Tag Archives: government

Navigating ISO/IEC 17025: Key Considerations for Cannabis Lab Software

By Montserrat Valdes
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In some states, cannabis testing facilities must undergo a third-party audit as a condition for obtaining their license. This may involve obtaining an ISO/IEC 17025 accreditation, which requires an evaluation from a qualified auditor. Alternatively, some laboratories may undergo a voluntary audit in certain regions to showcase their competency.

ISO/IEC 17025 is a widely acknowledged global benchmark for the expertise of testing and calibration laboratories. It establishes guidelines for laboratories to showcase their technical proficiency and ability to produce precise and trustworthy results.

For cannabis testing laboratories, obtaining ISO/IEC 17025 accreditation can offer a significant edge over their rivals. Such accreditation can result in several advantages, such as improved credibility, lower operational expenses, better conformity with local and state regulations and more efficient cross-border trade.

Integrating any standard into a regulated enterprise can be a complex undertaking and ISO/IEC 17025 is no exception. This standard puts a strong emphasis on quality by requiring laboratories to exhibit their impartiality, consistency and proficiency in all aspects of their work. Compliance with ISO/IEC 17025 necessitates timely and secure data retrieval, which is difficult to achieve without an information management system. Therefore, laboratories are increasingly turning to laboratory information management systems (LIMS) to modernize their practices, improve quality and meet ISO/IEC 17025 compliance standards. This article explores the critical factors that laboratory managers and staff should consider when selecting a LIMS that can help them fulfill the demands of ISO/IEC 17025. However, let’s first discuss the sections the ISO/IEC 17025 requirements are classified into.

ISO/IEC 17025 Requirements 

The ISO/IEC 17025 requirements are divided into five sections:

  1. General Requirements (Section 4): The fourth section of the ISO/IEC 17025:2017 standard details the general conditions that laboratories must follow. This section is primarily concerned with two critical aspects: impartiality and confidentiality. The impartiality requirement mandates laboratories to remain unbiased and take measures to prevent any potential bias. Similarly, the confidentiality requirement mandates that any information collected or generated during laboratory operations must be treated as private and safeguarded adequately to prevent unauthorized access. In instances where the release of confidential information is necessary by law or contract, the laboratory must communicate such release in an appropriate and timely manner.
  2. Structural Requirements (Section 5): In order to achieve the three key objectives of competence, impartiality, and consistent operations, this section addresses the fundamental organizational requirements of a laboratory. This entails being a legal entity with well-defined management responsibilities and documenting all activities, procedures and methods that fall within the standard’s scope. It highlights the importance of human resources by requiring laboratories to provide individuals with the necessary authority and resources to identify and rectify deviations from procedures, methods and the quality management system.
  3. Resource Requirements (Section 6): This section highlights the crucial role of resources in helping a laboratory achieve its objectives and maintain high standards. The section covers five areas, namely personnel, facility and working environment, equipment, metrological traceability and third-party products and services. To meet the standard’s requirements, personnel must demonstrate competence and impartiality, and lab personnel must record their current training status. Lab staff should also be provided with adequate resources to perform their duties. The facility and working environment should be suitable for generating accurate analytical results, while equipment must be properly calibrated and maintained. Metrological traceability is important to establish the connection between measurement results and a reference. Additionally, it is essential to thoroughly evaluate and approve third-party products and services to ensure their suitability. Clear communication of the requirements to third parties is also necessary in this regard.
  4. Process Requirements (Section 7): This section of the standard outlines 11 essential processes that aim to improve efficiency in laboratory operations. The processes include evaluating requests, tenders, and contracts, as well as selecting, verifying and validating methods. This section covers areas such as sampling, test item handling, and technical record-keeping. Other requirements include reporting outcomes, managing complaints and non-conforming work and controlling data and information management, which is especially important in the current digital era.
  5. Management System Requirements (Section 8): Section 8 deals with the laboratory’s management system, which must support consistent adherence to the standard’s requirements while ensuring the quality of the laboratory results. The section offers two options for the management system: Option A for new systems and Option B for existing systems driven by ISO 9001. The section consists of eight tasks which involve activities such as documenting the quality management system (QMS), identifying and addressing potential risks and opportunities, implementing measures for improvements and taking corrective actions. The final clause of the section involves conducting an internal audit of the laboratory’s management system to ensure it complies with the standard’s requirements.

Key Considerations for Selecting a Cannabis Lab Testing Software or LIMS

A cloud-based cannabis lab testing software to manage staff training with ease

Before selecting a Laboratory Information Management System (LIMS) for your cannabis testing lab, it is crucial to comprehend the informatics requirements of your laboratory. This involves understanding analysis necessities, limitations on reporting and data sharing, demands for instrument interfacing, requirements for sample barcoding and tracking, and procedures for ensuring quality assurance. Once all this is in place, a laboratory should take into account the following considerations:

Technology Considerations

When considering technology options, it’s important to consider future growth, data management and security and regulatory responsibilities. If a laboratory expects to grow in the future, it should consider investing in technologies that could enhance data management practices and security. The laboratory must also take into account how compliance with ISO/IEC 17025 will impact its future expansion and technological needs. To determine hardware and software investment, the laboratory must consider the type of work it will be performing and the associated regulatory and customer-centric responsibilities. It is also essential to identify the person or team responsible for addressing any potential technological problems, like setting up and maintaining software. If the laboratory wants to avoid procuring IT infrastructure and hiring IT personnel for maintaining LIMS, they should deploy a cloud-based LIMS that eliminates the need to have an elaborate IT infrastructure or dedicated IT staff. 

Cybersecurity Considerations

As the need for cybersecurity continues to grow in various industries, it has become apparent that cannabis testing laboratories are also vulnerable to cybersecurity threats regardless of size. Therefore, it is important to consider additional cybersecurity measures for these laboratories. Although the ISO/IEC 17025 standard does not explicitly mention cybersecurity, it does address the proper control of data in section 7.11. The standard emphasizes that LIMS, whether hosted locally or in the cloud, should be protected from unauthorized access and tampering. To comply with the ISO/IEC 17025 standard, laboratories should integrate cybersecurity considerations into their LIMS selection process. This can be achieved by creating a cybersecurity plan and including cybersecurity controls in the user requirements specification (URS) for LIMS software. Using a pre-built URS that includes cybersecurity controls can simplify the process of evaluating and selecting informatics software for laboratories. It is important to maintain the LIMS to ensure data and information integrity, recording any security breaches or non-conformance and addressing them promptly.

