Tag Archives: participation

By Dr. Markus Roggen, Amanda Assen, Dr. Tom Dupree

You generate the product, you should benefit from it too.

If you are not paying for the service, you are the product. This pithy phrase is often heard in discussions about social media’s use of personal information and user-generated content. The idea can be traced back to a 1973 short film that critiques television’s impact on culture and politics. Although about television, the quote, “you are the end product delivered en masse to the advertiser,” still rings true when talking about major online corporations.

We have all seen it with big corporations. In the first three months of 2021, of Facebook’s $26.2B revenue, a whopping $25.4B was from advertising sales. However, the space for an advertisement to be delivered en masse to the public is not the only thing purchased from Facebook. Access to personal information such as your search history, likes and posts are also purchased by companies to determine which advertisements they should target you with.Access to user-generated data by advertisers has sparked privacy and ownership concerns regarding large internet platforms. The idea of being surveilled all the time is uncomfortable, and many large corporations like Facebook have royalty-free and transferable licenses to your posts.

Similarly, many websites in the cannabis industry gain value from information submitted by consumers. As an example, the website Leafly provides over 1.3 million consumer product reviews that are often used for purchasing decisions. These reviews play a role in attracting more people to websites that operate with a similar system to Leafly, and in turn advertising space to reach those people is sold. According to their About page, more than 4.5 million orders for advertising space are placed with businesses on Leafly each year, generating annually about $460 million in gross merchandise value. So, the users work for free to attract an audience to these websites for the advertisers, and the websites make money from advertisers.

Can we empower users with ownership of their content, data and participation in profits?

Frustrated social media users exclaiming “We are the product!” does nothing to change our reality. It is unlikely we will change how big corporations like Facebook work, but can we ensure users receive some of the benefits in our own cannabis industry? Many of these websites, especially those for medicinal cannabis, are designed to genuinely help users. Can we further increase this feeling of having a transaction with the websites rather than feel like we are being sold to advertisers? The world of NFTs may offer some guidance.

An NFT (or non-fungible token) acts as a digital certificate of authenticity. Unlike cryptocurrencies (like Bitcoin), each NFT is unique, so it cannot be exchanged or multiplied. They are kept on a blockchain system, which is a growing list of computationally secure ledgers. The blockchain allows proof of ownership to be established for the person with the NFT, and prevents others from being able to tamper with or claim ownership of the artwork, game, tweet or cat picture it is assigned to. Although non-exchangeable, NFTs can be traded on a digital marketplace, like how a physical piece of art can be auctioned.

While NFTs and cryptocurrencies are certainly not without controversy and flaws, an NFT-like system that provides users with proof of ownership for their data and grants them control over what is done with it may be the way of the future for websites in the cannabis industry. Just like Facebook, when it comes to sales, online display advertisements are some of the top revenue generators for websites in the cannabis industry that utilize user-generated content. With an NFT-like system, users could be granted a royalty for their content, which would obligate websites to give a portion of their profits to the users when their content is sold to an advertiser. Users may be able to have a portfolio of their generated content, have some control over who can access their content and who their personal data can be sold to.

Websites that are more focused on cannabis for medicinal use often pride themselves on being more patient-focused and professional – no pothead puns or crass logos. An NFT-like system might be especially beneficial for these companies, as it would further increase the emphasis of trust and respect for users. In this case, an NFT-like system could be used to assign ownership of reviews to individual website users. Since these reviews attract new people to these websites, when access to a user’s data is sold to advertisement companies, then a portion of that revenue is given to the people who created the reviews. The estimated amount of revenue that reviewers help to bring into the company can be calculated and distributed accordingly. While this may seem like it would cause a significant loss of revenue for the websites, the increased trust that would come with this system would likely promote more users, generating an overall increase in revenue and credibility. Users could become more engaged and spend more time writing reviews, increasing web traffic considerably. Advertisers would be more attracted to the larger audience and the prestige of having their advertisement on a well-respected site.

An NFT-like system could hold large internet corporations accountable.

The new normal is corporations on the internet making money from the content created by users. In return, users receive none of the monetary benefits and have their personal information shared with hundreds of businesses. An NFT-like system, although theoretical, may be able to empower users to hold large corporations accountable for what is done with user-generated data. It is unlikely we can change big companies like Facebook, but if adopted early, this may be plausible in our cannabis industry. This in turn may not only give more ownership to the website users, but could also benefit the websites, and the advertisers. Overall, the product should be the website and the services it provides. An NFT-like system might help promote this and could make users who generate value for the website partners in business.

