In this episode of the Ganjapreneur podcast, host TG Branfalt is joined by Witt Rabon, co-founder and COO, and Jamar Brown, co-founder and President of Brand Development for DRO, a Colorado-based cannabis lifestyle brand that has been redefining cannabis culture since its launch in 2014. DRO stands out by weaving authentic storytelling, cultural identity, and bold design into its clothing and cannabis products. In this episode, Witt and Jamar share the origins of DRO, reflecting on how their personal journeys—from professional sports and corporate branding to a shared love for cannabis—helped shape the company’s unique voice and vision. They delve into how DRO transitioned from an idea sparked during their time as coworkers to a thriving lifestyle brand blending cannabis and fashion.

Other topics discussed in this interview include:

• The importance of connecting with consumers through authentic, relatable stories
• The role of design in bridging cannabis culture with mainstream audiences
• The importance of advocacy, social equity, expungement, and using their platform for cannabis education
• DRO’s approach to licensing deals, and the challenges and opportunities of entering big-box retailers
• And more!

This conversation offers a compelling look at the intersection of cannabis, culture, and business, highlighting DRO’s journey as a brand that honors legacy culture while helping shape the landscape of the legal cannabis industry.

Listen to this episode via the player below, find it on your favorite podcast app, or scroll down for the full transcript!

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Editor’s note: this transcript was auto-generated and may contain errors.

Commercial (00:03):

The Ganjapreneur Podcast is made possible by over 500 cannabis industry service providers in Ganjapreneurs Cannabis Business Index. At some point, every plant touching brand experiences the stigma that many industries still have to toward cannabis going strong. Since 2015, our business index is the most comprehensive and frequently visited directory for cannabis friendly services on the internet, saving you the time and hassle of sifting through uninformed and unwelcoming providers with categories for everything from business financing, to extraction equipment to interior designers and public relations. You’ll find every kind of specialist and business service you could ever need. Check out the business index today at ganjapreneur.com/businesses.

TG Branfalt (00:49):

Hey there, I’m your host, TG Branfalt, and this is the Ganjapreneur.com podcast where we try to bring you actionable information and normalize cannabis through the stories of entrepreneurs, activists, and industry stakeholders. Today I’m joined by Witt RayBan. He’s the co-founder and COO and Jamar Brown, co-founder and president of Brand Development of Colorado based cannabis lifestyle brand DRO, which first launched in 2014. How are you guys doing this afternoon?

Witt Rabon (01:18):

Oh, we’re doing good, man. How about you?

TG Branfalt (01:20):

Cool, man. Cool. I’m really excited to have you guys on. You’re the first sort of cannabis lifestyle brand that I’ve had on the show, so a lot of questions that I have for you. But before we get to those, tell me about yourselves. What’s your background and how’d you end up at DRO? I’ll let you go first. Jamar.

Jamar Brown (02:00):

My background, basically it is how I ended up in Colorado. So I actually went to school at CSU Pueblo and I played probably professional 10 years. For 10 years, and I just ended up staying in Denver. So while I was in Denver, I was up at MusclePharm. One of my friends introduced me to MusclePharm, and this is how I met Witt. And then our other business partner that was with us and Whit just came with me with an opportunity for Dr, and I thought about it, it’s my lifestyle. That’s how I was raised. I’m from Cali, drove life. It was supposed to be even. It was supposed to be no matter what. Like my mom, my dad, the background, marijuana, hydro, it’s me. It’s always in me.

TG Branfalt (02:58):

What about you? How’d you end up at DRO?

Witt Rabon (03:03):

Kind of similar story to Jamar’s. Basically we started out, we were both all working at MusclePharm together, and then me, Jamar and our other partner at the time, we were like, this is a facility filled with, I don’t know, it was filled with a bunch of Mormon meatheads. So us three with Jamar being from we all three kind of liked weed. And with weed, right, you pick up real quick in any sort of work environment or social environment who’s down, right? And we figured out the smokers. Yeah, we figured out that us three were kind of down with the weed stuff a lot more than everybody else there. So we kind of all latched onto each other a little bit more. So we were all just really good work friends and our partner at the time, like I said, we were all working at MusclePharm and saw the, it was kind of going from its pinnacle to, its more of a, I wouldn’t say a downward trend, but just definitely was not as hyped as it once was. And we were like, man, we can really do this. And once we saw DRO and the opportunity to jump on, me and Jamar are both like, this is us. We love weed, we love branding, we love marketing. We’ve had a lot of success in the sports nutrition field in the MMA industry with the clothing. We were like, we can do this ourselves. So that was pretty much just being at MusclePharm and seeing other brands while we were working there and basically learning how to build a brand was really what brought us all together.

TG Branfalt (04:45):

And so MusclePharm, it’s like you said, it’s a sort of sports lifestyle, sort of MMA lifestyle type brand. So then in your opinions, what defines a cannabis lifestyle brand?

Witt Rabon (05:00):

I would say just a brand that people feel like they’re connected to through the brand’s story. And that’s because everybody wants to hear a story and be attached to a story. And in cannabis it’s a bunch of just product. And these guys are like, oh, look we’re “Leaf Company” or whatever. And you’re like, okay, well outside of your dad gave you some money, what’s your story? Why is this weed special? It’s all just a bunch of warehouse weed at the end of the day. And whether it’s good warehouse weed or mediocre or bad, it’s all out of a warehouse. So how do you make this lifestyle and connect your customers to your product? And that’s, one, through your story. And then also through cultivating certain strains that actually have a little bit of a story behind them as well. Because if you go back to the beginning days of drug dealing before legal cannabis, the really good stuff always came with a story. You remember that the good stuff always had a story about the certain grower who grew it up in the mountains in Humboldt or what in Kentucky or wherever this shit came from. Nobody just sold it to you. Hey, it’s a bag of weed, it’s this price, buy it. They probably did, but at least when I was doing it, man, we always have a story behind that shit. Like I said, where it came from, who grew the shit, how it made it into your hands,

Jamar Brown (06:40):

That’s the bigger story because how it made it to your hands, that’s a story behind the story. And it’s all about being organic and people love to watch people. That’s not trying hard, not to say not trying hard, but being their self and being organic within the culture.

TG Branfalt (06:58):

Well, and I think it speaks to what you guys are sort of creating, because if somebody clicks on about section on your website, it’s a story. It’s esoteric. It’s very, very different.

Jamar Brown (07:11):

Yeah. Yeah. So

Witt Rabon (07:15):

Go ahead.

Jamar Brown (07:15):

Yeah. Oh my fault. But yeah, it’s different. And then it’s different stories within, because I play basketball, I smoke weed all around the world. I come from a heavy marijuana culture back home and you just keep building that story.

TG Branfalt (07:33):

So let me ask you, Jamar, what did you take away from that previous life before DRO? I mean, it’s one thing, the sort of MusclePharm aspect of it, but to be a professional international basketball player, I mean, that’s an entirely different sort of path.

Jamar Brown (07:51):

Yeah, it’s a different path. And then how social media is today when I was playing, I wouldn’t even talk about weed. I wouldn’t wear a weed shirt because it’s a business at the end of the day and I need a contract to provide for me family, et cetera or whatever. So you’ll be, they know you smoke, but they don’t want to know that you smoke. So I got a story where I went to Turkey and as soon as I landed in Alia, they tested me and the team manager came to me and he was just like, yo, make sure you just don’t smoke out here no more. I be don’t smoke out here. So they knew previous when I took my test, it came up dirty. They knew I was smoking, so I just waited till the end of the season and me and one of my teammates, so we had a soccer club too, so it was like 50,000 people, and we were just at his condo looking at the stadium, and he barely knew English. I definitely barely knew Turkish, but we both smoking a joint looking at the game, trying to figure out how we could win a championship for basketball. It’s just like the weed for me, bro. The world is full of hellos.

(08:59):

So the previous life, it’s easier now because when we first started, me being in that industry, I had players in there, it was just hard to get to players to wear DRO or whatnot just because, and now it’s a lot of players that are aware it represent it, it opened up, they’re not getting tested no more. So it’s a lot easier now.

TG Branfalt (09:25):

And so why are these sort of lifestyle brands important to the broader cannabis culture, which is really what we’re talking about here.

Witt Rabon (09:33):

Yeah, so I think the reason why is because one, it’s helping it become more acceptable and also helping it become more mainstream. Because if you’re just looking at cannabis itself and you’re telling some old guy like, oh yeah, it’s this dried up plant and you grind it up and smoke it, they’re thinking, oh, that’s devil’s lettuce. But when they get it presented to ’em, have you ever taken your parents in a cookie store? I mean, dude, they’re so overwhelmed. They’re like, look how professional this is. Everything’s all bright and colorful and dude, my parents don’t smoke weed or eat edibles at all. They bought shit in the store because they felt so comfortable with the branding and the way it was product was presented to ’em, right? I don’t think my dad would ever buy a bag of flower in a Ziploc, but when he saw it presented as a real nice pre-roll with some gold foil packaging, he was a lot more curious about the product and he wanted to try it.

(10:41):

And then he starts identifying the brands and seeing what’s what. And I don’t know, I think like you said, the brands really, really helped. The people that were not buying Ziploc bags of flower be a part of this. And what’s funny is eventually those people move from the branded packaging in stores, and once they start smoking, they’re like, oh, I want some street shit too. Then they start going backwards and wanting the Ziploc fire because it’s just funny to watch the natural progression of everything. But like I said, and even how everybody’s branding the product now, right? Too is everybody’s branding products. That’s not a hard thing to do is come up with a logo and brand yourself, but it’s just the fact of what brands we’re seeing now the people latch onto and gravitate to. And those are the ones that have a story behind them, like I said, where the people can actually relate to the company owners.

(11:42):

Maybe they can relate to the grower or even the story behind some of the genetics that they’re growing. Whereas like I said, a lot of these brands are just like, oh, my company’s called “Ocean Leafs,” buy my product. We grow weed. And you’re like, what else do you do? But yeah, I think that’s why lifestyle brands are important is because it’s the gateway to education really is what it is, and it gives people something to stand behind. I mean, if you look at any industry, like alcohol industry, people have their go-to beverages and there’s people that they don’t drink shit else, but Coors Light, they’re diehard Coors Light fans. And some of that’s the same thing is somehow at some point in time, Coors Light spoke to that person and made them a lifetime drinker. Whether it was just maybe the old Coors Light commercials where that just heavy were marketed towards the blue collar working man. Same thing with a lot of flower brands too. Look at that brand old pal, right? They were always known for giving you a little bit more. It was just grounded up weed in a tobacco pouch, but it’s actually one of the bigger brands in cannabis today. We might not know about it because we’re not that old dude buying that, but at the same time, they have that market cornered.

TG Branfalt (13:14):

Interesting. What about for you, Jamar? What are lifestyle brands? Why are they important to the broader cannabis culture?

Jamar Brown (13:25):

For me, the reason why it’s important because say if I go in the store, I see five different brands, one of them brands going to relate to my lifestyle, and if the weed is good and everything’s on point, I’m going with that brand. So it might be two strains I really, really like, but they might introduce me to a third strain that I really, really love. But it’s got to be within my lifestyle. I can’t just go smoke to the left because it’s cool. I got to smoke it. I like it, I want it, and I’ll pay for it,

TG Branfalt (14:06):

And it’s got to be different. It sounds like one of the things about your designs, your clothing designs that really struck me was they’re very interesting. They’re different. Again, this sort of esoteric-ness comes up. I’m a guy who, 40 years old, watches adultswim, and the shirts, the designs, they speak to me and I want to know what does that idea’s process look like? You’ve got a Calico cat holding a weapon, and it’s great. It speaks to me as different and a bit charming, if you will. So what does that process look like?

Witt Rabon (14:50):

So basically what we come up with the clothing designs is we try to do themes. Each collection where it sort of speaks, we might do a summer theme that was just related to, we did a whole beach club line where this whole entire collection was just dedicated to, it was almost like the lifestyle of lounging at a resort every day and the lifestyle that these kids that live on beach towns get to live every day where they just wake up and roll out of bed, throw some board shorts on and go kick to the beach with a bunch of chicks and have bonfires and parties. So we just try to do designs based upon different themes of what we feel like at the moment is cool and fun. Some of those other designs like the Coleco T and a lot of the ones you see on the website now, we do have some more classic based designs that we’re, we like to bring back in different colors or put it on different mediums, which the one you’re referring to is one of those that it was actually part of a collection dedicated to El Chapo that we did, and that was a piece that went with some Florence prison kind of themed year that we did.

(16:07):

But we brought it back in those new colors this summer because we wanted to do a whole drill classics line in new colorways for this summer just because now we’re at that point where we can go bring back shit from eight years ago. So yeah, that’s one of the design processes. I guess the creative process in coming up with these is a little bit more, it’s really based upon whatever the designers feeling on their pop culture vibes.

TG Branfalt (16:35):

And Jamal, you’re the president of brand development, so what role do you sort have in all of this

Jamar Brown (16:42):

Placement? Product placement, getting stuff to artists, making shit cool.

TG Branfalt (16:50):

You’re the guy responsible for making shit cool.

Jamar Brown (16:53):

Pretty much being at the right time at the right place, luck, it all comes together being six foot nine being a bully.

TG Branfalt (17:05):

I guess if you walked into Rube, I’d feel compelled to work with you in some form or fashion or else you’ll dump.

Jamar Brown (17:12):

I’m not coming in to break no legs or that, you know what I’m saying? I did all smiles. That’s what I roll with.

Witt Rabon (17:20):

It works because when JB walks in the room, he’s six nine and he’s got a drill hat on. What’s the one thing you’re going to see? You’re going to remember from that event, that networking event you went to? You’re like, that’s all I remember is this big guy with a drill hat on. But I don’t know, we’re going to do some business with him,

Jamar Brown (17:36):

Walking billboard, walking billboard.

Witt Rabon (17:42):

So it works because it’s, like I said, jb, it works well because JB is somebody that people want to talk to and immediately like, I got to hear this guy’s story, so it works well. I walk into a room or whatever. I kind of have to push it a little bit further. But it’s cool because it all works. Everybody can go in different rooms and come out with different results and it can all come together in the end.

TG Branfalt (18:14):

It’s hard for any company, clothing company, cannabis company, small business startups to stay in business for as long as you guys have going on 10 years as a company. How have you maintained the success for that long?

Jamar Brown (18:32):

Consistency? Pretty much. I mean, sleepless nights, early mornings, just being true to the brand and once we are the brand, so people gravitate around us, it’s a lot to deal with, but at the same time, I wouldn’t switch it up for nothing.

Witt Rabon (18:58):

I would say as far as being around for this long, it’s learning to deal with the ebbs and flows of the apparel and cannabis industry really is just knowing in your mind that, Hey, summer 22 might not have been that great. You got to stick with it and because summer 23, you’re going to be doing 10 times as much as you were. So I think that’s really a lot of it is just persistence, being consistent like JB just said, and just being willing to not give up when it’s not going your way. Really the hardest part is the discouragement because you can do everything in the world, but when you’re dealing with partnerships, licensing deals, third party manufacturers, somebody somewhere’s going to mess up and you got to figure out how to pivot from that really quickly and keep going and not just roll up in a corner and cry.

TG Branfalt (20:00):

How much have you guys had to learn on the job?

Witt Rabon (20:04):

Oh, everything.

Jamar Brown (20:06):

Everything’s hands on

Witt Rabon (20:09):

Every day. We learn something new every day. It changes too. Every single day in the cannabis industry is a new rule, a new law, a new packaging formulation you have to go and follow. So yeah, there’s a lot of that. It’s a lot of fires to be put out all the time, but that’s just part of it. There’s not a single industry in the world where I don’t think this goes on.

TG Branfalt (20:38):

So you guys have partnered with a variety– you had a variety of partnerships. One of the ones that I particularly like is that Riot Society line. How do you identify partnerships and what qualities do you look for in a partner?

Witt Rabon (20:55):

A lot of times it’s honestly just our relationships is who you end up partnering with because all humans, so we all tend to grab the low hanging fruit. So you just start, we were friends that have known the guys from Riot Society since we started the company, and we’ve been ping ponging back and forth a collaboration idea for damn seven years prior to doing it.

(21:22):

And then finally one day we were just finally one day planets aligned. Everybody had enough time at the moment to sit down and actually execute it. So that’s kind of how the Riot Society thing started. We obviously like and respect Riot Society in terms of their practices as far as being able to penetrate big box stores and be successful in those stores, their speed to market capabilities. Like I said, there’s a lot of partnerships we turned down. Unfortunately, it’s just because you talk to ’em and you just don’t vibe with each other and you’re like, man, I don’t know if I could work with them. But Riot Society was a very easy project to work on. We work a lot with Waka fka, he’s one of the owners of the company as well. So I knew Waka from a previous, I used to work for Live Nation and be in the concert business, so I knew Waka before this. And the second I saw DRO, I was like, I know who’s going to be a part of this is Waka. I was like, this is made for him too.

TG Branfalt (22:30):

Bit of serendipity.

Witt Rabon (22:32):

So that’s pretty much how the partnerships happen is just through people. And a lot of times too, man, it’s like you get hit up randomly by a company on the internet and you just go partner with them because there’s old saying that strangers will make you rich. I mean, not necessarily saying strangers have made us rich by any means. We’re still trying to get there, but at the same time, we’ve seen a lot of support from strangers. People come out of the blue, big time people and they’re just like, yo, I mess with this. This speaks to me. What can we do together? And it just works out. So I would say that’s how collabs are determined really is through our relationships. And then if the right person hits us up at the right time, sometimes the magic happens.

TG Branfalt (23:28):

And Jamar, when do you know things are going right? When you’re talking to a potential partner,

Jamar Brown (23:34):

When they’re interested, very, very interested in the bread, it speaks volume, and that’s what they locked on there. But then I know when it’s right, the vibe between us and a potential partner because you could have somebody come in and it could just be a money grab for them while we’re working a company, which we done seen it before, and you catch that red flag. But it is the vibe, how passionate they are about the brand. If you’re passionate, I’m passionate, let’s get on some paper and let’s dance pretty much because yo, I use it as a speed bump. Either take your time going two miles an hour or go 90 and crash everywhere. There’s a lot of Crashers out there. I used to be one, now I know how to take my time and figure it out.

TG Branfalt (24:31):

And so you guys have penetrated Zumiez?

Witt Rabon (24:37):

Yes. So we were in Zumiez back in, we actually got into Zumiez in the middle of Covid. Ironically, probably not the best timing on our part. Lesson learned. You get hit up by a big box store, man, I don’t care what time, there’s never a good time. I mean, obviously there’s better times than others, but you’re just like hindsight. We should have waited till after Covid was done where people could go in the store and shop. But now it was a good experience to be in the store to learn how these hangar programs work and how these big box stores need their stuff delivered and accomplished. We’re not in Zumiez right now. We’re still in their matrix, so I’m not saying you won’t ever see it in there again. Hopefully you will. We’re actually in Tillys and PacSun right now.

TG Branfalt (25:29):

So how did those deals come about? You said that Zoomies found you.

Witt Rabon (25:35):

No, we solicited Zumiez. We, once Waka came on board and then once we knew W’s TV show was going to be on Netflix, that was just the perfect storm to go pitch Zumiez. One of our sales manager actually used to be, he used to sell for Boulevard Last Kings, a bunch of bigger streetwear brands that were in Zumiez. So it was fairly easy to use his past relationships to enter into Zumiez because it was the same business model as before, rinse and Repeat. But yeah, like I said, these big box stores, I mean, they’re really cool. They’re fun to deal with, but man, you better be prepared to spend a lot of money on marketing to make sure that’s very successful in the store. And other than that, I think it’s, we’re very happy to be in Tillys and PacSun right now.

TG Branfalt (26:36):

How important is that for the company’s growth?

Witt Rabon (26:41):

I would say it’s pretty important. It puts your brand into the mainstream audience of people that might not have ever seen it before, as most people that are in shopping malls are not really the counterculture people.

Jamar Brown (26:55):

No. So you get

Jamar Brown (26:56):

Different demographics of people, and it’s a little, I do say it’s a little similar to how Nike always wants to give all the people and all the kids in high school, Nike, they supply all the football cleats, they supply all the, they’re planting the seed early, right? Because when you leave college and you have your own money, you’re like, yo, I remember Nike always gave me stuff all through high school and college in my sports career, when I go in the store, what are you going to buy? You’re going to buy Nike.

TG Branfalt (27:29):

Well, most famous brands, examples of Jordan’s, not a shoe. Jordan’s not a sneaker.

Witt Rabon (27:41):

Yeah, no, it’s a complete lifestyle.

Jamar Brown (27:43):

It’s a lifestyle for sure. It’s a lifestyle. But Jordan’s a lifestyle to the point where used to watch, what was that movie Come Fly with me with Michael Jordan after I finished watching that, I wanted to go put on some Jordans, go outside and work on my game. So now it’s a part of my lifestyle.

TG Branfalt (28:06):

Well, and you mentioned the sort of demographics, Jamar, is it something that you do is identifying the sort of demographics and doing that sort of work?

Jamar Brown (28:16):

Yeah, because even with the demographics, say we got a “Delta nine” shirt, and I could have somebody that come up probably like I’m in a grocery store and I got a hoodie on or something, and that person, it could be like 60, 65, and tell me a story about that. Tell me a story about that. Tell me a story about the triple beam and everything. Because back in their day, that’s what they used. So if I got somebody coming up to me 65 years old, it’s like it is culture of marijuana, but it’s different demographics, but everybody have a story, so this person might be real preservative or whatever, but oh, let me tell you about my story. Boom. Oh, then it opened up more doors. That’s what it does.

TG Branfalt (29:09):

I saw the triple beam design and I thought that it was fascinating that you are young guys and to have this sort of relic, it sort of speaks to that. Did that actually happen to you or somebody came up to you because you had that shirt on?

Jamar Brown (29:27):

Yes. Oh yeah. Every shirt I have, it’s a story behind it or loose lip sink shifts that relates to life. It look cool as hell and relates to life. So you might get a story or somebody walked by was like, ain’t that, that’s the damn truth. And I’m like, yeah. Then I might get into a story about it. Different avenues of life that you in corporate at the bottom, in the middle, it doesn’t matter and it relates. So everything we pretty much do relates one way or the other.

TG Branfalt (30:03):

So how does your brand continue to evolve and how in the next sort of few years as more states go online with legalized cannabis, how do you plan to evolve to those markets as well?

Witt Rabon (30:19):

So we do that through licensing deals. So we have our own line of genetics, so we’re able to, we just actually got a license deal in Florida, so you’ll see drove Florida, I would say, in stores by December. So yeah, we have, it’s just basically through licensing. You can start, unless somebody wants to give us a billion dollars, who’s listening to this? That’s about the only way to start penetrating other states really, really fast is basically you have to figure out your way to get in there and licensing, licensing is what we’re good at and what we know, and it makes perfect sense because now we can go to grows and alleviate their marketing burdens. Like, Hey, you guys want to go try and create a brand yourself and go through the 10 years of brand building it takes, or do you want to just latch onto us and alleviate your entire, give your marketing budget to us and let us do it, and now we all win. You can just focus on growing your product and making it the best possible, and you don’t have to worry about the sell in and sell through.

(31:41):

We come in and focus there, and nine times out of 10, as long as you have a good operating partner who has good intentions, it works,

Jamar Brown (31:55):

Makes life easier.

TG Branfalt (31:59):

And finally, what role can specifically cannabis lifestyle brands play in the broader conversation of advocacy?

Witt Rabon (32:12):

I think as far as brand kind of relating to earlier, as far as advocacy goes is like you said I was getting to is brands make these naysayers, I guess, or people fighting legalization a little bit. I feel like it makes it more comfortable for them and it makes it easier for them to accept and digest that this is a business and this is actually a real, there’s a lot more to this. It’s not just somebody growing some weed, a basement and trying to sell it in a book bag. It’s actually like now these people can look at these companies like, oh wow, there’s entire marketing teams, web developers, there’s a lot of stuff going into this other than just the plant,

Jamar Brown (32:57):

Just from pumping it out the basement to the streets, now you got a whole team, marketing, sales, ambassadors, partnerships.

Witt Rabon (33:13):

And then also we can kind of also bring more, because we have an audience, so we can also bring a little bit more education to our audience as well through last prisoner project type stuff. Or just telling people what’s going on in the industry that they might not be aware of. Like, oh, hey, do you guys know there’s a vote upcoming in this November where they want to lower your THC limit or they want to lower your amount you can purchase. And we can actually go and put stuff out there saying, Hey, vote no on this proposition because this is going to destroy your industry or our industry that we all love. Or we can come through with the positive things and be like, Hey, there’s a bill right here that’s going to help everybody. Safe banking, that’s going to help everybody win. Let’s make sure that you guys are aware of this and want this to move forward. Make sure the ones that want to tell your politician.

TG Branfalt (34:15):

DeMar. Do you find yourself doing a lot more of advocacy in your role than,

Jamar Brown (34:23):

I mean, yeah. Yeah. Even from the way how I grew up, my mom and dad, my mom and dad sold drugs. My mom had tremors runners, my mom had testers, house being raided, everything. And I used to just be a sponge on the wall, played basketball, but it always was in me. So me to transition to a legal business. And then even for reform, expunging, it’s a lot of people still in jail. I’ve been in jail for marijuana, and it’s just like now I have a company, but the thing is to keep spitting the knowledge, keep helping. Even the youth that’s coming up, this Gen Z and everything, it’s just different right now. But just to keep getting the knowledge out there and helping people and really identifying with these people. I’ve been through it, what these people been through, probably not at the certain extent what they’ve been through, but on the same path, I just chose to go this path to make your path easier. So it’s just more of getting out there, knocking on doors or kicking doors down. Because that small space, if you could get through that small space, it’ll open up for a lot of people. Not only you, but the people behind you in front of you, right or left

TG Branfalt (35:51):

Jamar. When you started in this industry, you said you grew up sort of around your parents selling weed and that sort of thing?

Jamar Brown (36:01):

Yeah.

TG Branfalt (36:03):

What was their reaction?

Jamar Brown (36:06):

My mom

TG Branfalt (36:07):

To it sort of coming full circle.

Jamar Brown (36:11):

I remember my sister came out here. I wasn’t even at where we’re at right now. I just showed my sister a little something, something. Next thing you know, my sister told my mom to the point, JB out here, you got a whole grow or whatnot. Then my mom was like, I used to make a hundred thousand a week doing this. Well, I’m like, okay. I learned from you. I just figured out how to transition it to a legal business. But the one thing that I take from my mom, she passed two years ago. I was in New York at Times Square. We had a billboard at Times Square. No way. And I happened to Facetimer at probably 5:00 AM and the billboard popped up and I showed her, and then she was just like, God damn that marijuana, your dad is turning in this grave of how far this shit will go.

(37:06):

I just got to be straight up. That’s just how she was. But she was proud. And my mom, once everything went down and my dad went to jail, my mom was going to jail on the weekends, so I think my mom was visiting my dad on the weekends. She was actually turning herself in. So once my mom stopped, she stopped. It was to the point she started calling Weed dope. I’m like, mom, this is not dope. And then when she was sick, I’ll send her stuff. And gradually, I think the older the people get and they get in situations, they start accepting some things, but I’m like, mom, you’ve been through it, but it was different back then, so I get it. So she proud when she was proud, for sure. She told me. So

TG Branfalt (37:54):

The advocacy side of it probably hits you a little harder than other people in your position, I reckon.

Jamar Brown (38:02):

Yeah, because bro, you ever, my auntie, I was young, but I seen it. But the way my auntie told me how the house get raided, she putting muddy in our Pampers, they throwing pounds out the window. The swat, catching the, that’s a real story. They catching the fucking pounds laughing, but that’s a real story. But the thing with my mom, once she got in trouble, she stopped. So I wish she was still here just to see how everything transitioned into legalization, everything and how she was alive when marijuana became legal, even in Vegas and Cali, but just so she could see the process and everything. I’m like, mom, I don’t got to look behind my back or left and right or meet somebody in a dark alley or get robbed or go to jail. I could drive with 30 pounds in a car, get pulled over. Oh, here’s my paperwork, sir. Okay, Mr. Brown, you can keep going. Well, thank you. Today’s not your day for that big bust. Peace.

