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Cannabis Industry Banks Still at Risk Without Passage of the Safe Banking Act

By Leslie Bocskor
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Here we are again, crossing our fingers, hoping that the Senate will approve the passage of the Secure and Fair Enforcement Banking Act (SAFE Banking Act). This Act would provide banks with regulatory protections, allowing them to offer critical financial services to cannabis businesses without risking the loss of their banking charter.

As the 2024 elections loom, the stakes have never been higher for passing the SAFE Banking Act.

Cannabis Legalization is On the Rise

As of August 2023, 40 states, four territories and the District of Columbia have legalized medical or adult use cannabis. While some states have moved more slowly, the entire West Coast (including Nevada and Colorado) has voted to pass laws allowing the sale and purchase of adult use cannabis. Most of the East Coast has followed suit; New York, Pennsylvania, New Jersey and Massachusetts have all voted to regulate cannabis. It has become evident that the majority of U.S. citizens are now comfortable with legalized cannabis (156 million people live in jurisdicitons that have legalized adult use).

Banking Roadblocks for the Cannabis Industry

Under current federal policy, banks and other large financial institutions face regulatory restrictions that make it challenging to provide the most basic services to local cannabis companies, regional cannabusinesses and MSOs (Multi-State Operators).

Federal anti-money laundering laws and related record-keeping regulations, such as the Bank Secrecy Act (BSA), have presented complex compliance protocols that prevent banks from meeting the business needs of local growers, manufacturers and dispensaries. Local cannabis business owners are therefore put in a difficult position, as they must balance daily business activity against the potential dangers of operating as a cash-only business.

How Would the SAFE Banking Act Help Banks Serve the Cannabis Industry?

The proposed SAFE Banking Act would protect banks from federal penalties for offering their services to cannabis businesses in states with regulated cannabis industries. Critically, the bill would shield banks from losing their deposit insurance. Without reform through the SAFE Banking Act, financial institutions will remain essentially prohibited from working directly with legal cannabis companies.

What Will It Take to Pass the SAFE Banking Act?

While the bill has successfully passed in the House of Representatives seven times, it has yet to pass in the Senate. Considering the current political climate, the clock is ticking to finally pass the SAFE Banking Act in the Senate.

Policymakers may need to introduce the Act as a stand-alone bill that outlines clear objectives and specifically addresses the issue from a public safety perspective. Cannabis is a hot-button issue, so adding additional legislation will muddy the water and make it easier for Senate members on the fence to vote against the bill.

Cannabis industry representatives and political allies must be strategic in navigating the bill’s potential passage and take the process step by step. First, the SAFE Banking Act must pass to allow cannabis businesses the opportunity to stabilize, grow and prosper. As the sector grows stronger and more accepted by mainstream America, more progressive bills can be introduced and will have a greater chance of successful passage in the House and Senate.

The SAFE Banking Act is an Issue of Public Safety

Every day the Senate chooses to sit on their hands, they put more Americans in harm’s way. This is unacceptable.

Because dispensaries and other cannabis businesses must process daily transactions without basic banking services, they often accumulate large amounts of cash. Dispensaries are, therefore, frequent targets for criminals. Even as the cannabis industry matures and contributes significant tax dollars to State coffers, banks and financial institutions have no choice but to sit with their hands tied, watching with horror as organized criminals literally take aim at dispensary staff.

The passage of the SAFE Banking Act is literally life and death for many cannabis industry employees. How many workers and customers must suffer harm before the Senate wakes up and passes this critical bill? Regardless of their stance on cannabis, members of the Senate must do their jobs, heed the will of the American people and pass the SAFE Banking Act to rectify this increasingly dangerous situation for the good of their constituents.

Lara Fordis, Fordis Consulting

Data-Driven Decision Making: Mastering Methodologies for Cannabis Market Research

By Lara Fordis
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Lara Fordis, Fordis Consulting

In any industry that is labeled as the “Wild West,” the ability to discern your target market, collect accurate data and strategically drive success has become paramount. With factors such as invisible shoppers, anyone who is a customer of a brand or dispensary and does not personally purchase what they consume, it’s critical to understand how and where the data an organization is using to make decisions is sourced. Effective market research is the cornerstone upon which cannabis brands can build their trajectory to growth, armed with a diverse array of methodologies designed to provide insightful data-driven insights. Through leveraging the power of dependable data, organizations can navigate the intricacies of the cannabis industry across a wide variety of markets, develop solutions that address actual pain points and position themselves as leaders in their niche.

Not to mention, in an industry where competition is fierce and resources have become increasingly scarce, market research emerges as the North Star guiding businesses along their decision-making path. The era of relying on intuition and gut feelings alone is behind us. As this industry matures, making decisions based on inadequate syndicated data has proven detrimental. This is where robust market research steps in, instilling confidence in decision-makers by offering comprehensive and intelligent data for well-informed and defensible choices. Market research naturally falls into two overarching categories: qualitative and quantitative methodologies. Within these categories, various research approaches can be employed to collect actionable insights across the industry.

Your research can hone in on consumers’ preferences, perceptions, motivations and pain points.

Qualitative research delves deep into the intricacies of human behavior, motivations and preferences. Techniques like in-depth interviews and focus groups—whether conducted virtually or in person—unearth nuanced insights that transcend mere numerical data. This type of research is particularly invaluable for discerning the human side of B2B interactions within the cannabis industry.

On the other hand, quantitative research focuses on the collection and analysis of numerical data. Through surveys, questionnaires and statistical analysis, companies can glean valuable insights into demographics, preferences and market trends. This data can be powerfully visualized through charts, tables and infographics, providing a clear picture of the market landscape.

A wide spectrum of methodologies can be put in place to garner actionable insights across various aspects:

Precision Product Testing: This methodology empowers businesses to amass authentic feedback regarding product quality, user experience and overall satisfaction. By employing a hybrid approach of qualitative and quantitative methods, companies can refine and develop their offerings, ensuring alignment with the expectations of customers. This approach ensures not only a product’s efficacy, but also its appeal in the context of the consumer’s interaction with the product.

In-Home Usage Tests (IHUTs): IHUTs involve providing cannabis products to customers for testing within their operational or natural environments. Often conducted as “diary studies” over a designated time frame, IHUTs provide invaluable insights into aspects like usability, practicality and long-term effects. For instance, conducting an IHUT study on cannabis-infused products designed to aid sleep can assess factors like taste, texture and efficacy, thereby tailoring products to meet specific needs.

