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Cannabis education for the masses

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The burgeoning cannabis market offers thousands of jobs, from budget tenders to extract technicians to pharmacy owners. These roles need to be filled by people who know the science behind the cannabis plant and how it affects the body. Although some U.S. schools have some cannabis-focused programs, it can be difficult to find quality cannabis education.

That’s why entrepreneurs like Emma Chasen are so important to the industry. After graduating from Brown University with a degree in medicinal plant research, Chasen co-founded Eminent Consulting, an agency that offers online cannabis education courses. You can learn the intricacies of cannabis in courses such as “Cannabinoids” and “Cannabis and Body Exploration of the Endocannabinoid Receptor System”. Industry professionals and amateur enthusiasts can use this curriculum to deepen their knowledge of the facility.

“Anyone can take these courses,” noted Chasen. This is because the curriculum is easily accessible to people of different backgrounds. Each course consists of several lessons, tests and a final exam. Finish the exam with a score of 80 percent or higher and you’ll pass the course. With this Proof of Entitlement, you can demonstrate your knowledge to potential employers in the cannabis industry. If you are an employer, you can use the material to train your current team.

“Dispensary owners can incorporate the curriculum into their employee training program,” said Chasen.

In addition to the extensive, detailed lessons and study guides, you can also access virtual chat rooms where you can talk to your colleagues and even to Chasen themselves. Mastering the material is possible because you have someone who can answer your questions when you get stuck.

For Chasen, the benefits of a science-based cannabis education go far beyond improving your career prospects: “Cannabis has the potential to help many people who suffer.”

Cannabis is legal in some form in 34 states, but many patients may feel that they cannot speak to their doctor about cannabis therapy. The education can make patients more comfortable understanding their own cannabis medications. For example, knowing about cannabinoids and terpenes can help determine which strains or cannabinoids to treat to treat conditions such as chronic pain or anxiety.

The reluctance of the medical community to join cannabis therapy led to Chasen’s trip with Eminent Consulting. While working with an oncology research team, she saw the researchers laugh at the idea of ​​a cannabis study for cancer patients. Realizing that traditional medicine and research wasn’t where she wanted to spend her time, Chasen quickly entered the cannabis industry as a budget tender.

Now Chasen focuses on Eminent Consulting. You can Check the course catalog online if you are interested in enrolling for a class.

Two States Stick the Landing on Cannabis Legalization: Week in Review

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The SAFE Banking Act is back in Congress, and political momentum is swinging in favor of the cannabis industry’s need to normalize its relations with financial institutions.

Safe Harbor Services’ credit union banked $3 billion in cannabis funds last year, part of a vast but fairly under-the-radar ecosystem where businesses are building rapport with smaller independent financial institutions like regional credit unions. There’s a lot to know to make sure that it’s a productive relationship, and federal reform is only one piece of the puzzle. Much of the work falls to the cannabis business, of course.

Here, we spoke with Safe Harbor Services Vice President Amanda McComb about some of the recent trends and changes that she’s seen in banking the cannabis industry.

Eric Sandy: Could provide a bit of a biographical sketch of Safe Harbor, as of early 2021, and the scope of how the business is interacting with cannabis businesses?

Amanda McComb: We started our cannabis banking program in 2015 and have since gone through 15 state and federal exams. So, it’s been a long haul, most specifically just for the cannabis program to make sure that we were staying in compliance and doing it in a safe and sound way. We also started a national [cannabis] program back in 2017. A lot of our clients that we bank here in Colorado were going out of state, and we wanted to follow them out of state because it’s really important for us to see all of their business—to be able to stand in front of the money and say that they’re legitimate businesses and that they’re operating within compliance, within their regulations. So, we started following them out of state and realized really quickly that we couldn’t be the only financial institution to bank the nation as a whole. We started working with other financial institutions to give them a compliance program that had obviously gone through multiple exams and had feedback from our regulators that we’d really tried to fine-tune.

So, we have about seven or eight different financial institutions that we work with throughout the nation. Here in 2021 we’re actually consolidating all of our cannabis-related initiatives into a new company called Safe Harbor financial. It’s combining those relationships with financial institutions and our relationships with cannabis clients and putting it all together in one company and then expanding the services that we offer to the industry. We’re working on lending and other initiatives to support the industry and bring them more normalized banking, because, as I’m sure you know, they just haven’t had a lot of normalized banking or lending or investments. The CEO of [Safe Harbor’s] credit union is essentially stepping down from the credit union and running this new company, focusing all of her efforts on all things cannabis-related and then moving into other ventures like virtual currencies and things that might be of use to the cannabis space at some point.

ES: What are some of the common misconceptions that Safe Harbor has run into? Are there certain banking-related questions that cannabis businesses are bringing to you that they haven’t fully grasped yet?

AM: As the cannabis industry gets more normalized and more states pass regulations surrounding cannabis, there’s the misconception that it could just be a regular bank account or a regular business account. Unfortunately, like we saw with the 15 state and federal exams, it just can’t be a normal business account at this point. Even if the SAFE Banking Act were to pass, it’s still so close to that black market history. There is still a pull because it’s so expensive to be in the cannabis space—especially places like California where they had cannabis before they really had regulations.

Trying walk that back and put regulations on these companies that have been selling for some time is expensive and labor-intensive for the companies. When they go to get a bank account, we’re very intrusive and we always consider ourselves the nosiest bankers around because we have had to ensure that they are legitimate businesses. There’s just so much compliance that has to happen on our end in order to protect the financial system as a whole, that it is more expensive. We can’t offer the variety of products that we could offer, quote unquote, normal businesses or normalized businesses.

ES: On the due diligence side of the conversation, what are some ways that these cannabis businesses might help prepare to work with a financial institution?

AM: We collect a lot of the same data that they would provide to get their license with their state. If they’re very organized and keep all of that together, it’s a good place for us to start. Having sophisticated or at least up-to-par bookkeeping and accounting [helps], so that we can look through their financials—specifically if they haven’t been banked. That’s one of the hardest parts: trying to prove that the funds that they’ve earned when they were unbanked are legitimately earned in their state. Having solid records so that we have something to rely upon when our regulators come in and ask, “How do we know that these are legitimate funds?” is important.

ES: Going back to those 15 state and federal exams, could you elaborate on what that looks like? And do those exams differ from state to state in any substantial way?