TG Branfalt (39:09):

I would love to sit here and hear all of your stories about towns being thrown out of windows, but we got to wrap it up here. Where can people find out more about you guys, more about DRO social media, that sort of thing?

Witt Rabon (39:29):

So they can go toro life.com if they want to peep out some of the clothing we have, and then also follow us on Instagram at @DROLife. That’s more of the lifestyle aspect of everything. If you want to go dive into the cannabis aspect of it, DROflower.com or @DROFlower on Instagram,

TG Branfalt (39:50):

That’s Witt Rabon, the co-founder and COO and Jamar Brown, co-founder and president of Brand Development of Colorado based cannabis lifestyle brand DRO, which first launched in 2014. Thank you guys so much for being on the show. Really appreciate it.

Jamar Brown (40:04):

Thank you. Welcome. Appreciate it.

TG Branfalt (40:06):

You can find more episodes of Ganjapreneur.com podcast in the podcast section of Ganjapreneur.com or wherever you get your podcasts. On the Ganjaprener.com website, you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Wayward Sound Studio. I’ve been your host, TG Branfalt.

In this episode of the Ganjapreneur Podcast, host TG Branfalt speaks with Tom Lauerman, better known as Farmer Tom, a longtime cannabis advocate, organic cultivator, and educator. As the founder of Farmer Tom Organics, Tom has worn many hats in his cannabis career, from medical grower and policy advocate to consultant and federal educator. In this insightful conversation, Tom reflects on his decades-long journey in the world of grassroots cannabis activism, including being arrested for cultivation in California, connecting with early pioneers like Dennis Peron and Brownie Mary, teaching federal scientists about organic cannabis farming, and more.

Tom also dives into the future of cannabis, offering his thoughts on the potential impact of federal rescheduling, the rise of pharmaceutical involvement in the industry, and the importance of patient rights and home grows. Whether you’re a home cultivator, medical patient, or curious about how the federal government is preparing for a change in policy, this episode delivers a wealth of knowledge: find us in your favorite podcast app, listen via the media player below, or scroll down for the full transcript!

Listen to the episode:

Read the transcript:

Editor’s note: this transcript was auto-generated and may contain errors.

TG Branfalt (00:52):

Hey there, I’m your host, TG Branfalt, and this is the Ganjapreneur.com podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists and industry stakeholders. Today I’m delighted to be joined by Tom Lauerman. He’s the founder of Farmer Tom Organic’s, a medical cannabis cultivator, federal policy reform advocate, hemp educator and industry consultant. How are you doing this afternoon, Tom?

Farmer Tom Lauerman (01:18):

Pretty good, TG. How are you doing, buddy?

TG Branfalt (01:20):

I’m great, man. I’m real excited to have you on the show today. We have a lot to discuss. You’re a man who wears many hats. So before we get into that though, tell me about your background and how you ended up wearing all of these hats.

Farmer Tom Lauerman (01:34):

Wow, it’s been a long road. I’ve been consuming cannabis for 50 years. I started in San Diego. I was selling weed so I could take care of myself, was never really much of a drug dealer because I like to smoke my own. I did it so I wouldn’t have to purchase so much cannabis. And we started growing at a young age there in 1994 and five. We worked along with Dennis Peron and the people from San Francisco and San Diego to get Prop two 15 on the ballot, which we were successful in doing. And then that led into our collective garden shelter from the storm where we had 20 patients. You bought a light, paid 50 bucks a month, patients got to take what they wanted. I was the grower. Steve McWilliams was kind of the head of the group and he supplied the phones to make it all happen too.

(02:40):

So that was good. And then we got arrested for 448 plants in 99. We were real active in the community down there in San Diego. We used to go to the townhouse meetings all the time and bring our four inch pot plants and tell ’em how safe marijuana was after the law passed and they continually rolled their eyes until they arrested us and we went back with the media and the mayor, Susan Golding wouldn’t come out of her office. Her husband owns like Jack in the Box, and she was horrified that her police arrested us and they already knew us all really well. They gave us back our grow equipment. So we popped up, they got us kicked like they usually do. They got us kicked out of our space. They threatened the landlords. That’s when these things go down. That’s the kind of model they use.

(03:34):

We’re going to take your property if you don’t get rid of these guys. So we popped up a little four by eight grow room and one of our patients, Michael Bartel, quadriplegic, good friend of mine, and we popped up in there and then other patients throughout the county gave us little starts and we grew ’em out. And our court date was so high profile that NORML gave us a free lawyer. So in the process when they raided us, we all had a media list back then. So that’s when I really got in tune with the media Brownie Mary back in the day. She got off of her charges because she had NBC there. So we knew we needed to buddy up with the media people in town and all the news stations and the newspaper and stuff because if we did, if any of us got busted, they wanted to know right away.

(04:30):

So we had all their pager numbers and we all have media lists. And when they raided us, my wife got all the trim out of her apartment, put it into a neutral space, and then got on her cordless phone and called all the media within 10 minutes. They were all there at the gate. And so it was really well documented, super high profile. We went to jail and then NORML gave us a lawyer. It was so high profile for free, and they decided not to charge us not to drop the charges because they were expecting us to at least one of us to make the mistake again. And so they didn’t charge us. So it was kind of hanging over our heads. And we moved a couple years later to San Diego. Wasn’t the cool little beach town I grew up in anymore. It was turned into Los Angeles and traffic all over the place and I was doing landscape construction and it just one development looked like all the rest of the developments.

(05:36):

I couldn’t tell where I was. So we moved to Williams, Oregon where we lived for a couple years. I was a farm manager, organic seed farm down there. Did some growing down there. Williams is kind of like the Garberville of Oregon. It’s kind of the main hub there, tucked way back in the woods. Very cool community. We had no idea when we moved there that it was that kind of community. But everybody at the health food store at obs, people’s co-op, you say, oh, you guys are going to love Williams. You’re going to fit right in. So that kind of got us up here. We stayed there for a couple years. I was a farm manager, organic seed farm, and then we bought our own farm here in Brush Prairie, Washington, which is on the outskirts of Vancouver, really in the Portland metropolitan area. So I’m like 20 minutes from the airport, half hour from downtown Portland, five minutes from the I-5 that goes from the Canadian border to the Mexican border.

(06:38):

So it really, for doing advocacy was ideal. So we grew for patients and then eventually I left my regular job and dove in full-time growing for patients here on our farm. We wrote a book Cannabis Consumers Guide that we put out. And I used to go to all the farmer’s markets. So before legalization happened, we had a medical marijuana farmer’s markets up here in Washington State. So like every weekend I would do a different farmer’s market selling weed and promoting my book and being out there in the community knowing I really, after being arrested and take it through the gauntlet in San Diego, I really wanted to take my advocacy to the next level and normalize cannabis. And we were fortunate enough that Washington and Colorado were the first two states and not California because then they would’ve just bulldozed the over as far as media attention and normalization.

(07:46):

And they have such a stronghold there and such a big economy too. So we had a bunch of media attention up here. I was on dozens of different local, I worked with Cuomo News a lot, NBC out of Seattle, did a bunch of pre cannabis stuff and then Markovich from Como News called me and said, Hey Farmer, all these people are blowing themselves up and blowing their houses up and people are getting maim producing BHO, butane Hasell. We all know that the butane puddles up on the ground close to the ground. You plug any device in little spark, boom, the whole place goes up. Hot water heater, pilot light on your stove or on your oven, the whole place can go up. It was happening regularly. And I said I knew that the legislators, we were very active up there too in Olympia, Washington kind of laying out the cannabis and we wanted to really keep patients rights in there, which they kind of destroyed, but that’s another story.

(08:56):

But anyway, so we put on, I go, sure man, let’s do it. I’ll do the open blast outside the total Safeway, we’ll show you how to do it. And then we’ll do closed loop inside and we’ll talk about CO2 and we’ll talk about bubble hash and water hash and we’ll talk about RSO because legislators traditionally know nothing about cannabis at all, like zero. And I don’t blame ’em because they got so much coming across their plate every day. There’s so much going on in every community. So I took the opportunity to educate them. I said, Matt, we’re going to put on a three hour symposium and we’re going to help them make the correct decisions because my talking point was, and I put it all together. So I made like everybody take off their big hats and just say, we’re going to come across as legitimate as possible on our message we want to get across is if you don’t tax it a regulator, you can continue to have these explosions.

(09:59):

It’s like a hundred dollars fix for the tube, some Pyrex, a little heater, coffee filter, zip tie, and a couple cans of butane and they’re blowing themselves up. And we explained to ’em that we are creatures of habit. We’d much rather go to the store and buy the beer than make it ourselves. And the same thing’s going to be with concentrates and BHO and concentrates we’re really taking storm across the country. And so two weeks later, a week and a half later, they changed their mind, changed the laws and made all concentrates legal at that point. And that really put me on the map. Previously, I’ve been on the cover of Northwest Leaves activists this magazine along with Grandma Kat and Jonah Tacoma from Dab Stars and Joy Beckerman Hemp like Ace Lady. And that got me out there. And then the opportunity came to work with the federal government and they knew that me and my wife were traditional medical growers.

(11:12):

We lived the lifestyle. We grew vegetables along with our cannabis. We were educators. We really wanted to set the stage. So the union guys thought it would be great if we did it. So they picked me out and I got on the phone with 10 agents from the CDC scientist agents from the CDC, and I asked them, where are you getting your info? And they said, oh, we’re getting it all off YouTube. And I kind of said, ah, that’s kind of, that’s really not fair to our industry. Why don’t I give you a tour? The lawyers and the DOJ said, no, we’re not doing a tour to these illegal operations, but we can make your pharma location where federal agents can learn touch and steady cannabis. So they said, well, we’re going to have to do a thorough background check. And me and my wife, we’ve always just played by the rules.

(12:04):

I’m not a baller, I’m not running stuff all over the place. I’ve got enough to take care of with my patients and my farm and living a good life as opposed to doing all the other stuff. A lot of people were partaking in at that time. So I said, dig in. So they came for two days in August. We had seven agents from the CDC there, all top scientists. Cton was in Africa studying Ebola victims. And he flew to my farm for the two day. We had set up a little popup using my veggies on the farm, serving him food, and we educated him. So I knew at this time that I had one chance to do this. I had one chance to normalize cannabis and teach these heavily PhD scientists about cannabis, not only cannabis, but be around people who are smoking cannabis all day long.

(13:01):

And so we started on the first day of education, we started smoking weed around it them well, somebody had to do it right? And if they don’t, you got to educate these people too. Like this isn’t heroin, we’re not meth out, we’re not fentanyl out, we’re not drooling, we’re not drunk. We’re none of those things. We’re we’re cannabis patients when we’re taking care of our health. So not only did we do that, we did dabs in front of ’em, we rolled joints. We really wanted to show ’em the whole consumer side. And then in between we had BHO hydrocarbon demonstrations. We had the top lab guys here to explain what’s going on in the laboratory and what they’re testing for. We did trimming, I mean trim machines. We had the whole gamut for two days. They went out with us for pizza and beer at night.

(13:57):

When they came out of the farm, we hugged, we gave them a big hug because I’ve been working with them on the phone. So I gave them a big hug and they welcomed them into our farm. And usually when they go out on these things, they’ve told me since they go, man, we usually met with lawyers and other tech people. Wherever we swab, they swab. Everybody’s documenting everything. And we really didn’t do any of that stuff. My goal was just to educate them as best possible. So when they come back for this study in October, they would have some knowledge on cannabis.

(14:35):

They saw my organic inputs, they saw how we grew our vegetables, they, how we grew our cannabis. I had two collectives at the time where we had over a hundred plants. So it was federally legal and just like with BHO thing, everybody think it was thought, I got so much shit for it. Unbelievable for educating the state government to make decisions. Oh, you’re showing them all of our secrets. You’re letting all this stuff. And then the same with this, oh, you’re bringing the feds on. They’re going to bust you all this stuff. But I got to know these guys and I trusted ’em. So we became, I still work with them today. They’ve got me looking for a hemp processor out there who’s willing to work with them. They want to collect some dust out of the corners and maybe put up some sniffers in there and collect the dust so they can go analyze it to look for any kind of allergic reactions, any of those type of things.

(15:35):

This is all our workplace health and safety stuff. So when they, in October, they came for the official HHE Health Hazard Evaluation. It’s a federally funded study. So we were one of the first to do a federally funded cannabis study on our farm where they did harvesting one day, big leafing another day and trimming. And the trimming day. That hooked us up with the cyber glove where they tracked the repetitive motion of our hands. And not long after that, the CDC put out a public service announcement stating that tremors can have carpal tunnel, can get carpal tunnel because of the repetitive motion. And it kind of went on from there. It was hard getting it into my hands and into the public because it went up on the website first and it was 2016 in election year, and the Democrats didn’t want to look like they were favorable to cannabis.

(16:43):

So they pulled it off the website and then Trump got elected and they brought in a new department head for Health and Human Services, and I guess they just go through and signed these things. So they had a backlog of ’em. So they stuffed mine in the middle. The guy went through and signed them all and then am delivery like six 30 in the morning. The next day the box arrived from UPS full of all these health hazard evaluations printed and ready to go because they knew if they got it to me, the public, then the cat when they couldn’t turn it back. So it was a big deal. We got the federal government to use the word cannabis instead of marijuana. James, one of the scientists I still am good friends with and work with, he said, Tommy never used the word marijuana once I go, I did it intentionally and I got flack from a lot of the old advocates for getting these scientists to use the word cannabis instead of marijuana.

(17:46):

They’re all like, we fought to use the word marijuana. What are you doing telling ’em it’s cannabis. I’m going, I use my own better judgment. These are the top scientists in the world for workplace health and safety. They ride all the reports and then OSHA makes laws out of them. So they’re highly esteemed. My message to ’em was, look, you don’t want to look like fools out there. You want to use the proper terminology so the rest of the world respects you. If you go into this scientific study with marijuana all over the place, people, these other scientists around the world, they’re, they’re not going to look highly on you. So we convinced them to do it. They used the word marijuana once. In the first paragraph it says cannabis, also known as marijuana. And then through the rest of the study, it can be found on my website on farmer tom organics.com, or you can go to farmer tom.com.

(18:44):

That’ll get you over there too. But the reports there, the educational days there, we took a bunch of pictures. So that’s been a really great experience. I’ve helped them with other projects along the way, and I’m still their go-to guy. If they need anything for hamper cannabis and want to do some studies, they call me up and ask me, Hey, do you want to do this? And I’m always up to helping ’em out. It’s not a paying gig, but it’s good communication and I found it very beneficial for me to still have a good rapport with them and work with them, especially since we’re moving into schedule three. I think that’s where my focus is right now. So I want to

TG Branfalt (19:32):

Ask, you kind of had a rocky start being arrested early in the nineties. Are you surprised that in 2024 we are talking about federal rescheduling?

Farmer Tom Lauerman (19:48):

Oh yeah. We never thought it’d be legalized Back in the day. We knew medical went in California, but we knew that was a slow road. California and the West Coast are usually ahead of things and just like storms sweep across the country, cannabis swept across the country from west to east. And that’s the kind of way I look at it. And I was blessed to already have my farm here and living here for over, well, in that time, almost 10 years I’d been here on this farm and that it all came together. So I talked with the media all the time. Most people weren’t talking to the media. Well, everybody was too. They knew the end was coming and they were getting as much money for their black market stuff as they could. And I’ve been more of an advocate as opposed to a major producer. So

TG Branfalt (20:46):

Your company, you have your obviously hands in a lot of different baskets. You’re spinning many plates. Can you tell me about your growth as a company as more states have gone online with medical and then later adult use programs?

Farmer Tom Lauerman (21:00):

Yeah, we’ve just been doing consulting. We did the first outdoor cannabis tours in the world here with Kush Tours back in the day. And this was Washington State, so all of the people who wanted to get into the cannabis came through my farm. They were money people and a lot of Chinese Mafia and Mexican mafia. And I didn’t care. They were paying Kush tours of me to have ’em on the farm. And I’m an eager educator. I probably a little bit too much to my demise or at least cash in the pocket. I like to spell it all out and give everybody good solid information. So we had a ton of people come through our farm where we educated them. And that kind of started it off. And then when other states came on board and then me working with the federal government, it kind of built me some cloud in my own way. My taught classes at Clark College here in Vancouver, I’ve been a keynote speaker. I’ve been an educator in cannabis for a really long time, and we were able to educate the federal government for the first time on production of processing cannabis on my farm.

TG Branfalt (22:19):

Well, I want to talk to you about that. I mean, you are a trailblazer. You’re the first to educate scientists in the federal government about our cannabis production. The first outdoor cannabis crow tour with Kush Tours was being first your goal when you set out on these projects?

Farmer Tom Lauerman (22:34):

No, I just knew I had the window to do it. I didn’t really think about the first so much. I knew that California, as soon as California goes legal, I’m going to be not the guy anymore. You know what I mean? I was the guy with the beard and the farmer, and then it went to California and all of a sudden it was Swami. He was the, but I knew I had a short window and then that we would be the first. So I always answered my phone. I always invited the mediocre. I always had. I’ve had a couple, two, maybe three documentaries done on me. I’ve been in 50 plus magazine and podcasts, and I was on NBC Nightly News, squawk Box, business News Weekly. I’ve been in Time Magazine, I’ve been in all of them starting off with this tourist stuff that kind of brought me into the national spotlight. Tourism and cannabis was a big deal when Colorado and Washington first came in to the game. Nobody else was doing it. People were coming to Washington and Colorado to buy legal weed, go to a store, get that whole thing that we’ve all been dreaming about for decades, upon decades is actually come to fruition. And you can go into a store, buy some weed and go, go smoke it or whatever consumption methods you want to do.

TG Branfalt (24:05):

I mean, you’re also the first federally recognized cannabis farmer processor in the us. What does that mean? What did that actually mean?

Farmer Tom Lauerman (24:18):

Well, the federal government during their backgrounds and had stuff and having me on their farm, having them on my farm, they recognize me as a cannabis producer and processor, and still to this day because they utilize me and what the strength it brings in, especially going into schedule three, I’ve already been vetted by the federal government to grow and process cannabis. I already have deep connections into the federal government to help businesses work their way through the next phase because cannabis, it’s a moving target. Anybody who thinks cannabis is going to stay the way it is for very long hasn’t been in cannabis very long because we all have to be like Gumby. We can’t set up and say, this is my business model and we’re not going to stray for it from it. We all have to. And they put new laws in and we’re like the work around experts. Cannabis people know how to, well, how can we work around it and what can we do to make sure that we can still do what we’re doing without too much interference?

TG Branfalt (25:27):

So I want to know more about advocating at the federal level, which again, you’re probably, what one, if not a handful of people who have probably taken this that’s not a paid lobbyist. Did anything surprise you that they knew the scientists that you met with? Is there anything that surprised you that they didn’t know? And ultimately, how were you received?

Farmer Tom Lauerman (25:53):

I was received great from them. We became buddies with them. I mean, we still text each other on the holidays. I’m friends with these guys and I’m the guy, we smoked weed around them and we went to the pub and drank beers. And then I would go out. I always do halfway through my meal burn one down, come back in. I just wanted them, I really wanted to normalize cannabis and break the stigma.

TG Branfalt (26:20):

Was there something that they knew that you were like, oh, this basic stuff, or were they all completely

Farmer Tom Lauerman (26:27):

Blank? They didn’t know anything. They were getting all their information from YouTube,

TG Branfalt (26:33):

Which is ridiculous on its face,

Farmer Tom Lauerman (26:35):

Which is totally ridiculous. That’s why I said, whoa, whoa, whoa, whoa. What can I do to educate you before you come and do the study? So you have some base about cannabis in general because for me, they went to the Mayo Clinic who does Minnesota, takes care of all of their edibles and products there. They’re made by the Mayo Clinic people. So they went for me. They went up. This is only going to happen once. We’re only going to go to one small farm and then we’re stepping up into the big leagues. I felt very blessed and honored, and I respect them and the work that they do. I don’t believe in everything governments do, but the civilian people that work there, the civil servants who are doing the day-to-Day science and protecting workers and stuff, man, they’re just people like us really. They just go by what the higher ups they’re telling them to focus on at each point along the way.

TG Branfalt (27:37):

So since the rescheduling sort of news, right, it’s still a proposal since that’s come out, there’s been a sort of, people have been speculating about what is going to happen to the cannabis industry as it sits. What’s rescheduling to schedule three would actually do. You’re somebody who has spoken to federal regulators, essentially. What do you think rescheduling cannabis federally would actually do and the potential impact on the current cannabis industry?

Farmer Tom Lauerman (28:08):

Yeah, it’s a hot topic now, but we were talking about it back in the nineties. We were always, everybody’s rescheduled. We were always, no, no, no. We want to, we want to make it like tomatoes. I could have it on my farm stand, a bag of wheated or a bag of fresh leaves for juicing or whatever. I want it to be a regular commodity. And so rescheduling what it’s going to do, it’s going to be a handoff to the pharmaceutical companies. Schedule three. You need a prescription for it. So you can see the writing on the wall. People don’t want to talk about it. They don’t want to talk about two 80 e and how great it is and how great it’s going to be for ’em. But I’m not really seeing it that way. I’m seeing it more once it goes federally legal, it’s going to be like Viagra or any other drugs that are in schedule three where you need a prescription and there’ll be TV commercials out there. Amazon’s already pouring money into the federal government for them to be able to ship it around. So it’s going to be like that. You are going to see a commercial. We have doctors on hand. They will write you your prescription for medical cannabis. Call us now. And then it’ll be discreetly shipped to you in a discreet packaging. And I think the way that’s the, it’s going to go.

(29:35):

Government follows certain things and they’re always set up to help the big corporations out at the end.

TG Branfalt (29:44):

So you think it’ll end up in the hands of the big pharmaceutical companies like Merck and so on?

Farmer Tom Lauerman (29:49):

Yeah, exactly. Or the bigger players that are in the game already who have the funds to do it because it, it’s a big as. But right now, the regular market, all they’re really focused on is high THC numbers. There’s some obscure products out there with CBD and CBG and different minor cannabinoids in there. But all of ’em are really just focused on how high this stuff will get you. And these people are, they’re capitalists, American capitalists. What they want to do is they want people to be able to smoke all the time. Like my strains that I grow, they’ll get you high for three or four hours, medicated for three or four hours. The strains they want is going to get you high for 15 minutes to a half an hour, and then you’re going to smoke more, right? They want to put that addictive thing in there.

(30:43):

Well, I need more to keep my high where I want it or whatever they’re looking for, whatever relief. So they’re not always straight up. They really don’t. As we’ve seen in every other business, they’re not looking out after really the consumer at all, or the regular people mean just look at our food supply, totally adulterated all these chemicals in it. They cause all these things. And then on the prescription side, on the pharmaceutical side, you see ’em on tv, it’s going to cause diarrhea and death and eczema and rashes, but it’ll help you with this one tiny thing, but it’s going to contribute to all these things. But what cannabis does in that is there’s all these different cannabinoids, there’s all these different terpenes, there’s all these different flavonoids. So there’s endless amounts of different therapeutics is what they like to call it these days.

(31:42):

Get these therapeutic blends out there and they don’t want to go away from their chemical based. These are all petroleum-based derivatives that create all the medication out there. And way back when, I think the Rothschild or whatever, once they went over and they kind of took over the colleges for medical school, and when you go to medical school these days, you learn a little bit about the body, but your main thing is to learn how to prescribe properly and to use our medicine. So cannabis can relieve all these different symptoms. It is great therapy for so many different things, but they don’t want it because it takes ’em away from what they’ve built decades to do. And it kind of smashes it all. And when you could do with terpenes of different cannabinoid compounds and flavonoid compounds address a lot of these issues therapeutically, then you really don’t need their expensive concoctions that they’ve made up that do all this other harm.

TG Branfalt (32:53):

I do want to go back a little bit to something that you said, talking about the trend of really THC, seeing how stone something can get you, and this is something that I’ve kind of pondered for a while, that there’s all these reports that cannabis is much stronger now. I don’t know how much I necessarily believe that, that sort of reporting, but it is true that when I started consuming cannabis in the early two thousands, you could get flour concentrates, you could get some hash here and there, but concentrates didn’t really exist in my world. I’m sure they existed, but not in my world. RSO, that sort of thing. Does that trend of these cannabis products, legal cannabis products being really potent, is that something that worries you as an advocate, as somebody who views it as a healing plant as opposed to a quote party drug?

Farmer Tom Lauerman (33:46):

Well, I think it’s going to be beneficial to have schedule three because the hemp side of it all, they’ve really focused on all the minor cannabinoids and they’re worlds ahead. They’re already federally legal out there, so they have to be GMP certified, they have to do all this thing. And there’s so much more advanced in the healing modalities or the healing components of cannabis than they are about profits and selling and getting people as baked as possible. So I really think the hemp, if we could concentrate on the hemp side of it and take the legalization that’s already happened and pull that model in, which is much less restrictive. They have to pay taxes, they have to do all the things that do a business, but being hemp, they can take the tax benefits too from it. So I just think that they’re way ahead.

(34:44):

I think the overregulation and the greed from the states, they really kick the patients to the side. And it’s all about making money for the states, mainly making money for the states. If you can’t ride off all these different tax exemptions and all the money’s just pouring into the different government agencies then. And really, I’m on the board of directors of a couple different medical groups, cannabis patients northwest here locally, and the Coalition for Patient’s Rights, which is a national organization based out of Nevada. And we look at all the different states, and it all started with medical, but now it’s all recreation and it’s all about money. So I learned when I was a kid, man, follow the money. Follow the money where it’s all happening. And if you follow the money in cannabis, it’s pretty much he tells the story.

TG Branfalt (35:46):

So I want to talk about your role as an educator. You launched the Hemp Farming Academy. You co-construct a cannabis and your health course at Clark College. Was education a natural progression for you?

Farmer Tom Lauerman (36:01):

Yeah, I always wanted to normalize and educate people and de-stigmatize the cannabis. I mean, that’s why we educated people here. When we did the tours originally, the book, I put out educated people, we educated the, I took the initiative. It was all my idea to educate the federal government. I said, well, let’s bring them in and teach ’em what’s really going on and let’s smoke weed in front of ’em and let’s show ’em how it is. And I can only assume that these are the same scientists from the Department of Health and Human Services that just recently made it said that cannabis has medicinal benefits, which has never been before, which is monumentally huge. It’s been downplayed, but what they’re doing now is monumentally huge, huge, huge. It just says that cannabis has medicinal benefits. That alone is crazy. So I’m all about get away from the rec side and let’s go back to the medicinal side and let’s force these pharmaceutical companies, these big companies, to focus on all the medicinal therapies that can be creative with terpenes and different cannabinoids and flavonoids, and let’s bring it all together and do some real medicine here.

(37:23):

Plant-based.

TG Branfalt (37:24):

Just as an aside, there are a lot of recreational consumers. They’re actually using cannabis therapeutically. They just don’t have to go through that medical sort of process, which for some people, maybe due to their job, they may work in a safety sensitive position or due to their owning of firearms, for example. I think that’s what keeps some people out of, because you do see, when RET goes online, you see a decline in patients. That doesn’t mean less people are using cannabis therapeutically. It means that less people are choosing to sort of register with the government. Do you think that that’s fair?

Farmer Tom Lauerman (38:10):

It’s what’s been going on. And people, they already know the products they’re after, they just can go buy it at a store without paying the extra fees, without being on a list is a big deal too. Who knows how these lists get opened up and then what could happen if a different administration comes in and they decide to clamp down? They got a list of all these patients if they really want to go. But I just don’t think, first of all, I don’t think the government, the federal government has the forces to regulate it, heavily regulated it anymore. The states definitely don’t. Every state has huge homeless populations, huge, huge step rings, like all, it’s kind of like our world’s just falling apart out there. I mean, I live in Portland and I was just in Portland and Portland yesterday, and the homeless problem there is huge still to this day. And they’ve made homelessness illegal, but it’s still all over the place. They don’t have the funds to control it. So I think people are out there. They know when they buy from the stores, they know what they’re getting. They want to make sure they get the right products.

TG Branfalt (39:30):

Tell me about your role as a consultant, which is I guess the sort of amalgam of everything that you’ve done in the cannabis industry and kind of in your life to this point when it comes to cannabis. What typically do people reach out to you for as a consultant?

