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While TOCC’s facility kept its power, many of its employees did not. And while the facility continued to run, hazardous road conditions made it impossible to drive throughout the state to deliver cannabis medicine.
Contributing Editor Cassie Neiden Tomaselli caught up with TOCC CEO Morris Denton, who shares some of the grim details of last week and how he believes the Compassionate-Use Program could improve to make medicine more accessible should another weather event impact the state of Texas.
Editor’s note: This interview was conducted on Feb. 19. It has been edited for length and clarity.
Cassie Neiden Tomaselli: How is the team doing overall?
But the lawmaker from Erie County, in the northwest corner of the state, became the first Republican in the Pennsylvania legislature to sponsor an adult-use cannabis legalization bill, which he introduced with Democrat Sen. Sharif Street on Feb. 24.
During a press conference with the two sponsors Wednesday afternoon, Laughlin said he knows it seems odd that he’s not a proponent of cannabis, yet he’s a primary underwriter of the legalization bill. But since he started working on the legislation with Street, an African-American of Philadelphia, he realized some of the social damage that communities of color have experienced over minor offenses, he said.
“That really got my attention,” Laughlin said. “But I think the final straw was a conversation that I had with one of my kids. And I checked with him. He said it was OK to mention this in the hearing. He told me that he could have a bag of weed delivered to the house in under an hour, and that’s better service than Amazon. And I realized that anyone in Pennsylvania that wants to smoke marijuana is probably already doing it. So, we might as well take this and regulated it. I think [it] is the most responsible thing that we can do.”
The approach to the bill focuses on a safe and legal means for adults 21 years and older to purchase and use cannabis; social and economic equity that includes expunging non-violent cannabis convictions; agricultural arrangements in a safe and regulated manner; and new tax revenue and job creation.
According to a press release from Street, polling indicates that nearly two-thirds of Pennsylvanians support adult-use legalization. And according to testimony from the Pennsylvania Independent Fiscal Office, adult-use legalization can generate between $400 million to $1 billion of new tax revenue for the commonwealth of Pennsylvania.
“BioAgronomics Group is thrilled to be joining forces with Segra International to advance the Canadian cannabis industry through providing high-quality, unique cultivars,” commented Robert Clarke, co-founder of BioAgronomics Group. “We expect this partnership will lead to increased access to popular and agronomically productive cannabis cultivars for licensed growers in Canada and internationally.”
In addition to the carefully selected “classic cultivars” curated by BioAgronomics Group specialists, Segra will also be able to supply proprietary and exclusive cannabis varieties from the BioAgronomics Group portfolio. These proprietary genetics were bred for potency and novel cannabinoid and terpene profiles, as well as ideal crop morphology and heightened pathogen resistance. Preparing BioAgronomics Group’s proven cultivars utilizing Segra’s tissue culture technology will ensure consistently high-performing plants that offer high yields of enhanced THC and terpene content. As with all Segra tissue culture products, the plantlets arrive as verified clean stock. Segra and BioAgronomics Group are pleased to offer these premium cultivars in our effort to help growers start with better genetics to realize higher profits.
“We are incredibly excited at the opportunity to partner with the team of industry-recognized experts at BioAgronomics Group and offer their cultivars, through tissue culture, to Canadian producers,” said Segra CEO Jamie Blundell. “BioAgronomics Group has a tremendous amount of experience developing premium cannabis cultivars for commercial production, and we’re honored that they are trusting Segra with their valuable genetic IP. Partnerships with leading experts and breeders, like BioAgronomics Group, combined with the benefits and biosecurity of plant tissue culture, will help producers dramatically improve financial performance as the industry and consumer preferences continue to evolve.”
Founder and President Corey Barnette says that his extensive business background gave him a solid foundation for his entrance into the cannabis space. And now that he’s spent years here, navigating the cultivation side of the industry and monitoring broader trends in the U.S., he says that there are ways for business owners to challenge the working assumptions about social equity and market development.
