant matter. At the Austin Lucky Leaf convention,Sondra Huddleston was looking to hook up growers and buyers. Sid asked her to find a buyer they thought would fit well. She told Theis that she liked what CCE was doing and how they do it, and asked if CCE wanted to do this process. Sid’s farm sent a couple pounds and CCE tested it out. Theis went to look up Sid and his background and realized just what Sid was, a bad ass cowboy. The crew at CCE decided that this product has to become a bbq sauce.
What’s popular and new for CCE? The most popular product for the company outside of the Side Miller BBq sauce are the salves for things like tattoos. The company will be changing from plastic to tin for the containers. The 1500mg and 950mg 4 oz salves are the popular versions of the product. People are reporting back to the company that a whole family will go through a jar in a week. They use the products on cuts, burns, sprains, etc. Once
people find out it makes them feel good, they use it up. CCE is working with regional retailers to get even more projects like the bbq sauce going. As well, they are always trying to come up with new products they feel the market needs and could use their bubble hash method with. CCE is currently working on dog/cat pet treats. On the veterinary side of things regarding those products, creating post surgery types of treats to help animals relax and heal. And for the consumer side, treats to calm your anxious or consistently agitated barking dog, the older pets with bone and connective tissue issues. Theis says that CCE is also working on CBG products with day and night capsules. Take one capsule for energy and getting the move on in the day, and take one for relaxing at night. The idea is a plan to help with homeostasis in the human body. The crew is also working with a whole new line of bbq sauces in addition to Sid’s. They are creating competition bbq sauces and marinades, dry rubs to include one titled 21 Gun Salute (21 spices and low sodium), and working on a hemp version of Schatte’s BBQ Sauce. Theis says they expect their next big product to be El Gallo Mix, a sour mexican gummy candy, as they are going to be working with them. Customers can find these products and more at https://cosmiccowboysextractions.com/.
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GREENCROSSATX.COM 2308 E. CESAR CHAVEZ, STE A INFO@EASTAUSTINCBD.COM
SUCCESS STORY: AUSTIN RETAILER HAS A DREAM
GREEN CROSS CBD GREENCROSSATX.COM 2308 E. CESAR CHAVEZ, STE A INFO@EASTAUSTINCBD.COM
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reen Cross CBD is owned by John Elmore, who grew up in New Braunfels and moved to Austin in 2007 to attend Austin Community College before transferring to Texas State University. Prior to opening his CBD boutique, John’s career was in aerial videography, running his other business, Aerial Viewpoints. The major attribution to Elmore’s career change was when his 95-year-old grandfather broke his hip, leading to hospitalization. His grandfather had no appetite, couldn’t eat and was not healing. After hearing great things about CBD, John brought him some CBD tincture oil, spoke with the nurses and they were able to get the doctor’s approval to administer CBD to him. They gave his grandfather the suggested dosage of CBD and that very same day, he ate a big meal! Following that, he ate every meal offered to him and between CBD and the benefits of proper nutrition he was able to walk again within a month, using a walker. John’s grandfather is still alive today at 98 years old! After this experience, John became a firm believer in the healing potential of CBD products. So, in 2018 he began to think seriously about opening his own hemp shop. After months of challenges, John finally found the perfect spot on East Cesar Chavez street, right next door to Juan in a Million. As East Side residents, John and Noelle are thankful that they get to help their local community. Their products are available online also, so Green Cross products get shipped all throughout the USA. Driven by a passion for helping people, Green Cross is grateful to have the opportunity to do just that. “When a patron comes in, they can tell us about what issue they’re having and we will do our best to point them in the right direction. We love educating everybody, so we always welcome
people who are new to hemp products, who may have a lot of questions. We have educated answers.” Many days you will be greeted by Noelle at the shop. She is from Oregon where she worked in the cannabis industry. Noelle worked in a medical and a recreational dispensary, where she expanded her knowledge of cannabis science. She was inspired to pursue a career in the cannabis industry after she had healed two chronic disorders she had [migraines and GERD] with the help of CBD and THC. She had chronic migraines for 2 decades, until she began using cannabis products frequently. After integrating cannabis into her daily life, she no longer got migraines, only occasional headaches still occur. Based on her personal experience, CBD can help ease headaches, digestive disorders, stress and anxiety and many different disorderly functions in the body. Green Cross is driven to destigmatize cannabis use and spread knowledge about the medicinal capabilities from the cannabis and hemp plants. John and Noelle are not medical
professionals, they are cannabis professionals with happiness and healing in mind. As cannabis connoisseurs, you will find Green Cross focuses on offering a diverse range of high-grade hemp flower strains. You can also find medicinal CBD products of all forms in Green Cross, as well as a fun variety of hemp-derived THC products. Their product selection is sourced half from local Texas companies, and the rest from Oregon, Colorado, California, Florida and Vermont. Green Cross can be hired for private events and parties as a mobile hemp dispensary. On another note, The Green Box, a cannabis kiosk machine is changing the cannabis game! Created by John, Green Box was an idea he had dreamed of, in his dream he was purchasing cannabis from a vending machine. Now he is in the process of franchising Green Box, since many people have been eager to take part in this revolution. We’ve received amazing feedback, people absolutely love the convenience. We are looking for businesses that are hemp-friendly and open to hosting a Green Box and earning passive income. Contact John for details.