January 23, 2019

Cannabis Legalization in Massachusetts: An Interview with Steven Hoffman, Chairman of the Cannabis Control Commission

By Aaron G. Biros

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On February 13 at the upcoming Seed To Sale Show in Boston, MA, Steven Hoffman, Chairman of the Cannabis Control Commission of Massachusetts, will deliver a keynote discussion. Hoffman will sit down with National Cannabis Industry Association (NCIA) Executive Director Aaron Smith to discuss the first few months of recreational legalization, challenges and the path forward for the state. We caught up with Hoffman to hear about some of the biggest obstacles and successes when it came to standing up a regulated adult-use cannabis market.

On November 8, 2016, voters in Massachusetts ushered in a new era for the East Coast, when they passed a ballot initiative to legalize adult-use cannabis. Almost immediately after that, the Massachusetts Legislature put a hold on implementation in order to study the issues and revise the legislation, which was ultimately signed in July of 2017. That September, Steven Hoffman and his colleagues at the Cannabis Control Commission were appointed to figure out how the state should regulate the market, enforce its regulations and roll out the new adult-use program.

The Commission was tasked with creating something brand new, without a roadmap in place and developing rules around some very contentious issues. “I think the biggest obstacle was that we were doing something unprecedented,” says Hoffman. “Every state is different demographically and the laws differ state to state, and we got a lot of help from other states sharing their experiences with us, but we were still going down an uncharted path for Massachusetts.”

Hoffman told us the very first thing they needed to do in 2017 was conduct listening sessions in which the commissioners listened to citizens for recommendations and heard people’s thoughts on cannabis legalization. “We did that immediately. We needed to conduct a process that was transparent, thoughtful and inclusive,” says Hoffman. “We then, in public, debated policies around adult-use marijuana regarding licensing processes, criteria and enforcement.”

They debated policies in a public forum for four days and came back the following week to embed their decisions in draft regulations that were submitted to the Secretary of State in December 2017. Then, they had 10 more public hearings, made some modifications to the rules, and promulgated a final version of the adult-use regulations in March 2018, keeping everything as transparent and inclusive as possible. “I don’t think anyone has been critical of that process behind it,” says Hoffman.

Certain pieces of the regulations stand out as particularly inclusive and progressive for Massachusetts’ cannabis program. For example, certain mandates encourage diversity and support communities affected by the drug war. Hoffman says the Commission couldn’t take credit for those completely because their objectives are explicit in the legislation, however, the agency still made sure the state followed through. “The mandate said the industry should look like the state of Massachusetts in terms of our diversity,” says Hoffman. That includes creating a diverse industry with respect to ethnicity, gender, LGBTQ, veteran and disabled participation. Additionally, he added, “it was a very explicit set of requirements that those communities who were disproportionally harmed by the drug war are full participants in the new industry we set up. Those were both legislative mandates, so we take them very seriously and I wouldn’t have taken this appointment if I didn’t think it was absolutely essential.”

You can expect to hear more from Hoffman on this and other matters related to implementing cannabis regulations at the upcoming Seed To Sale Show in Boston, MA, February 12-13, 2019. On November 20, 2018, the first adult-use dispensaries in the state opened their doors for business and began selling cannabis. Hoffman says he is most proud of their rollout of the program as well as the transparency and inclusiveness through which they conducted the process. “I think this is a very controversial issue; the voters approved this issue by 53-47%,” says Hoffman. “No matter what we do, we won’t make everyone happy, but we’ve done everything possible to allow people to participate and feel like they’ve been listened to. We made our decisions publicly and transparently.”

Beyond that, the Commission wanted to take their time to make sure things were done the right way the first time. “From day one, we decided we were going to do this right rather than meet an arbitrary timeline,” says Hoffman. “It’s gradual, it’s maybe slower than some people would like, but our rollout has been well-received and relatively smooth. I think a gradual and thoughtful process, not focused on a deadline, went very well. Hopefully we have given other states a model when they plan their own rollout.”

Hoffman wouldn’t comment on whether or not he would encourage other states down a similar path, but he did say they could probably learn a thing or two from them. “I expect other states will do what we did,” says Hoffman. “They will talk to other states ahead of them like us and hopefully will benefit from learning from our experiences. I don’t know what the laws will look like but I expect other states need to make it work for them specifically.”