While he may be in D.C., a smaller market than many of the larger states coming online, he points to the fragmentation of the U.S. cannabis space as a major problem.
“We have to build long-term relationships to build a stronger cannabis community among ourselves to be competitive and profitable for years to come,” he says.
Here, our recent conversation with Barnette helps illuminate that need.
Mila Marshall: You are one of the licensed industry’s few African American growers. How did you find yourself one of the few history makers in the cannabis industry?
BP Logistics is a California-licensed cultivation group owned by Minh Mai, CEO, and Chauncey Man, chief operating officer. Along with their team of experienced cultivators, the high-energy pair is determined to bring Asian cultivators to the northern California cannabis market with a forward-thinking grow strategy. Selecting Agnetix A3, one of the world’s most energy-efficient and most powerful LED horticultural grow lights, will ensure they have a significant advantage. This partnership marks a pivotal step in the team’s plan to develop technology-forward and sustainable facilities powered by energy-efficient and intelligent systems including lighting, HVAC, water management, nutrient control and data capture.
“Agnetix is by far the best grow lighting system on the market today,” Mai said. “The A3 water-cooled lighting system delivers a tremendous amount of high-quality light that benefits our plants while greatly reducing our carbon footprint.”
The team chose Agnetix as its primary lighting and cultivation management system for its high-energy efficiencies and data visibility. Agnetix provides a full suite of value-added benefits and a one-of-kind decision support system, employing energy-efficient LED lighting, canopy-level sensors, networking technology and data analytics.
“As we make this major shift in our model, having Agnetix as our partner will provide us with a sure path to exceeding our business goals,” Man said. “The superior level of customer service from the Agnetix team is unparalleled.”
Agnetix CEO Jordan Miles said, “We are thrilled to partner with this team and support their unique vision for sustainable growing facilities. Crop visibility, data-driven insights and remote control are just a few ways we endeavor to mitigate risks across all of their growing facilities and provide a greater peace of mind.”
Noncompliance with the new regulations may result in government or private prosecution, with potential penalties of up to $2,500 per day for an alleged violation.
Proposition 65 Warning Requirement
California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Prop. 65, requires the state of California to maintain an updated list of chemicals known to the state to cause cancer or reproductive toxicity.
Persons or companies who offer products for sale in California containing Proposition 65-listed chemicals must provide a “clear and reasonable” warning to the consumer (with limited exceptions) or face the prospect of penalties. Businesses usually choose to apply either the standard or “short form” default warnings provided in the Proposition 65 regulations, as these are deemed presumptively “clear and reasonable,” whereas any other warning language runs the risk of being challenged as noncompliant.
Prior Proposition 65 Requirement Limited to Smokable Cannabis
“This process may have had its fits and starts, but it is ending in the right place. And, I firmly believe, this process has ended in laws that will serve as a national model,” Murphy said.
One of the last hurdles to clear in today’s “cleanup bill” was the approach to law enforcement when dealing with underage cannabis possession, part of a broader intention to pass decriminalization legislation alongside the implementation of a regulatory regime. The debate over that bill lasted until just before Murphy’s 12 p.m. ET deadline to act on related cannabis legalization bills. State legislators landed on a cleanup bill today that sets up a written warning and community service policy for underage possession, rather than punitive civil penalties. (For those 21 and older, possession of up to six ounces is now legal, a critical step toward the amelioration of the long-standing war on drugs.)
"This is a major milestone on the path to ending cannabis prohibition in New Jersey," said Jennifer Cabrera of Vicente Sederberg LLP, in a public statement.
There is no immediate timeline for adult-use cannabis sales to begin in New Jersey, though a soon-to-be-named Cannabis Regulatory Commission is expected to convene in the near future to get the ball rolling.