Farmer Tom Lauerman (39:47):

Oh, I’ve been doing a lot of hemp consulting around the world. Did some in South Africa been helping out? A lot of different growers get started, and I think it’s more beneficial to bring somebody, it’s more beneficial and honest. Not that capitalistic businesses are honest. They want to bring in that best grower and then they want to have them there for a year and they want some kid to follow ’em around and learn everything that’s going on. And then they dump ’em for the $16 an hour, $20 an hour kid who’s learned the chops on growing cannabis and continuing it on. I think it’s better to bring on somebody like me. We walk you through, we educate you through the whole deal. You’re not screwing anybody over At the end of the day, your business doesn’t get black marked or looked down upon because you took advantage of people who, who’ve been in the cannabis industry for 20 plus years, or born into it from Oregon or Humboldt. Their parents grew cannabis too, and you get stained.

TG Branfalt (41:02):

So you said that you did some work in South Africa. What are other countries doing, or maybe the way that they regulate or maybe what some of the people that you are sort of working with, what are they doing that may be different than the United States or entrepreneurs in the United States?

Farmer Tom Lauerman (41:23):

Well, as far as South Africa is, the way they have their system set up is ideal. Everybody gets to grow their own weed and smoke their own weed, and there’s no recreational out there. It’s basically neighbors taking care of neighbors. I’m growing the corn, I’m raising the pig, I’m raising the cow, you’re growing the weed. We do a little exchange community, a community effort, and I think that’s really got the government, it’s all governments a little bit worried because they want to control everything and make as much money out of as possible. Basically, at the end of the day, it’s all about money.

(42:04):

Like South Africa, the government there knows nothing about cannabis. The inspectors, the police who come out to look at the fields, they really don’t know what they’re looking at. They have no idea what’s going on. There’s so much education that needs to take place in all of these countries. Now, if we look at Thailand now, Thailand went fully legal, but they saw that Schedule three popped up in the United States. And so we all want to keep America happy. So we’re going to get rid of our legal and we’re going to go back to medical. Sure, these stores are going to be open, but there’ll be a doctor in these stores or right next door. Yeah, go next door, see the doc next door. He’ll get you your paperwork. Then you can come and buy your products. So I think my spidey sense is that that’s what happened in Thailand. And if you do the math and look at the dates, as soon as the US government says we’re going to schedule three, which is back to a prescribed product, almost instantly the Thai government said, oh, we’re going to do the same thing.

TG Branfalt (43:16):

Do your Spidey senses tell you that we’ll see full decriminalization in your lifetime and possibly mine?

Farmer Tom Lauerman (43:25):

I don’t know. Well, yeah, on the federal level, I’m sure you won’t be able, I mean, people won’t be going to jail for it. The things that we really have to hold onto is home grow is huge and then medical patients’ rights to grow their own. And it’s been sad to see some people in the industry, even here in Washington in the early days, who had licenses to have a regular recreational license to sell, saying that, oh, we can’t have patients grow on their own. Oh, it’s too dangerous. They’re, they’re going to hurt themselves or somebody else, which is like a bunch of garbage, man. It’s a plant. If you can grow tomatoes, you can grow your own cannabis. Believe me,

TG Branfalt (44:11):

It may not be that good because I can grow tomatoes and I’ve tried to grow cannabis and it did not go well. What advice do you have for people looking to enter the cannabis space as it currently exists?

Farmer Tom Lauerman (44:28):

Well, I’d say be prepared for three. I’m really encouraging all of these groups to go. If you want to make the next move, bring somebody up like me who’s got experience working with federal regulators inside, I can get some inside information. I’ve already been vetted by the bring somebody in like me who can help you guide you through all the different things that are going on. Hold on one second. Since this is on tape, I don’t have to worry about it too much. But yeah, there’s going to be what’s coming down the road with Schedule three that’s going to bring both opportunities and challenges for all these businesses, right? They’re going to have to know about regulatory compliance, and I can help ’em with that. Dealing with the federal government and DEA and the F FDAs, all their rules and regulations. We can put in customized training programs to educate all their employees on a proper way to do GMP certified facilities and get up to date to play in that federal realm where it’s going, licensing, permitting.

(45:51):

I can help out with all those things. I can assist with federal licensing and applications and local stuff. Also operational audits and SOPs. I’m pretty, my SOPs through the work that I did with the federal government are the foundation for all workplace health and safety standards in the cannabis industry, and also my advocacy and representation. The work that I’ve already done carries a lot of weight in the federal laws that are coming aboard. And I think if you bring me on board, you have a better chance of participating in what’s coming because like I said, it’s a moving ball. Cannabis has always been a moving ball. If everybody thinks it’s going to be the way it is right now, it’s five, 10 years from now, I think you’re wrong.

TG Branfalt (46:44):

I would have to agree with you there. It sounds though like we would need for all the businesses and we would need a team of yous. Do you have any anticipation of training a team of yous in the future?

Farmer Tom Lauerman (46:59):

Yeah, definitely. I’ve got a group of people who are good educators like myself who have been around the plant for a long time. And yeah, I am looking forward to building a nice team around myself, a really well qualified educators and people who know the rules and what’s coming down the road.

TG Branfalt (47:22):

Tom, really, this has been a fascinating conversation. You have one of the most unique, interesting, and the longevity in this industry is really second to none. So I really appreciate you coming on the show and your candor throughout the course of the show. Where can people find out more about you? About Farmer Tom Organics? Yeah,

Farmer Tom Lauerman (47:48):

Go to farmer tom.com. That’ll shoot you over to the Farmer Tom Organics page. You can Google me. There’s a ton of information out there. You can just get on the phone. I answer my emails. I get back to people. I’m eager to help people ease into this new industry. It’s going to be a couple years, but the time to get started is now. And don’t dilly dally around because it’ll be here before you know it, and then you’ll all be scrambling and not being a part of the party. This is where it’s really going to be. And me, I really haven’t, I’ve turned down a lot of opportunities over the years because I listened to the people in my group who knew what was coming down the road. They knew it was going to be a race to the bottom. They knew all these startups, 90 something percent, just like any new industry that comes out, there’s endless amounts of failures out there.

(48:46):

So we own all of our own ip. I own all of my art. I was one of the first people to put his name and like this on a cannabis product by a guy named from a Nike artist, somebody from Nike, and then a guy from Marvel columnist did a full line of cannabis trading cars. So when you’re out there and just happened to be the first, you get all this influx. Everybody wants to jump on your ship, and that was cool. I got a lot of good, and we own our name. I’ve never taken any money, and I’m ready to work with any team who really wants to be a part of the next phase of cannabis, which is going to be pretty big, and it’s going to be some big dollars that are needed to be invested in to get to that place.

(49:35):

But with all of these cannabis companies and hemp companies that started off, there’s all these facilities out there right now that can be picked up for pennies on the dollar. So it’s a great time to jump in. It’s a great time to invest in some of these facilities that are fully functional, ready to go, but they’ve gone out of business and literally can pick those whole operations up for pennies on the dollar. I also have a genetics that I’ve been collecting and seeds that I’ve been collecting for years. Not only do I have the high THC ones, but I’ve got all the minor cannabinoids and all the terpenes covered. I have some high ling seeds that were collected from a friend of mine who recently passed away. He was a drug smuggler in the sixties, seventies, and he collected all these seeds and then he started breeding them and then he got sick.

(50:32):

So he had all these seeds and he started sending them to me. But he goes, I really want to get these good ones up and going again, so I’m going to send them to you. So he gave them to a mutual friend, and then he called the mutual friend and said, I need to go to the hospital. And then the next morning he died after the package was come into my house. So I have all these really old genetics and these really stable genetics with all of the cannabinoids and all the terpenes covered, not just the high THC one, but all the minor ones. So not only do I bring into your operation getting ready for schedule three, which is all going to be about therapeutics, and I have all the genetics that come with me. So not only are you working with the federal government being vetted all these things, but you’re also getting great genetics to start the process of creating great therapeutics.

TG Branfalt (51:35):

Tom, thank you so much for being on the show and for telling people not too dillydally because changes are coming soon.

Farmer Tom Lauerman (51:59):

Yeah, I want to thank everybody, at Ganjapreneur. You guys have been super good to me over the years. I appreciate getting to know you guys and supporting you. It’s definitely my go-to place to get cannabis news on a daily basis, kind of what’s breaking and yeah, it was pretty interesting to see what was going on with the DEA, getting their feedback, the public feedback. Nine out of 10 people want reform, want Descheduling want rescheduling, and then there’s only a handful of middle state attorney generals out there who really don’t want it. They’re still stuck in the caveman days and don’t want to budge. It’s too lucrative. It’s a money source for them. For all law enforcements, when they raid somebody, they can take your house, they can take your boats and your car, whatever you got, and that funds them. It’s money into them. So when cannabis became legal, they’re losing money from it.

TG Branfalt (53:07):

Money is also the only reason Smart Approaches to Marijuana exist, which is the opposition group who did a sort of form letter campaign against the federal rescheduling proposition and were one to every 100 was in opposition. Tom, thank you again so much for being on the show. That is Tom Lauerman, founder of Farmer Tom Organics, medical cannabis cultivator, federal policy reform advocate and educator and industry consultant.

The DEA’s public hearing regarding changing the classification for cannabis is scheduled for December 2nd, but what would Schedule III really mean for the industry as it exists today? In this episode of the Ganjapreneur Podcast, host TG Branfalt sits down with Morgan Fox, Political Director for NORML, one of the nation’s leading cannabis advocacy organizations founded in 1970. Morgan brings over a decade of experience in cannabis policy reform to the conversation, discussing the Biden administration’s announcement on cannabis rescheduling and the real-world impact it may—or may not—have on the cannabis industry, consumers, and criminal justice.

Morgan also sheds light on the intricate political dynamics that influence cannabis policy at the federal level, from potential barriers in the rescheduling process to the ongoing battle for meaningful reform in Congress. Whether you’re interested in cannabis law, industry tax issues, or the future of cannabis legalization, this episode offers deep insights into the current state and future possibilities of cannabis policy in the United States.

Find the episode wherever you listen to podcasts, or listen via the media player below! (Scroll down for the full transcript.)

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TG Branfalt:

Hey there, I’m your host, TG Branfalt, and this is the Ganjapreneur.com podcast where we try to bring you actionable information and normalized cannabis through the stories of entrepreneurs, activists, and industry stakeholders. Today I am joined by Morgan Fox. He is the political Director for NORML, which has advocated for cannabis policy reforms since 1970. How are we doing this afternoon, Morgan?

Morgan Fox:

Doing great. How about yourself?

TG Branfalt:

Cool, man. Cool. We are recording this interview’s on the heels of the Biden administration announcing that they would reschedule cannabis from a Schedule one drug to a Schedule three drug. But before we get into that, my man, I know you’ve been on the show before, but just remind people about your background and how long you’ve been at NORML and what your job entails.

Morgan Fox:

Sure. So I’ve been involved in a cannabis policy reform professionally since 2008. Started out at Marijuana Policy Project as an intern with basically just a backpack, a guitar to skateboard, rolling down to DC from Cleveland and was offered a full-time position shortly after that. Spent about 10 years at Marijuana Policy Project finishing up there as their director of communications before moving over to the National Cannabis Industry Association as their media relations director, and then spent a little under four years there before pivoting to NORML and working primarily in federal policy and lobbying. Although these days I wear a lot of different hats within the organization, but I really wanted to move more towards a consumer advocacy perspective and NORML was a perfect opportunity for do that. So really happy to be at this organization doing the work that’s been going on for more than 50 years now, as you said, a very momentous time.

TG Branfalt:

Yeah. So let’s talk about that a bit. There’s a lot of punditry going on, a lot of what will this do in your eyes as political director for NORML in NORML’s eyes? What will Federal do sort of broadly and for the cannabis industry at large?

Morgan Fox:

Before we get into that, I think it’s really important that we talk about the timing.

TG Branfalt:

All right.

Morgan Fox:

And because I think a lot of people might have the misconception that because of the Biden administration announcements and because of a lot of the rumors that have been swirling around on the internet, et cetera, that this is a done deal and it is not. DEA has final jurisdiction over this call unless Congress acts. Now, obviously, the administration can put pressure on federal agencies to enact the policy changes that it wants to see, but unfortunately, the Biden administration is not really in a position to do that with an election coming up with increasing partisan ranker going on within Congress and just generally in the United States, but also when we’re seeing pretty much daily hearings in Congress about weaponization of federal agencies for political purposes, the Biden administration really isn’t in a position to put too much pressure on the DEA to either expedite this ruling or to rule in any particular way despite all of the research that backs up this move, this is one of the problems with calling for complete descheduling. So when this process began with the formal announcement from the DEA and the Department of Justice that there was a notice of prose rulemaking, the White House office had 60 days to approve that and move it further down the process, they did that within a couple of days, which was not entirely unexpected, but still a really good sign that the administration supports this move and that is willing to throw its way behind it. Bureaucratically now we’re entering into the public comment period, which starts officially tomorrow, supposedly and will last

TG Branfalt:

May 21st. May 21st,

Morgan Fox:

Exactly. And will last approximately 60 days normally. And our allies are going to be trying to flood the comment section with information that the DEA really needs to make a decision on this because if you noticed, and the notice of proposed rulemaking was almost a hundred pages long and essentially laid out all of the reasons why they are going to ignore the information that HHS sent them, which a lot of people are saying is binding, but as soon as the public comment period begins is no longer binding, it has to be given significant deference. But that’s a very subjective term.

TG Branfalt:

Lemme just ask you real quick is how much of a difference would, I guess, as you put it, flooding this public comment? What kind of impact could that have?

Morgan Fox:

Well, I think it could have a significant impact because all this stuff goes on the record, and we’re going to be working with physicians, with patients, with average citizens, with advocacy groups to try to get the best information submitted during that public comment to make sure that people are seeing the real science and also seeing the real impacts that rescheduling could have or that rather not that rescheduling could have, but that keeping cannabis in Schedule one will continue to have. But that’s a very important point, but that process only lasts 60 days, so that’s going to be starting on May 21st. Supposedly there might be a delay of a couple of days, but it seems like the process is moving already after that 60 days. There is an administrative review process, so for the first 30 days of the comment, people can request hearings. I am fairly certain that those hearings will be granted because DEA wants more opportunity to show why it disagrees with the recommendations based on scientific information to not reschedule cannabis.

TG Branfalt:

And DA thinks that they have that scientific information,

Morgan Fox:

They think they do, and they want every opportunity to show it. And because they are the sole arbiters of the administrative judicial review, they can make that last as long as they want in previous attempts. And NORML has been involved in rescheduling petitions since basically 1972, and this period has always lasted much longer than we thought it would. We’re talking years. So the DEA has the ability to make this period after the public comment last for as long as they want, and then after that, there’s an initial period of rulemaking and debate, and then once they make a final recommendation, there’s 30 days until it becomes law, at which point it is then able to be challenged through litigation before it really becomes a law. So we’re talking about a process that despite the fact that the Biden administration fast tracked its portion of it could potentially last years. So I just wanted to temper everyone’s expectations that this is something that’s going to happen immediately because it’s a long drawn out process that everybody that wants to see these changes happen is going to have to be involved in some fashion.

TG Branfalt:

I mean, but with your explanation, it doesn’t sound exactly like the monumental decision that the administration sort of pegged it as I

Morgan Fox:

Well, symbolically, I think it’s very, very important. This is the first time that any administration or HHS has said that cannabis does not belong in Schedule one, which we all know is the case. And it’s definitely the first time that the administration has fast tracked its portion of the review process after the notice of proposed rulemaking has happened. I think that solidly shows that the Biden administration is behind this change, but again, it’s going to take a while. So I think that we have to temper our expectations in that regard, but also we really need to think about what sort of practical changes a switch to Schedule three would actually have on both the industry as well as consumers and criminal justice.

TG Branfalt:

I do want to get to that, but let’s go back a little bit here. In layman’s terms, what would federal rescheduling actually do?

Morgan Fox:

Really the most notable change is that it would resolve, at least in theory, resolve the two 80 E tax issue for licensed cannabis businesses under the current two 80 E tax code. Legal cannabis businesses cannot deduct a lot of the same normal business expenses that any other industry can, resulting in an effective federal tax rate of sometimes up to like 70 or 80% if not more, in addition to all of the state taxes and local taxes and regulatory compliance costs that they have to deal with. Two 80 E is a big reason that most cannabis businesses are operating in the red right now and will continue to do so. It’s not the be all end all solution to their financial problems by any stretch of the imagination, but it does take a significant amount of heat off that. I think most importantly though, it’s to talk about what it doesn’t do, which is it does not harmonize state and federal cannabis law.

It does not all of a sudden make cannabis legal medically because in order to be in compliance with Schedule three, cannabis would have to be approved by the FDA. This is a process that could take 10. Well, first of all, it’s a process that the DEA or the F FDA A is not set up to handle. Cannabis is relatively unique and there’s no history within the FDA of approving a substance that has adult use purposes. It has medical purposes. It comes in many different forms. It’s a botanical substance, so it’s notable in any sort of a consistent manner. Basically, the FDA is not set up to deal with things like cannabis as it currently exists. It is definitely set up to deal with cannabinoid drugs that have been developed pharmaceutically such as Dronabinol, Marinol, ros, Epidiolex, et cetera. But in order to get those sort of specific cannabinoid pharmaceutical products approved takes tens to hundreds of millions of dollars and many years of approval process.

So it’s pretty clear that cannabis is not going to be approved as a plant medicine or just as a recreational plant or as a plant in and of itself by the FDA under its current structure, there is a lot of talk at the FDA to create a specific lane for cannabis or for specific cannabinoid products that would really encompass all of its different uses and all of its different formulations, but that has not really come to fruition yet. There’s congressional legislation that is looking at that, and I think folks at the FDA are also looking at that. But all that is to say that in order for even medical programs at the state level to be in compliance would, first of all, cannabis would have to be approved by the FDA, which is not going to happen under the current structure. And then if it was then all existing state systems regarding medical or even adult use would have to be completely broken down and start from scratch because cannabis would have to be sold in pharmacies instead of dispensaries.

It would have to be by prescription only. This is what Schedule three means for drugs from a consumer perspective, I think it’s also important to point out that Schedule three doesn’t really remove any significant barriers to research, which I know a lot of people have been talking about. It doesn’t do anything for the criminal justice aspect of cannabis at the federal level in terms of people continuing to get arrested or in terms of either pardons, expungements, clemency, sentencing, relief of any sort. And also there are a number of federal policies in place regarding employment suitability, security clearances, et cetera, that are specific to cannabis and are not related to the schedule whatsoever. That would also have to change. So a simple schedule change is really, I think, only going to impact the two 80 e tax code in any sort of a practical impact in the near term should it be approved, which is not a guarantee. And also that the time in which it would get approved is not a guarantee either.

TG Branfalt:

So I do want to ask you about the timing. Let’s say that this went beyond the whole process went beyond the election, and let’s say that Donald Trump, the Republican presumptive nominee were to be elected could with a sort of swipe of his pen, could he just say, no, we’re not doing this.

Morgan Fox:

I mean, he could certainly direct federal agencies to deprioritize it and in a different political environment might have a whole lot more power over exactly what they do. In particular, threatening to terminate the heads of agencies and organizations within the federal government. If they don’t comply, then the Biden administration currently has. So yes, I think it could get shut down or slowed down significantly. I think in that particular scenario, it really depends on whether or not a presumptive president Trump recognizes the political usability of allowing the process to go forward.

TG Branfalt:

Forward. And so you did mention that medical cannabis program, state cannabis programs would have to be broken down and start from scratch. Do you think that this is something that we really aren’t talking about? Because it is one of those things where when this was announced and I started talking to my friends who own shops and that sort of thing, and they said, oh, we’ll be able to two 80 E, and they talked about that, but I said, listen man, this could put you out of business effectively because of how schedule three, what’s under schedule three? Is that something that we are not talking about enough?

Morgan Fox:

I think we only have to worry about that if the federal government in particular DOJ and FDA decide that they want to really start enforcing it. DOJ has a current policy now of non-enforcement for people that are in compliance with state medical cannabis laws. That’s actually adjudicated by Congress in a recurring appropriations bill that actually prevents the Department of Justice from spending any money to go after people that are in compliance with state medical laws. And we’re in the process of trying to expand that to adult use programs. But aside from the medical part for adult use, DOJs policy has been since the Cole Memo and even after the recession of the Cole Memo from acting or then Attorney General Jeff Sessions to withdraw the Cole Memo, federal prosecutors have behaved relatively the same as under the Cole Memo, but there’s just a little bit less of an organization wide enforcement on that that could change if there is a change in administration and a change of Attorney General as we saw during the first Trump administration. But the bottom line is that unless there’s a huge uptick in enforcement from DOJ and FDA that states are going to continue doing what they have been doing, which is operating in violation of federal law.

TG Branfalt:

So regardless of this rescheduling proposition, the situation for cannabis businesses is still going to be precarious. Is that correct?

Morgan Fox:

I mean, as precarious as it always has been, it’s still in violation of federal law. There are going to be a number of factors that come into play regarding exactly how precarious it becomes over the coming months and over the next couple of years. But really it does not change things on the ground outside of the tax issue.

TG Branfalt:

And were you and NORML as an organization surprised at this action?

Morgan Fox:

I was surprised at how quickly the wheels of bureaucracy moved within the White House to approve it, that this is a major issue for the Biden administration and in particular vice President Kamala Harris, probably a little bit less so to the president himself, but it’s also an issue that the administration as a whole is really trying to make a standout issue to help attract younger voters. So I mean, I think that aside from the rescheduling conversation, it’s really important for us to continue putting pressure on the administration to do the things that it can do unilaterally, which is expand the scope of the pardons that it has already issued, start making stronger public statements about the need for descheduling and about the need for Congress to start enacting expungement provisions and things of that nature. But as I said, politically, it’s going to be very difficult for the administration to pull any levers in terms of the actual administrative process of schedule review after this point. The fact that they did so quickly I think is a really good sign that they’re in our camp and that they want to try to move this process along as quickly as possible, but now it’s not really in their hands anymore.

TG Branfalt:

And let me ask you about the impact, the overall impact of the, pardon that the pardons that President Joe Biden has given to federal cannabis people convicted of federal cannabis crimes. How much of a sort of was that revolutionary? I mean, how much of an impact did that really have because there’s not a whole lot of federal cannabis convictions for possession?

Morgan Fox:

Well, the estimates about how many individuals were impacted varies because in order to actually get the certificate, you had to individually apply. But all those pardons are in effect. It’s just that they might not necessarily impact somebody’s ability to get a job or to get housing or education unless they have the certificate and they have to go and try to get the certificate themselves. And so I think that additional promotion of the fact that a lot of folks that have these charges is really incumbent on the White House to do, and they’ve been doing a pretty good job of talking of this move and the president went so far as to then extend it a little over a year over or after the initial announcement in order to bring more people under the auspices of the pardon. But the pardon announcements have a very set date.

So anybody that gets arrested after the issue of events of the pardon is not eligible yet. We’re hoping to get expansion on that. But also it’s important to note that a pardon is not an expungement. So your arrest record at the federal level for a low level offense that may have been pardoned by the president is still going to show up in a background check. And you need to have that certificate there to show that it has been pardoned. And even then, it’s not an expungement, but we are talking about thousands of people that are eligible for this and that have been pardoned. Only a few hundred of ’em actually know about it yet and have gotten the certificates.

TG Branfalt:

So you’ve been in DC working on cannabis policy for the better part of a decade. Is this the most weed friendly administration during your time in Washington?

Morgan Fox:

Hands down.

TG Branfalt:

Hands down,

Morgan Fox:

Hands down.

TG Branfalt:

Is that a surprise?

Morgan Fox:

Do President has done more for cannabis policy reform than Joe Biden. Now there’s a lot more that he could do. There’s a lot more that he should do. But in terms of friendly administrations, this is really like a night and day change. During the Trump administration, we saw a few limited public statements and we saw a little bit of movement on criminal justice reform like the First Step Act, but a lot of it was really not focused on cannabis outside of a few pardons and clemency actions specifically directed towards some people that really, really, really deserved it. Folks like Walton Angelos and Alice Johnson. But in terms of mass actions, not really. And the first person that he put in charge of the DOJ was an avowed anti-cannabis drug warrior in Jeff Sessions. Admittedly, he fired him pretty shortly after he rescinded the Cole Memo and he put in somebody that for all of his potential faults and for all of his disagreements with the Trump administration, had made several statements that cannabis enforcement in legal states was not going to be a priority, which I think is a huge step in the right direction.

But yeah, if we’re really breaking it down, even if you go back to Obama, I mean during the first years of the Obama administration, we were still seeing massive raids in California of medical cannabis providers, violent SWAT raids. We never saw any public statements from the Obama administration that cannabis should be legal or that nobody should be put in jail for cannabis. I would like to see the Biden administration now that it’s admitted that nobody should be in jail for cannabis to extend that to nobody should be arrested for cannabis. But that being said, despite the fact that there’s a lot of things that the Biden administration can do in the next couple of months, and if it happens to win reelection for the next four years to improve upon its record, still more than any sitting president has ever done for this issue.

TG Branfalt:

And I want to talk to you about one of the bills in Congress that would legalize cannabis federally, the more act, again, you’re in Washington, you’re there in the sort of dirt of the Capitol. What are the odds that the more act could pass both chambers?

Morgan Fox:

Very good, but not in this current Congress. As I’m sure everybody listening knows, Congress is pretty dysfunctional at this point.

The idea of being able to pass comprehensive descheduling and regulatory legislation is slim to none. We might have some opportunities to be able to pass more incremental legislation like Safe Banking or Bills Protecting Second Amendment rights for lawful cannabis consumers or bills, protecting housing rights for lawful cannabis consumers, legislation that could potentially provide federal funding to states and localities that want to help expedite the expungement process at the local level. Because obviously most arrests happen at the state level. They don’t happen at the federal level. So providing resources to help expedite and move that process along are absolutely necessary, especially since a small amount of dollars go really, really far once you get the system automated. But in terms of passing standalone descheduling legislation, it’s just not going to happen in the current Congress. However, we do have an opportunity to try to get as many co-sponsors as possible on both the Moore Act and on the Senate side, the Cannabis Administration Opportunity Act, so that we can roll into the a hundred 19th Congress with a broader base of support and with enough support that we can actually get these bills introduced very early in the session and start fast tracking them.

TG Branfalt:

And you had mentioned the sort of incremental steps that we could take. In my sort of estimation, I believe that it’s going to be another 50 years before we get full federal legalization in Descheduling, and I think that we will get the maybe incremental steps like you mentioned. Is that me just being grim or what do advocates think about that?

Morgan Fox:

I think we’re on a much shorter timeline than that for Descheduling either administratively or through Congress. But I do think that it’s going to have to come through Congress, but I don’t think it’s going to take another 50 years. I am loathed to estimate exactly how long it could take because unfortunately cannabis is subject to a lot of political realities that are completely unrelated to cannabis that either lower its priority on the consideration scale or that cause people that might be supportive of cannabis policy reform to use it as a cudgel against people across the aisle or to try to attack their political rivals. And we saw a perfect example of this last year where a relatively innocuous veterans related study bill was passed in the Center of Veterans Committee. And then when that bill along with a bunch of other non-cannabis related veterans bills were brought up for a cloture vote to try to skip the whole process and just bring them to a vote. People that were on the Veterans Affairs Committee that voted in favor of that measure and others that were in the package voted no on bringing it to a cloture. And Senator John Corny from Texas was on record as saying that the reason for that was because they did not want to give Senator Tester from Montana who is a Democrat, a win when he was leading up to an election year. So unfortunately, cannabis is often the victim of things that are far beyond our control.

TG Branfalt:

And you had mentioned the Safe Banking Act, which the sort of short version is would allow cannabis companies access to traditional financial services. That legislation has passed the house, and I may correct me if I’m wrong here, six times, 7, 7, 7 times. Anyway, what is stopping it in Congress is it’s still just this politics sort of issue as you just alluded to.

Morgan Fox:

There’s a little bit of that, but also because in order for this to become law, I mean I think that if it were to come up for a vote in the Senate, it would probably pass, but there’s no solid pathway for it in the house right now because standalone legislation regarding cannabis or really related to anything other than appropriations is having a really hard time getting through the house just in terms of getting space on the schedule. As we get closer to the election, that time that’s available is going to be less and less. And also the focus on issues that are not purely political is going to be less and less.

