Marijuana Business Magazine March 2021 by MJBiz Daily

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Insights for cannabis executives, investors & entrepreneurs

VOL 8 • ISSUE 3 • March 2021

From the

Roots Up Cannabis cultivators can start the growing season off right by getting back to the basics

Will the Vape Shipping Ban Hurt Your Business? Nailing Retail Design Launching Social Equity Initiatives

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March 40 FROM THE ROOTS UP

Cannabis cultivators can start the growing season off right by getting back to the basics.

Marijuana Business Magazine

March 2021 • Volume 8 • Issue 3

From the Editor

Five Questions With U.S. Rep. Earl Blumenauer

54 DOING GOOD

Hemp Notebook

Companies with active social equity initiatives share how they coordinated efforts and launched programs.

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Legislation intended to curb teen smoking also affects cannabis, experts say, though wholesale and manufacturing might be exempt.

Trends & Hot Topics

Company News

Industry Developments

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Insights for cannabis executives, investors & entrepreneurs

VOL 8 • ISSUE 3 • March 2021

From the

Roots Up

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Cannabis cultivators can start the growing season off right by getting back to the basics

On Our Cover +

Will the Vape Shipping Ban Hurt Your Business? Nailing Retail Design Launching Social Equity Initiatives

At Harborside Farms in Salinas, California, staffers are cross-trained to pivot to other departments. Photo by Michael Snyder

Several strains of cannabis at Ball Family Farms in Los Angeles are named after “The Karate Kid” movie franchise, including Bonsai, Daniel LaRusso and Miyagi-Do. Courtesy Photo

Marijuana Business Magazine | March 2021

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Marijuana Business Magazine | March 2021

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To start/change/cancel your subscription, visit MJBizMagazine.com, call us at (720) 213-5992, ext. 1, or email us at CustomerService@MJBizDaily.com. Marijuana Business Magazine subscriptions are currently free to qualified U.S. cannabusiness professionals and investors age 21 and over only. To advertise with us, email Sales@MJBizDaily.com or call us at (720) 213-5992, ext. 2. Marijuana Business Magazine, Volume 8, lssue 3, March 2021 lSSN 2376-7375 (print); lSSN 2376-7391 (online) Marijuana Business Magazine is currently published 10 times per year by Marijuana Business Daily™, a division of Anne Holland Ventures Inc. POSTMASTER: Please send address changes to: Marijuana Business Daily, 3900 S. Wadsworth Blvd., Suite 100, Denver, CO 80235. Copyright 2011-2021 by Marijuana Business Daily, a division of Anne Holland Ventures lnc. All rights reserved. Materials may not be reproduced in whole or in part without written permission. For reprints of any article, please contact Customer Service. MJBizMagazine.com

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FromtheEditor | Kate Lavin

Set the Stage Plan ahead today to enjoy an efficient, unrushed growing season in the months to come

arch is the sweet spot for farmers of sun-grown cannabis. The growing season has started, but we’ve not yet reached the labor-intensive days of plant transfer, training, harvesting and trimming. What better time to check in with experienced marijuana growers and get their tips for making the growing season as fruitful and efficient as possible? For this issue, we spoke with a variety of cannabis cultivators about everything from how to choose the perfect outdoor growing site to pairing genetics with climate, applying mainstream farming technology to a marijuana grow and more. Outdoor growers aren’t the only cultivators who will benefit from Marijuana Business Magazine this month. Chris Ball, owner of Ball Family Farms in Los Angeles, shares why he employs someone to oversee the growing schedule at his 20,000-square-foot cultivation facility—from when to clip mother plants to scheduling maintenance and how many hours of light each of the strains requires per week. Staff writers Laura Drotleff, Bart Schaneman and Omar Sacirbey all pitched in on “From the Roots Up,” our cover story starting on page 40. They created a comprehensive package that can serve as a cannabis grower’s to-do list for planting season each year—whether that begins once in the spring under a blue sky or once a week under LED lights.

Off the Farm

for producers of vaping hardware. It’s a must-read if your company is involved in the production or sale of vape products. New York-based business reporter Adrian D. Garcia spoke with marijuana companies that have started their own social equity programs to discover how other firms can follow in their footsteps. Among his findings: Companies with capital reserves can make tax-emempt contributions or use their knowledge of the cannabis licensing process to help social equity applicants win licenses of their own. Amber Senter, CEO of Breeze Distro and co-founder of Supernova Women, recommended partnering with existing nonprofit groups to learn where financial assistance and mentorship would be the most useful before diving into a project. Poll your network to find these groups in your area and consider asking employees what initiatives they would like to participate in. No matter where your business fits into the industry, we hope you are faring well one year into this COVID-19 pandemic and that the season ahead is safe and profitable.

Kate Lavin Marijuana Business Magazine Editor

Also in this issue, staff writer John Schroyer checked in with Congressional marijuana booster and U.S. Rep. Earl Blumenauer of Oregon about whether the industry’s optimism for legalization is warranted now that Democrats control the executive and legislative branches of the U.S. government. Additionally, Ivan Moreno wrote about legislation sneaked into the U.S. budget that has broad implications

This month’s cover package can serve as a cannabis grower’s to-do list for planting season each year.

Marijuana Business Magazine | March 2021

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FiveQuestions | with U.S. Rep. Earl Blumenauer

Marijuana Competing for Attention Longtime congressman and cannabis advocate calls 2021-23 ‘the most consequential session of Congress in a century’ By John Schroyer

ongressman Earl Blumenauer has been the tip of the spear for decades when it comes to marijuana reform in the U.S. House of Representatives. But he’s never been as optimistic as he is this year about the possibility that significant marijuana reform might pass through Congress. “I came out of the last session of Congress feeling better than I’ve ever felt. It’s coming together,” Blumenauer said. “If we do our job right, I think the prospects of success are very high.” Still, Blumenauer’s optimism is tempered. The longtime Oregon Democrat—who was first elected to the House 25 years ago—told Marijuana Business Magazine in mid-February that federal legalization is not a given, despite all the hopes industry insiders might have for the Democrat-led Congress and White House. Here are excerpts from the interview Blumenauer gave to Marijuana Business Magazine.

Since Democrats took control of the White House and both chambers of Congress, will this be the year Congress gets a significant marijuana reform bill to the president’s desk? Certainly, we’re in the strongest position that we’ve been in ever. You saw what happened in the House last Congress: We passed the SAFE Banking Act overwhelmingly. We had bipartisan research legislation that was enacted. And, of course, the MORE Act—kind of the gold standard of reform that included restorative justice. All of those were bipartisan victories. We are in a situation now where there is an opportunity to move forward. It’s not going to be easy. And there are huge competing interests: We’re dealing with this pandemic, we’re dealing with the near-collapse of the economy, the things that took place with the riot on Capitol Hill. You just go through the list, and it is daunting.

10 Marijuana Business Magazine | March 2021

But … the MORE Act has been championed now by (Sens.) Chuck Schumer, D-NY, Cory Booker, D-NJ, and Ron Wyden, D-OR—three of the most influential and committed people dealing with reform. There were six states this past year that passed interesting drug reform legislation. So, you’ve got momentum around the country, you’ve got leadership in the Senate that is strongly supportive of this. And we have demonstrated in the House that there’s bipartisan support. I like our chances.

Do you know what might be in the comprehensive cannabis reform bill that Sens. Schumer, Booker and Wyden are working on? I defer to my Senate friends. We are in consultation with them. Also, (Kamala Harris), the person who was our lead with the MORE Act last Congress, is now vice president of the United States. So that doesn’t hurt. I had some good conversations with Senate friends in the last couple of weeks … and we want to be supportive of their efforts. The outside advocates are consolidating and organizing along with the Senate leadership.

What can improve the odds of cannabis legislation passing in Congress this year or next? I think this is an area where people need to weigh in. The advocates, who are so passionate about this, along with those of us who have been fighting for this in Congress, have an opportunity. This is something that can happen. There are competing priorities in terms of criminal justice reform. This has been an area where, at times, people have been unduly timid. We know that this is broadly supported by the American public. And what we have seen around the country (is that) people have stepped up and been

successful with ballot measures—particularly in red states. It’s been fascinating. The movement for legalization and the growth of the industry is not waiting. This is galloping ahead. We’re looking at probably $20 billion next year. We have 108 million people who live where cannabis is legal for adult use. There are over a quarter-million people who work in this industry. So this is a movement that is not waiting for the federal government to finally get its act together.

Do you feel there’s a window open to cannabis reform that might close after the 2022 election? I think people ought to have the sense of urgency that this is the critical year. People need this legislation to be enacted. People need to have access to banking to be able to deal with this $20 billion industry that is growing exponentially.

What do you see as the biggest obstacles to federal reform? Well, when you’re dealing with a complex, important issue, there are a number of ways that it can be derailed. We have

to crush this coronavirus. That is probably Job One. It spills over into the way that our economy has been battered. And it’s going to be slow going recovering. This is going to be arguably the most consequential session of Congress in a century. I mean, we’ve not seen anything like this. This is unprecedented. And it’s at a time when there are deep divisions in our country and in Congress. One of the nice things about reform of our cannabis laws is this is an area that doesn’t have to be intensely partisan. This is an area where voters in red states have spoken, as well as New Jersey and Oregon. It can be something that brings people together. This interview has been edited for length and clarity.

John Schroyer is a reporter for Marijuana Business Daily. You can reach him at john.schroyer@mjbizdaily.com.

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HempNotebook | Kristen Nichols

Catch My Drift? States must take the lead in researching pollen transfer between marijuana and hemp

emp entrepreneurs have made an art of talking up the plant to people who hate high-THC marijuana. They’re great at explaining how hemp is nonintoxicating and can accomplish great things for the planet, winning over even the biggest cannabis critics. But the hemp industry needs a little help when it comes to communicating with state-legal marijuana operators. It’s a challenge that threatens to derail hemp’s renaissance before it really gets going. We all know that new states join the marijuana industry every year. That’s great news for those looking to cash in on business opportunities in new markets and climates. But the growth of cannabis production at all THC levels—both marijuana and hemp—is causing an increasing number of conflicts that only states can solve.

The Pollen Problem Most members of the industry know that pollen is a mortal enemy for anyone producing flower rich in cannabinoids such as THC or CBD. Cannabis plants are the lonely hearts club of the plant world; they crank out the most cannabinoids and terpenes when people remove the male plants and leave the females unpollinated. Because of this, it is crucial for any flower producer to ensure his

or her crops won’t be exposed to unwanted pollen. This problem is not unique to cannabis. Many crops can be damaged by unwanted pollen or pesticide drift, and the nation’s land-grant universities have spent decades conducting great research on commodities such as corn and soybeans. But when it comes to cannabis, there is precious little information about how far pollen travels. Some say 10 miles. Others say 3 miles. Some insist that pollen can travel 100 miles, depending on wind and geography.

States in the Dark Agronomists at Michigan State University noted the scanty research on the subject in a 2019 report that called on state regulators to be more forthcoming about farm locations in order to reduce hemp-marijuana conflicts. Too many jurisdictions still shield the locations of marijuana producers in the name of security. However, decades of state-legal marijuana cultivation have shown that growers face nuisance thefts but not the invasions by drug cartels some predicted at the outset of legalization. It’s frankly silly for a state agriculture department to have no idea where marijuana is growing when it licenses hemp cultivation. The U.S. Department of Agriculture helped fund an ongoing research

Instead of leaving it to private industry to develop cannabis cultivars that won’t produce as much pollen, state research institutions should prioritize pollen drift.

12 Marijuana Business Magazine | March 2021

project about hemp pollen drift at Virginia Tech. But the federal government is unlikely to throw serious research firepower at cannabis pollen drift when it can instead focus on the development of low-THC cultivars. This is where states need to step up. Instead of leaving it to private industry to develop cannabis cultivars that won’t produce as much pollen—or keep guesstimating on setbacks needed between male hemp plants and female flower producers—state research institutions should prioritize pollen drift. States will find that, by doing so, they’re helping nurture two industries at once: hemp operators and statelegal marijuana growers. Kristen Nichols is editor of Hemp Industry Daily. She can be reached at  kristen.nichols@hempindustrydaily.com.

Trends & HotTopics | Mike Regan

Who is the ‘Greater Fool?’ Marijuana shareholders can learn from GameStop’s trading frenzy

he meteoric rise of GameStop shares made headlines when independent investors drove stock prices up from about $19 in early January to a high of nearly $483 on Jan. 28. But what should be made of it? And what can the marijuana industry learn from it?

What happened with GameStop is a short squeeze. The same thing happened to Tilray in 2018, Volkswagen in 2008 and supermarket perator Piggly Wiggly in the 1920s. While it is possible to profitably invest by selling whatever is rising at ever-higher prices for nonfundamental reasons, such “greater fool” investing is a tough zero-sum game where, by definition, someone must eventually lose. Even the winner eventually loses when its trading counterparts run out of money or, as happened at Piggly Wiggly, when someone more powerful changes the rules of the game for their own benefit. Over the long term, I believe the highest and most reliable source of returns comes from the core function of capital markets—matching those who have more ideas than capital with those who have excess capital for a mutually beneficial deployment of capital at higher returns. Those fundamentals drive true value creation over time. But this does not mean it is wise to ignore price moves.

