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U.S. Trials Champion Sprinter Sha’Carri Richardson Tests Positive for Cannabis

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The Olympic dream for American sprinter Sha’Carri Richardson has been crushed by cannabis.

The 5-foot-1 track and field star rose to fame in 2019 as a freshman at Louisiana State University, where she clocked 10.75 seconds in the 100-meter dash to break the NCAA record.

On June 19, Richardson won the 100 meters during the U.S. Olympic Trials in Eugene, Ore., where the 21-year-old stopped the watch at 10.86 seconds to punch her ticket to the Tokyo Olympics that are scheduled to begin July 23. That’s the exact same time it took to land a top-three podium spot during the 2016 Olympics in Rio de Janeiro. Richardson’s personal best of 10.72 seconds is the fastest time in the world this year.

But Richardson’s Tokyo aspirations were halted July 1, when it became public she tested positive for tetrahydrocannabinol (THC), the main psychoactive component found in cannabis, from a urinary sample collected during the team trials, as first reported by Jamaica Gleaner.

Since Jan. 1, 2021, cannabis has been classified as a “Substance of Abuse” by the World Anti-Doping Agency and currently carries a maximum four-year ban. However, the U.S. Anti-Doping Agency (USADA) said in a statement July 2 that Richardson accepted a one-month suspension—as permitted under the applicable international rules.

“The rules are clear, but this is heartbreaking on many levels,” USADA CEO Travis T. Tygart said. “Hopefully, her acceptance of responsibility and apology will be an important example to us all that we can successfully overcome our regrettable decisions, despite the costly consequences of this one to her.”

According to the USADA, the 2021 World Anti-Doping Code newly classifies THC as a Substance of Abuse because it is frequently used in society outside the context of sport. Should an athlete who tests positive for a Substance of Abuse establish his or her use of the substance occurred out of competition and was unrelated to sports performance, the athlete would receive a three-month sanction. However, if the athlete satisfactorily completes a Substance of Abuse treatment program approved by USADA, the sanction may be further reduced to one month.

NBC Sports Group 

Sprinter Sha’Carri Richardson embraces her grandmother following her victory in the 100-meter dash during the U.S. Olympic Trials for track and field June 19 in Eugene, Ore.

On the Today show July 2, Richardson said she consumed cannabis after learning her biological mother died just before the trials. As shown on NBC television during the trials, she hugged her grandmother in a post-victory embrace following the 100-meter finals.

“My family has kept me grounded. This year has been crazy for me going from just last week losing my biological mother, and I’m still here,” Richardson said during an interview shortly after. “My biological mother passed away, and [I’m] still choosing to pursue my dreams, still coming out here, still making sure to make the family that I do still have on this earth proud.”

While Richardson is disqualified from her U.S. Trials victory, and therefore forfeits her automatic qualification to Tokyo in the 100 meters, her 30-day suspension ends July 27. That opens the door for her to possibly compete on the U.S. women’s relay team races, including the 4×100 relay scheduled for Aug. 5-6.

Beyond the one-month sanction, athlete eligibility for the Tokyo Games is determined by the U.S. Olympic and Paralympic Committee and the USA Track and Field eligibility rules.

“Right now, I’m just putting all of my time and energy into dealing with what I need to do, which is heal myself,” Richardson said during her Today show interview. “So, if I’m allowed to receive that blessing, then I’m grateful for it, but if not, right now I’m going to just focus on myself.”

In a July 1 tweet, Richardson said, “I am human.”

Richardson’s sponsor, Nike, released a public statement July 2 saying it would stand by her: “We appreciate Sha’Carri’s honesty and accountability and will continue to support her through this time.”

The Hawthorne Gardening Company Announces Exclusive Partnership Between Max-Fan and Industry-Leading Fan Manufacturer Ruck Ventilatoren GmbH

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PORT WASHINGTON, New York, July 1, 2021 – PRESS RELEASE – The Hawthorne Gardening Company, a house of brands that provides an array of tools for a multitude of gardening needs to help people live happier, healthier lives through gardening, announced a 5-year exclusive partnership between owned brand Max-Fan and German-based fan manufacturer Ruck Ventilatoren. The agreement is the latest in Hawthorne’s landmark efforts to join forces with leaders in the indoor cultivation industry, and will enhance product availability and innovation for growers of all kinds.

As a pioneer in indoor air filtration products, Max-Fan has worked with Ruck for more than 10 years. Together, the companies have engineered fans and filters designed to help encourage plant growth and help keep indoor facilities compliant with environmental impact regulations. This new exclusive partnership marks a significant milestone in the two brands’ relationship by empowering Hawthorne and Max-Fan to meet the skyrocketing demands of the indoor cultivation industry with high-quality, custom-designed products more quickly and consistently than ever.

“Max-Fan and Ruck are truly better together. Hawthorne is continuously forming elite partnerships to bring the best fans and filters to the North American market, and Ruck is no exception. We’re ready to push the limits of innovation,” said John Feather, manager, Max-Fan and Can-Filters at The Hawthorne Gardening Company. 

 

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North Carolina Senate Committee Passes Medical Cannabis Bill

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North Carolina took a step toward medical cannabis legalization Wednesday when lawmakers advanced legislation through committee to permit the sale of cannabis and cannabis-infused products to patients with “debilitating medical conditions.”

Some of the qualifying conditions written in the bill include cancer, epilepsy, Crohn’s disease, Parkinson’s disease, HIV, AIDS, post-traumatic stress disorder (PTSD) and more. 

The legislation would establish the regulatory framework for the manufacturing, licensing, distribution and cultivation of medical cannabis in the state.

