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Featured ArticleHow to Classify Employees in the Cannabis IndustryCannabis employers must meet numerous regulations across the organization, and making sure employees are properly classified doesn’t always rise to the top of the list. But employee classification is extremely important and affects how you pay your crew. Employers often ask our cannabis-focused recruiting and consulting firm Higher Growth Search whether they should classify employees as W-2 workers or independent contractors. And the reason is this: If you have W-2 workers, you pay payroll and other taxes. If you have independent contractors, you don’t pay all of those taxes. You can see the allure of classifying people as contractors. Important to know: Despite any classification agreement you have with someone who provides work for you, the courts, IRS, and state agencies have the final say as to whether you can designate the individual as an independent contractor. The penalties of misclassifying W-2 employees as independent contractors, interns, or volunteers can include time-consuming legal action, IRS fees, and substantial fines that might derail your entire enterprise. This Justworks article helps illuminate the issue: If the IRS suspects fraud or intentional misconduct, it can impose additional fines and penalties. For instance, the employer could be subjected to penalties that include 20% of all of the wages paid, plus 100% of the FICA taxes, both the employee’s and the employer’s share. Criminal penalties of up to $1,000 per misclassified worker and one year in prison can be imposed as well. In addition, the person responsible for withholding taxes could also be held personally liable for any uncollected tax. Who Is a W-2 Employee?  W-2 employees are essentially your “in-house” team. These individuals work directly for the company, are salaried and listed on payroll, and are entitled to benefits like vacation time, health insurance, and a retirement plan. W-2 employees are granted specific legal protections not usually extended to independent contractors. As a W-2 employer, it’s your responsibility to withhold Social Security and Medicare taxes, provide all necessary tools and equipment, and pay payroll taxes.  In short, a W-2 employee: Works for the company. Is upheld to the standards of the business. Is required by law to at least make minimum wage as their rate of pay, which may vary per state laws. The employer of W-2 employees: Is responsible for withholding Social Security and Medicare taxes. Must pay employer payroll taxes. Must provide all necessary tools and supplies. Must reimburse employees for all business expenses incurred during employment. Who Is an Independent Contractor? As the name implies, independent contractors have, well, a good deal more independence. They bring specialized skills to the workplace without the company having to worry about payroll taxes, labor laws, or employment laws. They provide their own equipment and determine, through a contract agreement, how, when, and where they will provide their services. Employers have very little oversight of independent contractors and may only hold them accountable to the services listed on the contract. For tax purposes, independent contractors fill out an IRS Form 1099 MISC instead of a W-2, making them personally responsible for paying the applicable taxes on their income, rather than their employer. In short, an independent contractor: Fills out a 1099 for tax purposes, not a W-2. Takes on all tax liability (the employer/company is not responsible for withholding any payroll taxes). Works for themself but provides services to a company on a contractual basis. Signs an agreed-upon contract with the company (outlining the rate of pay, hours of work allotted to the client, defined length of the agreement, and the expectations of the services provided by the contractor). Must provide their own tools and supplies necessary to perform their services. There are no reimbursements for these business expenses by the company unless established in the contract. Is not eligible for employee benefits through a company and must take on all profit or loss risks without any liability to the employer. Learn Your Local (and National) Labor Laws Labor laws can vary state by state, but proper classification of employees and independent contractors is a universal concern for all cannabis businesses, no matter where they operate. We recommend studying the specific laws pertaining to your city, county, and state – and always erring on the side of caution. A good rule to remember is that city regulations supersede county regulations, and county regulations supersede state regulations. Staying current with cannabis regulations is essential, as local laws, ballot initiatives, and industry-wide rules change frequently. For example, ongoing discussion about employee classification will have a significant impact on California and the gig economy at large. IRS Publication 15-A Employer’s Supplemental Tax Guide, Page 6, provides more details. As always, it’s suggested that you consult with a tax or legal expert for clarification on your specific situation. Need help hiring full-time or senior-level candidates? Contact the direct hire and executive search experts at Higher Growth Search today. We’re here to help. [...]
February 7, 2023Read More
Q&A InterviewAsk a Dispensary Owner: David Alport, Founder and CEO of Bridge City Collective in PortlandIndustry veteran David Alport shares his experience as a multi-store operator and the lessons he’s learned after years of running two successful dispensaries in Portland’s competitive marketplace. Peter – First, tell us a little bit about how you got into the industry? David – I started out as a professional cultivator, went from a novice grower to a professional grower back in 2009 when I made it my full-time job. We moved into a warehouse and started cultivating at a larger scale. And then in 2010, founded Bridge City Collective as a direct to patient resource. So initially, it was going to be kind of a gray market center but we waited until the first licensed framework came online in Oregon, and that happened in 2014. So that’s when we opened up the first two brick and mortar stores that we have here and those stores are still open today. Being one of the first stores in Portland is worth pointing out, not everyone can say that. We were one of the original top 10 stores that were licensed right at the outset. There’s only maybe one other one that’s still in the market with the original operators. Peter – Portland’s definitely a crowded market. Would you say that is the main reason why you’re one of the only last few standing of the original licenses? David – Yes, it’s a saturated market. There’s a lot of competition out here. We’re in the middle of, or middle to end of the second major down cycle we’ve had in Oregon since the regulated market came online. So yeah, just a lot of turbulence in the market, M&A activity, and people really needing to get focused and lean to be able to weather these storms. That has been really important for us. Peter – Yeah, and that’s obviously happening industry-wide now. David – Absolutely, yeah. So I started out as a cultivator then started these stores and realized pretty early on that we had some expertise and knowledge that may be beneficial to other states as they bring their cannabis programs online. And so we started entering other markets by way of partnerships and structuring deals as isolated entities to capture opportunities and bring what we know to the Midwest and the East Coast. we first did that in Ohio, and then we went to Missouri, Illinois, Massachusetts, Rhode Island, and New Jersey. So parts of the Bridge City Collective ecosystem have a presence in all of those states. And then we’ll also have some involvement in Florida, pretty soon, hopefully. Peter – And is that for your company, is that a for profit initiative or is that just being a good actor in the industry? David – Those are for profit initiatives, but we think of ourselves as conscious capitalists, right? Like we feel like it’s really important to be aware of our impact in the communities that we’re engaging in and try to get involved at the community level. Education is really important to us. There are people on our team that are teaching at community colleges in Illinois and New Jersey and we help facilitate mentorship opportunities for people who just want to learn. So as we build a business in a new place we think about what kind of community organizations are in our immediate sphere wherever we’re operating. We think about how we can engage with them and give back as a company These are things that we’re constantly thinking about as we carve out our path. But in the end, yeah, they are for-profit endeavors. Peter – It’s now been many years since you’ve been operating two dispenseries. What do you wish you had known kind of before you started the first one? David – Understanding the impact of 280E is critical. And at the outset, we were spending a lot more on marketing than we needed to. So over the years, that’s something that we’ve really gotten good at.. understanding what works for us and what doesn’t. we tried many different things, but on a really small scale and to see what works and then ramping up where it’s effective. If we had known earlier how much of an impact 280E would have on the bottom line, we wouldn’t have spent as much on marketing right away. Peter – That’s a common theme I hear from people, the impact of 280E is often underestimated when getting started. David – Also, I think it’s really important to note that when you’re thinking about spending your marketing dollars or devising your marketing strategy to not get too wrapped up in what your competitors are doing. And that’s true from an operational standpoint in general. It’s really important to understand the landscape and the nature of the industry and what people are doing, but it’s also important to not let that overly impact how you’re making your strategic decisions to operate the company and spend your marketing dollars. You really need to figure out what works for you, what works for your business and what works for your business’s mission and lean into that. Peter – Over the last couple of years, how have you adapted the dispensary based on feedback you got from customers? David – Sure, I think, product and pricing are really important. Offering products that suit the needs of the neighborhood that the store is in. These two stores in Portland are in drastically different neighborhoods, and the people that are frequenting our stores have different needs. So being aware of that and offering what they need is something that took us a little bit of time to figure out. Peter – Do you have a practical example of an adjustment that you made based on customer feedback? David – Sure, at one of our stores, people have a pension for more top shelf flour. At the store, people have more of a pension for affordable flour. It’s a challenge for us because we are so focused on quality, the challenge is finding the right flower to offer at a cheaper price. But we’ve been able to do that, typically just through smaller buds. So we’ll buy what’s called B buds from top shelf producers so that we can offer top quality flower at a cheaper price to our customers. Peter – How have you dealt with the challenges of payments over the years? David – we’ve gone through everything from just cash to at one point to taking Square, to now having ATMs and a compliant merchant processor that’ll do debit cards. We’re leaning into that debit card transaction more and more. That drives up the average basket price. And it takes cash out of the store, right? The more cash we have in the store, the more of a security risk there is. So trying to encourage people to use the debit card machine is important to us. Peter – And have you tested out or do you use kind of any loyalty programs, frequent shopper programs, and kind of how have you found those to work or be valuable, I guess at all? David – Yeah, we’ve had several programs over the years. When we were first starting out, we had a program that was 5% on cash, point accumulation that our customers could use to purchase products that are not infused. So shirts, lighters, paraphernalia, books, .. we have like a huge book selection. That’s pretty unique about us.. And at some point we tried out something called SpringBig. And that’s mainly a text messaging platform, but we also used it as a loyalty program. And in Oregon, that actually allowed us to offer points for products that actually have THC. And it’s been tough to really maximize those programs for us and get the most out of them. So we’ve been backing off of that. It’s just in Oregon, the market is so saturated and there’s so much convenience that its tough to use those tools to build loyalty. You build more loyalty, I think, just by having good relationships with your customers. and treating them really well and just, you know, building a welcoming atmosphere for them. Peter – What are some kind of creating market of efforts that you’ve tried that have been, you know, pretty successful in driving some new business in? David – Event-based marketing works really well. Having a party at your store and getting people out, getting them into your store and letting them know, hey, we’re here, we’re in the community, that really helps. Peter – And how do you let people know you’re having a party? David – So over the years we’ve… We amassed an email list, which is probably one of our biggest strengths, of around 12,000 people here in the Portland market. And when we send out emails, we get a really strong response rate from those. So that’s not just for events, but also if we have promotions or are trying to raise awareness about something. So that’s our biggest tool that we use. Peter – Your budtenders are the people on the front lines. How challenging is it to keep kind of like your best people on staff or to find new people? David – It is very challenging. especially in this market. People are always looking for job opportunities, and so you have to work really hard to make sure that they feel comfortable and at home. We pay above average wages. We treat our staff really well. And for the longest time, that’s all we really needed to do. I mean, we have one of the highest retention rates in Portland but now we need to think about the other attributes that make a good employee and plan for that. Nowadays, we might hire someone who doesn’t have the industry experience but has everything else that we need and then we will train them on the products and what we’re offering our customers. And I think for any operator, it’s really important to just make sure that you have open channels of communication with your team and your staff. And that if they have something that they need to say, that they can say it, and that they know they’re going to be heard. Peter – Do you have any hopes or thoughts on what you’re thinking might happen this year, in regard to the industry conditions and any potential reform? David – I’m hoping that by the end of 2023, we get to the end of this down cycle. In the industry, I think that we’ll start to see the market kind of loosen up a little bit. People will have a better understanding of what’s happening with the economy, the impact of the war in Ukraine and kind of where we stand there. And so I think there’s going to be less fear around job security which will create more spending. So for that reason, I’m optimistic. I think by the end of this year, we’ll start to kind of level off and get back to normal. I think we’ve gotten through the worst of it. Peter – What advice would you give a brand-new dispensary owner? David – You don’t know what you don’t know, right? So, try to talk to people who have been through it before and listen to what they have to say. Visit Website [...]