Situational awareness is necessary to know when the game changes. If you’re playing basketball with your friends, and 11 strangers in helmets and shoulder pads line up at half court, you need to realize you’re not playing basketball anymore and adjust your strategy. If you continue to shoot three-pointers, you’re going to get tackled.

Fundamentals Versus Market Mechanics In Berkshire Hathaway’s 1993 investor letter, Warren Buffett quoted his mentor, Ben Graham, as saying: “In the short run, the market is a voting machine—reflecting a voter-registration test that requires only money, not intelligence or emotional stability—but in the long run, the market is a weighing machine.” This is why opportunities to buy good companies at cheap prices exist. The “voting” of the market sells down something to below the value supported by fundamentals. Over the short term, the value of a company is driven by whatever the last person wanted to pay for one share—and sometimes for reasons that might have nothing to do with the fundamentals. Over the long term, the most solid support of a stock price is the fundamental profitability of the

underlying business: the “weighing.” If you can’t sell the stock (for example, because the public markets shut down or the company was private), the only return comes from cash distributed to the equity owners in the form of dividends or share repurchases. The best investors keep an eye on both the long-term fundamental “weighing” perspective and the nearterm price from the “voting” perspective. Then, they buy good companies at low prices when the two diverge.

Companies Weigh In Smart companies should have an idea of their own intrinsic worth and potential returns on existing and potential projects. If the market bids up their stock, companies will issue new

Even the winner eventually loses when its trading counterparts run out of money ... or someone more powerful changes the rules of the game for their own benefit.”

14 Marijuana Business Magazine | March 2021

stock at high prices to fund those highreturn projects. In an ideal world, GameStop would have sold as much new stock as it could after a tenfold increase in its market capitalization—which, ironically, would let them better fight their secular headwinds. But market dynamics probably prevent this. Though not currently in a squeeze, cannabis stocks traded up double digits (an average of 19% for U.S. operators and 55% on average for Canadian operators) after the Jan. 5 “blue wave” of Democrats’ Senate wins in Georgia and Aphria’s better-thanexpected earnings report. With that investor enthusiasm, 18 companies announced or issued $1.6 billion in new capital. While some of this capital will be allocated into high-return new projects, some will be

invested in disappointing projects—or even wasted on poor decisions and bad business models. The key to determining that is the incremental return on invested capital (ROIC). If the ROIC is high, the capital is used to expand high-return projects to the benefit of shareholders and the industry. Smart investors are happy about this.

Real-World Applications Some projects could generate lower returns than expected, such as when excessive capital raises led to excessive cultivation capacity in Canada. Ultimately, total supply was 2½ times demand, which led to declines in cannabis prices that pressured margins and eventually reduced the returns on capital until new managers began to reduce excess capacity.

Or the capital might simply be spent on low-return luxuries for self-interested management at shareholders’ expense. Determining the kind of investments companies are making requires understanding the fundamentals of the business, the strategy, the uses of the new capital and the incentives and past behavior of management. Over time, the only true value will be created by businesses providing desired services to paying repeat customers at good margins—not hoping to sell a never-profitable, low-ROIC business to a greater fool. Mike Regan is the founder of MJResearchCo.com and a regular contributor to Marijuana Business Daily. He and fellow analyst Colin Ferrian can be reached at mikeandcolin@mjresearchco.com.

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CompanyNews | U.S., Canada & International

U . S . D E V E LO PM E N T S

By Omar Sacirbey

Cresco Moves Into Florida With Acquisition Marijuana multistate operator Cresco Labs of Chicago entered an agreement to buy Bluma Wellness, a Toronto company with holdings in Florida, for $213 million in an all-stock transaction. Bluma, under its operating subsidiary One Plant Florida, has seven dispensaries in the state with eight additional locations planned. One Plant ranks 11th in Florida for number of dispensaries but is in the top five for per-store sales of smokable flower, according to state data. Bluma also has 54,000 square feet of cultivation space. Cresco CEO Charlie Bachtell said the company was impressed by Bluma’s cultivation facility, delivery operation and strong management team. Bluma said its shareholders will receive 8.6% of a subordinate voting share of Cresco Labs for each Bluma share held. The company anticipates the transaction being completed by the start of the second quarter, pending shareholder, regulatory and other approvals.

Green Thumb Nets $100 Million Cannabis multistate operator Green Thumb Industries said it accepted an offer to sell $100 million of stock to a single institutional investor as part of a previously announced securities offering in the United States—a first for the company. Chicago-based Green Thumb said the proceeds from the sale of 3.1 million subordinate voting shares at $32.03 per share will be used to increase the company’s financial flexibility. Green Thumb filed the offer to sell the stock with the U.S. Securities and Exchange Commission in August, saying it wanted to raise about $150 million through the sale of up to 10 million shares of stock.

Cannabis REIT IPO Marijuana industry real estate investment trust Advanced Flower Capital, also known as AFC Gamma, is planning an initial public offering on the Nasdaq exchange. The IPO is intended to raise $94.4 million-$105.6 million. The offering would involve the sale of nearly 5.6 million shares of common stock in AFC Gamma,

18 Marijuana Business Magazine | March 2021

Recent deals, acquisitions and other announcements from cannabis companies

or roughly 47% of all the company’s common stock, at a price of $17-$19 per share, according to a Feb. 2 prospectus. An over-allotment option would offer up to 833,333 additional shares. West Palm Beach, Florida-based AFC Gamma was founded in July 2020 and offers loans to established cannabis companies in states where marijuana is legal for medical or recreational use. The company expects to net approximately $91 million from the IPO, or as much as $105 million if the over-allotment option is fully exercised, based on an IPO price of $18 per share. AFC Gamma raised $80 million for loans last August, then loaned $22 million to Pennsylvania-based Organic Remedies in November. The company’s proposed Nasdaq symbol is AFCG.

Planet 13 Raises $54 Million Nevada marijuana company Planet 13 Holdings raised $53.9 million in a bought deal public offering. The money will be used for “potential acquisitions for purposes of retail, cultivation and production expansion outside of Nevada, as well as general corporate and other working capital purposes,” the company said. The offering by a syndicate of underwriters, led by Beacon Securities and Canaccord Genuity, sold a total of 9.9 million units of Planet 13 at a cost of $5.52 per unit, including units sold under an over-allotment option. Each unit includes one common share and a warrant to purchase 0.5 common shares, which can be exercised at $7.10 per share for the next two years. The underwriters received a cash commission of 6% of the gross proceeds, plus a compensation option equaling 6% of the units sold. The compensation option entitles the underwriters to purchase common shares at $5.52 per share for the next two years.

Arizona MSO Closes $35 Million Deal Multistate marijuana operator Harvest Health & Recreation of Arizona closed a sale-leaseback transaction, selling a cultivation and processing facility in Alachua, Florida, to Innovative Industrial Properties (IIP) for $23.8 million. Harvest anticipates approximately $34.6 million in total proceeds from the deal, including $10.8 million in unspecified improvements to be completed by Harvest and reimbursed by IIP, a California-based real estate investment trust. Harvest will continue operating the facility under a triple-net lease. The company did not specify how it intends to use proceeds from the sale.

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CompanyNews | U.S., Canada & International Power REIT Raises $37 Million Specialty real estate investment trust Power REIT, which has a portfolio that includes marijuana production facilities, raised $37 million through a rights offering that sold roughly 1.4 million shares at $26.50 per share. The capital will help Power REIT make strategic acquisitions. Power REIT said $4.5 million worth of proceeds from the offering would be used to finance acquisitions. The company will have “approximately $32.2 million available for additional investment.” Power REIT also announced the acquisition of a 37,000-square-foot Southern California greenhouse used for cannabis cultivation in a cash-and-stock deal worth $7.7 million. The Riverside County property, which already is leased to cultivator and flower brand Canndescent, was acquired from another private real estate investment trust. The transaction involved $2.7 million in cash and 192,308 shares of Power REIT stock, which closed at $26 per share on Feb. 2.

MSO Wins Loan for Litigated Grow

CAN ADA DE V ELO PMEN T S

Cannabis multistate operator iAnthus said it closed on $11 million of financing to complete a build-out and improvements of a cultivation and processing facility in New Jersey. The facility is the subject of litigation between MPX New Jersey and New York-based iAnthus,

which said in a statement it received permission from a New Jersey court to proceed with the construction. The $11 million loan carries an interest rate of 14%, and the notes are due in February 2023. The loan is secured by all of the company’s New Jersey marijuana assets, which include a medical cannabis dispensary in Atlantic City. The interest rate would decrease to 8% upon completion of iAnthus’ financial restructuring plan, which was approved in a Canadian court late last year. The MSO said it expects the expanded facility, once it’s completed, to be subleased to MPX New Jersey and that it applied with state regulators to open two satellite medical marijuana dispensaries.

Tech Firm Files for $54 Million IPO Agrify Corp., an ancillary marijuana business that produces hardware and software for indoor marijuana growers, began trading on the Nasdaq exchange on Jan. 28, raising $54 million in a 5.4 million share offering priced at $10 per share. The ag-tech company in Burlington, Massachusetts, trades as AGFY. Agrify said it will spend the offering proceeds on research and development, capital expenditures, working capital and general corporate purposes.

Aurora Raises $125 Million, Strikes Aussie Deal

Valens IPO The Valens Co. filed a base shelf prospectus with securities regulators in Canada that would enable the cannabis-derivative manufacturer to raise up to $117 million (CA$150 million) in aggregate over the next 25 months. According to the new filing, the British Columbia-based company intends to use any net proceeds for “general corporate purposes, strategic initiatives and international expansion.” The transaction will cost Valens roughly $19.6 million in cash and shares. Valens also recently entered into a definitive agreement to buy LYF Food Technologies, a cannabis edibles producer.

20 Marijuana Business Magazine | March 2021

Aurora Cannabis is raising $125 million via a stockpurchase deal to finance general corporate activities, which might include “opportunistically reducing debt,” the Alberta company announced. Aurora said in a news release that it entered into an agreement with a syndicate of underwriters led by BMO Capital Markets and ATB Capital Markets. The underwriters agreed to buy 12 million units on a bought deal basis at a price of $10.45 apiece. Each unit consists of a common share and half of one common share purchase warrant at an exercise price of $12.60 per share. Aurora trades as ACB on the Toronto Stock Exchange and New York Stock Exchange. Aurora also signed a five-year supply agreement with MedReleaf Australia. The deal makes the company the exclusive supplier of Canadian producers MedReleaf, CanniMed and Aurora brands. The cannabis will be cultivated at Aurora’s European Union-Good Manufacturing Practice-certified facility in Canada. No capital investment on behalf of Aurora is required as part of the agreement. Aurora holds a 10% stake in MedReleaf Australia.

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CompanyNews | U.S., Canada & International Canadian LP Buys Smoke Cartel

I N T ' L D E V E LO PM E N T S

Calgary, Alberta-based marijuana retailer High Tide is spending $8 million to acquire Smoke Cartel, a U.S. e-commerce website that sells cannabis accessories and CBD products. Under terms of the deal, High Tide will pay $2 million in cash and $6 million in High Tide shares for all shares of Georgia-based Smoke Cartel.

Global Pharma-Canna Deal Jazz Pharmaceuticals of Ireland reached an agreement to buy United Kingdom-based GW Pharmaceuticals

High Tide already owns Grasscity.com, a U.S. online cannabis accessory retailer, as well as an American online cannabidiol store CBDcity.com. The company also owns accessory wholesaler Valiant Distribution. High Tide said Smoke Cartel anticipates revenues of roughly $7.4 million and has approximately $1 million in cash on hand. Smoke Cartel was launched in 2013.

for $7.2 billion in cash and stock, making it the largest acquisition in the cannabis industry to date. GW’s main medical product is Epidiolex, an anti-seizure medication that achieved approximately $510 million in annual sales within two years of its launch, according to the company. Under the proposed cash-and-stock transaction, each

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GW shareholder would receive $200 in cash and $20 in Jazz ordinary shares for each GW American Depositary Share, resulting in an aggregate consideration of $7.2 billion. The proposed deal already has been approved by the respective companies’ boards and is expected to close in the second quarter of this year.