AM: Typically, a financial institution will be on a 12-month to 18-month exam schedule, and when we started our program, it was a lot of education for us and the regulators. It was a lot of discussion of what cannabis banking looks like. Not a lot of our regulators had experience in financial institutions that banked cannabis. The exams were very collaborative in us trying to figure out the safest way to bank this and to not make it impossible for the cannabis industry to bank—but also to ensure safety and soundness for our institution and for the financial system as a whole. It was a lot of back and forth, collaborative efforts that actually prompted us to develop our own compliance software in-house that we, from all of the feedback that we were getting from regulators, were able to streamline and male as easy as possible.

ES: One of the questions we’ve gotten pretty frequently over the years is from cannabis business owners trying to find credit unions who are willing to work with them in the cannabis space at all. So, how can credit unions signal to the cannabis industry that they’re open to this business, and how do these relationships start?

AM: At this point, what I’ve seen is it’s a lot of word of mouth. A lot of financial institutions are hesitant to come out publicly and say that they are banking cannabis because it does bring additional scrutiny. It can also be a reputation risk with our peers and with vendors that we work with. In my world, cannabis is more normalized just because I’ve had a front seat to it, but in talking to other financial institutions, they tend to be a lot more conservative with their risk. A lot of times it’s word of mouth between clients, which can be difficult because a lot of them are under NDAs with financial institutions. Some of it is just seeing the checks, if you’re getting checks from [financial] institutions. That’s not always super reliable, because the institution might not know that they’re banking cannabis necessarily.

There are some things to keep in mind, though, as the cannabis industry is looking for bank accounts and really investigating the financial stability of the institutions. Most of that is publicly available information. A lot of institutions, especially smaller institutions, think that cannabis will be the solution to their financial problems or the recessionary possibility. Sometimes, those are the ones that go out of business quickly because they just don’t have the capacity to handle all the compliance that’s necessary. So, it’s on the cannabis industry to do a little research on the financial institutions that they start to work with.

ES: Given that, what were some of the prime movers for Safe Harbor, years ago, to be willing to step into this space?

AM: The biggest one was community safety. When we started talking to the industry, a lot of Colorado was unbanked. We were hearing stories about these entrepreneurs who hadn’t been in a cash-intensive space. Working in a financial institution, we understand the risks of cash. We go through robbery trainings. A lot of my coworkers have been through robberies. So, we understand that level of risk. And when you’re talking to the industry and they’re going to ATMs late at night, shoving cash in ATMs and doing payroll in cash, the risk that we saw was very intimidating. We wanted to help in the sense of providing a place to put their cash—and they wouldn’t have to manage it. The other thing is, credit unions were really founded to bank the underbanked and serve the underserved. There didn’t really seem to be a more modern version of that than the cannabis industry, especially as they were being shut out of financial institutions and having to operate in cash. Those two are large driving forces for why we got into the industry.

ES: From your perspective, what sort of trends are you watching out of Washington—or what sort of aspects of federal reform, maybe in the SAFE Banking Act, are you looking for that would be legitimately helpful for the industry?

AM: The SAFE Banking Act will be helpful to institutions that are still willing to take on something that would be high-risk. FinCEN [The Financial Crimes Enforcement Network] is our ultimate regulator. I’m hoping that if something federally passes like the SAFE Banking Act, then FinCEN can respond and give us more detailed guidance on what they’re specifically looking for in cannabis banking. They do have a guidance for us. It’s from 2014, so it’s a little outdated, especially with how fast the industry is moving at this point. It allows for institutions to come in and bank [the industry] without being prosecuted, just because it’s cannabis. Right now, with anti-money-laundering rules and BSA, what we’re doing could be determined as money laundering since it’s federally illicit funds.

So, a lot of working with our regulators was really being able to stand in front of that money and say, “No, this was legitimately earned in my state, and we are doing the best effort or a good faith effort to ensure compliance and ensure that it’s all legitimate.” That side probably won’t go away. While it does open the door for institutions to get in, they still are going to have to have the compliance resources to still stand up and say, “This isn’t from the black market. It is legitimate money,” even if the SAFE Banking Act passes.

It’s an interesting discussion to have with financial institutions, because most of us are federally insured and it is a complicated conversation to have. It’s not just the cannabis space where we’re looking for money laundering and things like that, but it does have those close ties to the black market. We’re just a few years outside of it, you know?

ES: California and Colorado have come up, but, just in terms of geographic scope, are there any major differences in how banking regulations are playing out in newer cannabis markets, like an Ohio or a Florida?

AM: With a lot of the newer states coming up, it’s an interesting change in banking because a lot of our initial due diligence changes. We aren’t trying to show legitimacy to their funds, because a lot of times it’s just investment funds or owner contributions to get these licenses off the ground. With the newer markets, the initial due diligence is typically a bit easier because they’re going through the licensing process, so they have all the documents handy. There isn’t a lot for us to go in and validate. A lot of the states have learned from some of the mistakes that California and Colorado and Oregon and Washington and all of us made initially getting into it.

A lot of the newer states are a little bit easier. It’s funny, though, because a lot of [the new cannabis businesses] are the ones that think that it should be normalized banking because they just haven’t had that history of not having banking. What’s also interesting is new states like Florida and Michigan and others, they have very sophisticated backing. There’s Fortune 500 and there’s a lot of this sophistication in their management and control. It’s different from some of the mom-and-pop shops that we saw initially, and it’s very fascinating to see where the industry is going as far as being publicly traded in Canada and all of the international aspects that are coming into the cannabis industry.

 

Stockton University’s Cannabis and Hemp Research Institute to Offer Lab Testing, Education

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The SAFE Banking Act is back in Congress, and political momentum is swinging in favor of the cannabis industry’s need to normalize its relations with financial institutions.

Safe Harbor Services’ credit union banked $3 billion in cannabis funds last year, part of a vast but fairly under-the-radar ecosystem where businesses are building rapport with smaller independent financial institutions like regional credit unions. There’s a lot to know to make sure that it’s a productive relationship, and federal reform is only one piece of the puzzle. Much of the work falls to the cannabis business, of course.

Here, we spoke with Safe Harbor Services Vice President Amanda McComb about some of the recent trends and changes that she’s seen in banking the cannabis industry.