Regulatory Compliance Considerations

Meeting well-designed standards like ISO/IEC 17025 can enhance a laboratory’s operational culture and assure the reproducibility and accuracy of test results. If a laboratory is considering purchasing a LIMS solution and is unsure about how it can align with ISO/IEC 17025 and other regulations and standards, they can refer to resources like ASTM E1578-18 Standard Guide for Laboratory Informatics for guidance. The laboratory’s own requirements list can then be used as a checklist for vendors.

System Agility

A schematic representation of the various requirements of ISO 17025

Laboratories should consider if the LIMS under consideration can handle adding other types of testing, protocols, and workflows in the future. A flexible LIMS that allows for configuring various aspects of the system, such as sample registration screens, test protocols, labels, reports, and measurement units, is essential. When evaluating a vendor’s system, it’s important to understand what makes it user-configurable and how easy it is to make changes. Moreover, you must check if you can make changes in the system without requiring programming skills.

Cost Concerns

For a laboratory to have a clear understanding of what is included in the sales agreement, it is important to provide an estimate or statement of work (SOW) that outlines the details of the anticipated elements with as much specificity as possible. These elements should include the cost of licensing or subscription, core items needed to comply with regulations, the total cost of optional items, and the required services such as LIMS implementation, maintenance, technical support, training, product upgrades, and add-ons. There are two main pricing models for LIMS solutions: a one-time license fee and a subscription fee for cloud-hosted LIMS. If a laboratory has an internal IT team, it may prefer the one-time fee, but a SaaS subscription may be more cost-effective if they don’t have an IT team and want to save on hefty upfront cost. To accurately reflect the various pricing nuances, the estimate or SOW should specify whether the costs are for monthly or annual subscription services, hourly support and training, or a one-time fixed cost. 

The ISO/IEC 17025 accreditation offers several benefits, including improved credibility, lower operational costs, and better conformity with local and state regulations. However, integrating ISO/IEC 17025 requirements into a laboratory’s practices can be challenging. That’s where a cannabis lab testing software comes in. Laboratory managers and staff must consider several critical factors when selecting a LIMS to meet the requirements of ISO/IEC 17025. Key considerations for selecting a LIMS to meet ISO/IEC 17025 requirements with ease include technology considerations, cybersecurity considerations, regulatory compliance considerations, system agility and cost considerations. By meeting the compliance requirements of the ISO/IEC 17025 standard, cannabis testing laboratories can ensure the quality of their results and provide trustworthy services to their customers.

Building An Integrated Pest Management Plan – Part 6

By Phil Gibson
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This is the sixth and final in the series of articles designed to introduce an integrated pest management framework for cannabis cultivation facilities. To see Part One, an overview of the plan and pest identification, click here. For Part Two, on pest monitoring and record keeping, click here. For Part Three, on preventative measures, click here. For Part Four, control methods, click here. For Part Five, pest control action thresholds, click here.

This is Part 6: Emergency Response

When all prevention efforts have failed and your escalation procedures must be implemented, your emergency response document takes the stage.

Figure 1: We never want to see these at our door

It sounds obvious, but your emergency response document is your team’s guide to structure your response to an emergency. This begins with the simple definition of what is an emergency for your business. Emergencies can be to your personnel (personal injury) or your infrastructure (broken pipes/floods, power failure), and finally, a pest or pathogen outbreak that threatens the entire facility (insects/fungus, molds). Be sure to get the advice of your local service providers on the important things to put in to your response plan. This article is far from an exhaustive list, but it can get you started quickly with the basics for example purposes.

Personal Injury

Personal injuries are the events where you would call your local fire or police resources after stabilizing trauma events. Examples are chemical exposure, cuts, lacerations or broken bones from falls or crush events, burns, electric shock or earthquake or weather events. Injury response is to assess, call for medical assistance if appropriate, provide first aid and stabilize the injured, move to safety if possible, treat the injury and after the event is over and still fresh in everyone’s mind, consider what can be done to avoid the repeat of this or similar events in the future. Work those changes into your standard operating procedures.

Emergency Response to Facility Events

Figure 2: Cultivation IPM Prevention with Beneficial Insects

Whether the event is broken pipes or flooding, power failure or interruption, fire, HVAC failure or weather event, emergencies come in all sizes possible. It is likely that you built up a plan for emergency response as part of your city permitting process. Be sure to use those experts to refine your plan to include your operations.

Broken pipes start with the basics of turning off the source feeds and fixing the plumbing. If the water is actually rich fertilizer nutrients, cleaning and disinfectant is necessary as part of the drying and mop up process.

Environmental damage from fire, HVAC or weather event, lead to immediate treatment to try and save the current crops. This would include manual watering/misting, portable heater/cooler/CO2 burners. Verifying that backup power supplies turned on as planned. Are emergency fixes sufficient to power or run the systems necessary for plant life until power is returned?

Cultivation Events

Figure 3: Emergency Response Team Investigating Treatments

This entire paper has been about pest management, so emergency is expected to mean a pest or pathogen outbreak. We defined the escalated response actions up to the point of direct action and chemical interventions in chapters four and five. Your emergency response plan takes those actions to a site wide effort. Identify the pest and location/s that are causing the crisis, isolate the infested plants, remove the infected materials, clean, disinfect, and purify the contacted surfaces. Follow your plan and contact your emergency leaders.

Emergency Response Team

Your emergency response document identifies each of your team leaders and executives that are to be contacted in the event of an emergency. These leaders should be identified in the document with contact details and methods/on-call schedules for days and times of responsibility (after normal hours and holidays included). Someone is always on-call. The personal injury, facility and cultivation lead responsible should be identified and aware that they are the assigned resource and to treat emergencies as a priority.

Figure 4: IPM Preparation – Put It All Together for Success!

In Conclusion

We have covered an example integrated pest management philosophy from prevention through observation to limiting expansion to treatment and review. This continuous monitoring and learning process is a living document of standard operating procedures for any facility.

The attention of your team, their scouting observations, and attention to detail give you an opportunity to address and restrict any pest outbreak before it destroys your crop. Teach your operators well and reward them for their attention to your plan.

Clean and sterilize your facilities regularly. Preventing the emergence of pests will pay for the investment in a multitude of ways in both savings and profits. Plan your response thresholds and use traps to monitor your escalating protections. Target your treatments and remediations to match the threats to your harvests. As a last resort, apply approved chemical treatments judiciously to minimize the impact on non-target organisms.

Evaluate the effectiveness of your plan on an annual basis. Put your improvements to work for you to minimize your pest footprint and to increase your profits in every harvest.

For a copy of the complete Integrated Pest Management guide, download the document here.