Partnership Deal Subversive Real Estate Acquisition REIT is combining with Israeli marijuana producer InterCure in a deal that values InterCure at $300 million and is intended to secure a Nasdaq listing for the combined company. InterCure subsidiary Canndoc is Israel’s largest licensed cannabis producer, Subversive said in a news release. Subversive Real Estate Acquisition REIT, a subsidiary of New York-based Subversive Capital, made a

qualifying transaction last October to convert from a marijuana special purpose acquisition company to a publicly traded real estate investment trust. A $65 million private placement is intended “to fund the growth of Canndoc following closing.” The deal is expected to close in April, pending required shareholder and regulatory approvals as well as approval to list on the Nasdaq. The combined company will be listed on the Nasdaq exchange as a condition of closing and the Tel Aviv Stock Exchange. Ehud Barak, a former Israeli prime minister who now serves as Canndoc’s chair, will serve as chair of the combined company, with Canndoc’s current executive team remaining in place. Have a company announcement you want us to consider? Send a news release or general information to omar.sacirbey@mjbizdaily.com. (Note: We’re looking for news about expansions, financing, deals, partnerships and similar developments, not productrelated announcements.

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IndustryDevelopments | International & State MAP LEGEND High level of medical development/implementation Medium level of medical development/implementation Low level of medical development/implementation Other - federally illegal but unique circumstances Recreational

Countries included have passed legislation at the federal level and must fulfill at least one of the following criteria: • Cultivation, manufacture or sale of medical and/or recreational cannabis allowed. • Doctors can prescribe medical cannabis. • Import and/or export of medical cannabis allowed. High: Countries at the forefront of the global industry. Frameworks are established, and adoption is well underway. Medium: Implementation has begun but is still limited or restricted; lots of room for the market to develop. Low: Legislation has been passed, but implementation is very limited or nonexistent. Decriminalization is not included.

National & International News Cannabis Advocates Upbeat About U.S. Reforms, But Legalization Uncertain U.S. Senate Majority Leader Chuck Schumer’s commitment to make federal marijuana reform a priority sent cannabis stocks surging in early February. But experts caution that 60 votes likely will be required to avoid a filibuster in the U.S. Senate—a tall order in today’s partisan atmosphere. Schumer and fellow Democratic Sens. Cory Booker of New Jersey and Ron Wyden of Oregon announced in a joint statement in early February their commitment to developing a comprehensive marijuana reform bill. “To get to 60 senators is going to be a heavy lift,” said Michael Correia, lead lobbyist for the Washington DCbased National Cannabis Industry Association.

26 Marijuana Business Magazine | March 2021

Incremental efforts such as cannabis banking legislation might achieve more bipartisan support. Banking reform is “teed up. It’s the easiest low-hanging fruit with the longest track record,” Correia said.

Legal Recreational Cannabis Sales in Canada Outstrip Illicit Spending for First Time Sales of regulated adult-use cannabis overtook illegal transactions in Canada for the first time in the third quarter of 2020, according to data from Statistics Canada. Spending on nonmedical cannabis products in the third quarter of last year reached $644 million (CA$824 million), according to the updated figures. Unlicensed nonmedical sales, by comparison, were estimated to be $589 million in the same period.

The development demonstrates the success of legalization, experts say, though more needs to be done to put the regulated industry on firmer ground to compete with the legacy market. Falling prices, a wider breadth of consistent inventory and growing retail options have all contributed to the legal market’s success. “Price decreases on key verticals of dry flower have been essential for transitioning many of those consumers,” said George Smitherman, CEO of industry group Cannabis Council of Canada.

Mexico’s MMJ Program Offers Opportunity to Enter New Adult-Use Industry Marijuana and hemp companies keen to participate in Mexico’s emerging medical cannabis program should start preparing now, attorneys advise, noting it will give businesses

a leg up once the nation’s adult-use industry launches. The Mexican Congress faces an April 30 deadline to legalize cannabis for all uses under a directive from the country’s Supreme Court, which concluded the plant’s prohibition was unconstitutional. Although Mexico legalized cannabis for medicinal use in 2017, it took the federal government three years to publish regulations, which are still being tweaked. The Mexican government has begun setting a regulatory structure for medical cannabis in the country, making it possible for companies to start applying for research licenses to bring products to market. Attorneys expect the federal government to start issuing licenses by June. Imports are limited to finished goods, and only pharmaceutical companies are permitted to import cannabis.

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IndustryDevelopments | International & State WA MT

MN ID

DE MD VA

TN AR

SC MS

OH WV

RI PA

LA FL

■ Medical ■ Recreational HI

Note: This map does not include states that have legalized only CBD-based oils.

State News

Arizona The state’s 130 medical cannabis businesses might each snag a second cultivation license under a relatively new interpretation of the recreational marijuana legalization initiative approved by voters in November. MMJ businesses may apply to the state Department of Health Services for secondary cultivation permits April 1. “What it does is it creates more opportunity,” said Demitri Downing, founder of the Marijuana Industry Trade Association (MITA) in Arizona. “From an industry perspective … it’s gigantic.”

California The state Department of Public Health said that cannabis industry employees are classified as health-care workers and therefore have priority access to the COVID-19 vaccine. According to a bulletin, medical cannabis employees are eligible for immediate vaccination, and growing, production, storage, transport and distribution workers are eligible to receive injections based on vaccine availability. Separately, the Humboldt County Board of Supervisors permanently banned outdoor cultivation of low-THC hemp varieties in the renowned marijuana-growing region because hemp could send male pollen on to higher-THC varieties and depress cannabinoid levels.

28 Marijuana Business Magazine | March 2021

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IndustryDevelopments | International & State Colorado State marijuana regulators issued the first adult-use cannabis-delivery permit, reflecting a continuing nationwide trend to allow home delivery in the wake of the coronavirus pandemic. High Country Supply, doing business as Colorado Harvest Co., received the first adult-use marijuana delivery permit after state regulators started taking applications Jan. 1. The Aurora-based company hopes to start delivery services by March 1, pending city approval. Local jurisdictions in Colorado must approve marijuana deliveries within their borders, and Aurora opted into recreational marijuana delivery in December.

Delaware State regulators increased the number of medical cannabis business licensees from three to six after the number of MMJ registrations grew nearly 40% in 2020 over the previous year. The new licensees are CannaTech Research, EzyCure and Valor Craft Cannabis Co. Delaware’s heavily regulated MMJ market requires that cannabis businesses be vertically integrated.

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Idaho A proposed statewide ballot measure to legalize medical marijuana received the go-ahead to begin collecting the requisite 68,000 signatures it would need to go before voters in 2022. The Idaho Medical Marijuana Act would establish a new MMJ industry and supply chain in the state, including dispensaries and caregivers. Backers will have until April 30, 2022, to gather the necessary signatures to make the ballot. The campaign faces competition both from a Republican-led attempt in the state Legislature to prohibit the legalization of any psychoactive substances—including marijuana—as well as an MMJ legalization bill that lawmakers recently introduced.

Kansas State senators will consider a bill during the current legislative session to legalize medical marijuana. Senate Bill 92 would make it legal for registered MMJ patients to cultivate their own marijuana or work with caregivers. The legislation also would create a new Kansas Medical Cannabis Agency to regulate a formal MMJ system, enforce seed-to-sale tracking and other rules. If SB 92 is successful, applications for ID cards and licenses will begin Jan. 1, 2022, and a 4% gross proceeds tax will be levied on medical cannabis retail sales.

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IndustryDevelopments | International & State Maine A South Portland recreational cannabis retailer has run afoul of the state’s marijuana regulator over its logo, which depicts a mermaid holding a shell. Maine’s recreational cannabis rules prohibit labeling that depicts humans or animals and also ban promotions considered “attractive to persons under 21 years of age.” SeaWeed Co. owner Scott Howard faces a $10,000 fine over the image. He was given four months from the notice date to pay the fine and has been ordered to stop using the mermaid logo on its products, website and promotional materials.

Massachusetts A state municipality became the first to stop assessing a controversial 3% “community impact fee” on licensed cannabis businesses. The move, if adopted by other Massachusetts communities, could ease some of the financial burden marijuana businesses face in the state. Northampton, which is about two hours west of Boston, dropped the fee after experiencing few negative effects from the industry. City officials say they now will charge local marijuana businesses a fee only if their operations create a specific cost to the city, which has collected more than $2.6 million from the fee.

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Michigan The state’s marijuana regulatory agency is warning cannabis companies that fraudsters masquerading as regulators and industry executives are trying to trick employees into sending money or sharing security information about their businesses. One business lost more than $100,000 because of the scam, in which an individual impersonated a business owner and requested an employee transfer funds to an associate. Other reports involve scammers contacting employees about supposed inspections and requesting photos of their security systems, fire alarms, marijuana products, tracking numbers and exit doors.

Minnesota Prosecutors dismissed charges against a Minnesota hemp farmer whose plants had elevated THC levels, claiming that they had trouble locating witnesses because of delays in the case. Fillmore County prosecutors filed felony possession charges against Luis Hummel in March 2019 after seizing his plants. They tested at 3% THC, 10 times higher than the 0.3% legal limit for THC in hemp. The case originally was set for trial in April 2020 but was postponed because of the coronavirus pandemic.

March 2021 | mjbizdaily.com 33

IndustryDevelopments | International & State Mississippi Regulations for Mississippi’s medical cannabis program likely will be in place by July 1, according to members of the state Board of Health, but it’s still unknown when sales will begin. The state is set to begin issuing licenses for dispensaries and cards to patients by Aug. 15. But growing marijuana plants for the program will take months, and growers can’t begin cultivating until they get a license. Then, a laboratory will need to test the potency of the plants. There’s also a pending legal matter: The Mississippi Supreme Court is expected on April 14 to hear a challenge to the MMJ initiative that voters approved by a wide margin in November.

Missouri Florida-based marijuana inventory tracking firm Metrc lost an appeal in Missouri over whether the company was contractually allowed to charge licensed medical cannabis businesses extra money for state-mandated plant tags. The court loss follows an initial ruling by a district court that found the state was correct in its position that Metrc was prohibited from charging marijuana companies extra for its tags. Both courts agreed with state officials that the cost of the tags should have been included in Metrc’s initial proposed cost for implementation when it won the $5 million state contract in 2019.

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Nevada Regulators are accusing a cannabis testing lab of falsely boosting THC potency numbers and allowing contaminated products to pass. The Cannabis Compliance Board filed a complaint against Cannex Nevada, charging the lab with implementing “testing processes that were designed to protect the monetary assets of their clients without regard for consumer safety.” Regulators are seeking to revoke Cannex’s license, bar the Las Vegas-based lab from operating for nearly 10 years and fine the company $62,500. Cannex’s license has been suspended twice.

New Mexico The House Health Committee advanced a social equity and microbusiness-focused adult-use marijuana legalization bill while tabling a more business-oriented measure. House Bill 12 calls for rules to be developed by Jan. 1, 2022, and license applications to be accepted by July 1, 2022. Existing medical marijuana operators in the state could start adult-use sales on Oct. 1, 2021, if the bill becomes law. The legislation also would create a microbusiness permit category, require licensing diversity, invest a portion of revenue into communities harmed by the war on drugs and enable Native American communities to participate in the recreational market.

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IndustryDevelopments | International & State North Dakota The state will join 11 others keeping their pilot programs in place until they expire Oct. 31. North Dakota submitted a 2020 plan to the U.S. Department of Agriculture for review, but it was rejected and sent back to state officials to change. Agriculture Commissioner Doug Goehring, who is also president of the National Association of State Departments of Agriculture, said he asked the USDA to set different testing rules for grain and fiber production, saying the current testing parameters and interim final rules are designed for CBD and not the food and fiber varieties. States with similar concerns asked federal regulators to extend the 2014 pilot program through Dec. 31.

Oregon Two hemp-drying companies and their chief executive have each been fined nearly $200,000 by state environmental regulators in Oregon. The Oregon Department of Environmental Quality issued fines of $198,786 to Columbia Hemp Trading Co. and $196,288 each to CEO Jacob Crabtree and related company Columbia 410. The firms, near Portland, were operating without a required air-contaminant permit, regulators said, causing neighbors to complain of “noxious odors” coming from the facility. Crabtree disputed the claim and is fighting the penalties.

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Pennsylvania Gov. Tom Wolf highlighted recreational marijuana in his budget proposal, making the plant’s legalization one of his administration’s legislative priorities this year. The plan didn’t provide licensing details, but it did note that part of the revenue generated from legalization would be used to support historically disadvantaged small businesses. Separately, the state awarded the University of Pennsylvania School of Veterinary Medicine $14,432 to analyze cannabinoids in bovine serum and hempseed samples. Coexist Build received $4,500 for regenerative farming featuring hemp-based construction.

South Dakota The state Attorney General’s Office is dropping its defense of a voter-approved, adult-use marijuana amendment. The AG’s decision comes after a circuit court judge appointed by Gov. Kristi Noem ruled that the initiative is unconstitutional, setting up an appeal by legalization backers to the state Supreme Court. State AG offices are obligated to defend state laws that come under legal attack, but South Dakota Attorney General Jason Ravnsborg’s office said he fulfilled that obligation by defending the initiative in lower court and won’t take those efforts any further. South Dakota voters approved recreational marijuana legalization by a margin of roughly 54% to 46% on Nov. 3.