February 3, 2023Read More
Q&A InterviewAsk a Dispensary Owner: Ry Russell of Budz Emporium in Medway, MaineIn the first installment of Leafwire’s exclusive ‘Ask a Dispensary Owner’ Series, we spoke with Ry Russell, owner of Budz Emporium in Medway, Maine – one of the most northern cities in the entire continental states. Here are some great insights on the importance of pricing, transparency and truly listening to your customers. What do you wish you had known before starting the process of starting your dispensary? There is so much I wish I had known before I started opening the dispensary. I think the most critical is truly understanding your tax obligation. We learn a lot about 280e but until you actually process your taxes it’s hard to truly understand the impact. Taxes eat up roughly 35% of total revenue and you need to prepare for that. Remaining profitable while meeting your tax obligations is ultimately the name of the game. What surprised me the most about opening a dispensary? What had surprised me the most about opening a dispensary is the fine attention to detail. I came into this project with an extensive retail background and I felt confident and prepared for this undertaking, however, it is the hardest challenge I have taken on. Balancing vendors and prices with the value your customer expects is no easy task. Creating the ultimate in store experience that brings customers back over and over requires listening and adapting to everything that comes your way. A constant pivot is needed in this industry. How have you had to adapt the dispensary due to customer feedback? The thing I am most proud of when talking about our dispensary is our commitment to customers. When we opened the store we were following the market. Our prices were too high and our selection was too small. We listened to our customers and we fight like hell for the best value and now budz emporium is the first store in the state of maine with a price match guarantee and the widest selection of top shelf flower from across the state. People now drive hours to visit us because we have the best value in the state by far. We wouldn’t have pulled this off if we didn’t have a deep and passionate relationship with our customers. What sort of payment challenges have you dealt with and what is working for you now? Payment solutions is always a challenge. We started out with ATMs and then shortly after we opened the banks pulled them out. We went to a debit pay system and that network was taken offline a month later. Now we have a pin debit solution but we still do not rest easy. We always make sure we have a backup plan in the works in case a system provider goes offline. It is quite a headache and something we must be always paying attention to. Have you found any value in using loyalty programs or frequent shopper programs in order to drive loyalty? Personally, I don’t use loyalty programs. We guarantee the best price in the state. We are often asked if we offer a loyalty program and we usually joke and say “we could, but then we would have to raise prices.” The customer usually understands and appreciates that we are sacrificing huge margins in effort to provide a fair price each and every single day. Honestly, I believe this fair and honest pricing strategy is the main reason we are doing so well. What’s some creative marketing efforts that you’ve tried out to generate business? Marketing for an adult use business is challenging. The state has many restrictions that make it near impossible to communicate with customers outside of your store. However, we have found clever and crafty ways to advertise on the radio while remaining compliant. The radio has been our most significant source of customer acquisition. We do some newspaper advertising as well but the radio is where we see the biggest impact currently. Was hiring and managing a staff a bigger challenge than you expected? Staffing is always a challenge, for any business. However, I think dispensaries have to be extra careful. We don’t have any job applications and I don’t post jobs online anywhere. I go about my day in the community and if I see someone providing extraordinary service I do my best to get to know them and invite them to join our team. I believe the best way to find good people is to observe people doing what they are supposed to be doing out in the world and then rewarding good behaviors. if people are doing their best work when they expect no one is paying attention they will do excellent work for a manager that cares about them! I am very proud of the team we have built at budz emporium! Any predictions for what the industry should expect in 2023? I think mature markets are going to see the price of products continue to drop and the industry is going to have to get extremely invested in their communities in order to stay in business. The more things change the more they stay the same and at the end of the day the community needs to remain the center of attention. Visit Website [...]
January 24, 2023Read More
Q&A InterviewDon’t Take Chances. Partner with PowerQwest for 100% Compliant ATMsFinance and banking continues to be one of the cannabis industry’s most negatively impactful issues. With the plant still rendered federally illegal, many banks are reluctant to do business with cannabis operators – and that forces many dispensaries to continue relying on cash-only transactions. There are a number of problems with this approach: Customers being less willing to engage with the business Dispensaries being left especially vulnerable to theft Because of this, financial solutions to the notorious nationwide cannabis cash problem are in high demand throughout the industry. PowerQwest Financial, the cannabis-focused subdivision of Paramount Management Group, was founded in response to this resounding cry for help. The company offers 100 percent compliant ATMs to cannabis operators: mitigating risk, maximizing profit, and educating business owners on their most viable options within the cannabis financial sphere. We sat down with PowerQwest Financial Director of Retail Sales Jim Krawczyk to discuss the company’s foundation and explore how PowerQwest helps bridge the confusing gap between consumer and operator at nationwide cannabis transactions. Leafwire: How was PowerQwest first formed? Jim Krawczyk: PowerQwest is our cannabis entity that we brought to life a few years ago. We wanted to get into the cannabis space, and one of our private equity partners had some interest in the market. We formed PowerQwest in response to that – and as a way for us to jump into the cannabis arena. LW: What sort of services does PowerQwest offer the cannabis industry? JK: We offer 100 percent compliant ATM solutions to our customers. It’s a closed loop system: the money comes from a credit union to the federal reserve to an armored car guard, and is then deposited directly into the ATM. This means no one can interject their own cash, which renders it 100 percent compliant. ATMs can easily be turned into money laundering machines, and that’s where things get murky for operators under federal scrutiny. LW: Why do cannabis dispensaries need ATMs in the first place? JK: Since cannabis isn’t legal on a federal level, Visa and MasterCard don’t allow retailers to accept credit or debit cards for cannabis purchases. That means they have to rely on cash, and the safest and easiest way to provide customers with that cash is via ATMs – preferably one or more per store. LW: What are some cannabis industry-specific challenges you’ve come across since founding PowerQwest? JK: The industry has a lot of rules and regulations. When you’re talking about putting an ATM in a convenience store, there aren’t many rules to worry about. We can sell an ATM to the owner and install it – we can do whatever we want. Cannabis is much more rigid. With dispensaries we have to own the ATM, load it with cash, and from our benefit and backend, we have to make sure the dispensary owner has their best interest involved as well. It’s important to ensure we’re doing everything we can to make sure they don’t get investigated by the Feds because they’re doing something that is illegal. LW: In your experience, are dispensary owners commonly uneducated when it comes to what is and isn’t allowed for ATM transactions? JK: Yes. There are consultants in New York state, for example, where cannabis was very recently legalized telling dispensary owners the wrong information already. I have a partner who’s run across a few owners whose consultant told them, “Oh, just buy an ATM and you’ll be good” – and that’s not the way we do things. Every state will be a little different, of course. We try to reach out to newer states who are just getting new licenses, focusing on educating them before they get saturated with too much misinformation. We partner with other companies as well, which is how we get a lot of our referrals. LW: How does your referral program work? JK: If you work in the cannabis industry and run across a dispensary that is in need of an ATM, you can refer them to us. That will get you five percent of the monthly profit for every location that goes live for the life of the contract. And in addition to that recurring income, our partners receive a one-time $150 payment for each location once it becomes active. To refer someone, you can simply reach out to your dispensary contacts, provide them with the marketing materials we supply, and introduce them to our team. We handle the rest. LW: What is your ultimate goal as a company when it comes to helping advance the industry’s ongoing banking issues? JK: We want to continue educating dispensary owners on the rules and regulations of the ATM: what is acceptable, what isn’t, and what will keep them out of trouble with the federal government. LW: Why should a cannabis operator work with PowerQwest for ATM solutions? JK: Inflation is at a record level, and as a result, everyone can use a little extra money every month. We are one of the only ATM companies that provide surcharge income to the dispensary owner. That’s why we created this unique program. But more importantly: our partners can trust PowerQwest to provide nationwide service, reliable 24/7 support, and customized programs that meet the unique needs of the dispensary every time. Visit Website [...]
January 23, 2023Read More
Q&A InterviewHow Reakiro Continued Their Hemp Business in Ukraine in Spite of the WarIt’s hard enough to run a growing business in a new industry with constantly changing regulations. And then your country is attacked by an invading army. This is the exact situation that Stuart McKenzie, CEO of Reakiro, a hemp and cbd business, faced when Russia invaded Ukraine. Many of their employees were able to leave Ukraine and move to Poland where Reakiro had another facility, however, many of their employees stayed in the Ukraine. Reakiro committed to help their employees to find safer places to live and work, but the invasion continues and Reakrio continues to find ways to thrive and serve their growing customer base. How has the war in Ukraine affected Reakiro? What decisions did you have to make as CEO? When the war first began, our priority as a company was finding out who wanted to leave Ukraine, who could leave Ukraine, who was going to stay in the country, and how we could support them. Reakiro has a facility in Poland which many of us relocated to as our new home when we had to leave Ukraine To help those who were staying in Ukraine we helped members of the team move out of apartment blocks and into houses, and out of the city centres and into more rural areas where risk and danger has been considerably lower. In many ways, the last few years of adapting to the pandemic had prepared us well for working together when we were physically apart, but saying that, one of the bittersweet silver linings from this year is that many of us have been together in Poland living and working close to one another, which has made us that much stronger as a team. As CEO I knew that we had to find a way to continue as a business through the war. I know that’s not what many people would think about if they found themselves in a warzone, but the reality is we need to make sure the business is solid so that we can continue to support all of our employees through this turbulent and uncertain time. What challenges has the Reakiro team met this year? One of the most difficult things we’re dealing with is that no matter what we’re doing these days, we’re always thinking about the people who are still in Ukraine. While many of us managed to leave, there are many who had to stay. As I mentioned before, a big group of Reakiro employees relocated to our facility in Poland at the beginning of the war, and as a team we repurposed part of the facility in order to receive and distribute donations such as clothes, food, and medicine, which were coming in from all over Europe to go to those still in Ukraine and to those who had become refugees in Poland. Our staff have been dedicating voluntary hours throughout the day and night to help sort and distribute these items. In October we were honoured at the World CBD Awards in Barcelona for our charitable work this year, which was a lovely moment for the team to be recognised for everything that they’ve been doing. Now we need to continue to emphasise that the war is ongoing and people in Ukraine need support from those around the world even more than they did at the beginning. We really hope the global attention doesn’t wane as time goes on. What does the future look like for Reakiro and the CBD industry? The future of the CBD industry is very, very positive. There’s new legislation coming which will allow new innovation, greater awareness of the capabilities of CBD, and ultimately for the industry to grow. It’s currently near impossible to innovate new products because of the restrictive Novel Food regulations. But as this changes the industry will be receiving more investment from other sectors, allowing reach and awareness to grow hand-in-hand. The momentum of the CBD industry continues to grow and grow as the products continue to bring positive change to people’s lives. As for the future of Reakiro specifically, we’re looking to move into the medical cannabis space and we’ve partnered with a company in Malta to produce medical grade cannabis to distribute around the world . Medical cannabis products contain CBD and a high THC level and can only be accessed with a prescription. The doses of THC in question would be low enough not to make someone ‘high’ but medical cannabis is something that could help so many people experiencing many different conditions including pain management, neurological conditions such as Parkinson’s and Alzheimer’s, and also anxiety and panic attacks. We’re working towards closing the distance between doctors and medical cannabis, to help health professionals understand just how instrumental these natural products could be to helping their patients. What are the challenges that the industry as a whole faces? The biggest challenge we’ve always faced as an industry is how people perceive the hemp plant. Hemp is one of the world’s most resourceful plants, it can be used to make houses, batteries, clothes, and superfoods. This was recognised for thousands of years while people used hemp for a variety of reasons, but then when its growth was prohibited for 100 years all of that knowledge was erased. Now it’s our job as an industry to erase the image of a stoner with a joint and replace it with the knowledge of a plant that offers so many resourceful natural solutions. We need to do this in order for all our work in other areas, like product development, to have the true impact it deserves. What drives and inspires you to continue on this mission every day? The sense of being on a mission to change the world for future generations is my biggest motivator, and I think this would apply for many people in the industry. This isn’t a sector that people go into to get rich quick; it’s not a sprint, it’s a marathon. We’re thinking about generations and generations ahead, our children and grandchildren, and hoping that the work we put in now is going to make a difference. I know that sounds like quite a lofty ambition, but we can already see things changing now. In the relatively short time the CBD industry has been truly alive it has shifted firmly into the mainstream and we can see that people’s attitudes, and people themselves, are changing. Not a week goes by that I don’t get a message from someone whose quality of life has dramatically improved since using CBD, whether it’s helping with sleep quality or managing pain and mobility so that they can now do things like go on bike rides with their children with ease; nothing motivates me more than this. Visit Website [...]
