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Amazon Now Backs Federal Legalization

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Amazon’s Senior Vice President of worldwide operations, Dave Clark, wrote a blog post yesterday that is making headlines in the cannabis community. Clark’s blog announced a couple of major changes coming to the company’s operations.

Clark first touted changes to their “Time off Task” policy, a way to measure employee’s time spent logged in to company software. The changes basically boil down to averaging over a longer period of time to better gauge how employees spend their time.

Dave Clark, Senior Vice President of Worldwide Operations & Worldwide Consumer CEO

The second company policy change is why the blog post made headlines in the cannabis community. Clark says in the blog that Amazon will adjust its drug testing policy and no longer test for cannabis use in their drug screening program. “We will no longer include marijuana in our comprehensive drug screening program for any positions not regulated by the Department of Transportation, and will instead treat it the same as alcohol use,” says Clark.

The new drug testing policy change is big news for such a large and influential employer to make the shift in the United States, where surely other companies will follow. But even more influential is their backing of federal legalization. “And because we know that this issue is bigger than Amazon, our public policy team will be actively supporting The Marijuana Opportunity Reinvestment and Expungement Act of 2021 (MORE Act)—federal legislation that would legalize marijuana at the federal level, expunge criminal records, and invest in impacted communities,” says Clark. “We hope that other employers will join us, and that policymakers will act swiftly to pass this law.”

Given Amazon’s extremely large influence in American business and policy, the company backing federal legalization is sure to lead other large companies down a similar path. The show of support for the MORE Act represents the growing normalization of cannabis use and brings us another step closer to federal legalization.

Mark Your Calendars: The Cannabis Extraction Virtual Conference

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On June 29, 2021, Cannabis Industry Journal is hosting the Cannabis Extraction Virtual Conference. From Noon to 5 pm EST, you’ll get access to five veterans of the extraction market discussing a variety of topics related to the ins and outs of extracting cannabis and hemp.

Hear from subject matter experts who will share their perspectives on cannabis and hemp extraction, supercritical CO2 extraction, post-processing, risk management, hazards and controls, optimization, closed loop hydrocarbon extraction, machine learning algorithms and more.

Alex Hearding, Chief Risk Management Officer at the National Cannabis Risk Management Association (NCRMA) will kick things off with a session exploring the Hazards and Controls of Extraction with Liquified Petroleum Gases. Dr. Markus Roggen, Founder & CEO of Complex Biotech Discovery Ventures, will follow that up with a discussion surrounding the kinetics and thermodynamics of cannabis extraction.

Other talks from the Cannabis Extraction Virtual Conference include:

  • The Quest to Discover the Limnits of CO2 Extraction
    • Jeremy Deihl, co-founder & CTO of Green Mill Supercritical
  • The Future of Cannabis Concentrates: Developments in Hydrocarbon Extraction and Manufacturing
    • Michelle Sprawls, Laboratory Director at CULTA
  • Process Scale Up in the Cannabis/Hemp Industry
    • Darwin Millard, Committee ViceChair on ASTM International’s D37.04 on Processing & Handling of Cannabis

You can check out the agenda in its entirety and register here. Attendees will have the opportunity to ask speakers questions during the live Q&A session that follows each session. Registration is complimentary. For sponsorship opportunities, contact RJ Palermo at Rj@innovativepublishing.net

CU Boulder, Charlotte’s Web Begin Sleep & Anxiety Studies

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Charlotte’s Web Holdings announced a new collaboration with the University of Colorado-Boulder and their Research and Education Addressing Cannabis and Health (REACH) Center. The University’s REACH Center will conduct a preclinical study on how hemp oil can influence sleep quality and anxiety.

Charlotte’s Web and University of Colorado-Boulder Collaborative Study to Assess CBD and CBN’s Potential to Support Improved Sleep (CNW Group/Charlotte’s Web Holdings, Inc.)

The study will use Charlotte’s Web hemp products, including their full spectrum hemp formulations containing CBN, CBD and less than 0.3% THC. Monika Fleshner, PhD, Professor of Integrative Physiology and member of the Center for Neuroscience at the University of Colorado, will be the project lead and will conduct the study in her Stress Physiology Laboratory. “There is a great need for properly controlled experimental studies that are designed to test the potential neural and physiological impacts of hemp derived phytocannabinoids,” says Dr. Fleshner. “With support from CU REACH and Charlotte’s Web, our research will explore both the efficacy and mechanisms of how these substances can affect complex brain-mediated behavior, such as disturbed sleep.”

Tim Orr, senior vice president of Charlotte’s Web and president of its CW Labs division, is currently working on more than twelve scientific research studies with the company. “Charlotte’s Web is committed to advancing science on the benefits and safety of CBD and other hemp phytocannabinoids through rigorous scientific investigations such as this sleep and anxiety study,” says Orr. “We’re honored to team up with CU’s REACH Center to explore the potential impacts of full-spectrum hemp extract with CBD and CBN on anxiety and sleep quality.”

Long term, Charlotte’s Web expects this study will help build the foundation for future clinical studies to “better understand how specific ratios of cannabinoids and different delivery formats are effective at supporting improved sleep quality and instilling healthier sleep architecture in humans,” reads the press release.

5 Tips To Maintain a Healthy Organic Living Soil for Your Indoor Cannabis Facility

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If you scoop your fingers through layers of fresh, moist soil and look closely, you may notice the soil moves, crawls and even seems to breathe with life. There are more living organisms in a teaspoon of healthy soil than there are living people on Earth. Microbes, fungi, bacteria and insects are a few of the billions of hungry critters consuming and excreting their way through a living web of life within the soil. 