TG Branfalt:

And even with, do you think that the odds are better? Were Democrats to have control of both chambers or because if they had a slim majority like the Republicans do now in the house, they maybe end up in the same sort of position where they’re again trying to, as you said, get standalone legislation through and they’re just not able to do it?

Morgan Fox:

Well, I mean the facts are on the table. We know that we have less co-sponsors in the GOP for any cannabis related bills than we do in the Democratic Party, with the exception of the Second Amendment bills, which me as a nonpartisan guy, but also as a Second Amendment fan are very much in favor of, because I don’t think that you should be treating people differently because they’re cannabis consumers, especially if they’re not medical patients. But by and large, there’s less support in Congress among the GOP than there are among Democrats. But even Democrats have been guilty of deprioritizing this issue when anything else that they feel is more important either politically or policy wise comes up. I think democratic control, both chambers would probably speed things along. But I’m curious about exactly how much I think that getting standalone legislation passed in any GOP controlled chambers in the next Congress is going to be difficult but not impossible, largely because I think that people are much more coming around to the idea that not only are these sensible policies, but also that they’re increasingly popular among their base regardless of political affiliation or political leanings.

For the last couple of years now, we’ve seen that a majority of Republicans support ending cannabis prohibition, and those numbers are climbing, especially among young voters. I think that if you’re looking at retaining power in either chamber or of the presidency, you really have to look to young voters because they’re the ones that turn out during presidential elections, which they will be doing in November. So changing, I’ll basically break it down like this. I think people that are opposed to cannabis policy prohibition or are trying to obstruct its path through Congress are going to increasingly see negative potentialities come true because of those decisions that are going to affect their ability to get reelected.

TG Branfalt:

So let me sort of switch gears a little bit here, but would the election of Trump change NORML’s game plan in 2025? And if so, how?

Morgan Fox:

Well, I mean there’s not a ton that we can do administratively, but politically I think it does kind of change the game plan a little bit and it would require us to put a lot more emphasis on the administration just because Republicans in Congress would largely be following Trump’s lead. That being said, I think that obviously this is not going to be a priority administratively for the Trump administration. So we have been traditionally focusing on Congress and taking the administrative changes as welcome changes and putting pressure on the administration to do what it can as we have with every administration before the Biden administration. So I think that that portion of it would probably stay the same. What it really means is a potential change in the nuances of how we go about trying to push this in Congress and trying to elevate this issue to a priority one and one that from our organizational perspective, protects consumers and public safety as its foremost.

TG Branfalt:

And just lemme ask you sort of personally, again, you’ve been in Washington for a long time working on these issues in different capacities. How has the anger politics or the way that the complete partisanship and sort of gridlock, how has that sort of changed your perception or your job in Washington in that role? It must have gotten harder.

Morgan Fox:

It has. It has because primarily legislators are not super interested in legislating, and that’s a problem when you’re trying to pass standalone legislation. But across the board, I think that a lot of folks are viewing this issue more through the lens of politics than they are through policy. And when it comes down to it, this is sound public policy, but we’re in a situation where a lot of people are acting reflexively on both sides of the aisle where if someone from party A says X and someone from party B says Y, then a lot of people just line up along those lines and don’t really think about what this actually is going to do for the American people.

TG Branfalt:

I mean, it is kind of wild too, to think that someone like Matt Gats conservative has tried to do a bit on cannabis policy, if you ask me anyway.

Morgan Fox:

Yeah, I mean there are a lot of folks, it’s a very, very big tent. People that want to see cannabis policy reform. A lot of it gets down to some of the nuances of it because unlike just a few years ago, lawmakers and their staff are much more informed about the nuances of cannabis policy and about its various effects on society and things like that. So they’re asking a lot harder questions, some of which we don’t have the research for, but we’re also seeing a lot less interest in moving these things unless they can be attached to some form of a political win for them. And if they can’t than the prioritization of that legislation starts to drop. We’re also seeing former bedfellows across the aisle. It’s probably a bad word to use for that, but former partners across the aisle sometimes getting into all sorts of issues with each other or potentially not pushing legislation that their major co-sponsors on or original sponsors on because of other political issues. I can think of a couple of examples right now, but there are some that even intraparty where if certain members that are considered problematic for basically either the establishment or that are burning bridges left and right are also on the bill, then there’s very much less likelihood that you’re going to get a whole bunch of sponsors from their party on that bill.

TG Branfalt:

And you mentioned that it’s that legalization or cannabis policy, I should say reforms are a big tent. What role, if any, do you think that sort of broad state laws, state law reforms have had on bringing people into that tent?

Morgan Fox:

They’ve definitely been useful, and I mean I think it’s really important that whether or not a federal lawmaker supports or opposes legalization, the simple fact of the matter is that once their state passes something, then it’s incumbent upon them to look out for the best interests of their state. In practice, that doesn’t always happen, but in theory that’s exactly what should happen and it does give us a little bit more of an in. So I mean as well as I do that states have always been leading the way on this, and we are getting close to, I mean, we’re already over 50% of the US population living in adult use states. Once we get to 50% of the states themselves having adult use, we might be in a slightly better position, but it’s certainly not guaranteed. I mean, a lot of people have been saying for the last 20 years that as soon as we get 25 states, then we’ll be able to flip this issue in Congress. And that’s just not the case. There are plenty of lawmakers that do not like legalization despite the fact that their state did it that are not only not necessarily going to vote for something that would help the cannabis consumers in their state or help support the laws within their state, but that also might not prioritize those issues.

TG Branfalt:

The insight on this is really great, and I really appreciate you being so forward with what you’re thinking on this. What is on or what legislation is on NORML’s agenda for next session? Regardless of the outcome of the election,

Morgan Fox:

All of it, every single piece of legislation that has been introduced in the hundred 18th, we want to see be reintroduced in the hundred 19th as soon as possible so that we can start having a substantive conversation about it in a new political paradigm. If one exists, I mean no matter what, it’s going to be a little bit different. So I want to see all those bills get reintroduced, but in particular, obviously the bigger descheduling bills as well as the incremental bills that we can maybe move a little bit more quickly while we’re talking about the larger issue of Descheduling at the federal level. Personally, I’m very invested in the housing legislation that was introduced by DC’s Delegate Holmes Norton and Senator Cory Booker. I’m very interested in the firearm and Second Amendment legislation. I’m very interested in the Veterans Access legislation and we’re seeing a lot of opportunities to be able to pass this legislation not just through the normal order as standalones, but also through appropriations, things like the Cure Act and improving suitability requirements for past cannabis users.

Obviously, we’d like to see that expanded to include current cannabis use in a rare moment of bipartisan support. We saw last September that a bill that was sponsored by Jamie Raskin and Nancy Mace the Cure Act, which as originally written, would have eliminated both past and current cannabis use from suitability for either federal employment or security clearances be cut down to just past use. But the trade off for that was that it passed through House Oversight Committee with flying colors in a hugely bipartisan vote. It was like 30 to 14 in a Republican controlled committee with a fairly staunch Republican Jim Comer as the head of that committee. So this is just an indication of what we can do through Compromise and bipartisan negotiations going forward. No matter who’s in charge, we can get a little farther down the road. Unfortunately, that Bill hasn’t moved since then, largely because the house has been tied up in all sorts of craziness. But we’re still seeing that Bill get additional. We’re still seeing Safe Banking get additional co-sponsors, and I think that if we can continue along this path of developing bipartisanship in the name of Sound public policy and avoid the politicization of cannabis, then we might be able to get a lot done in the next Congress and maybe a little bit done in this Congress.

TG Branfalt:

Morgan Foxman, I really appreciate you coming on the show as you are a wealth of knowledge and information. Morgan Fox is the political director of NORML, which has advocated for cannabis positive reforms since 1970. Where can people find out more about NORML and maybe get in touch with you?

Morgan Fox:

Well, you can go to NORML.org if you want to learn more about the issue or the organization. Feel free to send me an email at morgan@norml.org if you have any questions or just want to discuss the issues at hand. But I highly recommend people go to normal.org/act so that they can contact both their federal and state legislatures in support of sensible cannabis policy reform.

TG Branfalt:

Morgan, thank you so much for coming on the show. I appreciate you, appreciate all the work that you do in DC so people like me don’t have to go there.

Morgan Fox:

It is rough and super hot right now, but always happy to help out and anytime I can ever be of assistance, please lemme know.

TG Branfalt:

Appreciate you, man. You can find more episodes of the Ganjapreneur podcast and the podcast section at Ganjapreneur.com and wherever you get your podcasts. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily along the transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Wayward Sound Studio. I’ve been your host, TG Branfalt.

 

In this episode of the Ganjapreneur Podcast, host TG Branfalt sits down with Jessica McElfresh, Chair of the Cannabis Law Institute and board member of the International Cannabis Bar Association, to explore the evolving landscape of cannabis law. Jessica shares her experiences practicing cannabis regulatory law in Southern California since 2010 and provides insights into the critical role attorneys play as the industry grows and federal rescheduling looms on the horizon.

Jessica also discusses the Cannabis Law Institute conference, which took place in Chicago over the summer, where legal experts tackled pressing issues like state and federal cannabis policies, social equity, and the potential impact of rescheduling on taxes, financing, and business operations. Whether you’re a legal professional or cannabis entrepreneur, this episode offers valuable perspectives on how to navigate the complex legal landscape of the cannabis industry and what could be in store as federal policy changes.

Editor’s note: this episode was recorded in June, before the event. To sign up for updates about the 2025 event, visit the International Cannabis Bar Association’s website: incba.org

Listen to the episode using the media player below, find it on your favorite podcast app, or scroll down for the full transcript!

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TG Branfalt:

Hey there, I’m your host, TG Branfalt, and this is the Ganjapreneur.com podcast where we try to bring you actionable information and normalized cannabis through the stories of ganjapreneurs, activists and industry stakeholders. Today I’m joined by Jessica McElfresh. She’s the chair of the Cannabis Law Institute board member of the International Cannabis Bar Association, whose conference is considered the preeminent annual conference for cannabis law practitioners and takes place next month on July 25th and 26th. How are you doing this afternoon, Jessica?

Jessica McElfresh:

Oh, I’m doing all right, Tim. Thanks for having me. Yeah, we’re very excited about our conference. It’s going to be on those dates you said in July, and it’s going to be at Northwestern Pritzker School of Law in Chicago, Illinois, kind of near the lake, so that’ll be exciting.

TG Branfalt:

Chicago’s a cool city.

Jessica McElfresh:

Yeah, we’re looking forward to it. Yeah, it’ll be our first time in Chicago.

TG Branfalt:

We will talk some more about that. Before we get to the sort of details of the conference, purpose of the conference, that sort of thing, tell me about yourself. How’d you end up sort of in the cannabis law space?

Jessica McElfresh:

Oh, wow. Well, I have been practicing what I would call now cannabis regulatory law in Southern California, primarily San Diego County since roughly 2010. So we are somehow heading up on nearly 15 years, which is kind of crazy in terms of why, well, it was there. I had graduated during the great Recession and I had always thought the cannabis should be legal, and I just increasingly thought the whole broader drug war and drug policy in this country was a farce, and I thought it would be an interesting thing to work on. So that’s the really short version.

TG Branfalt:

So did you work in the sort of early California medical cannabis sort of industry

Jessica McElfresh:

Mass? Yes, I did.

TG Branfalt:

And what did you do that during that period of time?

Jessica McElfresh:

Well, let’s see. I’d say 2010 was a really interesting time to get into it, especially when you look back now, because back in 2010, there was this sense in California that an appellate court was going to rule that cities and counties had to permit medical cannabis collectives to have storefronts in some form exactly how that would work. We weren’t quite sure. That turned out to not come true, but that was interesting to me. One, because I felt that the way the laws worked, which were an exception to criminal laws, which is just not a great way to regulate an industry, was a mess, really hurt a lot of people. It didn’t protect as many people as we had hoped. I also had a bit of a background in land use and permitting, and I could sort of see, because just how we do things in Southern California, sort of where that was going to be going.

And I thought, well, this is an interesting way to work on something that’s of interest to me that I think may have a positive influence on people, and had some combination of areas of law I had some experience or familiarity with. So that was why I was attractive and what I worked on. As I said, that sort of turned into helping people try to operate their collectives of various shapes and sizes, lawfully watching laws. It was changing. I lived through the federal reversal and policy in 2011, which was something else, and eventually we started to come out the other side and the city of San Diego around 20 14, 20 15. We finally got zoning regulations passed. I represented some of the very first permitted storefronts in the city of San Diego, which were medical marijuana consumer cooperatives at that time, and eventually we got two state licensing, and it’s just sort of proceeded from there. That’s the nice version.

TG Branfalt:

So it seems to me, and a lot of the attorneys that I’ve spoken to, they have experience and expertise in various parts of the law that they then apply to the cannabis industry. Is that what you’ve seen during your tenure?

Jessica McElfresh:

Yes and no. I’m of the school, or let me put it this way, I’d say that was honestly even true of what I was doing back at the time. I had familiarity with land use permitting, and I had familiarity with criminal defense. It was an odd moment in time where knowing both those things were very useful simultaneously. So it was interesting, and of course, every lawyer learns on the job in the moment with every client assuming they’re doing their job right. But yes, I’d say that’s true. I would also say it’s my advice always has been when say law students have reached out, oh, I really want to be a canvas lawyer. It’s like, well, that can mean a lot of things and that’s great, but what you’re really saying to me is you want to have an area of law or something that you have an in or you’ve worked in that then you want to bring a cannabis aspect to your practice, and that might become your entire practice. It may become a portion of it. It’s good either way. But yeah, that’s somewhat my standard advice. I’d say back when I started, it was a little more, there were only so many of us who were working in the space or willing to even talk to the clients. So it was a little different back then. It was more predicated on a willingness, but I always felt that to be successful in it, yes, you needed to bring something other than simply a willingness to work in the area.

TG Branfalt:

So it does bring me to my next question. It’s going to be the same question that law students have asked you. What is a cannabis attorney and how has that role changed in the wake of broad legalization in the United States?

Jessica McElfresh:

Well, the good news is that it’s changed in a way where there’s a lot more lawyers working in it, and there’s a lot more opportunity for lawyers and clients have a much greater need for a much wider variety of legal services. For example, back when I started, there really were only so many ways you could possibly set yourself up or set your collective up legally in terms of formation. Now how you operated it and how that worked was a bit of a game of whack-a-mole and hard to define. But as one colleague said to me recently, who’d been in it back then, like, well, it was simple. You basically had about two entity structures that you could choose from. That was it, and a lot of it didn’t go beyond that. Obviously today, there’s significantly greater need for more expertise in how you’re going to structure a business, how you’re going to do funding.

We’re getting more and more into what is and is not a securities issue. That’s just a basic example of something that’s changed, but we’ve also experienced a huge explosion and in work for intellectual property attorneys. We deal far more now with day-to-Day employment attorneys, assisting clients. I mean, there’s just so many examples, but I’d still say my advice to law students hasn’t changed that much. It’s not. It can a general practice to help clients with their various needs and help them at times also get connected with appropriate experts in law. But honestly, the best thing you can do for yourself and for your clients is to be able to offer them some area of law that you have some expertise or experience or want to develop some expertise or experience in and bring cannabis into your practice accordingly. But to be candid, other than wills and trusts, I think we’ve found an application for nearly everything at this point.

TG Branfalt:

So what is featured at the Cannabis Law Institute conference?

Jessica McElfresh:

Well, it’s going to be a two day event on our first day. It’s what we call our plenary day, which is a fancy of saying the sessions tend to be all in one room, and we have some of our more interesting guests that day, such as say, some state regulators or former state regulators are going to be talking about enforcement approaches, and when I say enforcement, I mean when and if it is appropriate to use more punitive measures. How are they effective? Do they work at all? Some of those sorts of questions. We’re also going to have an overview of the current international development and how possibly us and Canadian companies can expand overseas and what that looks like in terms of how does it work, and also how some international countries are dealing with some issues that we may wind up dealing with here in the next several years, such as import export issues such as that.

We’re also going to have a panel about meeting the cannabis press where we’re going to have various journalists who work on cannabis stories, talking about what is significant to them, and also offering our attendees some information about useful ways to possibly get featured or quoted or what’s of use to them. On day two. That is going to be an all continuing legal education credit for attorneys day. We run a grand total of 12 sessions through that day. We have two tracks running simultaneously in the morning, we’re going to have a track I’m calling the classics, which is going to focus on the current state of medical cannabis access and how some of those laws are changing, particularly in light of rescheduling some of our new laws regarding employment discrimination, which I jokingly refer to as employment protections for normal people, meaning people in normal garden variety, mainstream jobs as opposed to not employment issues within cannabis industry, but normal people, I jokingly refer to ’em.

We’re also going to have a panel in that morning talking about what is going to happen post rescheduling, what’s going to be changing at the federal level, how may investment opportunities be changing the fate of the dormant commerce clause in terms of influencing cannabis policy and licensing and what that may look like. And then in the afternoon, we’re going to have a panel. We’re going to have two tracks again, one is going to sort of be focused on state and local expansion. We’re going to be talking about D eight and D nine cannabinoid litigation. We’re going to have a panel that’s going to talk about possible visions for states that may be coming online and what maybe they want to do differently or learn from, well-intentioned, but less successful experiments we’ve had recently in some states. And then we’re going to have a panel two focusing on issues for attorneys. We’re going to have one on the Corporate Transparency Act and how that’s going to affect people’s practices as well as how to counsel their cannabis clients within it. We’re going to have one on the ethics of attorneys trying to offer services beyond being an attorney, say consultant or real estate broker. It could include your dry cleaner, but that one just doesn’t seem to pose any ethical issues.

That’s just some of the sessions. There’s a few others, but those were some ones I wanted to highlight.

TG Branfalt:

I mean, it sounds incredibly in depth, intense.

Jessica McElfresh:

You can say wonky. It’s okay.

TG Branfalt:

How many people are you expecting to come to this event?

Jessica McElfresh:

Well, it varies, but we are hoping to get, I’d say at least a hundred, maybe more. There must be something very wrong with me wanting to hang out for two days with a hundred lawyers, but I’ll be honest, it’s always one of the highlights of my year professionally. It’s a lot of fun.

TG Branfalt:

So you brought up the elephant in the legal room, federal cannabis rescheduling, which still as we speak hasn’t been fully finalized, but how are attorneys, yourself and those that you’ve spoken to broadly viewing potential federal reforms?

Jessica McElfresh:

I would say that the range of reactions among attorneys pretty much matches the range of reactions in the broader cannabis space. Some people think it’s going to be the greatest thing since sliced bread or the invention of the plant itself. Others think this is going to be never ending gloom and doom and nothing will ever be good again. Some think that we will be taken over by large pharmaceutical companies within two minutes. Others feel it will stop any further social justice momentum and further change. And then there are people in the middle who think, and this probably includes me, that it’s significant and overall in my family, you don’t really look at gift forces in the mouth, but it’s really more about what happens after this and where we go fit from here, and for example, not letting it stop movement for more social justice change, not necessarily getting caught up in losing what momentum we are having.

How do we, for example, use this to make the world better for medical cannabis patients as opposed to having it more, maybe even limit their access in some states and limiting them to simply eventual products that may come on the market that are actual schedule three? To me, it’s more about what do we do with it then? It’s not a cure all by itself. In fact, initially it was sort of interesting to list of people all the things that it was not going to automatically do all by itself. That made me real popular for a few weeks because a lot of people wanted to celebrate. I’m like, no, it’s not going to change all of our federal criminal laws. No, it does not necessarily mean your insurance is going to reimburse you for your medical canvas. No, it doesn’t necessarily mean banks are going to start giving you regular loans. Like, no, I’m sorry. It doesn’t automatically mean these things, but look, let’s not, let’s not throw too much cold water on the most significant change in federal cannabis policy since, oh, I don’t know. It was put in schedule one in the first place. A lot of things happened after that, some of which were envisioned when it happened. Some say it was only supposed to be a placeholder and it just went south. Maybe we need to look at this the same way. It’s about what we do with it and where we take it next.

TG Branfalt:

So do you think of all of the sort of things that federal scheduling could impact, do you think it’s going to have the biggest impact on financing on mergers and acquisitions on two 80 e on social equity?

Jessica McElfresh:

Well, this is speculation, but if I were inclined to rank, probably the biggest change is going to be on two a DE. It does appear, though I always am the biggest, the devil’s in the details person. It does appear that two 80 E only applies to drug trafficking of a substance that is schedule one or Schedule two. If conceivably this moves to schedule three, though we do not know at this point exactly how long rulemaking will take at the federal level, which I usually describe rulemaking because we experience it at the state level as well, is you have an idea. Then the government spends a lot of time figuring out what the rules are going to be. It’s very creatively named Tim, but it takes time and there’s a lot of hearings and there’s a lot of opinions. So we got to get through that, and I know that there is some optimism including by the Biden administration that they will get this done before the election. I would be very pleasantly surprised if that occurred. But I do agree they’re going to make a good faith effort at getting the ball rolling and moving quickly, and that’s excellent. We certainly wouldn’t want this to be announced and then just sit there like some dying house plan on my desk.

But that is going to take us some time, and in the meantime, hopefully, yes, the biggest change probably initially will be two 80 E. With that not being applied anymore, what I don’t know is whether we’re going to wind up, and don’t get me wrong, I mean that would be massive. I mean, if you really want to blow somebody’s mind at a cocktail party who doesn’t know much about cannabis, even people who, it’s really a fascinating thing to talk about because even people who don’t like cannabis, it turns out that they dislike double and triple taxation even more. Sure do. And a lot of consumers don’t like finding out how much of the price they pay at the retail outlet is ultimately in taxes. It’s an interesting thing to talk to the general public about those normal people, but obviously that is going to be a huge change in how much capital businesses have.

It’s going to simplify how their taxes work. It’s going to put them in line to really conduct their tax policy more like normal companies, for lack of a better term, companies that do not deal with this. So the potential to free up a lot of capital and enjoy a normal sense of deductions to not run around. I mean, at times trying to ask, it’s been clarified, but in the early days, trying to figure out what was the cost of good sold expense versus an overhead one. There was a real how many angels can dance on the head of a pin side, except for there was a lot of money involved. So this could be absolutely tremendous financially by itself. As a result of that, yes, a lot of people are expecting we’re going to see a return to investment in cannabis. I’ll be honest, that was kind of already occurring. It was so high for a few years then it went way down, but it was starting to come back on. But this definitely has the potential to turbocharge it. It’s not a directly associated result. It’s not an automatic cause and effect, but it’s probably also going to make banks more comfortable. It’s probably going to make a variety of private lenders and investors feel more comfortable, which hopefully as there’s more opportunity and more competition, we will also stop seeing quite some of the absurd financial costs and conditions associated with it.

TG Branfalt:

Will it have any impact on the fine send rules

Jessica McElfresh:

On the what?

TG Branfalt:

The fine send rules that, oh, the

Jessica McElfresh:

Can send.

Again, this is the classic. It’s not going to happen automatically, but there’s a very good chance that those will also be reexamined and adjusted. But that’s kind of what I mean. This does not automatically make it totally legal for banks to say bank adult use cannabis companies under federal law. It doesn’t, but it may bring them far greater comfort in relying on the current fiend guidelines as something that they can put some stock in as opposed to solely focusing on that paragraph at the end that says, we may really mean this, but we really may not. It could change at any moment and proceed at your own risk, and we think we mean this, but we’re really not sure because we’re lawyers and we have to write these sorts of things and that’s why no one likes us.

TG Branfalt:

How are attorneys preparing prior to this sort of potential federal action? How are you preparing? What are you telling people?

Jessica McElfresh:

Probably a lot of what we’re talking about here, which is one, we’re going to have to see how long this takes and what it ultimately looks like in terms of a topic that’s probably spurring a lot of discussion for preparation would probably have to do with two 80 E. Some people, the great debate right now is, is this hypothetically going to be applied retroactively? I would be quite shocked if that occurred because one, we don’t usually tend to apply changes retroactively that involve giving back estimates range from hundreds of millions to billions of dollars.

TG Branfalt:

Yeah. Rest isn’t that

Jessica McElfresh:

Business. That’s not really the norm. That’s not a cannabis thing. That’s just not the norm. So I’m a little skeptical of that. However, there is I think a far more vibrant debate over whether say for example, it may be reasonable to start calculating and doing your tax return for 2014, or sorry, 2024, excuse me. Apparently I live in a time warp that way. We’re not sure yet, but people are definitely having that debate and it’s definitely made people feel very optimistic about the future and really enjoying a far more normal balance sheet and return. So I’d say that’s probably in terms of preparation, people are really debating when and how and at what time. You mentioned social equity.

I think we’re already, I don’t know that rescheduling is necessarily going to again, have a direct cause and effect on those questions, but we are already seeing a great deal of litigation in federal court based on the idea in one form or another that social equity programs are violating the dormant commerce clause. Sorts of other things. I would expect, again, it’s the classic, no direct, but it will happen. We’re probably going to start seeing people feeling more and more comfortable bringing various claims in federal court predicated on federal law to challenge programs within cannabis. So right now we’re seeing dormant commerce clause, which of course is going to apply not only to a social equity program, but even a residency preference program. There really are at core about that, but we could wind up seeing programs that challenge or alleged discrimination under other theories in federal court in the future. I would be surprised if we didn’t.

TG Branfalt:

So one of the things that I’ve heard from patients and sort of read on the internet on blogs and groups and this sort of thing, is the idea that federal rescheduling could decimate the medical cannabis program basically that states have enacted because schedule three drugs are only allowed to be dispensed by pharmacies. You have to have a license to do that. Is that a founded fear, do you think?

Jessica McElfresh:

Everyone really depends on who you ask. On one hand, it’s a reasonable enough question because yes, that could happen. There could be states that may have said, I’m tremendously sympathetic to people who have illnesses, but I really don’t see any anymore why we have to take on having a medical cannabis program in our state. There’s going to be schedule three drugs brought by reputable pharmaceutical companies and they can finally be sold in a pharmacy. The way I would’ve preferred we could have done cannabis except for everybody told me that wouldn’t work. We could hear those dialogues and discussions, yes, but at the same time, there are others who feel that the products the pharmaceutical companies have brought to market so far that have more been at to et cetera, Epidiolex being example, they haven’t really proven to be the blockbuster runaway successes that they were hoping.

So there’s some thought that this may not be the world’s most attractive business proposition and qualified patients will more enjoy access in other ways. I would point out that this is probably also something where we’ve already had feedback, for example in California from some qualified patients, that the current market serves adult use sales primarily. It’s not really doing enough for them, and I’m not saying that there isn’t some truth to some of those criticisms, but it’s also hard to say that there isn’t access to cannabis in a state that has an adult use program. It’s really more about how do we tweak that program and tweak our laws to continue to make what’s needed available for qualified patients. We can still do that in this post rescheduling world. It’s again, it’s the classic, what are we going to do with it? This can be good, but what are we going to do next?

There is also some hope that this will assist in loosening and promoting more research, which will probably be good for everybody. There’s also some hope that physicians will be a little more comfortable talking about this or dealing with this too, really to know if that’s the case. And we are going to have a panel. These are going to be some of the issues we’re going to talk about during the medical cannabis law panel at the conference. They’re going to be about physicians and questions of insurance coverage and drugs coming to market. I mean, we’re going to be talking about some of this then. So that’s kind of the initial take is it’s really going to be what do we do with it?

TG Branfalt:

So you did mention this sort of potential international implications of these federal reform in the United States, and recently we saw Canopy Growth, a Canadian based cannabis company, complete a merger or a takeover of acreage holdings in the us and a lot of people have sort of, again, I’ve read that this is even though federal scheduling in the US hasn’t happened yet, this is sort of a preparation for looser federal laws. Do you think that we’ll see more transactions like this if the government does reschedule it to three, these international sort of acquisitions?

