Prominent edibles company’s expansion highlights evolution of cannabis industry

One of the largest and most prominent infused products manufacturers in the cannabis industry is expanding beyond its home base of Colorado, becoming the latest marijuana company to serve multiple states.

Denver-based Dixie Brands will enter California – the biggest medical marijuana market in the country – on July 1, when its products will appear on dispensary shelves in the San Francisco area via a licensing deal with a local company. It plans to enter Los Angeles and San Diego several weeks later and expand to several additional states in the second half of the year, the company told Marijuana Business Daily.

“It’s going to be a massive market for us,” said Joe Hodas, chief marketing officer at Dixie, adding that California could surpass Colorado for the company in terms of sales.

Dixie is far from the first edibles company to spread across state lines: Several – including Bhang Chocolate, EdiPure, Mary’s Medicinals and G Farma Labs – have cemented partnerships and licensing deals in more than one state, bringing in added revenue and spread their brand names across the country. Bhang is even available in Holland.

But Dixie is one of the most well-known infused products companies to go this route, and its expansion further underscores how the industry is evolving and maturing.

“These types of groups that are (expanding aggressively) are the ones that are fartherhttp://saragullickson.com/wp-admin/edit.php?post_type=press ahead than others,” said Zeta Ceti, owner of Green Rush Consulting in Oakland, California. “Being able to expand across the country and being able to have your brand in multiple states across multiple platforms, when it does become legal on a federal level, this is huge for them. It’s massive for them.”

And it’s not just edibles companies setting their sights on multiple states.

Ancillary firms have been building national brands for years, as they aren’t hampered by the same legal issues facing cannabis-touching firms. Now, dispensaries are also finding ways to expand, with owners competing for licenses in new MMJ states or taking on ownership stakes in companies competing for permits.

Sara Gullickson, a consultant with MariMed Advisors in Arizona, said it’s a natural evolution of the industry. She predicted that in another five years, there won’t be many lone operators left in the major markets. Instead, most stores and brands will be part of larger companies.
“I don’t think it’ll all go away, but we’ll see a lot less ma-and-pa shops,” Gullickson said. “At the end of the day, it’s power in numbers.”

That’s one of the reasons Dixie has been planning on expanding for years. The company is finally taking the leap because it eventually found the right partners in a new startup called Indus Holdings, which also owns another California-based edibles company called Altai.

“California is not a market that we originally were aggressively looking at, but… the partner is often more important than the market,” Hodas said. “This is part and parcel of our overall expansion plan.”

Dixie’s expansion plans were delayed by several factors. Aside from contract negotiations, finding the right real estate, insurance, manufacturing facilities and equipment bogged down the process, Hodas said.

The licensing deal with Indus was finalized six months ago, and Dixie provided the California company with nearly everything it needed (minus the THC) to produce the same products Dixie markets in Colorado.

By the end of the year, Dixie hopes to add another two to four states to the list of markets where it has licensing partners. The company is looking specifically at Washington State and Arizona, Hodas said.

Indus has the same ambition: CEO Robert Weakley said the company plans on building up Altai’s brand of edibles alongside Dixie, and is open to similar distribution and manufacturing agreements with other marijuana businesses. That even includes other possible products outside of edibles, such as extracts or concentrates, he said.

“Our facility is state of the art, and definitely has the capacity to grow and build,” Weakley said.

With Indus’s sales team and distribution network, Weakley said the company will likely have Dixie products available in several hundred California dispensaries by the end of the year.

Source: http://mjbizdaily.com/prominent-edibles-company-expanding-new-states-highlighting-cannabis-industrys-evolution/

Medical Marijuana to battle black market for customers in Illinois

Illinois Senate passes marijuana decriminalization bill but plans changes

When retailers open state-approved medical marijuana shops in Illinois later this year, they will face a distinct disadvantage in luring prospective patients across their thresholds: Marijuana will always be cheaper on the black market.

So what incentives might entice those patients?

Think cannabis-infused premium chocolate. Well-lit display cases that showcase buds as if they were jewelry. Informed employees who can guide each patient to the best strain for their needs.

Dispensary owners in Illinois are thinking, too, about Tupperware-style education parties, spa-like interior design and good old-fashioned customer service — all ways to beat out their fiercest competitors: underground dealers.

As the state’s pilot program lurches to life with the first marijuana expected to be sold in the fall, businesses are studying the strategies of veteran players in Colorado, Washington and California during site visits and trade shows.

Patient numbers have been low, with only 2,300 people gaining state approval so far. Some have complained about the fingerprint requirement to get a patient card, and others have said they’d rather stick with dealers who may also be their friends.

How to lure the latter away from the black market is on the mind of Gorgi Naumovski, whose company, KPG, holds permits to open dispensaries in the southern Illinois cities of Anna and Harrisburg.

“When they buy marijuana on the black market, it’s not tested, they don’t know where it’s coming from,” Naumovski said. “When they come to a dispensary, it’s gone through a process. It’s been tested, it’s been certified. They know what they’re getting.”