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IndustryDevelopments | International & State Virginia The House of Delegates and Senate each passed different marijuana legalization bills, taking a major step toward legalizing a recreational marijuana market. The differences in those bills—including whether vertical integration would be allowed—must be ironed out by a legislative committee for Virginia to take the milestone step. Gov. Ralph Northam supports legalization. Both measures call for a commercial recreational marijuana market to launch Jan. 1, 2024. The bills also emphasize licensing opportunities for small and minority-owned local businesses. Unlike other recently launched adult-use states, the existing four vertically integrated medical marijuana operators would not be allowed under the legislation to transition first into a recreational market.

Washington state The legal cannabis industry contributes roughly $2 billion a year to the state’s economy, according to a new report from Washington State University. The report, titled “2020 Contributions of the Washington Cannabis Sector,” found that in 2020 the industry was responsible for $1.85 billion of gross state product and supported about 18,700 jobs. Retail marijuana sales alone have grown 605% between 2015 and 2020, the report found.

38 Marijuana Business Magazine | March 2021

West Virginia State regulators announced the winners of 100 medical cannabis dispensary licenses, with many going to out-of-state companies. More than 30 companies received dispensary licenses, and many of them will have multiple stores throughout the state, according to the West Virginia Department of Health and Human Resources’ Office of Medical Cannabis. Multistate operators on the list include Columbia Care of New York, Holistic Industries of Massachusetts, Trulieve of Florida and Verano Holdings of Illinois. Those four companies also received cannabis processor licenses. Columbia Care, Holistic Industries and Verano Holdings were awarded marijuana cultivation permits as well.

Wisconsin Gov. Tony Evers proposed full marijuana legalization for the state in his 2021-23 biennial budget. The proposal comes nearly two years after state legislators shot down Evers’ previous plan to legalize medical marijuana only. The new proposal would see marijuana “taxed and regulated much like alcohol,” under the purview of Wisconsin’s Department of Revenue and the Department of Agriculture, Trade and Consumer Protection. Recreational cannabis stores would be licensed by the revenue department, with sales restricted to those 21 and older. Note: Entries sourced from Marijuana Business Daily, Hemp Industry Daily and other international, national and local news outlets. These developments occurred before this magazine’s publication deadline, so some situations may have changed.

March 2021 | mjbizdaily.com 39

Clones are moved into a pot at Harborside Farms in Salinas, California. Pot size can be critical to plants reaching maturity on time. Photo by Michael Snyder

40 Marijuana Business Magazine | March 2021

from the

Roots Up

nnovation in the cannabis industry is accelerating, with creative entrepreneurs developing emulsions, fast-acting formulas and other delivery enhancements for an ever-expanding universe of products. All this is happening while pharmaceutical chemists are preparing cannabis-based medicines for U.S. Food and Drug Administration approval. But for all the fancy value-added products, flower still rules the marijuana marketplace. In fact, demand for flower has been booming this past year during the COVID-19 pandemic, buoying the cannabis retail sector. “The cool thing about being a cultivator is that I wouldn’t say we control the market, but we’re very, very instrumental in the market. Because none of these dispensaries would exist without us. Not the other way around,” said Chris Ball, owner of Ball Family Farms in Los Angeles. Part of the reason the industry continues to thrive amid product innovation is because cultivators themselves are doing a lot of the innovation to produce better crops more efficiently. And like many consumer packaged goods, the quality and success of marijuana products in the marketplace depends on what growers devote to the beginning of the cultivation process—even before the first seeds are put in the ground. In the following pages, some of the industry’s most experienced and innovative cultivators share their advice for getting a grow off to a strong start, whether your crop is farmed indoors or outdoors. They understand that the root of the industry is cultivation, and that the root of cultivation success is doing things judiciously from the beginning. These experts’ tips range from site selection, soil testing and breeding genetics to grow-cycle planning, technology use and contract negotiating. We hope that the information in these pages helps establish the roots of a profitable growing season. So, go ahead and get started. – Omar Sacirbey

March is often considered the start of the cannabis calendar, with growers pollinating seeds before preparing to germinate them in the spring. For speculators looking to purchase land for cultivation and more-experienced cannabis farmers hoping to dial in efficiencies during the 2021 growing season, we’ve spoken with experts from around the country about how to get this year off on the right foot. In this issue, you’ll learn: • Favorable zoning, tolerant neighbors and good drainage are key factors to consider before buying land with the intent to cultivate cannabis. • Plan out the year ahead with details such as when certain strains are expected to mature, and plant with specific dates in mind to reduce the likelihood that multiple lots or rooms will require attention at the same time. • Plants brought from outside your grow should be considered contaminated and quarantined until determined otherwise. • Designate a planting station to increase efficiency and consider recruiting temporary workers to staff labor-intensive days such as planting, cleaning and harvesting. • Employing technology from traditional horticulture such as potfilling machines, irrigation stations and fertigation systems helps expedite tasks. • Choosing the right size of pots is an art: Too small, and your plants could become rootbound. Too big, and costs and carbon emissions go up. • “Don’t plant without a contract” is an important adage for professional farmers, although some industry executives who have been burned prefer to sell on the spot market.

March 2021 | mjbizdaily.com 41

From the Roots Up

Growing in the

Great Outdoors By Laura Drotleff

Hemp and marijuana growers provide strategies for success in producing field-grown cannabis crops

e’ve all heard the idiom, “Failing to plan is planning to fail.” But the sentiment is especially true for the spring outdoor planting season. Whether producing industrial hemp or outdoor-grown marijuana, growers can take steps to prepare themselves—and their operations—for success. These steps include: • Proper site selection and soil sampling. • Securing contracts with buyers. • Selecting genetics and young plants. • Protecting crops from pests and disease. • Mitigating the effects of natural disasters. Agronomists and growers weighed in on strategies they use and offered a range of recommendations for how outdoor cultivators can improve their chances of success.

Wesley Ray grows hemp commercially in Bend, Oregon. Photo by Megan Baker

SELECTING A SITE IS ABOUT MORE THAN CLIMATE

Choosing where to grow is one of the most important decisions a cultivator makes, and the choice should be made carefully for cost- and labor-intensive crops such as hemp or marijuana. Each state has its own rules that growers must follow for site selection. The California Environmental Quality Act (CEQA), for example, requires a review as well as a disclosure document that shows the impacts of a development. The agency then offers the public an opportunity to weigh in on the project, according to Natalynne DeLapp, executive director of the Humboldt County Growers Alliance in Eureka, California. But DeLapp said just because a development might be zoned for marijuana cultivation doesn’t mean that a community will accept that type of development. “If a developer is seeking to purchase a piece of property, they ought to invest in doing some sociological research to determine how accepted (cannabis cultivation is) going to be, because it could get very expensive,” she said. DeLapp said she has witnessed developers invest a great deal of time and money into expensive projects that went through all the proper zoning, environmental review and permitting processes, only to be denied after they received a “very caustic response” from the community.

42 Marijuana Business Magazine | March 2021

“They’re not denied based on facts or evidence—they’re denied based on politics and feelings and perception,” she said. “Even here in Humboldt … the epicenter of weed, I still regularly deal with angry misconceptions of what this plant is and what’s going to happen to the neighborhood, like whether property values are going to decrease.” But with 70% of the counties in the state not allowing commercial cannabis grows, the real problem becomes a lack of access to markets, DeLapp said. In Oregon, growers must show that an area can be farmed through a land-use-compatibility statement, according to hemp farmer Wesley Ray, co-founder of Combined Hemp in Bend. These documents, obtained through the state’s Department of Environmental Quality, show that a site’s plans mesh with local government master plans and land-use regulations. There isn’t much anyone can do about neighbors complaining about the smell of the crop, other than to give them ample warning, Ray said. “I think it’s just a neighborly thing to do to go tell your neighbors what your plans are, and that it’s going to smell in the summer months,” Ray said. “Especially talk to the ones that are downwind from you, because they’re the ones that are going to be smelling it … and they’re going to complain.” Proper site selection is also important for agronomic reasons. According to Scott Propheter, an agronomist, farmer

Hemp Acreage in the United States WA MT

MN ID

DE MD VA

TN AR

SC MS

RI PA

NV CA

■ Less than 1,000 acres ■ 1,000-10,000 ■ More than 10,000 ■ None

HI Source: 2021 Hemp & CBD Industry Factbook

and hemp-CBD executive based in North Carolina, hemp crops can grow in any type of soil, but the principle that applies across all healthy crops is good drainage. Additionally, growers need to look at crop history and the controls that were applied on a particular field, as many chemistries are extremely persistent in the soil. “Things like heavy metals are particularly important if you’re going for a smokable product, because obviously you don’t want you customer to be inhaling mercury, cadmium and arsenic,” Propheter said. “Get a soil sample off for analysis of pesticides and heavy metals to ensure that there’s nothing out there in that field that’s going to come back to haunt you later on.” This is especially true for first-year growers who are just taking over a property and might not know the land’s history, he said. “Even if it’s organic land, it’s really important to get that analysis done

because organic does not mean ‘not contaminated,’” Propheter said. Learn about the area’s ecology, as well, advises Ray. In addition to having soil tested, growers need to know whether they can sustainably grow a crop in that field, whether that means adequate water or if the land has issues with invasive species such as ants, deer or other pests.

THE CULTIVATOR’S QUANDARY: CONTRACT OR NO?

One of the first rules of cultivation is to have a contract in place with a buyer before putting live inputs such as seeds, transplants or clones into the ground. But not just any contract will do. Growers need to do their research and vet potential buyers to ensure they are reputable before signing on the dotted line. According to Propheter, processors in the industry who are bankrolling millions of dollars in contracts are unlikely to have the money on hand to pay on those contracts.

“Vet that buyer to ensure that they have the financial wherewithal to keep good on their contract—and, to take that a step further, have them put half the money in escrow prior to you even putting that crop out in the field,” Propheter said. “Unfortunately, growers have to do everything they can to protect themselves in this market because so many growers have been burned.” Hemp prices are extremely low because of a massive oversupply in the market and federal regulatory uncertainty that has hamstrung CBD products. Consequently, any processor that is entering contracts covering thousands of acres might not honor them, Propheter said. He advises growers to conduct background checks and contact references for potential buyers and look at who the processor’s customers are. If a grower can’t access that kind of information or a processor doesn’t yet have customers, the buyer probably won’t generate the revenue needed to pay for the contracts.

March 2021 | mjbizdaily.com 43

From the Roots Up Rather than playing in the bulk market, the better deal—at least until the market stabilizes—is to contract-grow small amounts for successful brands, Propheter said. “Successful brand owners are at the top of the value chain,” he said. “They’re getting the most money for the product that they extract and produce, whereas the folks that are trying to participate in the bulk market—they’re an ingredient supplier. The bulk market is just an absolute race to the bottom, and the margins are compressing significantly. So anyone who’s participating in the bulk market has a level of volatility that I would not be comfortable with as a grower.” After having signed contracts that processors, brokers and manufacturers ultimately reneged on—or have just flat out refused to pay—Oregon-based Ray said he doesn’t believe in the validity of contracts anymore. Moreover, he isn’t convinced that securing a contract is necessary before growing. Ray said a farmer who overpromises on a contract only to underdeliver because of faulty genetics or bad weather could end up defaulting. That’s especially true for farmers who are new to the industry and face a steep learning curve. “Why put yourself in that position?” Ray said. “So many people are about spot buys and pricing, and it doesn’t really matter—they’re going to go look for a cheaper price. Buyers are not loyal to the farm.” Marijuana growers, meanwhile, are less likely to set up a contract and prefer to sell their crop when prices are high, said DeLapp of Humboldt County Growers Alliance. “They don’t want contracts in place before they grow their crops,” she said. “If the product can be cultivated, harvested and then properly stored and preserved, they can sell it when the market rate goes back up.” Marijuana grows such as those in Humboldt County tend to be much smaller, craft-flower operations than the commodity-based hemp market, DeLapp said. But the market is still

in flux. She said the current market conditions in California, where much of the stored flower is moved into a “forced distribution model,” are not ideal. Under this model, flower is moved through several distributors before it ends up being sold to a manufacturer or retailer.

SECURING GENETICS AND YOUNG PLANTS

In Humboldt County, many marijuana growers are creating their own genetics, and because the area has more than 50 years of cultivation history, growers have access to a “significant repository of genetics” that grow well there, DeLapp said. The area, which accounts for a significant amount of the marijuana grown in California, has a “reasonable level of infrastructure” in developing new genetics, she said. “We also have about a dozen local nurseries that our cultivation community can tap into, and within that, our nurseries are working with local breeders or heritage breeders to develop cultivars that are expressing certain phenotypes for the specific microclimates around Humboldt County.” Despite its legal status, the hemp industry is comparably different, with a few plant-breeding companies working to develop novel, seed-propagated genetics and others selling different versions of the same varieties, according to Propheter. “There aren’t really a whole lot of unique novel varieties because most of these folks are just buying a variety or stealing a variety from another propagator and then rebranding it as something else entirely themselves,” he said. “Or they’re not conducting genetic development properly, so now you’re ending up with a tremendous amount of genetic variability across what you’re planting, which, in a highly regulated environment like this, is not conducive to having a crop that you don’t have to destroy.”