Jessica McElfresh:

Possibly, possibly not. Three is not an automatic path to straight ahead import, export or anything that might be more business efficient. But again, I think it will certainly, again, it’s about what comes next. It’s a signal that we’re probably going to go in those directions. We don’t know when. We don’t know exactly how, but investors, particularly ones who think they can predict the future, which are all the ones I’ve ever met, they read the signals, the tea leaves, the crystal balls. This is a really big crystal ball, so to speak. It’s a big signal. What it’s going to mean, what that timeline’s going to look like, who knows? But it definitely means a lot, and that is part of why we are expecting a broader infusion of capital period, and also with two 80 E going away, these companies being profitable in a way where you can get a decent return instead of just hoping and thinking this will probably happen sooner rather than later will occur. So we’re going to have to see.

TG Branfalt:

So what are the most pressing challenges that you hear from clients, from cannabis business owners sort of broadly and looking at the sort of next stage of their business?

Jessica McElfresh:

Well, I’m going to be honest. Most of my clients day to day, they’re certainly aware of this. They’re certainly interested in it. They’re certainly above all, I think looking forward to the possibility of a simpler tax return. But most of their day-to-day concerns are more about operating their businesses now, which means how high are the current state and local taxes and when are those possibly going to go down? Am I overregulated and how am I going to pay for that? Or what’s something where maybe I would like the state to do a bit more to assist me and assist consumers or to create this what city or county is going to open up next? I think that there is this luxury enjoyed by some companies that are extremely large where they can spend the majority of their time talking about rescheduling. For most people who are, and then there are people who work there who handle the day to day. Most cannabis companies are handled by people who are still very connected to the day-to-Day, and so they care about this. They do, but they’re honestly just as focused on what, say I’m in California, what the California legislature’s going to do. I bet if you were to take a straw poll of potential licensees in New York, they’re more concerned about the next head of their regulatory agency and what that person may do and how that’s going to go.

It’s great stuff. It’s a day I’ve been waiting to see for a long time, but we still got to pay the mortgage day to day, so to speak. This is a great financial planning tool for my retirement, so to speak. It’s not going to get MasterCard off my butt today.

TG Branfalt:

So how can clients, business owners identify the best attorney to help them navigate opening a cannabis business or expanding their business or a merger and acquisition sort of path?

Jessica McElfresh:

Well, I think that overall, I’ve always tried to live my life for advice on this topic by the idea that not every lawyer is for every client, and to be totally honest, not every client is for every lawyer. Sometimes it’s about a personality fit or a way the two of you work. Some people prefer clients who are very hands off and they do everything for ’em. Other people prefer to more work with their clients day to day and tackle some of the issues together or have that understanding. I had say, my other main pieces of advice are try to talk to a variety of them. Far too many people just hire the first person they meet or the person that their friend is using without really looking for what is out there and who may be the best fit for them. The other idea that there is only one attorney who’s going to do everything for you, there is no other business in the world that approaches things that way. So the cannabis industry should be no exception. I usually have a bad joke, which is one of the happier days of my legal career was when I didn’t have to try to give people employment law advice anymore, but I’m really not joking.

It’s been a tremendous virtue for me and for clients to connect them with people who can help them with other specific needs. Another bad sign for hiring a lawyer is they tell you that all of your ideas are great and everything is achievable, and it’ll be done super quickly because of what that really tells you is they just want that retainer check and they’ll tell you anything to get it, and that’s not a good sign for your future.

TG Branfalt:

Jessica, this has been a really fascinating conversation. It’s the sort of thing I wish that I could attend the conference next month. Where can people find out more about you, your practice, about the conference?

Jessica McElfresh:

Well, if you want to find out about me, you can find out more@wwwmcelfreshlaw.com. Man, if I could do it over. I keep my difficult last name out of this, but I didn’t. So it’s going to be M like Mary, C like cat, E like elephant, L like lamb, F like Frank, R like Rick, E like elephant, S like Sally, H like hat law.com, and yes, I spelled my last name all day. If you want to learn more about the International Cams Bar Association, you can find more about us at our main website, which is going to be IN cba.org, and then you can also find more information about the conference there. It’s the Cannabis Law Institute of 2024. Again, it’s going to be July 25th through 26th this year, and we’re going to be at the Northwestern Pritzker School of Law in Chicago, Illinois, and you can learn all about us there.

We’ve got a variety of pricing programs going up to the event. Our current one’s going to end on June 14th, but there’s always more, and also, we always have a lot of really sweet deals about getting a membership. For example, if you join for not much more than the price of coming to the conference itself, and personally, I think you’d be a fool not to take advantage of that because we have other events. We also always do a day of attorney programming and a nice party in the evening at MJ Biz Con. We’re planning to be back there again in early December at Associations Day in December. We have an entire catalog of CLEs social events throughout the year, an enormously useful listserv, a member directory. There’s just, oh, so much fun and there’s so many great opportunities to get involved and do work too. So if you like to do work and you want to meet more cannabis attorneys, it’s the best place to be.

TG Branfalt:

Jessica, I really, really appreciate you coming on the show, talking through the conference with me, running me through the paces, if you will, on rescheduling. Thank you so, so much for taking the time to be on the show today.

Jessica McElfresh:

Totally. Thanks for having me.

TG Branfalt:

That is Jessica McElfresh. She’s the chair Cannabis Law Institute and a board member of the International Cannabis Bar Association. You can find more episodes of the Ganjapreneur.com podcast and the podcast section of Ganjapreneur.com and wherever you get your podcast. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily along at transcripts of this podcast. You can also download the Ganjapreneur.com app and iTunes and Google Play. This episode was engineered by Wayward Sound Studio. I’ve been your host, TG Branfalt.

 

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TG Branfalt:

Hey there, I’m your host, TG Branfalt. This is the Ganjapreneur.com podcast, where we try to bring you actionable information and normalize cannabis through the stories of entrepreneurs, activists, and industry stakeholders. Today I am delighted to be joined by LJ Dawson. She’s the editor in chief of the Washington DC based cannabis news outlet, The Outlaw Report, which focuses on cannabis news and policy in the DC, Virginia, and Maryland region. How are we doing this morning, LJ?

LJ Dawson:

I’m good, TG. Thanks so much for having me on today.

TG Branfalt:

We have a lot to talk about. There’s a lot of recent happenings in the area that you cover, but before we get to that, tell me about yourself and how you ended up editor at the Outlaw Report.

LJ Dawson:

Well, I always joke I’m the least weed smoking cannabis reporter ever. I actually have a background in criminal justice reporting. I had my own criminal justice news outlet. I’ve freelanced reporting on the justice space and protests actually across the country. And I landed in DC right before January 6th, so it was a fun time to show up. I actually came here first in 2019 and did some political reporting. But yeah, I was here in DC and I reported on cannabis in Montana and Colorado a little bit. I’m originally from Colorado. We legalized weed when I was still in high school, if that gives you a little age. Dated myself a little bit there. But yeah, I reported on cannabis. I was always interested in the industry, and then the Outlaw Report reached out to me while I was still freelancing and trying to survive as all of us journalists are in this economy, which is not kind to anyone, especially not US reporters. And so I ended up at the Outlaw Report almost a year and a half ago, and it’s been a really exciting journey since then.

TG Branfalt:

So if you’re not the cannabis reporter smokes the least amount of cannabis, what drew you to reporting on cannabis? Even as far going back as Colorado and Montana,

LJ Dawson:

Cannabis is a fascinating intersection of alternative communities and thought processes. It’s always a great group of people to talk to. I think everyone who does drugs is always more interesting than people that don’t do drugs, obviously. But in all seriousness, cannabis is a really great intersection of criminal justice, business, the economy, legislation, politics, corruption. I mean, every single beat that you can think of is a microcosm in the cannabis beat, and it’s always something going on, something interesting. And cannabis has been criminalized, obviously for a very long time. It was very interwoven into the war on drugs, which obviously came down harder on black and brown people. And I had a history of reporting on injustice, and so I always wanted to cover cannabis in that way. And then also, I definitely believe that plants are the best way to heal ourselves, even if I don’t imbibe in smoking the good herb all the time, or regularly, as some of my good friends do. I definitely respect and believe in the scientific backing that it is a medicine for a lot of people, whether it’s mental health or actual chronic illnesses, et cetera. And so, yeah, I think it’s a great space to look into stuff to report on. So that’s what drew me to it.

TG Branfalt:

So one of the things obviously being in DC that you’re going to have to sort of focus on is the sort of nitty gritty, the legislation, that sort of policy stuff. So explain the current laws in DC as it relates to cannabis, because they’re different than any place else in the country.

LJ Dawson:

Glad you asked TG. So we are the only district in the whole United States. We are not a state, which means that we do not have state rights. So we are actually not allowed to set up anything, pass any legislation without congressional oversight. So that means that if the city council wants to pass the law, it goes into effect, but then it actually has to get reviewed by Congress. And at any point of a time period, some legislator in Congress can say, yeah, we don’t feel good about this, and they can pass a bill, get enough people, colleagues together to pass a bill to actually stop that legislation. And that is what has unfortunately happened for us. So we were able to legalize medical cannabis. DC legalized medical cannabis in 2013, and then we were immediately afterward stopped by a certain Republican, Andy Harris from Maryland,

TG Branfalt:

The Harris, the notorious Harris Rider,

LJ Dawson:

Harris rider that has something against DC. And that rider has basically prevented DC, which is a very liberal jurisdiction from actually setting up a recreational market. And so shortly after we were squashed in that area, there was an initiative passed called the I-71 Initiative, and that basically allowed decriminalized weed for the most part and allowed some home growing and then also allowed people to gift small amounts of weed to each other. I could give you up to two ounces of weed TG, as long as you weren’t giving me any money, I wasn’t receiving any money. And this was tested in court and actually stood as well. And so what happened is people kind of saw this as a little bit of a loophole, and were like, we aren’t going to have recreational weed. There wasn’t recreational weed in Virginia. There still isn’t. There wasn’t adult use in Maryland that just passed last year.

And so people saw this as a little bit of a loophole that they could start to exploit and started setting up actual stores. It started as popups actually, where people were coming together. They had a lot more weed than two ounces, which is the limit. They might’ve had pounds of weed, but they were gifting it. They were breaking it down, gifting it at popups. They were gifting it in stores, but they were actually setting up brick and mortars. And that all started around 2014 and just continued to blow up. And when it first started, police were raiding these places. I mean, they were not okayed by the city officials at all. They were getting raided, but they would, it’s like a cockroach. You squish it, and another one pops back up. And so these people were setting up stores just trapping out of them under the guise of gifting.

I would come in, they’d say, you have to buy this wristband. It’s $50 and oh, you wanted that Tropicana Cherry eighth, here you go. And so it kind of set up these pseudo dispensaries. And obviously Virginia and Maryland didn’t have access to weed. They certainly didn’t have access to underground strains that were getting pushed in through the underground channels into DC. And so people were going to these gifting stores and they were making tons of money. And it started with local entrepreneurs that were already in the cannabis, underground cannabis industry. And then as the years went on, it kind of expanded more to, as we know, the California markets started crashing. There were these large dispos in Cali that were setting up highways, underground highways to DC, to New York, to all these different markets to backdoor their weed that they had to get rid of.

And so it started getting a little bit more influenced by the big players in the cannabis industry that we think of that are a little less interested in the good of the patient, the good of the client. This isn’t your small Humboldt grower that’s working with a small seller in DC. And so anyways, we had an explosion of stores and in 2022, our medical market was still going. So we had a very small medical market, but people, you can go get weed at a gifting store without registering, just walking in, they have access to all the strains that you’re seeing on Instagram that the rappers are smoking, you’re going to go there even if it’s not tested most likely, rather than going to a medical dispensary that’s going to charge you a lot more. And so we had about half dozen medical dispensaries that were still serving patients, but there was a small sales, they weren’t doing numbers at all.

And so in 2022, DC Council had tried to keep passing recreational weed, and that just kept getting squashed by Congress. And in 2022, they were like, all right, we got to figure something out. So they actually passed an expansion of the medical market that we have in DC and they were able to say, okay, we see that we have all these unlicensed operators and we know that people in DC don’t want this illicit economy going on, so we’re going to try to fold unlicensed operators into the legal market, which has been done nowhere else in the US. No one else in the US has extended a peace offering to people that were operating illegally and said, we want you to come into the legal market.

TG Branfalt:

They ban them more than they would let them in.

LJ Dawson:

Right, exactly. You’re penalized basically. So they passed this expansion to do multiple things. They wanted to expand the market. They wanted to open up more licenses for people to grow, manufacture and to sell weed. And they also wanted to bring these unlicensed operators into the legal market. But again, it’s the legal medical market. It can’t be the recreational market because Congress has kept us from passing something. And so they passed this legislation and we’ve been in a whirlwinds since then, and I can update you on that as we go along. But it’s been just a crazy, crazy period as they’ve tried to transition us into a more expanded pseudo recreational, but still medical market.

TG Branfalt:

And one of the things, correct me if I’m wrong, is they allow self-certification. And I don’t know if that was included in the most recent reforms, but for patients, right?

LJ Dawson:

Absolutely. So that was included in the most recent reforms. One of the things that our government acknowledges in DC is that we have a barrier to people accessing legal cannabis. We can’t have any random person off the street, of course, 18 plus 21 plus access adult use cannabis. And so they said, alright, if we still have to have people certified as medical patients, we’re going to make it as easy as humanly possible. And so now in a manner of a few minutes, and you can actually do it for free until August 1st, if you’re a DC resident, you can actually self-certify yourself as a medical cannabis patient.

TG Branfalt:

And so what does that actually mean? What does this program look like? And so far, has it been effective in bringing people into the more regulated market?

LJ Dawson:

It’s a great question. So we also offer temporary registrations too, which I want to mention because it’s an acknowledgement that we have a lot of tourists in this area and that there were already people coming in from Florida, North Carolina and shopping in our medical market. Of course, there’s many more people going and shopping in our unlicensed market, but this program has helped a little bit, but there’s a key part of this Maryland legalized adult use last summer, we’re almost on a year of Maryland having adult use cannabis for everyone that’s 21 and over. And so DC had really bad timing with this, right? We started trying to expand our medical market when Maryland just ripped the rug out from under us. So it’s been somewhat successful TG, but we are seeing a slight rise in patients, but we don’t have that many yet, or we have continued to not have that many, and we haven’t seen an increase that you would expect maybe if this was really a great program.

And at the end of the day, it comes down to the fact that people don’t want to register. We are in a place where a bunch of people are federal workers. Cannabis is still stigmatized by many people. Of course, there’s this idea that your medical records won’t be released, but who knows if you’re applying for the CIA, I’m not, don’t worry. But if you’re applying for the CIA, they’ll probably find your records. So there’s this idea that people don’t want to register. I’ve been hearing from the legal medical dispensaries that are in the city right now that 30 to 70% of people are walking out every single day because they don’t want to register. And this is something that’s so easy, it can be free. And a lot of the dispensaries know this is a problem. So they’re actually helping people register right there. So you could walk in and be registered in minutes and people are still saying, no, no, no, I don’t want to do that. And they’re going next door to the unlicensed operator.

TG Branfalt:

That’s really, really interesting that people would choose. And again, I mean I think that that speaks to the region that you’re in where there are so many federal workers and government workers, and there are, we know some sort of slippery slopes when it comes to cannabis use and even applying to the federal government. I mean, you can be found lying on a federal form and things of that nature. And so tell me about some of the challenges covering cannabis policy in DC, Maryland, and Virginia, and how do you tow the line between local and national? Because so much of what comes out of DC is national news.

LJ Dawson:

I try not to get caught up in the hubbub on the capitol. There is constantly a cannabis news outlet, and I love all of our colleagues dearly. I appreciate everyone’s work, but there’s constantly people chasing after every single vote change, every single breadth of rescheduling. And the fact is that all of that stuff, whether it’s rescheduling, decriminalization, any of the legislation that’s working its way through Congress is very unlikely to pass, in my opinion, one. And then two is years away from actually impacting the person that is a medical patient or just a normal person trying to go smoke some weed and get a regulated clean product. And so I actually ignore a lot of it. And I’ve been on the hill, I’ve reported on the hill. I’ve great friends that are on the hill every single day. But I think that there’s an over diversion of resources spent reporting on the capitol because it is overcovered, a lot of the stuff that comes out of there is actually not newsworthy.

It’s only newsworthy because we’re giving it saying it’s newsworthy. And there’s so many stories in Virginia, in DC, in Maryland that need coverage, that is actual policy that’s currently in place impacting business owners, people of color patients, everyone that is most disenfranchised by big business, by politics, they’re actually getting impacted right now. So I always make sure that in any of the coverage we’re doing, I am prioritizing those people. And then I’m also prioritizing the small business owner that is either in the hemp industry or the cannabis industry that is trying to have an impact or start a business in this really crazy market.

TG Branfalt:

And I do think, to your point, that it speaks to a broader issue of journalism in general, which is a whole other conversation we could talk about where everything has turned into sort of horse race coverage and game coverage and is covered more like sports than policy. And not to say that I’m not guilty of it myself in terms of poll stories, it’s just the score. It’s just the score. Switching gears a little bit. You had said that you had covered sort of justice topics primarily for a while or had a keen eye on that for a while. How important are the pardons for Maryland Governor Wes Moore, and how important are the optics of a governor? Pardoning a record of people. I mean, this is the broadest pardoning by a governor so far.

LJ Dawson:

I’m really glad you asked this question, TG, and I think you used a key word, which is optics. Public opinion and public political energy is very crucial to the efforts to decriminalize cannabis or to get any movement on Capitol Hill. I do not want to undermine Governor Wes’ action in this case. I mean, it was almost 200,000 people that are being affected by this effort that he’s done. However, it’s not decriminalizing cannabis and these people are pardoned. But I was looking at the application to go through and get your pardon and it’s 27 pages long and every part of that needs lawyers on it and everything. But you’re talking about people that have been screwed over by the system over and over again. The system has never been their friend. And the governor does this and gets a lot of PR attention on the national scene.

He’s saying he hopes other governors join and do this. But I always think there’s a disconnect between the top of the government and actual impact on people. And so it’s great that this door is open for people to pursue expungement, right? Because if you get a pardon, then you have to pursue your expungement and you the cleaning of your record. But this does not fix anything. This doesn’t fix the decades potentially that someone has been refused jobs spent in prisons because of cannabis charges that they faced. I also want to highlight that the difference between nonviolent and violent charges. There’s a really big push on all criminal justice reforms to do nonviolent, nonviolent, nonviolent charges. And of course that’s easier to stomach for everybody. But the truth is, is that if someone was forced to go into the drug game, we’re not talking about people that were pulled over with an eighth of weed or a pipe, but we’re talking about people that had to participate maybe because of the place they grew up in, the economic opportunities they were afforded.

They had to participate in the drug industry. And if they had to, that’s very rarely going to be a nonviolent charge. You’re usually going to have to have a gun on you. You’re usually going to be caught up in the other parts of being in the drug game. And so there’s people who are impacted by the war on drugs that are not going to be nonviolent offenders. And so those people sometimes get left behind. And then there’s also still tons of people, thousands of people federally incarcerated for nonviolent cannabis charges, including Jonathan Wall, who was recently sent to federal prison in Maryland actually on trafficking charges just a few years ago. And so there’s still people currently incarcerated in Maryland, federally. Obviously the governor can’t impact that. He only has a jurisdiction over his state. But I think it’s important that we stay realistic when these things happen and don’t get caught up in any PR or optics that is pushed on us.

TG Branfalt:

I mean, I think the coverage that came out after the fact was similar to when Biden issued those pardons, which really had an effect on what 200 people. I mean, again, I’m not trying to downplay it much like you weren’t either, but the optics were kind of more important than the actual policy that it implemented and the reforms that it implemented.

LJ Dawson:

Yeah, and tj, I feel like a lot of the advocates and people that have been impacted by cannabis criminalization, they’re taught to kind of be grateful for breadcrumbs, right? We’re taught to just be like, oh my gosh, thank you so much for doing this. When it’s like, Hey, this is still not enough and we should be okay being able to say thank you and you need to do more and we need more.

TG Branfalt:

So what are the challenges for the region’s cannabis policy when on one hand you have more progressive, and then on the other hand, you have Republican governor Glenn Youngkin in Virginia who has done everything in his power and along with the legislature to block the implementation of cannabis adult use cannabis in Virginia as approved by the previous democratically led legislature?

LJ Dawson:

Yeah, I’m really glad you brought that up. Virginia is a very interesting case. It was literally legalized to have adult use in a democratic controlled legislature. And then Youngkin came in who’s a Republican and has blocked the market. The law has already passed, but he is not allowed the actual implementation of a legal adult use market in Virginia. And they have some of the highest medical costs actually. We see people in our patient counts in DC, Virginia patients are the second highest register people that come over and shop in our medical cannabis market. And also, I’m sure they’re shopping in the illicit stores a lot in DC. And so this has a real impact on Virginians. Not everyone in Virginia is close to DC. They’re not close to Maryland. And so we are kind of at a loss of hope for Virginia until Youngkin leaves office.

That means that we could be looking at 2027, 2028 before an actual adult use market is set up. So there’s also other things going on with hemp in Virginia. So I’m kind of reporting on two opposite spectrums, right? Because there’s Virginia where it’s still the dark ages. There’s Maryland who just legalized adult use last year. The market opened up last year again, but being critical, keeping them in check. The only operators that have been able to sell weed to in the adult market are previously licensed medical dispensaries. And so we have a lot of MSOs, a lot of previously established dispensaries, not small guys, not social equity candidates necessarily making millions of dollars in Maryland and the adult use market, but Maryland also has a lot of cool programs going on to try to engender and cause a growth of social equity or people that were the small guy in the cannabis industry there.

And then we have DC, which is federally controlled and kind of in the middle of the road. I just try to keep up to date with everything. Obviously we have a lot of different things going on, but each state has its own power imbalances. It has its own players, and we just try to make sure that we’re paying attention to all of the major stakeholders so we can accurately report and get the information that each of those states need. The last thing I’ll say is that the markets impact each other too. So Virginia, DC and Maryland are very close together, and the big city centers are very close together. So even if Maryland’s a whole state, Virginia is a whole state DC in the middle, we have a lot of big cities that are all near DC. Baltimore is not too far from us. And so if there’s a market change in Maryland that could push patients into DC if there’s the market change in Virginia that could push patients into DC or out of DC and vice versa. So we try to make sure that people know how the other state next to them or district is impacting their market.

TG Branfalt:

Are you seeing in the region, are you still seeing a lot of, how do I want to put this cannabis enforcement in Virginia? Meanwhile, the surrounding states in the district have legalized, so are we still seeing a lot of harms in Virginia despite the neighborhood being broadly kind of adult use?

LJ Dawson:

Virginia is still pulling people over with pounds of cannabis in their car, and Maryland is too, and DC is actually kind of the only place which I can get into after the only place that is actually not focused so much on cannabis enforcement. But Virginia is very much still focused on cannabis enforcement. They’re very much still a state that is doing traditional policing. They have rural areas there. Manassas, Virginia is tiny. There’s a bunch of rural areas in Virginia that are– it’s a more conservative-run state in all ways down to the police departments. And so you have people getting pulled over in Virginia that are getting busted with cannabis, but that’s still happening in Maryland too. Just because you have an adult use market does not mean that illicit or underground cannabis transportation and selling is not getting enforced as well. And so in Virginia, we actually have a little bit of a replica of dc They’re doing adult sharing, so their shops actually getting sped up that are adult sharing cannabis, right?

No, I 71 initiative in Virginia. It’s they’re trying to create a loophole that doesn’t exist, and those shops have been getting raided. Those shops have been getting shut down and people are forcing or facing jail time and charges for that. And in Maryland as well, people I see every other week someone getting arrested in a news article about someone getting arrested for a pound of cannabis or vapes, et cetera. So there’s still enforcement going on. I would not drive through Virginia if I was anyone with a pound of cannabis. That would be at least make sure your taillights are all working. Do not get pulled over in Virginia. They’re not going to be kind to you.

TG Branfalt:

Have any portions of the law taken effect such as allowing people to possess an ounce personal use, or is that still blocked?

LJ Dawson:

Yes. So you can possess, that’s why I said a pounds. Okay, okay. Yeah, you can possess cannabis in Virginia, right? But yeah, you got to be careful about the amount that you have.

TG Branfalt:

So we talked about, you had mentioned enforcement in Virginia and Maryland. What about enforcement in DC?

LJ Dawson:

So we’ve seen quite the seed change in dc As I had mentioned, there was a proliferation of unlicensed shops towards the end of 2016, probably till 2020. They were getting rated almost weekly, monthly. The cops were allegedly taking the weed and taking the money, and then they were arresting people and then letting them go and letting people just reopen somewhere else. However, in 2022 when they passed the medical cannabis expansion, part of that was actually a safe harbor that starting last year in January, gave unlicensed shops a year to do what they had to do because they were opening up applications and technically saying the doors open, unlicensed applicants or unlicensed operators can apply to become a legal medical dispensary in dc. And this was really unique. In DC we had multiple application periods for different types of businesses, but there was actually specifically an unlicensed operator retail period at the beginning before social equity and before standard. And they gave unlicensed operators 90 days to apply to become part of the legal market, and they actually had to prove that they were operating illegally, paying taxes as a gifting business to qualify for these licenses. It’s quite wild. There were definitely a lot of people who were like, there’s no way I am going to submit any government document saying that I was gifting

TG Branfalt:

Breaking the law,

LJ Dawson:

Right? I was gifting weed, and it definitely wasn’t two ounces. It was millions of dollars. And I was filing taxes saying that off of T-shirts, I made $10 million last year, right? So this was very unique, and they said they weren’t going to enforce, and that safe harbor period ended in January. However, we have not had more than four dispensaries, new dispensaries open, and we’ve had no new cultivation centers and no new manufacturers open. So the council gave them another until September. So another, I think it was four months if they applied to keep doing what they were doing, acknowledging that there’s a lack of supply in DC and that there were patients that weren’t going to be able to be served. So if you’re an unlicensed operator who applied during the licensing period and said you were gifting and they approved you, and you’re in the process of turning into a legal medical dispensary for the location you applied for, you can keep gifting out of it until September of this year.

However, in March, they started enforcement and that enforcement was against shops mostly that had not applied shops that were gifting, which are now most shops don’t even gift. They’re open dispensaries at this point elicit open dispensaries much like you have in New York. And they started enforcement. And the enforcement started very delicately with just letters that said, you’re warned this is what you’re doing. It came from our cannabis regulatory agency. It did not come from the cops. And there have only been a few raids, and most of those raids seem to be because of mushrooms, mushroom products being sold alongside cannabis. Well,

TG Branfalt:

Isn’t that another sort of layer to this? Because DC voters approved psychedelic medication therapies, I should say in 2016.

LJ Dawson:

So we have another initiative called I 81 that’s often mistaken to be just a replica of the I 71 Cannabis Initiative for mushrooms. And what it did actually was decriminalize a possession of a certain amount, and it also deprioritized enforcement of psychedelics. It did not do any gifting legislation or any gifting initiatives such as I 71. So it’s still very illegal to even share mushrooms technically even, and especially to sell them in dc They’re still obviously a federally controlled schedule one substance.

So after they started enforcing in March, they laid off a little bit. They started delivering warnings, and those warnings have not really stopped any unlicensed shops from being open. They got the warnings and most of them stayed open or open the next day, kind of this idea that we’re going to go until the wheels fall off. We’re going to make as much money as we can until they literally kick us out. And this actually started impacting the forecast of the new medical market. There’s over 50 stores that should be opening in DC that’s over a 900% increase. We’ve only had a half dozen stores that were medically licensed retail stores, and now there’s over 50 that should be getting licensed and open in the next three to four months. And the medical market’s not doing well because there’s still an unlicensed market that’s thriving in dc.

And so the medical community, a lot of them are pushing the DC Council to do more, to be able to kick these unlicensed operators out, because every time you put a medical dispensary next to an unlicensed operator, that unlicensed operators always going to win. There’s less barriers to shop. It’s better product in a lot of people’s opinions, even though if it’s unregulated and it’s often cheaper. So we are waiting to see what happens, but they just passed emergency legislation to start being able to padlock unlicensed operators to do the same thing New York did. To seriously try to clear these dispensaries that are unlicensed out of DC so the medical market can actually have a chance.