Building An Integrated Pest Management Plan – Part 5

By Phil Gibson
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This is the fifth in a series of articles designed to introduce an integrated pest management framework for cannabis cultivation facilities. To see Part One, an overview of the plan and pest identification, click here. For Part Two, on pest monitoring and record keeping, click here. For Part Three, on preventative measures, click here. For Part Four, control methods, click here. Our final chapter, Part Six, discussing emergency response, comes out next week to wrap it all up.

This is Part 5: Pest Control – Taking Action

Previous chapters have covered the many preparations you can take to protect your facilities from pest attacks and outbreaks before they get started. This chapter will summarize the concepts of pest control thresholds and the actions you can take for the painful event when you surpass those limits (and various examples). The Integrated Pest Management (IPM) recommendations provide you with a framework for these plans.

Figure 1: Cleaning regimen, the heart of successful operations – no biofilm buildups

Preventative actions are part of your regular site operations; in other words, they are how you avoid problems before they happen. Just to hit this action one more time: cleaning must be fundamental to your facility. Water sanitation and changing filters must be done on schedule and frequently to avoid biofilm build up and nasty self-multiplying eco-systems.

For each of the rooms in your facility, identify the acceptable tolerance level for each type of pest that you may encounter. Define the intervention levels per room: preventative, direct action and escalated direct action. Follow your predefined procedures and defend your facility. Let’s cover high, medium and low tolerance example responses.

High Threshold for Tolerance

For example, the impact on your plants, your profits and your yields from the discovery of a white fly fluttering inside of one of your flower rooms may be very small. If this presence is late in your harvest cycle, your tolerance of this discovery may be very high. Your team could take preventative actions to clean the room more aggressively or to check your traps more frequently, but you are probably not going to want to invest in aggressive actions at that time in the harvest cycle.

Move from passive observation to the shake test. With sticky traps in place, shake or brush your plants. Do you see the bug counts increase on your test sheets?

Figure 2: Thrip Evidence c/o UC ANR Publication 7429

As that infestation grows, you may set a threshold for direct action (i.e. 5-10 flies per trap per week). If you reach that level, implement a treatment action with a non-chemical microbial biofungicide to stop growth in the roots or neem oil as a direct chemical action.

When you reach your escalated threshold of 10-20 flies per trap or direct plant damage is apparent, an infestation is more serious. In that event, you may choose to take steps to directly reduce the pest population with knock down sprays of approved direct chemical pesticides like citric acid or insecticidal soaps. Be sure to use your Personal Protective Equipment (PPE) for breathing and contact safety if you get into this situation.

Medium Threshold for Tolerance

Depending on the timing in your harvest cycle, the discovery of fungus gnats in your grow room may trigger a medium level alarm for you. Is the location, a small example with a minimal frequency? Is this addressable with additional attention to cleaning the area and longer dry periods in the irrigation or is this the beginnings of an infestation? Fungus gnats feed off of fungus or organic matter in soil triggered from an overly moist root environment. You may choose to react with immediate cleaning at the first existence in a room. Or you could set your “Medium” level alert status to be additional sticky trap distribution at the first visible gnat. If those counts reach 10-20 gnats per sticky trap per week, begin your foliar spray regimen with Zerotol or the equivalent.

Figure 3: Fungus Gnats

If these counts do not respond to your treatment, meaning that the next sticky trap count reaches beyond 20+ gnats per trap or visible direct plant damage, then institute your root drench protocol with a solution of BActive 1-2 times per week until the problem is under control and the counts are reduced. If the growth continues, look to approved pesticides in your area (as an example, AzaGuard Asadirectin).

Low Threshold for Tolerance

Alternatively, you may have a unified air circulation system due to facility limitations. Your air circulation may be shared across all of your mother plants, clones, veg and flowering plant areas. In that case, any presence of an airborne fungal infection like powdery mildew would have a very low tolerance of acceptance. Selective de-leafing of the infection and increased airflow are your first defense. Any visible presence beyond that would trigger a low threshold alert and immediately start a preventative action, such as carefully removing the infected plant material much wider than a few leaves and treating the area with foliar sprays like Zerotol (hydrogen peroxide plus).

If the penetration continues or expands, treatment would escalate to minimal risk pesticide follow up and observation. Chemical oils or citric acid might be in your mix in this case.

Figure 4: Powdery mildew in cannabis – Ryan Douglas Cultivation LLC

Finally, if repetitive treatments once a week are not turning the tide, increasing to once per day or even once per ON/OFF lighting cycle until the infection is controlled. At this point, you may decide to strip the room down and start over. Clearly the choice to “throw in the towel” is a total loss of the crop, but it may be the best option relative to minimal yields and failed flowers that will not sell.

Pest Control Actions

Our Integrated Pest Management recommendations paper gives you examples of what to consider for plans with white flies, fungus gnats, root aphids, powdery mildew and biofilm on plumbing or surfaces. These follow the preventative action, direct action, escalated direct action and pesticide approaches for each example. These are options to plan for water sources, root treatment, tunneling, crawling and flying phases.

In summary this week

As covered, preventative measures are your best defense. Hire expert consultants and plan these well. Escalate your response based on your scouting activity and your plan. Add your sticky traps, de-leafing, root drench, foliar sprays or knock down sprays as defined by your pest population control actions document.

For more detail on each of these treatments, you can see examples for your integrated pest management procedures in our complete white paper for Integrated Pest Management Recommendations, download the document here.

In our final chapter, Emergency Response, we will review control thresholds and example plans for a range of problems from biofilm build up to white flies and more.

Our final chapter after will describe emergency response framework and reviewing your complete plans. See you next week.

The Distressed Cannabis Business: An Alternative to Bankruptcy

By Paula Durham, Scott E. Evans
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Bankruptcy is Not an Option

Bankruptcy courts do not provide protection to cannabis and cannabis-related businesses.Bankruptcy can be a very helpful tool for a distressed business. Bankruptcy allows a business to stop collection actions, discharge certain debts, cancel unfavorable contracts and provides breathing room to restructure the business.

What if your cannabis operation is struggling or failing – file for bankruptcy, right? Not so fast. Despite cannabis being legalized or decriminalized for certain activities at the state level, it remains illegal at the federal level. Therefore, the bankruptcy court will not provide protection to cannabis and cannabis-related businesses (CRB).

Alternatives to Bankruptcy

A State Court receiver may be the best alternative when bankruptcy is not an option.Enter the state court receivership. Receivership is an equitable remedy that is often employed as an alternative to a bankruptcy proceeding. A receivership can address business insolvency or can be a temporary remedy during legal proceedings between disputing business partners, with control of the enterprise hanging in the balance.