January 11, 2023Read More
Press ReleaseCanaQuest Achieves Statistically Significant Reduction of Seizures for Epilepsy Compared to Standard CBDDrug Candidate, CQ-001 (cannabidiol “CBD” + IP formula), also demonstrated substantially reduced seizures at higher doses, with less CBD, compared to standard CBD. (OTC PINK:CANQF) (the “Company” or “CanaQuest“), a clinical-stage life sciences company focused on drug discovery and development of next-generation targeted cannabinoid therapeutics for the central nervous system (CNS), today announced Statistically Significant efficacy results from the Clinical Dose & Efficacy Study (“Study”) conducted by Dr. W McIntyre Burnham, emeritus professor of the University of Toronto’s Temerty Faculty of Medicine. In comparison to standard CBD, CQ-001 (cannabidiol “CBD” + IP formula – essential fatty acids) demonstrated 40% more seizure reduction at a medium dose in the maximal electroshock seizure (MES) model. This result indicates that CQ-001 is stronger than standard CBD, and could be used a lower dose to achieve seizure control. Highlights derived from the Study are as follows: The enhanced efficacy from these clinical studies further validates the pre-clinical trial results obtained by Dr. Steven Laviolette, a professor and neuroscientist, at Western University. These results set the stage for substantially smaller dosages of CBD generating the desired results without the negative side effects and will define a dosage of CQ-001 for a clinical trial (Phase II/III, double-blind trial, 60 patients). CanaQuest has identified the regulatory pathways to obtain Rx Drug Identification Numbers (DINs) in Canada and the USA for Epilepsy rare neurological conditions. CQ- 001, in combination with its proprietary processing and delivery method, is estimated to be approved in about 3 years. “Further testing will be necessary, however preliminary tests suggest that CQ-001 is stronger than regular CBD,” said Burnham, pharmacologist and co-director of EpLink. Paul Ramsay, President, stated, “The Clinical Study results reconfirm the pre-clinical trial results conducted at Western University, and further substantiate the magnitude of this life-changing discovery.” Physicians, psychiatrists, pharmacists, and healthcare practitioners interested in joining our growing network can contact paul@canaquest.com. About: The Ontario Brain Institute – EpLink The Ontario Brain Institute is a provincially funded, not-for-profit organization that accelerates discovery and innovation, benefiting both patients and the economy. EpLink is the Epilepsy Research Program of the Ontario Brain Institute and is focused on finding new ways to diagnose, treat and improve the lives of people living with drug-resistant epilepsy. The program is funded by the Ontario Brain Institute and aims to bring health innovations directly to the epilepsy community. About: CanaQuest Medical Corp CanaQuest Medical, a clinical-stage, life sciences company, is focused on the drug discovery and development of next-generation targeted therapeutics within the endocannabinoid system and specific brain receptors. The Company is focused on treating neurological conditions, such as epilepsy, anxiety, depression, and Post Traumatic Stress Disorder “PTSD”, including addiction. The Company is the industry partner for research and product development with Dr. Steven Laviolette, a professor, and neuroscientist, with decades of experience in the field of mental health and cannabinoids, at Western University. Dr. Laviolette and his team of 13 scientists made two amazing discoveries that are drug candidates targeting neurological conditions: Drug candidate,CQ-001, supported by (cannabidiol “CBD” + IP formula) – molecules bond and synergistically attach to PPAR receptors allowing CQ-001 to cross the blood-brain barrier (BBB) to target the central nervous system (the brain) with amplified effects and efficacy. CBD by itself did not do this in the pre-clinical trial research. The second Drug candidate, CQ- 002, supported by (cannabinoid “THC” + IP formula), is a safer alternative to all other THC products based on pre-clinical trial results. An OTC (less potent version) of CQ-001, branded as Mentanine®, targeting anxiety, depression, and PTSD (without claims), is available for sale via CanaQuest Store in the US. Acknowledgement: CanaQuest has been named: 2022 Global Excellence AwardsBest Medical Cannabis and Botanical Oils Product Development Company, 2022 North America– awarded by Global Health & Pharma, UK. CANAQUEST CONTACT: Paul Ramsay, PresidentCanaQuest Medical Corp paul@canaquest.comTel: 416.704.304CanaQuest.com CanaQuest Store [...]
January 10, 2023Read More
Q&A InterviewWill the Cannabis Cashless ATM Crackdown Continue in 2023?The end of 2022 gave the cannabis financial world a glimpse of what some experts believe will be the inevitable fate of popular alternative payments used by most of today’s U.S. dispensaries. Cashless ATM network shutdowns, beginning in early December, had concerned and affected American dispensary operators scrambling to find alternative ways for customers to pay for products. Some of the largest alternative payment processors of ATM transactions, such as NCR’s Columbus Data Services, turned off the ability of processors to use their service at the time. Both small, and multi-state operators, were impacted by these shut downs, and it was predicted as much as one-fifth of the industry’s Cashless ATM payment systems were unavailable at one point. Cannabis shops across the US are rushing to find alternative ways for customers to pay after networks that supported a popular bank workaround began to shut down https://t.co/jJHqnWlaUu— Bloomberg (@business) December 5, 2022 The Cashless ATM Quandary Cashless ATMs, also called “point-of-banking” systems, have long been the go-to method for marijuana retailers that don’t have access to traditional banking services to give their customers cash-alternative payment options. These systems allow cannabis buyers to use a bank card, pin pad, and card insertion device in lieu of an ATM terminal. With Cashless ATM cannabis retail payment solutions, the total dollar amount selected by the customer is directly transferred to the retail dispensary operator for a purchase, while the customer receives the remaining balance in cash, along with their products. For a customer purchasing $110.50 worth of cannabis goods, for example, a cashless ATM transaction would have the cannabis retailer returning $8.50 in cash. While accounting logic is consistent in both ATM and Cashless ATM payment scenarios, the latter transaction is considered bank fraud and the $8.50 of change paid to the consumer is considered money laundering. But this technology is made to have ATM withdrawals appear as if they are coming from separate entities, and sometimes different addresses altogether, such as a neighboring Massachusetts McDonald’s, as a Bloomberg article reported in April, 2022. At that time, such transactions looked likely to move about $7 billion past the usual money-laundering controls of the banking system last year — or about a quarter of all U.S. cannabis sales. “A Cashless ATM doesn’t make much sense, because instead of an automated teller machine that dispenses cash, but what it’s really doing with cashless ATM transactions is hiding their origination,” said Ethan R. Smith, an Executive Assistant with Las Vegas based ATM Merchant Systems. “So, it’s not giving the right address, it’s not giving the right business name, or industry the business is in, which is important, especially for ATM regulations and transactions.” The Crackdown Will Continue in 2023 This past December’s round-up and shut down of select Cashless ATM service providers came exactly a year after Visa had said it was aware of the scheme, and declared it prohibited on its network. And unfortunately, most cannabis business locations are relying on these non-compliant ATMs to do business, resulting in “outlaw” ATMs. So, what we saw just last month was merely a foreshadowing of what we can expect in 2023 with greater federal banking enforcement. “This is a pivotal point in cannabis banking,” said the CEO of one payment-technology provider affected by the chain of events. “It’s left merchants in the lurch because it happened overnight, but the writing has been on the wall for a while now,” said Peter Su, senior vice president at consulting and software firm Green Check Verified. Cashless ATM Works, It’s Cannabis Cash That Doesn’t It’s worth clarifying on thing about Cashless ATMs. From a customer standpoint, they’re convenient and effective. Essentially, the Cashless ATM is just a normal payment at the counter, rounded up to the nearest dispensable increment, and given back with change. For the retailer, the process itself wouldn’t be illegal were the money put into a bank and not the owner’s bank account. A proper solution does exist, and it’s one where a compliant, 3rd party provider owns the end-to-end solution, the funds that finance it, and keeps them distinctly separate from the dispensary’s money. This is where ATM Merchant Systems has emerged as an industry leader filling the void as an ATM/vault cash services provider completely independent of cannabis business ownership and involvement. “With ours, we own the ATMs, we’re bank sponsored, we’re regulated by the networks, we follow all the rules and compliance, we load the cash (which is bank funded since it’s loaded completely out of the loop from the dispensary), and none of the dispensary money touches the ATMs,” explained Smith. “So, it’s clean going in, and clean going out, which is then used to purchase, the customer can purchase it wherever they’re at,” Smith continued. “Our machine just happens to be in the dispensary and they’re able to use their money, understand and purchase the product.” This is what it takes to be truly compliant with ATM systems in the realm of cannabis dispensaries. Up until recently, it wasn’t necessary, as enforcement hadn’t tightened up on the prevalence of onsite dispensary money fueled workarounds. But look for all that to change in 2023 as authorities firm up regulations and cannabis banking draws nearer and nearer to a federally approved reality. [...]