There may be a menu of strains, he said, with different potencies and balances of CBD, the component said to give marijuana its medicinal properties, and THC, the psychoactive ingredient that makes people feel high.

“Is this going to put me on the couch, or help me clean the house?” Aaron Varney, co-director of Dockside Cannabis in Washington state, said in paraphrasing what a customer might want to know.

Most Americans prefer to buy marijuana from legal sources, said George Jage, president of Marijuana Business Media, which sponsored a trade show in Chicago that closed Thursday. It drew 2,100 attendees from 42 states, including 259 people from Illinois.

“Last year was also the year that marijuana went mainstream in America with it becoming more socially acceptable and increasingly more available to many Americans,” Jage said.

California attendee Tom Hymes agreed. “I’m a family man. I’m a normal person,” Hymes said. “It was thrilling for me to get my medical marijuana card…. I think there’s a natural incentive for people to go that route. What will inhibit that is making it an unpleasant or unwelcoming experience.

“And the price.”

While black-market prices vary widely and are hard to track, experts at the trade show pointed to a crowd-sourcing website that collects anonymously reported prices as the best general estimates. According to the site, high-quality marijuana sells on the Illinois black market for about $350 per ounce. Legal dispensaries must charge more to cover overhead and a 7 percent privilege tax assessed on commercial growers and passed along to retailers.

In Michigan, where black-market pot sells for $250 to $300 an ounce, medical marijuana retailers are charging $300 to $350 an ounce.

Dispensaries should charge more, otherwise they’ll risk their customers reselling the product on the black market, according to Patricia Rossi of Wellness Connection of Maine, that state’s largest medical marijuana group. That’s what happened to her.

“We started having a strong suspicion that what we viewed as a compassionate pricing strategy was actually feeding diversion on the black market,” Rossi said during a panel discussion at the Chicago trade show.

Varney, during the same panel, said he’s started hosting Tupperware-style parties in his stores to appeal to customers who want to learn more about the products with friends after work. Recreational marijuana is legal in Washington state.

Dispensaries may want to provide an ATM for customer convenience — credit card companies won’t deal with marijuana dispensaries, forcing retailers to be cash-only, industry experts said.

“People expect to be able to use a credit card or debit card. But because of the ecosystem that exists right now, it’s not a possibility,” said Isaac Wechter of Chicago-based Sky Processing, which has ATMs in 70 medical marijuana dispensaries across the nation. “I don’t think it’s easier, but it’s legal. It’s a heck of a lot more convenient than going to jail.”

Interior design is also important. Naumovski’s company is contracting with Massachusetts-based MariMed Advisors to use their dispensary model Thrive, marketed as “a high-end dispensary experience.”

“It’s going to be welcoming. It’s going to be secure,” Naumovski said. Patients will “see a spa-like setting where they’re going to be welcomed and not rushed to buy.”

 

Source: http://www.chicagotribune.com/news/nationworld/ct-illinois-pot-black-market-20150523-story.html

Marimed’s Sara Gullickson to speak at marijuana business conference & expo may 20

 

Topic: Tapping Big New Medical Marijuana Markets: NV, IL and NY

PHOENIX, AZ and CHICAGO, IL and BOSTON, MA–(Marketwired – Mar 25, 2015) – Sara Gullickson, VP of Marketing for MariMed Advisors (a subsidiary of Worlds Online) (OTCQB:WORX) will be a panelist at the Marijuana Business Conference & Expo in Chicago. Gullickson and three others industry experts will discuss “Tapping Big New MMJ Markets: Nevada, Illinois and New York” at 3:00 p.m. on the opening day of the conference, Wednesday, May 20, 2015, at the Hilton Chicago Conference Center.
Gullickson, the co-chair of Women Grow-Phoenix Chapter and also Executive Director of MariMed subsidiary DispensaryPermits.com, has four years of experience as a leader in the medical marijuana (MMJ) industry and nearly a decade of experience strategizing and executing online and traditional marketing campaigns for the health, beauty, medical, dental, fitness and spa industries. She has successfully assisted medical marijuana clients in eight states, including Ill., Nev., and N.Y., through the medical marijuana license application process, laying out every aspect of their business strategy from identifying locations all the way through developing product and tracking customer results.
“Every state forms their medical marijuana processes differently and entrepreneurs often get bogged down in the regulations and red tape,” noted Gullickson. “Having experience with dispensary and cultivation centers across multiple states, we have developed strategies, procedures and protocols that have been proven to work and are replicable. I’m looking forward to sharing our insights on tapping the new markets in New York, Nevada and Illinois to create efficient, productive and healthy businesses that will provide safe, high quality medical cannabis products to patients who need them.”
Visit MariMed Advisors at Booth # D311 at Marijuana Business Daily’s Marijuana Business Conference and Expo, May 19-21, Hilton, Expo Center, Chicago. 
About MariMed Advisors/DispensaryPermits.com:
MariMed Advisors provides total solutions for the design, development, operation, funding and optimization of medical cannabis cultivation centers and dispensaries. The MariMed team developed the highly regarded, state of the art and regulatory compliant, Thomas C. Slater Compassionate Center in Rhode Island, which serves as replicable and scalable model of excellence. It merges commercial horticultural principles with proven cannabis production techniques. With its affiliate, DispensaryPermits.com, MariMed has secured both award winning license applications and market shares for its clients in eight states, creating one of the best track records in the industry. MariMed provides turn‐key management, funding, staffing and personnel training, implementing best practices in the industry. It is on the forefront of medical research working with physicians and scientists to create precision dosing to treat specific conditions.
Source: http://www.marketwired.com/press-release/marimeds-sara-gullickson-to-speak-at-marijuana-business-conference-expo-may-20-otcqb-worx-2003452.htm