If passed, a Medical Cannabis Production Commission would issue 10 supplier licenses. The legislation would also reduce the maximum number of medical cannabis centers per supplier from eight to four and would require suppliers to pay the state 10% of the gross revenue derived from cannabis and cannabis-infused products, The Associated Press reported.

The legislation was adopted in a voice vote by Senate Judiciary Committee members, according to the AP, as the majority agreed that cannabis should be offered legally to help alleviate symptoms like pain and nausea caused by severe illnesses and diseases.

Republican Sen. Bill Rabon, bill sponsor and cancer survivor, said the bill had moved him because of his personal experience. “At times, it has been difficult for me to talk to some people about that,” Rabon told the committee. “But I will say again that the time has come that this needs to be discussed, and we need to compassionately care for our fellow man in any way that we can.”

In the first hearing on the bill last week, military veterans expressed their support for the measure stating that cannabis helped alleviate PTSD symptoms. Others criticized the bill for being too narrowly drawn, the AP reported.

Chris Suttle, a cannabis legalization activist, told the committee that he used cannabis when he was suffering from a brain tumor to help alleviate symptoms like swelling in his brain, according to WRAL-TV; however, he said he doesn’t believe the bill would have covered his illness at the time because the tumor could not immediately be identified as cancerous.

“You call this the Compassionate Care Act. I call this an insult,” Suttle said. “The number of dispensaries that you are offering is ridiculous for a state that has 100 counties. The extra regulations that you are putting on this are not fair to those that have been hurt the worst by the war on drugs.”

Conservatives argued against the legislation saying it would lead to an increase in recreational use and that the effectiveness of cannabis use for medical illnesses remains uncertain, according to the AP.

Rev. Mark Creech, executive director of the Christian Action League of North Carolina, argued that “smoked marijuana is not medicine.”

Republican Sen. Kathy Harrington said that she would not have supported this bill six months ago; however, her mind has changed once her husband was diagnosed with multiple myeloma and has been going through cancer treatments. “I believe we’ve already had some moments in our lives where this type of medication would have assisted,” she said.

Although the measure cleared its first hurdle, it still has to pass through at least three additional panels before making it to the Senate floor. If passed, it would then head to the House of Representatives for consideration.

Julia Jacobson Discusses Environmental Challenges and Solutions in ‘Beyond the Show’ Podcast

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Adult-use cannabis legislation has yet to be formally introduced this year in the Pennsylvania Legislature, but the state’s medical cannabis program was expanded June 30.

Pennsylvania Governor’s Office | www.governor.pa.gov

Pennsylvania Gov. Tom Wolf signs legislation to expand the state’s medical cannabis program June 30. 

Signed by Democratic Gov. Tom Wolf on Wednesday, House Bill 1024 allows qualified patients to legally possess up to a 90-day supply of cannabis, an increase from the previously allowed 30-day supply. It also permits patients to continue utilizing curbside dispensing services. Both changes were adopted in response to the COVID-19 pandemic, but the new law makes those provisions permanent. 

RELATED: Pennsylvania’s Medical Marijuana Advisory Board Discusses Permanently Adopting Temporary Regulations Related to COVID-19

In addition, H.B. 1024 removes the cap that one caregiver may only support a maximum of five patients and authorizes “synchronous interaction,” or physician-patient remote consultations that occur in real time via audio or video conferencing. The law also expands the qualifying conditions for eligibility to include cancer remission therapy, as well as spinal cord or central nervous system damage with “indication of intractable spasticity and other associated neuropathies,” according to the bill’s text.

According to the governor, the new law acts on the recommendations made by the Pennsylvania Department of Health to revise the Medical Marijuana Act, which was signed into law in April 2016.

“It’s been five years since Pennsylvania legalized medical marijuana, and in that time the Department of Health has examined the program’s successes and challenges and made important recommendations on improving the law,” Wolf said in a statement Wednesday. “This legislation provides important updates to our state’s medical marijuana program to ensure that patients have improved access to medication.”

More than 340,000 Pennsylvanians participate in the state’s medical cannabis program, according to the National Organization for the Reform of Marijuana Laws (NORML).

Pennsylvania’s regional organizer for NORML, Chris Goldstein, told The Associated Press that H.B. 1024, which was first considered in committee May 24, moved quickly and there were no hearings to gather input from patients nor their caregivers.

“The bill actually has a lot of provisions that are industry friendly, and most controversial is to allow remediation of mold in cannabis flowers by extracting it into new products,” Goldstein said. “I think that’s where patient voices could have been heard.”

Under the signed legislation, cannabis producers can remediate contaminants, like mold or yeast, to turn it into products that are not to be inhaled or ingested, such as topicals.

With an adequate supply, there are 125 medical cannabis dispensaries in Pennsylvania with product available as of June 30, according to data from the Pennsylvania Department of Health.

While the final version of the bill passed the House, 165-36, and the Senate, 47-3, in the Republican-controlled Legislature, the upper chamber voted to table Democratic Sen. Sharif Street’s amendment that aimed to allow qualifying patients 21 years and older to grow up to five plants at home for personal use. The amendment failed in a 29-21 vote.

In February, Street and Republican Sen. Dan Laughlin—who voted in favor of the home-grow amendment—teamed up to announce their collaboration on crafting an adult-use bill for this legislative session, but they have yet to formally introduce that bill.