This is why some indoor cannabis growers are embracing organic living soil methods. Organic living soil allows a plant to easily access which essential nutrients it needs when it needs them. The microorganisms exchange nutrients and microlife with the plants, creating a symbiosis in the soil that will continue perpetually. Growers mimic this natural balance indoors using a base soil and adding amendments and inoculants filled with fungi, bacteria, beneficial insects and other microlife. Healthy, balanced soil will make available all of the nutrients necessary for an eager, hungry hemp seed while keeping pests and disease at bay without the use of harsh pesticides or herbicides.

Take advantage of the below tips at your indoor growing facility so you can ensure your living soil will continue to give back to your cannabis plants day after day, week after week, and season after season.  

Tip 1: Get a Base

The first step to maintaining a healthy living soil according to Chris Teeters, director of cultivation at Harbor Farmz in Michigan, is to have a good base. He’s not just talking about base soil, but also a base of knowledge and experience about growing organically. Take some time to understand the systems of microbes that are responsible for keeping the soil alive and nutrient-dense for your plant, called the soil food web.  

“Learn how to create a good base soil. Read about it, find a recipe that will work for you,” Teeters said. Research is important, as living soil can be a scientific process. But learning through experience is just as important as reading up. “Don’t get too wrapped up in, what I call, ‘analysis paralysis,’” he said. “A lot of people will get stuck on what they’re reading and what’s going on in their head that they forget to just learn through application and observation.”

Base Soil

Base soil is the foundation of your living soil. You can buy premixed recipes of living soil online, but Teeters recommends finding a local compost or soil business where you can see and touch the soil. They will also have a good understanding of soil mixes that will work well in your local environment. Most living soil recipes are a combination of peat, aeration (like pumice) and compost. 

Consider using a cover crop or mulch (such as shredded hemp stalk and defoliated plant leaves) which will help retain moisture and capture excess nutrients in the soil.

Tip 2: Start With a Healthy Plant 

A healthy soil that is mixed, fed and watered to perfection will mean very little if the plant you place into the soil is riddled with disease or a devastating stowaway pest. 

Unless you are taking cuts or clones from your healthy plants, it’s best to start from seed, said Jeremy Silva, owner of BuildASoil, a custom organic soil and fertilizer company in Colorado. “There are problems you just can’t see until you get more experienced. Even then, you’re going to have some that slip through the radar, and you have to determine if it’s worth it, and that should be based on experience,” Silva said.

If you find that you have unwanted pests in your soil, predatory mites and other beneficial insects that reside in living soil can be helpful. Teeters recommends using heavily fermented plant extracts like comfrey and pumpkin, or diatomaceous earth, a pesticide made from fossilized remains of tiny, aquatic organisms, to help with pest problems. If pest pressure is high, a root drench using Karanja cake can be used. 

Tip 3: Balance and Feed the Soil With Amendments and Inoculants

Just like in nature, your living soil will need a balance of macro and micronutrients to keep the plant thriving throughout its life cycle. Maintaining this balance in your living soil is largely determined by two things: amendments and inoculants. 

Soil amendments are the compost, manure or mulch that enhance the soil’s physical properties such as pH or texture. Inoculants are materials used to increase the level of microbes in your soil. Inoculants like fungi and bacteria promote root growth and break down the amendments, which in turn, feeds the plants. 

When to Amend

How often you amend your soil will depend on the environment you are growing in. Teeters oversees a large-scale operation at Harbor Farmz that creates the optimal environmental conditions for its plants, so he and his team amends every 10 days. “Every room is under a parameter control system. I’m running these plants at the highest temperatures and highest humidity levels possible … that they can handle during certain periods of their growth cycle to maximize growth,” Teeters said. “The soil does require amending and put in a faster regime than a home grow because of the science behind what we’re doing here.”

For home growers growing with varying temperature and humidity, Teeters recommends amending at the one-month mark after planting and once more before harvest. 

Pro tip: Validate your amendments if possible, especially if you are buying them online. You’ll want to review the Certificate of Analysis (CoA) to make sure you are OK with the level of heavy metals or potential of pesticides, which can affect the quality of your cannabis. 

Tea Time: Applying Amendments and Inoculants With Compost Teas and Seed Sprout Teas

Compost teas and seed sprout teas are both ways to apply amendments and inoculants that contain important fungi and bacteria to reamend the plants throughout their growth.

To create a compost tea, Teeters uses a large water reservoir fitted with a pump. He then adds worm castings, kale, alfalfa meal, feather meal, bone meal, nettles, comfrey and other organic amendments that contain calcium, magnesium, boron, nitrogen, phosphorus and potassium—all the macro and micronutrients necessary to grow plants. The water is agitated, oxygen is added and once the tea is brewed, it is mixed into the organic living soil. “We utilize those teas because they are living. We brew them to a point where they’re full of oxygen and microbes and bacteria,” Teeters said. “So we utilize those compost teas to maintain a balance of life and nutrition in the soil.”

Sprout teas are created by soaking seeds, such as hemp or barley grass, in a container of water until they germinate. The seed-and-water mixture is blended into a concentrate which can be added to your water then dispersed to your plants during watering. 