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HYDROSHACK HYDROPONICS
BY STACEY LOVETT
Houston Heights is home to Hydroshack Hydroponics – a full-service hydroponics retailer who prides themselves in the firsthand knowledge they have imparted to their customers over the last 10 years of business. . Sprouting from a small hydroponics start up in the front office of their warehouse, Hydroshack has since grown into the biggest store of their kind in Houston, dealing in high end soils & nutrients, lights, and accessories for hydroponic growing. They deal in primarily indoor grows for all gardening needs but added in hemp as the industry cropped up in Texas. The owner, Chris Powers, always knew some form of legalization would happen in the state and built the company up to be a known entity when that time came. Following the passing of the hemp bill, his business was revived having been in competition with big online retailers. What sets Hydroshack apart is their solid client base they’ve built and the fact that they have become a destination with their own fully licensed in-house grow operation that serves
as a firsthand tool to both learn and teach about growing the crop with hydroponics. They do not grow to harvest but simply provide a live setup of a handful of plants where customers can experience what they sell in a functional setting. The majority of Hydroshack’s clientele is based in the greater Houston area with about 10% comprised of online retail and customers they draw in from nearby states and other Texas cities like San Antonio and Dallas. As Oklahoma passed legislation to legalize cannabis, their smaller retailers began running out of products and began coming into Texas to restock. It also serves as a hub to their Louisiana neighbors who do not receive as much internal support of the industry and cross over into Texas for a more pleasurable shopping experience.
Indoor grows allow for a more controlled setting and cut out many of the external variables that have led the initial outdoor growing season in Texas to get off to a rough start such as unpredictable weather and terrain, pests, nutrient and pH balance, and varying climate zones affecting the harvest window. Powers and his crew caution new clients with big outdoor grow plans to consider indoor operations as well as start small with 10-100 plants as they’ve seen firsthand the excitement turn big investments into big failures quickly. The team works to teach people how to grow, that there is science behind it, and how to utilize the products they carry to cultivate an operation best suited for their own personal needs. The two most important factors in an indoor hydroponics grow according to
Hydroshack is climate control and lighting, both requiring the biggest investment. Many growers underestimate the importance of temperature and humidity control disregarding seeing the need for mini-splits and dehumidifiers. The secondary setup decisions like soil type or coco coir, nutrients, pest control, etc. are available in store to most variables and involve more personal preferences behind the choices. The staff at Hydroshack Hydroponics provides knowledgeable consulting to get people started down the right path with growing hemp and building a foundation to create a customer-retailer relationship, not just a sale. With so many varying methods and opinions on growing as well as such regional diversity in the agriculture, the online case studies do not always fully translate to one particular growing situation. Hydroshack starts from the basics with new clients and custom develops a growing plan based on their own personal needs. The process can get intricate and in the interest of investing in the growth and success of their customers they work not to overwhelm in technique
or investment. These relationships often lead to a reciprocal benefit learning directly from customer experiences as well. Powers cautions new growers to be patient and take their time, making sure not to rush into big decisions and big risks; there is plenty of time and opportunity to tap into the cannabis industry and be successful without overstretching and potentially losing everything. Another thing Powers and his team have
found is that farmers tend to have the agricultural background with crops like soy but find transitioning to a flowering plant a bit different as far as the technique, external factors and the market itself. They advise them to start on a manageable, small test environment as well and build on that to grow success. The majority of their clients choose to farm out of a small indoor grow tent and range into standard room sizes to warehouses which they foresee the popularity of exponentially growing when full legalization finally happens. Transitioning from indoor to outdoor grows is a careful process that involves careful cloning and propagation as well as nutrient balance to get the baby plants sprouted and to size to transfer outside for higher success. In this window in between the transition is where Hydroshack comes in with a lot of their consulting at the next level. Building and nurturing these relationships has allowed this Houston homegrown business to thrive and continue to support the local grow community with it – an instance of patience and opportunity paying off in their own growth.
THINGS YOUR BANKER WISHES YOU KNEW
BY JUSTIN FISCHER, CO-FOUNDER AND CEO OF RISKSCOUT
Institutions are required, by law, to “know their customer”, and the lack of available or delayed industry training makes it nearly impossible to fulfill that requirement. As a result, institutions are often delayed in their decision to either launch or not launch banking programs, including hemp, until they have gained a thorough understanding of the industry, including perceived risks. Banking an industry the institution doesn’t thoroughly understand can lead to regulatory scrutiny. Further complicating the matter is the requirement for key stakeholders to approve banking programs that may present elevated risks to the institution; including hemp banking programs. This can prove challenging given the lack of available educational materials but also due to hemp’s close association with marijuana. Potential reputational risk is always top of mind for board members and is a key driver in their decision making. Some institutions simply choose not to bank hemp because they either don’t have the necessary resources (i.e. - staffing, technology, etc.), they feel the risks of banking the industry is outside of their risk appetite, or a combination of both.
A business operating in the hemp industry can find it difficult to find a financial institution (bank or credit union) that will provide financial services. The hemp industry remains woefully underbanked despite the fact we’re upon the third anniversary of legalization through The Agricultural Improvement Act of 2018 You Should Advocate for your Business and the Hemp Industry at (aka as the 2018 Farm Bill). So what gives? Quite a bit, actually. And your Financial Institution it’s time for the hemp industry to find out what’s really going on at You would be surprised at the number of banks and credit unions across the country, and for the industry financial institutions throughout the country that still believe hemp is federally illegal. Many to learn how to better advocate for and protect themselves in the of the people that get to decide who does and banking world. If your banker was able to speak openly and freely who doesn’t get to bank aren’t keeping abreast the changing legal landscape in the cannabis to you about what is happening behind the curtains, these are the of industry - including the legalization of hemp. top four things they’d want you know and consider: Their poor understanding of legal permissibiliYour Financial Institution May Not Understand Your Hemp Business Your financial institution doesn’t have an ax to grind with hemp, they just may not understand it. In fact, bankers are not given mandatory training on specific industries. Truth be told, the only industry-specific training a banker gets is through personal research, consultation with industry experts or legal counsel, or industry-specific overview training through webinars, whitepapers, etc. As you can imag-
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ine, seeking out training on new industries, such as hemp, is extremely difficult as credible research materials and training content are scarce - especially within the first year or two of the birth (or-rebirth in the case of hemp) of an industry. As a result, there is often a gap between an industry’s need for financial services and financial institution readiness. It’s a vicious cycle and it happens with nearly every new industry that is deemed, whether right or wrong, as “higher-risk”.