Eric Sandy: Could provide a bit of a biographical sketch of Safe Harbor, as of early 2021, and the scope of how the business is interacting with cannabis businesses?

Amanda McComb: We started our cannabis banking program in 2015 and have since gone through 15 state and federal exams. So, it’s been a long haul, most specifically just for the cannabis program to make sure that we were staying in compliance and doing it in a safe and sound way. We also started a national [cannabis] program back in 2017. A lot of our clients that we bank here in Colorado were going out of state, and we wanted to follow them out of state because it’s really important for us to see all of their business—to be able to stand in front of the money and say that they’re legitimate businesses and that they’re operating within compliance, within their regulations. So, we started following them out of state and realized really quickly that we couldn’t be the only financial institution to bank the nation as a whole. We started working with other financial institutions to give them a compliance program that had obviously gone through multiple exams and had feedback from our regulators that we’d really tried to fine-tune.

So, we have about seven or eight different financial institutions that we work with throughout the nation. Here in 2021 we’re actually consolidating all of our cannabis-related initiatives into a new company called Safe Harbor financial. It’s combining those relationships with financial institutions and our relationships with cannabis clients and putting it all together in one company and then expanding the services that we offer to the industry. We’re working on lending and other initiatives to support the industry and bring them more normalized banking, because, as I’m sure you know, they just haven’t had a lot of normalized banking or lending or investments. The CEO of [Safe Harbor’s] credit union is essentially stepping down from the credit union and running this new company, focusing all of her efforts on all things cannabis-related and then moving into other ventures like virtual currencies and things that might be of use to the cannabis space at some point.

ES: What are some of the common misconceptions that Safe Harbor has run into? Are there certain banking-related questions that cannabis businesses are bringing to you that they haven’t fully grasped yet?

AM: As the cannabis industry gets more normalized and more states pass regulations surrounding cannabis, there’s the misconception that it could just be a regular bank account or a regular business account. Unfortunately, like we saw with the 15 state and federal exams, it just can’t be a normal business account at this point. Even if the SAFE Banking Act were to pass, it’s still so close to that black market history. There is still a pull because it’s so expensive to be in the cannabis space—especially places like California where they had cannabis before they really had regulations.

Trying walk that back and put regulations on these companies that have been selling for some time is expensive and labor-intensive for the companies. When they go to get a bank account, we’re very intrusive and we always consider ourselves the nosiest bankers around because we have had to ensure that they are legitimate businesses. There’s just so much compliance that has to happen on our end in order to protect the financial system as a whole, that it is more expensive. We can’t offer the variety of products that we could offer, quote unquote, normal businesses or normalized businesses.

ES: On the due diligence side of the conversation, what are some ways that these cannabis businesses might help prepare to work with a financial institution?

AM: We collect a lot of the same data that they would provide to get their license with their state. If they’re very organized and keep all of that together, it’s a good place for us to start. Having sophisticated or at least up-to-par bookkeeping and accounting [helps], so that we can look through their financials—specifically if they haven’t been banked. That’s one of the hardest parts: trying to prove that the funds that they’ve earned when they were unbanked are legitimately earned in their state. Having solid records so that we have something to rely upon when our regulators come in and ask, “How do we know that these are legitimate funds?” is important.

ES: Going back to those 15 state and federal exams, could you elaborate on what that looks like? And do those exams differ from state to state in any substantial way?

AM: Typically, a financial institution will be on a 12-month to 18-month exam schedule, and when we started our program, it was a lot of education for us and the regulators. It was a lot of discussion of what cannabis banking looks like. Not a lot of our regulators had experience in financial institutions that banked cannabis. The exams were very collaborative in us trying to figure out the safest way to bank this and to not make it impossible for the cannabis industry to bank—but also to ensure safety and soundness for our institution and for the financial system as a whole. It was a lot of back and forth, collaborative efforts that actually prompted us to develop our own compliance software in-house that we, from all of the feedback that we were getting from regulators, were able to streamline and male as easy as possible.

ES: One of the questions we’ve gotten pretty frequently over the years is from cannabis business owners trying to find credit unions who are willing to work with them in the cannabis space at all. So, how can credit unions signal to the cannabis industry that they’re open to this business, and how do these relationships start?

AM: At this point, what I’ve seen is it’s a lot of word of mouth. A lot of financial institutions are hesitant to come out publicly and say that they are banking cannabis because it does bring additional scrutiny. It can also be a reputation risk with our peers and with vendors that we work with. In my world, cannabis is more normalized just because I’ve had a front seat to it, but in talking to other financial institutions, they tend to be a lot more conservative with their risk. A lot of times it’s word of mouth between clients, which can be difficult because a lot of them are under NDAs with financial institutions. Some of it is just seeing the checks, if you’re getting checks from [financial] institutions. That’s not always super reliable, because the institution might not know that they’re banking cannabis necessarily.

There are some things to keep in mind, though, as the cannabis industry is looking for bank accounts and really investigating the financial stability of the institutions. Most of that is publicly available information. A lot of institutions, especially smaller institutions, think that cannabis will be the solution to their financial problems or the recessionary possibility. Sometimes, those are the ones that go out of business quickly because they just don’t have the capacity to handle all the compliance that’s necessary. So, it’s on the cannabis industry to do a little research on the financial institutions that they start to work with.

ES: Given that, what were some of the prime movers for Safe Harbor, years ago, to be willing to step into this space?

AM: The biggest one was community safety. When we started talking to the industry, a lot of Colorado was unbanked. We were hearing stories about these entrepreneurs who hadn’t been in a cash-intensive space. Working in a financial institution, we understand the risks of cash. We go through robbery trainings. A lot of my coworkers have been through robberies. So, we understand that level of risk. And when you’re talking to the industry and they’re going to ATMs late at night, shoving cash in ATMs and doing payroll in cash, the risk that we saw was very intimidating. We wanted to help in the sense of providing a place to put their cash—and they wouldn’t have to manage it. The other thing is, credit unions were really founded to bank the underbanked and serve the underserved. There didn’t really seem to be a more modern version of that than the cannabis industry, especially as they were being shut out of financial institutions and having to operate in cash. Those two are large driving forces for why we got into the industry.

ES: From your perspective, what sort of trends are you watching out of Washington—or what sort of aspects of federal reform, maybe in the SAFE Banking Act, are you looking for that would be legitimately helpful for the industry?