Dispensary slated for Southwestern New Hampshire

A medical marijuana treatment center is slated to come to the southwestern part of New Hampshire, but details on when it could be here are still scarce.

As the N.H. Department of Health and Human Services considers 14 applications to establish four treatment centers across the state, the agency has prioritized a dispensary for Cheshire and Sullivan counties, because of a concern that vendors might not otherwise come to the area, according to Eric D. Borrin, director of contracts and procurement at the department.

State regulations were tweaked to incentivize treatment centers to come to the western part of the state, including a rule that will allow the company that builds a dispensary in this area to also build one in a more populated region of the state, Borrin said.

The four dispensaries in New Hampshire will be in the northern, central, east and western regions.

For medical marijuana advocates and patients who could benefit, the dispensaries are a long time coming in New Hampshire. The state has been the slowest in New England to pass medical marijuana legislation, and still has not passed a provision for home-grow. Connecticut and New Hampshire are the only states in New England that don’t allow qualifying patients to grow their own plants.

Some advocates think even though dispensaries are coming, they won’t do enough to address the need.

“New Hampshire has by far the most draconian marijuana laws in New England and the least friendly medical marijuana law,” said Matthew Simon, New England director for national advocacy group the Marijuana Policy Project.

And Simon said he’s worried that the $80,000 annual fee the state asks dispensaries to pay will translate to high costs for patients.

“There’s just no guarantee that dispensaries can sell cannabis to these patients at reasonable prices,” he said, adding he believes some patients may still try to buy marijuana illegally instead of paying higher costs at dispensaries.

The fee is so high because the department had no funding to start the state’s medical marijuana program and needs enough to make the program self-sustaining, according to the program’s rules coordinator, Michael Holt.

Sara Gullickson, vice president of sales for national medical marijuana consulting group MariMed Advisors said the high price is a difficult thing to contend with, but she believes that in New Hampshire, it’s necessary.

“It’s a stressor for the government agency as well,” she said. “If that’s what they have to do … it’s not that I agree with it, but I also don’t disagree with it.”

Gullickson’s company is working with vendors who want to open dispensaries in New Hampshire, but she declined to name them or say how many MariMed is working with.

Potential dispensaries already have a long list of rules to follow from the state human services department. Dispensaries will have to cultivate hundreds of their own marijuana plants on site, sometimes growing five or more strains tailored to different kinds of ailments.

Gullickson said her group is committed to making sure dispensaries “really turn it into a medical experience” for patients. Many treatment centers would have a doctor on their boards of directors and have spaces in the center for patients to discuss private medical conditions with staff.

The centers will treat patients with conditions including cancer, glaucoma, multiple sclerosis, Crohn’s disease, severe pain or traumatic brain injury. Bills from the state Legislature may add more conditions to the list.

State Rep. Larry Phillips, D-Keene, says he supports the direction New Hampshire is taking with medical marijuana in dispensaries, although he thinks it’s been slow to get here.

“Definitely,” he said, when asked if he thinks the state has lagged in passing legislation for medical pot. “I think a lot of people could be using it.”

Phillips is one of those people who could benefit from medical marijuana; he has multiple sclerosis.

Though Phillips is sponsoring a House bill to study legalizing recreational marijuana, he does not support the idea of home-grow.

“My gut reaction is that when you allow it to be grown, then it opens it up beyond strictly medical use,” he said.

Simon thinks otherwise.

“A lot of people have a really hard time understanding why it’s still a felony to grow a couple of plants,” he said.

The other sticking point that politicians and medical marijuana advocates agree on has to do with money.

Even though marijuana is legalized for medical and recreational use in various states, possessing it is still considered a crime under federal law. That’s a problem when dispensaries want to deposit their money in a bank. Federal regulations make it difficult, and many banks shy away from the marijuana industry.

That leaves many dispensaries dealing with a cash-only business, according to Gullickson.

The New York Times recently released a short documentary on Colorado’s recreational pot industry, where growers have to transport bags of cash to secure, undisclosed locations in lieu of a bank.

“Some (banks) are willing to take that money and some are not,” she said, adding that her organization and others are lobbying for the federal government to change the law, for the safety of those in the industry.

Attempts to contact two local police chiefs to discuss potential law enforcement issues of an area dispensary were unsuccessful.

Holt says state officials are aware of the money issue, but there’s not much in New Hampshire’s law that addresses it.

But despite that, now that New Hampshire’s medical marijuana law has been passed, Holt believes the process of setting up the dispensaries is taking time, but going well.