RELATED: Talks About Adult-Use Cannabis Bills Heat Up in Pennsylvania; Introduction Does Not

Most provisions in H.B. 1024 became enacted immediately following the governor’s June 30 signing. However, the legislation gives the Pennsylvania Department of Agriculture secretary 30 days to make public the list of pesticides that growers and processors can use. That list will be updated annually

Gov. Wolf Signs Bill Expanding Medical Cannabis Access in Pennsylvania

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Adult-use cannabis legislation has yet to be formally introduced this year in the Pennsylvania Legislature, but the state’s medical cannabis program was expanded June 30.

Pennsylvania Governor’s Office | www.governor.pa.gov

Pennsylvania Gov. Tom Wolf signs legislation to expand the state’s medical cannabis program June 30. 

Signed by Democratic Gov. Tom Wolf on Wednesday, House Bill 1024 allows qualified patients to legally possess up to a 90-day supply of cannabis, an increase from the previously allowed 30-day supply. It also permits patients to continue utilizing curbside dispensing services. Both changes were adopted in response to the COVID-19 pandemic, but the new law makes those provisions permanent. 

RELATED: Pennsylvania’s Medical Marijuana Advisory Board Discusses Permanently Adopting Temporary Regulations Related to COVID-19

In addition, H.B. 1024 removes the cap that one caregiver may only support a maximum of five patients and authorizes “synchronous interaction,” or physician-patient remote consultations that occur in real time via audio or video conferencing. The law also expands the qualifying conditions for eligibility to include cancer remission therapy, as well as spinal cord or central nervous system damage with “indication of intractable spasticity and other associated neuropathies,” according to the bill’s text.

According to the governor, the new law acts on the recommendations made by the Pennsylvania Department of Health to revise the Medical Marijuana Act, which was signed into law in April 2016.

“It’s been five years since Pennsylvania legalized medical marijuana, and in that time the Department of Health has examined the program’s successes and challenges and made important recommendations on improving the law,” Wolf said in a statement Wednesday. “This legislation provides important updates to our state’s medical marijuana program to ensure that patients have improved access to medication.”

More than 340,000 Pennsylvanians participate in the state’s medical cannabis program, according to the National Organization for the Reform of Marijuana Laws (NORML).

Pennsylvania’s regional organizer for NORML, Chris Goldstein, told The Associated Press that H.B. 1024, which was first considered in committee May 24, moved quickly and there were no hearings to gather input from patients nor their caregivers.

“The bill actually has a lot of provisions that are industry friendly, and most controversial is to allow remediation of mold in cannabis flowers by extracting it into new products,” Goldstein said. “I think that’s where patient voices could have been heard.”

Under the signed legislation, cannabis producers can remediate contaminants, like mold or yeast, to turn it into products that are not to be inhaled or ingested, such as topicals.

With an adequate supply, there are 125 medical cannabis dispensaries in Pennsylvania with product available as of June 30, according to data from the Pennsylvania Department of Health.

While the final version of the bill passed the House, 165-36, and the Senate, 47-3, in the Republican-controlled Legislature, the upper chamber voted to table Democratic Sen. Sharif Street’s amendment that aimed to allow qualifying patients 21 years and older to grow up to five plants at home for personal use. The amendment failed in a 29-21 vote.

In February, Street and Republican Sen. Dan Laughlin—who voted in favor of the home-grow amendment—teamed up to announce their collaboration on crafting an adult-use bill for this legislative session, but they have yet to formally introduce that bill.

RELATED: Talks About Adult-Use Cannabis Bills Heat Up in Pennsylvania; Introduction Does Not

Most provisions in H.B. 1024 became enacted immediately following the governor’s June 30 signing. However, the legislation gives the Pennsylvania Department of Agriculture secretary 30 days to make public the list of pesticides that growers and processors can use. That list will be updated annually

Michigan’s Cannabis Industry Hits $3.2 Billion; Illicit Market Still Booming

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Three years after their product launch and over 15 years since the idea came about, Amy and Dave Nudelman have secured a patent for their tetrahydrocannabinol (THC) and cannabidiol (CBD) infused chewing gum, Joygum.

Amy is the owner of Joygum, and her husband, Dave, works as a consultant for her.

The product is currently sold in about 225 stores in Colorado and is available in two of the largest dispensary chains in the state: The Green Solution and LivWell, Amy says.

© Courtesy of Joygum

Joygum product packaging

Joygum comes in seven flavors, with three sugar-free options and varying CBD and THC ratios. 

Each flavor comes in a 10-piece package or ten servings. Lemon Mint, Watermelon Spearmint, Bubba Gum and Strawberry Kiwi (sugar-free) are infused with 10 mg of THC per serving. Blue Raspberry Lime is infused with 5 mg of THC and 5 mg of CBD per serving. Mango (sugar-free) is infused with 5 mg of THC per serving and Peppermint, also sugar-free, is infused with 10 mg of CBD and 1 mg of THC per serving. 

“The active ingredient is released within the first five minutes of chewing it and lasts about [two hours],” she says. “You can keep chewing it like a normal piece of gum. I’d say the flavor profile lasts about 15 minutes.”

How It Started

Dave has worked in confections, dietary supplements and chewing gum for nearly 25 years, Amy says. In 2006, she joined Dave on a business trip to Antwerp, Belgium, where she thought of creating cannabis-infused chewing gum.

“Every day [on the trip], I took the train somewhere, and this one day I went to Amsterdam, and I brought back some cannabis,” she says. “It was about 1 a.m., and my husband was working in the factory. He was grouchy, and I said, ‘Hey, let’s go smoke something.’”

“I was high at a gum factory,” she adds. “And I said, ‘We should make THC chewing gum.’”