AM: The SAFE Banking Act will be helpful to institutions that are still willing to take on something that would be high-risk. FinCEN [The Financial Crimes Enforcement Network] is our ultimate regulator. I’m hoping that if something federally passes like the SAFE Banking Act, then FinCEN can respond and give us more detailed guidance on what they’re specifically looking for in cannabis banking. They do have a guidance for us. It’s from 2014, so it’s a little outdated, especially with how fast the industry is moving at this point. It allows for institutions to come in and bank [the industry] without being prosecuted, just because it’s cannabis. Right now, with anti-money-laundering rules and BSA, what we’re doing could be determined as money laundering since it’s federally illicit funds.

So, a lot of working with our regulators was really being able to stand in front of that money and say, “No, this was legitimately earned in my state, and we are doing the best effort or a good faith effort to ensure compliance and ensure that it’s all legitimate.” That side probably won’t go away. While it does open the door for institutions to get in, they still are going to have to have the compliance resources to still stand up and say, “This isn’t from the black market. It is legitimate money,” even if the SAFE Banking Act passes.

It’s an interesting discussion to have with financial institutions, because most of us are federally insured and it is a complicated conversation to have. It’s not just the cannabis space where we’re looking for money laundering and things like that, but it does have those close ties to the black market. We’re just a few years outside of it, you know?

ES: California and Colorado have come up, but, just in terms of geographic scope, are there any major differences in how banking regulations are playing out in newer cannabis markets, like an Ohio or a Florida?

AM: With a lot of the newer states coming up, it’s an interesting change in banking because a lot of our initial due diligence changes. We aren’t trying to show legitimacy to their funds, because a lot of times it’s just investment funds or owner contributions to get these licenses off the ground. With the newer markets, the initial due diligence is typically a bit easier because they’re going through the licensing process, so they have all the documents handy. There isn’t a lot for us to go in and validate. A lot of the states have learned from some of the mistakes that California and Colorado and Oregon and Washington and all of us made initially getting into it.

A lot of the newer states are a little bit easier. It’s funny, though, because a lot of [the new cannabis businesses] are the ones that think that it should be normalized banking because they just haven’t had that history of not having banking. What’s also interesting is new states like Florida and Michigan and others, they have very sophisticated backing. There’s Fortune 500 and there’s a lot of this sophistication in their management and control. It’s different from some of the mom-and-pop shops that we saw initially, and it’s very fascinating to see where the industry is going as far as being publicly traded in Canada and all of the international aspects that are coming into the cannabis industry.

 

Jushi Holdings Announces Update on Expansion Project at Pennsylvania Grower-Processor Facility

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<![CDATA[

BOCA RATON, Fla., April 1, 2021 (GLOBE NEWSWIRE) – PRESS RELEASE – Jushi Holdings Inc. (CSE: JUSH) (OTCMKTS: JUSHF), a vertically integrated, multistate cannabis operator, announced the first phase of its previously announced expansion project at its Pennsylvania cultivation facility located in Scranton, Pennsylvania. The company’s wholly owned subsidiary, Pennsylvania Medical Solutions, LLC (PAMS), has entered into an amendment of its existing lease with Innovative Industrial Properties, Inc. (IIP), making available an additional $30 million in funding for the first phase of property development of the facility. The funding will be used to complete the buildout of the existing 89,000-square-foot building and an approximately 40,000-square-foot expansion of the facility for a total of 130,000 square feet. The first phase of the expansion, with an estimated budget of approximately $40 million, is expected to add approximately 26,000 square feet of canopy for a total of 45,000 square feet and is expected to be completed by the fourth quarter of 2021, subject to regulatory approvals.

PAMS is also in the design stage for the second phase of the planned expansion, which would add approximately 60,000 square feet to the building and increase total canopy to approximately 110,000 square feet. Jushi expects PAMS to begin the second phase of the expansion in the third quarter of 2021, with a revised preliminary budget between $25 million – $30 million and an estimated completion date of the second quarter of 2022, subject to regulatory approvals. The estimated combined cost of the two phases of expansion has increased to $65 million – $70 million, from its prior preliminary total of $50 million, as Jushi has increased the size and scope of the proposed expansion. The facility is expected to be approximately 190,000 square feet after both phases of the buildout have been completed. In addition to these two contemplated phases of buildout, PAMS continues to assess and develop further expansion opportunities at the facility to meet the needs of patients and wholesale market demand, now and in the future.   

“We are excited to officially commence the first phase of expansion at our subsidiary’s Pennsylvania grower-processor facility,” said Jim Cacioppo, CEO, chairman and founder of Jushi. “We continue to see strong growth in the Pennsylvania medical market and this expansion will allow PAMS to significantly increase its canopy space and production capacity to solidify availability of its award-winning, high-quality branded suite of products to both our 11 BEYOND / HELLO medical marijuana dispensaries as well as into the wholesale market across an approximately 100 medical marijuana dispensaries operating in the commonwealth. This expansion is also expected to create over 100 new jobs and generate additional tax dollars in the Scranton region. We appreciate the strong support of IIP as a long-term real estate capital partner, teaming with us to provide strategic real estate capital at an opportune time for our continued expansion in Pennsylvania.”

The facility produces high-quality, indoor grown flower, extracts and concentrates, and is strategically located within minutes of Interstate 81, Interstate 84 and the Pennsylvania Turnpike, enabling efficient distribution to the 111 dispensaries currently operating across the commonwealth, including Jushi’s 11 operational BEYOND / HELLO dispensaries.

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New Mexico Poised to Legalize Adult Use Cannabis

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On March 31, 2021, legislators in New Mexico reached an agreement on SB2/HB2, a bill that legalizes adult use cannabis. The bill now heads to Governor Michelle Lujan Grisham’s desk, where she is expected to sign it.

Following the conclusion of the regular legislative session, the New Mexico House and Senate reconvened for a special session to finalize the cannabis legalization deal at the governor’s request.

New Mexico Governor Michelle Lujan Grisham

The Cannabis Regulation Act (SB2/HB2) decriminalizes possession for adults over 21 and sets up a regulatory framework for licensing, commercial production and sales by April 1, 2022 (a year from now).