“We’ve met those goals on time and earlier, in fact, for some of those items,” he said, referring to the timeline for getting the dispensaries up and running. “We’re as invested in this being a successful program as anyone else.”

Source: http://www.sentinelsource.com/news/local/dispensary-slated-for-southwestern-new-hampshire/article_ab6fa741-1d98-5d85-a824-a58e7f2162db.html

WEEDSDAY WEDNESDAY-A LIVE CANNABIS RADIO SHOW-WOMEN GROW!

Welcome to Weedsday Wednesday! Everything you ever wanted to know about medical cannabis! Join us as we talk with Sara Gullickson from Women Grow, 1 of a 3 part mini series! Call or blog and join us as we chat live!!!! Cannabis Interviews, strain reviews, product reviews, news and information about anything and everything medical marijuana related in Tucson, Arizona and the world at large! Get up to date, live information about what’s happening with all of the marijuana laws of our state, the dispensary process, clubs, education centers and everything happening in our exciting little trail dust town!

Check Out Education Podcasts at Blog Talk Radio with Weedsday Wednesday on BlogTalkRadio with Weedsday Wednesday! on BlogTalkRadio

COSTS ADDING UP FOR MEDICAL MARIJUANA ENTREPRENEURS

In the world of medical marijuana entrepreneurs in Illinois, there’s plenty of green behind the grass. Hundreds of would-be medical marijuana growers and sellers have put millions of dollars on the line hoping for coveted state permits that were supposed to issued by former Gov. Pat Quinn by the end of last year. To snag those valuable permits, the entrepreneurs hired consultants, lawyers and lobbyists. They’re already paying rent, in some cases, or have money tied up in options to buy property. And now, they wait. And with millions of dollars on the line, waiting can get expensive. The state’s medical marijuana program — and the status of the coveted 21 medical marijuana farming licenses and 60 dispensaries licenses — depends on the decision of one man: Illinois’ new Gov. Bruce Rauner. Nobody is sure what he’s going to do, and Rauner has given few hints. A spokesman, Lance Trover, said in a statement: Rauner “has serious concerns about the law and how licenses were chosen. However, he is committed to a quick and thorough review of the program, in the hopes of bringing clarity to the many concerned families across the state.” The new governor has said among his chief concerns are the clouted people that may be awarded licenses. Politically, issuing the licenses may not appeal to the anti-drug element of his party. Still, some Republicans have come out in favor of the program, hoping for jobs in their rural communities. Even some La Salle Street bankers have shown an interest in cashing in on the legal marijuana business. In October, U.S. Attorney Zach Fardon was quizzed by finance attorney Richard Demarest Yant, who wanted to know if Chicago banks have the all-clear to accept funds from legal marijuana businesses. Applicants are so fearful of offending Rauner that they are reluctant to go on the record about their concerns, but chief among them is the rising tide of costs with nothing to show for it. ‘The longer it takes, the more money they’re having to burn through without any guarantee they’re going to get a permit or see a return on their investment,” said Kris Krane, a managing partner of 4Front Advisors, a marijuana consulting firm. Krane, who is working with several applicants in Illinois, declined to speak about specific applicants. But one of the people Krane works with is strip club and trucking firm owner Perry Mandera, who hopes to grow and sell medical marijuana in Chicago. Mandera has said he’s invested $10 million just into the cultivation center on the city’s Southeast Side. Even for smaller players, the costs add up, records show. For example, Organic Leaf Medical Dispensaries, which seeks to open a dispensary in the Ukrainian Village neighborhood, had by November shelled out nearly $300,000 to lawyers, lobbyists, consultants and an architect, according to City of Chicago records obtained through the Freedom of Information Act. That doesn’t include application fees. It cost applicants a non-refundable $25,000 fee to apply for a cultivation center licenses and non-refundable $5,000 fee for a dispensary license. So far, the state’s collected $5 million in fees from the more than 350 applications submitted. An owner of Organic Leaf, Iman Bambooyani, said the group is paying rent and utilities at their proposed site at 744 N. Damen. The group also applied for three other dispensary licenses, Bambooyani said. “I’m just hoping for the best,” he said. Other applicants have said they have options to rent or buy properties contingent on getting the state license. And when those expire, applicants have to re-up and pay up or lose the carefully selected property, some said. “These businesses have put in a tremendous amount of investment just to get to the point of applying for licenses, and when the process breaks down like this, that leaves them stuck with the bill and nothing to show for it,” said Taylor West, deputy director of the National Cannabis Industry Association. On average, marijuana entrepreneurs spent at least $100,000 just on the application process, said Sara Gullickson, vice president of sales for MariMed Advisors, a medical marijuana consulting firm working with applicants in Illinois.

“Everybody is pretty concerned,” Gullickson said. “They’ve spent a lot of time, money and resources on these applications.”