ty is just another factor in the shortfall of available financial resources for the hemp industry. So what can be done about this? Members of the hemp industry should advocate not only for their business but their industry as a whole at their financial institution. By taking a strategic and educational approach to engaging your financial institution, you help them to understand idiosyncrasies throughout the industry and promote the development of more tailored banking solutions. Community banks exist to serve their communities, but they often fail to
do so properly due to the lack of understanding what types of businesses are actually operating in their footprint. Hemp industry advocates can be the missing link between lack of educational resources for bankers and financial institution readiness to bank the industry.
You Should Conduct Due Diligence on the Hemp Banking Program at Your Financial Institution When seeking financial services for a hemp business, it is just as critical for the business to understand the size and scope of a financial institution’s hemp banking program as it is for that financial institution to understand the size, scope and nature of the business. Some important questions to consider when seeking a financial institution: Is the financial institution asking any questions about the operations of the hemp business? If not, the institution may not have a true hemp banking program in place or they may have a program in place that does not meet regulatory expectations and the risks of the program being shut down and account closure are elevated. Institutions with hemp programs that do not meet regulatory banking guidance run the risk of having their program shut-down at the order of regulatory authorities which may result in the exit of all hemp related businesses and associated accounts. Affected hemp businesses would be required to seek a banking relationship at another financial institution; often within 30-days or less of the institution’s hemp banking program closure. Is the financial institution openly advertising their hemp banking program? If not, this may be an indication the institution is not fully invested in the program and the risks of the program being shut down due to internal risk appetite changes are elevated. Is the financial institution charging additional hemp banking program fees? If not, the institution may not have a hemp banking program in place because a true hemp banking program can be costly, if done correctly. Conversely, if the institution is charging any additional fees, ensure they are suitable for your long term goals and determine what you are getting for the fees they are charging.
There is a Reason Why Your Financial Institution Asks for So Many Documents A financial institution that is running a truly compliant hemp banking program will be seeking out additional information from prospective
and existing hemp businesses, above and beyond the normal business documentation collection, both during onboarding and on a recurring cadence. The additional business information is to ensure the institution is complying with the “know your customer” regulatory expectations discussed earlier. Failure to supply requested information could result in failed onboarding as a customer or member to an institution or termination of an existing account. As a result, it is critical to understand and comply with the institution’s request for information. Examples of what a hemp business may be asked to provide at time of relationship application or on a periodic recurring cadence after onboarding include, but are not limited to: information on the business including operations, details on key parties including individuals with 25% or more ownership, a list of significant vendors, copies of applicable hemp licenses, business formation documentation, Certificate of Analysis (COAs) to show THC testing results and website & social media URL information. As mentioned above, once onboarded as a customer or member to an institution’s hemp banking program, you should expect to receive a request for updated business information from the institution on a periodic basis. Most institutions are reaching out to their customers or members based on their perceived risk of each hemp industry sector; this typically occurs on an annual basis, if not more often. For example, a hemp farmer may hear from their institution in the spring so they can understand growing plans for the year and again in late fall to receive THC testing results after crop harvest. While a brick and mortar retail store may hear from the institution on a quarterly basis and be required to provide a list of products being sold along with THC testing results for a sample of products on the shelves. You may also hear from your financial institution outside of the standard set cadence for refreshed business information. It is critical to be prepared to respond to your institution when additional information is requested as failure to do so may result in the exit of your banking relationship. Other red flags that may result in the denial or exit of a banking relationship include: Not providing pertinent business information that serves to verify business identity. Any business name changes, operational changes, etc. are important to note in an application or request for updated business information. Claims of Efficacy. The FDA does not allow hemp related businesses to make claims of
efficacy about their products. Most financial institutions conduct product and website reviews to review for language that may violate FDA rules. This includes absolute statements such as “say goodbye to pain” or “this product will provide relief ”. Questionable or missing Certificate of Analysis (COA). There is a fine line between a product being considered hemp or marijuana and the only way for a financial institution to verify hemp crops and hemp products are within the legal THC limit is by reviewing up-to-date COAs. Hemp businesses are encouraged, when possible, to provide updated COAs on their website and/or provide updated applicable COAs to their institution once received. Transparency with your financial institution is imperative to maintaining your hemp banking relationship. An institution that has opted to bank the hemp industry is taking a calculated risk and hemp businesses should reassure their institution they have made the right decision to bank hemp by meeting the institution’s requirements. Hemp businesses must be prepared to answer requests for information in a timely manner and be prepared to provide supporting documentation for given answers.
Conclusion Whether you’re struggling to find a financial institution to serve your hemp business or you have decided that your financial institution is not the best fit for your short and long-term financial needs and goals, there is an available free resource to assist hemp related businesses in finding financial institutions that offer sustainable banking solutions. For more information visit verileaf.io. Once you have found the financial institution you want to partner with, ease the burden of banking by developing a process to prepare information for onboarding and ongoing requests with your financial institution. Typically initial and recurring requests will be around ownership, product offerings, and crop or product testing so consider preparing your information as part of your ongoing business practices making it easy to respond with your up to date information in a timely manner. There’s a lot here to sort through. But the adage “measure twice, cut once” will serve you well in doing the necessary footwork in having a successful banking relationship. Your financial institution is there to help you, just make sure that it’s the right one for you.