In 2014, Dave split off from the company he was working for and began doing consulting work. Shortly after, the couple teamed up and began to crack down on formulating the product, she says.

“It probably took us about 350 tries and nearly three years to get [the product] running,” she says. “We were actually on the market, and we were still tweaking it–it was really tough to do, and we had a lot of obstacles.” 

When the couple first began to formulate, they lived in Baltimore, Md., where one of the biggest challenges they faced was limited access to resources. 

© Courtesy of Joygum

Joygum

“Formulating out there was a problem,” she says. “We didn’t have access to the concentrate we needed or the testing we needed on the East coast. It was just still so early.….You couldn’t get the product you needed, and the only way to do it was to have access.”

The lack of resources led the couple to temporarily head to Denver, where they could successfully create a product, but it wasn’t perfect. 

“We got the THC in the gum, and honestly, it didn’t work at first,” she says. “When we started, we did not use water-soluble. I think the first time we made it, we just put direct concentrate right into the gum, mixed it up and began cooking it.”

“We didn’t realize the science behind it, but chewing gum is a resin, and cannabis is a resin,” she adds. “When you combine the two, it gets bound up in the chewing gum. So, when we finally figured out what was going on, we figured out we needed to make it water-soluble, and that’s where our patent lies.”

The Patent

In March 2017, the couple filed for a patent and trademark on Joygum but ran into problems with their attorney. They then filed again in March 2018, after they officially moved to Colorado.

“We were finally living in Colorado and got hooked up with an excellent law firm that handles cannabis,” she says. “And again, that comes down to living in Denver where you can talk to people [in the cannabis industry] who use an accountant or an attorney. When you’re in a non-regulated state, it’s just [difficult].”

After nearly six years, the couple was granted a patent on March 31 covering “encapsulated cannabinoids and chewing gum.”

One of the biggest challenges in securing the patent was ensuring that the product is different, unique and doesn’t collide with any other products out there. 

“When I decided to patent the product, what I started doing was just researching,” she says. “The attorney did this too. They read what you want to do and start researching to see if it infringes upon any other patent that’s out there.” 

There are many other cannabis gum patents out there; however, Amy and Dave were one of the only people to formulate the product and get the THC to work correctly, she says.

“To make [the gum] water-soluble, you need to encapsulate it–you need almost to put it in a bubble, so it doesn’t bind,” Amy says. “And in doing that, we’re making it water-soluble. It’s actually a super broad patent–it covers it if it’s in the coding, if it’s in the gum, if we put a liquid center, etc.”

Before the couple secured the patent, they were skeptical of teaching others how to create the product and expanding it to additional states, Amy says. The patent provides extra protection, and under it, the owner must permit other parties to create and sell the product.

“Before, if we taught somebody else and went into another state and said, ‘Here, we want a licensing deal. You can make this for us, and we’re going to get X amount for each package you sell.’ What’s to stop them?” she says. “It happens all the time with licensing. It’s new and hard to control. So with the gum, I was just afraid to teach somebody how to do it and let it out without any protection on it.”

“One of the first things they ask you in this industry is ‘Who owns the IP?'”, she says. “So now, I own the IP for my product. It’s not somebody else’s. I’m not licensing it; it’s mine. And I would think in the long run, any cannabis product that has that kind of protection is definitely going to be more valuable in the future.”

Looking ahead, the couple wants to expand the product to other states, cities, and countries and hopes to secure a deal with another state by the end of this year, she says.

They are also launching a new product sometime in July called Joy-Bombs, a fruit chew product infused with THC.

“My goal is to build my brand at this point,” she says. “And eventually, you know, if I choose to sell the company, it’s definitely got more value with that kind of intellectual property attached to it.”

 

A Q&A with Rob Sechrist, President of Pelorus Equity Group and Manager of the Pelorus Fund

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The cannabis industry in the United States represents about a $50 billion asset class making it one of the largest new asset classes in the country. Commercial real estate lending is a key enabler for companies seeking to expand and scale. Pelorus Equity Group is one of the largest commercial lenders in cannabis with over $170 million deployed since its first cannabis transaction in 2016.

Since 1991, Pelorus principals have participated in more than $1 billion of real estate investment transactions using both debt and equity solutions. Pelorus offers a range of transactional solutions addressing the diverse needs of cannabis related business operators. While most cannabis private equity lenders focus on real estate acquisition and refinancing, Pelorus has leveraged its experience in more than 5,000 transactions of varying size and complexity to offer value-add loans, a rarity in the industry.

We spoke with Rob Sechrist, president of Pelorus Equity Group and manager of the Pelorus Fund. Rob joined Pelorus in 2010 after several years in the California real estate market. In 2018, Pelorus launched the Pelorus Fund where Rob is currently the manager. The Fund converted to an REIT in 2020.

Aaron Green: How did you get involved in the cannabis industry?

Rob Sechrist: Pelorus is a value-add bridge lender. We’ve been lending for a long time, originally in the non-cannabis space. We’ve done 5000 transactions for over a billion dollars – more than a lot of banks.

In 2014, our local congressman Dana Rohrabacher passed the Rohrabacher-Blumenauer Amendment that defunded the Department of Justice from prosecuting any cannabis related business in a medically licensed state. We were a supporter of that legislation and once that passed, we took a serious look at utilizing our expertise in being a value-add lender and applying it to the largest asset class of real estate that is newly coming about today. That cannabis related asset class is about $50 billion.