January 5, 2023Read More
Q&A InterviewSowing the Seeds of Safety and Security By Justin Wilmas, Netwatch There’s no denying the tremendous evolution we’ve seen in the cannabis market over the last few years; all signs point toward this demand continuing to increase. The U.S. cannabis market is projected to reach $72 billion annually by 2030, according to New Frontier Data. Currently, 21 states and Washington, D.C., have legalized recreational and medicinal marijuana use, and 38 permit medicinal use. As more and more states come online with various levels of production and need, it is more important than ever to explore this market’s security and monitoring requirements. Security plays a critical role in the success of facilities in this industry, mainly because of security and compliance. Production and retail facilities rely on video monitoring services to monitor product from seed-to-sale and ensure safety throughout. Video helps stakeholders extract relevant information and events from captured video to save time and enhance responses. Intelligent video solutions take it a step further: prioritizing resource management, enabling various security components to merge into a typical picture, and increasing situational awareness. Challenges Abound From needing to provide a sitemap detailing security to ensuring various locations are correctly set up for security monitoring – compliance regulations are tedious, evolving quickly, and may vary from state to state, county to county. In cultivation operations, video surveillance cameras are required throughout, assigned to plants and specific areas within the manufacturing facility. It can be challenging for growers and sellers to keep up with the changing laws and regulations. Additionally, there is a need to protect a cultivation facility or dispensary from criminal action and liability. Some cannabis businesses may be targets for various types of crime, whether inside the facility or on the premises. With high levels of footfall in and out of dispensaries, it is essential to be protected from claims. Cannabis providers rely on robust security infrastructures to address these needs, and more often than not, they include video surveillance and security guards. But COVID-19 changed the landscape as more businesses looked to add intelligent technologies to protect sites that were now unmanned. Concurrently, contract guard companies endured challenging times due to the difficulty of hiring and retaining personnel and the rise in wage rates and health insurance costs.   Today, companies are looking at finding ways to leverage both services. With technology designed to augment guards, there is an opportunity to embrace a process that will bring both together.  The introduction of AI supports greater automation and augments the efforts of security personnel on the ground, allowing them to focus on more crucial tasks rather than everyday operations. By combining AI with guards, businesses gain an effective force multiplier that works to ensure the highest levels of security.  One such solution that can be highly valuable is proactive video monitoring. Proactive video monitoring (PVM) empowers security personnel to focus on high-impact activities while an AI-based engine “watches” for potential security events. By monitoring, engaging in intervention, and reporting, PVM is proven to be highly effective at stopping criminal activity.   PVM also augments on-site security staff by increasing their ability to see, hear and identify danger. Hazardous activities — such as responding to a dangerous situation — can now be managed by PVM. This approach significantly reduces liability and ensures the continued safety of on-site personnel. It can also help support less desirable jobs, such as working the night shift, where perimeter rounds are completed several times each hour. Using PVM removes the monotonous, sometimes risky work and leaves more strategic duties to your security guards.  But there is far more to these types of intelligent video solutions.  PVM detects threats and unauthorized activity and, within seconds, can alert a highly-trained intervention specialist to verify the incident-in-progress. Intervention specialists assess and confirm the danger over a live video feed from a remote location during a security event. When necessary, intervention specialists can proactively intervene by speaking directly to the intruder through a live audio warning advising the individual that they are being recorded and should leave the premises immediately. These interventions can deter loiterers and other potential criminals from proceeding further onto the premises. In 98 percent of cases, a live warning through an intervention specialist will stop criminals from proceeding. Unlike traditional methods of video monitoring which are prone to signaling false alarms, PVM can reduce false alarm frequency by verifying actual actions through intelligent technology and the experience of highly-trained specialists. When necessary, operators will immediately alert the responding police department and management and provide insight into what is occurring to ensure response teams have the correct information at the right time.  Though on-site monitors and third-party remote monitoring companies can successfully initiate an alarm should an incident occur, PVM companies can assist a cannabis business even further. When contracting with a PVM company, cannabis businesses can customize their alarm response and set pre-determined protocols for the PVM company, depending on the situation and threat level. These protocols may include live auditory interventions, alerting management of the cannabis business, and notifying law enforcement, depending on the incident. The Heart of the Solution “Proactive” is the driving force behind PVM and what sets it apart from traditional offerings. PVM always has an active presence behind the scenes, observing the situation. Organizations can rest assured they won’t need to pick up the pieces left in the wake of a destructive and potentially costly crime. PVM is effective at preventing criminal activity by monitoring, engaging in live intervention, and reporting. An intervention specialist is automatically alerted in real-time of risks caught by the built-in intelligence. If an intruder is detected, the operator can communicate with them directly to tell them to leave. PVM delivers numerous benefits that should be noticed. The video surveillance market is full of outdated solutions and reactionary measures that leave businesses with a steep bill to pay. Organizations can achieve guaranteed peace of mind by investing in proactive solutions.   For those businesses in the cannabis market looking to supplement their security operations, PVM is a solution you should consider. With the experts handling all the heavy lifting, organizations can focus on growth. And, right now, in the cannabis industry, the sky’s the limit in terms of opportunity. Netwatch has been preventing crime and protecting assets for cannabis businesses and other organizations with proactive video surveillance solutions for almost two decades. The company’s technology and processes are designed to streamline the flow of live incidents across thousands of sites, enabling faster response with no nuisance alarms. Driven by machine learning, the system continually improves, increasing accuracy and quality. This enables faster reaction times and a reduction in false alarms, allowing Netwatch intervention specialists to work to the highest industry standards, including the strictly regulated conditions in the cannabis industry.  Learn more about our unique approach by visiting our website at netwatchusa.com [...]
January 4, 2023Read More
Press ReleaseImportance of Reliable, Transparent, and Compliant ATM Programs in DispensariesThe importance of utilizing a full-service, experienced, and compliant ATM company in dispensaries has never been greater. The continuing shut down of scrip terminals (“cashless ATMs”) is directly affecting your ability to conduct business. If you’re like any successful business owner, your main goal for your cannabis retail operation is obvious: to remain operational. But your main priority? To ensure customer satisfaction. It goes without saying that you can’t have a successful business without customers. On a more granular level, having cash in your customer’s hands allows them to buy their favorite products, keeps your doors open, and the cash flowing. ATM Merchant Systems’ Cannabis ATM Program focuses on Network Compliance and Cardholder Experience both leading to customer satisfaction and a bustling retail business. With over 27 years’ experience as a nationally recognized Independent Sales Organization (ISO), ATM Merchant Systems leveraged its knowledge of and relationships in the industry to create a Compliant Cannabis ATM Program that includes Bank Sponsorship, Network Compliance and Approval, Bank Funded Vault Cash and Armored Car. Paired with their proprietary Cash Management System and 24/7, 365-day in-house service team makes their program an industry leader. There is NO cost to the retail business but rather a generous profit-sharing partnership. Utilizing bank-funded vault cash not only ensures strict Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance but allows ATM Merchant Systems to have unlimited scalability within the United States. Partnerships with the nation’s most reliable ATM manufacturers as well as national armored carriers guarantee quick response times. While ATM Merchant Systems has many priorities, one of their main focuses is safety within the storefront. Therefore, it’s important to use a professional armored car service that is experienced and insured. ATM Merchant Systems’ program eliminates all risks associated with bringing money in paper bags to load ATMs including: the risk of theft, personal injury, and business liability. ATM Merchant Systems prides itself on transparency therefore they never mask cannabis business’ identity from Processors, Networks, Banks, or Customers. ATM Merchant Systems encourages the promotion of your legal business name, address, and additional locations. Which is why their custom Digital Signage ATM Topper is included on each ATM machine via their sister company zem-media.com. These showcase your brand, increase sales, and decrease perceived wait times. Partnering with ATM Merchant Systems means no more issues with cash access, money laundering claims, loss of banking (due to ATM fills), employee theft, high fines, and network disbarment for non-compliant transactions. Experiencing fewer risks allows you to spend more time focused on sales and retail strategy. Avoid all the risks of “cashless ATM” terminals as they continue to shut down and become less viable. Give ATM Merchant Systems a call today. To learn more about ATM Merchant Systems and their Compliant ATM Program visit https://atmms.com/cannabis or call 888-878-8166. [...]
December 14, 2022Read More
Q&A InterviewCannabis Vape Landscape and the Hurdles to Future-Proofing Your Dispensary Operations with Andy Signh of NuvataAndy Singh, CEO of Nuvata, Discusses the Cannabis Vape Landscape and the Hurdles to Future-Proofing Your Dispensary Operations How have the cannabis and nicotine vape markets looked similar or dissimilar over the last decade? Before technology was where it is today, consumers had to buy e-liquids, juice, and mods in the nicotine market. This was similar to initial dry-herb vapes of the time, which were stationary, less portable, and not super well-equipped. In the nicotine industry, we saw technology advance to a place where Juul could be the leader. They came out with portable hardware and interchangeable pods, which were sold separately, revolutionizing the industry. They became a hot commodity and did exceptionally well. Altria, a tobacco giant, invested billions of dollars in them. While Juul was positioned as the leader, many brands started coming out with disposables. Puff Bar, for instance, blew up because they focused on a few simple concepts: Phenomenal flavors Ease of use Single-use disposables Compact and convenient form factor Many different players recognized this is where the industry is headed, and many new nicotine brands have originated from that concept. Fast-forward a few years. Before getting banned in the United States, Juul was losing their market share because disposables were capturing it, along with other regulatory issues they were facing. Everyone leaned into disposables because of their convenience, flavors, and form factors. Simultaneously, cartridges were the only available product in the cannabis industry. A few years ago, there weren’t many disposable cannabis vapes; The focus was primarily on cartridges. When Nuvata launched in 2019, we predicted this trend would change. We didn’t know when, but we knew it would. We were ahead of the game. What we’re seeing today is a testament to this shift. Now, we’re seeing cannabis disposables trending upwards and becoming more popular. We’ll see this trend remain consistent over the years, and I wouldn’t be surprised if demand for disposables took over cartridges in the future. It’s interesting to recognize the parallel between the cannabis and nicotine industries. Traditionally, you have two components: the hardware and pod for nicotine, and the cartridge and battery for cannabis. Now you can package those technologies as single-use and price them similarly. What has your personal experience in the cannabis wellness space suggested about the importance of mindfulness in the consumer experience? My personal experiences in the cannabis and wellness spaces inspired me to start Nuvata and define the principles of what we stand for. Personally, when I consume cannabis, I experience this sense of transcendence. My endocannabinoid system is stimulated, and certain parts of the brain are unlocked that may not usually be active without cannabis. When you recognize the changes that are taking place mentally and physically when you’re consuming cannabis, you can harness these effects to enhance whatever you’re doing. Cannabis can help you “be a better version of yourself” — be more reflective, slow down, and look at things differently. We’re so self-absorbed that we often forget to be in the moment and instead always live in our thoughts. Cannabis can help alleviate that and bring us a sense of presence. Nuvata’s curated product line is linked to various lifestyles and helps to bring consumers the mindfulness of cannabis in a convenient package. Are there any consumer purchase trends pointing to success with certain vape features, such as controlled dosage, disposability or other design elements? Headset has shown a 15% increase in demand for cannabis disposables in 2021. That should remain consistent in 2022. I imagine that as technology advances, you could have a controlled temperature feature on cannabis disposables based on the terpene profile and the ideal temperatures for each of those terpenes. As technology advances, there will likely be a combination of controlled dosage and disposability. A convenient form factor combined with advanced disposable vape technology to allow for the perfect smooth dosed draw will drive the vape market. Tell me about the hardest lesson you learned from the unpredictability of the cannabis market. For me, the hardest lesson was recognizing where the limiting factors are in the supply chain. If you look at California specifically, the lack of retailers is the bottleneck of the industry. There are not enough retailers to service California, but there are many distributors, cultivators, and manufacturers. Creating that imbalance causes saturation on one end of the market and limitations on the other. Already, you’re positioning the industry for failure by enabling this disconnect. At any given time, regulations can change, hindering businesses and how they operate. You can never anticipate how the industry will shape itself, but you can look at where it stands at the time and position yourself to mitigate as much risk as possible. Other markets, like New Jersey, limit the number of cultivators but not the number of retailers. We can already predict commodity prices will be high. Product pricing will also be relatively high because there will be a lack of supply. The overabundance of retailers will create a bottleneck because they will compete with each other and fight to survive. The state could always elect to stop issuing retail licenses when the market becomes too oversaturated, or they may allow an influx of cultivator licenses to come online. It’s essential to think about the entire landscape and the economic consequences of a shift like this. The cannabis industry is so dynamic and ever-evolving. Regardless of the state or municipality you operate in, success requires adaptability, analyzing the facts in the moment, and bracing yourself to mitigate as much risk as possible. We can look at Oklahoma for one more example. There was no cap on licenses in the state, so there are several thousands of cultivators and manufacturers and retailers. You had to realize early on that you have to achieve a certain level of scale to operate with longevity and remain competitive, which is very capital-intensive. Given the regulatory framework, commodity prices will inevitably plunge down, which we are seeing today. You must operate somewhat on an industrial scale to sustain the lower margins required for success, especially if you are a cultivator or manufacturer. If you recognized this supply chain pinch early on, you might have been able to steer your business in the right direction. The last two years have been a rollercoaster. How do dispensary owners and operators stay ahead of unpredictable sales cycles? Dispensary owners have to recognize that the cannabis industry is very dynamic. There could always be some regulatory change that results in reconfiguring how they operate their business. Dispensary operators must be adaptable in this type of environment. Many dispensary owners operate on net terms, which is essentially a function of a debt instrument. If a shop operates like that and you experience an economic downturn — be it a massive sales decline or inflation — it puts them in a bad position and a worse bind. Dispensary owners need to do a few things to stay profitable: Recognize how to operate sustainably Limit the level of debt they operate under Keep the overhead adaptable by syncing overhead with their revenue performance Budget out 280E implications in real time while operating their business What’s the biggest hurdle to matching client health and wellness needs to cannabis products in the dispensary setting? The biggest hurdle is the information flow from brands to customers, which is essentially in the hands of the budtender. That’s why brand education is hugely critical for dispensaries. It doesn’t help that budtenders have a pretty high turnover rate. The budtender staff is constantly rotating because it’s an entry-level position, which makes it even more challenging to keep brand education fresh and consistent. Brands must conduct budtender education consistently, either quarterly or semi-annually. Even so, when budtenders educate customers on multiple brands and products, their memorization capacity is limited. Budtenders must keep all this information fresh to best guide customers based on their needs and what they are looking for, which is challenging. It would be beneficial if there were a more direct, consistent connection between the customers and the brands, like some sort of in-store pod, catalog, kiosk, or virtual library with brand and product information. Few dispensaries are doing that. Most rely on the budtenders to support and guide the customers, which is a human limitation. How does a dispensary figure out how many vape products to carry and identify which are best for their target market? Many dispensaries position their brand partners in distress by carrying too many vape brands and similar products. Stores are already limited by the number of customers they see, and creating a saturated sales menu makes it very difficult for brands to stand out and be successful. Dispensaries must be intentional and strategic about their brands, particularly regarding vapes, as products are very similar. If you’re carrying seven or eight cartridge brands with similar potencies and strains, you’re essentially pitting brands against each other. It then comes down to whichever brand can spend more marketing dollars to acquire customers and be successful. That is often not sustainable for the brands themselves. Accordingly, dispensaries need to be strategic about the number of brands they carry in each category and how they differentiate between the products. That’s why Nuvata picked the disposable category and why we focused on effect-based flavors; no one was doing this. We were intentional in that sense to differentiate ourselves. We also differentiated ourselves to customers by offering a more guided and tailored experience to make it easier for them to find what they’re looking for with an emphasis on terpene education. [...]