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CANDIDATES
Susan Hays
Sid Miller
Carey Counsil
James White
Ed Ireson Page 46 • www.TexasHempReporter.com
JAMES WHITE
An Interview For Texas Agriculture Commissioner THR: Where do you stand with the Texas Hemp program in expanding it and regulating it, do you think there are deficiencies as well? JW: I am the only candidate, regardless of party affiliation, aspiring to become your next Commissioner of Agriculture that has the legislative record supportive of establishing the current Texas Hemp program. In 2019, I co-authored HB 1325. Chapter 12.002 of the Texas Agriculture Code states explicitly that the Texas Department of Agriculture (TDA) “shall encourage the proper development and promotion of agriculture, horticulture, and other industries that grow, process, or produce products in this state.” Absolutely, I will leverage my constructive legislative relationships to respond to the needs and wants of Texas agriculture consumers and the desire of Texas agriculture producers to develop and expand new markets, and in particular, hemp production. I necessarily do not see any deficiencies, but I do see opportunities. To begin with, Texas has a strong pro-business environment, great research institutions, and phenomenal hemp producers and entrepreneurs. The first order of business, as the next Commissioner, I will re-nurture an environment, perceptively and substantively, of ethics and transparency. It is very disrespectful and embarrassing to all Texans that we are directing law enforcement resources to investigate the unlawful behavior of connected lobbyists/political insiders. The TDA should not be the sole domain of political insiders and lobbyists. I will follow up diligently on Sunset Commission recommendations to review and revise agency rules with objective of insuring that hemp industry regulations are certain and less burdensome. I will seek the assistance and guidance of our entire agricultural industry, state agencies involved with ethical and financial oversight, to include the public in strengthening TDA’s executive leadership’s ethics and transparency.
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A few years ago, the incumbent excessively increased fees and taxes on our agricultural producers. I will review the producer fee structure for the hemp industry and achieve revenue-neutral fees. Producers should not fund extra FTEs and bureaucratic positions for family and friends, that have absolutely nothing to do with growing the prosperity of their industry. As the next Commissioner, I will revive the producer councils as a constructive policy partner. I will facilitate the ongoing seed research in order to find hemp seed variants that will thrive throughout Texas. I will also facilitate the expansion of processing plants for the hemp producers. Moreover, I will facilitate the development and expansion of ports, roads, bridges, and our oil/gas infrastructure to ensure that the hemp supply chain has the means to deliver its product to market. What is your stance on expanding the Texas Medical Marijuana program? Generally my philosophy legislatively and my temperament as your next
Commissioner is that Texans, patients and/or physicians should have access to treatments that preserve life and enhance the quality life with minimum regulatory barriers and criminalization. The purpose of government is to allow Life to thrive. Therefore, we should expand this program to meet the demands of the market. Instead of this medical programs being a law enforcement exception, the Texas Medical Marijuana program should be treated as a medical necessity. I am the only candidate in the race who has a legislative record consistent with this philosophy. What are your thoughts on the delta-8 discussion going on in Texas? It is very simple: In the the 2018 farm bill, the definition for hemp is the following: <0.3% of tetrahydrocannabinol (THC). The current hemp state statute also adheres to this definition. Supposedly, we are in the middle of a pandemic that reportedly has claimed at least 80,000 lives of Texans. This is a litigation distraction from more important health and safety challenges.
What are your thoughts on the smokable hemp ban? This is another litigation distraction from more important issues confronting Texans. Nevertheless, legislative guidance may be needed to resolve some issues. Let’s review the recently passed federal and state statutes.The journey to revive agricultural/industrial hemp began with the 2014 Farm Bill initiative which created a federal voluntary pilot hemp program. Texas did not opt into the voluntary program. However, with the 2018 Farm Bill, Texas created a statewide hemp program. Statutory and regulatory responsibility begins at the federal level. Congress defines hemps as: “… the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Under the “extent allowable under federal law,” Congress does not make any differentiation between ingesting methods. Additionally, paragraphs (1)-(3) of Sec. 443.204 are permissive, yet, paragraph (4) is attempting a prohibition that is at least not consistent with federal law or state statute: “… the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
As an aside, as required by federal law, Texas has submitted its hemp plan to the Secretary of Agriculture for approval and Texas has won federal approval with the “smoking” prohibition provision.[1] Another interesting point is that the smoking prohibition is also in the Texas Agriculture Code (See Note 9), even though the Agriculture Code deals with the following, not manufacturing: “Sec. 2.001. DEFINITIONS. In this chapter, “agriculture” means: (1) the cultivation of the soil to produce crops; (2) horticulture, floriculture, or viticulture; (3) forestry; or (4) the raising or keeping of livestock or poultry.”[2] 1
Co-author, HB 1325 (2019): https://capitol.texas.gov/ BillLookup/History.aspx?LegSess=86R&Bill=HB1325.