"The legislation was intended to promote small locally owned businesses and should foster a vibrant craft cannabis industry in the state," Cabrera said. "It reserves licenses for microbusinesses and offers them a streamlined application process that will reduce barriers to entry and help them get a footing in this growing industry. There are some additional steps we would like to see policymakers take to make it easier to operate these microbusinesses, and we look forward to working with them as they fine-tune the system. Still, this is a great starting point and opens the door to a lot of exciting opportunity for local entrepreneurs."
The company holds five retail licenses, which is the maximum number of licenses that any one company can have in Missouri’s market. Missouri Health & Wellness opened its first location in Washington at the end of November, and its second location in Sedalia just before Christmas. The company then opened a third dispensary in the state’s capital, Jefferson City, on Jan. 25. Now, Missouri Health & Wellness has its sights set on its final two stores in Kirksville and Belton, which will open by the end of the winter.
The company is standing up its locations quickly, despite Missouri’s medical program experiencing delays due to the COVID-19 pandemic. Missouri Health & Wellness HR Director and Regional Manager Kathleen Beebe says it took a year and a half for the state’s first dispensaries to open after the state began issuing patient ID cards, but there has been a steady increase in the number of patients enrolling in the program.
“What’s most exciting is when you have patients walking in the door for the first time and you hear about … what they’ve been dealing with, and they’re so excited to have another option,” Beebe tells Cannabis Business Times and Cannabis Dispensary.
Most of Missouri Health & Wellness’ patients are 60 years old and older, she says, and many are first-time cannabis consumers who are frustrated with the results of traditional medicine.
“I think that’s the No. 1 thing that excites me most about this industry, is that we are bringing some relief to people,” Beebe says.
As part of his $91-billion budget released Feb. 16, legalizing cannabis would generate more than $165 million annually for Wisconsinites, beginning in the second year of the biennium, Evers announced in a statement. Under the governor’s proposal, that money would increase revenue, create jobs and reduce costs associated with the state’s criminal justice system. The proposal also includes legalizing medical cannabis.
But two days after the 717-page budget was released by the Democrat executive, it was met with scrutiny by two key Republicans who control the majority in both chambers of the state legislature. During a virtual luncheon hosted by WisPolitics.com, an online magazine and news service covering political and governmental news in Wisconsin, Rep. Mark Born and Sen. Howard Marklein slammed Evers’ inclusion of cannabis legalization in the budget.
Born and Marklein are the co-chairs of the Joint Finance Committee (JFC), meaning they hold the fiscal keys as two of the most important decision-makers in the state Capitol. The committee members will spend the next few months rewriting the governor’s budget, with their version going to the Assembly and the Senate for a vote—Republicans own a 60-plus-percent majority in both chambers.
“Well, [cannabis legalization is] a huge issue; huge topic that I don’t believe should be included in the budget,” Marklein said. “It’s a significant enough policy change that that topic needs to be debated in the light of day on its own. I’ve heard from my sheriffs, my healthcare professionals, social workers, we’ve heard from representatives and legislators in Colorado on this topic, and it’s a big policy shift, and I just believe it’s too big to be inserted into the state budget.”
Piggybacking on those comments, Born said, “This is a major thing that has a lot of stakeholder groups on both sides. The senator just mentioned some of them. So, obviously we do public hearings on the budget, but they are on a lot of issues and they’re time limited because of how many things we have to dive into. These are big, broad discussions, and this is just one example of many of them that the governor put into this budget where it doesn’t belong.”