December 7, 2022Read More
Q&A InterviewHow VRF Technology from Mitsubishi Electric Trane Can Help Your Indoor GrowSome of the most successful contributors to the cannabis industry are those who’s products are well established outside the industry. By leveraging prior success, these contributors are delivering measurable value and leading innovation to the cannabis industry. One such contributor is Mitsubishi Electric Trane HVAC (METUS) – a joint-venture of HVAC industry titans Mitsubishi Electric and Trane Technologies who’s Ductless and Variable Refrigerant Flow (VRF) air conditioning systems are renown for long term reliability and energy efficient operation. METUS has brought their decades of product design excellence and innovation leadership to cannabis professionals providing indoor cultivators with lower monthly operating expense, reliable operation, consistently higher output, while helping customers decrease their carbon footprint. We sat down with Senior Manager of Strategic Programs Michael Hampton to discuss the company’s history, their initial foray into cannabis, and their current position when it comes to industry progress and innovation. Leafwire: How was Mitsubishi Electric Trane HVAC first started? Michael Hampton: Our parent company, Mitsubishi Electric is one of the world’s leading names in the manufacture and sales of electrical and electronic products and systems used in a broad range of fields and applications. Our products are used in factory automation, visual info systems, energy systems, power generation, and of course air conditioning systems. The technology our cooling and heating products are known for – inverter-based – came to the US in the early ‘80’s. Our ductless and VRF air conditioning systems have helped stimulate the US adoption of energy efficient products into homes and businesses. LW: When and why did Mitsubishi Electric Trane HVAC begin servicing the cannabis industry? MH: We’ve been in the cannabis business for a long time as our products are uniquely applicable due to their small, modular, and easy to install features. Because the cannabis industry has experienced incredibly strong growth over the last 6-7 years, we’ve increasingly worked to partner with informed and motivated owners who need their facilities operating reliably and profitably month in and month out. LW: What were some issues with cannabis HVAC systems you identified and hoped to solve when you entered the industry? MH: Large, inefficient, very inflexible products. Typically, cannabis HVAC systems are either large packaged units that sit up on a roof – which requires steel structural support – or, they sit outside, and you have to run duct work across the building in order to move air around in the right places. These products were large, heavy, and inefficient when it came to energy consumption. This resulted in high energy bills for owners and growers, because the machines either had to be 100 percent on or off to work. Grow rooms also tend to be fairly smaller in size, so there is usually very little room to run duct work or have large pieces of equipment hanging from the ceilings. Our small modular design really addresses those issues and benefits operations. LW: What are some of the most popular trends you’ve found in today’s cannabis indoor grow world? MH: The need for the ability to use a single system and spread its energy across multiple rooms, which our modular approach easily addresses. Instead of having one system service one room at a time, we’re able to take a single system and spread it across multiple grow rooms in a way that creates both efficiency and helpful redundancy. If you have one system down but it’s spread across four different rooms, you can still optimize 50-70 percent of your grow capacity. LW: How does this approach support the industry’s growing need for sustainable operations? MH: Across all industries, we’re experiencing a growing concern for the environment: reducing high energy costs, and moving away from fossil fuels. This fits right into our products. They’re all electric, they provide cooling and heating, and they reduce the cost of energy by being so efficient. LW: What are some top tips every indoor grower should know about their HVAC system? MH: Growers are paying their electric bills every month, and that’s an expense that reduces profitability. If they can reduce those electric or utility costs, it will have a profound impact on their overall success. As a grower, you need to make sure you’re investigating the best solutions for your grow room in terms of efficiency and energy use. It’s sort of like buying a car: you can buy a car that gets 10 miles to the gallon, or a car that gets 40 miles to the gallon. Be aware of that efficiency margin. You should also make sure you’re taking advantage of redundancy capabilities. Design your rooms in a way that, should a mechanical system experience a failure (which will happen at some point in time), you won’t lose your entire room. You might go from 100 percent down to 75 or 50 percent, which gives you time to keep your crops growing while you wait for that system to be repaired. Take advantage of any products that can enable your progress in that area. Finally, be aware that there are systems that can average temperatures within a grow room, and therefore do a better job of cooling it. Areas within a grow room can be warmer or cooler at any given time, so having things like multiple sensor locations or multiple averaging temperatures can provide a more uniform cooling experience, which also saves energy. LW: What sets Mitsubishi Electric Trane HVAC apart from your competitors? MH: Our support. As a manufacturer, we provide support from the design stage through startup and beyond. We have people whose sole job is to ensure our products are working and reliable. We have tech support, design support, and training support for people who are installing and servicing our products. We’ve been in the U.S. market since the early ’80s, and we’re basically the first manufacturers of this technology. We’ve been doing it the longest, have the most experience, and we made the investment to support customers throughout the country. Finally, part of the total cost of an AC system isn’t just the initial installation. You also have to factor in how much it costs to operate, and how easy it will be to maintain. A lot of our competitors require major maintenance costs to run efficiently. Our products do not. Our filter changes are easy to perform, and there’s no water treatments necessary, or drives or bearings to lubricate or oil. As long as you keep your coils clean on a yearly basis and change your filters on a quarterly basis, you’ll have a system that performs reliably and consistently for many years. This is a cost that no one thinks about until something breaks and everyone is panicking, but we’ve factored that in from the start. Visit Website [...]
December 6, 2022Read More
Q&A InterviewHow to Increase the Value of Each Transaction with Interactive OffersWith cannabis still federally illegal, the industry finds it consistently difficult to advertise and create brand awareness without violating federal guidelines. The branding, advertising, and marketing space in the legal industry is notoriously murky to navigate, with constantly-changing regulations and wildly different requirements depending on what state or region you’re advertising in. This has forced the hand of strategic brand agencies to get more creative than ever before – like Interactive Offers, who utilize native advertisements to elude restrictions and connect with target audiences in a lasting and impactful manner that can have a transformative effect on how the legal industry markets itself. Leafwire sat down with Interactive Offers co-founder Wesley de Souza to discuss their unique approach to branding and the impact it’s already having on legal cannabis today. Leafwire: How was Interactive Offers first founded? Wesley de Souza: Originally, I ran an ad agency that handled a lot of media buying and placements for major publicly traded companies not in the cannabis or CBD space. We focused on buying media, placing content, and other forms of advertising. We found ourselves spending so much money on programmatic advertising and some of the media we had to utilize just wasn’t great, so we decided to start our own platform. LW: What sort of needs does Interactive Offers meet for the industry? WDS: interactive offers focuses on smaller niches. Google and related companies have programmatic ad features on a monopoly, so we found a little niche within the email space. Running a programmatic ad stack within email and programmatic Click to opt in. That’s our main focus: helping companies build out their own data base which lead to much higher conversions / ROI. LW: Why did you decide to focus on cannabis and CBD? WDS: For us, it was a two-step process. A CBD company actually acquired us to begin with. They’ve since switched their focus to be more of a brand aggregator, but at the time they were strictly CBD. So that was one reason, but another is that we don’t have to abide by any ad exchange rules, because we don’t tie into any ad exchanges. The bigger ad exchanges will deny campaigns simply because they don’t understand the industry. Which allows us to take full advantage of the over looked markets. LW: What sort of benefit does that provide you? WDS: All the publications we have on our platform are directly coded either in newsletters or on the website, so we don’t need approval for any ad exchanges or a DSP or whatever the case may be. Essentially, a lot of those regulations the CBD industry has to abide by on Google, Bing, or any other platform – we don’t have to worry about those setbacks. LW: Without those headaches to worry about, what other tricky things have you come across operating within the cannabis/CBD space? WDS: Well, I think our biggest setback is the option for scalability. If a client wants to spend $50,000 or $100,000 on advertising per month, we can easily do it for the financial industry, for example. But for CBD or Cannabis , we might find it difficult to spend a budget on that level – it’ll take us longer and be on a smaller scale than other industries, which can pose some issues. LW: How does the Interactive Offers platform work to help build a cannabis or CBD brand? WDS: With cannabis, we can get really specific with targeting, because we base it all on email address rather than IP address, which uses households. We also focus on click-to-opt-in funnels instead of cost-per-click or cost-per-impression, meaning the advertisers will only pay us per lead delivered. Take the brand Peet’s Coffee as an example – we help them build out an email funnel to reengage clients, but only charge them per email that makes it into their funnel. This allows brands to have more than one chance at an upsell. Let’s say a consumer subscribes to an email newsletter for a thirty percent-off coupon on their next purchase – that advertiser now has another chance to contact that user until they purchase a product or hit unsubscribe. We’ve taken that concept and applied it to every industry we operate in, including CBD and cannabis. LW: What do you think the future of cannabis ad tech is? Do you see more brands turning to this style of advertising? WDS: Absolutely. This model provides more value to the advertiser. They can get instant sales off the database we’re constantly acquiring on their behalf. Our platform also allows you to work both ways, meaning an advertiser can also be a publisher and increase that cart value for every sale they have. For example, on an advertiser’s transactional page, we’ll display a series of ads that aren’t in competition to what they’re selling – more e-commerce ads like Macy’s, Peet’s Coffee, etc. Then, they’re able to increase the value of each cart because they’re selling that lead, if the user accepts and clicks. An advertiser can also publish and increase each value of their cart, essentially making more money off each buyer. Visit Website [...]