2
https://statutes.capitol.texas.gov/Docs/AG/htm/ AG.12.htm#12.002
This is why I believe Third District Court of Appeals drew a distinction between the processing and manufacturing of smokable hemp versus distributing and selling and decided to lift the ban on product sales. This situation has created an absurd compliance environment in which hemp merchants will just repackage their products to “consumable” hemp from “smoke-able” hemp. The Texas pro-business model has flourished on the notion of a certain and less burdensome regulatory environment. The controversy regarding smoke-able hemp has created uncertainty and unless corrected by the Legislature and the courts based on the science and our pro-business principles (Texas Veterans of Foreign Wars [I am a member of the VFW] is a plaintiff fighting the DSHS regulation. In sum, as your next Commissioner of Agriculture, regardless of the agricultural product or industry, and in particular hemp, I will tirelessly work and promote a pro-business environment of regulatory certainty. .
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Anti-Marijuana Indiana Governor Backs Proposal To Set Up Legalization Rules If Federal Prohibition Ends The governor of Indiana isn’t personally in support of marijuana legalization, but he says he’s on board with having lawmakers pass a bill to set up the regulatory infrastructure for a legal cannabis market. That said, he’d only be open to enacting the reform after federal prohibition ends.
G
ov. Eric Holcomb (R) was asked about cannabis policy during an end-of-the-year interview with Indy Politics that was released on Tuesday. Specifically, he was asked whether he’d “object to Indiana lawmakers at least starting the process” of setting up a licensing structure for legal cannabis businesses so the state can “flip the switch” when federal law changes. “I don’t mind that at all,” the governor replied. It would be a unique legislative process that no other legal marijuana state has pursued, with lawmakers hashing out rules on issues like licensing and taxes without a clear timeline for implementation that hinges on a possible future action by Congress. The GOP governor’s support for the proposal was welcomed by the Indiana Democratic party, which recently mounted a push for marijuana legalization and called on state lawmakers to enact the reform. Rep. Sue Errington (D) said she is working on a bill along the lines of what the governor says he’s open to. She recently hosted a town hall event to hear from constituents on the issue.
If the GOP-controlled legislature fails to pass a legalization bill during the 2022 session, the party organization said Democrats are prepared to campaign on the issue, leveraging the popularity of ending prohibition among Indiana voters. But while Holcomb endorsed the idea of setting the state up to legalize, he’s made it abundantly clear that it’s not his top priority and he will give deference to the federal government, refusing to enact reform until a federal policy change comes. “We’re talking about something that is illegal, and it’s just at the core of me—I’ve said this, I’ve taken a couple blows—it’s to uphold and defend the laws of the state and nation,” the governor said. “I don’t get to pick and choose. Even if I agreed with it, I couldn’t get myself to just look the other way as a lot of states have. But just because a lot of other states have doesn’t mean it’s the right thing.” In the meantime, Holcomb said he does want to see more research into cannabis. “I would encourage research, proper research, to be conducted,” he said. “We’ve got Indiana University and Purdue University that agree to participate in—an
ag school, a medical school—to do the proper research as they would with any other controlled substance and get the [Food and Drug Administration] involved in and get real data.” The governor similarly talked about his interest in exploring the medical benefits of marijuana during a separate interview with WANE-TV this week. A 2018 poll that found that about 80 percent of Indianans favor legalizing cannabis for either medical or recreational purposes, and 78 percent agreed that simple possession should be decriminalized. Adding pressure to enact reform in Indiana is the fact that neighboring Illinois and Michigan have each legalized marijuana for adult use and Ohio has a medical cannabis program. Illinois retailers have already sold more than $1 billion worth of legal adult-use cannabis so far in 2021.
DAN HERER INTERVIEW
BY JESSE WILLIAMS
Russell: Let’s talk about the work your dad did, and we’ll bring us up to speed here and what you guys have been doing in recent years yourself, continuing his legacy. I understand, though your dad was a veteran in the military and as a young man, Jack Herrer was not a fan of cannabis, was he? Dan Herrer: No. He had believed everything that he had ever learned or heard, either in school or from the government or from the newspapers, from the 40s and into the 50s, that cannabis was the Devil’s weed and everything that it was purported to be, that it was gospel for him because the government said so. And it wasn’t until after he had served in Korea and came home, married my mother, and had myself and my two brothers. And after the relationship ended at the end of the 1960s, he met a woman that he wanted to date, and she wouldn’t engage with him in any meaningful way because he was too square. And after months of asking her to go out, she said, Jack, if you want to spend some time with me, you’re going to have to smoke some pot with me. And that one evening changed him from an anti-drug, anti-marijuana, anti hippie, anti counterculturist to a person who was very inquisitive and had a new understanding from a personal standpoint. And literally, when they say that a leopard can’t change the spots, my father overnight changed those spots and subsequently, in the next 40 years helped to change the narrative and the course of the world with regards to its understanding of cannabis and hemp. And it became a real message and a real movement that allowed people through his passion and through his education and through his book, The Emperor Wears No Clothes that was written in 1985, really helped people to find their voice and to be able to stand up in their communities, even like communities like Texas that are moving a little slow but allowed people the ability to actually be able to speak about cannabis in a way that couldn’t be refuted, that couldn’t be contested because it was all based in fact.
And when he pulled up to the security at the federal building, he said, “Why are all of these Canadians so upset that they would be protesting at the federal building.” Page 56 • www.TexasHempReporter.com
And a lot of that fact was information that came through our government prior to prohibition, which after prohibition, the dynamic and the narrative of cannabis and hemp changed completely. And he was so upset that he felt betrayed by this country that he spent the last 40 years of his life fighting every single day for the ending of prohibition, the release of all cannabis prisoners and the legalization of marijuana and hemp. Because it was part of that culture at that time. And I know that Vietnam was going on. There was that peace and freedom and all of that, that was all part of the culture that got him into trying cannabis. So I’m sure it was alright in the height of that culture when he discovered it. And at the age of ten, in 1972, through the things that started happening in and around his house, when we would visit him, my brothers and I just started to discover cannabis. But for us, it wasn’t really like, oh, there was pot laying on the table. It was really that my father really started writing about cannabis because he was so interested in all of this nuance and all these new things that he was finding out. And he’s always been a writer. So he wrote a book called Grass in 72 which was released in 1973. And it was this book that talked about what cannabis was in a sense of how your high should be if it was good weed or bad weed and what that high would be and how much you should pay for it. And it sort of became this cult classic, even for them became an underground hit. It became an underground success. And people thought my father, after his first book, was already in authority on cannabis. But the book was done in sort of a furry Freak Brothers cartoonish illustration. And so my discovery of cannabis was using that book as a coloring book. And so as I was coloring the book with my colored markers, I was reading about cannabis in the most comical way.