In either scenario, the court appointed receiver takes control of the business and must assess the posture of the business and determine the best path forward. The receiver’s options run the gamut from operating the company as is, restructuring operations to maximize profit or closing shop and liquidating the business as a whole or in pieces. The receiver has a fiduciary responsibility to determine the option that best satisfies creditors, similar to duties required of a trustee in a bankruptcy.

The importance of having a receiver well-versed in the cannabis industry cannot be overstated.Distressed cannabis companies are often prime candidates for receivership. Cannabis is a burgeoning industry with huge growth and profit potential. However, worlds have collided in the Green Rush, where business-minded individuals, often with little knowledge of cannabis, have partnered with individuals well-versed in cannabis culture, cultivation and consumption, but with little experience operating a business. Add a dash of complex state laws and regulatory drama in the form of the federal/state divide on legality, a dollop of fraud potential due to the largely all-cash nature of the business and you’ve created the perfect recipe for insolvency, litigation or both. In these often-chaotic conditions it is easy for a cannabis company to become unprofitable. A receiver can add significant value by stabilizing the business while the litigation proceeds or while developing a restructuring plan. In either case the goal of a receivership is to maximize the value of a business for the benefit of its stakeholders.

If you are considering restructuring options for your cannabis operation, a receivership can be an excellent choice. However, a cannabis receivership is not for the faint of heart. There are two significant areas that distinguish cannabis receiverships from receiverships involving non-cannabis businesses: First, the complex regulatory environment and second, banking. The importance of having a receiver well-versed in the cannabis industry cannot be overstated. Making a mistake in these areas can cause more harm than good. 

Complex Regulatory Environment

Cannabis operations are subject to a complicated regulatory framework that varies by state as well as by type of legalization (medical versus adult use cannabis). Receivers unfamiliar with the cannabis industry and the associated regulatory framework will be behind the curve on day one.

Upon appointment over a cannabis entity a receiver becomes responsible for the regulatory posture of that entity.Regulatory hurdles begin at the outset of a receivership. Although receivership is an excellent restructuring option for cannabis operators in distress, regulations surrounding the authorization requirements for those operating the business on a day-to-day basis (including receivers) vary by state. Some states, but not all, even have specific regulations for receiverships.

For example, the rules and regulations for cannabis operators in Colorado administered by the Colorado Marijuana Enforcement Division (MED) include provisions for receiverships. Specifically, the MED requires court appointees, including receivers, to register with the State Licensing Authority as Temporary Appointee[s] of the Court within seven days of appointment.

Similarly, Washington State cannabis regulations directly address receiverships. Specifically, Title 314 allows receivers or trustees to operate a licensed cannabis business, but the receiver must be qualified by the Washington State Liquor Control Board (LCB). Qualification requirements include  active status on the LCB preapproved receiver list or submission of an application to serve as a receiver for a licensee within two days of appointment. Furthermore, to serve as a receiver of a Washington state cannabis licensee the receiver must meet residency requirements.

Conversely, the Arizona cannabis laws and rules do not specifically address cannabis receiverships. Nevertheless, Arizona does require anyone volunteering or working at a medical or recreational cannabis dispensary to be registered with the Arizona Department of Health Services as either a Dispensary Agent (DA) or a Facility Agent (FA). Therefore, a receiver appointed over a licensed cannabis business in Arizona must obtain the applicable registration upon appointment in order to take control of the licensed entity in a compliant manner.

The fun doesn’t stop after the initial appointment hurdles are cleared. The regulatory environment across the country is a patchwork of complex laws. States that have legalized or decriminalized cannabis on some level have instituted often complex rules surrounding the cultivation, manufacture, wholesale and retail sale of cannabis. Even seemingly simple concepts such as the definition of cannabis are not so simple in some states. For example, Massachusetts includes cannabidiol (CBD) in its definition of cannabis while Arizona does not.

Some states, like California, do not allow the sale of cannabis licenses. Other states, like Colorado, allow for the transfer of commercial cannabis licenses. In a turnaround situation it is particularly important to understand the options available to liquidate a licensee’s assets.

Similarly, many, but not all states have rules requiring cannabis product testing by accredited laboratories prior to retail sale. Most states require THC potency testing, while others (like California and Colorado) also require testing for pesticides and toxins. Conversely, testing for toxins and contaminates is voluntary in Florida. Product testing is expensive and time-consuming, and operators must have a comprehensive system in place to ensure compliant product is available for sale to retail and wholesale customers.

Even taxes are different for cannabis businesses. A receiver must understand and be able to manage a cannabis business in order to comply with and minimize taxes under the infamous 280e regulations of the U.S. tax code.

Upon appointment over a cannabis entity a receiver becomes responsible for the regulatory posture of that entity. Accordingly, the receiver must ensure that any regulatory deficiencies are identified and corrected in order to ensure compliant operation.

We’ve highlighted just a few of the myriad of regulatory concerns facing a receiver upon appointment. It is critical to engage a receiver who has experience working under the complex cannabis regulatory structure for your distressed cannabis operation.

Banking

One of the most important things a receiver does upon appointment is to identify and secure the assets of the entity in receivership, including cash. This normally involves opening a bank account in the name of the receivership entity that is controlled solely by the receiver and moving cash assets into the controlled account.

This typically ordinary task is not so easy with a cannabis operation. Because cannabis remains illegal under federal law, processing funds derived from the sale of cannabis (even sales that are legal at the state level) can be considered by the Department of Justice (DOJ) as aiding and abetting criminal activity or money laundering.A receiver must negotiate the complex banking regulations regarding cannabis businesses and effectively manage the large amounts of cash, which may not be bankable.

The Financial Crimes Enforcement Network (FinCen) issued guidance in 2014 that cleared the way for financial institutions to service canna-businesses (2014 Guidance). The 2014 Guidance requires financial institutions who choose to provide services to CRBs to design and implement a thorough customer due diligence review that includes, in part, analyzing the licensing of the entity, developing an understanding of the business operations of the entity, and ongoing monitoring of the entity. In addition, financial institutions are required to file a Suspicious Activity Report (SAR) for every transaction they process for a CRB, should they choose to accept the business.

While this is a positive step forward, it is a heavy compliance burden that comes at a cost. Naturally, compliance costs incurred by banks to service cannabis operators are passed on to the customer; fees of $2,500 per month per account are not uncommon. The high compliance costs, coupled with the significant regulatory risk, keeps most banks out of the cannabis market; thus, making it hard, but not impossible, for a receiver appointed over a cannabis operation or CRB to obtain banking.

While banking options do exist, the reality is that most canna-businesses operate on a cash basis. Distressed cannabis operations may not have the cashflow to afford banking services, at least at the outset of a receivership. Further compounding the banking problem, some banks that are open to cannabis are not open to receiverships, further limiting banking options.