November 16, 2022Read More
Press ReleaseIndiva Advisors LLP Partnership to Bring Thought Leadership to MJ Biz Con 2022Indiva Advisors LLP (Las Vegas, NV) is excited to share details of their participation at the upcoming MJ Biz conference in Law Vegas, Nevada. Partners Jessica Velazquez and Katye Maxson-Landis will be bringing their signature brand of thought- leadership to educate new industry entrants and veterans alike. Indiva Advisors, LLP is known for education, advocacy, and activism at Federal, State, and local levels. Focusing on tax policy considerations, social equity, interstate commerce, social consumption and emerging psylocibin regulatory developments, the firm brings thoughtful, elegant accounting and tax solutions to every discussion. Chief Operating Officer Katye Maxson-Landis will be appearing with The BuzzKillas on Thursday, November 17 at a Main Conference Breakout session. Moderator Kate Robertson will lead a conversation on lessons learned from nine years of legal cannabis with strategic advice from both the legal and accounting perspectives. Entrepreneurs and professional service providers new to the industry can both learn from the experience of early-adopter adult-use markets to weather volatility, and balance short-term and long-term growth strategies. “Many entrepreneurs continue to jump headfirst into the new cannabis industry without good tax and legal information, a detailed business plan or an understanding of the unique facets of state-legal markets.” says Maxson-Landis. “This leads to mistakes that waste capital, create tensions between owners, operational inefficiencies, and bad business decisions.” The Buzzkillas formed as an Oregon market braintrust who have been working in highly-regulated cannabis since the beginning and plan to share informative anonymized anecdotes about individual businesses experience of the evolution of compliance regimes and the resulting market shifts. Conference attendees can add the session in their show planner, the group plans a follow up webinar in December for those unable to travel this year. Managing Partner Jessica Velazquez will be taking part in the Women Grow “takeover” at the MJ BizCon Central booth on Wednesday, November 16. This first-of-its-kind event at MJBiz is an opportunity to highlight amazing women-owned companies, brands, and female entrepreneurs. Jessica will moderate a conversation on cannabis policy at 2pm to discuss progress made in 2022 and hopes for 2023. “As more states move to better regulated markets, and the Federal Government takes steps to adapt agencies and strategies for a national marketplace, it remains imperative that industry not forget the advocacy that has brought such progress.” states Velazquez. “This is an important time of year to take stock and make strategic plans. Just as we do for our individual businesses, the industry must set priorities to improve existing markets for both consumer and supply-chain and support the new markets coming online.” Indiva Advisors, LLP will be hosting a booth on the Expo floor (South Hall Lower, 906) for conference attendees interested in learning more about either topic. ABOUT Indiva Advisors LLP is the leading accounting firm dedicated to the cannabis industry whose team of experts’ service cannabis and hemp businesses in 18 states, ranging from dispensaries to cultivators to ancillary companies. We transform our evolving cannabis industry expertise into innovative, value-added solutions for our clients, business partners and the community. We elevate the standards of ethics and integrity within the industry as it evolves into federal and legal legitimacy. Jessica Velazquez is a Certified Public Accountant (CPA) licensed in Illinois & Nevada and a member of the AICPA. She hails from public accounting firms PricewaterhouseCoopers and Ernst & Young, as well as Zappos.com and The Cosmopolitan of Las Vegas. She serves as Treasurer for the Minority Cannabis Business Association and represents “Small Firms” on the AICPA National Commission on Diversity & Inclusion. Katye Maxson-Landis is a Certified Public Accountant (CPA) and a member of both the AICPA and OSCPA. She is well known as a thought leader on 280E taxation issues and related small business concerns. She is a member of the AICPA Cannabis Conference planning committee and OSCPA Women’s Initiative Committee. She provides professional education to CPAs, EAs, bookkeepers, and lawyers through state professional organizations and The Moxy Accountant, a one-of-a-kind NASBA accredited cannabis tax training program. CONTACTMiranda Weigler, Chief Marketing OfficerIndiva Advisors LLP1-833-880-0420 x103Miranda@IndivaAdvisors.comwww.IndivaAdvisors.com [...]
November 9, 2022Read More
Featured ArticleLeafwire’s Official MJBizCon 2022 After Party ListAfter parties are a huge part of the week as we all descend upon Las Vegas this November. Not sure where to go after a long day at the expo? We’ve got you covered. Check out the Leafwire official MJBizCon 2022 After Party List! Some of them are private and require additional approval, but some are open to all. NameDateTimeLocationLinkBlunt BrunchNovember 15th12pm-5pmIPEC Las VegasRSVPINCBA Solicitors SoiréeNovember 15th6pm-8pmMJBizConRSVPPSYC’ed: Hip-Hop & Poetry NightNovember 15th6pm-9pmBrooklyn BowlRSVPMCBA MJBiz Kick Off PartyNovember 15th7pm-9pmTBARSVPVicente Sederberg Meet & GreetNovember 16th3pm-5pmThe CosmopolitanRSVPEnd the Day on a High NoteNovember 16th6pm-10pmParis Hotel RooftopRSVPCannabis Marketing ReceptionNovember 16th6pm-8pmMargaritaville on the StripRSVPTHC Girls the Necessary PartyNovember 16th6pm-10pmTBARSVPSensi Soiree at MJBizConNovember 16th6pm-9pmThe STRATRSVPCOVA “Back to the 80s” After PartyNovember 16th7pm-12amThe DoyleRSVPThe Grasslands PartyNovember 16th8pm-12am18BinRSVPTHC Girls Industry NiteNovember 17th6pm-10pmTBARSVPDanksgivingNovember 17th8pm-12amOmnia Nightclub TerraceRSVPHigh Times Biz Bash 4.0November 17th8pm-12amBrooklyn BowlRSVPHush House: A High Hustler AffairNovember 17th8pm-12amTBARSVPShangri-LaNovember 17th8pm-12amThe IndustrialRSVP Once you RSVP, share which after parties you’re going to by making a post on the Leafwire news feed! [...]
November 7, 2022Read More
Exclusive ContentCannabis: The True Bipartisan IssueWhen you think of cannabis users, who do you think of? Often our cultural image of pot smokers is quite polarized; our minds tend to wander towards hippies, rappers, and crowds of unruly teenagers. These groups are seen as degenerates by some and liberators by others, but most important, none of them truly exist. Much as there is no “average” American, there is no average “stoner”. These assumptions make it all too easy to look past reality: as cannabis consumption becomes more mainstream, it has become more bipartisan. With the exception of those 75 and older, the majority of adults in the US are in agreement that Marijuana should be legalized for both medicinal and recreational use. According to the Pew Research Center, 72% of those who lean Democrat and 47% of those who lean Republican are in support of legalization. Remember, that’s just the people who are in support of full legalization. When we account for people who feel that medical, but not recreational Marijuana should be legalized but not recreational use, the opinion of the American public is undeniable: only 5% of Democrats and 12% of Republicans feel that Marijuana should be illegal in all cases. With such strong, bipartisan support in the polls, it’s impossible not to wonder, why isn’t more legislation being passed? Let’s take a look: On April 4th the U.S. House of Representatives approved the Medical Marijuana Research Act. Currently, American researchers must get their data from Israel, the United Kingdom, Canada and other countries with more forward-thinking legislation. This legislation would allow researchers to study cannabis from dispensaries instead of having to outsource information. Additionally, the bill makes it easier to apply and get approved to study cannabis by eliminating and simplifying many federal barriers. The most interesting thing about the legislation? It was bipartisan. Passing by a vote of 343 to 75, the bill was sponsored by Democrat Earl Blumenauer and Republican Andy Harris. What is most interesting about this duo – and the bipartisan coalition surrounding cannabis – is that even when there are disagreements about whether or not marijuana should be legalized there is a consensus that what people are smoking should be researched to make sure that it’s safe . As Blumenauer himself states in the congressional record: “The cannabis laws in this country are broken, including our laws that govern cannabis research,” he continues, “because cannabis is a Schedule I substance, researchers must jump through hoops and comply with onerous requirements just to do basic research on the medical potential of the plant.” Gone are the days of staunch rejection of anything to do with marijuana, as even those repelled by the smell can’t ignore the smoke ; Cannabis is undeniably a bipartisan issue. Recognition that it is no longer politically feasible to ignore questions of health, safety, and legalization are contributing to a changing political climate. Politico reports: “In interviews with more than a dozen lawmakers, staffers, advocates and lobbyists, all agreed that in recent weeks the tone has changed on Capitol Hill. Senators previously opposed to anything but a major marijuana decriminalization bill are slowly warming to another option: adding provisions to a broadly supported bill that would allow financial institutions to offer banking services to the cannabis industry, called the SAFE Banking Act.” So, what does this tell us about the future of Marijuana legalization? Well, not much. Despite this change in tone, very little seems likely to occur on the Federal level; as of yet there is no tangible plan to pass anything substantive. This is because any plan to Federally legalize Marijuana would come with many other provisions attached. What this does mean, is that the question is no longer “should cannabis be legalized?” but rather “how and under what conditions?” Some, like Rep. Alexandria Ocasio-Cortez are seeking to have criminal records expunged for those with non-violent cannabis-related offenses . Others are less concerned with amending the injustice of cannabis criminalization’s past and are focusing more on companies having access to Small Business Administration programs. Where does this leave the average weed smoker? Even if full legalization on the Federal level may seem like a pipe dream, smokers can better trust what’s going in their pipes because the government has made it easier for cannabis related research to occur. If it’s a sign of anything, it is that the act of smoking is getting safer as what is being smoked is becoming more transparent. Additionally, as cannabis becomes normalized State governments are filling in to legalize, tax, and regulate marijuana. On the state level, it is becoming an inevitability due to the overwhelming support for it. As KHN writes: “In Montana, 57% of voters approved the recreational marijuana initiative — the same share received by President Donald Trump. In South Dakota, 54% voted for recreational marijuana and a whopping 70% approved medical marijuana. In Arizona, the recreational pot proposition also passed easily.” Those kinds of margins are what caused state Rep. Derek Skees to reconsider a bill he was drafting to repeal the Montana ballot measure in anticipation of its passage. Skees told the Missoulian the day after the election that after it became clear voters supported it — while also supporting Republican candidates for office up and down the ballot — he decided to shelve it. “There’s no way I’m going to try to overturn the will of Montana” Even Red states are turning Green, showing the Cannabis may be the true bipartisan issue. [...]