He realized that all of these same things can be made with hemp and the byproducts of hemp. They could be non toxic and biodegradable and renewable, and be done in a way that wasn’t harmful to our environment. Jesse Williams: Dan, this is Jesse Williams of the Texas Cannabis Collective, I wanted to ask if it was true that Jack had a vision at 74 that the people of this planet could simplify our Earth’s problems, environmental issues with hemp. Dan: Well, I’m not exactly sure what year that happened. But there was a moment in time that as he started looking at what prohibition was and all of the products that were no longer able to be made from hemp that were being made by toxic, non renewable, poisonous practices within the manufacturing of everything from plastics to clothes. That he realized that all of these same things can be made with hemp and the byproducts of hemp. They could be non toxic and biodegradable and renewable, and be done in a way that wasn’t harmful to our environment. And that if you look at growing it out and using it to its full utility at scale, that the narrative of this climate crisis that we have today and the future of the world literally could be greatly altered by embracing this plant. Russell: It wasn’t until, I guess, about July of 83, I believe, Dan, that Jack was arrested on some really erroneous charges. And he fought this in the court system. And ultimately, they gave him a jail sentence. And this prison sentence, jail was light. They sent them to federal prison for registering voters to vote after dark. Dan: He fought this all the way, and it just kept getting denied. And it really seemed like they were trying to ostracize him and every step that he took to try to fight in that case. But it was really, ultimately his time in prison. I believe that in 83, when he went to jail, that really got the ball turning in his mind to get this book going. It’s exactly what had happened in the story behind that. And he spoke about it. I speak about it. I was there. I was a young adult. I was already in my early 20s when this happened. So we were petitioning and registering voters on the lawn of the Los Angeles Federal Building in Westwood, California, right off of Wilshire Boulevard in the 405. And it really started when Ronald Reagan was elected in 1980. And it was during the 1980 California Marijuana Initiative, which my father was the proponent of. And we were there occupying the lawn at the federal Building for about 80 days. And when Ronald Reagan was elected President, he was on his way from his home in Bel Air, down Veteran Boulevard across Wilshire Boulevard, where the federal building was on his way to his pre inaugural haircut. And as he came up to the federal building, he saw all these petitioners or protesters on the lawn. And he saw all the signs that they were holding up. Page 58 • www.TexasHempReporter.com
And the officer poked my father in the chest and said, we are at war with you.
And when he pulled up to the security at the federal building, he said, “Why are all of these Canadians so upset that they would be protesting at the federal building.” And he was informed that they were not Canadians because he had mistaken the cannabis leaf for the maple leaf. He was told, no, those aren’t Canadians. Those are marijuana protesters. And he says, Well, can’t we do anything about it? And they said, no, we took them to court and they have the right to be here. And he was overheard to have said, Well, I’m going to be sworn-in in the next couple of weeks. Let me see what I can do. And it was shortly after that, that my father and a few of the people that were still registering voters at the time, were arrested for registering voters at dark on federal property, and they were given a $5 fine because they knew that the charges were really frivolous. But they really wanted to end the encampment on the lawn. And by arresting my father and a few of the other people, everything disbanded and the lawn was evacuated. And the police officer came up to my father as my father explained it at the time. And he said, You’re under arrest for violation of the Sedition Act. And my father, being an ex-military police officer, said, Well, I understand what the Sedition Act is. How are we in violation of that? That only applies at times of war. And the officer poked my father in the chest and said, “we are at war with you.”
I don’t think that these companies really understood just the horrific effects of long term use of these products and how they would affect the lives of humanity 100 years later. And my father was arrested, given a $5 fine along with the other co-conspirators. And off they went, everybody paid their $5 fine except my father, who said, I’m an American. This is my right, and I will not plead guilty to sedition and pay a $5 fine just to go home. And he fought that all the way up through the court system, the federal court system in the state of California. And finally, the Supreme Court denied hearing the case. And my father was imprisoned in San Pedro for just a period of a couple of weeks. But it was during those few days that for the first time since he had discovered cannabis and was fighting for it, that this was like the first time that he was by himself, that there wasn’t any noise around him other than some of the inmates singing and playing harmonica. And he was really like, what do I do with my time, even as short as it was going to be? And he asked us to send him some paper and some pencils. And so while he was sitting in a jail cell, he started outlining what would become the book, “The Emperor Wears No Clothes, which was then printed in earnest and with quite significant content in 1985. And it was that book that actually started to change the narrative of cannabis and gave people the ability to find their voice and stand up and demand the rights to this plant. And today it is still talked about as one of those catalysts that is helping to end the war on drugs and the war on people. And today, 35 years later, it is even more relevant today than it was in 1985. It was a group of hippies reading this book and learning about it and standing up and finding their voice today. The information that exists in that book and the updates that it’s gone through over the past 35 years really speaks to all citizens of every country because all of these facts remain true. And that is, if you use cannabis to its full utility, the world can be changed and saved. Russell: So, Jack goes to prison and comes out with the notion to come up with this fantastic book. And that’s when he really started to get pissed. He got pissed off and then he started pissing everybody off. But he starts educating folks. I think one of the things that I remember about this book is that I probably read this and parts of it in junior high, if not like high school. I was probably in 9th grade or so when I remember getting my hands on this. And like you, my parents were hippies. They met in California and 67 in Los Angeles. And so I knew what marijuana smelled like as a young kid and it didn’t take me long before I was stealing or swiping from mom and dad. But I was probably smoking around 12-13 years old and junior high. But I really became aware of this book around my sophomore year or freshman year in high school, and it starts to expose the Harry Anslinger days of the 30s. And I thought it was interesting how they demonized marijuana, not just through the jazz music and the black community at that time. But the book exposes how there’s a connection to the plastics industry, right. And how this was starting to affect. So there were a number of conspiracies kind of out there. And wouldn’t the resurgence of hemp hurt the plastics industry in the 30s? That was one of the things he pointed out as well.