Tip 4: Create a Watering Routine

Watering your plants is 20% of the process of maintaining living soil which can cause 80% of the issues if not done properly. BuildASoil recommends a watering formula of 5%-10% of the soil volume. If you have a small container with large plants, you’ll need to water daily. If you have a larger raised bed with smaller plants, you’ll only need to water about once a week. The temperature and humidity in your environment will also play a large role in watering your plants. “Think of soil moisture on a scale of 1-10. One being bone dry and 10 being muddy wet. We want to operate in the 3-7 range all day long, day in and day out,” recommends BuildASoil’s blog, “You can do this by calibrating automatic watering systems or by hand watering with a little intelligent thought.” 

Tip 5: Set it and Forget it  

Once you’ve created a balanced web of life in your soil, resist the urge to till or disturb it. The whole goal of living soil, according to Teeters, is to get your soil balanced so that you can “set it and forget it.” 

“You want your soil to be settled in. That allows for the soil food web to start to generate itself and keep a balance and take off,” Teeters said. “There’s so many little microbes, bacteria, enzymes and fungi in the soil. By putting your hand in and mixing it up, you actually are destroying and disturbing that sensitive balance, even in the top layers of your soil.”

Apply and Observe

The food web you create in your living soil may do better with certain amendments, something growers have to learn through experience. “It’s OK to just try something, it’s OK to put some extra alfalfa meal in one of your batches or don’t put any alfalfa meal in a batch and use kale instead, and then add an additional amount of castings to your initial soil,” Teeters said. “You’re going to learn through practicality. You’re going to learn the most through application and observation when it comes to the actual gardening.” 

Using organic living soil in your indoor cannabis growing facility is a sustainable, low-waste growing method, as well as a beautiful example of how scientific application and Mother Nature can work together. This balance creates a mutually beneficial web of life that can create smooth, high-quality cannabis that some growers, like Teeters, believe is a difference you can taste. 

 

Smokable Medical Cannabis Bill Approved by Louisiana Senate

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Christopher Jensen, cofounder and treasurer of the National Cannabis Roundtable (NCR), says the work the trade association has done on the Secure and Fair Enforcement (SAFE) Banking Act is just one example of the behind-the-scenes efforts the industry group does on a regular basis to push cannabis reform.

“It’s not just a trade association that monitors what’s happening on the Hill and reports back to their members. We’re doing a lot of the work,” says Jensen, who is also co-founder and CEO of Mana Supply Co., a medical cannabis company based in Maryland with locations in Missouri and Colorado. “And that was really attractive to me, to be able to sit down and not only spend the time explaining, educating, doing tours, doing things to help legislators understand what the issues were, but I really liked the notion that we were going to be so involved in policy itself.”

Now that the SAFE Banking Act is on its way to the Senate, where there is hope it will finally pass after making its way through the House multiple times, Jensen explains what NCR is focusing on next.

Michelle Simakis: What has been the National Cannabis Roundtable’s (NCR) priority most recently?

Christopher Jensen: We’ve done a lot of work on the SAFE Banking Act over the past couple of years. It’s come out of the House and we’re looking for a place for a place for that bill in the Senate.

[NCR helped] legislators with all the background information, and we got an alliance with the American Bankers Association … getting them all the information they needed to get to the place [the bill] is now, which is a banking bill that with bipartisan support very easily made it out of the House, and we do expect bipartisan support out of the Senate side.

MS: What is the biggest hurdle to passing the SAFE Banking Act and also the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which passed the House in December?

CJ: You can’t eat the whale in one bite. Everybody wants this change to happen immediately. The best way to get this done is incremental progress. So, you ask, what’s going to stand in the way? The more complex the problems, and the more issues you throw at it, the more places there are to disagree. So I think that while there may be this feeling that we want to have one great sweeping thing take care of it all and make all of our problems go away, I think the reality is for progress to go forward, we want to be incremental in that approach.

RELATED: U.S. House Passes SAFE Banking Act as Part of New Coronavirus Relief Bill: UPDATE

MS: How do you work on a bipartisan level to mitigate political disputes?  
CJ: It’s about educating and finding out what’s important to a particular legislator no matter what their party and address those needs and concerns. That includes running back and forth between offices. We know from this office this is important, is there room for that in the bill? Or, can we move this around and still get to the same place of success? And that’s why I talk about incremental progress; there’s a give and take that has to happen so that both sides feel like they’ve got a win.

Operating a business in cannabis is like operating in a recession all of the time because of all of the tax burdens and the regulatory requirements and all the risks in cannabis. You’re operating as if you’re in a stress environment all the time, which is part of reason I got into it.

MS: What do you think is the greatest challenge holding the industry back right now, if you were to name just one?

CJ: The federal tax burden. 280E is obviously what holds industry back the most. That tax burden makes it difficult for people without access to capital to operate and be entrepreneurial in this industry. I think the regulated markets in these states are doing a good job, and I think the industry is doing a good job. [Eliminating the tax burden] comes once again benefit to social equity, benefit to entrepreneurs and benefit to the business, and how it can grow, and the impact it makes on the American economy.

MS: You founded TrustPoint International in one of the most challenging economic periods for the U.S. in history – the Great Recession – and were successful. For many cannabis businesses, the COVID-19 pandemic and the economic fallout as a result was their first experience with a downturn of that magnitude. What lessons learned did you bring from that experience more than a decade ago to your role as a cannabis business owner and on the NCR?

CJ: Operating a business in cannabis is like operating in a recession all of the time because of all of the tax burdens and the regulatory requirements and all the risks in cannabis. You’re operating as if you’re in a stress environment all the time, which is part of reason I got into it.