Of course, that’s not the only thing happening in New Jersey.After the New Jersey medical cannabis dispensary licensing process was halted in late 2019 amid a legal dispute, an appeals court ruling Feb. 18 has once again restored the green light to regulators and prospective businesses. Some 150 applications are back on the table, with the state able to issue up to 24 new licenses. Read more SLANG Worldwide is bringing its suite of cannabis brands to Missouri and Virginia, two newly legalized medical cannabis markets that offer a lot of promise to the business. In the same stroke, SLANG is expanding its presence in Michigan’s retail sector. Read more Despite Curaleaf’s share prices dropping after a warning letter from the FDA, a judge found the company has been transparent about risks associated with the industry. Read more HEXO Corp. announced its acquisition of Zenabis Global Inc. earlier this week, a major headline that sees the Canadian licensed producer planting a flag in Europe’s cannabis market. Read more New York Gov. Andrew Cuomo announced 30-day amendments to the Governor's proposal to establish a comprehensive adult-use cannabis program in New York. Read more
And elsewhere on the web, here are the stories we’ve been reading this week:Yahoo! Finance: “Jamaican export legislation, expected to be finalized in mid-2021, is back on track, and the global industry’s need for a solution to quell supply shortages remains.” Read more Pasadena Star News: Nearly a dozen lawsuits from different cannabis companies had been filed against the city of Pasadena since 2019, and now most of them are gone. Read more San Francisco Chronicle: “Medical marijuana workers now have priority access to the coronavirus vaccine, under revised California guidelines.” Read more Leafly: As of January 2021, the U.S. cannabis industry is supporting 321,000 full-time jobs. Read more High Times: The London Stock Exchange will now allow cannabis businesses to trade publicly. Read more
This all came about through SLANG’s new strategic partnership with Merida Capital Holdings, a private equity firm that touts a deep portfolio—both plant-touching and ancillary. For SLANG, the move allows the business to place its proprietary brands (O.pen, Bakked, District, Pressies, Lunchbox Alchemy and Firefly) in front of new patient and customer bases.
As CEO Chris Driessen said, "Integrating our brands in emerging markets through strategic partnership is core to our growth strategy.” Here, we caught up with Driessen to learn more about the partnership and about the inherent attraction of newly legal markets in the U.S.
Eric Sandy: In terms of Missouri and Virginia, how do you view the opportunities in these two emerging markets
Chris Driessen: As emerging markets, these are markets where you work with a strategic partner—in this case, Merida and their affiliates—to bring products to market. It's similar to what we've done in Florida with Trulieve or Michigan with Gage. This fits that model perfectly. What's really interesting about both of these states, from my point of view—one, Missouri's regulations, the way they're rolling out the program, it’s a pretty wide open market. It’s a state with a good population. Certainly on their southern border with Oklahoma, there's massive access for patients there. So, as far as the model itself, the way they've drawn up the program bodes very well for a business like ours. And then you turn to Virginia, which is a little different—more limited, a little more restricted, but with all the recent regulation with what the governor is trying to do there, it could come on really quick. Obviously, we want to skate to where the puck is going, not to where it's at. So, two separate markets, but we're excited about both for two different reasons.
ES: As you step into a new market like these two states, what are some of the keys to bringing your brand to a marketplace with patients or even consumers who may not yet be familiar with your brand?
The court also insisted that the New Jersey Department of Health clean up its licensing process and take a more transparent approach to the work.
"Hopefully this decision will allow everyone to move on and start getting down to the business of providing patients the medicine they need," said Edmund DeVeaux, president of the New Jersey CannaBusiness Association, in a public statement. "Far too much time, energy and money has been expended on this entire licensing process with too few results to show for it."
In December 2019, a lawsuit gathered eight rejected medical cannabis applicants to put forth claims of procedural error. As that case kicked off, the state halted the licensing process entirely. Included in today’s ruling, the appeals court did overturn the rejection of ZY Labs, one of the original eight plaintiffs, and kicked the decision on that application back to the Department of Health. The other seven applicants in the legal case remained on the sidelines.
“This was a significant victory for ZY Labs,” said Lee Vartan, an attorney that represented the applicant, told NJ.com. “ZY Labs is confident in the strength of its application and looks forward to being awarded a license to cultivate medical marijuana in the central region.” New Jersey issues both cultivation and retail licenses, as well as a limited number of vertical licenses across the state.
As of now, only 13 dispensaries are operating in New Jersey (under the aegis of 10 licensed businesses). According to the state, those dispensaries are servicing about 100,000 registered patients.