TG Branfalt:

It’ll be interesting to see how well that works because I live in New York, not the city, obviously very upstate, but there are still quite a bit of illegal dispensaries,

LJ Dawson:

Absolutely TG. I’ve literally seen Instagram ads where unlicensed operators, which Instagram ads is a whole nother conversation, but unlicensed operators have literally been saying, DC’s closing I-71 stores. Don’t worry. We still will have a delivery sign up. Now we’re offering you a percentage off sign up, get in the door, get your number in. And I mean, DC, there’s so much going on in the city. The cops have so many other problems. They do not want to get dragged into cannabis enforcement unless there’s a shootout going on. It’s a big crime like making money to them. It would’ve been maybe some years ago a priority, but right now it’s not. And they do not want to get caught up in the legislative mumbo jumbo that has been caused by the federal oversight in DC.

TG Branfalt:

So I want to you a question that I find myself asking myself and also asking my colleagues and people that I’ve worked with, and as you said at the top, you’re a believer in sort of plant medicine and things of that nature. How do you as editor in chief remain objective? Because most of us covering cannabis have a bit of bias towards cannabis. I’m a lowly podcast host and staff writer, and I believe that that gives me a little bit more leeway, if you will. But as editor in chief, I think that there’s a different responsibility there. So can you talk about that a little bit?

LJ Dawson:

Absolutely. We’re already assumed to be biased, obviously, because we’re called the Outlaw report. We report on cannabis. And there’s an idea in the journalism world that if you’re even reporting on cannabis and a little alternative independent publication, that you’re obviously going to be like smoke weed, everybody. But that is not how we are. I think that it’s very important that we’re still a journalistic news outlet, and our job is to hold everyone accountable. That does not just mean the government. That doesn’t just mean the businesses. That means people too. So we know that cannabis is evolving. We know that cannabis is getting stronger. We know that there are new products coming out. We know that there’s little research on those products. We’re not talking about grandpa’s cannabis getting grown in the backyard anymore, and we need to remind everyone that. And so it is our responsibility to talk about studies.

It’s our responsibility to talk about testing, to report on the cannabis industry as if it was the food industry, as if it was any big industry that people are consuming. I mean, cannabis consumption is now acknowledged that it’s incredibly high. This is something that’s happening. People smoke weed. That’s a PSA for all of us. We always have, right? People smoke weed. People are still smoking weed now, they’re eating weed. I mean, they’re doing everything. And so it’s our responsibility to stay non-biased and focus on both the negatives and the positives of the cannabis industry and hold everyone accountable, whether that be at the top or the bottom.

TG Branfalt:

So one of the interesting things that Outlaw Report has done is launched a map of the progress and locations of DC cannabis licenses. What went behind that decision and how important is that map to stakeholder engagement?

LJ Dawson:

TG, I’m really glad you asked about this. This was a map that organically came up because I was trying to keep track of all of our applications in this last period. And so in our cannabis expansion of our medical market, just in DC, we have had hundreds of businesses apply as manufacturers, cultivators or dispensaries, retail locations. And this map is incredibly important. DC is a small place. Real estate is a high commodity. It’s rare. It’s even rarer to find real estate that you can rent or buy as a cannabis business. And so our map is a really great visual breakdown tracking where all of these cannabis businesses are in the process of getting open. Just because someone gets a license, someone gets their application in, that can mean they’re still months away. And so our license map is a way for people–it’s color coded–

It’s a way for people to keep track either of what’s happening in their own neighborhood, what’s happening in the neighborhood, that they want to open a business where they can actually go buy legal weed that will soon be tested in a lab in DC, we don’t have testing quite yet, and it’s a way to just keep track of what’s going on. It’s not the only offer or perk that we offer to our subscribers. We’re also offering real-time legislative updates, and we hope to expand that to the Maryland market within the next four months. This is our goal to become a sustainable news outlet. All of our articles are free. We will keep them free, but some of this more labor intensive data stakeholder information that we take a lot of time out of our reporting to create, we are asking people to support us and subscribe to get access to that.

TG Branfalt:

Well, hopefully the next time that we chat, we can talk more about how you build the actual subscription model and that sort of thing. But in the meantime, where can people find out more about The Outlaw Report? Where can they find this map and maybe find out more about you?

LJ Dawson”

So come to OutlawReport.com to see all of the most recent news stories we’ve been writing, covering the DMV area, and subscribe to get access to our map. You can find me at @LJreports on Twitter and Instagram, and my email is also on our website. If anyone has any tips, tidbits, or hot takes they want to share.

TG Branfalt:

That is LJ Dawson. She’s the editor in chief of the Washington DC based cannabis News outlet, the Outlaw Report, which focuses on cannabis news and policy in the dc, Virginia, and Maryland region. Thank you so much for being on the podcast today, lj. It’s been fun.

LJ Dawson:

Thanks, TG, and hopefully you will have us back.

TG Branfalt:

Definitely. There’s a lot more ground to cover here. You can find more episodes of the entrepreneur.com podcast and the podcast section of Ganjapreneur.com and wherever you get your podcasts. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the Ganjapreneur.com app and iTunes and Google Play. This episode was engineered by Wayward Sound Studio. I’ve been your host, TG Branfalt.

 

Alaska was one of the very first U.S. states to legalize cannabis after voters there embraced the reforms in 2014; the market was also the very first to get state-wide regulations for social cannabis use, although some towns have passed stricter local regulations than others. But while Alaska’s cannabis market is one of the oldest in the country, its immense size and inherent isolation make doing cannabis business more complicated than many other state-legal markets.

In the latest episode of the Ganjapreneur.com Podcast, Chris joins our host TG Branfalt to discuss the early days of Alaska’s cannabis marketplace, Chris’ transition from working in cultivation to the retail side of the industry, and strategies he implemented at The Tree House for improving foot traffic and the overall cannabis retail experience. The interview also covers unique Alaskan cannabis industry experiences, like flying on commercial airlines while carrying tens of thousands of dollars worth of cannabis products — because sometimes that’s the only option — and the benefits of getting to know your customer base on a more personal level.

You can listen to the interview through the media player below or through your favorite podcasts app, or keep scrolling down to find a full transcript.

Listen to the podcast:

Read the transcript:

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Cara Wietstock: Hi. I’m Cara Wietstock, culture editor at Ganjapreneur and host of our YouTube show, Fresh Cut. The best way to understand cannabis business is to speak directly to those who work within it and Fresh Cut was created to shine recognition on the people who fill these roles. In this interview series, we focus on those with their hands and the dirt, both literally and figuratively, from cultivators to bud tenders, educators to advocates, activists to lobbyists, we aim to illuminate the workers who keep this industry thriving. Enjoy one on one conversations with me and guests by watching along on the Ganjapreneur YouTube channel and follow our social channels to keep up with the latest episodes. Have a great day.

TG Branfalt: Hey there, I’m your host TG Branfalt and thank you for listening to the ganjapreneur.com podcast, where we try to bring new, actionable information and normalize cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today, I have finally completed my near five-year mission to get somebody from Alaska on this show. I’m delighted to be joined by Chris Ray. He’s the general manager of Anchorage, Alaska’s Tree House. Chris has worked in the state’s cannabis industry since August of 2016. How you doing man?

Chris Ray: Good. How are you?

TG Branfalt: I’m very, very well. Like I said, it’s great to have somebody representing Alaska finally on the show. I have a lot of questions that I think a lot of people have been sort of asking me about so I finally get to have answers for them. But before we get into that, man, tell me about out yourself, your background, and how you ended up in the cannabis space.

Chris Ray: Yeah, before we hopped on here, like I was telling you, I started doing the retail thing after I went to college. I went to University of Idaho for a year, tried to figure out what I wanted to do with life. Realized a four year school wasn’t really for me so I kind of bounced around between Washington, Hawaii and then I ended up in Missouri. Just started working retail down there for a few years then I got a call from one of my old basketball coaches from back in my high school days and he said that he was starting a cannabis retail in Fairbanks and he wanted my help. And so August of 2016 rolled around, I moved up there, helped him out in the cultivation and then helped him out in the retail. Got that going October, 2016 and then I was with them until about April of 2017.

And then I went over and joined Grass Station 49 in Fairbanks. They started off with just one location. We expanded to two more in Fairbanks, so three total within the first two and a half years. And then we opened a store in Nome shortly after that. And then once we opened up that store in Nome, I got a call from a buddy of mine here in Anchorage who was starting up a retail and he had already had a cultivation going. He’s big in the local hiphop scene, which really kind of gained my interest and my attention. And then that’s when I came down here and started working for the Tree House. And so we just opened up in July of last year, so 2020. Haven’t been open for a year yet. Just been kind working through the kinks and trying to get everything going. That’s kind and where we’re standing now.

TG Branfalt: You say that you started in sort of the cultivation, retail and now you’re helping sort of build a store as a general manager. What were some of the challenges for you when you were making that transition?

Chris Ray: I think the biggest challenge is it’s never been done before, the cannabis retail. Essentially everything that you’re doing and learning, it comes with taking some L’s here and there. Some learning lessons. I think the hardest part though for me, is trying to find like the right people to fit in. Because I think everyone who smokes and who’s a stoner wants to be in the industry but you’ll notice that everyone that smokes and a stoner usually doesn’t have the work ethic or the know-how’s to show up on time or to do things like that. The little simple things. That was a big eye opener realizing that everyone isn’t going to really fit that mold. But once you get around the whole staffing because we’re in Alaska so there’s not very many people.

There are people but there’s not a whole lot like you would say in New York or in California to pick from. Getting around that, once you get around that, just trying to find the product too because we’re a big state, not a whole lot of people. There’s a lot of cultivations but you’re talking about anywhere from when I was in Fairbanks, for instance, having to get stuff from Valdez, that’s a whole day and a half trip, a drive down six to eight hours and then you’re talking about getting the product there. Well now you’re not going to drive back because you’ve been driving all day. Now you’re waiting for the next day to come back. If there’s any construction, which in the summer in Alaska, they call it construction season, stopping all the time. Wintertimes you’ve got the snow, snow storms where you can’t travel through. It makes it really difficult when it comes to the whole transportation and I’d say the hiring aspects of things.

TG Branfalt: Well, I had read once this very unique story about somebody, it was when the Alaska market was first sort of coming online and I guess a lot of places in Alaska, you can only get to by aircraft.

Chris Ray: Yeah. A lot of those other places like Juneau or Ketchikan. My buddy Jason, he runs Frog Mountain CO2 Extraction. I’ve been working with him for a few years now and he’s got a fly to Anchorage twice, three times a month just to get product to people. At that point, now you’re trying to get on schedule with all these retails to see when you can deliver, when you can’t deliver. And if you know anything about ordering and stuff like that, sometimes you got money. Sometimes you don’t. Someone’s like, “Hey, I’m coming up on the 30th,” but you just put in two huge orders for the 25th. It’s like, all right, now I got to kind of juggle these around because he’s only coming up this one time. The next time you’re going to see him is on the 15th or on the 20th. Flying by air is crazy.

TG Branfalt: Has anyone come into any issues with sort of regulatory bodies or anything because cannabis remains federally outlawed and you have to get on a plane with it? Or is there anything like that?

Chris Ray: From my experience and doing the transports and what I’ve run to with the airlines, as long as you’re straight and up front with them and you have all your paperwork and it’s all manifested and you have it on your persons, they’ll go through, they’ll take you to a room, they’ll check you out, make sure everything’s good to go. As long as your paperwork is correct, they send you through. At that point, when I go through TSA, I feel like they’re looking for explosives. All the necessaries that they should be looking for when I’m trying to do my job and run a business and I have paperwork from the state that says I’m legally allowed to fly through or transport this, there’s nothing they can really do about it. Now of course they can stop us and be like, “Hey, we don’t feel this is safe for you flying today.”

But I haven’t seen that happen with anyone. I popped on one of the local airliners with 20, $30,000 worth of concentrates and, “Oh yep. All good.” And I’ve got families on the plane sitting in front of me and behind me and I’m just loading up all this stuff on the aircraft and it is what it is.

TG Branfalt: That’s unlike any, no one else, no other operator in any other state has to deal with something like that. Can you tell the audience a bit more about Alaska’s cannabis law and what if anything sets it apart from some of the ones in the continental United States?

Chris Ray: I think the thing where we’re very different is in California, for instance, when you have medical, you have shops that are accessible to go get your medicine and to do what you need to do. In Alaska medical passed years, years ago, I want to say 96, I could be wrong but it passed years ago and we have no medical setup to where anyone can go and buy their own stuff. Everything’s like, all right, you’re medically set up. Here’s a card. You can grow. But in the state of Alaska, it’s already legal for you to grow so the only thing it’s really doing is if you’re a minor and you need it, then you can have someone grow for you. But you still can’t be like, hey, I need to go to the shop. Here’s my med card. Do I get a percentage off? Or is there a certain selection that I can go to? We don’t have any of that.

In Alaska, if you’re 21, you have a legal ID, you can come shop. Your medical card means nothing. And even if you have a medical card, you can grow but guess what? Me and my buddy, we’re legally 21, we’re allowed to grow in the house. It’s very different in that aspect, you would think there’d be something set up to where people could actually use that medical card to go use it and do something positive with it. But all they can really do is what they’re already allowed to do. But other than that, the regulations, we’re allowed to buy up to seven grams of concentrate per purchase per day. I know in Washington, you’re not allowed to do that. We’re allowed to get these cool little baller jars with seven grams of concentrate, in Washington they only get these little itty bitty ones.

TG Branfalt: Yeah. In Massachusetts, it’s the same way you can’t get more than a gram.

Chris Ray: Yeah. Which, if you have someone who smokes a lot, you’re going to be done with that gram by the time lunch is over.

TG Branfalt: Basically. Now you say that you grow your own and you have to grow indoors. Is there an outdoor growing season for cannabis in Alaska?

Chris Ray: Yeah. We have legal outdoor grows. There’s one in Fairbanks. What is it called? Fox Creek Farms or something like that. Rosie Creek Farms. They’re outdoor. They only harvest once at the end of the summer. That’s all they do. Entire wintertime they just clean up, process, make six packs, make joints. Me personally, I don’t think it’s very lucrative but then again, I don’t have an outdoor grow, so what do I know? But I just know in Alaska, once that permafrost sets come end of summer and it starts getting cold, if you don’t have that stuff planted in time right now where it’s still getting cold out in the springtime, you’re not going to be able to harvest in time. But some people do have the greenhouses that are enclosed, that get the sunlight and then it’s fixated with the AC inside so if it gets too hot, it can cool down a little bit. There are some assisted grows like that. Lots of people that are just locals grow outdoor if they have a big backyard or autoflower plants on the back deck are very popular. I know lots of people who do that.

TG Branfalt: Are you allowed? In some states you can’t sell clones? Is that something you’re allowed to do in Alaska?

Chris Ray: Yeah. Yep. If you’re a retailer and you have a cultivation, you’re allowed to sell your clones. I know some places do it on the regular. Some places don’t do it at all because they don’t want that risk of you taking a clone and going home and be like, oh man, you gave me spider mites or oh man, I got PM. And I didn’t get PM till I brought home this clone. And then they blame it on the retail or the cultivation for that matter.

TG Branfalt: Got you. We’ve talked about some of the challenges that you face, when I asked you earlier about the flying and that sort of stuff, what are some of the unique benefits to you think running a cannabis shop in Alaska?

Chris Ray: I feel like you get a lot more personable with the customers because you have your select fan base, not fan base, but customer base that like your store. In California, I’d imagine you’d probably have somewhere closer to 500 to a 1,000 transactions a day at a busy shop in town. You’re probably looking at like 200 to 400, maybe. Those people that are coming in, you’re seeing the same faces every day. You’re able to get up close and personal with those people, learn about them, really find out what they’re like and what they’re looking for and really cater to their needs versus just on a huge, corporation scale, buying everything on the map that you can because it sells or because the computer tells you that it’s doing good. I’d say that’s one of the main, big benefits about being in Alaska.

TG Branfalt: Well, and you talk about the computer and you do use data at the Tree House and could you tell me a bit about how you use that data and how that data translates to enhance the customer experience?

Chris Ray: Yeah, so right now we use GrowFlow for a point of sale. I started using it back in, I want to say 2018 is when we switched over at Grass Station when I was there. My biggest thing for a bud tender to come in and to use the system is I need it to be simple and I need it to be like their iPhone for instance or their Android. They can get on it, they can find their text messages, type it out. It sends, it’s done. When we use GrowFlow to find out those analytics and that information that we need for the retail, using their insights tool that they have to tap in to see all right, when are our most transactions going through? Is opening up at 8:00 AM on Saturday, Sunday worth it?

We found out that it wasn’t on the weekends for us but Monday through Friday we have a bunch of early risers that are there right at 8:00 AM as soon as we open up the doors, almost like getting their morning coffee. From that aspect that really helped us tap in with that and get that opened up because we were wasting a bunch of payroll hours on certain shifts and certain days where we had three people scheduled to where we look at GrowFlow and say, “Hey, from noon to 1:00 you’re only doing this much. Maybe you only need two people instead of three.” It’s been really good in that aspect.

TG Branfalt: Was it surprising to you that you had a bunch of people sort of waiting outside at 8:00 AM during the week?

Chris Ray: For me, no, because when I was in Fairbanks, that was one of the first big changes that I did was I was like, “Hey, it’s cool to open up at 10:00. I get that but there’s people who wake up at 6:00 AM that run out of weed the night before, wake up at 6:00 AM and only have a bowl and they got to be at work at 9:00 so when we open up at 8:00 they just got their coffee. Now they’re here. Let me get a couple of pre-rolls real quick.” Or some folks only have a 30 minute lunch so when they get on a lunch at 12:00, they don’t want to spend 10 minutes driving to the shop, waiting in line for five to 10 minutes and then trying to whizz back to work. If they can come in at 8:00 AM and get what they need, now they can enjoy that lunch that they have at 12:00, smoke that pre-roll. All right, I got 10, 15 minutes to eat my food now and to recover and to go back inside.

That was one of my big eye-openers right there and kind of why I knew it would work. It was just on the weekends. People go out Friday night, get hammered or whatever they might do, smoke a whole lot and then they don’t wake up till 9:00, 10:00 AM the next morning, especially if it’s their day off.

TG Branfalt: Yeah, nowhere in New York, we just went legal we don’t have shops yet and so we go to Massachusetts but they don’t open in Massachusetts until at least 9:00, most of them 10:00, 11:00. I wonder how much they might be doing the same thing you are trying to figure out when the best time for them to be open. Is there any other way that using the data has changed your operations?

Chris Ray: Yeah. With the top sellers and the top suppliers, when I first started using it, it was top brands. And then I know I talked, I can’t remember who I talked to within the company, but I was like, “Hey, like we really and use the brands portion. But if you could make it top suppliers, that would be 10 times helpful.” Because everything that pulls in through Metrc is going to pull the supplier name and the cultivation. Off the rip, if you can do something with suppliers that are doing the best, that’ll tell me which ones I need to really order from. And then that really helps out with your whole ordering on a big scale. You know who you need to spend what money with or who’s getting the large orders and who’s getting the smaller orders because a cultivation might have eight strains but only one of them is selling really well in your shop, which there’s nothing wrong with that. I just know that I need to buy lots of that one and have that one so it’s never running out because that’s one of the top five sellers.

Same thing with the products, whether it be a vape cartridge or shatter live resin, whatever it might be. I really might like refined and live resin but if it’s only selling 2,000 to $3,000 worth of stuff in the shop per two weeks, but Frog Mountain or someone else is selling five to six and that’s not my favorite and that still tells me that I need to go with Frog Mountain a little bit more versus what I like, which at the retail side, that’ll kill anyone quicker than something else was just ordering what you like. It’s like going to a restaurant. There’s 20 things on the menu for a reason. You know what I mean? You might not like pasta but someone else might come in and that’s what they’re looking forward to.

TG Branfalt: You’ve been in the industry since, for basically for what? Seven years now or six years.

Chris Ray: Yeah, I was Pakalolo’s first employee.

TG Branfalt: What do you think is or what have you noticed is, through the data, is the most popular sort of form maybe not brand, but is it flowers? Is it concentrates? Because state by state it differs.

Chris Ray: Pre-rolls.

TG Branfalt: Pre-rolls.

Chris Ray: Yeah, I would’ve thought, me personally, I love buying flower and rolling it up myself but there are so many people on go in Alaska, whether they’re going fishing, camping, whether they’re driving on a six hour trip to go somewhere up north or going on a road trip. Because everywhere in Alaska, you got to drive to get there. You’re looking at no less than an hour drive somewhere. I feel like people just traveling a lot and being on the go, those six packs and those four packs that we sell and just pre-rolls and all just take over the market. There’s lots of good flower out there and there’s lots of good concentrates, but people from concentrates there’s only a select few that use them.

TG Branfalt: Yeah. You mentioned people having to travel and as we discussed before we went on here, Alaska’s one of those places that I really would love to visit. Very much considered moving there at one point. What portion of your customers are tourists? And what role does tourism play in your bottom line ultimately?

Chris Ray: When I was in Fairbanks, tourism played I’d say during the summertime about a good 30 to 40% of your customers are tourists.

TG Branfalt: That much.

Chris Ray: Because you got people coming up. They’re trying to just see what it’s like in the summertime, trying to enjoy themselves. In the wintertime, I’d say it dies down a little bit because not many people want to come deal with the cold but they want to see the lights, especially in Fairbanks. Now, when I got to Anchorage, we kind of opened up right before the pandemic so the whole tourism thing, it really hasn’t kicked into full gear or I don’t even know if it will this summer. I know Alaska’s offering the vaccine to anyone that comes to Alaska that wants to get it. That might bring some tourism up. But at the Tree House, I really haven’t seen that in full scale yet but from Fairbanks in that summertime, I’d say a good 30 to 40% in the summertime. And then probably about 20, maybe 25% in the wintertime. But a lot it’s just your diehard locals that want to come through and support local businesses.

TG Branfalt: Do you guys have that corporate culture up there that have sort of permeated in other states?

Chris Ray: We have a couple of shops up here that have kind of taken that bigger, all right, we’re going to take a larger footprint. We want three cultivations. We want four retails. There’s a couple like that. Not a whole lot. I’d say for the most part with us being in Alaska, everything still seems small craft for the most part. But I hope it doesn’t come in here like that.

TG Branfalt: No, you’re super fortunate because the idea of an entire market being a craft market is it’s really unheard of down here.

Chris Ray: Now, there are a lot of cultivations to where I feel like there’s a lot more midgrade weed that it outweighs the good weed that’s out there for sure. And some of those guys that have two, three cultivations, that they’re putting out a lot of mid grade stuff. Those smaller guys that only have the one cultivation, sometimes they get overlooked.

TG Branfalt: And you find them through data, right?

Chris Ray: Oh, you have to, you have to, yeah.

TG Branfalt: You mentioned that the Tree House just opened around the time that COVID hit. The pandemic obviously didn’t change your operations that much at the Tree House. But when that did hit, what did you have to do? What did the industry have to do in Alaska to deal with that?

Chris Ray: The industry actually opened up curbside pickups. They didn’t open up for delivery but they did allow us to do some curbside pickups. Us at the Tree House where we’re at, we didn’t feel comfortable doing the walking outside with product and dropping it off to people. We kind of just went with the whole social distancing, cleaning on the hour, every hour, wiping down everything. Thankfully with our shop, we only have about 10 to 12 employees so keeping everyone safe and healthy for the most part, we were good. We didn’t have anyone break out with any cases or anything like that.

But the industry as a whole, with them doing the curbside pickup, I feel like it helped out a lot of shops because a lot of shops don’t have the floor space that we do to where people can come in and be distanced. For them to walk out real quick and all right, here you go, boom, boom, boom. You already paid for it. All right. Thank you. Make it real quick for them. I feel like it made some of the customers and the consumers feel safer about coming to get their product but once it kind of laxed up a little bit, I feel like people they’re looking forward for things to opening back up and being able to come back in and see the big jars of weed and smell them and have a more hands on experience. Because I feel like that’s why most people come to the shop is to have that hands on experience.

TG Branfalt: Yeah. It definitely had to sort of change the way that people were buying cannabis. Did you notice any sort of?

Chris Ray: Yeah, we thought sales might slow down a little bit because people not wanting to leave the house or whatever it may have been but with us being an essential worker in the state of Alaska, business stayed the same if not got better. A lot of people came out, they were willing to spend more money because they only wanted to come once or twice a week versus the four times they were coming. You had some people who were just at home more so they weren’t going out as much so they were smoking more. I’m sure anyone who’s a smoker knows how that goes. If you don’t have to leave the house or go check in or meet with anyone, you’re just smoking up because it’s there. No, business stayed pretty steady. Pretty good. It was a good time. It definitely had some learning lessons as far as how to pivot when a pandemic hits. That was definitely my first time working through something like that. Just following the guidelines of the state of Alaska and stuff like that.

TG Branfalt: And as general manager, you were the one that basically had to implement all this stuff.

Chris Ray: Yeah. And it’s tough, when some places are going overboard with it to where they’re only allowing five people in store at a time to where some shops were like, all right. people can come in as long as we’re distanced. Kind of putting it on the bud tenders a little bit like, “Hey, if you see it getting packed in here, ask some people to wait outside in the hallway.” But thankfully our bud tenders are pretty good. They’re pretty quick. Keeping the constant flow within the shop and we have an entrance one way and an exit the other way. Just kind of keeping that traffic streamlined and not having a whole lot of people pass by each other was a good thing.

TG Branfalt: Has the pandemic affected sort of your ability to keep, get or retain the employees because down here it’s, everybody is hiring all the time now because the unemployment check is good. Has that been something that you faced as well?

Chris Ray: No. The only thing that we really face is some employees they might get a job offer from a job that offers them medical benefits or something like that, to where it’s like, “Hey, I’m going to go take this job because I need the benefits,” or, “Hey, I’m going to go take this job because I only have to deal with five people now instead of 200.” But never did I have anyone be like, “Hey, I don’t feel safe working because of the pandemic or COVID or anything like that.” Like I said, we have a lot of space in our shop so even the bud tenders, from register to register, there’s a good four to six feet. And then from the customer to the employee, it’s already a good four feet. Just add another two feet to that, I feel like it made everyone feel pretty safe.

TG Branfalt: It’s good to hear that you guys did particularly well, just with health and being able to manage the pandemic. One of the things that I always found interesting about sort of Alaska’s cannabis law was that they were early adopters of allowing or eventually allowing social use. And a lot of states have since then either enacted their own law or included it in their own reforms. How do you think lounges will affect the industry?

Chris Ray: I’m very curious to see how it’s going to go. One of the first ones just opened up in Fairbanks but I don’t know if you know but it kind of varies from city to city with the rules on which you can consume. In Anchorage, they put it out to where, all right if you get an endorsement for the onsite, you’re only allowed to consume edibles. Well, in Alaska, the max for edibles is 50 milligrams per package. Exactly. I don’t see very many people be like, “Oh yeah, I’m going to go over here today and go buy some cookies and go sit down and eat these cookies.” I just don’t see that being lucrative to anyone. But in Fairbanks, they have it to where you can buy up to a gram of flower from that place and you can smoke it there.

The place in Fairbanks that’s open, they have, you can walk in there, there’s a cafe, TVs, it’s an old Chili’s building so kind of imagine a Chili’s. Walk in there, you get you your coffee or your smoothie or whatever, you buy a pre-roll, one gram pre-roll or buy one gram thing of flower and you can roll it up yourself. Smoke that and then leave. I’m just kind of curious though, if cops are going to sit around the corner, like they do at new bars when new bars open up or something like that and kind of camp out. I think it’ll be cool but I’m very curious to see how it’ll all pan out in the end.

TG Branfalt: I love the idea of an old Chili’s being able to smoke weed at an old Chili’s.

Chris Ray: Yeah. It’s got to grow in there. It’s got a little cafe and then they got the retail on the other side. It’s pretty big.

TG Branfalt: That’s great use of space, man. There’s an old Pizza Hut here. I hope they do the same thing here. Are you guys planning? You said you have a big space, are you guys planning to try to get that endorsement?

Chris Ray: I think if Anchorage were to ever change it to where you could smoke flower or consume concentrates, then I think it would be worth the conversation but just how it right now with just the edibles I don’t think it makes sense because you have to have a state of the art ventilation but I don’t know why you’d have to have a state of the art ventilation if there’s only edibles allowed. It just doesn’t make sense right now.

TG Branfalt: Is the beverage game strong up there?