November 7, 2022Read More
Exclusive ContentHow Alternative Financing of a Pre-Roll Machine Is Saving One Cannabis Company Money, Optimizing Business, and Preserving Equity2022 has been a difficult year for cannabis operations to secure capital with raises off 64.5% YTD. The cannabis cultivation and retail sector has been hit the hardest, with total capital raised down 67.0%, and more notably, equity capital raised dropping by a whopping 96%. Go to any investor pitch competition or capital conference, and legions of worthy, viable cannabis operators are all vying for attention from the same limited number of equity investors actively participating in the market. Few of them will actually secure investment, and for those lucky enough to succeed, not as much capital is being offered as in years past. In fact, 2022 has produced no cannabis equity deals valued above $25M at the time of this writing. All this, while nearly 1,000 cannabis entrepreneurs are competing for New York’s first 150 dispensary licenses. For those who do win them, where does the capital come to build out operations, stock inventory, and run operations as business ramps up? In years past, private equity investors were more accessible and eager to participate in the exciting, emerging market. The better your company promised to solve a problem, the larger the check they’d be willing to write. Today, with equity options having all but dried up, cannabis business debt financing is the highest in the industry’s history. Alternative lending made up 54.4% of total capital raised through September of 2022, and for many operators, this sort of access to capital makes a whole lot of sense. With capital deriving from private sources, alternative lenders aren’t beholden to the same industry restrictions as banks, and the right ones can offer competitive financing terms and interest rates for cannabis operators. National Business Capital One such lending company is doing just that. National Business Capital (NBC) has enjoyed success in conventional business lending since the founder, Joe Camberato, began the company out of his bedroom in 2007. Fifteen years later, the lending marketplace includes over 75 lending partners and has eclipsed $2 billion in total business financing. With an impressive Trustpilot review score of 5.0 from over 2,000 reviews, National Business Capital has proven itself to be a consistent provider of customer satisfaction and successful funding. CannaBusiness Financing National Business Capital’s foray into alternative lending for the cannabis industry began five years ago, and over $20 million in capital has been funded to marijuana and CBD operators since. The company has successfully helped businesses across nearly every touchpoint of the market, from consumption devices, to cultivators, and even cannabis marketing and business development agencies, with an approximate breakdown as such. Biotech (5%)Cultivation/Growing/Farming (20%)Hemp & CBD Products (20%)Marijuana Products (20%)Consumption Devices (10%)Cannabis Marketing and Business Development Agencies (5%)Other Ancillary Companies (20%) According to Camberato, his company’s CannaBusiness financing is primarily used by cannabis operators for facilitating business growth, helping cover business expenses, and venturing into new business opportunities. To qualify for cannabusiness funding through a National Business Capital alternative lender, a cannabis operator need only meet the following criteria. 1 year in business$10K in monthly revenueNo minimum FICO score Rolling in Wins with a New Pre-Roll Machine One of National Business Capital’s clients is now enjoying exceptional returns in the financing of an automatic pre-roll machine. With a $750,000 total ticket price, NBC was able to finance the equipment over four years, with a manageable monthly payment, at a competitive interest rate, all while preserving equity in the company. “It’s really important to pull in the right lending products, because on an equipment deal the collateral is that piece of equipment and you actually leave your cash flow in your business and receivables unencumbered,” Camberato explained. Introducing the new pre-roll machine allowed the cannabis company to better optimize its resources. With automated production, the company no longer required eight employees to hand roll products. Those critical human resources were reassigned to other parts of the business, generating greater value and contribution. “This company was able to buy the machine, and the payment of the machine versus what they were paying eight employee salaries was like one 10th of that cost,” Camberato said. “The payment was maybe one or one and a half employee, so they basically saved 80% of what they were paying in salaries.” “If they didn’t do this deal, it would would’ve cost them more money,” Camberato explained. “By doing it, they saved money, and those awesome employees that they had, they put into other parts of the business where they really needed people.” The NBC financed pre-roll machine yields multiples of product quantity than were possible before, with greater product consistency. “A lot of companies don’t even realize there’s a lot of equipment lenders that’ll do that stuff, especially that size,” Camberato said. “So that was a really special deal that we got done.” [...]
October 27, 2022Read More
Q&A InterviewAdd Your Voice to the Higher Growth Search Cannabis Hiring and Employment SurveyAs the legal cannabis industry continues to expand, so do the opportunities for employment within the market. Cannabis companies are constantly looking for new talent to flesh out their teams and adjust to the growing demands of the industry, and with that comes a need to partner with a staffing firm to make employers’ search for prospective employees that much easier. Based in California, Higher Growth Search is a cannabis employment and HR solutions firm that offers industry-specific expertise and a spectrum of à la carte services to both job seekers and companies looking to expand their teams. Higher Growth Search just put out its annual survey – the 2022 HGS Pulse Check – to get a feel for how cannabis operators are addressing a range of employment-focused challenges. Cannabis employers are encouraged to participate and add their voice to the conversation. Survey respondents can request to receive the results, along with the Higher Growth Search 2023 Salary Guide, both of which will be published in early 2023. The survey takes less than five minutes to complete. The data will not be sold and is for HGS’ internal use only to develop the survey results report. We sat down with HGS’s SVP of Marketing and Business Operations Melita Balestieri to learn more about the survey, what it will cover, how it will aid the industry, and how it will help innovate the team’s approach to helping companies find the employees they need. Leafwire: How does the HGS Pulse Check Survey work? Melita Balestieri: This survey is for cannabis companies and will illuminate industry hiring and business trends. Once the survey results are in, we’ll assess the data we’ve come away with and write up an industry-wide report that will reflect our findings, to be published in early 2023. LW: How do you hope the Pulse Check survey will help inform cannabis companies on their approach to operations? MB: We want to provide hiring managers with insights into hiring trends and employment practices within the cannabis industry. The report findings will help employers learn how their colleagues handle various recruiting and hiring challenges. The report will also provide cannabis operators with insight into how to build and refine their recruiting strategies, allowing them to set themselves up for success in today’s ever-changing cannabis business environment. LW: What are some of the most important things you’re hoping to learn from the survey? MB: We’re interested in learning what strategies employers are using to recruit qualified candidates, whether they’re providing employee benefits, and how they’re assessing the state of the cannabis industry in our current economy. LW: How are you planning to implement new strategies moving forward based on the results? MB: As a staffing and HR solutions partner to cannabis companies in all stages of development, we customize our services to each client’s most pressing needs. That being said, we’ll use our survey results as a guidepost to keep refining our offerings and ensuring that we provide effective, cost-conscious solutions, whether for executive search, direct hire, recruitment on demand, or human resources solutions. Want to join in? Take the Higher Growth Search Pulse Check Survey today. [...]
October 26, 2022Read More
Q&A InterviewCannIntelligence: Helping Cannabusinesses Navigate The MarketCompliance is a difficult arena to navigate within the cannabis space, especially considering the plant has different regulations placed on it depending on the various governing regions. Because of this, companies that focus on cannabis compliance are essential for operators hoping to stay profitable, successful, and safe for consumers. CannIntelligence – formerly known as CBD-Intel – has gone from focusing on CBD to other cannabinoids, approaching the plant and its regulations and compliance standards as a whole on behalf of operators throughout the country. As the industry evolves, so does the need for thorough legal and market compliance analysis, and that is exactly what CannIntelligence brings to the table. Leafwire sat down with Head Legal Analyst Anthony Traurig to discuss the company’s formation, how their initiatives have transformed along with the industry, and where they are today. Leafwire: How was CannIntelligence first founded? Anthony Traurig: Our company started in the e-cigarette sector with ECigIntelligence. However, after spending time in that arena, we figured out that we wanted to cover other emerging sectors that operated in legal gray areas. We were providing value to e-cigarette clients to help them navigate those environments, and we wanted to expand that help to other murky markets. So in 2018, we launched our second platform, CBD-Intel, which provided independent market and regulatory data for the CBD sector. As the industry evolved, so did we, and we naturally began covering cannabis and other cannabinoids more broadly. Because of this, we changed our name to CannIntelligence to reflect that evolution. LW: What does CannIntelligence focus on, and how does the team service and contribute to the industry? AT: CannIntelligence is focused on providing objective market and regulatory data that the global cannabis sector can rely on to make informed decisions. We currently have regulatory data on over 60 countries, with analysts and correspondents positioned all over the globe. We are in constant contact with authorities and stakeholders in the industry, which helps us gain a global perspective not only on where the industry stands, but also where it is headed at any given time. Our clients – who range from companies to regulators to NGOs – have come to trust us for our unbiased, detailed analysis of the cannabis industry. LW: You mentioned that the company just changed its name from CBD-Intel to CannIntelligence. What’s the reason behind the name change? AT: We have been operating as CBD-Intel since we launched the platform in 2018, but a lot within the industry has changed in the meantime. Our coverage of cannabis has evolved along with these changes, and we have gradually been covering more cannabinoids and cannabis products – rather than just CBD – as a result. Today, we cover a much wider range of cannabis products, like intoxicating hemp-derived cannabinoids (IHDCs) and medical and recreational cannabis. Overall, we remain committed to providing the same premium data to the wider cannabis sector that made our services indispensable in the CBD sector. LW: What parts of the plant do you research from a regulatory perspective, and how do findings from the different cannabinoids you work with vary, if at all? AT: We analyze the regulation of all cannabinoids globally. But at this point – with the exception of a few jurisdictions – regulations are focused primarily on CBD and THC. However, that will inevitably change as the properties of more cannabinoids and combinations of cannabinoids are better understood, and we will be tracking those developments closely. Lawmakers and regulators remain more concerned about intoxicating cannabinoids like THC and HHC, but consumer demand for these products is forcing policymakers to inform themselves more about cannabis, and I think that’s a positive development for the industry and for society as a whole. LW: How do IHDCs factor into your work? AT: We have been tracking IHDCs closely since the boom of delta-8 in the U.S. began, and have also been monitoring their creep into Europe and other markets. We have in-depth market and regulatory analysis of IHDCs in the U.S., and will soon release IHDC data from outside of the States. As a company, we have witnessed how IHDCs disrupt the hemp and cannabis industries, and we firmly believe that anyone operating in those industries needs to pay attention to IHDCs regardless of whether they ever intend to make or sell them. We have focused a lot of our resources towards covering IHDCs because their legal status is so murky and they are so difficult to track through traditional retail channels. Our coverage of IHDCs on a global level is truly one of a kind. LW: What is the future of IHDCs in the industry? AT: Although our market data has found that IHDC products are increasing their presence in many global markets and we have identified a few potential legal markets globally, the U.S. is currently the only market in which IHDCs are thriving. IHDCs have enjoyed a greater recognized legal status in much of the U.S. due to the unique language in the 2018 Farm Bill that isn’t included in other countries’ laws. In the U.S., all eyes have to be on the upcoming 2023 Farm Bill – especially for cannabis operators. Although we have noted a region-based legislative shift, from states banning IHDCs to states regulating their sales instead, the federal government could effectively shutter the IHDC industry if they amend the hemp definition to close the “loophole” that allows IHDCs in the upcoming farm bill. I do not think it would be politically wise for Congress to close the loophole and restrict access to cannabis products when citizens have voted time and again for more access to cannabis, but the chances of the loophole getting closed are significant enough that the industry should be paying close attention. LW: What is your opinion on Oregon’s recent ban on CBN? How might it affect the rest of the nation and market? AT: It is certainly understandable that regulators would want to subject “artificially derived” cannabinoids – which Oregon considers CBN to be – to stricter testing standards by keeping them within the state dispensary system for the short term. However, I hope that there can be some sort of compromise to appease regulators’ concerns during the one-year grace period before those products are completely banned. While there is some valid concern about byproducts in synthetic products like CBN, the world is chock-full of synthetic products that are consumed by the masses without anyone thinking twice about it. If testing can ensure that potentially harmful byproducts are not present in these types of products, then those cannabinoids should be treated the same whether they are derived directly from the plant or synthetically. This concept has been accepted in many other industries. Going forward, I hope that testing to ensure the safety of the products is the solution instead of banning them. [...]