Hands-On Collaboration Sessions: Site-based, central location or mobile product testing enables real-time observation of product trials, enabling an immediate evaluation of sensory attributes and practical effects. These collaborative sessions can involve consumers directly engaging with the products, such as the scenario where consumers grind, roll and smoke their joints. This hands-on approach fosters deeper understanding and involvement, leading to more actionable insights for product enhancement.

Strategic Online Surveys: While online surveys are a well-established approach for capturing quantitative data from a broad consumer base, by designing targeted questionnaires tailored for specific market segments, companies can assess preferences, satisfaction levels, brand perceptions, and even purchasing intentions. These insights are invaluable in engineering products and services to specific consumer needs.

Focus groups can provide unique insights from many different perspectives.

Nuanced Focus Groups (FGs): Focus groups bring together a small group of individuals for facilitated discussions. These discussions can be conducted in a central location or even virtually, allowing geographically diverse participants to contribute insights. This approach is perfect for delving into perceptions, motivations and pain points. For instance, a focus group centered on testing prototypes for cannabis-related accessories can provide valuable input for refining products catering to specific needs.

Tailored In-Depth Interviews (IDIs): In-depth interviews, conducted either in person or virtually, provide an opportunity for one-on-one engagements. These interviews are particularly useful for exploring sensitive or controversial topics. For example, assessing the suitability of a prototype product for budtenders through in-depth interviews ensures candid feedback without the influence of group dynamics.

When embarking on cannabis market research, it’s imperative to navigate the intricate landscape of state regulations, especially when dealing with THC-based products. The cannabis industry operates within a patchwork of regulations, which vary from state to state, impacting the feasibility and logistics of product testing. Adhering to and understanding these regulations ensures compliant product testing, upholds participant safety and generates indispensable insights for product development.

At the end of the day, market research is actively emerging as the linchpin for the short- and long-term prosperity of our industry. Leveraging a blend of qualitative and quantitative approaches, such as surveys, focus groups and product testing, equips businesses with a profound understanding of preferences, motivations, and feedback. By embracing data-driven decision-making, cannabis companies position themselves at the vanguard of data-driven achievement, fortified with confidence and assurance.

The CBD Regulatory Environment in Europe: Part 2

By Shelley Stark
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This is Part Two of a four-part series discussing European cannabis regulations. Click here for Part One. Part Two analyzes the differences between the UK, the EU and the US. Part Three, coming next week, dives into dosage, approvals and more. Stay tuned for more.

EU Regulatory Environment

We Europeans look with envy at the American market and wonder, why can’t we be more like that? The differences between the American market, the UK and the EU economic zone couldn’t be more different, but changes seem to be on the horizon. While both the UK and the EU apply the Novel Food law, implementation varies significantly.

In the EU, applications are submitted to the EU Commission, and approval can take up to nine months – just for approval of the application – not the testing that will follow. And while the application carries no fee, collecting the required data just to make the application can be expensive, and can run into six figures or higher. Once the application is approved, there may still be data gaps and uncertainties, with toxicology testing that can take years to complete, and ultimately must be approved and validated by EFSA (European Food Safety Authority). The required toxicology testing is where things get really expensive, with both the EIHA (European Industrial Hemp Association) and EFSA estimating costs around €3.5 million.

The EFSA’s Panel on Nutrition, Novel Foods and Food Allergens (NDA) has received 19 applications thus far for CBD as a novel food, with more in the pipeline. According to their website, NDA chair Prof. Dominique Turck reported that they “have identified several hazards related to CBD intake” and that many data gaps need filling before evaluations can go ahead. However, she concluded, “It is important to stress that we have not concluded that CBD is unsafe as food.”

As always, with food and drug reviews, it is up to the applicant to prove that a product is safe for human consumption. And for the EU Commission, EFSA is conclusive. And while initial testing is with animals, it also includes human testing, which helps explain the high cost.

At present, the EFSA has been unconvinced by the applications submitted so far, and seeks more data regarding the effect of CBD on the liver, gastrointestinal tract, endocrine system, nervous system and on people’s psychological well-being, as well as the impact on human reproduction.

Thus, in 2019, the EIHA formed a German corporation, the “EIHA projects GmbH”, formed for the purpose of pooling partners money to pay for the application and toxicity testing. The Novel Food applications (NFAs) for CBD isolate and synthetic CBD were submitted on November 4, 2022 and full spectrum will follow in April/May of 2023. It should be noted that the application for synthetic CBD has been completely dropped as no testing was ever preformed.

The applications must be reinforced by a series of tox studies under the auspices of the EFSA and for the UK, the FSA. The EFSA will start the risk assessment as soon as the suitability check is performed. The suitability check is a process performed by EFSA to make sure that they have enough data to perform the risk assessment. According to their webpage, the risk assessment can take nine months.

In the case of the application put forth by the EIHA projects GmbH, the CBD isolate dossier will be submitted to the EFSA in September and enter the risk assessment phase. In this phase, the EFSA will go over the data and can ask for more data, should they feel it necessary. They are allowed 9 months to complete this task and submit their recommendations to the EU commission for a 27-member vote, whereby the EIHA projects GmbH application will be valid and legally binding. The EIHA projects GmbH is expecting a validation during the course of 2024. This is a huge game changer!

The application for Full Spectrum distillate should be readied by the end of 2023, whereby the EFSA should be finished with the risk assessment near the end 2024. As Full Spectrum takes into account minor cannabinoid as well as limited THC, it is more complex. It should be noted, that testing full spectrum distillate with a 0.2% THC limit, tests the limit for how much THC can be ingested by humans without side effects. This study is unprecedented and might well have an enormous impact on the issue of THC and its possible future legalization. It is also costing a further one million euros to bring to fruition.

The UK Regulatory Approach

The UK Novel Food approach differs greatly from the EU’s, which has both strengths and weaknesses. What makes the UK CBD market so robust is that the FSA allows products to be sold as long as they were on the market prior to February 13, 2020 and are linked to applications submitted before March 31, 2021. As a result, the FSA was flooded with applications – many later denied on technical grounds, in great part because they didn’t meet these terms. Currently, some 11,000 products worth a projected 1 billion GBP in revenue remain on the FSA list, having passed pre-validation while the FSA awaits the final toxicology report. Only 400 CBD products have been culled from the list, but to date, not a single application has yet been approved. Pre-validation status is incumbent upon a toxicology report, and it remains to be seen how many companies are able to produce such a report.