Governor Grisham is expected to sign the bill, and when she does, will become the 17th state to legalize adult use cannabis, following New York that legalized it yesterday.

According to AP News, the New Mexico bill gives the governor’s office a lot of power in licensing the industry and “monitoring supplies.” That includes the power to appoint a superintendent of the Regulation and Licensing Department, which is in charge of regulatory oversight in the new market.

The Cannabis Regulation Act sets up an excise tax on adult use sales of 12% that rises to 18% over time, in addition to the “current gross receipts on sales that range from 5% to 9%.” The bill also removes taxes on medical sales.

New York legalizes adult cannabis

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Cannabis use and possession are officially legal in New York after Governor Andrew Cuomo (D) signed the state legalization law on Wednesday.

New York has legalized cannabis, making it the fourth state to approve reforms under the legislative process. The measure was passed politically in both chambers and signed by Governor Andrew Cuomo (D) on Wednesday morning.

Some aspects of the reforms took effect immediately, including adult ownership. Extinction of crimes now legal under the new regime and the creation of the Office of Cannabis Management. The law allows adults to grow their own plants – three mature and three immature – but that provision won’t take effect until sales begin, which is expected in about 18 months.

MP Richard Gottfried (D), a long-time advocate of reforms in the state, described the passage of the law as a “milestone on the way to a more rational drug policy in New York.”

“Now the marijuana regulation and tax law is going to take a big step forward. It will create economic opportunity, including community reinvestment and social justice programs. As a result of the passing of the MRTA, New York is expected to generate approximately $ 350 million in annual new tax revenue and create between 30,000 and 60,000 jobs. “- Gottfried in a statement

The final bill will allocate 40% of tax revenue for reinvestment in communities hardest hit by cannabis law enforcement, 40% for public education, and 20% for drug treatment, prevention and education. The bill provides a 9% state and 4% local tax on recreational cannabis sales, along with taxes based on THC levels – 0.5 cents per milligram for flowers, 0.8 cents per milligram for concentrates and 0.3 cents per milligram for groceries.

The bill also provides social use Facilities.

Half of the licenses are reserved for social justice Applicants including minorities, women, disabled veterans, and those hardest hit by the disproportionate enforcement of cannabis laws. The action also includes social justice programs, including loans, grants, and incubators for smallholders and individuals from overly affected communities wishing to enter the area.

Troy Smit, deputy director of the Empire State NORML, stated that New York was once the “capital of the world for the arrest of cannabis”.

“This may not be the perfect law,” said Smit in a statement, “but today cannabis users can hold their heads up and smell the flowers.”

Original article: https://www.ganjapreneur.com/new-york-legalizes-cannabis-for-adult-use/

Agrify Announces Record Fiscal 2020 Annual Results

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<![CDATA[

BURLINGTON, Mass., April 1, 2021 (GLOBE NEWSWIRE) – PRESS RELEASE – Agrify Corporation (NasdaqCM:AGFY), a developer of highly advanced and proprietary precision hardware and software grow solutions for the indoor agriculture marketplace, reported financial results for its fourth quarter and year ended Dec. 31, 2020.

2020 Highlights

  • Total revenue increased 195.7% to $12.1 million
  • Began realizing higher-margin software as a service (SaaS) revenue as customers commenced operations utilizing the Agrify Insights™ software solution
  • Completed the development of and started taking pre-orders for the newest generation of Agrify’s Vertical Farming Units (VFUs), which offer improved lighting efficiency, greater light output, and a wider range of environmental control and reproduction, furthering the company’s mission to deliver consistency to the industry
  • Acquired TriGrow Systems, Inc., which was the exclusive distributor of Agrify’s indoor grow solutions, giving Agrify full control of sales, product marketing and customer relationships
  • Acquired Harbor Mountain Holdings, LLC (HMH), an agile manufacturer and installer of many of Agrify’s products, giving Agrify direct access to HMH’s research and development, testing and flexible manufacturing plant located just outside Atlanta, along with key engineering talent and equipment

Management Commentary

“We are pleased with the growth we achieved in 2020,” Agrify CEO Raymond Chang said. “On many fronts, last year was a pivotal turning point for Agrify. We successfully executed several strategic initiatives such as accelerating market adoption, focusing on customer success and building our team, and all of these efforts provide us with the opportunity to deliver sustained revenue growth and profitability. Additionally, we advanced our technology and software platforms and expanded our customer offerings, which enabled us to significantly increase our order backlog and sales pipeline.

“As we look towards 2021, we note that we have already made progress on a number of key initiatives, including launching our Agrify Total Turn-Key (TTK) Solution, the industry’s first total turn-key solution. Through this program, we aim to help our customers by providing them with access to capital, leading-edge technology and the industry expertise they need to consistently cultivate high-quality products. This should enable our customers to get to market faster, with consistent, high-quality products that are grown in a controlled and replicable environment, all at a lower cost of production. We passionately believe this new partnership opportunity will be highly desirable to customers in this rapidly evolving industry, which is experiencing a favorable shift in the regulatory landscape. We are seeing many positive signs of potential cannabis reform in new markets, and as demand continues to grow, we believe there will be an increasing number of potential customers looking to partner with us due to our premium solutions. The Agrify TKK Solution especially enables us to partner with customers early and help establish their cultivation systems to position them as well as ourselves for long-term growth, together.”

Chang concluded and said, “I would like to thank each member of the Agrify team for their hard work and dedication. All of their efforts have set Agrify up for a great year in 2021. With the right team and technology, combined with a strong balance sheet and significant customer pipeline, we are well-positioned in our drive to capture additional market share and to enhance long-term shareholder value.”

Key 2021 Developments, To Date

  • Completed initial public offering and listing on the NASDAQ under the symbol AGFY
  • Raised approximately $147 million in total net proceeds from our initial public offering and a subsequent secondary offering, including two over-allotments
  • Integrated Metrc with Agrify Insights™ software platform, adding regulatory tracking and compliance functionality in several states
  • Established a partnership with Confident Cannabis, a cannabis business-to-business (B2B) wholesale platform powered by verified lab data, to integrate Confident Cannabis’ lab data with the Agrify Insights™ software platform, enabling cultivators to enhance certain processes to optimize the chemical composition of plants
  • Expanded relationship with Hannah Industries by entering into a binding letter of intent for an additional $3 million contract encompassing facility build-out and installation of 179 VFUs
  • Appointed industry veteran, Stuart Wilcox, former Curaleaf chief operating officer, to the Agrify Board of Directors
  • Entered into a binding letter of intent to establish a partnership with Atlantis Hydroponics to build-out a research and development facility focused on the hemp market
  • Introduced an enhanced comprehensive customer offering with the launch of the Agrify TKK Solution and currently engaged in advanced discussions on multiple potential customer opportunities

To view the full financial summary, click here.