October 19, 2022Read More
Q&A InterviewFrom Slopes to Sand, Winter Greens Cannabis Delivery Finds Steady Solution in Dama PaymentsIt was a big day for Winter Greens when I spoke to owner Todd Winter, as his Orange County, California delivery-only cannabis store had finally arrived at opening day. This Costa Mesa, California location is the second of two such Winter Greens delivery locations, the first having been established in 2018 in Truckee, California, near Lake Tahoe. Winter had relocated his family to the area from Orange County and found the need to service both the Tahoe region’s local and tourist population with dependable, compliant cannabis delivery service when he started his first store. But the Winter Greens Orange County location was a bit more challenging to get up and running. A cannabis-progressive city in an otherwise largely conservative county, Winter Greens’ Costa Mesa location came after over a year of regulatory compliance requirements. Something to be expected from a city new to the recreational cannabis market and still discovering what regulations work, and which are merely bureaucratic. A practicing attorney by trade, Winter was able to navigate the challenges. With a portfolio of notable clients including Eureka Vapor, Pacific Stone, Humboldt’s Finest, and Kush Bottles, WINTER LLP has helped small and medium hemp and cannabis businesses navigate the ins-and-outs of regulatory nuances. Despite the unpredictable hurdles he would encounter opening his Orange County operation, one thing Winter had in place the whole time was his payment solution. The Problem It’s customary for cannabis operators to encounter struggles managing a primarily cash transaction business in a world of traditional banking. With cannabis still federally illegal, business owners face severe limitations on how to manage their banking and payment needs. Cannabis operators frequently try to apply traditional solutions to an untraditional business, and for Winter, the experience was no different. Winter Greens first attempted to manage transactions and banking with a traditional bank account. That works for so long, until the bank finally, and ultimately figures out you’re not selling Beanie Babies or whatever other business you’ve claimed to be conducting. This leads to a nightmare scenario where a cannabis operator’s funds are either held indefinitely or never released. It never came to that for Winter Greens, but the interim solution was short lived. The company next tried to conduct its banking business through a credit bureau, but that proved to be a temporary solution as well. Limitations on cash withdrawals, deposits, and the availability of funds make credit bureaus a patchwork of difficulty to work with. As a last resort, Winter Greens used Square as a transaction solution, but that, too, proved short lived. The Dama Solution Ultimately, Winter discovered Dama Financial and its suite of financial solutions tailored for cannabis operators. With an account managed by Dama there are no limits on deposit frequency or amounts, and no frustrating end-of-month caps on account size. Dama follows all FinCEN and BSA/AML rules, adheres to Cole Memo priorities, and stays current with state and federal regulations to ensure clients remain fully compliant, something important to Winter. Paytender Once Winter Greens was up and running with Premier Banking, Winter integrated Paytender into the company’s point of sale system. Text-to-pay electronic payments now account for nearly 40 percent of overall sales at his Truckee location. “We love Paytender, we try to get everyone on it,” he said. “Once you’re set up, it’s really incredible, and so easy to use. Everyone who uses it loves it. Our drivers love it too. The tip feature is great.” Once users have signed up on paytender solution, and have successfully linked their bank account, the system generates a “QR code” which, sent to a user’s phone, enables the payment will be continued on a mobile device. Next, the user receives a text from Winter Greens with a link to paytender to complete the transaction to pay for their delivery before it arrives. With Dama’s proven, reliable banking and transaction solutions in place, Winter Greens Orange County is poised for success. The company has even created a rewards program for its customers converting 3% of every order placed into “Winter Greens Rewards” to be redeemed at checkout. [...]
October 18, 2022Read More
Q&A InterviewIn an Investment Tight Cannabis Market, Debt Financing Has Become a Capital Resource Alternative Canna Business Resources Has Perfected2022 has been a tough year for cannabis companies seeking equity investment. Global equity raises have declined 77% year-to-date, to $962.1 million. I’ve seen even promising, patent-holding cannabis companies struggling to find the right investment partners. This is likely not going to change until corporate valuations improve, according to some industry execs. “Cannabis is a defensive industry,” Andrew Fellus, CEO of Canna Business Resources (CBR) told me in an interview. “Investors in general view this industry as defensive because it’s not going anywhere. Even if it does slow down a bit, it’s not going to zero.” Fellus remarked that industries like electric vehicles have a lot more investment risk than cannabis. His point is well taken, as California based electric vehicle manufacturer Rivian lost $1.7 billion in the second quarter of 2022. Equity investors know the cannabis industry will always be an investment option, are holding out for a stronger market, and are meanwhile looking for some meaningful short-term fundamental results elsewhere. Still, cannabis operators need to expand in light of the fact that there is less capital available in the market. Many are left to find consolidation parters that can provide some liquidity or better access to capital. For operators like these, accepting multistate operator stocks at current discounted levels presents a potential upside in a merger or acquisition deal. Viridian Capital Advisors tracked 75 mergers and acquisitions transactions globally with a total value of $3.5 billion through the end of April 2022, up 3.5% from the same year-to-date period in 2021. Cannabis Debt Financing on the Rise By contrast to equity investment, cannabis debt financing is up 73% year-to-date in the U.S., to $729.3 million. This bodes well for the team at CBR that specializes in cannabis debt financing. CBR provides cannabis companies with growth capital, acquisition financing, equipment financing, CRE financing, or special situation financing. The company can provide funding up to $20M as a bridge to an equity deal or a just general working capital facility, both first and second lien loans, and is often able to structure financing that is complementary to an existing credit facility. The company is a market leader in providing 2nd lien loans to cannabis operators with additional capital needs beyond what their existing senior lender is willing to provide. A unique product is tailored to companies that have an existing senior lender, can demonstrate sufficient cash flows, and are looking for a creative capital solution. “We’re not equity players, we don’t invest in the equity, we don’t own the equity, we provide financing options for working capital for businesses that either need to grow or that are just getting off the ground,” Mr. Fellus explained. “And instead of taking eight months in investor discussions and going out of business in the meantime, we can close a financing in as little as one week.” Financing New York Cannabis Operations CBR prominently represented itself as a capital source and viable alternative to equity investment at the recent Benzinga Cannabis Capital Conference in Chicago, IL. With timely progress in New York’s Adult Use licensing activity, CBR presented cannabis operators with a faster, non-dilutive financing option to quickly tap into the state’s market opportunity. CBR knows that cannabis entrepreneurs and existing companies in the licensing process must line up their working capital today to prepare for a surge of demand next spring. The New York market is bound to be supply constrained and that means manufacturers can be a bottleneck, or they can be a resource. Having the right amount of working capital to launch a thriving and critical part of the supply chain. For soon-to-be New York dispensary owners, shelves need to be fully stocked with enough supply in inventory to make it through an expected surge in demand upon opening. And for cultivators, massive amounts of working capital will be needed to bring much needed high-quality flower to the regulated New York market on a timely basis. Mr. Fellus, himself a lifelong New Yorker, said that the New York market will require billions in investment in infrastructure, marketing, product development and compliance, and that CBR has set up a separate division and allocation to underwrite and finance New York market participants. CBR has a track record of success assisting new and growing cannabis businesses with capital resources to seize opportunities brought about by regulation and legal change. When final regulations were approved for consumption lounges in Nevada, CBR was able to help a client acquire a suitable property with which the operator could vertically integrate its existing cultivation operation into a retail store with attached lounge. The company provided $3.5 million in loans, consisting of a $2.5 million in real estate acquisition and $1.0 million for working capital needs. The working capital needed for the facility included tenant improvements, furniture and fixtures, personnel, and inventory. The loan was structured at a 75% Loan-to-Value ratio with a three year-term and interest only component. The cannabis real estate loan has a three year balloon. In some cases, CBR even offers exclusive interest only structures. Understanding Hurdle Rates A the halfway point of the year, interest rates began to rise, impacting the cost of capital for borrowers. At the same time, it’s also impacted hurdle rates for investors. As Mr. Fellus explained it, “The Hurdle rate being the hurdle you need to overcome in order to be a profitable investor.” So, the hurdle rate being your total cost of capital. “So the way you would look at it if you’re an investor is, ‘Okay, I’m borrowing money from somewhere, whether it’s investors or otherwise,” Fellus said. “The cost of that capital is ‘X’ plus your cost of overhead investment committee compliance, all of which are going up. So, it’s not getting easier to run one of these lenders or investor groups because the regulatory burden is increasing and so that means your hurdle rate is going up.” If your hurdle rate going up, then the cost of capital to the borrow is also going up. As an investor, to beprofitable on your investment costs you more. “I think a lot of people don’t know that cannabis is still a nascent industry when it comes to talking about really openly talking about the inner workings of finance,” Fellus continued. The Future of Cannabis Debt Financing Many, many successful entrepreneurs are in this industry and they’ve done well for themselves and theyhaven’t needed outside financing. But when they do, as Mr. Fellus pointed out, they begin to see how the hurdle rates work for private capital and it’s more expensive than they anticipated. “As the cannabis industry becomes more competitive, it’ll become prohibitive to bootstrap it and you’ll need outside capital,” Fellus said, “So I think it’ll become more prevalent to the discussion of cost of capital in the industry in the next couple years.” As a family office with its own money, CBR “We don’t need to get our capital from anywhere else, and we have set rates for borrowers that we’ve been doing for years that are not economically sensitive,” Fellus explained, citing his company’s advantage for its borrower clients. “I call them clients because they really are–like half the time I spend my time helping them learn how to run their business.” In today’s capital sparse cannabis industry, having a lending partner that will not only provide the resources to operate and grow, but guide your business along the way is an ideal scenario. And for small and medium sized cannabis operators not looking to participate in an M&A, CBR offers an appealing alternative and an opportunity to have a financing partner that will evolve as their business does. [...]
October 6, 2022Read More
Press ReleaseCannaCon the Nation’s Leading Cannabis Conference and Expo Returns To VirginiaOn October 14th-15th the industry-leading cannabis business exposition, CannaCon, is heading to the Greater Richmond Convention Center. Over the years, CannaCon has established itself as the premier destination for cannabis industry professionals, with unbridled opportunities for business-to-business networking on its exposition floor. As the first major cannabis exposition to come to Virginia since legalization, CannaCon will once again provide a place for the community to shop, learn, and network. Featuring exhibitors from across the US selling everything you need to grow in the cannabis space from the latest in soil, nutrients, and lighting, to packaging, processing and more. Each CannaCon expo is uniquely catered to the needs of the local industry — the upcoming event will feature a seminars on Legalization to Licensing: Opening Virginia’s Adult-use Retail Market by JM Pedini Executive Director of Virginia NORML, managing your plants nutrition by Joel Perkins of Key Grow Solutions, How to permanently reduce your cost per pound with Jim Walker of CanGrow Solutions, and so much more. About CannaConCannaCon is dedicated to creating and strengthening lifelong partnerships within the emerging cannabis industry. It is our mission to provide a global B2B venue for cannabis businesses, marijuana entrepreneurs, investors and community partners to showcase industry products, people, innovations and technology. We are committed to cultivating business values within the cannabis industry through education and responsible community involvement. CannaCon – Contact Angela Grelleangela@CannaCon.or206-250-6398 Use code “LEAF30” for 30% off tickets Get Tickets [...]
October 5, 2022Read More