When I started getting involved in the cannabis industry, there was great exuberance. People started getting listed on the Canadian Exchange. There was a lot of money going around, and I don’t think I was as conservative as I should have been. Then we had that market correction, and I think the industry has figured a lot of things out. I think people expanded far too fast. But when COVID-19 hit, there were a couple of things that saved my business, personally. Most of these governors decided that cannabis was an essential business, that we were medicine. That was so important. I can’t tell you what would have happened to my patients in Maryland if Governor Hogan would have shut it down. That saved us.

On the flip side, the capital investment anywhere really dried up, but in cannabis in particular, it was already difficult and made it so hard. There were a lot of plans we had, like expansion and growth, but we had to tighten our belts and get very, very cautious, as if we were a brand-new startup all over again. That wasn’t comfortable, but it was old hand. I started a business during a recession, and so I was going to see it through this one. I’m not sure we’re through this.

You can’t eat the whale in one bite. Everybody wants this change to happen immediately. The best way to get this done is incremental progress.

MS: Regulations can change quickly. Where have there been missed opportunities in the industry?

CJ: Most states have discussions about THC content. It’s one of the most misunderstood things among legislators. They don’t understand [the nuances,] so I think it’s really important that you not only pay attention on a grassroots level but on a local, state and federal level. Let’s be honest; everyone should have been paying attention to the [2018] Farm Bill and what happened with hemp and what that means for the cannabis side of the business.

Right now we are facing a hemp industry that obviously is omnipresent; you can buy CBD from your gas station down the street. And now that [extractors] have learned to convert CBD into delta-8-[THC], we really need to pay attention because delta-8 will affect what legislators think. If they see that delta-8, which is psychoactive, and they are watching kids come in and buy it at gas stations, we have to understand what that means for us.

RELATED: States Begin Implementing Delta-8 THC Bans

MS: With that said, do you consider delta-8 a threat? Is there an opportunity to regulate it better?  

CJ: We formed a delta-8 committee inside of NCR, and we are currently evaluating what this means. I don’t want to state NCR’s definitive position yet because that’s still being formed. But we need to understand the dangers, the consequences—we need to understand the upside. We’ve gotten into a gray area. Is this an artificially derived cannabinoid or is it a naturally derived cannabinoid? We have obviously been in favor of regulation to the extent that it doesn’t choke the industry. Regulation keeps people safe.

NCR wants to take a measured and methodical approach in understanding this issue, and very quickly we will come up with our guidance and our suggestions for that, and we will only do it after we build consensus with the entire board. And we can take that consensus to the legislators and educate them and make sure that they understand, as well.

MS: What would you say is NCR’s greatest accomplishment so far?

CJ: The work that was done on SAFE was incredibly important, I think that it was lot of that not only the education but a lot of that negotiation that National Cannabis Roundtable did between offices. I’m super bullish and I’m super optimistic that this will get done at some point this year.

This interview has been edited for length and clarity. A shorter version of this conversation was published in the June 2021 issue of Cannabis Business Times.

 

Harborside Announces Agreement to Acquire Sublime for U.S. $43.8 Million

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<![CDATA[

OAKLAND,
Calif., June 1, 2021 – PRESS RELEASE – Harborside Inc., a California-focused, vertically
integrated cannabis enterprise, announced it has signed a definitive agreement to
acquire 100% of the issued and outstanding equity of Sublimation Inc. ("Sublime"),
an award-winning cannabis manufacturing company located in Oakland, Calif., for
a total consideration of U.S. $43.8 million. The acquisition is expected to
close, subject to customary closing conditions, in July 2021.

Founded
in 2016, Sublime is best known for its expansive line of high-potency,
high-quality and affordable, Fuzzies branded pre-rolls, a leading brand of
pre-rolls in the state of California, as well as vapes and roll-your-own flower
kits. Since 2019 Sublime has delivered a revenue compound annual growth
rate (CAGR) of approximately 70%, and ended 2020 with 7.9% California pre-roll
market share, according to BDS Analytics.
Sublime is strategically positioned for continued growth as pre-rolls are the
fastest growing cannabis sub-segment within the California market since the
beginning of 2020.

Upon
completion of the acquisition, Harborside expects to realize significant
synergies by bringing together Sublime’s brands, production capabilities and
robust distribution system with the high-quality cannabis grown at the company’s
Salinas, Calif. cultivation facility, which is anticipated to result in
additional gross profit and earnings
before interest, taxes, depreciation and amortization (EBITDA) by
extending the reach of Sublime, Harborside and Key branded products throughout
the state. Harborside also expects to bolster Sublime’s marketing capabilities,
which is expected to drive higher retail margins for the company as an owned
brand within its portfolio. Finally, Harborside will seek to license the
Fuzzies California lifestyle brand in additional legal adult-use markets across
the country, particularly those that do not currently have high potency infused
products.

“This
acquisition adds an iconic, award-winning California brand, with an exceptional
product offering and consumer following, to our growing brand portfolio,” Harborside
Interim CEO Peter Bilodeau said. “Harborside has been a customer of Sublime for
many years, and we know the quality of their products. With the existing
production capacity and soon to be completed upgrades at our Salinas
cultivation facility, we are well-positioned to support the continued growth of
the Sublime brands while expanding the reach of Harborside’s existing branded
product portfolio in both the retail and wholesale markets, which we expect to
ultimately drive increased profitability across our entire business. We’re very
excited to continue to provide consumers with innovative, high-quality products
while delivering strong value for our shareholders. The company will issue
new guidance in due course.”

Sublime
CEO Ahmer Iqbal said, “Harborside is known for being an innovative pioneer
within the California cannabis market and has garnered a long-term reputation
across the state for being a leading retailer and producing high-quality
products. As a leader among California brands, we are thrilled that Sublime
will join the Harborside owned-brand portfolio, leveraging their production and
retail capabilities to further expand the distribution of Sublime products
throughout California.”