Those costs will eventually fall on patients, said Rep. Lou Lang, the Skokie Democrat who sponsored the medical marijuana legislation. “All of that may add to the price [of the marijuana] when the patients buy it,” Lang said. “Businessmen don’t want to lose money. It’s not good for patients for this to extend much longer.” Lang said members of the Rauner administration have met with Quinn holdovers to discuss the program. For now, Rauner is keeping Bob Morgan, the state’s medical marijuana czar, on board. “Far be it from me to offer the new governor political advice, but if he asked, I would tell him it’s in the best political interest to just move the process along,” Lang said. “These are very sick people that need this product.” Industry insiders say patients will continue to suffer until the issue is resolved. “It is absurd that a program that was approved and began to be designed more than a year ago and should be right now providing serious relief for critically ill patients is instead hung up in some kind of bureaucratic or political wrangling,” West said. It cost applicants a non-refundable $25,000 fee to apply for a cultivation center licenses and non-refundable $5,000 fee for a dispensary license. So far, the state’s collected $5 million in fees from the more than 350 applications submitted. An owner of Organic Leaf, Iman Bambooyani, said the group is paying rent and utilities at their proposed site at 744 N. Damen. The group also applied for three other dispensary licenses, Bambooyani said. “I’m just hoping for the best,” he said. Other applicants have said they have options to rent or buy properties contingent on getting the state license. And when those expire, applicants have to re-up and pay up or lose the carefully selected property, some said. “These businesses have put in a tremendous amount of investment just to get to the point of applying for licenses, and when the process breaks down like this, that leaves them stuck with the bill and nothing to show for it,” said Taylor West, deputy director of the National Cannabis Industry Association. On average, marijuana entrepreneurs spent at least $100,000 just on the application process, said Sara Gullickson, vice president of sales for MariMed Advisors, a medical marijuana consulting firm working with applicants in Illinois. “Everybody is pretty concerned,” Gullickson said. “They’ve spent a lot of time, money and resources on these applications.” Those costs will eventually fall on patients, said Rep. Lou Lang, the Skokie Democrat who sponsored the medical marijuana legislation. “All of that may add to the price [of the marijuana] when the patients buy it,” Lang said. “Businessmen don’t want to lose money. It’s not good for patients for this to extend much longer.” Lang said members of the Rauner administration have met with Quinn holdovers to discuss the program. For now, Rauner is keeping Bob Morgan, the state’s medical marijuana czar, on board. “Far be it from me to offer the new governor political advice, but if he asked, I would tell him it’s in the best political interest to just move the process along,” Lang said. “These are very sick people that need this product.” Industry insiders say patients will continue to suffer until the issue is resolved. “It is absurd that a program that was approved and began to be designed more than a year ago and should be right now providing serious relief for critically ill patients is instead hung up in some kind of bureaucratic or political wrangling,” West said. Contributing: Kim Janssen

Marimed’s Sara Gullickson named co-chair of Cannabis Industry’s women grow Phoenix chapter

Gullickson to Moderate Medical Marijuana Dispensary Inspection and Medical Director Compliance Panel, February 5 Worlds Online Inc. December 29, 2014 10:01 AM

Sara Gullickson, executive director of MariMed Advisors’ DispensaryPermits division, has been named co-chair

PHOENIX, AZ and BOSTON, MA–(Marketwired – Dec 29, 2014) – Women Grow has named Sara Gullickson as co-chair of its Phoenix Chapter, the second largest chapter of this new, rapidly growing organization that connects, educates and empowers cannabis business leaders. Gullickson, Executive Director of the DispensaryPermits.com division of MariMed Advisors (a subsidiary of Worlds Online) (OTCQB: WORX), brings four years of experience as a leader in the medical marijuana (MMJ) industry and nearly a decade of experience strategizing and executing online and traditional marketing campaigns for the health, beauty, medical, dental, fitness and spa industries. She has successfully assisted clients in seven states through the medical marijuana license application process, laying out every aspect of their business strategy from identifying locations all the way through developing product and tracking customer results. Her work has helped clients earn MMJ cultivation and/or dispensary licenses across the country. In addition, Gullickson launched a free weekly CannaBusiness Webinar series that is an invaluable source of information to both novice and experienced MMJ entrepreneurs. “I am looking forward to helping establish Women Grow as a valuable networking and professional resource organization for the cannabis industry at this critical juncture when marijuana prohibition is ending,” stated Gullickson. “This is a ground floor opportunity for women to gain a foothold in a growing industry. Developing authentic relationships by working together, supporting one another and serving as professional resources to one another, we can help our members be a powerful force in reducing the stigma and fostering acceptance of medical cannabis and in developing the strategies, technologies and businesses that will lead this industry into the future.”

 

In debate over medical marijuana, some see dollars

WEST PALM BEACH — Medical marijuana supporters have had a singular focus in making their case to voters across Florida: sick and suffering patients.

Many backers also see the money at stake in the debate over Amendment 2.

Thousands have attended workshops about how to start marijuana businesses. Farmland filled with tomatoes, lettuce and cucumbers awaits the possibility of being replanted with a new leafy green. And entrepreneurs ready to offer everything from legal services to cannabis-infused chocolate-covered pretzels stand by for a chance to expand into the fourth-largest state.