A receiver therefore must be prepared to quickly secure all cash assets of the receivership entity and ensure appropriate internal controls are in place to control cash on an ongoing basis.

Cannabis has been legalized or decriminalized in a majority of U.S. states but remains illegal at the federal level. Therefore, federal bankruptcy protection is not generally an option available for a distressed canna business. However, not all is lost because state receiverships offer an excellent restructuring option for distressed cannabis operations.

Minnesota Legalizes Adult Use Cannabis: Part 2

By Abraham Finberg, Rachel Wright, Simon Menkes
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In Part 1, we examined the current status of adult use cannabis in Minnesota, paying particular attention to the licensing framework, taxation and social equity considerations. In this article, we’ll cover some important need-to-know info if you’re considering opening an adult use business in the “Land of 10,000 Lakes.”

Starting a Cannabis Business in Minnesota: Important Considerations

As the state does not expect to begin issuing licenses before the first quarter of 2025, now is the time to plan a licensing campaign. With a population of 5,714,000, 64% of which live in the Twin Cities of Minneapolis-Saint Paul, Minnesota is close in population to Colorado, with 5,774,000 residents. Colorado currently has around $1.8 billion in yearly retail cannabis sales. This may suggest a similar possible level of sales for Minnesota once its retail cannabis market matures.

In a recent op-ed piece for Marijuana Moment, the New York cannabis consulting firm of Bridge West Consulting suggested three reasons, in addition to low cannabis excise taxes and reasonable license fees, why entrepreneurs should consider investing in a retail cannabis business in Minnesota:

  • Minnesota legislation prohibits localities from banning cannabis businesses. This avoids serious problems that have plagued cannabis businesses in other states including California and Montana in which access for cannabis companies has been denied and, in Montana’s case, even reversed. (Minnesota’s new legislation does allow local governments to limit the number of cannabis retailers to one for every 12,500 residents, however.)
  • Minnesota has allocated funds to assist social equity cannabis businesses, including $6 million to the CanStartup which will fund non-profits to make loans to budding cannabis businesses.
  • Bridge West makes the interesting observation that Minnesota is bordered by four states—Wisconsin, Iowa, South Dakota and North Dakota—none of which have legalized adult use cannabis. Moreover, an estimated 1.9 million people live outside of Minnesota within a 50-mile radius. That means that not only will Minnesotans not have to compete with out-of-state cannabis dispensaries but will benefit from the purchases of out-of-state residents that live within a comfortable distance.

How a License Application is Scored

HF100 gives some guidance as to how the Office of Cannabis Management (OCM) will score license applications, awarding points for the following 9 categories: social equity status, veteran status, security and record keeping, employee training plan, business plan and financial situation, diversity plan, labor and employment practices, knowledge and experience and environmental plan.

The OCM may award additional points if the applicant would expand service to an underrepresented market. Points may also be awarded to those applicants who can demonstrate a negative impact from cannabis prohibition such as arrest or imprisonment of the applicant or their immediate family. This is different from social equity status and the law says points may be awarded to the applicants “in the same manner as points are awarded to social equity applicants.”

Emphasis on Market Stability; Prohibition of Vertical Integration

Minnesota is taking measures to ensure “market stability,” which it doesn’t specifically define, but which it says involves:

  1. Ensuring an adequate supply of cannabis, but not a glut.
  2. Eliminating the illicit cannabis market.
  3. Promoting a craft cannabis industry.
  4. Prioritizing growth and recovery in communities that have experienced a disproportionate, negative impact from cannabis prohibition.

HF100 states, “The office shall issue the necessary number of licenses in order to ensure the sufficient supply of cannabis flower and cannabinoid products to meet demand, provide market stability, and limit the sale of unregulated cannabis flower and cannabinoid products.”

Continuing its emphasis on “smaller is better,” HF100 says, “Unless the office determines that the issuance of bulk cultivator licenses is necessary to ensure a sufficient supply of cannabis flower and cannabinoid products, the office shall not issue a bulk cultivator license before July 1, 2028.”

Vertical integration is also prohibited. “The office shall not issue licenses to a single applicant that would result in the applicant being vertically integrated.” HF100 goes on to state that microbusinesses are exempted, and that if the OCM determines that vertical integration is necessary to ensure a sufficient supply of cannabis and cannabis products during the first year of such products being sold to customers, it may authorize one or more applicants to be vertically integrated. However, such a group of licenses are very temporary and will expire at the end of that first year period.

An entity holding a cannabis retailer license may also hold a delivery license, a medical retailer license and an event organizer license. But no retailer may hold any other license. Also, no entity may own or operate more than one retail business in one city or county.

Interestingly, Minnesota is also allowing cities or counties to own and operate a municipal cannabis store, possibly similar to the way Utah has government liquor stores which compete with private bars, breweries, wineries and distilleries.

In Summary

Minnesota is just beginning to define and establish its adult use cannabis market. Like other states before it, it is attempting to promote social equity aims at the same time as it’s working to avoid the serious problems of a competitive illegal market and an over-or-under supply of cannabis to its citizens.

With low license fees and excise taxes and a good-sized population, 420CPA believes cannabis entrepreneurs should seriously consider Minnesota for possible investment. The first cannabis retail businesses are not expected to open for another 18 months, so now is the time for businesspeople to lay the groundwork for their applications and future locations.

The Sensory Branding Opportunity for Cannabis Products

By Dr. Ed Szczygiel
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Cannabis brands are facing a proverbial fork in the road: determining whether their product evolves into a luxury consumable or affordable agricultural commodity. While it is reasonable to assume the cannabis market space will organically grow into a luxury goods industry such as wine and spirits, the luxury brands that serve as the foundation of these markets were built over years of engagement between consumers, connoisseurs and producers. If cannabis companies want to successfully market their products as luxury items, a concerted effort towards well-defined, consumer-accessible branding is required.

The first step towards evolving a cannabis brand towards luxury is overcoming the fixation on cultivar identity. Unregulated cultivar naming currently impedes creativity and craftsmanship, disrupting brands and salespersons’ abilities to clearly communicate strain aesthetics.

The good news is the alcohol, coffee and consumer packaged food (CPG) industries have done most of the heavy lifting, paving the way with robust sensory science and analytical approaches to product characterization. Cannabis stakeholders need only adapt their tools and apply them to cannabis with similar intention.

Research suggests that aroma is one of the strongest predictors of positive consumption experience. As adult use consumers become familiar with current product offerings and increasingly legal availability, they will seek products that consistently yield the best experience. The most successful brands will be those that most effectively communicate that experience and then deliver it. The status quo – describing aroma using strain names, top terpenes or THC content – is not effective at harmonizing a brand’s promise with consumer experience.