44 Marijuana Business Magazine | March 2021

Natalynne DeLapp

Because market prices for biomass have dropped off significantly, Propheter said some of the bad actors who were selling faulty seeds have now “shifted their scams” to propagation. “It’s important for growers to actually go and visit the facility where their seed or clones are being propagated and actually vet the procedures and genetic lines that these folks are providing,” he said. Working with the extension service available through land-grant universities, looking at variety trials data and talking with other local growers about their experiences growing different genetics can help hemp cultivators make a more informed decision about which varieties will work best in their climate, Propheter said.

COMBATTING PESTS AND DISEASES FROM THE START

Starting out with a new crop, growers should make sure they are sourcing clean clones or seedlings. “Always assume that what you’re bringing into your garden is somewhat contaminated—any new plants that are brought in should be quarantined first,” DeLapp said. “Farmers should have an integrated pest-management plan for dealing with pathogens and pests. Test early, assume that it’s contaminated and then work backward.”

Growers should receive a certificate from the nursery where they’re buying their young plants that confirms what they’re getting is clean, DeLapp said. Growing cannabis is difficult enough, but hemp and marijuana cultivators have very few pest and disease controls available in their arsenal to protect their crops. Before using those that are labeled for hemp or approved for marijuana production, Propheter said, growers should check with their contracted buyers to ensure ingredients in the chemistry will not compromise their crops. “There are easy solutions to take care of pests and diseases, but nine times out of 10 that’s going to bring your crop out of compliance with your contract, and then you’re going to be stuck with an unmarketable crop at the end of the season,” Propheter said. He recommends working with university extension specialists or consultants to learn about local pests and diseases and how to treat them. Beyond that, he said, scouting on foot—rather than riding past the crop in a vehicle—is crucial. “The most important thing you can put on that land, when you have a crop out there, is your footprint,” Propheter said. “You can’t be a ‘windshield farmer’ with this crop—you have to scout this crop every single day and find issues before they become major issues.” Even then, most of the controls registered for hemp through the Environmental Protection Agency are more effectively used as a preventative than a treatment, he said. “Particularly when you’re talking about things like corn earworm—there are some organic solutions for that, but you’re going to get maybe 60% control with an application, and you’re going to get better control the earlier you find them,” Propheter said. “So, if you walk out on that crop and you already have big worms, it’s probably a little late to be applying any of those organic solutions.” Hemp farmer Harold Jarboe of Tennessee Homegrown in Nashville

Agronomist Scott Propheter farms hemp in North Carolina. Courtesy Photo

uses “gangster insects”—biological control agents (BCAs) that eat insect pests. While other farmers wonder about the efficacy of releasing BCAs and beneficial insects into an outdoor ecosystem, Jarboe says they’re looking for a “target-rich environment” and using biological controls preventatively “made a quantitative difference.”

MITIGATING NATURAL DISASTERS

There is little cannabis growers can do to prevent natural disasters such as wildfires, hailstorms, flooding or hurricanes from wiping out crops—but they can take some measures to mitigate potential issues, according to DeLapp. “Make sure that there is appropriate defensible space, that the lands around are managed to reduce fire impact, have more water storage for fighting fires on the property and make sure that you can keep the ash off the crops,” she said. Farmers in Humboldt County and other areas of California that are prone to wildfires are stocking up on lightweight shade fabric or frost cloth that still allows diffused sunlight to reach plants but protects them from wildfire ash, she said. Mitigating natural disasters ultimately goes back to site selection, Propheter said. “You should be putting this crop on extremely well-drained land,” he said. “It’s a lot like clary sage or tobacco—it doesn’t like to have its roots sitting in the standing water for any long periods

of time. In your natural site selection, as you’re taking that into account, there should be some protection there against things like flooding.” Additionally, growers should ensure that their operating costs are low enough that they can make their money back with the crop insurance that is available to them. Oregon-based Ray experienced a midseason hailstorm that nearly wiped out most of his crop in 2019, but because of the still-high cost of insurance deductibles, he instead works to keep operating costs low. “We hear people say they farm for $8,000-$15,000 an acre, depending on what methods they’re using. We did it for almost $2,700 an acre this year,” Ray said. “That allows us to assess crop insurance and see that it’s not worth it—by the time you pay your deductible, what are you really going to get out of it? You’re just putting yourself further behind.” Short of moving cultivation indoors into a protected environment, outdoor growing is risky and “you just have to roll with it,” Ray said. “You’re battling Mother Nature every day, and every day, you wake up and you go out and you hope it’s a good day. That’s pretty much all you can do.” Laura Drotleff is a reporter for Hemp Industry Daily and Marijuana Business Magazine. She can be reached at laura.drotleff@ hempindustrydaily.com.

March 2021 | mjbizdaily.com 45

From the Roots Up Cannabis companies turn to experimentation, contract labor and technology to make planting operations more efficient

Sowing Solutions By Bart Schaneman

lanting is among the most laborintensive parts of the cannabis growing process—and arguably one of the most crucial to get right. While larger, commercial agriculture operations including those in hemp can use traditional equipment such as tractors and row planters, many marijuana growers still plant the hard way: by hand. Unless an indoor grow or greenhouse operation has shelled out huge money for automated solutions, the clones, cuttings or seeds most likely are going into some type of growing medium via manual labor. But there are better ways to do this than others, experts say. “Every time the plant is moved or transplanted, it costs time and money—and growth time is lost,” said Sam Ghods, CEO of Connected Cannabis, a Sacramento, Californiabased marijuana company with a grow operation in Arizona. “In looking to decrease that cost and improve rate of growth, we look to move that plant as little as possible.”

PLANTING EFFICIENCY

For Ghods, that means minimal transplanting and maximal vegetative grow space and time before the plant goes into flower. Ongoing research with different pot sizes, grow mediums and watering frequencies all factor into minimizing plant touching and maximizing growth for Connected Cannabis. At Denver-based marijuana operator Lightshade, the cultivation staff pots clones and transplants larger plants

Connected Cannabis in Sacramento, California, aims to move its plants as infrequently as possible. Courtesy Photo

as part of the weekly workflow in the indoor and greenhouse operations. “One thing we do to increase efficiency in that area is to use compressed coconut coir media that is hydrated on-site,” said Dan Banks, director of cultivation strategy. “This allows us to bypass all of the labor typically tied up in filling pots.” The organic media Banks uses is engineered to have specific and reliable air- and water-holding capacity. “The really innovative thing about this media is that it is shipped dry/compressed and already pre-portioned into grow bags,” he said. “To ready pots for use, we just spread the dry bags out and flood our trays.” The bricks hydrate from the bottom, and once they have expanded by absorbing enough water, Banks’ team is ready to add plants. The 1-gallon compressed containers Lightshade uses for small plants can be placed directly on the 3-gallon final containers, reducing transplant labor. With indoor grows, Ryan Douglas, a cannabis cultivation consultant based in Vero Beach, Florida, recommends cultivators designate a specific station for planting to increase efficiency. Douglas’ system prevents workers from having to

46 Marijuana Business Magazine | March 2021

lug seedlings and materials to a different room for each planting. “This ensures consistency, saves time, and the transporting of plants from the planting station to the new growing area should only take a matter of minutes,” he said. In greenhouses, Douglas suggests bigger commercial operations consider automating the transplanting process. Technology commonly found in traditional horticulture—such as potfilling machines, irrigation stations and fertigation systems—can be employed for cannabis production to expedite tasks, he said. (See “Getting the Right Tool for the Job” on page 48.)

LABOR TIPS

As far as staffing, Connected Cannabis employs farm-labor contractors for heavy lifting such as days when the company harvests, cleans and replants a 5,000-square-foot room. The company's cultivation team uses farm-labor contractors for trimming, harvesting and planting. Depending on the size of the job, Connected Cannabis will bring in anywhere from 10 to 100 people to handle the task, with close supervision from company management.

From the Roots Up “This process used to take us three days. Now we are at an average of 10 hours,” Ghods said. “Labor definitely is the No. 1 cost for us.” As far as overall management of the process, Douglas recommends correctly staffing the cultivation team by hiring an experienced head grower from traditional horticulture or mainstream agriculture. “It’s important to start early in the hiring and structuring of the cultivation team,” he said. “It’s much easier to teach an excellent commercial grower the specifics about cannabis rather than teaching a home grower how to manage a commercial facility.” As a rule of thumb for staffing an indoor or greenhouse facility, cultivation businesses should employ 25 workers or fewer for every 100,000 feet of cannabis canopy space, Douglas said. “If you’re above that in an established business, that should be a red flag you’re not working as efficiently as possible.” Kim Cisneros, director of production at Bay Area, California-based Harborside Farms, the cultivation arm of the medical marijuana company founded by Andrew and Steve DeAngelo, said cultivation is a common area for staffing bloat, especially when the company is trying to hit production goals. “If we are ever behind, we hire temps, which is another cost,” she added. The company also tries to cross-train employees so they can pivot to other departments as needed. “As a team, we have also helped each other find efficient processes to keep labor costs down. It’s a constantly evolving process.” An in-house purchasing coordinator manages Harborside’s spending by department. He tracks each department’s needs to keep production on track and in line with quarterly budgets. Needs vary by department and consist of things such as soil, pots, fertilizer, nutrients, tools, bags, pre-roll tubes, personal protective equipment and more. “As for spending on labor, all overtime and additional temporary labor must be

Getting the Right Tool for the Job

Denver-based Lightshade reduces transplant labor by placing 1-gallon compressed containers directly on 3-gallon final containers. Courtesy Photo

approved at the time of request, ensuring that we’re tracking spending in real time and aren’t surprised with one large sum cost at once for materials and labor,” Cisneros said.

AUTOMATION AND SOFTWARE

Harborside uses automation to increase efficiency in certain areas, such as transplanting clones into 1-gallon pots and moving plants into flowering houses. “So far, automating these processes has helped eliminate labor costs by 80% or more,” Cisneros said. “We are consistently looking for new ways to improve and simplify efficiency.” At Connected Cannabis, Ghods said the company uses enterprise-resourceplanning software Acumatica in conjunction with Quantum Leaf Solutions to integrate its cultivation system with Metrc seed-to-sale software. California mandates that cultivators track every gram of product grown and sold through Metrc. Acumatica and Quantum Leaf are two of the software packages that help Connected Cannabis do that. Before this solution, Ghods said, one worker was inputting data manually with QuickBooks. The integrated software creates efficiencies throughout the supply chain and helps with recordkeeping during the planting stage. “These are indispensable tools,” Ghods added.

48 Marijuana Business Magazine | March 2021

Bart Schaneman covers cultivation and extraction for Marijuana Business Magazine and Marijuana Business Daily. You can reach him at bart. schaneman@mjbizdaily.com.

Cannabis cultivation consultant Ryan Douglas in Vero Beach, Florida, advocates incorporating mainstream farming technology into the cannabis cultivation process. For example: Pot-filling machines: Commercial operators use pot-filling machines that break up large, compressed bales of soil and then automatically fill pots using conveyor belts. This method allows operators to fill thousands of pots in a fraction of the time it would take manual laborers to do the same task. Transplanting machines: The conveyor belt continues through an irrigation station and then onto a transplanting machine that precisely and rapidly places rooted cuttings into each pot. “The equipment is incredibly precise, saves on labor and is capable of transplanting tens of thousands of seedlings in a single day,” Douglas said. Fertigation systems: Accurate mixing and delivery of fertilizer and water to crops can be achieved through fertigation systems. Many hydroponic vegetable growers use closed-loop fertigation systems that are appropriate for cannabis cultivation. After each irrigation, the leachate that pours through the bottom of the pot is captured, filtered and then mixed with fresh water and fertilizer and sent back out to the crop. Cannabis growers can use this technology to guarantee that no fertilizer runoff enters the environment or the municipal sewer system. – Bart Schaneman

Ryan Douglas

Planning to Excel Los Angeles cultivator keeps a strict schedule to maximize output and avoid bottlenecks

Indoors By Omar Sacirbey

erhaps the most important tool that Chris Ball, owner of Ball Family Farms in Los Angeles, has in his cultivation toolshed is database software Microsoft Excel. “Our best friend is that computer program,” said Ball, explaining that he depends on Excel to plan and coordinate the seven strains he grows annually in eight grow rooms that each can hold about 60 plants. Ball breeds and uses his own genetics to grow six signature strains plus a “oneoff ” in any given year. His bestseller, Daniel LaRusso, gets two rooms, while the other five signature strains and the one-off strain get one room each.

A 12-MONTH PLAN

Every strain needs its own room because each has its own environmental preferences, Ball said. Some cultivars thrive when the room is cold while others do better when it’s hot; some need more humidity while others excel with less humidity. “We have different lighting patterns, depending on the strain,” Ball said, adding that each room has 30 lights. “It really comes down to dialing in your strain, figuring out what that particular cultivar likes and doesn’t like. And then you set that room up so that the plant will be in the correct environment for that cultivar.” The different strains also take varying lengths of time to mature. To avoid

Chris Ball owns the 20,000-square-foot cultivation facility Ball Family Farms in Los Angeles.