Important to note is that due to Brexit, a UK validation when it does come, will not be valid in the EU, but products with an EU application accepted on the Union list will be valid in the UK.

UKflagStill with a projected 1 billion GBP at stake, it is easy to why UK CBD manufacturers work to appease the FSA despite the regulatory hurdles. By keeping the door open, the UK has managed to keep investors interested in the CBD market and the public safe from unmonitored products.

This is certainly not the case in the EU, where despite a smattering of products still ducking the authorities, the EU market remains thin by comparison. Their approach has stymied growth compared to the UK where robust Novel Food regulation is in place, but approached differently.

At present, a market comparison of the EU to the UK or North America seems bleak, at least for now, but following approval, future EU-wide distribution could be highly profitable. As we inch closer to a Novel Food listing, the European market may yet prove to be one of the largest markets for the safest CBD products in the world.

The American Market

Still, it is the American market that makes our mouth water; where oils, tinctures, candies, cakes, and drinks with every cannabinoid from CBD to Delta 9, Delta 8, and HHC are available and producers are on their way to becoming millionaires. With a market currently estimated at $6 billion, forecasts reach upwards of $16 billion by 2026.

FDAlogoAnd the health-related concerns, the testing requirements? Are these limited to the UK and the EU? Let’s take a closer look! A mood of caution is emerging in the American cannabis market, that includes producers and lawmakers alike, who are pushing for stricter laws and enforcement.

In America, the FDA (Food and Drug Administration) has alerted the public to CBD’s potential harmful side effects on their website and hope to force congress to deal with the issue.

Many of their concerns validate those of the FSA and the EFSA. For example: on their website the FDA makes a reference to only one CBD product that has been approved: a medicine called Epidiolex. The FDA cites the review of the Epidiolex’s application in 2018 when they identified certain safety risks, including potential for liver damage. The EFSA requires testing on the same issue.

Training, Education & Compliance: A Q&A with Chase Eastman, CEO of Rootwurks

By Cannabis Industry Journal Staff
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Founder and CEO Chase Eastman officially launched Rootwurks in January 2022. But the journey began years earlier, and passed through industries including food safety training and digital media and television. Rootwurks at its core is a training platform. The cannabis industry deals with an incredibly complex system of regulatory environments that vary widely from state to state.

Rootwurks is participating in the upcoming Seed to Sale Safety Workshop at the CQC on October 16. Click here to learn more.Making sense of different and evolving rules across this patchwork of regulations  is a very daunting practice that every cannabis company must undertake. Enter Rootwurks, which helps companies meet compliance demands while maintaining their quality standards across state lines and jurisdictions. 

We sat down with Chase to chat about his background, what he thinks of regulatory compliance in the industry, and how the future of training might mold the cannabis marketplace.

Cannabis Industry Journal: Can you tell us about your background? How did you get involved in the cannabis industry? 

Chase Eastman: Both of my parents were career entrepreneurs. At some level, I was always destined to give this a shot. As a teenager, I started working at Alchemy Studios, my father’s company, before it became the training company it is today – back then we were a small marketing studio that sold creative services & learning development to Fortune 500 companies. 

Chase Eastman, CEO of Rootwurks

About a decade later, I started working for a home shopping network and was instantly hooked on the fun, fast-paced environment of the marketplace. I eventually became head of the digital media department of the company, right about the time Groupon started making waves in 2012-2013.

At the home shopping network, content was key for sales. At the same time, learning platforms like Linda.com (LinkedIn Learning) & YouTube were exploding in popularity and my dad and I started having a lot of conversations about the role these new technologies would have on the adult learning landscape. I decided to go back to work with my father at Alchemy Systems, focusing on end-user learning content. 

Our specialty was the food manufacturing space, and we were constantly experimenting with different strategies for blended learning, mixed media formats, and adult learning. This focus on using technology to connect people to expertise is at the very core of what Rootwurks provides.

This was my 20-year journey to education and training, but my path to cannabis began at home, with my family as my mom battled cancer. Years earlier our neighbors and dear family friends encouraged my mom to try cannabis to treat the side effects of chemotherapy. 

With cannabis, my mom could cope better with the pain and nausea, helping her eat and build up her strength. I witnessed all of this first-hand and cannabis quickly found a special place in my heart as a life-changing medicine. 

My mother, father and I started to look for ways to use our expertise in training and compliance systems to help the cannabis industry ensure the safety and effectiveness of cannabis products. We quickly realized that the best way to help the industry is by making it easier for companies to deal with compliance demands and the frustrating lack of universal standards and consistency in cannabis.  

Food regulations are by no means simple. But cannabis is far more complex, especially for smaller companies that just want to grow weed and help people find the products that will work best for them.

CIJ: Alright so what is Rootwurks? Tell us about your company.

The Rootwurks Learning Experience Platform

Chase: Rootwurks is first and foremost a training platform where education and compliance meet.  

We believe that compliance adherence happens when people are doing what they should be doing when and where they need to do it. We also know that employees must have access to the information they need in real time, in a simple and easy-to-understand manner. 

The Rootwurks Learning Experience Platform is also a communication tool and learning aid devoted to our goal of connecting people with expertise. For specific use cases like sales training for budtenders, the authoring tool and templates make it very easy to disseminate communication or training on a wide scale. 

I like to talk about the Ebbinghaus Forgetting Curve – a theory that essentially says adults are forgetful AF and lose a lot of information very quickly if it isn’t reinforced. The Rootwurks platform contains built-in operational reinforcement tools that flow into auditing, verification & validation modules. All this information feeds into a corrective action engine helping companies develop and deploy  preventive actions. 

A checklist module in the Rootwurks training platform

The ecosystem is based on the premise of training and reinforcement. Checklist modules can be adjusted to create training that reinforces the quick, easily-digested micro learning models. Embedded videos in the modules can include checklists for employees to follow, or they can simply watch videos to reinforce learning at the end of a training module, for example. 

Employees can use the dashboard to instantly see all of their learning activity for the day. Companies can simultaneously use the platform for onboarding new hires while also providing ongoing education and training for longtime employees.  

Flexibility is at the core of the system. Cannabis regulations include a massive amount of unnecessary complexity and all of it varies from state to state. A large operator going into a multi-state phase will have different SOPs for each state, and must still maintain quality standards across every company location. This is why we built all of our programs as templates that customers can adjust to meet compliance guidelines in each and every state they operate. 

But this isn’t an “off-the-rack” platform. Companies can customize the system with their branding and training materials as they see fit. This solves the “blank screen paralysis” that companies face with training programs. 