Transaction
Details

Upon
closing, Harborside will acquire 100% of the issued and outstanding shares of
Sublime (the “Sublime Shares”) in exchange for a total consideration of U.S. $43.8
million (the “Purchase Price”). The Purchase Price comprises of approximately $38.4
million payable in multiple voting shares of Harborside, representing
approximately 207,579.66 multiple voting shares of the company based on
volume-weighted average price of the subordinate voting shares of the company
on the Canadian Securities Exchange (CSE) for the 30-days immediately preceding
the date of the agreement and approximately $5.4 million in cash (of which
approximately $3.4 million will be used to repay existing indebtedness of
Sublime). The Purchase Price represents a multiple of approximately 1.78
times to the estimated $24.6 million of standalone 2021 revenues for Sublime.

The
Agreement provides for, among other things, customary representations and
warranties and covenants, including mutual non-solicitation provisions and a $1.5
million termination fee payable by either the Harborside or Sublime in certain
circumstances. The acquisition is subject to the approval of the shareholders
of Sublime, and the receipt of certain regulatory approvals and other customary
closing conditions for a transaction of this nature.

The
directors and officers and certain shareholders of Sublime, collectively
holding approximately 86.5% of the outstanding Sublime Shares, have entered
into voting and support agreements and have agreed to approve the acquisition.
In addition, concurrent with the closing of the acquisition, Harborside will
enter into a lock-up agreement with certain shareholders of Sublime (the
"Locked-Up Shareholders") in respect of the multiple voting shares of
Harborside to be received by such shareholders pursuant to the acquisition (the
"Lock-Up Agreement"). Pursuant to the Lock-Up Agreement, the
Locked-Up Shareholders will agree not to sell, assign or otherwise transfer the
multiple voting shares received. The restrictions lapse in three installments
with 50% of the shares released from the restrictions on the 12-month
anniversary and 25% of the shares released from the restrictions on each the
15-month and 18-month anniversaries from the closing of the acquisition,
respectively.

Harborside’s
board of directors has approved the acquisition. As well, Sublime’s board of directors
has approved the acquisition and has resolved to recommend that Sublime
shareholders vote in favor of the acquisition.

]]>

How To Get Acquired In Four Critical Steps

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We have all read the headlines and press releases touting an acquisition with a fit so seemingly perfect it feels predestined. It may be true in some cases that two businesses just “found” each other. However, it is more likely that a solid acquisition is the result of a calculated process on both sides of the deal. To put it bluntly: Good acquisitions do not materialize out of thin air. 

Do not depend upon your amazing product or service offering, no matter how revolutionary, to reel in the deals alone. Do not believe that your own hype will raise the interest of potential buyers. Do not feel that you will be one of the rare companies that just “finds” its perfect match. If you are pursuing an exit strategy of acquisition, you had better be thinking with an acquisition mindset and planning to make it occur.  

Developing a roadmap to acquisition may seem a little daunting, but the process can actually be fairly simple—if not easy. It can be summed up in four critical steps which, when followed, will dramatically increase your chances of success. These are the signs that say you are serious about being acquired.

1) Create a strategy.

It might seem like an obvious first step, but you would be surprised by the number of business leaders who do not follow, or even possess, a clear, articulated strategy. I am convinced that without one, any success a company meets is purely by chance. The power of a great idea or an incredible product can only take you so far. You need a North Star to guide you.

But creating a strong strategy that accurately reflects what your business offers and how it can be leveraged for acquisition is not always easy. The temptation to exaggerate strengths and downplay weaknesses can be strong. Your strategy must address what makes your business attractive while honestly acknowledging where it falls short, and how the business can make up for these perceived shortcomings. When developing a strategy that will take you to acquisition, pie-in-the-sky thinking must be tossed aside in place of stone-cold reality. 

Be especially careful not to fall into the trap of blindly trusting your own assumptions without backing them up with evidence. Take advice cautiously and with scrutiny to ensure you are not just listening to sycophants and good-intentioned well-wishers. Create an optimistic strategy, but one with realistic expectations and an honest approach. A plan created through rose-colored glasses will quickly fall apart.

In the cannabis industry, there are some unique, significant challenges that any acquisition strategy will need to address. There will no doubt be numerous competitors in your space, many of whom will also be vying for eventual acquisition. Positioning among a sea of companies all hoping to be acquired can be a tricky proposition. The rapidly changing nature of the cannabis industry requires swift adjustments when they are needed to adapt to sudden change. Be clear that your strategy differentiates your company in the correct ways, and is nimble enough to alter course if necessary. Avoid relying on the personalities of top leadership as a key component of your strategy. And be certain any strategy recognizes and accommodates the financial and regulatory issues the business will face in the cannabis space.    

2) Generate buzz.

Very often, companies neglect or ignore one of the most important tools at their disposal on the road to acquisition: Communication. If your acquisition strategy does not include a communication plan, go back and revise the strategy. An investment in a consistent and sustained communication program is what sets smart companies apart from others, and can make the difference between being acquired and being ignored. In a choice between two equals, the business making the most noise is the one that grabs investors’ interest. A focused communication program with a consistent flow of information reaching the right audiences conveys momentum, purpose and energy. These are three attractive factors any business desires.