“Millionaires are going to be made,” said Steven Siegel, CEO of Fort Lauderdale-based BioTrackTHC, which offers an inventory-control system and other services to marijuana businesses.

 

Siegel has been seeing month-over-month growth of about 30 percent and expects $8 million in revenue by year’s end in states where some form of marijuana legalization has already taken place. Though he hears from many aspiring entrepreneurs who want to open dispensaries, Siegel says there is money to be made in countless ancillary services, from lab testing to fertilizer to delivery services.

“My company does not touch marijuana at all,” he said.

 

Like all statewide ballot measures, Amendment 2 will require 60 percent support in the Nov. 4 election to pass. To obtain marijuana, a patient would have to get a doctor’s certification of their condition, which in turn would qualify them for a patient ID card they can use at licensed dispensaries.

Ata Gonzalez, a Florida native who is now CEO of California-based GFarmaLabs, believes passage would further open his company’s potential to become a national brand for its various marijuana products, including dozens of different chocolate bars, truffles and other candies.

Because of federal drug laws, companies such as Gonzalez’s aren’t able to centralize production and ship marijuana-infused products from state to state. Gonzalez envisions entering partnerships in which his company teaches other business how to create GFarmaLabs’ products, providing everything but the marijuana.

“Florida has needed something for many years now to bring them back into the economy,” he said.

The enthusiasm has fueled attendance at marijuana business seminars. Roadside billboards promise “a new industry is coming to Florida.” Any industry will depend in large part on the Department of Health. If Amendment 2 passes, the agency’s regulations would determine the ease of opening a dispensary, and as a result, could dictate the ultimate size of the economic impact.

The health agency’s analysis of Amendment 2 gives a glimpse at what could happen with passage: an estimated 1,789 treatment centers serving 417,252 patients; sales totaling anywhere from $331 million to $5.6 billion; and sales tax revenues of about $19.9 million up to $338 million. Additional tax revenues could be generated from property taxes on dispensaries and other businesses.

Not all business leaders are enthusiastic. David Hart, an executive vice president at the Florida Chamber of Commerce, said it’s “absolutely not the kind of business expansion that we would hope to see.” He said it would jeopardize the state’s image and threaten existing businesses.

“The proponents of this will tell you that this is just about medical marijuana, just about people that are extremely ill,” he said. “For those that are out there saying that there could be an economic boom tells me that both of those groups can’t be right.”

Those entrenched in the industry caution it is still in its infancy and operating in a complicated legal framework with potentially high start-up costs.

“There’s nothing easy about getting rich in this business,” said Derek Peterson, who runs a marijuana dispensary in Northern California that sees about 900 patients a day. “This is a long game, this isn’t a short game.”

Peterson has smoked marijuana since he was a teen, and tapped into its medicinal value after breaking his neck while surfing about 10 years ago. He also saw the potential for a big paycheck. He was earning up to $400,000 on Wall Street five years ago when he learned a friend’s dispensary was making about $18 million a year.

Terra Tech, the company Peterson leads which runs hydroponic farming operations around the U.S., is poised to capitalize on an expansion of marijuana into Florida and other states. The company grows vegetables sold under the Edible Garden brand, but his cooperative contracts with farmers include agreements that would shift to medical marijuana should it be legalized.

Though debates on Amendment 2 have drawn many supporters, leaders of the opposition have tried to tamper enthusiasm, largely through television ads that portray the measure as full of holes. Jessica Spencer, who is leading the Vote No on 2 group, said voters shouldn’t be confused by who will benefit from a possible economic boom brought by the amendment.

“This is big industry,” she said. “If people think this is about the little guy and this is about small business, it’s not.”

Source: http://www.tbo.com/news/florida/in-debate-over-medical-marijuana-some-see-dollars-20141018/&ct=ga&cd=CAIyGmQyN2U3Y2QxMTE2ZWI0YjA6Y29tOmVuOlVT&usg=AFQjCNHxRLNACNzkxwCve071A4zN39cTZg

Lyons: pain clinic owner makes case for pot

When over-the-counter painkillers don’t work, Paul Sloan’s clinic prescribes addictive opioids. Marijuana, Sloan says, could help.

Paul Sloan’s crusade has him paying for billboards and writing letters to the editor, hoping there is time to overcome what he sees as a misguided but effective disinformation campaign.

Big names in law enforcement statewide are deeply involved, and not on his side.

What cause has him so willing to reach into his wallet?

Well, Sloan is a local pain clinic owner who helped lobby for and crafted clinic regulations. But, the odd thing is, he isn’t thrilled with the drugs prescribed at his business., and he does not mind saying so.

Doctors at his clinic frequently prescribe an addictive and hazardous array of drugs called opioids, such as oxycodone and its cousins.

Sloan says he much wishes patients could use a lot less of those addictive drugs.

“What this stuff is doing to people is terrible,” Sloan told me. “It changes them.”

They are a necessary evil, to some extent. Patients who need the drugs deal with such severe pain that life is misery whenever something blocks that source of relief. Sloan has argued in the past that federal drug agents aiming to prevent abuse of those drugs have been overzealous in restricting supplies to pharmacies, which has caused shortages that make legitimate pain patients do without.