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Digital Marketing Tips to Help Grow Your Cannabis Business

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The cannabis industry is quickly growing with the chance of sales tripling to $30 billion by 2023. With many rules and regulations that business owners must follow, marketing your cannabis business can be a challenge. While many may not know where to start with marketing, there are organic and simple tactics that owners can implement that can help drive more traffic to your website, resulting in more leads and sales.

Digital marketing is the most effective way to improve your brand’s online presence, reach your target audiences, rank higher on Google searches and ultimately drive more sales. Today, 81% of people turn to the internet before making a purchasing decision, but determining what digital marketing efforts are most valuable can be a daunting task for business owners. When looking to implement digital marketing strategies, businesses should leverage the 80/20 rule—focusing efforts on the 20% of the digital marketing tactics that yield 80% of the most impactful results. With this in mind, some of the key digital marketing tactics to implement today include:

Keep up with Reputation Management

This dispensary ad appeared on Variety.com

Having positive reviews for your company is key to having customers come back, and for new customers to try your business out. With 72% of customers not making a buying decision until they’ve read reviews, companies should prioritize soliciting for reviews from customers and stay up to date on the reviews that are coming in. Businesses should respond to all reviews, whether good or bad, as this shows to customers that the brand cares and values the customers opinion and feedback and wants to continue creating a positive experience for everyone. Reviews should be shown prominently on the business’s website for customers to clearly read and can also be used in emails or social media posts.

Make Search Engine Optimization (SEO) Top of Mind

Focusing on developing a solid SEO strategy ensures that customers can find your company on Google when they are searching. In оrdеr to rank well in search engine results, websites need search engine optimization (SEO), which is a powerful tool and a must if your company wants to be found online by customers. With Google processing 12.18 billion search queries in July 2020 alone and 93% of all online experiences beginning with a search engine, making sure your business can be clearly found and seen online is imperative for your cannabis business’ success. Keeping your website and basic information—such as hours, contact information and prices—up to date will keep your SEO high. 

Incorporate Customer Relationship Management (CRM)

PlugPlay, a California cannabis brand, stays relevant with creative posts like these.

Gathering customer emails is KEY and your business should have a solid plan on how to capture them, whether that’s an incentive for providing an email when they enter the site or one at checkout in the retail shop. Businesses should have the customer’s name, phone and email as a baseline to use to email or text blast out the latest promotions. From there, companies can also create a loyalty program for customers in order to give them an incentive to keep purchasing from your business. By creating targeted and personal messaging to customers with the help of CRM tools, loyalty is created to the brand, which can increase purchasing power and the amount spent.

Embrace Social Media

Social media is a part of almost everyone’s life and it’s the perfect opportunity to give customers an inside view into your company, the products you sell and any promotions or specials going on. Utilizing Facebook, Instagram and Twitter is essential for directly reaching your customer base with visually appealing and timely content. Social media is an opportunity to get personal with your brand and build relationships with your customers for them to see what kind of brand you are. Social pages should remain up to date and should be keeping up with the comments that followers are saying.

As more dispensaries and cannabis businesses pop up across the country, marketing your business may seem like a challenge for business owners, but simple and useful digital marketing tools can be incorporated into the business plan to create more quality leads and sales. Ensuring you have a strong digital presence for customers to find you and learn about your business online is the key to success.

The State of Cannabis Banking at a Pivotal Moment in the Industry: Q&A with Safe Harbor Services’ Amanda McComb

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The SAFE Banking Act is back in Congress, and political momentum is swinging in favor of the cannabis industry’s need to normalize its relations with financial institutions.

Safe Harbor Services’ credit union banked $3 billion in cannabis funds last year, part of a vast but fairly under-the-radar ecosystem where businesses are building rapport with smaller independent financial institutions like regional credit unions. There’s a lot to know to make sure that it’s a productive relationship, and federal reform is only one piece of the puzzle. Much of the work falls to the cannabis business, of course.

Here, we spoke with Safe Harbor Services Vice President Amanda McComb about some of the recent trends and changes that she’s seen in banking the cannabis industry.

Eric Sandy: Could provide a bit of a biographical sketch of Safe Harbor, as of early 2021, and the scope of how the business is interacting with cannabis businesses?

Amanda McComb: We started our cannabis banking program in 2015 and have since gone through 15 state and federal exams. So, it’s been a long haul, most specifically just for the cannabis program to make sure that we were staying in compliance and doing it in a safe and sound way. We also started a national [cannabis] program back in 2017. A lot of our clients that we bank here in Colorado were going out of state, and we wanted to follow them out of state because it’s really important for us to see all of their business—to be able to stand in front of the money and say that they’re legitimate businesses and that they’re operating within compliance, within their regulations. So, we started following them out of state and realized really quickly that we couldn’t be the only financial institution to bank the nation as a whole. We started working with other financial institutions to give them a compliance program that had obviously gone through multiple exams and had feedback from our regulators that we’d really tried to fine-tune.

So, we have about seven or eight different financial institutions that we work with throughout the nation. Here in 2021 we’re actually consolidating all of our cannabis-related initiatives into a new company called Safe Harbor financial. It’s combining those relationships with financial institutions and our relationships with cannabis clients and putting it all together in one company and then expanding the services that we offer to the industry. We’re working on lending and other initiatives to support the industry and bring them more normalized banking, because, as I’m sure you know, they just haven’t had a lot of normalized banking or lending or investments. The CEO of [Safe Harbor’s] credit union is essentially stepping down from the credit union and running this new company, focusing all of her efforts on all things cannabis-related and then moving into other ventures like virtual currencies and things that might be of use to the cannabis space at some point.

ES: What are some of the common misconceptions that Safe Harbor has run into? Are there certain banking-related questions that cannabis businesses are bringing to you that they haven’t fully grasped yet?