Our goal is to remove these hurdles and help companies schedule, assign, and validate training.  

CIJ: In the food industry, the culture of safety and quality is such a standard practice. In your eyes, how does the cannabis industry compare and in what areas do you see a need for improvement? In other words, what are the biggest problems facing cannabis from a safety and quality perspective? 

Chase: In the food industry, there is an expectation that safety and quality is ingrained in daily operations. The food industry also knows full well the importance of having a proactive accountability culture in the workplace backed up by internal auditing. The FDA has partnered with the food industry to promote these principles for more than a decade – so we shouldn’t expect this to happen overnight in the cannabis industry.  

Audit insights can help train employees to maintain regulatory compliance

But the food industry had a decades-long headstart on the cannabis industry, during which they’ve pushed back on non-practical regulations and built partnerships with state regulatory bodies. 

In a lot of ways, time is the biggest thing that the cannabis industry needs. It needs time for industry to work in partnership with regulators to honor the intent of the rules, while still maintaining practicality. Succeeding as a cannabis business is tough even without factoring in these regulations, which throw all types of inefficiencies into the manufacturing and sales process.

It’s no wonder we’re dealing with so much confusion, with so many states having such different sets of regulations. We’re seeing all types of companies really struggle, because the current state of affairs is not as sustainable as they thought. 

We need to find ways to honor the fun, subversive, and life-enhancing aspects of cannabis culture while also building partnerships between the industry and regulators. It’s going to take time, but I’m confident we can get there. 

CIJ: How do you envision the future of education and compliance within the cannabis industry and where do you see this market going in the next ten years? 

Chase: The easy answer to that is the sky’s the limit. We timed the launch of Rootwurks right with a global recession at a time when the cannabis industry is facing unprecedented headwinds. We still need SAFE Banking to cross the finish line and full access to the financial system. There’s too much momentum behind cannabis and I think we’ve reached a tipping point.

Moving forward, I think the brands that succeed will be the ones that implement training and education programs and treat them as vital to their daily operations. 

The next 24-36 months won’t be easy. But we are learning so much as we go and we are not done figuring out all the different ways the plant can be utilized. The industry is only going in one direction and I’m thrilled that at Rootwurks, we can help more and more companies achieve their dreams in cannabis.

The CBD Regulatory Environment in Europe: Part 1

By Shelley Stark
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This is Part One of a four-part series discussing European cannabis regulations. Part One serves as an introduction. Part Two, coming next week, will analyze the differences between the UK, the EU and the US. Stay tuned for more.

As I walk through any European cannabis expo – events like Cultiva Hanfexpo, Cannafest Prague or Spannabis – it is easy to be struck by the differences to those in the U.S. First, there are no THC products, nor are there any CBD food products such as drinks or confectionaries. This is because of the EU Novel Food regulations: “which applies to any food stuffs not commonly used for human consumption before 15 May, 1997.”

As a result, American CBD manufacturers – with virtually no regulation of cannabinoid infused products – have an enormous advantage. In the EU, any “novel food” must be tested and proven to be safe for human consumption.

Still, hemp was not always considered “novel.” In 1997, hemp plant products were considered outside the scope of the regulations EC 258/97.” And more specifically, “that hemp flowers … are considered to be food ingredients” (e. g. used for the production of beer-like beverages). Hence, not ‘novel.’

european union statesSo, right until the end of 2018, nature more or less aligned with the legal establishment, and many products made it safely to market because extracts of cannabidiol (CBD) were considered ‘novel’ only if the levels of CBD were “higher than the CBD levels in the source of the plant itself: Cannabis sativa L.”

However, in January 2019, the catalogue entries for “Cannabis sativa L.” were updated, such that even a naturally occurring level of cannabinoids are now excluded. For the industry, this was a frustrating turn of events, affecting any and all food products to which CBD might be added – confectioneries such as gummies, brownies or cakes, but also includes oils and tinctures containing CBD extracts and other cannabinoids.

Technically, all products on the EU market containing natural CBD or an isolate or distillate are illegal. So, the industry has been playing a cat and mouse game, where consumer labels display vague information or simply state ‘not for human consumption’. The result is a well-developed gray market, that hinges on benign authorities in your jurisdiction.

Sometimes, a producer is able to convince authorities that their product is allowed under Article 4 submission, whereby the producer claims that any CBD content in the food is naturally occurring and a traditional food.

Article 4 is a provision of the Novel Food Regulation (EU) 2015/2283 that allows an operator to check with the national authority on the status of a particular food before bringing the product to market. In the framework of this EU regulation, the operator checks whether the food is traditional or novel. If the food is considered traditional, then the food can be placed on the market immediately. But, if it is novel, it requires a Novel Food authorization.

Good news emerged on June 2, 2023, where in the EU, it has been agreed that once again, hemp leaves are considered a traditional food and are no longer considered Novel. Hemp leaves and tea can be marketed in the EU without further hurdles, but this does not include extracts.

In the case of extracts, CBD isolate and distillate are Novel, not traditional, and a firm must provide toxicology reporting. Both EU and UK law provides that any product containing a CBD extract placed on the market falls under the Novel Food regulations. Ultimately, tests must verify with a high degree of certainty whether CBD is safe to ingest in any amount. And how much is safe before changes occur to internal organs such as the liver or reproductive systems. The FSA will verify results in the UK, while the EFSA is responsible for the EU. 

In the EU, the EFSA will send their final recommendation to the EU commission for approval, where after a 27-member vote, the item will be added to the Novel Food Catalogue. Approval at the individual state level, is next to impossible to acquire, for example, Austrian law states: “Oils/extracts containing cannabinoids placed on the market as such or in foods are considered novel foods and must be authorized in the EU.” No such approval is currently available. Placing it on the market is therefore not permitted.

No ambiguity there!

Some EU countries, such as Greece for example, appear more lenient and others not, but it is retail that is first in line for fines if an investigative authority walks in the door. The situation is certainly nerve-wracking, and having suffered through several of these AGES investigations, I closed my store as a result. Others have had similar experiences. One large retail chain owner reported that he fears the check by the authorities, as each one leads to a fine of some sort, or the demand to remove products. Without notice, he says, the health authorities could decide on even harsher punishments such as larger fines or even removing his business license. Then what, he wonders?

Cannabis Social Equity: Paving the Path for Inclusive Economic Opportunities

By Annu Khot
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The cannabis industry isn’t a level playing field. It’s disheartening to say. But as someone who has been building a soon-to-open dispensary for the last three years, I’ve experienced this lack of equity firsthand.