But generating buzz does not come without risk. Avoid extravagant marketing excesses that detract from the business. That brand-new Tesla wrapped in the company’s logo probably looks pretty cool, but it sends a frivolous message. Frugality is rewarded above indulgence when it comes to becoming acquired. Use your communication approach to thoroughly research the right events and conferences to attend to get in front of the right audiences, as well as the best organizations with which to associate your business. Utilize your messages to showcase how your product or service solves the problems others cannot or will not address.

Finally, although the competition might be cutthroat, your communication does not need to follow that lead. Engage your competition as a community to encourage a good-natured, if combative, network of like-minded professionals. The competitor of today could be the partner of tomorrow. Go ahead and make a splash, but do so with humility. 

3) Build the right relationships.

As you have most likely done to help build your career, establishing and maintaining relationships with the right people is also a critical part of any acquisition strategy. Your communication plan should clearly outline which audiences are essential for your strategy to succeed, and you should identify how you will connect with and impress these audiences. There are some telling indicators like who sits on your Board of Directors or makes up your Advisory Board that can increase your credibility, and you should be sure these entities communicate the right message to potential buyers. Recruit board members whose industry knowledge and strategic influence suggest confidence in your company’s product and management. Fill advisory boards with experts and influencers who enhance your reputation and increase the validity of your claims. Secure partnerships that minimize your shortcomings and complement your offerings. Finally, communicate all of these attributes to the right media and analyst audiences on a consistent basis to remain top of mind when your sector makes news.

As a cannabis business, it will be critical to establish relationships with experienced experts who can help navigate the often confusing and constantly changing regulatory and legal environment of the industry. Not everyone expected to land in cannabis, and many are ill-equipped to negotiate the hurdles and roadblocks the space can throw at business. Working with the right attorneys, accountants and other professional service providers who know the industry and understand its nuances can prevent deal-breaking errors down the road. Audited financials that reveal a monster tax liability will kill a deal in an instant.

Utilize your relationships to position for the long-term vision of acquisition, as well as to satisfy near-term needs. Examine potential partnerships with an eye toward the future. Those that make sense today may not be compatible with your exit strategy. 

4) Follow up and follow through.

As trite as it might sound, the old business maxim still applies: Plan the work and work the plan. No matter how well researched or meticulously articulated your overall acquisition strategy, there will always be hiccups. Be prepared to stay flexible, recognize flaws in thinking and adapt when necessary. Mistakes will be made and unforeseen industry developments will undoubtedly interfere with your plans, but the ability to respond with agility and quick action will be easier when you are being guided by a sound strategy.

Of course, none of this will guarantee success. However, following these four steps will position you far above other companies competing for the attention of would-be suitors. They are the telltale signs of a business that understands its appeal and is organized and strategic in how it meets its goals. These are the attributes anyone desires in a company considered for acquisition. And they are the ones that grab my attention, as well.

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The National Cannabis Roundtable’s Christopher Jensen Talks 280E, SAFE and Delta-8

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Cannabis beverages are becoming a more visible product category, particularly as dispensaries begin adding adequate cooler space for brands entering the space. For Keef Brands, which has been around for years, the evolution has been steady—moving through medical markets, allowing patients to become acquainted with the product, and then getting familiar with the burgeoning adult-use landscape in the U.S.

Keef Cola originated in Boulder, Colo., in 2010, with a keen eye to the many adaptive shifts that were coming in the cannabis market. Eventually, just based on how humans interact with one another, the market would embrace cannabinoid-infused beverages. With $2.9 million in U.S. sales in Q1, according to Headset, Keef Brands makes up a large part of what remains a small (but growing) market segment.

Travis Tharp was named CEO after serving as president and COO. Here, we spoke with Tharp about the state of the cannabis beverage segment and what we can expect next.

Eric Sandy: What’s the current scope of Keef Brands in the U.S.?

keef cola

 

Travis Tharp: We’re currently in seven states, plus Puerto Rico, and those are Colorado, California, Arizona, Oklahoma, Missouri, Maine and Ohio. We launched our three latest markets of Ohio, Maine and Missouri in the first quarter of 2021, and we’ve been very pleased with the acceptance that those people have welcomed us to in all of these states. We’ve had really great partners in all of these, because we have to work with a manufacturer in each area. You have to set up your entire ecosystem in each state, and we’ve been very fortunate to have some wonderful partners over the years. This latest group is no exception.

ES: How does Keef Brands navigates the differences between medical and adult-use markets?

TT: It’s a really good question because I think it speaks to the evolution of our company over the years. Keef was one of the original edible brands in Colorado, all the way back in 2010, and the first product lines were medical sodas at the 100-milligram level that were targeting medical patients. That was something our founder nailed, because he started working with the folks who were the early adopters—the evangelical people who wanted to be in the industry, who wanted to be a budtender, who wanted to use it for medicinal purposes. We were able to set up a really strong relationship with both consumers and retailers over the first three or four years of medical-only in Colorado, so that when it switched to adult-use and brought out our lower 10-milligram beverages, it was very warmly received.

We had some allies and support in the industry for us bringing out an adult-use option. I’ve seen that happen in a couple of different markets that we’ve gone into. And I think that’s something that we really take to heart. It’s a very significant part of our entry strategy—to take care of the medical patients and have an option for them, providing them multiple options, whether it’s something like the mocktails that are the sugary tasty beverages or something that’s more of a health-conscious, low-sugar, low-calorie option for other medical patients. Since we’ve been able to meet the market in these early stages, we’ve been able to build a really strong partnership with all the retailers and the customers. Being from Colorado and having a lot of people over the years associate a positive experience of coming out here with the brand has really helped us develop. When the new states would come on, you see the acceptance and the brand recognition is happening faster and at a higher rate than in the first couple of markets that we launched.