AM: As the cannabis industry gets more normalized and more states pass regulations surrounding cannabis, there’s the misconception that it could just be a regular bank account or a regular business account. Unfortunately, like we saw with the 15 state and federal exams, it just can’t be a normal business account at this point. Even if the SAFE Banking Act were to pass, it’s still so close to that black market history. There is still a pull because it’s so expensive to be in the cannabis space—especially places like California where they had cannabis before they really had regulations.

Trying walk that back and put regulations on these companies that have been selling for some time is expensive and labor-intensive for the companies. When they go to get a bank account, we’re very intrusive and we always consider ourselves the nosiest bankers around because we have had to ensure that they are legitimate businesses. There’s just so much compliance that has to happen on our end in order to protect the financial system as a whole, that it is more expensive. We can’t offer the variety of products that we could offer, quote unquote, normal businesses or normalized businesses.

ES: On the due diligence side of the conversation, what are some ways that these cannabis businesses might help prepare to work with a financial institution?

AM: We collect a lot of the same data that they would provide to get their license with their state. If they’re very organized and keep all of that together, it’s a good place for us to start. Having sophisticated or at least up-to-par bookkeeping and accounting [helps], so that we can look through their financials—specifically if they haven’t been banked. That’s one of the hardest parts: trying to prove that the funds that they’ve earned when they were unbanked are legitimately earned in their state. Having solid records so that we have something to rely upon when our regulators come in and ask, “How do we know that these are legitimate funds?” is important.

ES: Going back to those 15 state and federal exams, could you elaborate on what that looks like? And do those exams differ from state to state in any substantial way?

AM: Typically, a financial institution will be on a 12-month to 18-month exam schedule, and when we started our program, it was a lot of education for us and the regulators. It was a lot of discussion of what cannabis banking looks like. Not a lot of our regulators had experience in financial institutions that banked cannabis. The exams were very collaborative in us trying to figure out the safest way to bank this and to not make it impossible for the cannabis industry to bank—but also to ensure safety and soundness for our institution and for the financial system as a whole. It was a lot of back and forth, collaborative efforts that actually prompted us to develop our own compliance software in-house that we, from all of the feedback that we were getting from regulators, were able to streamline and male as easy as possible.

ES: One of the questions we’ve gotten pretty frequently over the years is from cannabis business owners trying to find credit unions who are willing to work with them in the cannabis space at all. So, how can credit unions signal to the cannabis industry that they’re open to this business, and how do these relationships start?

AM: At this point, what I’ve seen is it’s a lot of word of mouth. A lot of financial institutions are hesitant to come out publicly and say that they are banking cannabis because it does bring additional scrutiny. It can also be a reputation risk with our peers and with vendors that we work with. In my world, cannabis is more normalized just because I’ve had a front seat to it, but in talking to other financial institutions, they tend to be a lot more conservative with their risk. A lot of times it’s word of mouth between clients, which can be difficult because a lot of them are under NDAs with financial institutions. Some of it is just seeing the checks, if you’re getting checks from [financial] institutions. That’s not always super reliable, because the institution might not know that they’re banking cannabis necessarily.

There are some things to keep in mind, though, as the cannabis industry is looking for bank accounts and really investigating the financial stability of the institutions. Most of that is publicly available information. A lot of institutions, especially smaller institutions, think that cannabis will be the solution to their financial problems or the recessionary possibility. Sometimes, those are the ones that go out of business quickly because they just don’t have the capacity to handle all the compliance that’s necessary. So, it’s on the cannabis industry to do a little research on the financial institutions that they start to work with.

ES: Given that, what were some of the prime movers for Safe Harbor, years ago, to be willing to step into this space?

AM: The biggest one was community safety. When we started talking to the industry, a lot of Colorado was unbanked. We were hearing stories about these entrepreneurs who hadn’t been in a cash-intensive space. Working in a financial institution, we understand the risks of cash. We go through robbery trainings. A lot of my coworkers have been through robberies. So, we understand that level of risk. And when you’re talking to the industry and they’re going to ATMs late at night, shoving cash in ATMs and doing payroll in cash, the risk that we saw was very intimidating. We wanted to help in the sense of providing a place to put their cash—and they wouldn’t have to manage it. The other thing is, credit unions were really founded to bank the underbanked and serve the underserved. There didn’t really seem to be a more modern version of that than the cannabis industry, especially as they were being shut out of financial institutions and having to operate in cash. Those two are large driving forces for why we got into the industry.

ES: From your perspective, what sort of trends are you watching out of Washington—or what sort of aspects of federal reform, maybe in the SAFE Banking Act, are you looking for that would be legitimately helpful for the industry?

AM: The SAFE Banking Act will be helpful to institutions that are still willing to take on something that would be high-risk. FinCEN [The Financial Crimes Enforcement Network] is our ultimate regulator. I’m hoping that if something federally passes like the SAFE Banking Act, then FinCEN can respond and give us more detailed guidance on what they’re specifically looking for in cannabis banking. They do have a guidance for us. It’s from 2014, so it’s a little outdated, especially with how fast the industry is moving at this point. It allows for institutions to come in and bank [the industry] without being prosecuted, just because it’s cannabis. Right now, with anti-money-laundering rules and BSA, what we’re doing could be determined as money laundering since it’s federally illicit funds.

So, a lot of working with our regulators was really being able to stand in front of that money and say, “No, this was legitimately earned in my state, and we are doing the best effort or a good faith effort to ensure compliance and ensure that it’s all legitimate.” That side probably won’t go away. While it does open the door for institutions to get in, they still are going to have to have the compliance resources to still stand up and say, “This isn’t from the black market. It is legitimate money,” even if the SAFE Banking Act passes.

It’s an interesting discussion to have with financial institutions, because most of us are federally insured and it is a complicated conversation to have. It’s not just the cannabis space where we’re looking for money laundering and things like that, but it does have those close ties to the black market. We’re just a few years outside of it, you know?

ES: California and Colorado have come up, but, just in terms of geographic scope, are there any major differences in how banking regulations are playing out in newer cannabis markets, like an Ohio or a Florida?