It starts with the industry’s foundation. We’re in an era where anyone can start a business. Create a logo, launch a website and upload promotional content on social media. A few clicks and…boom, you’re a business owner. Lovely, but absolutely not the case for the cannabis industry.

Getting started is no easy feat.

Budding cannabis entrepreneurs (pun very much intended) need a ton of capital in order to get started. And as cannabis isn’t federally legalized, entrepreneurs don’t have access to traditional banking loans. They either need to fund their cannabis venture with their life savings or turn to family, friends and their community to fundraise. Unfortunately, not everyone has such privilege or access. This reality contributes to the industry’s unequal playing field – and due to a lack of legalization, shows no signs of letting up.

Jessica Gonzalez

Jessica Gonzalez, a Jersey City-based attorney and cannabis advocate, spoke to this challenge in a recent NJBiz interview. “It’s extremely expensive to enter and survive in this industry, and given the limited capital options, you are forced to seek private investors – which opens a whole can of racial and gender bias. The need to stay capitalized, coupled with constantly changing regulatory environments, expensive service professionals, lack of real estate, a social stigma and IRS tax code 280E, creates high barriers to entry and high survival barriers.”

As Gonzales notes, funding is just one piece of the puzzle. Once you’ve secured said funding and have decided to start a cannabis venture, you’re navigating a minefield of ever-changing regulations. This demands the help of pricey service professionals–attorneys, operators, marketers and more–who remain abreast of current laws and have the subject matter expertise to properly guide you.

The issues with the cannabis industry are clear – funding is difficult to secure, marketing is nearly impossible and pricey consultants are table stakes. On the bright side, operating in cannabis isn’t all doom and gloom. Solutions are ahead–and they’ve been baked into the operating strategy of many fantastic, social-equity led dispensaries, includingSocíale, the soon-to-open Park Ridge, IL dispensary. While getting started is no easy feat, as leaders, we should each take it upon ourselves to empower those wanting to work with this life-changing plant by developing an industry that’s ripe with endless opportunities.

Economically empowering employees should remain top-of-mind.

The lack of equitable wealth creation in the cannabis industry bolsters its inaccessibility. It’s unfair that if a dispensary or cannabis business succeeds, only the entrepreneur wins financially. Yes, employees may get a small discretionary bonus at the end of the year – but they’re not woven into the fabric of the business’s profitability. Employees – and those earlier in the value chain, like growers – are left out in the cold, while dispensary owners seek to profit immensely.

Personally, when I started in the cannabis industry, I thought this dichotomy was blatantly unfair – and vowed to be a powerful force in changing that. At Socíale, profit sharing is a part of our DNA. Employees will take part in dispensary profits from the day they start. This way, everyone wins–and if employees decide to start a cannabis venture of their own, that ambition is more in reach. This is a massive piece of what the cannabis industry preaches when it has conversations surrounding social equity. It’s time the industry and its leaders back up this ideology with a plan of action. Embracing the concept of ownership not only among founders and senior leaders, but among employees at all levels, can provide a valuable taste of entrepreneurship. Situations like these often empower employees economically to create lasting changes for not just the company they’re working for, but for themselves and their families at home.

Social equity license holders should pay it forward. 

Social equity dispensaries should embrace the pay-it-forward mentality among the communities of which they serve, especially those disproportionately impacted by the War on Drugs. It’s unfortunate to see dispensaries falsely advertise with a “social equity” label, merely for the vanity of it all.

Socíale is beholden to certain promises we made to the state of Illinois, who granted us our social equity license. This includes employing people from under-represented communities and advocating for cannabis social justice – two causes that we’re deeply committed to. As we look to shape the future, let’s remain hopeful about what it holds. Collaboration over competition needs to be the motto. If we all partner together to think beyond profits and aim to better the greater cannabis community, we’ll all be better off.

The Infused Pre-Roll Revolution: How to Ride the Wave and Boost Your Brand

By Johnathan McFarlane
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While pre-rolls are finally getting their moment, posting notable growth across virtually every market, much of that growth has been powered by the infused pre-roll subcategory. In Michigan, for example, infused pre-rolls now make up over 40% of the category, and 9 of the top 10 best selling pre-roll products are infused. But what’s driving this trend? How can brands capitalize on this new opportunity?

A galaxy of variations… and differentiation. 

Once saturation and price compression rear their ugly heads, cultivators in maturing markets quickly realize that producing just flower is a tenuous position. You are beholden exclusively to the price of flower, and it is often the first category that begins a race to the bottom. Diversifying your offerings, specifically with value-added products, is a necessary path to protect your brand and continue to grow as competition heats up. Pre-rolls are a common first step beyond flower because it’s a relatively convenient step. Many smokers roll flower into joints anyways, so why don’t we do it for them? It’s also been the only category to show steady, consistent growth across virtually all markets. The problem is that none of this is a secret, and so the pre-roll category can get crowded quickly. To stand out amongst the crowd, many brands are turning to a subcategory with an almost limitless potential for differentiation: infused pre-rolls.

An infused pre-roll sold at BeLeaf

While standard pre-rolls have only two ingredients (paper and flower), by adding an infused element to the product you introduce an almost limitless potential for differentiated products. “Our team is doing a lot of R&D on pairing the right flower with the right extract to create an entirely new experience,” says Jason Nelson, CEO of BeLeaf in Missouri. “We’re hearing a lot of legacy consumers talking about the entourage effect between flower and extract, which is something that is still being explored.”

Almost anything can be infused into pre-rolls: distillate, diamonds, rosin, shatter, the list goes on. Not only that, the concentrates and extracts world expands nearly every day with some new creation, which means the infused pre-roll subcategory expands along with it. “There are tens of thousands of combinations you could make,” says Nelson. “The sky is limitless, assuming you have the right technology in place to produce them consistently.”

Being the same as everyone else can mean death for a cannabis brand, but creating unique products that few other brands have – that’s the key. Separate yourself from your competitors.

Pack more punch… and more profit 

It’s no secret that many brands use their less-than-premium flower in their pre-rolls. That’s a big part of what has historically given the pre-roll category a reputation for poor quality. We often answer questions from customers asking how much trim they can include in their pre-rolls. While we advocate for always using quality flower and little to no trim, there is still a place for budget-friendly products in the category. That’s where many brands find an excellent use-case for infusion. You can infuse average flower with distillate (or some other extract) and even fruit terpenes to give it a significant “glow-up.” With the right combination, a very average budget pre-roll can be turned into a product that tastes better, smells better, is more efficacious and is more profitable than a non-infused, low-end pre-roll.