ES: Dosing is a big part of this conversation. How does Keef position its 10-milligram beverages and the idea of what “10 milligrams” might mean for customers?

TT: We always tell everyone that nobody reacts the exact same. Everyone needs to understand what their correct dosing is. We always subscribe to the “start low and go slow” adage. One of the benefits of beverages and the reason that people are starting to gravitate toward them versus other form factors is that when you drink a beverage, the uptake of THC happens sublingually versus going down and having to process through your stomach and your bladder. It really provides a consistent, sessionable experience that people are used to having with alcohol or something of that nature. You just don’t want people to have a negative experience when they’re trying the product.

In all of the states where we launched, we’ve been on a very aggressive education campaign. We’re in the very early stages of the life cycle of this industry. Look at the last two years, and beverage has gained a lot of from a units and sales perspective. It’s gained a lot, but it’s still a relatively small segment of the overall market with a lot of opportunity to grow. We work together with competitors to try to get the word out. The old “a rising tide lifts all ships” adage really applies in the beverage segment right now.

ES: I was going to ask about the state of the market. Beverages are a small slice of the pie right now, but they seem to be growing quickly.

TT: There’s been a good evolution of adoption of beverage. We always thought that social consumption lounges would be when beverages would start to take off. Ironically, it was during the pandemic—with people having a lot of time on at home—that they tried new products. We saw an acceleration of that, specifically, in the beverage category. You’ve seen some new entrants that are coming with very low-dose offerings, which I think is great. We address a couple of different segments of the market. We don’t address all of them currently.

We know that there’s room in the cooler—and making sure that the cooler actually exists in the retailers is something that’s been a shared endeavor and a shared challenge. Some of the original dispensaries were set up bodega-style. But you can see an evolution in the newer markets where they’re trying to adopt a different type of retail experience that incorporates a larger refrigerator, and that’s amazing,

ES: What’s the on-site consumption situation in the home state of Colorado?

TT: It been passed at the state level, and the cities are starting to implement it. It’s on the way. It’s not where California is as of yet, or some of the other states, but it has been passed and people are gearing up for it.

ES: There’s a lot of talk about “occasion-based consumption” in the industry. Where does the marketing for beverages place this product segment?

TT: Our core brand ethos is welcoming everybody to the party, whether that’s somebody who’s never experienced cannabis before or somebody who’s an old pro. That’s been one of our major points that we always try to stick to: We want people who are experiencing beverages when they’re at a barbecue not to have to go somewhere else and remove themselves from the party. They can stay there with it, with a beverage, and stand next to their friends who are having a beer or some other beverage and still be a part of the party and not have to actually excuse themselves. That’s a really interesting shift. Something that we really try to adopt and educate people on is that it allows you to stay in the social setting. It allows you to really enjoy a different alternative experience to just alcohol.

ES: It seems like this speaks to the broader “normalization” conversation, too.

TT: It does. One of our taglines is, “Drink your cannabis.” Our founder, about 10 years ago, started telling people that the two major forms of human interaction over the development of our history had been smoking and drinking. Everyone, in 2010, was focusing on the smoking aspect. He wanted to solve the drinking segment. He thought that would be a really interesting way to go about this, and a way for it to be normalized. His 94-year-old grandmother was one of the first people who ever tried one of his original Keef Colas. She took a sip, and she said, “Is this cannabis?” She took a sip and looked at her husband and said, “You just said I couldn’t smoke it.” And then she took another sip.

It was like a company genesis story that really helped us focus in on what we were trying to accomplish. And it’s taken longer, I think, than anybody ever plans—and most things do. There have been a couple of false starts on the anointing of beverages as the next big thing. But I think what we’re seeing is a solid acceptance from the mainstream audience of at least trying it and understanding, “What are some of the benefits? What are some of the things that they need to consider?” And that’s really all we can ask for.

ES: How does tourism fit into this? Meaning, when folks visit Denver or LA, it would seem like beverages offer a more discreet, casual way to check out this new market without buying a bunch of flower for a weekend trip.

TT: We’ve gotten that feedback from numerous people who have come from in from out of state. When we’ve gone into other states, they said, “Oh, I’ve been to Colorado. I’ve had your brand in Colorado. This is great. We love that you guys are here.” It’s a great alternative to just the traditional methods of consuming cannabis. One of the things that we’ve really tried to focus on over the past few years is making sure that we’ve got the right quality controls in place so that the Keef that you have in LA tastes the same as a Keef that you have in Maine.

ES: What’s next for Keef Brands this year?

TT: Our two key focuses this year are that we wanted to accelerate the velocity and go deeper with our product lines in our existing markets—specifically in Colorado—and really work toward normalizing a purchase of a four-pack versus just a single can. By and large, it’s been very well received, and we’re able to do some volume discussions and have it be normal. It’s like a grocery store or a liquor store experience. That’s thanks to the adoption and the acceptance of the general public.

And in Q1, like I said earlier, we launched in three new markets. We were very heads-down. Our next launch will be with Canada. Our partner there is gearing up. We think we’ll be on the market if not by the end of Q2, early Q3. That’s a really big focus of ours. We’re also looking at the new states that are coming online. Generally, I would say we’re looking toward expanding some more states over the course of the next six months.

ES: As far as those partners on the ground, what are the traits you’re looking for?