AM: With a lot of the newer states coming up, it’s an interesting change in banking because a lot of our initial due diligence changes. We aren’t trying to show legitimacy to their funds, because a lot of times it’s just investment funds or owner contributions to get these licenses off the ground. With the newer markets, the initial due diligence is typically a bit easier because they’re going through the licensing process, so they have all the documents handy. There isn’t a lot for us to go in and validate. A lot of the states have learned from some of the mistakes that California and Colorado and Oregon and Washington and all of us made initially getting into it.

A lot of the newer states are a little bit easier. It’s funny, though, because a lot of [the new cannabis businesses] are the ones that think that it should be normalized banking because they just haven’t had that history of not having banking. What’s also interesting is new states like Florida and Michigan and others, they have very sophisticated backing. There’s Fortune 500 and there’s a lot of this sophistication in their management and control. It’s different from some of the mom-and-pop shops that we saw initially, and it’s very fascinating to see where the industry is going as far as being publicly traded in Canada and all of the international aspects that are coming into the cannabis industry.

 

New Mexico Legislature Passes Adult-Use Cannabis Bill, Which Now Awaits Gov. Lujan Grisham’s Signature

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This is a developing story. It has been updated to reflect the Senate’s amended passage of House Bill 2 at 8:30 p.m. Mountain Time March 31.

The New Mexico Legislature worked overtime, but adult-use cannabis legalization is now steered toward Democrat Gov. Michelle Lujan Grisham’s desk after the House and Senate voted to pass legislation during a special session March 31.

The lower chamber cleared the three-time amended adult-use bill, 38-32, Wednesday afternoon, while the upper chamber added one more amendment before passing the bill, 22-15, Wednesday night on the Senate floor, where the bill previously stalled during the legislature’s 60-day regular session that concluded March 20, which sparked Lujan Grisham’s call for the special session.

The House reconvened shortly after the Senate’s passage to approve the upper chamber’s amendment to the bill, officially sending it to Lujan Grisham for signing—with her ink, New Mexico will become the 18th state to legalize adult-use cannabis.

One key amendment adopted in special session House Bill 2, which was a continuation of H.B. 12, the Cannabis Regulation Act that the body passed Feb. 26, includes raising the excise tax on cannabis products from 12% to 18% over the course of six years, beginning in 2024, according to chief sponsor Rep. Javier Martinez (D). Under the bill, roughly 4% of the excise tax would be distributed back to the local communities where the cannabis is sold, whether it’s a city or county municipality, Martinez said on the floor Wednesday.

The House Tax Committee approved the amended excise tax portion of the bill during the first day of the special session on March 30.

“As we embark on building a brand-new industry and we get to set the rules of the game for how this industry will play out … this is a good opportunity to actually raise revenue,” Martinez said. “If we’re going to do this, we might as well get the most we can get without overdoing it to the point where we are maybe undercutting our efforts to get rid of the illicit markets. So, that’s the number we settled on—18% excise tax.”

According to Martinez, economic projections indicate that adult-use legalization would create more than 11,000 jobs and generate $28.6 million in tax revenue in the first year of implementing a program, which H.B. 2 aims to activate no later than April 1, 2022.

Another amendment to H.B. 2 directs 100% of revenue distributions to the state’s general fund, Martinez said on floor.  

“We heard from members of both parties; we heard from members of both chambers that earmarking dollars at this stage of the game, when the framework isn’t even legalized, when revenue isn’t even coming in yet, was not a good idea,” he said. “And, so, we’ve conceded that point. We removed all specialty funds that we had created under the legislation. That’s not to say those funds will not come back.”

Martinez said he’s committed to ensuring those funds are established through legislation in the next regular session, particularly a rural equity fund that provides rural communities that would want to join the industry access to capital and business development support mechanisms. 

Meanwhile, several main proposals of the adult-use bill remained intact, such as allowing adults 21 and older to possess no more than 2 ounces of cannabis, 16 grams of cannabis extract or 800 milligrams of edible cannabis. Adults will be allowed to grow up to six immature plants and six matures plants per household for personal use. The bill also creates 10 license types, ranging from the needs of large-scale vertically integrated companies to small-scale microbusinesses.

Additional foundational principles of the bill include protecting and enhancing New Mexico’s medical cannabis program as well as ensuring social justice when it comes to providing reinvestments toward communities disproportionately affected by prohibition, Martinez said.

During the first day of the special session in the upper chamber, the Senate Judiciary Committee added 11 amendments to an accompanying Senate Bill 2, an expungement measure for certain low-level cannabis arrests and convictions. The next day, on Wednesday, S.B. 2 passed full-body votes in the Senate, 23-13, and the House, 41-28.

According to S.B. 2, those serving jail time for cannabis-related offenses would have their cases reviewed by corrections officials within 30 days following the effective date of the Democrat-sponsored bill. In addition, the bill states by April 1, 2022 the New Mexico Department of Public Safety shall review the public records in the state’s criminal history databases and identify all past convictions that are potentially eligible for recall, dismissal and expungement.

The legislature’s passage of the adult-use cannabis and cannabis expungement bills won’t be the end of cannabis regulation in New Mexico; it will only be the beginning, said Sen. Katy Duhigg (D), who sponsored S.B. 2.

“I know that there are going to be a lot of additional improvements in the future going forward,” she said Wednesday night on the Senate floor. “But what we have now in House Bill 2 is a solid framework to be able to make a change in our state that is a long time coming.”

Martinez, who has introduced legalization bills four times to House endorsements without final approval, said the adult-use bill passed on Wednesday has been “written, rewritten and amended.”

Nearly 75% of New Mexicans approve of cannabis legalization with provisions in place to ensure tax revenue is reinvested back into communities, including 94% of Democrats, 93% of Independents and 46% of Republicans, according to the Drug Policy Alliance.

Lujan Grisham has expressed support of adult-use cannabis legalization, saying it is one of the best moves to make in an effort to build a bona fide 21st century economy in New Mexico. She is expected to put pen to paper for H.B. 2 and S.B. 2 on April 1.  

“I am grateful to those legislative leaders and members who have expressed enthusiasm about returning to the people’s work so soon after a challenging 60-day session,” she said in a press release when she called the special session.

“The unique circumstances of the session, with public health safeguards in place, in my view prevented the measures on my call from crossing the finish line,” Lujan Grisham said. “While I applaud the legislature and staff for their incredible perseverance and productivity during the 60-day in the face of these challenges, we must and we will forge ahead and finish the job on these initiatives together for the good of the people and future of our great state.”