A preroll infusion automated system

In a competitive market, value-added products are important and infused pre-rolls add value two degrees past flower. That translates to better margins and more cushion from the fluctuation of flower pricing.

“Our infused pre-rolls average retail price is more than double that of our non-infused products,” says Noah Levine, head of Oregon-based category leader Benson Arbor. “But our cost to produce an infused pre-roll is less than double non-infused. We end up with significantly higher profit on our infused products.”

Of course, there is more to consider beyond just profit. But CEO of The Clear, Rich Batenburg, Jr. has an important reminder to everyone in the cannabis business: “Remember, prices never go up in cannabis! Before launching a product into this subcategory, you need to determine if it has sufficient margin to sustain the line over time.”

Collaborate to accelerate

Collaborations between brands are becoming more and more common in the cannabis industry, especially between brands that specialize in separate categories. It’s not a new concept – craft breweries have been using this tactic for years. Fans of each brand get exposed to the other, and in some instances even get introduced to a new category. It’s become so common, in fact, that many brands exclusively create collaborative products.

A DialedIn and Terrapin Care Station collaboration

Although they focus on live-rosin edibles, DialedIn Gummies in Colorado used this tactic to power their meteoric rise over the past several years. Every single DialedIn SKU is a collaboration with a different grower. DialedIn’s VP of Sales Keith Portman says, “Our collaborations have been a huge factor in our success. Including our partner’s logo on our tins helps promote their brand as well as ours, and helps us establish great relationships. We’re proud to say we’ve collaborated with over 100 rosin makers and cannabis growers.”

A side-bonus is that co-marketing and co-branding products usually comes with either a discount on purchased ingredients (like flower) or simply a revenue share or royalty without any additional capital needed. We’re now seeing this trend pop up in the pre-roll game as well; co-marketed infused pre-rolls are becoming common projects between concentrate and flower brands.

It’s about gaining something you might not normally have access to. Noah Levine at Benson Arbor points out, “We partner with farms that grow strains that we normally don’t, so it widens our selection. And, it helps with the hype. We leverage the popularity of both brands to create something that’s unique, and often a limited-run, which builds a sense of FOMO (fear of missing out) and curiosity with the consumer.”

Infused pre-roll manufacturing gets easier

When infused pre-rolls began hitting the market several years ago, they were difficult and time-consuming to make, so they were primarily marketed as a luxury option. That is no longer true. With machines like the RollPros Blackbird that can handle homogenized, infused plant material, or the Sorting Robotics Jiko, that automates injection infusion, producing infused pre-rolls is becoming more cost effective and more automated.

Nohtal Partansky, CEO of Sorting Robotics says, “The infusion process was the most labor intensive part of manufacturing a pre-roll. It was impossible to do at scale. But now with the right automation equipment it’s easier and more affordable. You can make a significantly better, more consistent product with a dramatically lower labor cost.”

The Blackbird atuomated system

Beyond the lower labor costs, the right equipment even allows you to create products that simply weren’t possible to make by hand in a commercial setting. “We have a customer on the East Coast that makes a blunt infused with live rosin and then coated in by crushed diamonds,” Nohtal continues, “that product really wouldn’t have been possible to manufacture even two years ago.”

The RollPros Blackbird presents another example of infused pre-roll manufacturing becoming more automated and easier. The Blackbird can create certain types of infused pre-rolls without any additional equipment. Kyle Loucks, CEO of RollPros says, “More and more of our customers are using the Blackbird to produce infused. Some use it exclusively for that purpose. They infuse and homogenize the flower first and run it through the Blackbird to roll it up. We are seeing some really unique products come off our units.”

What’s next?

Data from virtually every market shows significant growth in the infused pre-roll subcategory, and the momentum shows no sign of slowing down anytime soon. By adding an extra element to their pre-rolls, brands can stand out in a crowded market by diversifying their offerings and using infusions to increase potency and profits. Pre-roll automation equipment has made the manufacturing process easier and more affordable, allowing brands of all sizes to create complex infused products. With popular options ranging from distillate infusion to kief dusting to crushed-diamond coating, there is something for everyone in this burgeoning product category. In the midst of this flourishing landscape, the infusion of creativity, technology and advanced manufacturing processes continues to propel the infused pre-roll category forward, solidifying its place as a dynamic and lucrative dimension within the cannabis industry.

Trenton Makes The World Takes: A Q&A with Tahir Johnson, CEO of Simply Pure Trenton

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Tahir Johnson is the founder and CEO of Simply Pure Trenton, the first black-owned social equity dispensary to receive a license in New Jersey. He’s a well-known cannabis advocate who’s held leadership roles at the Marijuana Policy Project, the National Cannabis Industry Association (NCIA) and the United States Cannabis Council. Tahir was born and raised in Trenton, New Jersey, so coming full circle and starting a dispensary in his hometown is something truly special.

From growing up in New Jersey to graduating from Howard University, working in finance and wealth management at companies like Morgan Stanley, to finally launching a business back in his hometown, he embodies the Trenton success story.

Tahir is speaking at the upcoming Cannabis Quality Conference in Parsippany, New Jersey on October 18. Ahead of his presentation there, we caught up with Tahir to learn a little more about his background, his thoughts on social equity and some advice he could offer to other minority cannabis entrepreneurs.

Cannabis Industry Journal: Tell us a little about yourself – what’s your story?  

Tahir Johnson, Founder & CEO of Simply Pure Trenton

Tahir Johnson: My name’s Tahir Johnson and I am the founder and CEO of simply pure Trenton. I was born and raised here in Trenton. I am a Howard University alumnus. I’ve spent most of the past few years of my life in the DC Maryland area. I came home to apply for the licenses and thankfully won them. I am one of the first 11 dispensary licenses to be issued last year. I licensed the brand from my good friend, Wanda James, who is the founder of the original Simply Pure back in Denver, Colorado. She started the very first black-owned dispensary in the country. I am excited to be carrying this legacy.

Before cannabis, I spent most of my career working in finance. I came into the industry in 2019 and started out as a budtender after quitting my job in finance, starting to work at a dispensary. I began working in advocacy, joining the NCIA in 2019 then went on to the Marijuana Policy Project and the US Cannabis council in 2021, where I was up until I started this dispensary. It’s been amazing being back home and close to the family after being away for 22 years. I am just really excited that I am on track to open the first black-owned social equity dispensary in the state of New Jersey.