But at least he knows those policing efforts are based on a rational concern: Recreational users want these drugs, too, and many become fiercely addicted. So do many legitimate users.

That harsh reality has him crusading again, but not for easier access to opioids. Now he is paying for billboards that urge people to vote yes on Amendment 2, the proposal to legalize medical use of marijuana with a doctor’s prescription.

Sloan says he doesn’t want to get into the marijuana business. He has no plans to run a dispensary. But he would be thrilled to see his clinic writing prescriptions for marijuana. He is convinced it is far safer and far less addictive that what his clinic is prescribing now.

Research indicates marijuana or cannabis extracts can help some pain patients use dramatically less of the truly dangerous and addictive opioids they get now. Some probably won’t need opioids at all, he believes.

That doesn’t mean his billboards are a good financial investment. Though he much wants Amendment 2 to pass, he says he has no idea if that will help or hurt his bottom line. Family doctors would be able to prescribe marijuana if the amendment passes, so his campaign isn’t a scheme to drum up business for pain clinics, Sloan says.

“But I’d sleep a lot better,” Sloan said. As is, after Tylenol and the like have failed, there is no good in-between medicine that doctors can try when treating severe pain.

It is just insane, he says, that anyone who accepts and understands the need for opioid prescriptions could even consider voting to reject medicinal marijuana. The dangers of marijuana — even the most questionable, hyped-up, probably fictional ones — pale in comparison to the dangers of opioids.

Sheriffs statewide insist they know otherwise, thanks to long experience busting people who use marijuana for fun.

That is indeed a long history, but the experience seems irrelevant to me.

Yet they and others in the well-funded anti-medical marijuana campaign have made a dent. Though polls once showed the proposal as likely to pass, recent ones show support may have slipped to below the 60 percent needed to approve the amendment.

I share Sloan’s hope that Amendment 2 will pass. Banning medical marijuana while opiods are being prescribed seems like deciding a butter knife is too dangerous but a chain saw is OK.

But I’m not qualified to give medical advice. For that, you should probably go to your sheriff.

Source: http://www.heraldtribune.com/news/20141018/lyons-pain-clinic-owner-makes-case-for-pot

New banking rules create tough barriers for state’s growing medical pot businesses

For the first time since opening his medical cannabis business, Len Goodman feels like a drug dealer.

Goodman and his wife, Susan, are owners of NewMexiCann, a state-licensed provider of medical marijuana to some 1,300 customers. With one location in Santa Fe, they soon hope to expand here and open a shop in Taos. But as of this week, they have no bank to service their business or their customers.

Len Goodman said his patrons cannot use credit cards, so they must pay with cash or a check. His 23 employees are paid with dollar bills stuffed in envelopes, and he has to shuffle money off-site several times a day to seven different safes at undisclosed locations. All vendors — such as a janitorial service — have been pre-paid until the end of the year.

 

“About a month ago, they decided to shut down all the cannabis accounts. They said, ‘You have two weeks. We’re cutting you a check. Goodbye,” said Goodman of his longtime financial institution, the State Employees Credit Union.

He went to the credit union and retrieved a cashier’s check, with his business deposits totaling $400,000.

At a time when there are more and more medical cannabis providers, there is also increasing uncertainty over U.S. banking regulations for the industry, which has made businesses hypersensitive about security and has imposed more barriers for patients.

There are 13,000 registered medical cannabis users in New Mexico and 23 producers. Albuquerque attorney Jason Marks said at least half of them are having issues with banking.

“There are patients who are not able to purchase with a credit card — it’s a huge problem for patients who need courier service,” Marks said. “There are security risks. All these are problems nobody wants to see happen. We have a small crisis on our hands.”

Marks, who represents 18 growers in the trade association, Cannabis Producers of New Mexico, is working to educate New Mexico banks about the new regulations and hopes the situation can be resolved in the coming months with one of them moving to accept deposits. The U.S. Congress also is moving to clarify some of the regulations, which are impacting the industry in other states, but Marks doesn’t expect that relief to come soon.

Duane Herrera, executive vice president of the State Employees Credit Union, used to handle accounts for Goodman and other providers. “We were happy to have those accounts,” he said.

What changed were new clarifications from the Financial Crimes Enforcement Network, a branch of the U.S. Treasury Department, that beefed up bank reporting requirements after the Sept. 11, 2001, terrorist attacks to curb money laundering.

He said credit unions are not set up as commercial banks, and his does not have the staff needed to provide the due diligence to comply with the investigative and paperwork edicts.

“I feel bad for them,” Herrera said. “The law was passed in New Mexico, and it is legal to have a medical marijuana business in the state, but they’ve made it really difficult to handle the banking. We just couldn’t do it.”

The initial policy was issued in February 2014 and known as the Cole Memo, for Deputy U.S. Attorney General James Cole, who reiterated the federal government’s position that “marijuana is a dangerous drug and that illegal distribution and sale of marijuana is a serious crime that provides a significant source of revenue to large-scale criminal enterprises, gangs and cartels.”