August 3, 2017

Florida Medical Cannabis Market Growth Stymied By Red Tape

By Aaron G. Biros

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The demand for medical cannabis in Florida might be growing steadily, with patient numbers soaring, but that doesn’t mean the market will grow accordingly. Due to hampering regulations and a lack of state guidance, the industry in Florida is tiny and patients have limited options for medical cannabis products.

A little more than three years ago, Governor Rick Scott signed a bill into law, legalizing medical cannabis, but only for terminally ill patients and only for one strain, Charlotte’s Web. That stipulated a low-THC, concentrated oil form of cannabis. That bill also set up the licensing framework for what is now an extremely limited market.

Florida Gov. Rick Scott has been accused of making the licensing process secretive Photo: Gage Skidmore, Flickr

In November of 2015, the Office of Compassionate Use, now called the Office of Medical Marijuana, issued licenses for five dispensaries. To get a license, applicants needed to meet a variety of absurd requirements. That included being a nursery in business for thirty years, growing a minimum of 400,000 plants at the time of applying, paying $300,000 in fees and a $5 million performance bond.

Fast forward to Election Day last year when voters passed Amendment 2 by a wide margin, amending the state’s constitution and legalizing medical cannabis for a broader scope of qualifying conditions. What hasn’t changed, however, is the old vertical licensing framework. Critics have dubbed this a “pay-to-play” market, with massive barriers to entry prohibiting small businesses from gaining market access.

David C. Kotler, Esq.

David Kotler, Esq., attorney and partner at CohenKotler P.A., says we shouldn’t expect to see a viable market for years as a result of all this red tape. “Honestly the State of Florida, with their limited licenses and odd requirements to qualify for licensure have stunted what could be a good market both for businesses and patients,” says Kotler. “It has been an inefficient roll-out and is truly an embarrassment for the state, legislature and the Department of Health.” Kotler says he’s heard reports of extremely limited product selection, poor quality, as well as no dried flower being offered.

But the patients are pouring in by the thousands- on July 27^th, the Office of Medical Marijuana reported 26,968 registered medical patients, with more than 10,000 patients signing up since June 7^th. “Despite my belief that it would be a slow roll out, it appears the patient count is picking up,” says Kotler. “The elimination of the 90-day doctor-patient relationship will certainly help this.” He is referring to the reversal of a waiting period policy, where patients had to wait 90 days before receiving a medical cannabis certification. “But there still seems to be a backup with issuance of cards and poor guidance from the Department of Health leaving many doctors unsure of what they should be doing,” says Kotler. The rules and guidelines for physicians participating in the program are still not established, but the Florida Board of Medicine expects to vote on them this week, reports say.

Matt Karnes, founder and managing partner of GreenWave Advisors

With seven licensees right now and a total of ten licensees by October allowed to grow and distribute cannabis products, the question remains if that is enough to satisfy the growing number of patients. According to Matt Karnes, founder and managing partner of GreenWave Advisors, the state is adjusting by adding more licensees and allowing them to operate more dispensaries, potentially trying to sate that demand. “Both of these amendments will likely serve as a catalyst for revenue growth but could be tempered by a lack of physician participation (as we have seen in other states) in the medical marijuana program,” says Karnes. “For every incremental 100,000 patients who register in the Medical Marijuana program, four more licenses will be issued and existing licensees will be allowed to open another four dispensaries (current cap is 25). We do not expect an incremental 100,000 patients until sometime in 2021.” His firm’s market projections account for those increases and edibles now being sold, but still no dry flower allowed. They project total sales figures in the state to reach $712 million by 2021.

Those figures are contingent on the increase in registered patients and more licensees. If Florida’s vertical licensing model remains, it’s quite possible the state will see a cannabis shortage, much like Nevada during their opening month of adult use sales. “Instead of learning from so many states before it, Florida forged a path down the rabbit hole that may limit Florida’s potential until either a legislative change or a backlash at the polls in the form of an amendment bringing forth adult use,” says Kotler. In New York, that vertical licensing model arguably created a monopoly, with only a select few businesses controlling the entire market. That doesn’t foster market growth; it hurts quality, keeps prices high and prevents real competition. “We see how that worked out for New York,” says Kotler. “We cling to that despite what could be a large patient base with the potential to service tourists who wish to have reciprocity.”

Florida’s market could be a powerhouse for the state, with the potential to generate millions in tax revenue, create thousands of jobs and actually help patients get the medicine they need. But until the state ditches their conservative, closed-door approach, we won’t see the industry truly flourish. .