Rob Sechrist, president of Pelorus Equity Group and manager of the Pelorus Fund

We decided that we had the expertise to move into this space and to build these facilities out for our borrowers so that the cannabis use tenants would have a fully stabilized facility and make it operate. After the amendment passed in 2014, by 2016 we had originated our first transaction. Since that time, we’ve originated 51 transactions in the cannabis space for over $177 million so far. It wasn’t that big of a pivot when you’re just providing the value-add loan.

“Value-add” in the loan business means that a portion of the loan amount, let’s just say is a million dollars, maybe 250,000 of that, is a pre-approved budget to go back into the property. In cannabis property those are typically tenant improvements and/or equipment to fully stabilize that tenant. So, we’re the first fully dedicated lender in the nation exclusively to cannabis and we’ve done more transactions than anybody else in the nation.

Green: What are some challenges of cannabis lending compared to traditional lending?

Sechrist: The number one challenge in cannabis is that you must disclose to your investors that you’re originating the loans to cannabis use tenants. Many people have concerns that lending indirectly might be federally illegal. If you did not disclose that to your investors when you form that capital stack to fund these transactions, you’re going to run into issues. So, you would need to create a vehicle where you disclose to your investors that you’re intending to lend into cannabis and it’s still federally illegal. Doing one-off stand-alone transactions deal by deal is not sustainable if you’re going to be a large lender.

There are other challenges. Because cannabis is still federally illegal, it gives insurers and other third parties the ability to deny a claim, or certain lender protections. Some examples include errors and omissions insurance, title insurance, property insurance, etc. and all of them say in those policies that if you’re doing something federally illegal, then the policy is null and void. So, you must think your way through very carefully all the things that could potentially be an issue. You also have to disclose to those third parties and find a way to get them to acknowledge it to make sure you have the coverage if you ever have to make a claim. That’s a very difficult process.

Green: How has the investor profile in cannabis lending changed over time?

Sechrist: Our fund was structured to allow for institutional capital from the inception. We were able to do that because we are completely non-plant touching. Our fund only lends to the owners of commercial real estate. We do not lend to any cannabis licensed operator directly whatsoever. Our borrowers – the owners of the properties – would then have a lease agreement with the cannabis use tenant. Even if it’s an owner-operator, those are separate entities. That’s how we’ve distinguished ourselves.

Pelorus Equity Group, Inc. Logo

Regarding the investor profile, the first $100 million plus we raised was primarily from retail investors who were individuals writing checks up to a million dollars. Once we had three years of audited track record and our fund was $100 million, we then pivoted over to family offices and institutional investors and pension funds. We’re now working primarily with those types of investors.

The reason that we started with retail investors is that it’s very easy for me to explain our model to a single decision maker and answer their questions. Once I move into family offices or institutional investors, the opportunity goes to a credit committee where I’m relying on some other party to educate the investor about our investment. It’s enormously challenging at that point if it’s not me doing the talking. I know the answers, but I’m having to rely on somebody else to answer questions. We’ve tried to educate everybody we speak with and craft our documentation in such a way that even when it’s not myself answering the questions directly, people can understand how we thread the needle through some of the legal hurdles.

Green: How do you prioritize deal flow, and what are the qualities of a successful loan applicant?

Sechrist: We typically maintain a pipeline of around $150 million in transactions at any one time.

Applicants must have real estate. We’re not doing business loans or operator loans directly to tenants or business operations. So, that’s the starting point. We want a real estate piece of collateral where we feel more than comfortable with the loan-to-value and ratios and the loan to cost and other figures, that we feel that this transaction is going to be a success for our borrower and ultimately the tenant.

Next, we will only work with very experienced operators who have a proven track record where this is not their first transaction. Ideally, we are working someone who is looking to expand their operations and who is ready to either move from being a tenant of their previous facility and buying their next facility.

The next aspect that we’re looking for is the strength of the borrower’s guarantor. They must be able to qualify to support that transaction. Many of our transactions are millions or 10s of millions of dollars. You must have a sponsor that can support that size of a transaction.

Green: What sort of value-adds should a cannabis property owner look for in their lender?

Sechrist: Most people that are looking for loans are only familiar with getting loans for themselves on their owner-occupied house. Most loans have points, they have a rate and a term, loan-to-value and things like that.

“We wanted to make sure that when we underwrite the transaction, that every single piece of capital is necessary to get that facility all the way to where that tenant can start generating their first crops and make their lease payments.”When you move into construction loans or value-add lending, there are other elements that are more important than the pricing of the loan. The number one thing is to get that property fully stabilized and built as quickly as possible. Cannabis tenants are generating 10 to 15 times more revenue per month than non-cannabis tenants.

If you go to a bank and borrow money it may be a third of what it costs to borrow from us, but they process draws maybe once a month. So, if you’re having to advance the money for improvements of the property, and then the bank reimburses once a month, at a certain point you’re not going to be able to advance any more money until you get reimbursed. The project comes to a stop. So, in your mind, you might have saved an enormous amount on the pricing of the rate, but it’s costing you dearly in revenue and opportunity costs. We typically process 50 to 100 draws post-closing on transactions, and we get that facility built and the money reimbursed to all the contractors on a multiple-times-a-week basis. It’s happening in real flow all the time.

A typical problem for a tenant is that the tenant improvements are orders of magnitude higher than a non-cannabis tenant – anywhere from $150 to $250 per square foot. In addition, the equipment is often enormously expensive as well. It’s tough to put money into a buildout for a building that you may not own. Our vision at Pelorus was, let’s not force these tenants – the cannabis operators – to raise equity at the worst possible time when they’re not generating revenue through the facility. Let’s shift that capital balance for those tenant improvements and equipment from the from the tenant to the owner of the building, which is where it’s secured and adds value to that building anyway. Our vision was to shift that money from the balance sheet of the tenant over to the owner of the real estate so the tenant didn’t have to sell equity to come up with that money. Then the tenant is paying for the improvements in the lease rate and the borrower is paying for improvements in the note rate. And so we’ve shifted tenant improvements from being an equity component to now it’s just priced in the debt. This way you know what the terms are and you know what your total exposure is there.