Investors in the company filed the lawsuit in August 2019 after Curaleaf received a warning letter from the U.S. Food and Drug Administration (FDA) for selling CBD products with unsubstantiated health claims about the products treating cancer and Parkinson’s disease, among other health conditions. (Curaleaf responded by removing the health claims from its website and social media accounts.)
The day after the FDA administered its letter, Curaleaf’s stock price fell $0.54, or over 7 percent, and continued to fall in the following days.
The plaintiffs have argued that Curaleaf did not properly disclose the risks associated with selling CBD products.
However, in a Feb. 16 ruling, U.S. District Judge Brian Cogan said Curaleaf has been fully transparent about the legality of its business.
“Starting on its first day in existence, the Company publicly and repeatedly acknowledged the very information that plaintiffs contend it concealed: its cannabis-based products are not approved by the FDA and thus the FDA may regard their promotion as violating established law,” Cogan wrote in his opinion.
HEXO will pick up Zenabis’ two indoor cultivation facilities and 2.1 million square feet of greenhouse space (all located in Canada) to ramp up capacity with another 111,200 kg of production annually.
“The transaction gives HEXO immediate access to the European medical cannabis market through Zenabis’ local partner, with an established facility in the European Union supplying pharmaceutical products to the European market,” according to a press release announcing the move. “The facility also serves as a European Union Good Manufacturing Practice packaging and distribution center for medical cannabis products produced in Zenabis' Atholville facility.”
Atholville is located in New Brunswick, Canada. Zenabis’ local partner on the ground in Europe is ZenPharm, based in Malta.
“We're thrilled to welcome the Zenabis team into the HEXO family. Zenabis has built solid relationships and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere, in Canada and abroad” said Sebastien St-Louis, CEO and co-founder of HEXO Corp., in a public statement. “We are proceeding with this transaction because we believe it should be accretive for our shareholders, and it also positions HEXO for accelerated domestic and international growth while supporting near-term requirements for additional licensed capacity. HEXO’s growth strategy includes expanding our global presence, and this acquisition is an important step in that direction.”
On the past five days of trading (as of Feb. 17), HEXO is down 6%.
Domestic expansion is the addition of one or more cultivation sites within the same state, province, or country. A cannabis business can expand by building new cultivation assets from scratch, or acquiring existing operations that are fully functional. However, entrepreneurs should determine whether they are legally permitted to expand their business before they establish high hopes for domestically increasing their cultivation footprint.
Do you have permission to expand?
The biggest deciding factor on whether or not to expand a cultivation business should be determined by regulations. If your existing license allows for more than one cultivation site, and you are now in a position to take advantage of that option, initiating an expansion project should be fairly simple. If your current license only allows for one cultivation site per license, expansion won’t be as easy. In this scenario, a cultivation business must either purchase an existing license or submit a new license application. Regulations governing these activities differ by state and country, and some jurisdictions prohibit the transference of licenses between companies.
Expansion through building more facilities
If you’re considering expansion, then you’ve already been through the start-up process and you recognize the importance of proper land selection and facility design. Review Chapters Four and Five, or consult the site assessment checklist found in the Appendix to help expedite these processes.
Sustainable growing solutions
"As we work to reimagine, rebuild and reopen New York, we're taking every opportunity to address and correct decades of institutional wrongs to build back better than ever before," Cuomo said. "We know that you cannot overcome a problem without first admitting there is one. Our comprehensive approach to legalizing and regulating the adult-use cannabis market provides the opportunity to generate much-needed revenue, but it also enables us to directly support the communities most impacted by the war on drugs by creating equity and jobs at every level, in every community in our great state."
Allocation of $100 Million Cannabis Social Equity Fund
Social and economic equity are the bedrock of Cuomo's proposal to legalize cannabis for adult-use and as part of that, his proposal includes a $100 million dollar fund to help revitalize communities that have been most harmed by the war on drugs.