Chris Ray: In comparison to Washington, it’s pretty weak or like California it’s pretty weak. There are a couple of good beverage companies up here, like Fire Eater, they make a few different sodas. Red Run makes a lemonade that a lot of people tend to like but other than that, there’s really not very many drinks. And again, that counts as an edible so the entire soda can only be 50 milligrams. I know most people are looking for a 100, 250 milligram drink because they want to drink half of it and store the rest of it for later or something.

TG Branfalt: Yeah. In Michigan when I was in Michigan, the max was actually 10 milligrams.

Chris Ray: Wow.

TG Branfalt: Yep. On a beverage. And that was actually medical too. But then you could get at the same time, you could also get basically syrup that was 500 milligrams a bottle and that was a good time.

Chris Ray: Yeah. We have the syrup but again, the syrup it counts an edible so it can only be 50 milligrams. There’s a public comment out right now to raise that from 50 to a 100 to see how that goes. I’m hoping they do. Enough people have voiced their opinions about it. I think that’s on the next meeting or the next agenda to see if they’re going to push that through. And if that does, I think that’ll open up the edible game a little bit to where more people want to come in and experiment with edibles and try them. Because I know right now, 50 milligrams to a 200 pound man, it’s really, it’s not going to do much.

TG Branfalt: Yeah. On the flip side though, if you’re worried about police also sitting around outside, you get someone who’s not used to it at all and 50 a hard.

Chris Ray: It’s a good amount.

TG Branfalt: It’s a hard ride.

Chris Ray: For sure. For sure.

TG Branfalt: You’re a young dude in this industry, you’ve been in your position now for a little under a year but you’ve been in the space since 2016, really at the beginning in Alaska. What’s some advice that you would have for someone looking to get into the industry, man?

Chris Ray: Be willing to come in and get your foot in the door any way that you can. When I first came up, I came up to help run the retail so I was the assistant store manager. When I left there, I had to go to a new company and just to get my foot in the door there, I just came in as a packager. If you’re good at your job and you can voice your opinion here and there and the right people are willing to listen, they will. But that would be my biggest thing is just be willing to get your foot in the door some way. A lot of people don’t want to come in and bud tend or package but a lot of the people that I know today that are in their top positions at certain companies within the state of Alaska, they all came in and they bud tended for a year, a year and a half, they packaged or they watered and trimmed for a year.

They did the little things to kind of study the people around them moving and making the bigger decisions so when the time came to where they needed someone else to make those decisions, they kind of already been watching and it’s a lot easier to teach. I feel like a lot of people come in on their high horse and want to be a manager or a key holder, someone of importance right away instead of coming in and just taking it easy and learning a little bit. It’s a brand new industry and a lot of places there’s a lot of room to grow and companies are just going to keep popping up right and left. If you’re doing your job at the one place, and they got nothing but good things to say about you, a lot of these other places are going to come to you, knocking at your door, looking to build with you instead of just having you be someone come in, making 15 an hour, showing up for 30 hours a week and clocking in and clocking out.

TG Branfalt: And maybe have showed up on time, right?

Chris Ray: And you hope so. Man, you’d be surprised, dude. You’d really be surprised.

TG Branfalt: I worked in the bong industry for a very long time, you can’t be surprised.

Chris Ray: Man, it’s just like, people want more and they want to raise or something but you can’t show up on time six out of the six days out of the week, seven days out of the week. It’s really not hard to show up five minutes before your shift. If you’ve got it to where you’re flexible and you can show up whenever, then by all means do that. But usually when you’re a bud tender or a packager, it’s like, hey, your shift starts up 4:00 so be ready to work at 4:00, not show up at 3:59, take your hat off, take your jacket off, go use the bathroom and then by the time you come out in front to count your drawer, it’s 4:10. It’s like, dude, where you been?

TG Branfalt: That will not get you far in the cannabis industry in Alaska or anywhere else I don’t think. Where Chris Ray can people find out more about you and more about The Tree House?

Chris Ray: All of my social medias are @shawnhemp_, that’s Shawn, S-H-A-W-N-H-E-M P_. That’s my weed moniker. I’ve been rolling with it for a little bit now but that’s pretty much where I post anything that I like, local cannabis, lots of buddies of mine that grow lots of rec stuff that I try for the first time, stuff like that. I’m pretty active on there. But the Tree House, all of our social medias are TheTreeHouseAK. And then we have our website, thetreehouseak.com. That pretty much has our deals, our menu, what we’ve got going on. We try to keep that up to date. And then just story on Instagram for the Tree House is pretty active and always shows what’s going on in the store and stuff like that.

TG Branfalt: Well, if I ever make my way to Alaska, I’ll know where to land the plane.

Chris Ray: Yeah. If anyone is coming to Alaska and they want to see some shops or smoke some good weed, come hit me up, shoot me a message on Instagram, reach out. Everyone in Alaska is super friendly, man. That’s the one thing I love about it here. It’s not like going to Vegas or California, there are some sheisty people in Alaska, don’t get me wrong. But for the most part, everyone who is involved with the weed game, they’re pretty good people.

TG Branfalt: Well, I really thank you for taking the time out and coming on the show and giving me this sort of perspective and insight because it’s been a long time that I’ve been trying.

Chris Ray: I’m surprised it took you five years. That’s crazy to me, man. There’s two or three podcasts up here that talk about marijuana on the local scene. There’s 30 shops. I’m just, I’m surprised no one’s reached out.

TG Branfalt: You guys are sketchy of us mainlanders.

Chris Ray: Oh, see man, I learned all my experience down there on the mainland. I was right down between Kansas City and St. Louis for about three, four years down there in Columbia.

TG Branfalt: Columbia. I’ve never been, man. I’ve never been.

Chris Ray: Yeah. It’s an interesting place, man. It’s like a tunnel between Chicago, Memphis, Kansas City and St. Louis.

TG Branfalt: Chicago’s a great city.

Chris Ray: It’s right where the University of Mizzou’s at. A lot of people come through there, a whole lot of different walks of life.

TG Branfalt: That’s Chris Ray. Thank you so much again. Hopefully you can keep me posted on whether or not that push works to get the level of THC in edibles raised. And hopefully we’ll talk again soon, man. I really appreciate it.

Chris Ray: Yeah. Yeah. Reach out whenever.

TG Branfalt: You can find more episodes of the Ganjapreneur.com podcast in the podcast section of ganjapreneur.com, on Spotify and in the Apple iTunes Store. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. I’ve been your host, TG Branfalt.

As cannabis becomes more and more ubiquitous in social circles and even in public spaces, it’s important for new cannabis products to collectively drive the industry’s innovation and acceptance by more mainstream audiences. MyHi is especially in tune with that fact as a company and has dedicated a significant portion of its launch and brand identity to centering the conversation about social and convenient cannabis use.

In this episode of the Ganjapreneur.com Podcast, our host TG Branfalt connects with MyHi’s founder and CEO TJ Stouder to discuss the inspiration behind MyHi’s patented stir STIKs, the benefits of being able to add its fast-acting and nano emulsified THC powder to any beverage, and how the product is changing perceptions of social cannabis use and the role cannabis should play in social drinking circles. The pair also discuss emerging cannabis markets and trends from around the country, strategies for building a brand in the whirlwind cannabis industry, tips for entrepreneurs who are considering their own cannabis venture, and more!

Listen to the full interview below. You can also scroll further down to find a transcript of the interview.

Listen to the podcast:

Read the transcript:

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Cara Wietstock: Hi, I’m Cara Wietstock, culture editor at Ganjapreneur and host of our YouTube show, Fresh Cut. The best way to understand cannabis business is to speak directly to those who work within it, and Fresh Cut was created to shine recognition on the people who fill these roles.

In this interview series, we focus on those with their hands in the dirt, both literally and figuratively, from cultivators to budtenders, educators to advocates, activists to lobbyists. We aim to illuminate the workers who keep this industry thriving. Enjoy one-on-one conversations with me and guests by watching along on the Ganjapreneur YouTube channel, and follow our social channels to keep up with the latest episodes. Have a great day.

TG Branfalt: Hey, there, I’m your host, TG Branfalt, and thank you for listening to the Ganjapreneur.com Podcast, where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today, I’m joined by TJ Stouder, he’s the founder and CEO of MyHi, a line of water-soluble calorie- and sugar-free THC powder stir STIKs.

This is a product that I’m really excited about as somebody who doesn’t really consume much alcohol and have used many different products to try to bridge that non-drinker gap with my drinking friends. I’m really excited to have TJ on the show to let me know more about himself and this product. How you doing this afternoon, man?

TJ Stouder: Very well, TG, TJ, thanks for having me. This is going to be fun.

TG Branfalt: Hey, and I’m screwing it up already.

TJ Stouder: That’s great.

TG Branfalt: I’m really stoked to have you on the show, as I said at the top and as we were talking about before, I don’t really drink that much, so to have a product that is water-soluble, it can be mixed with most anything. But before we get into all that, man, let me know about yourself. You have a really interesting background.

TJ Stouder: Awesome. Thank you. Yeah. In a nutshell, I was a kid born in Indiana that was a cannabis consumer for most of my life. I like to call it the home of the stigma to put it simply. Not a good place to be a cannabis consumer. Left Indiana, grew up professionally at Procter & Gamble working on a myriad of big brands and kind of around the world on different budgets, brands and marketing of building consumer products.

I learned one big insight throughout that entire experience, which brand consumer connections go a lot deeper than a point of sale purchase. I like to use the example of throughout quarantine we still wash our clothes with Tide because it’s part of who we are, not how we wash our clothes. That’s how P&G thought about building a brand and really how, let’s call it, I grew up thinking about brands.

Left P&G on a mission to find something closer to home, a product or something that would work closer for me. As I said, long-term cannabis consumer, didn’t think that was the answer, believe it or not, despite the green rush and everybody going that way. I ran into some close family issues that needed CBD and/or any form of cannabis that they could get into and saw light basically in my mom’s eyes that she needed a root, like a brand, like what I just discussed, to open up that world of cannabis to her.

It’s, as I said, the home of the stigma. It runs very deep and people are afraid of this plant. That nice branding, that approachability, the product design for your life has really become crucial to people discovering this plant and really what I dedicated myself to and all of my skills, and now I’m in cannabis for the last three years. Super excited to be here.

TG Branfalt: You talked about your time at Proctor & Gamble, can you tell me a little bit about moving from the more corporate culture at a multinational company to the cannabis space and what some of your challenges were?

TJ Stouder: Definitely. It was a fun journey. I’ll say it’s not as far as it would seem apart. The biggest challenge is really … it’s been built bottoms up on how corporate structure works. However, it works really well. It’s just … Let’s call it, P&G they call it proctoids and you learn exactly how to be a P&Ger from day one to the end, which is impressive and it works and good teams, strong teams. You get brilliant people across all their roles.

Stepping out of that, we walk into cannabis where it’s a very differently trained environment of corporate world, however motivated, ambitious, sticking to the things that work and really focusing on blocking and tackling of getting stuff done. You see a lot of parallels. I’d say biggest challenge is timeliness of meetings. You ask what I’m doing today, I have no idea.

I hope I have at least 10 important meetings coming up after this, but it’s always fluid and you got to adapt. I think we share an awesome passion for wellness for consumers that drives us all to work 24/7, work harder than any industry I’ve ever worked in. Again, super excited about the momentum of cannabis, but some of the blocking and tackling we’ll still have to work on.

TG Branfalt: You had said too that going from Proctor & Gamble you didn’t exactly see yourself going into cannabis. You mentioned briefly your personal story. Was there something personally that you saw preventing you from getting into the space or what was your thinking at that time?

TJ Stouder: Good question. I’ve never answered that one. I’d say honestly, I never worked on spirits for a reason. I believed in the products I worked on and that they truly brought wellness or some better good to the consumer’s life. I saw cannabis like I saw spirits. It’s recreationally okay to go out and exit work, throw out some stress, have a party on a weekend, go to a concert, whatever it might be, but it’s not a way of life.

I don’t drink alcohol as part of who I am. It’s not something I do as you said, as a non-drinker. We evolve from our college days of how much can I drink? Versus, okay, I’ll have a social beverage with a friend or a business meeting, something like that. I think what I learned through my family members and my mom’s wellness journey was there’s a lot more to this plant. I was a recreational consumer that didn’t see the downside of it.

I was more than excited to consume cannabis myself, but I didn’t see the upside and how in important that can be as a product to consumers and really bringing this product into their everyday life. That’s where I really saw it as a career when I learned about the wellness upside of this plant and frankly, the recreational side is wellness.

As I watch states look at medical versus rec, it’s a happy hour is wellness for a consumer. It’s stepping out of your stresses from the day and getting ready to go into your evening and hopefully enjoy your family time, whatever that may mean. It’s more than getting as drunk as you can get at a bar.

TG Branfalt: Yeah. I mean, that’s something that during my tenure covering this industry, I realized that yeah, I consumed recreationally. I never had an interest in getting a medical card, but then realized, “Well, I’ve been medicating this whole time.” To your point, I mean, I think even for people who have consumed cannabis for a long time, that we end up there in that thinking, if you know what I mean.

I want to talk to you about MyHi. When I first saw this product, the first thing I went to personally as a guy who really loves candy and sugar was Pixy Stix, man, just THC Pixy Stix, and that excited me. Then obviously I started reading a bit more and I was like, “Wow, this is sort of a game-changer in many ways.”

Because as a non-drinker, I go to the bar, I order a soda and then I have to go outside, smoke a joint, or rip a vape or eat 30/40 milligrams of edibles before I get in there. It was something that excited me. Tell me and the listeners a little bit more about MyHi and what really differentiates it from other edibles in the space.

TJ Stouder: Awesome. Well, and thank you for telling a bit of the story through your own experience, because it’s exactly MyHi, how you said it. We like to say MyHi, my way. I am a cannabis consumer who finds a lot of points in my day that are tough to consume. Products don’t fit, as you just explained. I’m out with my friends for a drink and stepping outside to smoke a joint takes me away from my friends.

I miss a couple of toasts. I miss some news update, friend’s pregnant, et cetera. I’m outside smoking a joint. I take that edible before I go in. I’m not high when I get to the bar, an hour later I’m too high and it’s managing that experience. For me, it’s a product that fits in between all the others for those moments where you can’t consume for the cannabis consumer.

Secondly, and as you get to Pixy Stix, it’s that experience for a consumer that differentiates our product and bringing it back to like a cocktail, mixing up a drink at the table when your friends are having an alcoholic cocktail or elevating your alcoholic cocktail as you prefer. It’s that experience of stirring it in that makes cannabis cool to everybody at the table and you don’t have to separate to smoke.

You don’t have to eat the gummy under the table. You’re back in the middle. Lastly is that nanoemulsified powder is crucial to that experience. I choose flower as a consumer because it’s manageable, controllable. I know exactly where I’m going to go and how far. That’s why I like flower and I find with other discrete products, it’s often tough to manage some of that curve. With the nanoemulsion, it hits in we say 15 minutes conservatively.

Some of our consumers come back with faster, really like a cocktail would. You can have one every 30/45 minutes as you’re out or have one quickly on the go and you know exactly how far you’re going to go. Really MyHi, my way puts that experience back in the consumer’s hands to enjoy the product at their pace out and about.

TG Branfalt: Well, I mean, as most people know and you know, and I know, is the average edible, I mean takes 45 minutes to an hour, especially somebody my size, 6’3″, over 200 pounds, it can take a while. What type of cannabis consumer is MyHi aimed at? I know you say MyHi, my way, but for older consumers generally we say start low, go slow. Start with little 2.5, five milligram edible, if you’re going to go there. You talked at the top about marketing and brands, who is the end-user in your opinion for MyHi?

TJ Stouder: Awesome. A lot of people, I think. I like to say America drinks and I want to make that mean something different.

TG Branfalt: Interesting.

TJ Stouder: I mean, right now I have three beverages in front of me on my table that fits into my routine. It’s a water, a coffee and a juice from my breakfast that’s sitting here ready to be infused. I think the target demographic is really somewhere between the non-canna curious and I’ll explain what that means to me, and what we obviously know, the canna curious.

Non-canna curious to me is I live in Colorado and 75 to 90% of my friends don’t go to a dispensary more than once a year. That’s concerning for me as a category participant, investor and believer in the growth numbers behind this category. A developed market like Colorado, and I have a pretty good group of friends, that don’t see the need to go into a dispensary.

That for me, we get super excited about the current cannabis consumer. We all have friends that say, “I don’t smoke, or, eh, I had an edible one time and I was glued to the couch for the next three days. I’m not trying that.” I think encouraging that non-canna curious, who’s seen so many barriers about why to go in dispensary or really the intimidation about the products there, it’s approachable, it’s branded, it’s fun.

It’s something they can do that’s more like other things they consume in a beverage and a cocktail. I think that differentiator for the non-canna curious is most important for all of us to share what we believe are the upsides of this category with the new consumer. However, again, the flower I buy announced, and I don’t look at any other products.

I believe this stick elevates that experience in a way that me, as nearly that consumer, I put one of the sticks in the water, and enjoy a bowl or a joint next to it, really elevating that high to another level from an experience standpoint and because of that nanoemulsion, fast-acting, getting the high more elevated than it would’ve been on just a joint.

I didn’t even get to the caffeine element, which I should mention, but we do 30 milligrams of green coffee bean extract that truly elevate the experience versus I think many disappointments with sativa.

TG Branfalt: Yeah, and we are going to talk about the recipe a little bit later on, but I do want to just touch onto your point that I’m one of those people, I mean, I live in New York. We don’t have dispensaries. When I go to dispensaries, I’m primarily looking for edibles, metered-dose edibles so I know what I’m going to get.

So to have a drinkable product which are not … or a product that can be mixed with drinks, in an immature markets such as Massachusetts that doesn’t have a strong canna beverage presence, I think is something that I personally, a long-time consumer who really does like edibles would gravitate toward to that product. To your point about the non-canna curious, how overall does your product fit into the canna beverage market, which I said is mature some places, immature other places?

TJ Stouder: Super excited for canna beverages across the board. I think the category speaks to a lot of what I’m looking to … excited about on our product and how it hits the demographic. A lot of them are ready-to-drink beverages, which I think for a consumer has a place and a time and you know what you want to drink. I’m at a convenience store in a normal beverage, I pick my favorite juice and I’m ready to go.

What our product provides is the ease and convenience of infusing whatever you’re drinking, wherever you’re drinking, which I think the biggest benefit for consumers is it doesn’t have calories and it doesn’t have sugar. If I put it in a water, it’s a refreshing water that gives me my dose without anything else. If I want to make a hightail, I can get creative and make whatever I want.

I think as I look across the beverage markets, a lot of them are ready to drink and exciting and I think we’ll have a great place in that consumer’s refrigerator. We’re hopeful to be in every pocket, in their hats, behind your ear, easy, ready to go, convenient because our consumers are on the go. They live multitasking lives everywhere they go.

TG Branfalt: I’ve never heard the term hightail before.

TJ Stouder: That’s new. We’re working on coining it. The thought is replacement for a cocktail or elevating another mocktail and really MyHi-tail.

TG Branfalt: I like that too. What do you anticipate or expect the beverage market to look like when it’s fully mature?

TJ Stouder: Great question. I think full spectrum, the markets we look at today, beverage is small and growing rapidly. The rationale for that in my mind is they’re nascent markets with consumers like me that are hard to convince to change their product. I have my flower in my cabinet. I’ll check something else out here and there but I know my routine at the end of the day.

I think the emerging markets are super exciting from Las Vegas to New York, let’s call that the emerging side of the country, not fully developed, where new consumers aren’t used to smoking flower. They don’t understand concentrates. They’re a bit more connoisseur, whatever it might be. I think the new products and especially beverage are going to have a big way.

Then lastly, as I mentioned, markets like that, social lounges will be game-changers for cannabis. It’s the fact that happy hour at a cannabis type bar with no alcohol is going to be a new concept that I’ve experimented a lot with, but I know most of the country has not.

That’s the most exciting part for me, because waking up the next day at 5:00 AM to run and go to work is a new feeling for an alcohol drinker himself when you’ve had a long night out. I think that’s the growth market and I think it’s going to be a much larger portion of the national category split.

TG Branfalt: Well, and if I’m not mistaken, Colorado just recently passed social use legislation, is that accurate?

TJ Stouder: Correct. But it’s small and there’s a few licenses. Again, in a nascent market, I know how to consume at home. It’s bringing me out into the … And again, look where alcohol is. It’s everywhere from the ballgame to the park, to the kid classes on the weekend, alcohol has found its way to be our social life. Cannabis is not there in any market with social use. It’s separate from what everybody else is doing.

TG Branfalt: Have you had any potential social use licensees reach out to you yet?

TJ Stouder: Not yet. We’ve talked to a few that are working on plans for the back half of this year in California. We’ve only launched in California to date, but writing’s on the wall coming very soon. We are talking to some people in New York that are … It sounds like they’re going to aggressively move to the lead in social use. I think things are going to come in 2022 for sure.

TG Branfalt: I have to ask you this question and recently there’s been other products that have gotten a little bit targeted for their marketing practices we shall say. I’m not going to name names here, but what your product is essentially, it is a powder. Do you anticipate, or have you experienced any pushback for a powdered cannabis product?

TJ Stouder: It’s a great question and nowhere you see the risks of powders and I know why some of these companies are receiving backlash, at least in my opinion. We try to tailor our entire experience around that beverage delivery and it all starts with our stick itself, which is it’s designed off the Mai Tai umbrella. MyHi, you start to see ordering a bar and a drink, it sits nicely on top and looks like an umbrella in your drink.

Really everything we communicate is about infusing safely above 21, 18 with a medical card, beverages and really even we stay away from alcohol trying to manage that experience. As you said, with microdosers, learn how you infuse four ounces of water, learn how that 15 to 30 minutes goes and really learn how it works with your body first.

Really again, we’re a wellness-focused company that sees a recreational high as part of a wellness routine and everything we do in our product follows that nature. I’ve seen some of the others that are going different roots with powders that frankly, again, because I believe in cannabis as a category, I believe in the wellness nature, I think we need to be overly cautious with everything we do ensuring that people are consuming safely.

As a company, we believe in that. We continue to push. I’d say the biggest backlash we receive is really from buyers and dispensaries that are learning the category and new formats and how the science behind the actual pattern itself delivers to the consumer that is an educational curve for the category that we think we can get around with great marketing, a great delivery device that really differentiates versus that crowd.

TG Branfalt: In the three years that you had said that you’ve been in this space, how much of that has been focused on educating people about your product?

TJ Stouder: A lot. We do it very simply because we do it via trial. We sell all of our products in one, singles. So you can try it first and assume it works for you. Biggest for us is check this out. We do it as cleanly, safely and with this technology very transparently as possible, give it a shot. It’s a lot of people, like you said, are exploring beverages in the early days, even the more connoisseur consumers, but it might be the first beverage they’ve ever tried.

It’s really experiencing that first stick is what we try to get everybody a chance to do via everything from events to sampling. Education is transparency in my book because I think the category in total is learning by the day. We give that consumer promise that we’re going to stay ahead of the curve and really vet the right technologies and ensure your experience is top notch.

TG Branfalt: Talking about the experience, we spoke briefly about the recipe earlier. Tell me about the process of coming up with that recipe, which includes green coffee bean extract, L-theanine, theanine. I’m not a science, man, and monk fruit, which I think is very interesting. Your background isn’t necessarily in food, beverage, so tell me about your experience coming up with the recipe and what that process was like.

TJ Stouder: Awesome. Number one is transparency and know your lane. I never try to be smarter than I am and I find somebody smarter than me when you need something like formulation. However, it started with an insight and as I mentioned earlier, better than a sativa. I’m disappointed by sativas and I think we all know the … or at least the more experienced cannabis will know the seeds aren’t what they used to be and sativas and indicas are mostly a myth.

There’s mostly hybrids available and the mix of terpenes on that plant will greatly affect your experience, especially state to state, et cetera. A lot of those challenges of flower. Sativa, I always find myself grabbing a coffee next to a sativa to actually give myself energy, “That’s not what you promised sativa,” is what I say as a consumer.

Really what we did, we picked a hybrid extract to really capture the essence of that THC nanoemulsion that goes into your bloodstream faster, really delivering a more elevated experience naturally. Then green coffee bean extract, which is pure all-natural green coffee bean, 30 milligrams. That’s about a third a cup of coffee. It gives you a nice social awake high next to your THC and it’s really energizing, productive.

It’s funny, the influencer is coming back to us when they run out of samples saying, “I got so much stuff done while I have my MyHi.” It’s a new category of high. We’re saying that kind of asking people to prove us wrong, but it’s a different experience versus other products we personally have tried. It’s energetic, it’s awake, it’s social and it’s buildable as you have a couple of them next to each other.

Green coffee beans, the core that you’re actually going to feel, the next one is L-theanine which really is anything negative anyone gets from coffee, jitters, drowsiness coming down, things like that, L-theanine kind of balances that out and really L-theanine means balance, focus in general, an all-natural let’s call it brain supplement.

It’s a nice next to that caffeine and THC, keeps you balanced and focused, which a lot are feeling, especially on those longer evenings of enjoying MyHi. Lastly, monk fruit is critical for the no sugar piece and no added artificial sugars, et cetera. Monk fruit … I don’t know how it was discovered recently.

I just wanted to learn more about monk fruit myself, but I’ve been using it in everything and anything I can. It’s all-natural sugar. It doesn’t spike your sugars for diabetes. It is a super fruit that we’ve been missing to sweeten nicely. It’s only 10 milligrams, but it gives a nice little sweet refreshing edge on the end and keeping that no sugar, no artificials.

TG Branfalt: Interesting.

TJ Stouder: I didn’t actually answer your question. I got all that from Google. I started with literally the insight and I said, “What’s the best way to naturally do this stuff?” I think it’s funny that we work so hard in a lab to come up with complex long formula cards that the consumer can’t understand, and that’s how the consumer actually finds wellness.

For us, we’re starting very simple. THC is at the center of our product. Everything else is to help that feeling along, but innovation path is strong and we’re planning on doing minor cannabinoids, other formulas, terpenes, et cetera, to really bring different moods, different taste profiles and whatnot to MyHi. It’s just a start, let’s start with energy.

TG Branfalt: Is there a particular terpene that you’re more excited to work with or a specific cannabinoid? I mean, you seem like you’ve done a whole of thinking about this.

TJ Stouder: Lots and lots. I’m excited for cannabis. I mean, what we don’t know is what I’m most excited for. I’ll give you an example on the terpene front. We study about 40 terpenes out of over … I’m not even going to quote a number. I’ve heard over a hundred thousand as the safest number I’d say known terpenes on the planet, most concentrated in cannabis as a plant.

For me, what was destroyed over years of stigmatization and prohibition of cannabis is too sad to think about and what’s yet to be discovered because we’ve only really started researching the depth of this plant is too much to dream of. Really crafting that experience with some of the scientists who actually do the work behind me being a googler with insights, there’s huge upside.

It’s just really tailoring that experience up to fast-acting and long-releasing that can do it 15 minutes by 15 minutes where you’re going to go all via this stick.

TG Branfalt: Again, I hate to harp on it, but it’s one of these products and you’re just so interesting in the way that you present it, that a lot of times I don’t really get to … What’s the word I’m … I don’t want to say excited again, but I’m normally not super stoked on these things. Now that New York’s legal, I do hope that it is something I am able to find on the East eventually.

What states are you most excited about entering? You said that you’re right now only in California, what’s the future look like?

TJ Stouder: We have a small team that’s very focused. California’s the largest market with the most brands, frankly, is why we’re starting there. We want to prove it against the big guys and again, that we can grow a cannabis consumer’s basket size, the guy who’s buying flower concentrates and edibles already, plus a MyHi.

As well as drive new traffic into every one of those stores to look at cannabis for the first time, because they saw a product like this or see that’s something that might be approachable to their world. We believe after proving that in California, looking at a multi-state operator that has multiple states quickly, three to five to 15. We provide a unique standard operating procedure that gets up and running quite quickly.

It’s the patented delivery device of the stick itself, the consumer brand that’s ready to plug and play into any market and really hit that demographic provides a differentiator versus cannabis. There’s, as you say, kind of … And I don’t know how to put this in the nicest way. I’m a consumer that loves going into dispensary and I see the excitement of every consumer in there. The products we got to step it up.