CIJ: Tell us about Simply Pure. How did you start this dispensary and how did you meet Wanda?  

Tahir: So, I met Wanda back in 2019, back when I was with NCIA. Initially, it was never about opening a dispensary or anything back then. I was just building a network and finding like-minded minority folks in the business for possible future collaboration. You know, Wanda, I think of her as an OG. She’s been a friend and mentor from Day 1. So, when I initially wanted to apply for a license in New Jersey, I knew that Wanda wanted to grow and take her business outside of Denver. I went to her and asked possibly about partnering, seeing if she wanted to do this with me. She thankfully agreed to it and the rest is history.

Tahir Johnson (left), Wanda James (center) and John Dockery (right)

CIJ: Could you give us a timeline of how Simply Pure Trenton got started? Where are y’all at right now and what sort of roadblocks have you had to overcome?

Tahir: Sure, So I got the conditional license in May of last year, then I got the annual license in April of this year. Early on, hurdles were definitely access to capital. Thankfully, me being one of the first licensees and I think my background and network helped me get access to the money. The biggest barrier, when you look at getting a license, there are so many moving parts. Getting the license is just one small piece of it. Then getting local approval is another obstacle. But man, getting the building permits has been one of the biggest roadblocks I’ve ever faced. If somebody asks me what my biggest roadblock was, it’s building permits. Because in New Jersey, you have to get approval from multiple different outside agencies that really have nothing to do with building or cannabis ore anything. The latest approval we’re waiting on is from the Raritan and Delaware Canal Commission and I’m wondering what the hell does that have to do with building out the interior of my space? You know what I mean, it’s just a lot of red tape and diplomacy that I have to go through. A lot of it is very unexpected!

CIJ: Alright switching gears a little bit here. How would you define social equity in the cannabis industry’s current climate and where we’re at today? What does economic empowerment mean to you?

Tahir: I would say first that social equity in cannabis specifically is the idea that people who have been the most impacted by the war on drugs should have the opportunity be a part of the industry. And that’s super important because we’re building a completely new industry and one that’s doing billions of dollars in sales. In my opinion, when we say people who have been most impacted by the war on drugs, those are by and large the black, indigenous and Latino populations. So, it’s been black and brown folks that have been largely affected by the war on drugs. If we’re going to have a new legal system, those same people who were 4x more likely to be arrested for cannabis should at least get the opportunity in ownership of this new industry.

A rendering of the Simply Pure dispensary storefront

Economic empowerment is one of the biggest parts of social equity. It’s actually what drew me to cannabis in the first place. When you look at the opportunities in cannabis, it’s a business that’s hard to get into, but It’s a lot harder to do if you have a lack of access to capital. Drawing from my career in finance, when you look at black communities, we have 1/10 of the wealth of our white counterparts. Looking at such a cash-oriented business where you can’t just get a normal business loan from a bank, you have to have personal wealth and access to venture capital or private equity. Well, our communities have less access to that because of our background, our networks and upbringings. So social equity is the idea that there should be some support systems in place, some help in bringing opportunities of the cannabis industry to us.

One part of that is licensing and giving us access to the licensing process. Another part of this issue that is being administered more recently is actually making sure that wealth is distributed through programs and policies. Not everyone may want to start a dispensary like me, but they were still severely impacted by the war on drugs. Seeing money from the tax dollars generated by the cannabis industry now going back to the communities to fund rebuilding and revitalizing projects is great. It really comes down to leveling the playing field to create those opportunities for people that should have them.Tahir Johnson will be presenting at the upcoming Cannabis Quality Conference in Parsippany, New Jersey, October 16-18. Click here to learn more.

CIJ: What does community mean to you? How does your business fit into and support the Trenton and larger NJ cannabis community?

Tahir: For me, one of the biggest things I’m proud of growing up in Trenton is that sign on the bridge, “Trenton Makes, The World Takes.” Growing up, this area was an industrial town. Both of my grandparents had good factory jobs and were able to support a family, but a lot of that has left the city over the years, leaving it economically depressed. I’ve been pulled over, arrested, we’ve had family members locked up all just because of cannabis. So the idea that now, through cannabis, to be able to have an opportunity to build something positive in our community, to create jobs and wealth in our community, giving back in this same place is wonderful. I think of this as the economy and opportunity of the future. In New Jersey specifically, the state has one of the biggest racial disparities on arrests. A lot of that is due to cannabis. I remember growing up, every time we get pulled over, you know we’re getting searched. There’s been real life situations, where there was a seed or a roach in the car and we’d have to decide who’s going to jail today just because of a roach. You know, how many people’s lives have been impacted and changed just because of a cannabis arrest? Now, looking at New Jersey and this ability to right those wrongs, it’s really a beautiful opportunity.

When I talk about my community, the way that I’ve been able to inspire people and make our community proud has been the biggest thing for me. For us, we haven’t seen a lot of people make it and get to achieve success. So, to be able to have this opportunity and to be from here actually doing this is one of my biggest motivators, showing people from my community and from across the state that we can be successful in business. We often hear how difficult it can be and how making it in business seems like mission impossible to so many, being able to achieve that mission and give some hope and inspiration to people where I come from is truly special.

CIJ: If you could give yourself advice ten years ago, what would it be? What advice would you offer to other BIPOC entrepreneurs trying to make it in the cannabis industry?

Tahir: Let’s see where I was ten years ago. I would say just always continue to keep the hope and keep the faith. Stuff gets tough, but as long as you keep the vision and the path, it’s going to be okay. What I would say to other cannabis entrepreneurs is largely the same thing. This is hard as fuck. It is very hard. No matter how many times you get knocked down, you have to get back up. Don’t believe the hype. Don’t let anybody make you believe that you can’t do it because you can. It takes believing in yourself, even if people don’t believe.

This would be something that if you are a minority entrepreneur, this is really true. You really do have to be better and stronger. Educate yourself. Take the time to network with people that look like you and don’t. First you want to build a team and a support system. You also want to be able to build. Some of your allies that can help support you, they might not come from your same community or background. I wouldn’t be here if it wasn’t for a lot of very diverse people that believed in me. Work hard, network, believe in yourself because nobody else is going to believe in you. Put in the work and that’ll bring success to anything you want to do.

Tahir Johnson (left) with John Dockery (right)

CIJ: Any final thoughts you want to share with our readers?