Through this fund, qualified community-based nonprofit organizations and local governments would apply for funding to support a number of different community revitalization efforts, including, but not limited to:Job placement and skills services,Adult education,Mental health treatment,Substance use disorder treatment,Housing,Financial literacy,Community banking,Nutrition services,Services to address adverse childhood experiences,Afterschool and child care services, system navigation services,Legal services to address barriers to reentry, andLinkages to medical care, women's health services and other community-based supportive services
The grants from this program may also be used to further support the social and economic equity program.
Location: Pauls Valley, Oklahoma
One word to describe your cultivation style: Passion
Indoor, outdoor, greenhouse or a combination: Indoor
Can you share a bit of your background and how you and your company got to the present day?
I got started in Los Angeles, CA medical program in 2003 through 2010. I moved back to Oklahoma with no expectation of Oklahoma having a medical marijuana program. In 2018 S.Q. 788 passed and we built a team of like-minded individuals but with wide ranging skill sets and took off.
State Sen. Nancy Skinner introduced legislation Feb. 11 to loosen some of those constraints by expanding resources to help city and county governments that don’t have the wherewithal to oversee legal cannabis operations, she said in a release about her bill. S.B. 398 would allow local jurisdictions access to a state program that would manage certain bureaucratic functions for them, like enabling businesses to obtain licenses through the state.
“Californians legalized cannabis four years ago, yet the state is still plagued by a multi-billion-dollar illicit cannabis market,” Skinner said in the release. “Why? Too many cities and counties don’t have the bandwidth to set up cannabis licensing and regulations. S.B. 398 will help cities and counties greenlight legal cannabis by allowing cannabis businesses to get their local licenses through the state.”
In November 2016, Californians approved Proposition 64, The Control, Regulate and Tax Adult Use of Marijuana Act, by a 57.1% majority, legalizing adult-use cannabis statewide. The proposition was intended to reduce the illicit market with an above-ground legal playing field that ensures the production and sale of safe, regulated cannabis, Skinner said.
But the Legislative Analyst’s Office (LAO)—a nonpartisan fiscal and policy research institute for California’s legislature—estimates that adult-use cannabis businesses operate in less than one-third of jurisdictions statewide, which, in part, is because of the complicated regulatory framework Proposition 64 requires local governments to administer, the congresswoman said.
Integrated Room Automation helps cultivators maximize plant biomass and phenotypic expression, strengthen top-line performance and mitigate risk. Combined with InSpire’s plant-centric HVACD systems, cultivators can achieve 24-hour vapor pressure deficit (VPD) control and greater resistance to pathogen introduction and expression.
“Historical wisdom and technology provides a very solid foundation on which to build, but we can’t ignore that the commercial cannabis industry is rapidly evolving,” said Adrian Giovenco, CEO of InSpire Transpiration Solutions. “It is becoming increasingly important for legal cannabis cultivation operations to leverage cutting-edge strategies in order to maximize profitability. When growers can monitor, control and analyze a full range of environmental data, they can drive yields and innovate in ways that will move the entire industry in exciting new directions.”
InSpire’s Integrated Room Automation provides cannabis cultivators with the ability to:Leverage environmental crop steering techniques with real-time controlOptimize plant performance with transpiration and carbon assimilation insightsMonitor moisture content of harvested flower during the dry/cure process for consistent product weight and qualitySchedule temperature and relative humidity setpoints, plus automate light schedules and carbon dioxide enrichment by room to optimize phenotypic expression run after run Access a fully functional IOT platform with customizable alerts and bank-level security from anywhere in the world
“Integration like this is essential for success,” Giovenco said. “Using independent units to heat, cool, dehumidify and clean the air leads to high operating costs, prevents plants from reaching maximum metabolic rates and puts the entire operation at risk of pathogen contamination. Cannabis operations can successfully meet their [key performance indicators] by implementing repeatable, precise environmental control for greater consistency in product quality, optimized phenotype and chemotype expression.”
To learn more about InSpire’s Integrated Room Automation, visit: https://inspire.ag/hvac-products/controls-monitors/]]>