Courtesy Photo

harvesting multiple strains on the same day or harvesting crops too far apart—as well as to ensure a steady and consistent supply of product—Ball and his team meticulously plan their year. “At the beginning of the year, we come together as a team and map out the entire

year from start to finish—from January all the way to Dec. 31. We write out our schedule of when this strain is going to be in this room for this many weeks, this strain in this room for this many weeks,” Ball explained. This is where Excel comes in.

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Chris Ball keeps tabs on what is happening in each grow room at Ball Family Farms using Microsoft Excel spreadsheets. Courtesy Photo

“Having all that on an Excel sheet helps us forecast how we’re going to operate. We can forecast how many hours (of labor) we’re going to need on said day if we’re de-leafing, if we’re trimming, if we’re transplanting, if we’re just watering,” Ball said. “But we have to forecast it out for the entire year to be as efficient as possible throughout the year and not be wasting money in labor costs, not run into an issue where we’re harvesting two or three rooms on the same day.”

THE TETRIS METHOD

The planned-out schedule includes buffer dates in case something goes wrong, such as an air-conditioner malfunction or lights blowing out. Otherwise, it needs to be precise. “You have to be very diligent and very meticulous about that, because things happen,” Ball said. To help coordination, the Excel cells are all color-coordinated according to rooms, strains, dates and various tasks such as de-leafing and watering, Ball said. He estimated there are 10 categories on that Excel sheet. “It looks like Tetris,” he joked, referring to the video game with colorful blocks.

“We have a full-time person paying attention to this Excel sheet eight hours a day, because things pop up or go wrong. Or, we have to get a contractor in to fix an AC unit, and we have to plan that because some days a contractor may not be able to enter the facility because they might screw up the environment. “Everything is on a schedule. Because once we get going, a plant doesn’t stop.”

KEEP TO THE CYCLE

To help keep the schedule, Ball Family Farms follows a cycle where employees are harvesting rooms every two weeks. How many rooms you plant is determined by how much drying space you have, Ball said. At his grow, employees plant one to two rooms at a time because the drying room, which is about 1,000 square feet, can accommodate only two rooms worth of cannabis at a time. Ball develops his own genetics, nurturing mother plants that stand about 7 feet tall. He typically gets 100150 clones from one mother, he said, and clips a mother plant about every two weeks.

50 Marijuana Business Magazine | March 2021

Which strains are planted first and most often depends on their popularity and growing cycle length, Ball said. For example, the Daniel LaRusso strain takes 11 weeks to grow and is the most popular, so that is planted to start the year, giving Ball five harvests of that strain. Some other strains might take only eight weeks and therefore can be planted later but still result in roughly six harvests. “We typically like to (harvest) one room every two weeks. Since we have eight rooms, it works out pretty cool for the month because it’s an even number,” Ball said. “So, four weeks in a month, there’s eight rooms, we go every two weeks. And we’re pretty golden.” At the same time, when the different grow cycles converge later in the calendar year, Ball is ready thanks to the Excel sheet. “We can see that months ahead of time, so we prepare for that,” Ball said.

Omar Sacirbey is a reporter for Marijuana Business Magazine. You can reach him at omar.sacirbey@mjbizdaily.com.

From the Roots Up

Steps to Attaining

Outdoor Success

By Omar Sacirbey

Oregon cultivator says planning, genetics, pot size, timing and ground transfer are among the keys to a successful season

utdoor cannabis cultivators have little to no room for error. “We get one shot,” said Michael Johnson, chief operating officer of Siskiyou Sungrown in Oregon. “We plant in the late spring and harvest in the fall. It’s a little bit more complicated because we don’t have multiple cycles in the year, and you really have to get it right.” Planning helps growers improve their chances of getting it right. “To be a true farmer, planning is everything,” Johnson said. Careful planning JANUARY includes picking the strains that will grow well in your climate. Johnson and his Siskiyou teammates spend January and February digging into heavy planning. “You pick the right times for everything. By the end of February, the entire year is planned out,” Johnson said. The first decision to make is what strains to grow. Johnson taps Siskiyou’s “pretty big genetic library,” which is inhouse, and considers which strains have been doing well both in the marketplace and in the field. Then he uses this

To decide which genetics to cultivate, Siskiyou Sungrown management evaluates which strains have been performing well in the field and at retail. Courtesy Photo

information to formulate a plan. “In choosing genetics for outdoor cultivation, it’s imperative that you are confident they are going to grow well in your climate,” Johnson said. “The majority of cannabis genetics in the world would not work well in any given climate—ours included, because there’s just so much nuance.” For example, many cultivars—sativas in particular—originated in warm, humid climates like those in Central America, the Caribbean and Southeast Asia. “You really have to make sure that your cultivars are going to be well-acclimated to your environment,” Johnson said, adding that it might take a few harvests to determine whether a certain strain is a good fit for your area. It’s also critical to look at the photo periods—the length of day and night—that trigger plants to go into flower. “This is No. 1,” Johnson said.

52 Marijuana Business Magazine | March 2021

When breeding, MARCH pick pollen sources that have proved successful in the past. Breeding is another important part of the growing season. Siskiyou does the breeding in-house. The cultivation team produces its own feminized seeds using pollen from male plants on female plants that have been “winners in the past.” “We’ve got a stable of females ready to receive the pollen and create lots of seed. By about March, we are finishing up our big breeding rounds,” Johnson said. This will yield 9,000 to 10,000 seeds. Siskiyou makes a “big push” in the first two weeks of April, filling 8,000-9,000 individual plastic pots with organic potting soil and setting them up in the greenhouse so the soil gets acclimated to the temperature and other environmental factors.

Workers then place each individual seed into a small pot by hand with tweezers, cover it with soil and give it a little water. Then, in middle to late April, they germinate the seeds. “That next 30 days, from middle April to the middle of May, is very delicately watching the temperatures and moisture content of those pots,” Johnson said. Of the 9,000-10,000 original greenhouse seedlings, about 6,000 seedlings make it into the field by late May. It’s imperative that cultivators have materials ordered and prepped by the time the germination and transplanting phases begin, Johnson said. APRIL Pick the right pot size for your seedlings. The bigger the pot, the more room the roots have to grow—so that when they are transplanted into the ground they can continue to grow and thrive. The downside to a larger pot, Johnson said, is that more soil equals more cost and a greater carbon footprint. Soil contains carbon that is released when it is tilled for agriculture. Repeatedly manipulating soil increases atmospheric carbon, which can contribute to climate change. “We’re doing somewhere in the range of 8,000 to 9,000 seedlings in one push. So even an extra few inches in width or depth of a soil pot can really add up. And we’re very cognizant of our carbon footprint, as much as we are about our input costs,” he said. It also takes more time and labor to transfer plants into the earth from big pots than small ones. “The larger the pot you use, the more time it takes for someone to come in, gently pull the thing out of the pot and dig a little hole and stuff it in the earth,” Johnson said. “We found that in years past, when we used a larger pot, the time for planting just took way too long. We’re at a place now where a crew of three to five people can plant 6,000 plants in less than a work week.”

But while smaller pots are cheaper and require less time to transplant outdoors, the plants’ roots run a higher risk of becoming rootbound—or stop growing because they’re bunched up. When rootbound plants are transplanted, it typically takes a couple of weeks for them to grow again. If plants are starting to get rootbound in the pot but a late freeze or other harsh weather prevents moving them outside, growers run the risk of their plants getting stunted. The roots will correct after a couple of weeks, but losing two weeks in a vegetative growth cycle of only 12 weeks is significant. “The way we look at it is, we have a finite amount of time: Outdoors, these plants are going to flower at the same time, regardless of whether you plant them in the middle of May or at the Fourth of July. They are going to flower at the same time because they flower based on the environmental conditions and the photo period that’s telling that plant to go into flower,” Johnson said. Decide when MAY to move your plants from the greenhouse outdoors. Choosing a planting date—when the plants are taken from the greenhouse and replanted outdoors—should be an early part of your planning process. “In a perfect world, you would plant as early as you can,” Johnson noted. But the decision about when to plant is really made by Mother Nature and the last days when freezing temperatures can damage plants. It’s also important to factor in a buffer between the last expected frost date and when you actually start planting. Johnson usually goes with seven to 10 days. In Siskiyou’s case, that’s around May 15-20, Johnson said. “We plan around the last frost, and the thought process is, ‘How do we plant at that moment and give our plants the best chance of success?’”

Many factors go into the answer, Johnson said, including: • What is the ideal age and height of a seedling when you put it in the field? • What is the size of the pot the plant is in? • How much soil is in the pot? • How wide and deep is the pot? • How big of a taproot have you cultivated? OCTOBER Use cultivars that flower and finish over a period suitable for your needs. Another important consideration is how long plants need from the point of flowering to harvest, Johnson said. “In nature, it’s not that simple,” he said, because the light cycles can’t be adjusted with the flick of a light switch like they can be indoors. “It’s a gradual transition. Certain cultivars may transition into flower at 14 hours of daylight, and some cultivars may flip into flower at 12 hours of daylight,” Johnson explained. “Neither of those indicate how long it will take from flip for the plant to finish. There are cultivars that flip early and take a long time to finish. And there are cultivars that flip late but take a short time to finish.” Johnson and other growers said indica-leaning hybrids are better suited to colder, more-rugged northern growing regions because they require only a short period from flowering to finish in such climates. Sativas and sativa hybrids such as Sour Diesel and Amnesia Haze do well in warmer outdoor climates, although growers will want to factor in humidity as well. In the end, a good planting season boils down to good planning. “Purchasing all your stuff ahead of time, making sure it’s landed on site, making sure everything is lined up, is critical, because time is of the essence,” Johnson said. “We don’t have any time to waste when the springtime hits.”

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g n i o D Good

Companies with active social equity initiatives share how they coordinated efforts and launched programs

arijuana companies face mounting pressure from advocates, consumers and regulators to address the lack of diversity within the cannabis industry. In response, some companies have launched their own programs aimed at providing women and people of color with more opportunities to succeed in the space. These efforts range from mentorship programs spanning many months to multimillion-dollar funds that support nonprofits and community organizations. The team at Curio Wellness, for instance, established a $30 million fund in December to provide startup capital for minority business owners. The Timonium, Maryland-based

By Adrian D. Garcia

medical marijuana company intends to assist women, minorities and disabled veterans in opening franchises linked to Curio Wellness. “Diversity is a challenge,” said Jerel Registre, managing director of the Curio WMBE Fund, adding that Jerel Registre a lack of diversity prevents cannabis supporters “from coming together under one banner.” In recent years, social equity measures have become a prerequisite in many states writing cannabis legislation for new markets. New York Gov. Andrew Cuomo and state legislators, for example,

have failed to launch a recreational market partly because of a lack of agreement on such factors. In Washington DC, members of the Congressional Black Caucus tacked on social equity measures to the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which passed the U.S. House of Representatives in December. “Coming up with a solution that either serves as a blueprint or as one of many solutions to the diversity challenges in the industry enables (it) to move forward,” Registre said.

SOCIAL EQUITY FUNDS Curio’s part of the solution is to invest in diverse entrepreneurs who would

March 2021 | mjbizdaily.com 55

Doing Good Green Thumb Industries in Chicago drew more participants than expected when the company launched its License Education Assistance Program. Courtesy Photo

Several cannabis companies have developed initiatives to address the lack of gender and racial diversity within the industry as well as the impacts of marijuana prohibition on people of color. Corporate social equity programs can range from setting aside funds to support nonprofit organizations to organizing mentorship programs that benefit community members. Here are some considerations for firms that want to add a social equity focus to their corporate social responsibility plans: • Engage with social equity advocates to learn how you can best help your community. Ask your network what organizations are on their radar.

like to open their own dispensaries. The individuals impacted by cannabis team looks to sponsor entrepreneurs prohibition receive clemency or reentry in states with medical cannabis frameassistance. The fund also will be used works that include a limited number of to help groups focused on economic available licenses. inclusion in the cannabis industry, “We would provide financing toward said Brian Herrington, director of the initial capitalization, so that would government affairs at Hawthorne. include the store build-out, the licensing, MENTORSHIP PROGRAMS the initial inventory and the working Chicago-based Green Thumb Industries capital they need as they ramp the store has taken a different approach, launching up over the first few months to get revenue flowing,” Registre told Marijuana its License Education Assistance Program (LEAP) in 2019. The multistate operator Business Magazine in December. In exchange for the upfront capital, the last year held private consultations, shared educational presentations and provided fund initially takes a 40% equity stake other resources to help women and people in the new dispensary. As the business matures, the entrepreneur buys back that of color apply for licenses to operate in Illinois’ highly regulated cannabis stake, Registre said. The entrepreneurs industry. could become full owners of their This year, Green Thumb transitioned franchises in as little as three years. LEAP into an incubator program to Hawthorne Gardening Co., a divisfurther mentor entrepreneurs ion of Scotts Miracle-Gro, as they prepare to enter the disclosed in late 2020 that market. the company started a “We want to reach out and $2.5 million fund to benefit pull people up, and that’s nonprofits with cannabis what the LEAP program and social justice missions. the incubator program does,” The Hawthorne Social said Michael Fields, director Justice Fund will focus on of corporate social responorganizations with prosibility at Green Thumb. bono programs that help Michael Fields

56 Marijuana Business Magazine | March 2021

• Funds can be established to support nonprofits with social equity focuses or to give capital directly to entrepreneurs with diverse backgrounds. • Strategize about ways to give beyond financial contributions. Consider tapping internal resources for mentorship programs that could benefit a few individuals or help a larger group. • Work with accountants and lawyers to determine the best structure for diversity investments and programs. Consider hiring people with related expertise to launch the initiatives.