Figure 1: Illustration of both the conventional branding approach (top) and the sensory-based branding opportunity (bottom).

The conventional cannabis product branding approach leaves to be desired a tremendous opportunity to characterize cultivars (Figure 1). Sensory science, the discipline used to evoke, measure, analyze and interpret reactions to materials through human perception, has been used for decades to characterize CPGs from skin lotion to washing machines. Adapting these well-established techniques for use in cannabis can be challenging, but it is certainly worth the investment.

These shifts in the cannabis industry have already begun to occur. I recently was the principle investigator on a white paper that presented a novel cannabis aroma wheel derived from aroma descriptors and a panel of trained sensory experts. In the study, sensory scientists evaluated randomly sampled cannabis flower over a period of several months. The researchers combined qualitative focus panels, literature review and formal blinded sensory tests to develop a comprehensive lexicon that served as a tool for trained evaluators to characterize cannabis aroma. This novel and robust tool (Figure 2) was designed to be used by trained panels to characterize cannabis aroma, is freely available and is just the beginning of a collective development of a data-driven cannabis lexicon.

Much like the World Coffee Research Lexicon referenced here, the Cannabis Aroma Lexicon is a tool with a specific purpose: collecting an objective description of the product aroma. It is a living document that will grow along with the industry. In the future, we may have lexicons to describe more than just aroma. Tactile and appearance sensory attributes of cannabis will gradually be defined by sensory scientists, presenting more opportunities for deep craftsmanship in the cannabis industry.

Figure 2: Expert-derived aroma wheel tool for cannabis aroma characterization.

The role that dispensaries play in adoption of standardized quality metrics is critical. The product features that position cannabis to be a craft product warrant the presence of a third-party expert to translate and guide consumers during the purchasing process. It’s intuitive to ask a waiter to recommend a pairing (i.e., a dry red wine to pair with a seafood dish), given the trust that consumers put in the restaurant to understand the properties of the food they are serving. Dispensaries have thus far filled the service structure role for cannabis, but the vast amount of unknowns regarding the physiological and sensorial effects of cannabis have resulted in inconsistent experiences that leave something to be desired in terms of consumer trust.

Application of sensory science in cannabis is an unparalleled opportunity for brands to build consumer trust and differentiate their products in a sea of strain names and high potency flower. Cultivars that can be established as measurably aromatic in a specific character can leverage that aroma profile to add significant value to the product. For example:

  • Cultivar name can be aligned with the perceived aroma (e.g., garlic is not bad, but expecting tropical and getting garlic can harm consumer trust).
  • Product catalog can be consolidated and optimized to avoid sales cannibalization by growing specific products to meet consumer group’s needs.
  • Guesswork is removed from breeding by measuring when a product is meeting sensory goals and ensuring it doesn’t drift over time.
  • Demonstrating transparency will win over ethical consumers. Utilizing controlled, blinded studies to profile aromas will add value to ethics-minded consumers.
  • Becoming a leader in connoisseurship. In the forefront of this shift in branding, one can position a brand to be ahead of the competition.
  • Elevating the dispensary experience. By utilizing aroma profiling, products can be more easily sold by budtenders and salespeople.
  • Opening doors to new application types (e.g., seasonal, occasion centered or geographically unique cultivars).

These are just some of the ways that aroma characterization will differentiate products and simultaneously contribute to cannabis brands’ ability to communicate craftsmanship and the maturity of the industry as whole. Not only will adoption of robust sensory-based branding improve the consumer experience by providing a means to compare products to one another, it will promote adoption of good manufacturing practices that simultaneously improve the quality and safety of cannabis products. Without consumer-accessible quality metrics, brands have little incentive to produce products of elevated quality and are conversely incentivized to prioritize quantity and meet minimum regulatory requirements.

Importantly, cannabis businesses will use this tool to adapt to an inevitable industry-wide shift towards connoisseurship and application of robust sensory science. While it may be challenging to shake off the “bad habits” that currently plague many brands, cannabis has significant potential as a luxury good. Consumers are eager for a better cannabis experience from purchase to consumption. How will your brand use sensory profiling to expand or evolve product offerings to succeed in a cannabis market full of luxury brands and what steps will you take now to prepare?

Digital Insurance Solutions are Ripe for Fast-Growing Cannabis Dispensaries

By Jay Virdi
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Cannabis sales in the United States are expected to hit $100 billion by 2030, and yet dispensary owners still face hurdles before getting up and running, namely obtaining the right insurance coverage. Unlike a coffee shop or clothing store, it can be difficult to secure the insurance coverage needed to satisfy the requirements prescribed by the state and/or commercial leasing agreements.

Yet a simple answer to the dilemma exists. Increasing demand for cannabis business owner policies has prompted some retail insurance brokers to provide convenient turnkey solutions via digital commercial insurance platforms. These platforms circumvent the traditional underwriting process that could trudge on for weeks, allowing cannabis businesses to ramp up operations sooner.

Currently about 30% of insurance customers interact with and purchase from their insurance provider digitally for their business needs. This can be a game changer for a fast-growing cannabis business operator.

What do you need to obtain insurance online?

Obtaining insurance online lets dispensaries secure a complete, holistic insurance policy in one quick pass to cover the industry’s unique risks.

Increasing demand for cannabis policies has prompted some insurance brokers to offer digital solutions

Like any other commercial business package policy, you’ll need to provide details about your business and its operations when harnessing a digital insurance platform.

The first piece of information needed will be proof of licensing with the applicable state or commonwealth where the business operates. This piece is critical since cannabis is still illegal at the federal level. In addition, businesses will need to have other basic data on hand before finding coverage online, including:

  • The legal name of the business
  • Tax identification number
  • Operating locations
  • Annual or monthly sales projections
  • Number of employees

A Closer Look at Cannabis Coverages

Crime, extreme wealth conditions and legal challenges count among the risks faced by cannabis dispensaries. Here are three essential coverages important for cannabis business owners and operators.

  1. Commercial property insurance. Owned cannabis dispensary properties can face perils such as fire, storms, theft and vandalism. Buildings hold value and need to be repaired or replaced if any adverse events occur. Leased properties may contain equipment and fixtures owned by the business and subject to the very same hazards. Commercial property coverage can help cover the cost of replacing business contents and inventory if damaged through a peril covered by the policy.
  2. General liability insurance. Cannabis retail outlets experience a high volume of foot traffic from customers, vendors and technicians, for example. As such, trips, slips and falls could occur and lead to lawsuits. General liability insurance helps cover legal defense costs should any of these parties seek to recover compensatory damages from accidents and mishaps on the property or occurring elsewhere in a business-related capacity.
  3. Product liability coverage. Issues such as quality control with infused products and concentrates can be a concern for cannabis purveyors. Lawsuits arising from mislabeled or improperly tested products likewise need to be defended by cannabis businesses. Comprehensive product liability coverage can meet the needs of cannabis dispensaries promoting and selling a unique variety of product offerings.