Dan: Right. And I’m not so sure that it’s a conspiracy as it is. If you’re a conspiratorial thinker I could understand it. But the reality is anytime that you can remove a threat to ongoing industrial businesses, and you can eliminate that from being a threat to your future profits, whether it’s conspiracy or whether it’s intentional, because you have to think about what was happening at that time. You’re talking about the petrochemical industry really coming into its own, the plastics industry, the nylon industry, the synthetic materials industry, the paper industry, the pharmaceutical industry, all of these industries, all during the early 1900’s and into the 1930’s and 40’s were all really patenting new technologies and the use of this really cheap thing called oil. I don’t think that these companies really understood just the horrific effects of long term use of these products and how they would affect the lives of humanity 100 years later. I think at the time, they were really just looking at protecting profits and shareholders interests in these companies, whether it was Standard Oil or whether it was FISA or whether it was the Hearst Paper Company or whatever it was, every product that we were using at the time was potentially going to be affected if you use hemp for any of their products. So if you were a paper manufacturer and our supplier like William Randolph Hearst was and a great percentage of the worth and value of your family, and your name was in the paper industry, both through the sale of newspapers and the fact that he owned one of the largest privately owned holdings in tree farming that was then turned into paper. And then you realize the relationship between creating paper from trees through the sulfuric acid process, and that if you were the sulfuric acid maker and you were the paper company that these two things fit together. And if you were to use hemp instead, you wouldn’t be using the sulfuric acid, you wouldn’t be cutting down trees. So the threat to their value and their worth as a corporation were directly threatened by the knowledge that one acre of hemp could produce as much paper making materials as up to four acres of trees. And that was a threat to these industries. And so if you’re a paper company, you could really create and control the narrative by putting out information that led to Reefer Madness and all of the crazy statements and proclamations of how dangerous cannabis was to individuals and then who to blame it on and who to fear. Who to blame it on and who to fear was the Mexicans,the Blacks, and the jazz musicians and actors, anybody that would dare to threaten the livelihoods of the very wealthy and connected. Russell: Well, to your point, the farmer would have been the one making money if they mass produced hemp. It would have been the hard working farmer, the grower and not these industrialists. Dan: Well, I understand this. The United States, whether it is the government or whether it is the industries that exist within the United States, they do not ever want to give up power to somebody who can put a seed in the ground and grow their wealth. They want to be able to control that wealth, control the commodities that that product creates. Let farmers be farmers, let them dig and hoe the ditches, let them deal with the manual labor, the people who run businesses, they’re smarter than that. And they’ll have a take-it-from-here kind of attitude. And they never want somebody who works in the dirt to have a voice at the table of those with clean nails and the ability to manipulate markets. And that strategy is still true today, even in the cannabis industry, in the hemp industry today, there are so many roadblocks and detours that we’re all taking within the space that continue to affect how fast we are able to use this plant, how we’re able to utilize the products that can come from it. And all of these are still in place today because big business will not allow something that is so simple as to put a seed in the ground, put some water on it and grow wealth for your family and health, for your community and a product to put into the market if it’s not controlled by them. Listen to the entire podcast interview in the online article for the episode titled Dan Herer Podcast #63 at texashempreporter.com
TEXAS HEMP COALITION Q&A The Texas Hemp Coalition interview with Bayou City Hemp BY ILLISA NOLAN
Meet Jeromy Sherman, Co-Founder of Bayou City Hemp Company and President of the Texas Hemp Coalition Why did you get into the hemp industry? My family has been farming corn and soybeans for over eighty years so the idea of growing a plant and turning it into products that can make peoples’ lives better was something I had to be involved with. I have always been a huge believer in the medicinal benefits of the plant; and now more so than ever, as more and more research show the relief it provides for people who really need it. With the hemp industry in Texas being in its infancy, there is a great opportunity for growth and education. I have been involved in many successful startups in the energy arena in the last 17 years and will apply my combined knowledge of farming, entrepreneurism, and commodities to see Texas become leaders in the hemp industry. We founded Bayou City Hemp Company to bring professionalism, transparency, and innovation to an industry shrouded in stigma, and be an aid to Texas farmers, retailers, and consumers who need it. Tell me about your company? What does it specialize in? Bayou City Hemp Company is one of the first and largest hemp extraction companies in Texas. We have a 15,000 ft CGMP, Kosher, and Organic facility located in Houston, Texas and use supercritical CO2 as our extraction method of choice. We explored many extraction methods and determined that CO2 extraction was the most beneficial and effective process due to the tunability and precision as well as the environmentally friendly nature of extraction, creating clean byproducts
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for other use downstream. Our bread and butter are in our formulations as we pride ourselves on innovation in this ever-changing industry. We have three chemists on staff including a PHD chemist that provides both oil based or nano water soluble formulations for either bulk purchase as well as providing the end product for white labeling or private labeling. Our executive team comes from the oil and gas space, so we are used to a very regulated industry and tried to bring this mindset as we grow the organization. What is something unique that your business does? One of our first innovations in our lab was the nano-emulsifier, which is up to 1000x smaller than other oil soluble, mixes better as an additive with alcohol or coffee and is better absorbed - up to 90 percent versus the 15 percent of oil soluble. We also specialize in custom blends including unique cannabinoid ratios for our clients and customers. Consumers are getting more