“Whatever expertise they need from within the walls of Green Thumb, they would have access to, which is invaluable.” Fluresh, a vertically integrated cannabis company, also has launched a mentorship program to further its goal of making the industry more diverse and equitable for victims of the war on drugs. The Grand Rapids, Michiganbased business plans to work closely with about five community members this year through its Fluresh Five Accelerator Mentorship Program. “We may not do this perfectly, because we don’t necessarily know how to run internships and programs like that,” said

Chris Anderson, general counsel and chief regulatory officer at Fluresh. “That said, we believe that with our leaders and managers in our business, as well as our connections within the industry … there’s enough real-life knowledge that will really have a positive impact on the participants.”

The Fluresh Five Accelerator Mentorship Program is designed to make the cannabis industry more equitable for victims of the war on drugs. Courtesy Photo

SETTING UP A SOUND STRUCTURE Curio, Hawthorne, Green Thumb and Fluresh all tailored social equity programs to fit their companies’ capabilities and priorities. Fluresh, for its part, decided to work with a handful of individuals room only. Finally, we were renting out to provide participants with one-onspace at a local college to make room for one mentorship, Anderson said. The everyone who was interested.” company has more than 200 employees Curio and Hawthorne have taken and specifically tasked its community different approaches to their fund impact strategist with handling the concepts. Hawthorne relied on the program’s logistics, such as coordinating knowledge of its parent company and dates and scheduling visits to partner established its fund via a one-time organizations. donation to The Scotts Miracle-Gro “We wanted to take a small, biteFoundation, a 501(c)(3) nonprofit. sized group where we’re hopefully not “By putting it into the 501(c)(3) overstretching our team too much mechanism, we can only give to other or giving these people less than they 501(c)(3)” organizations, Herrington expect,” he said. said. “This really targets where the There are also legal dollars are going to ensure concerns to consider, that the community benefits.” Anderson added. “Part of The Curio fund, for the regulations (say) that comparison, was established any non-employee has to be under a traditional private accompanied at any point equity structure. It’s being (when they’re in a cannabis seeded via investments from facility).” the company’s leadership Green Thumb, on the other and third-party investors. Chris Anderson hand, worked with hundreds Registre, who has a finance of people through its LEAP background that includes investprogram to try to assist as many aspiring ment banking at JPMorgan and private entrepreneurs as possible. equity firm Sterling Partners, was hired “Don’t underestimate the number of to organize the fund. people who will avail themselves of such DOING WHAT’S RIGHT, resources,” Linda Marsicano, vice presiFOR THE RIGHT REASON dent of communications for GTI, advised Some social equity initiatives from other companies looking to implement cannabis companies have been criticized their own programs. “When the (LEAP) program first started, we had a conference for being self-serving or superficial. There’s an incentive, advocates say, for room booked, and many more people firms to focus on diversity in order to came than we thought. It was standing

reap benefits such as obtaining licenses from local governments that favor social equity efforts. “There are a lot of companies starting their own social equity programs, but of course, they have prioritized themselves in the process,” said Amber Senter, CEO of Breeze Distro. The Oakland, California-based nonprofit she cofounded, Supernova Women, helped establish the social equity programs in Oakland and San Francisco and contributed to legislation in California that funds such programs throughout the state. Firms can avoid missing the mark by partnering with nonprofits and organizations that are repairing damage caused by the war on drugs, increasing diversity in the cannabis industry and spearheading other social equity initiatives, Senter said. “It’s really important for these companies that are well funded to make sure that they are working with groups like Supernova so that they have a pulse on the community—what’s actually happening on the ground,” she said. “Let these organizations that have been the doing work take the lead.” Partnerships with community organizations can take the shape of establishing a donation framework, such as setting aside a portion of sales or giving a one-time sum. However, it’s important for businesses to “not just

March 2021 | mjbizdaily.com 57

Doing Good CHALLENGES TO CANNABIS INDUSTRY PARTICIPATION What are the Biggest Barriers to Ownership in the Cannabis Industry? Access to startup capital Obtaining real estate or a physical location Complexity of regulations Caps on the number of available licenses Skills and knowledge required to run a business Regulations prohibiting certain people from participating in the industry Neighborhood resistance Residency requirements Other

10% 20% 30% 40% 50% 60% 70% 80%

What Would Help You Advance Your Employment, Ownership or Career Opportunities in the Industry? Information on how to access capital Training in best industry practices Knowledge such as business-plan development or accounting Information on identifying or obtaining real estate or property Training in how to navigate the licensing process Other 0

10%

20%

30%

40%

50%

Source: Survey of more than 300 business leaders, industry employees, social justice advocates and government staff, as prepared by Analytic Insight for the Department of Excise and Licenses, City and County of Denver.

throw money at the issues,” Senter said. They can also leverage their resources such as partnering on workforcedevelopment programs and training opportunities.

GETTING ON BOARD Before starting its social justice fund, Hawthorne reached out to community

organizations to help understand where the firm should focus its efforts. The Port Washington, New York-based company also held meetings with business leaders to understand their level of interest and areas they wanted to address, Herrington said. “The success of any type of community-outreach program (relies on)

58 Marijuana Business Magazine | March 2021

making sure that you have the buy-in internally from the people within your company,” Herrington said. “It’s also talking to everybody within the company, even informally, just to understand their thoughts,” he added. “‘Getting that feedback helped inform the program that we wanted to put together.”

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Does the Vaporizer Shipping Ban Apply to You? Legislation intended to curb teen smoking also affects cannabis, experts say, though wholesale and manufacturing transport might be exempt By Ivan Moreno

Congress is prohibiting the U.S. Postal Service (USPS) from shipping nicotine vaping products to prevent underage smoking. But attorneys say the legislation includes language that makes all types of vaping products subject to the ban. The federal government still has to explain how the law will be enforced, but cannabis attorneys say anyone who sells vaping products needs to know that: • Shipping must happen through private companies such as DHL, which require a signature upon delivery. FedEx and UPS have said they will not ship vaping products. • The shipping ban is part of an update to an existing law to collect taxes from tobacco sales by state, which means vaping products will have to start complying with those same tax requirements. • Sellers of vaping products must register with the U.S. attorney general. • Although the legislation takes effect in March, the USPS has 120 days after that to create rules to implement the new law.

March 2021 | mjbizdaily.com 61

Vaporizer Shipping Ban

Vape product retailers will need to use private shipping companies and obtain signatures upon delivery.

he U.S. Postal Service will be prohibited from shipping vaping products starting this summer because of a new law that has cannabis businesses worried. In late December, when Congress approved an appropriations bill to keep the government running, lawmakers included the text of a separate measure. The “Preventing Online Sales of E-Cigarettes to Children Act” prohibits the USPS from shipping vaping products. There’s no mention of hemp or marijuana in the new law, but businesses in both sectors should be prepared to comply, said Rod Kight, a cannabis attorney in Asheville, North Carolina. “To the extent that they are participants in the industry who are selling vape products, it absolutely affects them,” Kight said of companies that manufacture or sell cannabis vaping supplies. The legislation takes effect in late March, after which the USPS has 120 days to create rules to implement the law. FedEx and UPS already have said they will follow the U.S. Postal Service’s directive and won’t ship vaping products.

“Effective April 5, 2021, UPS will not transport vaping products to, from or within the United States due to the increased complexity to ship those products,” Matthew O’Connor, a UPS spokesman, said in a statement.

BECOMING COMPLIANT

Currently, there is no publicly available information about how often vaping products are shipped in the mail. However, U.S. consumers ordered $44 million in CBD vape cartridges online in 2020, providing some measure of how often mail carriers might be used to fulfill orders, according to Rick Maturo, associate client director for the Nielsen Cannabis Insights Practice. Under the new regulations, sellers of vaping products must do the following: • Ship through private companies, such as DHL, which requires a signature upon delivery. • Register with the U.S. attorney general. • Implement an age-verification system. “A lot of them are doing age verification already,” Kight said. “For

62 Marijuana Business Magazine | March 2021

some, this is going to be a larger project to take on.” Business-to-business sales—whether for wholesale distribution or manufacturing—are exempt from the USPS shipping ban, Kight said, as long as they have the necessary licenses to operate. Arnaud Dumas de Rauly, CEO and co-founder of The Blinc Group, a New York company that develops and supplies cannabis vaping hardware, called the new restrictions “another attempt by the government to ‘demonize’ nicotine vaping.” However, he expressed confidence that lawmakers are not targeting cannabis. Arnaud Dumas de Rauly

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“The most important concept about this part of the bill is its intent, and that is to curb nicotine vaping, not cannabis,” Dumas de Rauly said.

New regulations pertaining to vaporizers are intended to eliminate underage smoking.

TIME TO PREPARE

Since the USPS still has to issue new rules in the following months, Dumas de Rauly said there is plenty of time for the government agency to explain how the ban on shipping products will be enforced. This window, he added, “also leaves the door open for our industry to lobby USPS.” Kight agreed that businesses should use the time before the law goes into effect to prepare for looming changes. “The first thing (for cannabis business owners) to do is to become aware of the law and whether or not it will affect them. And if they’re a (vaporizer manufacturing) company or retailer of vaping products, this will affect them,” he said. The new regulations update an existing law governing the taxation of cigarettes and smokeless tobacco, known as the Jenkins Act, which has been in place since 1949. While the law is directed at nicotine products, the way the new legislation is worded casts a wide net. The term “electronic nicotine delivery system,” for example, includes any product that “delivers nicotine, flavor or any other substance to the user inhaling from the device.” It’s the “any other substance” part of that sentence that makes cannabis businesses anxious. Updates to the act include “CBD liquids as well as vaping products that don’t contain any nicotine whatsoever,” said Gregory Conley, president of the Connecticut-based American Vaping Association. Figuring out the applicable local and state taxes in all the places a company sells products is going to be challenging, he said, and might require lawyers and consultants. “It should be possible to modernize the tax infrastructure so that you don’t have small businesses suddenly having to

“You need to be prepared to raise your shipping prices considerably.” — Gregory Conley American Vaping Association

get licenses and deal with 20 to 50 different state tax authorities—not to mention native tribes and local governments,” he argued. Conley said his organization lobbied Congress to find an alternative to prohibiting shipments of vaping products through the USPS but was “met with

64 Marijuana Business Magazine | March 2021

total resistance to that idea.” His group also argued the definitions in the law were overly broad. “The best that we can hope for is there’s going to be an opportunity to comment with the USPS—as well as engage with different state tax authorities—to determine what compliance is going to be necessary,” he said. “You need to be prepared to raise your shipping prices considerably.” Conley said how big of an impact the new rules have will depend on how strictly they are enforced. The punishment for violating the law can include three years in prison, but Conley said a more-likely scenario is that a company faces steep fines and gets shut down. “For nicotine vaping products, which will get the majority of the enforcement,” he said, “this is very bad.”

Ivan Moreno is a reporter for Hemp Industry Daily and Marijuana Business Magazine. You can reach him at ivan.moreno@ hempindustrydaily.com.

BestPracticesInRetail | Solomon Israel

Oregon retailer Gnome Grownʼs sales floor was designed by Phoenix-based High Road Design Studio. Courtesy Photo

High Design Retailers focus on seamlessly moving customers and making a lasting impression

arijuana still carries a stigma in many communities. Adopting the right design can make a cannabis store feel more comfortable for shoppers. There’s no single right way to design a marijuana retail store. But making deliberate design choices that reflect your brand and values can build buzz, draw new customers and keep them coming back for more.

Design Insights Veteran dispensary designer Megan Stone is the founder and creative director of Phoenix-based High Road Design Studio, which focuses on marijuana retail design and branding. Since launching the company in 2013, Stone’s team has worked on 62 cannabis retail outlets in 17 states. After establishing the basic boundaries of a new dispensary project

such as local regulations and the real estate itself, Stone said the next step is taking “a very close listen to the client’s brand and their story—and who they’re trying to be and how they’re trying to go about doing it.” Although it’s hard to distill the entire spectrum of store design into only a few categories, Stone sees three broad archetypes for dispensary design, each exemplified by a High Road project: High-volume retail: Happy Valley, a Massachusetts recreational marijuana outlet with locations in Boston and Gloucester, was designed with the goal of maximizing customer throughput. To do that, Stone said High Road used express checkouts, separating the cashier from the order-pickup counter to speed up transaction processing time and minimize bottlenecks.