Outside the standard commercial package offering, dispensaries can opt for coverage such as business interruption insurance, which helps pay overhead costs if the operation must temporarily cease due to a covered peril.

Cannabis businesses also often need to retain workers compensation insurance that helps pay for lost time and/or medical bills incurred by employees who become ill or injured on the job. Commercial crime policies help cover losses that may occur on premises or in transit in a cash-centric business.

If cannabis industry owners and managers use an online platform for their insurance needs, they could secure a certificate of insurance in as little as 24-48 hours. HUB’s digital commercial insurance platform, powered by Insureon, is one such direct-to-consumer solution. The platform is ideal for licensed retail cannabis dispensaries in all legal US states.

Minnesota Legalizes Adult Use Cannabis: Part 1

By Abraham Finberg, Rachel Wright, Simon Menkes
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Part 1: The Current Status of Legalization

Minnesota has long been known as the “Land of 10,000 Lakes” and boasts over 14,000 bodies of fresh water covering at least 10 acres. The Dakota Sioux word for water, “Minne”, appears in the word Minnesota (clear blue water) and many locations around the state, including Lake Minnetonka (big water), Minnehaha Falls (waterfall) and Minneapolis (water + the Greek word for city).

With all this emphasis on water, it’s no wonder Minnesota’s cannabis-lovers are wondering whether the state’s new adult use legislation will issue in a river of profits for both the state and its future adult-use cannabis businesses.

Overview

In May 2023, House Bill HF100 was passed by the legislature and signed into law by Governor Tim Walz on May 30, 2023, making Minnesota the 23rd state in the union to legalize adult use cannabis. Effective August 1, 2023, it will be legal to possess up to 2 pounds of flower (2 ounces in public), 8 grams of concentrate and 800 milligrams of infused edibles.

HF100 also established the Office of Cannabis Management (OCM), which will be responsible for overseeing the state’s adult-use program. Minnesota’s medical cannabis program, now under the auspices of the state’s Department of Health, will transition over to the OCM on March 1, 2025.

The OCM website makes clear that “the regulatory framework will take time to develop and will require input from communities throughout the state” and that “the legislation proposes that retail sales for adult use cannabis in Minnesota begin in the first quarter of 2025.”

Minnesota Licensing Framework

The legislation establishes sixteen licenses including ten adult use license types: microbusiness, mezzobusiness, cultivator, manufacturer, retailer, wholesaler, transporter, testing facility, event organizer and delivery service. There are also two hemp licenses and four medical cannabis licenses.

Adult use license fees are reasonable compared with other states with application fees from $500 to $10,000, initial license fees from $0 to $20,000 and annual renewal fees from $2,000 to $30,000.

The state also will give preference to social equity applicants and notes that “The legislation prioritizes applications for business licenses from people who live in low-income areas that have experienced a disproportionate impact from cannabis prohibition and for military veterans who lost honorable status due to a cannabis-related offense. Social equity includes people who were convicted of cannabis-related offenses before the effective date of the legislation.”

Taxation of Cannabis Sales

Tax on cannabis products will be limited to 10% in addition to the state sales tax of 6.875% and any local sales taxes which may already be in place. Local governments will not be allowed to collect an additional cannabis-specific tax. Additionally, medical cannabis sales will not be taxed at all. The combined adult-use cannabis excise tax of 16.875% gives Minnesota the fifth-lowest cannabis tax rate in the country, with only four other states—Michigan, Delaware, New Jersey and Maryland—offering marginally lower rates.

Cannabis tax revenue will be split 80% for the state’s general fund and 20% to local governments. These tax receipts will fund a wide range of programs including the Minnesota Department of Health’s prevention and education efforts (including for media campaigns), data collection and grants for local and Tribal public health departments to support education, technical assistance and outreach.

The Social Equity Factor

As with many other adult-use states, there is a strong social equity element in Minnesota’s legislation. The legislation calls for automatic expungement of low-level cannabis convictions and for creating a Cannabis Expungement Board, which will review felonies for expungement or resentencing.

The law also creates a Division of Social Equity within the OCM, which is charged with providing outreach and services to communities disproportionately affected by cannabis prohibition. HF100 states that “Status as a social equity applicant must account for at least 20 percent of the total available points.” This suggests a strong favoring of a social equity application but stops short of requiring a certain amount of social equity licenses be awarded at the beginning of the program, as has been the case in New York.

At this time, HF100 states that an individual qualifies as a social equity applicant if they’re:

  • a military veteran who lost honorable status due to a cannabis-related offense;
  • a resident for the last five years of [a] … neighborhood that experienced a disproportionately large amount of cannabis enforcement [as determined by the OCM]
  • a resident for the last five years of [a neighborhood] … where … the poverty rate was 20 percent or more; or … the median family income did not exceed 80 percent of statewide median family income.

To Recap

Minnesota just legalized adult-use cannabis with the passage of House Bill HF100 and is in the early stages of rolling out its program. The first adult-use sales aren’t expected to take place until the first quarter of 2025.

Just a cursory glance at the state’s adult-use cannabis program shows Minnesota is trying for a friendly, business-positive environment for new cannabis companies, especially considering its low excise tax and moderate licensing fees. As with most other adult-use states, the social equity factor will play an important part in the issuing of licenses and must be taken into consideration.

We at 420CPA encourage cannabis entrepreneurs to examine Minnesota as a potential location for their future cannabis business. To that end, our Part 2 will dive more deeply into Minnesota adult-use with these topics:

  • Important information for those looking to start a cannabis business in Montana
  • How license applications will be scored
  • Other valuable information with which to weigh your decision.

Minnesota adult-use cannabis presents an exciting opportunity for cannabis entrepreneurs. 420CPA will help make that decision as easy as possible!

The Craft Cannabis Cavalry: A Story of Small Business & Economic Empowerment

By Aaron G. Biros
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The Tohiyusdv Cavalry is a black-owned small business based in rural Virginia. At its core, they grow and process cannabis for CBD products, but it’s really much more than that. Through its Precision Craft Farmer Program, the company works with existing small minority-owned farms to introduce them to the cannabis market.