We wanted to make sure that when we underwrite the transaction, that every single piece of capital is necessary to get that facility all the way to where that tenant can start generating their first crops and make their lease payments. Most of our peers in the space don’t look at it that way. They just do the acquisition or the refinance. They don’t do anything for the tenant improvements. They don’t do anything for the equipment. The tenant is left out there to either raise that equity or the borrower – the owner of the real estate – is having to come up with that additional capital on their own. We think you’re set up for failure in that circumstance. So, we blend all that into one capital stack. It’s important that the tenants can get all the way up to being able to cash flow and support that facility and be fully stabilized so they can refinance into a lower cost bank or credit union transaction.

Green: What federal policies and trends are you monitoring?

Sechrist: First, I think that it’s important to remind people that the Rohrabacher-Blumenauer Amendment has protected everybody from any prosecution. So, there’s no jeopardy out there that exists. The second thing I like to tell people is there are 695 banks on FinCEN’s website of cannabis Tier 1 depositors, and of those, we’re tracking numerous FDIC insured state banks and credit unions that are lending directly. We’ve been paid off by banks.

So, there’s this massive misconception that there’s no banking at all and that everything is happening by cash. The only cash buildup that happens is at the retail dispensary level because credit cards aren’t allowed for retail sales at the dispensaries. Out of the 2,000 transactions that we’ve either processed or reviewed, not one has ever not had banking set up. So, it is a big misnomer that there’s no depositor relations for Tier 1 banking, which is plant touching.

Tier 2/3 depositors are ancillary, which is what we are at Pelorus. There are 100 private lenders and dozens and dozens of state and federal credit unions or state banks and credit unions, not federal, that are FDIC insured and lending. Those banks are difficult to get loans from because they only want to do urban environments. They want to do fully stabilized companies and they want to use alternative views and the facility has to have seasoning for cash flow. It’s difficult to qualify for them. So, banking and lending exists out there, and most people are not aware of that.

Green: What are you most interested in learning about? This could be either in cannabis or in your personal life.

Sechrist: My two passions are snowboarding and racetrack driving. I just came back from the Mille Miglia race in Italy, and I do a lot of driving on the racetracks. I’m always looking to learn from those experiences.

In the cannabis sector, social equity programs are happening across the nation and cannabis licenses are being issued to operators. We would like to help participate in some system of educating these applicants that win the awards. Lending to an owner of a property who just won a license but has no experience is going to be problematic. Somebody needs to be thinking that out and making sure that these people that win have enough experience and education to set them up for success. Cannabis is one of the most complicated businesses ever, and they’ve got this license as their ticket, but they need to know how to make sure they’re going to be successful.

Green: Great Rob, that concludes the interview.

Sechrist: Thanks Aaron.

HERBL Announces Retirement of Chief Operating Officer Art Smuck, Appoints Robert Turner as Incoming COO

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SANTA BARBARA, Calif., June 30, 2021 – PRESS RELEASE – HERBL, California’s largest cannabis distributor and supply chain solutions company, announced the retirement of its chief operating officer (COO), Art Smuck, and the appointment of Robert (Bobby) Turner as the incoming COO. Turner joins HERBL with over three decades of management experience at Whole Foods Market and will oversee operations, transportation, purchasing and product security throughout the organization.

Smuck is a supply chain veteran whose 30-plus-year career spanned across leading consumer packaged goods (CPG) and logistics companies, including Nestle, ATC Logistics & Electronics, GENCO and FedEx Supply Chain. At HERBL, Smuck led the company’s operations, transportation, human resources, legal, compliance, loss prevention and information technology departments. Under his leadership, HERBL grew its client base to over 850 storefront and non-storefront retail licensees and became one of the most comprehensive supply chain operations in the modern cannabis industry. Smuck will remain in an advisory role with the company following his retirement.

Turner will assume the role of COO starting July 5, 2021. Prior to HERBL, Turner worked through every level of Whole Foods Market, from in-store management to vice president, where he grew the company’s retail footprint by nearly 170%, and most recently served as the regional president in the South. Turner will apply his expertise in business development, driving revenue and profit growth, team building and community engagement to HERBL’s expanding operations.

"On behalf of the entire HERBL team, I want to thank Art for his leadership over the past two years; his sweeping knowledge of the supply chain ecosystem has established best practices that the entire industry will benefit from for years to come," HERBL CEO Mike Beaudry said. "Bobby’s valuable experience in scaling national brands and his ability to create synergies across various internal teams will be a tremendous asset to the company as we enter our next stage of growth."

In June, HERBL announced its acquisition of Blackbird, a premier cannabis distributor and direct-to-consumer software solutions company based in Nevada. Through this transaction, HERBL becomes a leading multistate supply chain solution in the cannabis industry.

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Can Cannabis Get Even More Social?

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Cannabis has always had it tough when it comes to marketing. Part of it is simple logistics. A DTC playbook, heavily contingent on growing a brand’s audience and pushing folks to purchase products through digital marketing, isn’t a possibility for them. Despite its mainstream acceptance, most large ad platforms like Facebook and Instagram won’t touch it because of its tenuous legality. Banner ads don’t convert and only end up on specific platforms like Pornhub or Weedmaps anyway.