66 Marijuana Business Magazine | March 2021

Cannabis stores with a striking design can attract positive attention from customers, neighbors and the media. But retail design choices also must be highly functional and put the customer first. Tips for achieving a winning design include: • Considering consulting with a designer, even if you can’t afford a design firm from start to finish. • Thinking from a customer’s perspective in order to meet their needs and desires. • Contemplating how design choices reflect your brand and mission. • Using design to minimize bottlenecks and ensure efficiency. • Knowing that a top-notch construction team will be needed to implement your design vision.

“They didn’t sacrifice the retail experience, either. They still have a beautiful showroom. The products are displayed very (nicely), and everything is behind glass,” Stone said. Education-driven retail: Design centered around teaching is a good fit for medical marijuana dispensaries such as Maitri Medicinals in Pittsburgh,

where Stone called the consultation-room experience “a cornerstone of our design.” “The way we set up their merchandising really helps facilitate conversations about the products so that customers could ask and learn about all the different modalities of consuming cannabis,” Stone explained. That educational approach was particularly important in Pennsylvania, she added, because the state initially didn’t allow sales of smokable flower. “Their brand is centered around educating on the plant, educating on how to consume it, educating on how it helps you, and our store design definitely had to relate to that.” Experiential retail: Gnome Grown, an Oregon retailer with a whimsical, “very rich brand story,” illustrates a more experiential approach to marijuana retail design, Stone said. “We really wanted to embody their brand: their organic nature, their stewardship to the environment, their dedication to quality and just their approachable, friendly ‘gnominess,’ for lack of a better term,” she explained. To that end, Stone said her design team focused carefully on everything from finishes to furniture to fixtures, communicating “authenticity and craftsmanship and quality.”

Inspiring Calm in California West Hollywood, California, retailer Calma has been dubbed Los Angeles’ “most inviting” cannabis shopping experience by LA Weekly. The dispensary was designed to exude “feminine energy,” said general manager Mara Stusser. The eye-catching pink exterior, decorated with monstera leaves, was hand-painted by a local female artist. The floors and fixtures are marble, and one wall of the dispensary sports an enormous LED video display that usually shows soothing nature scenes. “The space itself is very welcoming. It’s very open, it’s very calming,” Stusser said.

Marijuana retailers Happy Valley in Massachusetts, Calma in California and Maitri in Pennsylvania, from top, offer clean, modern interiors.

Courtesy Photos

She added that the elegant design—made visible by large, street-facing windows—helps lure passers-by. “Sometimes people will say to us, ‘Wow, I just had to come in here because I didn’t know what this was,’” she said. “They have this curiosity, because they’re not used to seeing a cannabis retail store look the way that ours does.” For other retailers just starting their designs, Stusser recommends thinking from a customer’s perspective.

“I feel that when you’re going into designing a cannabis retail space, you really have to think about your customer: What are they coming for? What do they want to see? What do they want to feel?” she said. “I’m huge on making sure that your design speaks your brand and speaks for your mission statement.”

March 2021 | mjbizdaily.com 67

BestPracticesInRetail | Solomon Israel Minimalist High Design in Toronto Cannabis retailer Edition opened in Toronto in December with fanfare from a variety of design-focused publications. Elle Décor declared at the time, “This may just be the world’s chicest cannabis shop.” Edition founder and CEO Ryan Roebuck said he “wanted to break that stigma of what the traditional cannabis retail dispensary should look like.” Roebuck said the design of Edition’s first location was meant to make a high-end retail experience available to cannabis shoppers—particularly an older, more affluent demographic that’s used to shopping at other luxury stores—without intimidating other customer demographics. “Luxury, to us, doesn’t necessarily mean white gloves, silver trays (and) expensive prices. Luxury, to us, is an experience, impeccable quality and an overall beautiful environment,” he said. Roebuck describes the store as light, open and airy. A custom scent, made in collaboration with Murphy & Jo Candle Co., pervades Edition’s space. “When you deal with good designers and good architects, the questions that they’re asking at the beginning of the process shouldn’t necessarily be, ‘How do you want it to look?’” Roebuck said. “It should be, ‘How do you want it to feel? How do you want it to flow?’”

A Touch of Detroit in Flint, Michigan Michigan cannabis retailer Common Citizen’s store in Flint won a 2019 Gold Award for retail store design from the International Council of Shopping Centers. Chief Operating Officer Joe Jarvis describes the location as “warm and welcoming,” with a design that puts customer experience first. “Just from the aesthetics and from the material selection that we use, we want to be inviting, and, most importantly, we really want to capture a broad audience. We want people to be able to see themselves in our store,” he said.

Common Citizen in Flint, Michigan, uses design and color to differentiate product categories. Courtesy Photo

Jarvis said materials including metal, glass and finished, unpainted wood reflect the revitalization of Detroit, the largest city in the state. “It’s got that warm aesthetic, but it’s got a little Detroit grit in it as well,” Jarvis said of design at the store, located an hour northwest of Detroit. Common Citizen categorizes its cannabis products by the “common states” they satisfy, such as “unplug” or “sweet relief.” The retailer uses design elements and colors to illustrate those categories on the sales floor. An in-store cafe serves as an opportunity for shoppers to slow down and relax. (Or it did when there wasn’t a pandemic.) “We don’t want people just to rush in and rush out the door. … We really want to connect with our customers,” Jarvis said.

Budgeting Considerations Stone said design fees from a reputable firm such as High Road can range from roughly $20,000 to $100,000, depending on factors including the scope of services needed and the project timeline. But store operators without that kind of budget can still benefit from a brief consultation with a designer, she said. “If somebody came to us with a $500 budget, we’d be happy to sit

68 Marijuana Business Magazine | March 2021

down and have a conversation and a consultation and at least help them make some really important decisions about where they should spend their money,” Stone said. For store operators set on a do-ityourself design, Stone identified display fixtures as a critical area that could benefit from professional input. She also offered an important reminder: Money spent on designers is just one step in a comprehensive construction process. “Your average interior designer is not a contractor. It’s not HGTV, where we’re going to be the ones coming in and helping to demo the space and paint the walls,” she said. “Designers are experts in doing the plans, specifying materials, making sure that the space is going to be built in a way that serves your business,” Stone said. “We require solid professionals (who come in) after us to make sure that what the client paid for in the design process actually is what they’re going to get to enjoy for years to come.”

Solomon Israel is a reporter for Marijuana Business Daily International. You can reach him at solomon. israel@mjbizdaily.com.

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IndustryPlayers | New Hires & Promotions

Evelyn Wang

By Omar Sacirbey

Cosmetics Exec Gives P&B a New Look

eteran beauty executive Evelyn Wang is the new CEO of Papa & Barkley, a leading cannabis wellness-products company in California that is best known for its topical goods. Wang joins Papa & Barkley from Los Angelesbased Milani Cosmetics, where she was the chief marketing officer. She also has held senior roles at well-known beauty brands such as L’Oréal, Neutrogena Cosmetics and Estée Lauder. The executive already had an interest in wellness and plant-based medicines when a friend introduced her to a recruiter seeking to fill the Papa & Barkley post. “From a business-potential aspect, the question I asked myself was, ‘Does this brand have the potential to scale?” Wang told Marijuana Business Magazine. “While we are already a top brand in the California dispensary channel, I see a very clear runway to scale the brand even further within California, definitely on e-commerce nationally and then ultimately globally.” This is where Wang’s experience comes in. “That ability to amplify the compelling aspects of a brand story is a skill set that I bring to the table. It’s about understanding how you structure a company to ensure that the resources and investments required for driving it forward with consumers are in place. And also, understanding distribution strategy and helping to strengthen operational processes,” she said. “I think these are all things that transfer really well from the beauty world and the consumer packaged goods world (to cannabis).” What does Wang hope to be able to say in a year or two? “I would like to see Papa & Barkley in every American medicine cabinet.” The outgoing CEO, P&B founder Adam Grossman, becomes executive chair of the board. Zeeshan Hyder has also joined the company as chief financial officer after four years in that role with MedMen Enterprises.

70 Marijuana Business Magazine | March 2021

A look at some recent hiring moves in the marijuana industry

Former Obama Cabinet Official Joins Marijuana Trade Group Kathleen Sebelius, the secretary of the U.S. Department of Health and Human Services under former President Barack Obama, will serve as an honorary co-chair of the National Cannabis Roundtable (NCR). Sebelius, a Democrat and former governor of Kansas, is the second high-ranking politician to align with Washington DC-based NCR. Republican John Boehner, a former speaker of the U.S. House of Representatives, joined the group in 2019 as an honorary co-chair.

 Erstwhile Trump Appointee Joins Hemp Group Russell Coleman, who served as U.S. attorney for the Western District of Kentucky from 2017 until Jan. 20, has rejoined the U.S. Hemp Roundtable to lead cooperation efforts with law enforcement and ensure members abide by the group’s ethics policy. Coleman held the same role at the Hemp Roundtable before his appointment as a federal prosecutor. He formerly worked for U.S. Sen. Mitch McConnell, who is from Kentucky and is credited for steering hemp legalization in 2018.

 Consumer-Focused COO Joins Maryland Marijuana Business Culta, a leading cannabis brand in Maryland, welcomed Allison Siegel as its new chief operating officer. Before Culta, Siegel was president at Next Day Blinds, a direct-toconsumer business in Maryland with more than 400 employees. She also spent 10 years as an IT and marketing executive at Total Wine & More, a national alcohol retailer headquartered in North Bethesda, Maryland. Siegel acted as chief revenue officer at Next Day Blinds before becoming president. Before that, she built Total Wine’s IT applications, a loyalty program and a consumer-insights group.

Veteran COO Joins California Supply-Chain Firm Radiant Farm, a Santa Rosa, California-based cannabis supply-chain management company with manufacturing and distribution operations, hired Newton Paskin as its chief operating officer. Paskin is also president and CEO of Explorer Technologies,

a process-solutions company in San Jose, California, that serves consumer, medical, biotech and other industries. He also has served in advisory and executive roles to several other technology businesses.

company that will be majority owned by Partner Colorado. The change will occur July 1. Seefried is known for establishing Safe Harbor Private Banking, a compliance-based banking program for the cannabis industry, in 2015 and expanding it nationally. The program, licensed to other financial institutions through Safe Harbor Services, today has 10 affiliated financial institutions in five states. In 2020 alone, Safe Harbor Private Banking “managed and validated over $3 billion in cannabis-related funds,” according to a news release.

 Banking Pioneer Takes Next Step

 New Leadership at California Lab

Cannabis banking innovator Sundie Seefried is transitioning from her role as CEO of Partner Colorado Credit Union to become CEO of Safe Harbor Financial, a new cannabis banking

Sonoma Lab Works, a testing company based in Santa Rosa, California, promoted Christian Sweeney to president. Sweeney joined the company as president of

lab operations in September and has since helped the firm expand service offerings and establish stronger management metrics. A chemistry and food science specialist, Sweeney began his cannabis career with Cannabistry, a marijuana research and development organization, where he led a team focused on cannabinoid analytics, extraction technologies and cannabinoid delivery as vice president of science and technology. In addition to his current role overseeing science and lab operations, Sweeney will be responsible for the sales, marketing and finance departments.

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IndustryPlayers | New Hires & Promotions  Canopy Exec Joins German Cannabis Company Chuck Rifici, co-founder of Canadian marijuana companies Canopy Growth Corp. and Auxly Cannabis Group, joined the board of Eurox Pharma, a German medical cannabis company. Rifici is currently executive chair of Feather Co., a vape pen manufacturer. He also has served on the boards of Aurora Cannabis, The Supreme Cannabis Co., Origin House and Meta Growth Corp. Eurox was founded in 2019 by executives who previously held senior posts at Deutsche Bank, McKinsey & Co. and Dr. Reckeweg & Co., a 75-year-old pharmaceutical business that produces plant-based medicines in Germany.

Concepcion joins two other new board members whose duties began in January: • Nurys Camargo, who took the agency’s social justice role for a five-year term. • Bruce Stebbins, who is also serving a five-year term.

Former Aide to Run MMJ Program

 Massachusetts Marijuana Commission Fills Vacancy Boston attorney Ava Callender Concepcion will fill the final open position on the Massachusetts Cannabis Control Commission. Concepcion formerly served as director of the Suffolk County District Attorney’s Office and advised on policy and legislation.

72 Marijuana Business Magazine | March 2021

Matthew Santacroce, a former policy director for outgoing Rhode Island Gov. Gina Raimondo, started work in midJanuary as head of the state’s Office of Cannabis Regulation. Santacroce most recently worked at The Policy Lab, a think tank run by Brown University. Hired or promoted someone for a senior-level position? Send a news release or general information to Omar Sacirbey at omar.sacirbey@ mjbizdaily.com.

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