TT: I’ll use Buckeye Relief in Ohio as an example. We do our homework, and we speak with other brands. We actually co-located with Wana Brands in a couple of different facilities, and they had nothing but good things to say about the Buckeye Relief team. We were able to confirm that in every one of our interactions. When you’re in cannabis, every manufacturing relationship has unique pieces to it because every state is different. But the core qualities are, transparency, a desire to continually improve the product and a commitment to consistency. Those are the key aspects of this, and Buckeye has been great in that regard.

Cannabinoid Hyperemesis Syndrome – CBD Health and Wellness

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Cannabis use in the United States has grown by leaps and bounds over the past decade and this has created new health problems for some users. One of these problems is cannabinoid hyperemesis syndrome (CHS).

CHS occurs in cannabis users with specific symptoms that include persistent cycles of nausea and vomiting. People often take hot baths to relieve nausea and suppress vomiting. Since cannabis is known to have anti-vomiting properties, it is paradoxical that its cannabinoids can also help induce vomiting under certain circumstances.[1]

Because CHS is a relatively newly recognized disease, it often is misdiagnosed and can stay there for years. Its symptoms are very similar to those of cyclic vomiting and other illnesses, and many health professionals initially choose these diagnoses over CHS.[1] However, CHS is a disease in its own right, affecting almost exclusively long-term users who use cannabis on a daily basis.

CHS manifests itself in three different phases. The first is called the prodromal phase. During this time, the affected person suffers from mild nausea, irregular eating habits and gastrointestinal complaints. However, at this stage, it is rare for patients or doctors to attribute these common symptoms to CHS. In fact, many patients use even more cannabis to manage symptoms.

In the second phase, the so-called hyperemetic phase, those affected experience vomiting and / or abdominal pain for 24-48 hours. Dehydration is a common occurrence during this phase as well. As in phase one, patients also tend to increase their cannabis use to relieve symptoms. Patients also compulsively immerse themselves in baths or showers, which many believe provides relief from their discomfort.

Recovery is the third phase. It sees the end of vomiting and a return to normal eating habits. In addition, people stop bathing and showering frequently and stop all cannabis use, which is one of the pillars of CHS treatment. The other is symptom management through the use of IV fluids and relaxation. Dopamine antagonists and benzodiazapenes have also shown promise in treating symptoms, but opioids have not.

Perhaps the most difficult aspect of treating CHS is diagnosis. Its symptoms are similar to many other diseases, and its cause (cannabis) is often used to alleviate these symptoms. However, with more research and more patients presenting with CHS, at some point more information will become available about how to treat this new disease.

Image source: https://www.pexels.com/photo/man-in-white-button-up-shirt-holding-white-paper-5028382/

References:

  1. Galli, Jonathan A. et al. Cannabinoid Hyperemesis Syndrome. Curr Substance Abuse Rev. 2011, Volume 4 (4): 241-249

Terpenes and CBD combinations for certain benefits

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The entourage effect may still be largely puzzling by the scientific standards of concrete evidence, but when it comes to anecdotal evidence and plausible theories, it is the X-factor of green magic.

An educated approach to combining CBD and terpenes to create synergy and double certain effects could likely go a long way.

Anti-inflammatory

Anti-inflammatory is one of the most pronounced properties of CBD, and most of the terpenes studied, including pinene, humulene, caryophyllene, myrcene, terpinolene, ocimen, borneol, and bisabolol, also show anti-inflammatory effects. It’s only natural to assume that any combination between them and CBD would catalyze this effect.

antioxidant

Both CBD and terpenes have shown promise in various studies of their activity against oxidative stress. After all, one of the main causes of oxidative stress is rampant inflammation, so all of the terpenes mentioned above are also antioxidants to some extent.

In antioxidant studies, the terpenes limonene, humulene, myrcene and terpinolene are outstanding.

Since neurodegenerative diseases such as Alzheimer’s are also caused by inflammation and oxidative stress in the brain, some terpenes, such as linalool, have shown neuroprotective potential in particular – another area that scientists rely on CBD.

Anti-fear

The anxiolytic properties of CBD are another important point on his business card, but here, too, this effect is also evident with terpenes, namely limonene and linalool.

Dr. Russo on CBD and terpene combinations

Much of our knowledge and / or speculation about the peculiarities of the entourage effect comes from Dr. Ethan Russo, one of the founding fathers of cannabis research, and his iconic overview paper. Taming THC.

Russo suggests that the “psychopharmacological effects of limonene, pinene and linalool could supposedly prolong” [CBD’s] Advantages in mood in such [Alzherimer’s] Patients. “

In addition, he believes that “terpenoids with analgesic, anxiolytic or sedative effects can complement this (anti-insomnia) activity, particularly caryophyllene, linalool and myrcene”.

Russo also cites promising studies on CBD’s ability to break the vicious circle of addiction and cites a clinical study that found that a black pepper essential oil significantly reduced nicotine cravings.

While the researchers behind the study attributed these results to the “irritation of the bronchial tree that simulates the act of cigarette smoking”, Russo suggests a pharmacological cause of the effect – the terpenoid profile of black pepper, namely “myrcene from sedation, pinene from increased or in particular Caryophyllene via CB2 Agonism and a newly discovered putative mechanism of action in addiction treatment. “

In particular, he names caryophyllene as a particularly strong factor, as it is a highly selective CB. acts2 Agonist that can simulate the activity of the synthetic agonist JWH144, which was shown to be effective in the fight against cocaine in a rat study.

Of course, many of these hypothetical manifestations of the entourage effect fall into the speculative realm, but there is a huge difference between educated, thoughtful speculation and wishful thinking and / or shots in the dark.