sophisticated on what they want to buy as they want custom blends that are tailored to certain ailments, and we work very hard at Bayou City to get them the results they need. Our focus on quality from both the number of times we distill our CBD and the isolates; that we can create high quality, high strength products. You’ve heard them often say vodka that’s been distilled 3, 4, or 5 times. They do this to give the product higher purity and alcohol content. The best representation to our quality is not only the number of times we distill our product but think of the number of rooms and machines the hemp has seen once it arrived in our facility. We take 50lbs of hemp to produce that one liter of isolate. What do you think are the main challenges within this industry? In my opinion, some of the main challenges in the Texas hemp industry is the ever-changing regulatory aspect of the industry. I think these challenges really stem from the lack of regulation from the FDA and cause a ripple effect through each state on how it regulates hemp and hemp products. Organizations like Bayou City and the Texas Hemp Coalition, where I currently serve as President, work to serve as a voice for the Texas hemp community and let our regulators know how important this industry is to Texas. What is the most important advice that you would give individuals who are looking to get involved in this industry? My advice for anyone who wants to come into the industry to understand the entire supply chain. Once you understand how
THE GREAT DELTA-8 DEBATE
BY JESSE WILLIAMS
This year has been a wild ride for hemp, and cannabis in general in Texas and it’s not going to stop for a single moment. Our 2021 year started off with a legislature that filed quite a few cannabis related bills in the House. Penalty reduction, medical cannabis, a hemp cleanup bill were the primary topics being pushed in the 87th regular session. Texas saw weak advancement on medical progress for cannabis, no penalty reduction measures signed off because of the desire to include delta-8 language, and the hemp cleanup bill failed for the exact same reason with even more debate on that delta-8 issue. A committee hearing saw licensed hemp agencies and advocacy groups compared to cartels during hearings. Groups were visiting offices to prevent language designed to block delta-8 from inadvertently destroying the rest of the hemp market. And DSHS testified that they were under the presumption that delta-8 was illegal regardless of what the legislature did with the cleanup bill. Delta-8 was clearly all over the place and on most of the industry’s minds. The majority of the industry moved forward after the regular session under the presumption that delta-8 avoided a death blow. Others had seen that DSHS was making their claim in the Senate committee hearing because they had held a hearing on the topic and practically nobody knew that it happened. That meeting was to review the controlled substances schedule of Texas to oppose the carved out exemptions. Their results were something that most industry talking heads and experts said, “flipped the definition of hemp on its head.” There is definitely a problem with delta-8 in the industry and it’s not delta-8 itself that is the problem. Delta-8 is a result of failing to pass proper cannabis regulations while passing a hemp program with no cleanup bills federally or on a state level to address gaps in that program. Itself on its own is
not a reason for danger. People creating products that they claim are delta-8, that are really delta-9 are an issue. Think they aren’t? Wait until you have to be in front of a judge arguing that you were arrested for something that isn’t what is on the label and what was in the bottle is illegal in Texas, all while you can’t get a lawyer because it’s too expensive. People creating products that have byproducts in their extracts that are not conducive to healthy human living are also a problem. A CBD Oracle Lab Study article showed some Delta-8 products are 7700% over the legal delta-9 THC limit. That last sentence, google it and have your mind blown if you didn’t already know this. Then the icing on the cake of these issues are lab results that have been falsified possibly by the product manufactures or another party down the line after lab tests were done. Products with metals in the original testing being eradicated from the lab result altogether, along with delta-9 thc being relabeled as delta-8 or completely removed from the results as well.Retailers using one lab COA for all of their products they ship and sell over the counter is another issue. A brownie should have its own COA, a gummy should have it’s own, and a tincture should have one as well that isn’t the same COA as the hemp product placed in the item. The item itself needs a COA, not just the substance infused into the product. This still isn’t a need to remove delta-8 or
any other THC isomer from the market. Removing it from the market is a knee jerk reaction, and one that shows no true thought was put into the decision. Elected officials can claim they have put lots of thought into this, but what does it mean if their thoughts are put aside for a few higher up figures, instead of representing their constituents? What should the state of Texas do to set an example on how to wrangle this issue? Should we have labs that are audited by the state to ensure testing is done properly? Should we ensure that any product that is placed out for retail has a lab result from a Texas lab before it can be placed on shelves or sold to Texans if they have a physical location in state (we cannot do that to a product just passing through the state, as that would likely violate interstate commerce laws)? Should QR codes lead to a website presented database that is operated by the lab instead of the retailer or the wholesaler? How many counterfeit products could be weeded out of online systems and retail shelves that plan to sell to Texas residents? This next legislative session we can expect to see varied interests coming out on all sides, including medical marijuana that are going to have input about this, and the hemp industry needs to be ready with answers and be ready to fight for their products. We are all in this together and we all need to push the industry forward together in a healthy and responsible fashion if we want this to work.