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

And because the legal status changes on a state-by-state basis, it’s extremely difficult for a brand to span across multiple markets. Just think: why would someone living in Florida care about a cool cannabis brand in Detroit if they weren’t in that industry or have ties to that state? This also makes influencer marketing tough because people aren’t finding the coolest people in their respective states to follow. They’re just finding people they think are interesting.

That leaves budtenders – point of sale experts – that hold a huge position of educating and steering folks towards products. Most folks are newer to cannabis – or cannabis has grown up a ton since their past casual experience with it. Budtenders offer an informative, hyper-local solution with extremely limited reach to a narrow market.

But the future shows promise. A new wave of platform marketing has emerged with new formats and lots of room to cultivate and grow for cannabis brands. With a little understanding of what’s driving the success of social media newcomers and evolving mainstays, cannabis companies can potentially find new avenues for marketing and brand-building success.

Going Native

There’s currently a lot of opportunity through the larger cannabis retail and native ordering apps – ones like Weedmaps, Leafly and others that have widespread brand recognition within the cannabis community and a growing array of social media-like features. These are places that already segment according to markets, with a built-in, educated audience open to creative approaches to branding and marketing.

These types of apps are also becoming the norm more and more. Especially since the pandemic, dispensaries are doing most of their volume through online orders and pickup. As a result, making sure you show up, look great and convey your unique position on these platforms is incredibly important.

Listening and Learning

Whether it’s Clubhouse or other upcoming rivals on the horizon, audio platforms are great because they can serve as a means to have an honest, direct and enlightening conversation about cannabis. This is great news for budtenders who can help a brand expand their reach by facilitating these sorts of conversational consumer relationships. As the cannabis market matures rapidly, people will need a safe place to normalize consumption, talk about dosage or about how normal consumers (not just stereotypical potheads, but every day, “constructive members of society”), are able to use cannabis effectively in their day-to-day lives.

A lot of other visually-based platforms are about curation or presentation of an ideal life and less about learning or sharing – a place where audio platforms can shine.

Old is New

In some cases, it’s not about just using new platforms but finding better ways to utilize old ones. For example, legal or not, a lot of folks are about discretion when it comes to their cannabis. They want to get questions answered and learn about brands and products via peers and experts, but they don’t want their bosses or grandparents knowing that they’re hitting a pen between meetings or before brunch.

That’s why time-based content platforms – Snapchat, Instagram, WhatsApp and others – that offer individuals and brands some measure of safety, as well as controlled messaging, will help continue to normalize cannabis.

Another non-cannabis example worth emulating is Psilodelic, a psilocybin gummy brand that’s super low-dose and decently branded, using Instagram in a creative way. Purposefully making their accounts private and going without a public hub, the only way to buy the product is to follow and DM them. “Hacking” the platform in this way means they have to shut down and open up new accounts all the time, but they’ve done an amazing job offering a product that, similarly to cannabis, is sometimes inaccessible, and have done it in a way that’s simple and feels more elite. That’s creative entrepreneurship.

In the end, using these changing platforms means approaching them as tools to foster a better relationship with people. The brands that succeed will have dead-simple instructions and information that really helps to empower folks to look at cannabis in a different way. Then, as we finally reach legalization, these brands will find themselves better equipped to step into the mainstream, confident in the meaningful relationships they’ve already cultivated.

Holland & Hart Launches Cannabis Practice With Arrival of Rachel Gillette

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When Ben Telford showed up for work June 23 at the Greenleaf Compassionate Care Center in Portsmouth, R.I., he was shocked to learn that his employment was terminated.

In April, Greenleaf Portsmouth employees became the first cannabis dispensary workers in the state to unionize after a 21-1 vote to join the United Food and Commercial Workers Union (UFCW) Local 328. The organized Greenleaf team includes budtenders, keyholders, online team members and delivery associates.

Employed by Greenleaf since May 2020, Telford was a keyholder at the Portsmouth medical cannabis retail facility in Portsmouth, where his responsibilities included opening and closing the store, cash management and day-to-day operations, as well as performing other duties in the absence of management. He was also a member of Greenleaf’s union bargaining committee, a role he retains.

Courtesy of UFCW Local 328

Ben Telford, second from right, had his employment as a keyholder at the Greenleaf Compassionate Care Center in Portsmouth, R.I., terminated on June 23. 

“I was definitely shocked,” Telford said of his termination. “I’m a hard worker, both on the job, at the site, and then off the job as far as the effort to unionize and get our team together and get a contract negotiated.”

While his termination came as a surprise, Telford said he had thought about the possibility.

“I’ve been a very loud voice for myself and for others on the team that worked there,” he said. “But the reason I was given the day I was terminated … was that my services were no longer required. And when I asked for further explanation, I was told that there was none needed to be given at the time, so I gathered my belongings and left for the afternoon and said goodbye to everybody.”

Telford was informed of his termination by Greenleaf’s chief of staff and director of retail operations, but he said it’s his understanding that the decision came from Greenleaf CEO Seth Bock. Cannabis Business Times and Cannabis Dispensary reached out to Bock for comment but as of June 30 have not yet received a response.

According to a UFCW Local 328 press release, Telford’s termination is only the latest in a string of firings by Bock. “In the last six months, the Greenleaf CEO has fired the director of retail operations, the head of delivery, the human resources manager and the chief operating officer.”

In addition, Telford said the director of inventory at a Greenleaf cultivation facility was also terminated recently.