Tahir: Yea, so in addition to me winning my licenses, my close childhood friend, John Dockery, will be opening another Simply Pure location in downtown Trenton too, which is really exciting. I am really looking forward to getting to the finish line with all of this and being able to open. I think one of the biggest things I’d like to add is that there are so many people depending on us for this, so many jobs on the line, the community I am waiting to serve, all of these things and we’re encountering delays that are typical of this industry with the long road from getting licensed to opening and operating. A lot of people are expecting us to be open and we’ve encountered some slight delays, but we’re excited to be opening soon and expect that to happen no later than October.

Is the Cannabis Industry Sitting On An Untouched Gold Mine Of Innovation?

By Pam Chmiel
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Universities across the country are working in all areas of research and development to advance cannabis cultivation, medicine, drug delivery and technology. But these innovations are collecting dust because the universities are not in the business of commercializing products in the marketplace.

In 1980, the federal government passed a law that said universities that receive federal funding, which most of them do, will have the option to own whatever intellectual property or invention they develop from that federal funding. Initially, universities resisted the idea feeling they were selling their souls to the private sector and corporate America. But opinions have changed, and the marriage between universities and industries is a common and rewarding business strategy for both sides.

I interviewed Lance Anderson, a partner at the law firm Dickinson Wright who is uniquely positioned to play matchmaker to research universities, entrepreneurs and VCs to help them uncover cannabis innovations and create partnerships. Lance is also educated in life sciences, including proprietary plants, genetics and plant-derived products, and served as in-house counsel and lead IP attorney for a large public research university system and an early-stage venture capital company.

Pam Chmiel: What led you to play matchmaker to universities and cannabis businesses?

Lance Anderson: I learned that universities are interested in commercially benefiting from some of their innovations when I worked in the technology commercialization office at Texas Tech University right out of law school.

The concept of “technology transfer for commercialization” already exists in universities and presents a vast opportunity for cannabis businesses to commercialize their innovations.

Lance Anderson, an attorney at Dickinson Wright

“Technology Transfer” agreements refer to moving technology, knowledge or innovations from one organization, such as a research university, to another entity, such as a cannabis company, through licensing agreements that grant permission to use intellectual property (IP), patents or proprietary technology for commercial purposes.

Even though legalization is sweeping the country, I’m finding that academic institutions and their administrators are concerned they will lose all federal funding and are hesitant to take the chance on a cannabis research project. They are still getting comfortable with the opportunities to work with the industry, and the farm bill act of 2018 gave them the push to do so.

And why not tap into these universities, which receive millions and millions of dollars in funding? You’re not out a lot if you properly structure your relationship with them. You do not have to pay them millions and millions of dollars to get this technology. Knowing what the university wants and how to structure that relationship is key.

Pam: What are some of the benefits a business can gain by forging a partnership with a university?

Lance:

  1. Cannabis companies benefit by gaining access to cutting-edge research, expertise and resources that can accelerate and elevate their product development and market entry.
  2. The association with academic institutions can help build trust among consumers, investors, and lawmakers.
  3. Working with university research students may create a pipeline of qualified employees who may want to work for the company.
  4. Submitting a joint proposal with a university seeking government grants may lead to additional funding for the research project.

Pam: What types of partnerships do you currently see in development?

Lance: Pharmaceutical companies have collaborated with research universities for years on drug development and undoubtedly have their eye on the cannabis industry. Federal agencies like the USDA lean on academic partnerships to develop unique plant traits to improve crop production. You’ve got institutions developing new mind-blowing genetics, like polyploid species, that allow you to fine-tune the plant traits you’re interested in. There are always advances going on.

Clemson and Cornell Universities are leading the charge in cultivation by partnering with farms to develop techniques to grow better crops and increase profitability. And interestingly, many of the land grant institutions that receive federal grants, like Mississippi State, Michigan State and Texas A&M, are now diving into plant trait development. And it’s not unrealistic to think they will transition into plant-touching technologies ripe for the cannabis industry to come in and run with it from there.

“Researchers are now getting more access to cannabis strains that are more like what we’re seeing on the market, but it’s still not where we need to be”

But the research desperately needed to move the industry forward is medical research because lawmakers want proof that cannabis has medicinal benefits before they are confident in pushing for legalization. Unfortunately, the US government has been part of the problem in making it hard to conduct research, whether clinical trials, clinical research or simple preclinical studies on cannabis. Until recently, the University of Mississippi was the only university allowed to cultivate for research. So the researchers are now getting more access to cannabis strains that are more like what we’re seeing on the market, but it’s still not where we need to be. Not even close.

Academic partnerships are not a new concept, but the cannabis industry has yet to embrace it fully. Opportunities are beginning to develop where government agencies will participate and or fund the work in cannabis from the university standpoint. The National Institute of Health has a program that’s getting kicked off for cannabis research. And they all understand and recognize that the fact we don’t have enough clinical data available is a major hindrance to the advancement of this industry.

Pam: What is legally involved in a technology transfer partnership?

Lance: Collaboration between cannabis companies and research universities can take various forms, such as research partnerships, sponsored research agreements, joint ventures, or licensing arrangements. The specific model depends on the goals, resources, and intellectual property involved in the collaboration. An attorney can structure an agreement in a manner that lets everyone slowly advance into the relationship and get satisfied with the milestones they want and at which point this thing begins to take shape.

“Opportunities are beginning to develop where government agencies will participate and or fund the work in cannabis from the university standpoint.”

Cannabis businesses are no strangers to utilizing multiple entities in their corporate structuring. They may have a holding company that owns the real estate, a staffing company that manages the HR for the flower-touching operations, and another that holds the intellectual property. You’re seeing an entire industry familiar with IP licensing for the first time in a long time, and universities want in by licensing their intellectual property.

The university may require a licensee to have a product in the marketplace and a first sale within two years. So that introduces the concept of perishable intellectual property rights where you can default or don’t meet the licensing requirements. That perishable concept sometimes makes it hard to raise money because the investors prefer a guarantee that you have the license and will not default.

The takeaway is universities are thirsty for partnering and looking for strategic initiatives. Universities have access to patient populations, and the cannabis industry has the business know-how to take their innovations to market. It will take some culturing of both sides to understand the opportunities. But once everyone’s on the same page, the deals will look like the licenses and joint venture deals we see now with multi-state operators.

Pam: Lance, do you have any closing thoughts for our audience?

Lance: I’ve thought about this potential synergy for years as I’ve watched these two areas I practice in often. Academic partnerships are the catalyst to move the cannabis industry forward and are right in front of us. The time is now, and I’d love to be there.