Via land leasing, profit-sharing, crop-sharing, facility design, community involvement and incubator-style support, Tohiyusdv Cavalry has built a network of farmers and a community around them that work together to gain access to the larger cannabis market.

Tohiyusdv, pronounced “toe-hee-yoos-da,” means “calm” and comes from a Native American dialect in the region. James Arrington III, founder of the company, is both African American and Native American, so the name is a nod to his roots. While Arrington insists he is just one part of this larger organization, it’s his passion for community, small business, social equity and cannabis that drives the company.

James C. Arrington III, founder of Tohiyusdv Cavalry

We sat down with James to learn more about the Tohiyusdv Cavalry, a bit of his background, how him and his community have found success and what they hope to achieve.

Different Sides of the Tracks

He grew up in Norfolk, Virginia alongside his two brothers and sister with a view of two different lifestyles. “We grew up in the hood of Huntersville, but I was raised in a white church, so it was interesting seeing both sides of the tracks and seeing the side that some of my friends couldn’t see,” says Arrington. The dichotomy of his upbringing gave him a unique perspective that he took to heart, eventually going to Old Dominion University for electrical engineering at the encouragement of a teacher.

Throughout his formative years, he didn’t really get involved with cannabis – that came much later. In his college years though, he met his Delta Chi fraternity brother Ernest Toney, who would go on to become the founder of BIPOCann, a nonprofit that helps social equity entrepreneurs, minority business owners and professionals in the cannabis industry.

Arrington with a recent indoor hemp crop

Working as an electrician to pay for tuition, Arrington graduated and launched what would become a successful career in electrical engineering. He worked as a subcontractor for the government in warzones, designing electrical systems with security and defense in mind, before starting his own company CalArr Consulting. “What really tied me to the industry was when I started using cannabis for my mental health and to understand who I am,” says Arrington. A combination of his upbringing and his career led to his PTSD, which then led him to cannabis as a tool for his wellbeing and mental health.

More recently, he spoke with Ernest Toney, who said, “Look man, I’ve seen what you’ve done with your business over the years and you should consider getting into the cannabis industry.” Arrington took that advice and ran with it. “So, the company I started is a mission-driven company based around healing, cannabis, understanding and helping people,” says Arrington. “Tohiyusdv Cavalry is based around working with small farmers and minorities; We introduce them to the cannabis industry.”

Here Comes the Cavalry

Right now, his company works with hemp and CBD products, but he says they are looking to expand into the THC market once Virginia legalizes and they already have some partners they’re working with in other states to expand the program.

Tohiyusdv Cavalry has been around for about two years now and Arrington says the heartbeat of it is their craft farmer program. “These are existing minority farmers in a community, already growing crops like soybean or corn,” says Arrington. “These are generational farms that have been passed down through family, some of them almost 100 years. They’ve always had to change with the times.” In changing with the times, a lot of these small, rural farms are seeing the hemp market as a possible pivot, but hardly know where to begin. “They are starting to hear about farmers in their community growing hemp, but having trouble finding folks to buy their crop.”

Some of the products from Tohiysudv Cavalry

That’s where the Cavalry comes in. “What you see in minority backgrounds is a lot of opportunities like this that are very scary to step into,” says Arrington. “We’re teaching people how to get into the industry, helping them through processing and getting on the market using new technology, and we do it at their pace.” Some folks in their network just want to rent space on their farm out to a hemp grower, others want to dive right in and create CBD products. They operate a white label program for some and help set up turnkey facilities complete with extraction and processing for others. “We work with them to build a community around their farm,” says Arrington. “We are just the engine behind these small farmers helping them get access to the larger market.”

From the Ground Up

A good example of the work they put in is Everbreeze Acres. Based in Rustburg, Virginia, Everbreeze is a 434-acre farm and bakery that’s been in the same family for generations. They had an interest in the cannabis market, so they approached Tohiyusdv Cavalry. James and his crew came in and built a 2,000-square-foot facility that is hydroponic, fully turnkey and automated. “We are teaching them the process and turning it over to them,” says Arrington. “We are teaching them how to take care of the plants, grow the crop, harvest and process it, all while collecting data.”

Everbreeze Acres

Before brainstorming how they want to market their products and how they want to be represented, the owners of the farm were still a little skeptical. Being in their 70s, they wanted to make a product that has some medicinal properties and could help people take care of themselves. So, James and his team put together a plan to launch a daily supplement, akin to a multivitamin.

Now Everbreeze Acres is using CBD as a megaphone to communicate their story. They were wary at first, but learned about it, grew to like it and now run a fruitful cannabis business. “We have their facility up and running and we’re growing several strains that work best for them right now,” says Arrington. “We’re about a month away from another harvest there.”

Building Community

Everbreeze Acres embodies the concept of the Tohiyusdv Cavalry. Helping small farmers establish themselves in the cannabis industry, building community around them and working to help their following and their mission.

A Tohiyudv Cavalry cultivation facility

Small business is the keystone of many communities, the cannabis industry included. Economic empowerment is sort of a way of staving off big business too. Given the history of big tobacco in the Virginia area, many stakeholders are worried if they’ll still have a seat at the table when Virginia legalizes adult use cannabis. “Looking at it in that sense, we are hoping that creating this group of diverse minds and backgrounds is building a table where everyone can sit at,” says Arrington. “We want to provide that place for them and let them know that, yes, this is the room for you, this is the place for you. We’re lending a helping hand and giving them a voice and a megaphone, sharing what they want to see in this industry.”

When asked what advice James would give himself ten years ago, the mood was somber. “Ten years ago, my mentor, alumni Dave “BamBam” Hoffman died. I would say that was the thing that gave me that kick in the ass, that I wasn’t doing everything I could do.” He has the same advice for minorities and indigenous people getting into the industry now: “Don’t be afraid to do it, the skills that you have you can put into the industry in some way. Your fit is out there. If it’s the right way, it’s never going to be easy. Push through it, keep going,” he says.

Growing in Virginia

Tohiyusdv Cavalry is ready for the day that Virginia legalizes adult use cannabis, but James says he hopes they make room for the small farmers. “Small farmers are what makes Virginia, Virginia.” They are in talks with some larger medical cannabis companies about creating similar programs for sourcing from craft growers. Through their strategic partners, a big part of their work right now is around partner and sponsor outreach, getting more businesses interested in sponsoring facilities and investing with small farmers. “Our hope is that we’ll be able to keep expanding the program and involve more minority farmers in Virginia and that it will only keep growing,” he says. “We’re optimistic that we’ll have three more farms signing on this year. And hopefully when Virginia legalizes adult use cannabis soon, we’ll be ready to expand in that market and keep on growing.”