“It depends on the person, but, overall, it’s been very retaliatory,” Telford said. “The owner, Seth Bock, has been allowed to move as he pleases. And, overall, when people get the skills that require higher pay and have had a long tenure, he’s been known to just kind of clear house and get some fresh faces that are happy to be there, because getting in the cannabis industry is something that a lot of people want to do.”

The UFCW Local 328, which represents more than 11,000 workers in a range of industries throughout Rhode Island and southeastern Massachusetts, is now filing unfair labor practices charges with the National Labor Relations Board (NLRB) over what the Local 328 called the illegal retaliatory firing of a Greenleaf employee.

The Local 328 release also claims Bock has exhibited a history of retaliation against employees.

Jeffery Dieffenbach, former finance director and general counsel for Greenleaf, was fired in January 2020. In September, Dieffenbach filed a lawsuit against Greenleaf to remedy and seek relief for unlawful employment practices arising under the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, and other U.S. labor laws.

Dieffenbach, a 71-year-old Newport resident at the time he filed the lawsuit, worked for Greenleaf for six years. When he was first hired by Greenleaf as a part-time independent contractor, he was paid $30 per hour for 10 hours a week. By October 2018, Dieffenbach was being paid $90,000 per year as the finance director and general counsel, according to the lawsuit.

In a subsequent interview with WJAR-TV, a local NBC affiliate, Dieffenbach said, “I was never reprimanded. I was never given any negative comments or reviews of my work.”

While Greenleaf’s workers unionized in a 21-1 ballot count on April 5, 2021, they had filed for their union election in early March, citing concerns about job security and lack of workplace protections.

More specifically, contributing factors leading workers to organize included Greenleaf’s elimination of an employee sales incentive program that included weekly and monthly cash bonuses offered to sales associates, budtenders and delivery employees, Telford said. In addition, the company also reduced worker benefits such as a discount program for employee patients who also purchased medical cannabis from the center, he said.

“That came during the time of them kind of clearing house at the top end and getting rid of a few employees,” he said. “But it followed the history of abusive behavior and discriminatory practices from management.”

Amidst Telford’s termination, Greenleaf attempted to reinstate a new employee incentive program last week but then had to rescind that effort because it was not part of a union-negotiated contract, UFCW Local 328 Director of Organizing Sam Marvin said.

Theoretically, if such an incentive program is not in a contract, then the CEO can take it away at any time, he said.

“I don’t know what Greenleaf’s intent was, if it was a tactic,” Marvin said. “But they are required, and they have to come to the table and negotiate good faith over it, and they have to provide additional details like how it’s going to impact the workforce, who’s going to be eligible, who is not—really, they need to explain their proposal and why they’re proposing it, and they have to give their workers the chance to respond.”

Local 328 currently represents workers from four cannabis businesses, also including the Ocean State Cultivation Center (OSCC) in Warwick, R.I.; the Curaleaf medical dispensary in Hanover, Mass.; and the Cresco Labs cultivation and processing facility in Fall River, Mass.

RELATED: Unionization Efforts Are Under Way in the Cannabis Space

After Greenleaf workers filed for their union election in March, the company hired Government Resources Consultants of America Inc., a counter-union organization based out of Illinois, according to an LM-20 Agreement and Activities Report filed with the U.S. Department of Labor.

The consultants’ objective? “To persuade employees to exercise or not to exercise, or persuade employees as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing,” according to the report.

The out-of-state, union-prevention consultants held mandatory meetings and distributed flyers to employees at the Greenleaf dispensary, according to UFCW Local 328.

“Doing what we do, we encounter union-busters all the time,” Marvin said. “It doesn’t really matter what company or what industry you’re trying to organize. And they all say the same thing. They’re all going to try to use the same kind of tactics.”

Anti-union consultants often change their tactics based on what they think will work, but the underlying intention remains the same, Marvin said.

“They’ll talk about dues, they’ll talk about strikes, they’ll talk about, ‘Give us another chance,’” Marvin said. “They’ll talk about how long the process might take. So, they kind of throw everything against the wall and they hope that it sticks.”

The Greenleaf workers remained united with their nearly unanimous vote. Telford said his voice in favor of organizing remained active throughout the process.

After he was terminated last week, union representation reached out to Greenleaf’s lawyers for further explanation. They responded that his sales performance was subpar during the month of May, according to Telford.

“And I am not a sales associate,” he said. “Now we’re working with the National Labor Relations Board to file unfair labor practice charges and seek justice for wrongful termination.”

On Saturday, June 26, the UFCW Local 328 held a one-day strike near Greenleaf’s Portsmouth care center to protest Telford’s termination. The union employees at Greenleaf voted unanimously to authorize the strike.

“I don’t even have the words to describe the gratitude I feel and the appreciation I have for everyone, and the patients that came by while we were picketing [to] express their support too— that’s something I’ll never forget,” Telford said. “It was the most humbling experience I ever had.”

The unionized Greenleaf cannabis workers released the following joint statement in the Local 328 release:

“We want to first recognize our patients and thank them for the support we have received throughout this process of unionizing. We understand that this action may have disrupted some people’s ability to purchase their medicine, which is something we take very seriously. As workers, we strive to provide the highest quality services and products that we can, because we believe in cannabis and its medicinal benefits.

“Over these past few weeks, ownership at Greenleaf has continued to make decisions that impede us from providing that quality of work. After the wrongful termination of one of our best team members, we collectively decided that we had no choice but to take this action.

“We’re proud to work in this industry and will continue to stand together in solidarity as we progress towards our goal of negotiating a contract that helps in establishing a standard within our dispensary that supports our growth as professionals and helps bring the focus of our work back to the people that matter the most, our patients.