As part of that enforcement — and other issues related to money laundering, where money is raised through illegal activity and then washed through legitimate businesses — the government requires banks to submit Suspicious Activity Reports for depositors making unusually large cash deposits or rotating money through several accounts.

But the Treasury Department, in clarifying the rules for cannabis businesses, went further than saying banks must just file the paperwork. It also required them to verify it and “develop an understanding of the normal and expected activity for the business, including the types of products to be sold and the type of customers to be served,” according to the rules.

The rules also say institutions should submit a report when “the business receives substantially more revenue than its local competitors.” There are other requirements as well, including the need to reverify information on a regular basis.

Federal regulators have said the policies are meant to give financial institutions more comfort in servicing the cannabis accounts and to move the business out of the shadows and into mainstream banking.

But it isn’t working that way in all cases, according to one report.

“The Financial Crimes Enforcement Network (FinCEN) attempted to clear the air, issuing guidance in February that tacitly acknowledged the legality of banking marijuana,” according to an article by Brian Kindle published in August by the Association of Certified Financial Crime Specialists. But “several months later, the effect of that guidance remains hazy. Comments by FinCEN Director Jennifer Shasky Calvery indicate that while a small handful of institutions are providing services to the legal marijuana industry, many others have terminated relationships with customers tied to the marijuana trade.”

Kindle wrote that “anecdotal evidence suggests that a growing number of marijuana businesses, particularly in Colorado and Washington, are running funds through personal accounts or simply accumulating ever-increasing piles of unbankable cash.”

Attorney Marks thinks that larger states with multinational companies and more commercial banks are handling the issue better than New Mexico.

“If we had more banking options, we wouldn’t be in quite the corner,” Marks said.

Len Goodman said there is an extensive questionnaire in Oregon for growers who want to use banking services there. He is taking that form to New Mexico lenders to show them how others are navigating the reporting requirements, but he has not yet received a firm commitment from any of them. In Washington, the state regulators got involved in lobbying local banks to accommodate the industry.

The issue has even frustrated related businesses, such as one owned by Robert Davis, founder of Peace Medical Marijuana Consultants in Albuquerque.

Davis contracts with therapists and medical providers who can advise patients on the state Department of Health program, which is open to those with any of 16 qualifying medical conditions, including cancer, AIDS, chronic pain, post-traumatic stress disorder and epilepsy. He then helps them make their application to the state, which must verify the paperwork and documentation.

“We help patients gather medical records and answer a lot of questions,” Davis said.

Davis started the work when his mother was diagnosed with AIDS and he learned how difficult the application process is. He has an office in Albuquerque and is now expanding to Las Cruces. He doesn’t sell cannabis directly to patients but is still stigmatized as a business owner.

 

“I hired a company to do our payroll and signed all the paperwork, and as soon as it hit the upper levels, I never got a call back,” he said. “It’s a pain in the ass. We’ve been a legal business for seven years,” he said.

He pays his two employees in cash and has a limited checking account, which is set up under the name “Peace MMC.”

Goodman is the former owner of a tile company in Santa Fe and a part-time business consultant. He and his wife have 23 employees and paid the state of New Mexico $175,000 in gross receipts taxes last year, which must be sent in quarterly. They also withhold IRS and Medicaid tax for those on their payroll.

Susan Goodman said most of their obligations were pre-paid before the credit union account was closed. But the clock is ticking, and they need to find a resolution before January. “Everything I know we owed I pre-paid to January,” she said. “I even pre-paid our cleaning service until the end of the year.”

The providers are more concerned about the impact to customers — one-third of whom used to pay with a credit cards online and ordered products through a courier service. Many of those patients, such as those in hospice care or in rural areas, can’t come into the retail shop off San Mateo Road. For security reasons, the business was originally set up to be as electronic-payment friendly as possible.

“Now you have to send us a check or money order,” Len Goodman said. “A lot of those people we won’t see again.”

In a recent newsletter to patients, Goodman writes, “Many of our patients have expressed real concern for our safety at NewMexiCann now that we can only take cash. Thank you all for your concern. We have set up procedures that limit the likelihood of exposure due to our cash on hand.

“We have made arrangements for our cash and deposits to be removed from our premises daily. It is now moved by courier daily to an off-site secure lockup location. … This will help a great deal to insure the safety of our patients and staff.”

Goodman is hoping to expand his business next year, when the state approves an increase in production for each licensed grower, but that will be more difficult without banking services.

Marks said the industry is young and growing and doesn’t have problems with toxic real estate assets or a declining customer base.

“This is such a regulated area, you’re not going to have those problems,” Marks said. “I think the banks that take this on will be happy to have the New Mexico cannabis producers as customers, and all the other banks will be sorry.”

Goodman estimates the producers in New Mexico will generate $20 million in sales this year.

“It’s a lot of money, and it’s all going to go to one bank — if they want it,” he said.

Source: http://www.santafenewmexican.com/news/business/new-banking-rules-create-tough-barriers-for-state-s-growing/article_ddd7eb7b-dd32-5cfe-bd0d-4ad68b7c4fdf.html