As I look at the counter and I see one after another of things that look a lot alike and don’t motivate me to consume it, it’s … I love cannabis. I’m happy to buy it because it’s something there, but how do I find which product’s going to change my life? How do I find the one that if I’m going into quarantine, I need to stock up for a year and a half because there’s no chance I’m running out of this product?

I think we, as a category need to continue to push ourselves that just because the consumer’s willing to buy it, doesn’t mean it’s our best effort. We got to push for better and better and better and more innovative. I get excited about as more states come on board, as federal legalization looms, better and better products are coming.

It’s exciting to see the innovation for me as a consumer, beyond our product, and I say this to all of us as motivation. It’s exciting to see new products, new consumption, new consumers.

TG Branfalt: I mean, I really appreciate your insight. Your background’s very different than a lot of people who enter the space, and you’ve obviously chosen a very successful team. One that shares your vision, which you’ve clearly stated and I think is very worthwhile in this space at the very least. What advice would do you have for other entrepreneurs looking to enter the cannabis space?

TJ Stouder: Excellent. I think number one is find what you do best and find how to do it in cannabis. I think the world we see in cannabis today is a very small portion of what it will be in the future. I talked about things like social lounges and hospitality. They don’t exist yet in cannabis. I get a lot of people that come and they do something completely different from what cannabis today looks like, which I felt like that person.

I’m a consumer brander that came from P&G and worked on fine fragrances down to detergent and it’s, how do I play a role in cannabis? There’s no brands, there’s no scaled consumer products, et cetera. Ah, this is a consumer product that we need to scale and the industry needs you with your well-meaning mission to come aboard.

It’s finding how cannabis grows into the world you live in because it’s going to, as legalization comes in, as more consumers come on board as part of their daily routine. Find what that is and put your all into it. You really want in, there is plenty of space to grow this category.

TG Branfalt: Finally, my man, where can people find out more about MyHi and maybe find out more about you?

TJ Stouder: Awesome, getmyhi.com, G-E-T-M-Y-H-I.com, that’ll be in the show notes, is the best place, check it out. Now, all of our information my team’s done a phenomenal job with the website in our early days of launch. There’s plenty there.

TG Branfalt: The marketing is really something special.

TJ Stouder: That’s where we start obviously, and then come to California. We’re starting there, but hey, get out there this summer. It’s the summer of ’21. People are traveling again. I think we’re hopefully past this pandemic. Check us out in California. Would love to hear your thoughts if you get some product. If not, ask your local budtenders, write to your governor wherever you are in cannabis. We’ll come to your state hopefully soon.

TG Branfalt: Brilliant. That’s TJ Stouder. He’s the founder and CEO of MyHi, a line of water-soluble, calorie- and sugar-free THC powder stir STIKs. Thank you so much my good man for being on the show and I really look forward to one day finding MyHi in New York or Massachusetts, or basically anywhere on the East Coast now that we are opening up. Thank you so much for being on the show.

TJ Stouder: Awesome. Thanks TG.

TG Branfalt: You can find more episodes of the Ganjapreneur.com Podcast in the podcast section of ganjapreneur.com on Spotify and in the Apple iTunes Store. On the ganjapreneur.com website, you will find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. I’ve been your host, TG Branfalt.

With nearly one million medical cannabis caregivers licensed in the state, Michigan is an often undersung hub of cannabis culture, cultivation, and industry expertise.

In an interview covering entrepreneurship and the Michigan marketplace, our podcast host TG Branfalt recently connected with Joseph Ori, a career lawyer and entrepreneur who co-founded Michigan’s Six Labs. In the following episode, Joseph discusses his pivot to the cannabis space, the company’s scientific approach to cannabis cultivation, and the advantages of working with a versatile team. The interview also covers Six Labs’ brand-building process, their prioritization of experience-focused cannabis products, and more.

Check out the full podcast episode below! You can also scroll further down to find a full transcript of the interview.

Listen to the podcast:

Read the transcript:

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Cara Wietstock: Hi, I’m Cara Wietstock, Culture Editor at Ganjapreneur and host of our YouTube show. Fresh Cut. The best way to understand cannabis business is to speak directly to those who work within it, and Fresh Cut was created to shine recognition on the people who fill these roles. In this interview series, we focus on those with their hands and the dirt, both literally and figuratively, from cultivators to budtenders, educators to advocates, activists to lobbyists.
We aim to illuminate the workers who keep this industry thriving. Enjoy one-on-one conversations with me and guests by watching along on the Ganjapreneur YouTube channel and follow our social channels to keep up with the latest episodes. Have a great day.

TG Branfalt: Hey there, I’m your host, TG Branfalt, and thank you for listening to the Ganjapreneur.com Podcast, where we try to bring you actionable information in normalized cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today, I am joined by Joseph Ori. He’s the co-founder, General Counsel, and Government Relations for Six Labs, one of Michigan‘s largest craft cannabis cultivators with a complete focus on quality and precision and a passion for advanced research development and technology. How you doing this afternoon, Joseph? A pleasure to have you.

Joseph Ori: I’m doing great, TG. Thank you for having me. Really appreciate it.

TG Branfalt: As a lot of our listeners know, I actually spent a year in Detroit. I love the city. I was there when they legalized cannabis, but was not there when they actually started sales. I did go to a Cannabis Cup there, which is a story for another day that has been posted to the website, but before we discuss Six Labs and craft cannabis, which is really exciting, tell me about yourself, man. You obviously wear many hats for Six Labs, so tell me about what you do there and your background. How’d you end up in the cannabis space?

Joseph Ori: Well, the cannabis space sort of called out to me, I think, but I have a background. I played sports competitively my whole life, and most of it was spent playing football toward the latter part of my teens, and then I ended up playing college football and I actually ended up with two back surgeries while in college. Back in the ’90s, they were giving out Percocet and Oxycontin like it was candy and we, obviously, didn’t know any of effects of those substances and the addictive quality. I was one of the lucky ones because I didn’t react well to them and I was in an extreme amount of pain all of the time. I mean, I’m talking back since I was… I don’t want to date myself, but since I was 20.

I stumbled upon cannabis in college and, you know… Whereas, most people were using it just recreationally to have some fun. I started to notice that it was mediating my pain. Whereas, you drink alcohol and I’d feel like shit the next day. I mean, I was completely dehydrated. My back would kill me even more. I’d worry it was cannabis. It wasn’t, so I became sort of self-medicating myself over the years. Then, as this industry grew and they started to actually acknowledge that there were medicinal qualities and sort of at the same time the parabola was going downward for opioids and all of the negative exposure that they rightly received, I said, “I’m a believer in this.”

The opportunity presented itself to… You know, I’ve been an investor in cannabis separately before Six Labs, and so an opportunity presented itself that Six Labs, I’m sorry, that Michigan was opening up to a new set of rules and they were going to open up larger cultivators and go recreational legal, and my partners and I saw an opportunity. We bought some land out there and we got it approved locally. We raised tons of money and got this thing off the ground. We’re all in our… The challenge we had was… I tell people this a lot is that we’re all in our 40s, so we’re seasoned businessmen, and one of the things that comes with that is that you know what you’re doing, how to run a business, and by that point in time in your life you know some people who’ve got some wealth.

We were able to raise money and we were able to put together this company relatively easy in the sense that we all had a role. The challenge was that once it started to take off, we all had to leave our careers. My main bread-winning background was that I’m a trial attorney for 25 years and I’m also, again, a restaurateur. I’ve owned record labels, been a sports agent. I’ve done a lot of things in my life, but this was basically saying, “Okay, you have to sort of take a step back from what we’re doing every day.”

My law firm, I’ve had to put some people in place because I’m the founder and owner of that law firm, but I’ve had to put some people in place to sort of help me out and bring some younger attorneys up and make them partners and share the piece of the pie, so to speak, so it’s been a journey. I mean, it’s exciting and we’re really happy with where we’re sitting right now, but obviously, we say that in cannabis every year is like a dog year, I mean, every month is like a dog year, so we’ll see how it goes.

TG Branfalt: No, I mean, this is a really incredible journey. Going back a little bit, you said that you were an investor in cannabis companies before you launched your own. Tell me about the… maybe not the companies that you invested in per se, but what drew you to those companies in that early stages.

Joseph Ori: Well, so what happened was is that Illinois got in the game. I’m not going to say they were the first ones, but the medical aspect of cannabis in Illinois was pretty early on. I was approached by several entities that was a couple of which are massive companies now and trying to get me to invest in their company, which I did. Then, I got approached by some other groups that actually wanted to do what we did, which is actually take a role in the company and get it off the ground and get licensed in Illinois and sort of see where it took you.

I at that point in time was too ingrained in what I was doing professionally as a trial attorney and I had some very… I represent people who can’t represent themselves, so I do catastrophic injury and I represent a lot of people who would never be able to pay me if they had to. I work for free unless I win, representing infants that are injured at birth and things like that and construction workers who are severely injured on the job. And I was ingrained in a lot of big cases. I couldn’t walk away.

I kind of had that itch back then, and then sort of as I found myself five, six later with this opportunity in Michigan, it just made sense to do that at that time because I had surrounded by partners. My partners are guys I’ve known for many, many years and it was really odd because one of the things as an entrepreneur as I’ve learned is it’s one thing to have a great idea.

It’s one thing to have a great plan and to get funded, but to have yourself surrounded out of the gate with people who you know and you trust… Also, I mean, if I tell you this you probably wouldn’t believe it, but so what do you need to run a business? You need, well, we need an attorney. You’re going to build something, you need a builder. If you’re going to have finances, you need an accountant. If you need operations, you need a guy in those operations.

Well, all five of my partners, my other partners, had these. One of my partners is a certified accountant. He’d had a background in banking. I’ve got another partner who was a builder and left his career as a builder to [crosstalk] build our facility. We’ve got other guys who fell into place that were also key critical roles in the company, so we didn’t really have to go outside of us to sort of have at least the nuts and bolts of building a business.

Now, learning cannabis space, totally different animal, and we needed to bring in the right people to sort of roll the cannabis and know what the market was. Funny thing is we have most of our partners are in our 40s. I actually turned 50 recently, but we have a young guy who’s like 30 years old. He started with us when he was 27 and he’s our cannabis guy, you know, so [crosstalk] he’s our cannabis expert.

TG Branfalt: When you were searching for that cannabis guy, was the majority of the people younger?

Joseph Ori: Yeah, so one of the things that we learned right out of the gate, and this goes along with some of the things you and I were discussing before the podcast just separately, the image of this industry has changed. We started going out to find head of cultivation and head flower managers and veg managers. We first went and what we did was an immense amount of due diligence. Before we even stepped foot into this industry, we toured all over California, Colorado, Oregon. We went to… We knocked on doors. We went into all the facilities we could get into, the cultivation facilities, crossing facilities, dispensaries. We wanted to know what was working and what wasn’t working.

I’m not going to name any names, but we saw some pretty deplorable situations out there and we said, “Okay, so how are we going to separate ourselves from all of these people?” We took notes and said, “Okay, these are the things that seem to be working, and then let’s look at where the new frontier is going to be in this industry.” One of the things we were leaning toward was possibility, still exists, of the federal government legalizing it. We thought, “Well, if the federal government legalizes it and the FDA gets involved in as much as it addresses the medical side of this product,” I don’t even know if we call it a product, I guess we can call it a commodity, “Then, we’re going to have to meet certain standards.”

We basically said, “Let’s build a facility that’s forward-thinking and it may cost us more money than we want and most of these other facilities would cost us, but let’s build it with forward-thinking technology. Let’s build it. It could be retrofit with futuristic technology if need be.” That’s what we did. We did an extraordinary amount of homework and to be able to create and… I brag about this because we haven’t been told anything differently. I mean, we have people come through our facility from other states and guys who know cannabis way more than the five of us when we started out, we’ve been in the business for 10 years or so, they’ve never seen anything like our facility. We continually get these accolades from people.

It’s helped us because we’ve landed some big licensing deals just based off of our operations and the way our facility appears. We’re saying basically, to sum it up is, if the FDA gets involved and our cannabis doesn’t pass whatever those regulations may be, then no one else’s is, and we said, “So that’s what we wanted to do,” and then [crosstalk] you know, that’s what we’re trying.

TG Branfalt: To your point with the FDA, I mean, I’ve always sort of maintained that everyone’s, “Oh, we want federal legalization,” but I believe that they’re just going to make it more onerous and a much sort of harder for current operators in states because federal regulations are going to be far behind those of the states at that point.

Joseph Ori: Yeah. I think it’s really odd because I thought maybe with this new administration there was going to be a major push right away to do something and it’s a little bit lagging more than I thought it was going to be. What I thought it was going to be, you know, federal legalization, I think what they’re going to do is just they’re going to ultimately reschedule it and they’re going to leave it up states to do what they have to do, what they’re currently doing, which is allowing their inside operations, the companies that are in their state, to build their industry. Then, I think it will be somewhat like… The real question will be interstate commerce, you know?

TG Branfalt: Yeah.

Joseph Ori: If you have Illinois, which is weird because we’ve actually talked about this, so we have Illinois and Michigan, but we’re not contiguous except unless you cross Lake Michigan. You have to go through Indiana to get to Michigan-

TG Branfalt: Yeah.

Joseph Ori: … and Indiana’s not, you know, not going to go legal anytime soon. We’re like, “Okay, if we open up interstate commerce, are we’re going to be able to cross over into Illinois through Indiana? Or can we take boats across Lake Michigan and go to Illinois and sell product? I mean, those are legitimate questions that-

TG Branfalt: Yeah.

Joseph Ori: … we have no idea, you know, what what’s going to happen because barring true federal legalization where they just say, “Okay, we’re taking over control of this and here’s what’s going to happen,” you don’t really know how it’s going to play it’s self out.

I mean, alcohol sales have been largely kept outside of federal preemption. I’m not trying to get too legal with you, but federal preemption basically says federal laws preempt state laws. Now, there’s been exceptions to that. One of those has been alcohol. If you compare cannabis to alcohol, at least from a recreational standpoint, it would follow that they’re going to leave it up to the states. This state says it’s 18 years old, that state says it’s 21, this state has restrictions on… and local municipalities on what can be sold, what times it can be sold, who it can be sold to and when and where. It still looks like it’s always going to be maintained within the confines of each state, at least from my perspective.

TG Branfalt: No, and they’ve done the same thing with cigarettes now in New York. It’s 21, so to your point, I do want to sort of switch gears a little bit and talk to you about sort of craft cannabis. Tell me how Six Labs and yourself defines craft cannabis.

Joseph Ori: That’s a great question, so it’s not synonymous with top shelf cannabis. Craft cannabis, we feel, is defined by four qualities, which is smell, flavor, experience, and appearance. Top shelf, usually we say the top shelf cannabis has to have at least high, high rankings on three of those fours. Whereas, craft cannabis, we’ll have all four of them. The most important one, I think, is experience, and there’s other distinguishing features that will make craft cannabis separate itself from top shelf, which is the terpene profiles, the potency, the cannabinoid profiles, and tolerance. When you get into tolerance is where I really think the difference is, is craft cannabis we say is like a craft wine. It’s got different features.

Now, what we try to do is we say, “If you can create batches of cannabis that are consistent in smell, flavor, appearance, and most importantly experience, and also try to create profiles that will keep the user from growing a tolerance to it,” so meaning if you take it… if you are an edible fan, you’re taking a 10 milligram edible that’s from flower. It’s born of flower that it was craft flower. Or, you smoke a half gram pre-roll. Are you going to get the same effect and the same level of experience today as you will six months from now? Or, are you going to have to start smoking a whole gram? Or are you going to have to take two edibles?

We’re trying to… We’re basically saying the craft cannabis is always going to be, we believe, that it always will be special. It’ll always have its own place, so what we kind of set out to do is said, “You know, we’re going to try to spend and we have the ability with our facility to do that. We’re going to try to make craft cannabis at a larger scale. We’re going to try to compete with the guys who are making… who have a 3,000-square-foot grow or 5,000-square-foot grow, focus on a couple of strains and say, ‘This is the craft cannabis, the best quality that you can possibly have.”

We said, “We’re going to try to do that in a larger scale. We’re going to get that much attention. We’re going to give it that much time, energy, and create a climate and an environment where we can do that at a larger scale.” It’s very challenging. We’re trying to make it precise and as clean as possible, and precision is the main goal of our company.

TG Branfalt: You’re the first person that I’ve ever spoken to who put such an emphasis on experience. When you have these conversations with people, which you must do in order to be meeting these sort of goals, when you ask them, “What experience are you looking for?”, something like that, what’s the response that you get most often?

Joseph Ori: I guess to answer that question, it’s like if you’re at a dinner party and you’re with some friends and the subject of cannabis comes up, you’re likely not talking about strain names because it gets confusing. One of the things, and I can say this, I’ve been a customer for years and I was like, “Okay, what does this even mean?” It’s basically trying to say, “Okay, do we have the ability right now to say that you will have this specific experience from this strain?” No, and what we’ve learned, too, is that sativa, indica, and hybrid is really… There’s no true sativa [inaudible]. Everything is sort of a hybrid. There’s no true indica.

To say, “Okay, well, one’s going to kind of make you sleepy or tired and chilled out, the other one’s going to give you energy, will allow you to maybe focus better,” just based on strain is not really the truth. What they’re realizing is the entourage effect of certain levels of terpenes and ratios of cannabinoids. THC is not necessarily the main thing. It’s like it’s still I see that there’s… You can grow THC, high-potency THC product and you’ll get tons of money for it even at the wholesale level. Everybody wants 28%, 30%, and I don’t think that this industry’s moving toward that. I think it’s moving away from that. I think, you know-

TG Branfalt: Right.

Joseph Ori: … people don’t want to get blown out of their minds necessarily. They would prefer to have an experience, so while we can’t say that we have reached the point where I can tell you, “Hey, buy this and you’re going to feel this,” I think that what we are moving forward and we’re working on a product line that’s coming out.

We’re a house of brands, so we have five products and we’re working on a sixth. One of our products we’re saying is going to be geared toward allowing you to select it based on what you want to do and to heighten that experience. If you’re going to go… If you want to be creative, we’re going to say, “This is going to help you be more creative. If you want to just chill out and watch a movie and not think, then this, this a strain… this is a product, not a strain, but this is a product that will heighten that experience. If you want to explore, this is a product that will heighten that experience.”

Frankly, I think that there’s something to be said for the possibility that there would be heightened sexual experiences with certain products. What we’re trying to do is not tell because you can’t, I don’t think you can yet, like you tell the end user, “You are going to feel this way,” every single one of them. I do think that we’re at the point where we can say that, “If you’re going to do this occasion-based, occasion-based, this is the product. You will have a better time doing this with that.” That’s what we’re aiming for.

TG Branfalt: How do you R&D this, man?

Joseph Ori: Well [crosstalk] so you do… You know, you test it on your many employees. You sample a product. That’s what we do, and it’s not just simply that. We’re… Israel has got a lot of research that comes out of there. They’ve very, very passionate about it. More toward the medical, I’ll be honest, but-

TG Branfalt: Yeah.

Joseph Ori: … but you learn a lot from the medical that you can garner and sort of follow the process of if you have a particular strain that is more leaning towards sativa and you can combine the terpene profiles and the CBD ratios because those work against each other, and you can combine them together and consistently grow it with that ratio. You’re going to… Like I said, you may have eight out of 10 people who use it and say they had a bad experience, and to be fair, it’s like, okay, when I gave you my example with my opioid experience, I’m one of… They’ll give you a million things what the drug can do to you. Most people are just going to feel what it’s supposed to, and they didn’t tell you that a vast majority of people become addicted, but they also… Some people just don’t feel well and some people have nausea and vomiting.

I don’t think there’s a single substance out in the world that’s even been tested and approved by the FDA that can guarantee a specific feeling, but if you can do it to the extent where there’s a vast majority of expectation, that you’re likely to have this sensation when you utilize this particular product and you can rely on that and it works for you. I mean, let’s face facts. The one beauty is that I think I read something recently that there’s still not a single account of anyone dying from overdosing on cannabis.

TG Branfalt: Yeah. No, it’s basically impossible.

Joseph Ori: Basically impossible, so you may have to try it and you may have to go out and buy it and say, “Okay, well, hey, Six Labs is telling you they’ve got this line of cannabis out here and this is what this is for your occasion-based.” You say, “I’m going to try it.” We think your result will be satisfaction. I think that’s we’re aiming for,

TG Branfalt: Moving things on a little bit, when I said at the top I’ve been in Michigan and it was still medical and I went to a Cannabis Cup and I did get blown out of my mind by somebody with dabs. To your point, I do think that we are moving away of that sort of high-test stuff. I’m a guy who’s been smoking… using cannabis since I was 15, 16 years old, and now I much prefer five-milligram, 10-milligram edibles. Either I’m getting old or I don’t like to be as fucked up anymore.

Then, they legalized in 2016 the first Midwestern state to legalize recreationally. Obviously, they didn’t get up and running before Illinois because Illinois just… Pritzker was like, “We’re doing this, we’re going it now.” Tell me about Michigan’s industry seven years after voters have approved the reforms. Is it where people think that it should be as an operator? Is it a satisfactory business climate?

Joseph Ori: You know, that’s a tough question to answer and is broad of a term. Legal cannabis particularly in Michigan has in the initial stages struggled under the weight of pressure of scaling cultivation and led to quality issues on the larger cultivation level, which allowed caregivers to sell to dispensaries directly because they were the only ones who were making cannabis, creating cannabis that was available and that could be used.

It took a while to get the cultivators up and running, the larger cultivators, and the entire sector was slow to deliver the results that they expected. A lot of it… I think at one point in time not so long ago, about 70% of the larger cultivator cannabis wasn’t passing testing, so [crosstalk]-

TG Branfalt: 70%?

Joseph Ori: 70, yes-

TG Branfalt: That’s unreal.

Joseph Ori: … so while the challenges were most pronounced then, I think today there’s a difference. It’s different now. THere’s a lot of larger cultivators online. It’s robust competition, but Michigan is like… Nobody understands this, man. Michigan has a long history rooted in cannabis. I mean, you know, when you-

TG Branfalt: Ann Arbor itself, I mean-

Joseph Ori: Yeah. It’s unbelievable, man. It’s almost like California. It’s wild how deep-rooted cannabis use is in Michigan. The funny thing is like we’re being challenged by a black market. There’s the seizures at the border. I give it a little bit of fact. The seizures at the border in 2019 and 20, I’m sorry, in early 2020 to late 2020 increased like 1800%. They were seizing massive truckloads of commercial-grade cannabis at the border coming in from Canada because Canada can’t get their shit straight.

They have so many companies out there that have so much product because they have a huge black market problem that they’re shipping their high-quality packaged goods through the United States, the border of Michigan in Windsor. They’re getting seized and guess what the penalty was in 2020? I don’t think it’s any different, not, man, in 2019. It was $5,000 fine per ton.

TG Branfalt: Per ton?

Joseph Ori: Per ton, so I mean, I like my chances. All right, if I’m up in Canada, I’m like, “Well, you know what?” Nobody was arrested according to these accounts I’ve read and they were just sent back up to Canada and their passports were revoked to come to the United States, so I’ll take my chances all day. That’s what you’re competing with, but you still see the sales going through the roof. We kind of look at it and we’re like, “Man, if they could just,” so it’s like everybody says about 70% is still black market cannabis being sold in, you know, in the United States in general, and then pretty close to that ratio in Michigan.

You’re like, “Okay, if we could just chip away 10% of these people,” and the sales are still robust. Imagine what it would really be. We’re hoping that with education will come people saying, “Okay, we’re going to shift. We’re not going to buy it from this black market dealer down the street. We’re going to buy it from a licensed entity where it’s highly tested, highly regulated and, oh, by the way, this company Six Labs says, ‘Hey, we might have stuff that’s more sensation… more occasion-based for you and you can rely on it and you can always know the consistency and you can always know the cleanliness.’”

That’s what we’re hoping changes, but it’s going to be some time before that changes. We look at alcohol. We’re like, “Okay, after Prohibition, there were still people making whiskey, moonshine.” It took a long time and some government regulation and brands to really come out to do away with that type of mentality. I think we’re a ways away, but it’s growing in the sense that there’s… I mean, I think in Illinois we’re actually waiting for our grow license award, which has been over a year since we had it pending and COVID and a bunch of host-

TG Branfalt: Yeah.

Joseph Ori: … of other issues in Illinois have north allowed us to find out whether we want our grow license here. I mean, their taxes on cannabis, and granted their taxing the hell out of it here, which doesn’t help to fight the black market, either, but in 2020, the taxes of cannabis beat alcohol sales taxes [crosstalk] you know, it’s amazing.

TG Branfalt: Well, I understand your frustration as an operator about the illicit market, but part of the problem is taxes because I can go to my boy down the street, get an ounce for $200. If I go to Massachusetts, I’m dropping 450.

Joseph Ori: Correct.

TG Branfalt: That’s a hard pill to swallow.

Joseph Ori: Oh yeah, so we actually have some friends on the border of Indiana and Michigan, which is really… They only drive through Indiana for about 30 miles to get to Michigan, so from Illinois. You make that turn around the east part of the lake and you’re in Michigan. We had guys who were and still are going taking the drive to Michigan to buy commercial-grade tested cannabis rather than buying it in Illinois because Illinois’ tax is like 40% almost and Michigan’s isn’t that bad. Michigan I think… Actually one of the beautiful things that separates Michigan from a lot of other states is that the tax isn’t as great, so that helps us, but you’re still… If you’re budget conscious, no matter where you’re at, I think you’re doing exactly what you just said.

You’re going to go buy your cannabis to get a higher quantity rather than quality to save yourself some money, and especially if it’s something you’ve been doing for years. The funny thing is, TG, is that I kind of tell people this all of the time. It’s like all the years of consuming cannabis and you’re just like, “Okay, we didn’t know where the hell it came from half the time,” and it was all probably grown outdoors. Who knows what they were using and are still using on it to kill the infiltrates and to get rid of pests. I’m thinking to myself, “Because of what we’re doing indoors, we can control all of the climate. Every single aspect of everything is dialed in.”

It’s still challenging to do it the right way and keep it clean. It’s not like just pushing a button, man. It’s a lot of work. It’s a lot of attention to detail, and so I tell people, “I can’t imagine what was in the shit that we were smoking when we were younger.” I mean, and I went to school in New York City and there was… Who knows where it was coming from? It could have been coming from any one of 10 different places. I can’t imagine that they were caring too much, you know, that Rafael Cantana down in Mexico or somebody out in Humboldt County was caring too much about what they were using to kill the pests. I just… I don’t know.

TG Branfalt: I mean, growing up, for sure, I definitely smoked some mildew-y products.

Joseph Ori: Yeah.

TG Branfalt: When you’re 18, it doesn’t matter what you put in your body anyway, does it?

Joseph Ori: Yeah, yeah.

TG Branfalt: We talked briefly about sort of the history of cannabis in Michigan. We didn’t really get into it, but if I’m not mistaken, Ann Arbor was one of the first cities in the United States to legalize it medically and-

Joseph Ori: Yeah [crosstalk]-

TG Branfalt: … part of the history. Some people have began calling Michigan The Second Emerald Triangle, and so I’m wondering if you could sort of speak to why it’s gotten this moniker?

Joseph Ori: Well, I think, like I said, because of how deep-rooted cannabis has been in the state and there’s been a lot of private growing and there’s 30,000 caregivers who many of them who are very, very highly experienced growers and been doing it for… some, for generations, I think, prior to becoming legal. We have a robust set of strains that can compete with any state and, obviously, we don’t have our enfamed Humboldt County as California has for The Emerald Coast or whatever, but we do have every bit of the competition that California does. I mean, we have… That I would say is one of the greatest features of Michigan which separates it is that because there’s such competition, that the quality of the strains and what people are trying to do and the innovation that’s coming from that is I believe for Michigan at the forefront of the Midwest at a minimum.

I can’t necessarily say that we will overtake California, but I do think that we have a very strong hold on number two at this point based on those factors. I think that as… We’re only a little bit over a year and a half, two years into recreational, the strides that the state has made are amazing compared to other states. I don’t think it’s an unfair moniker to place on it.

TG Branfalt: Do you think eventually it’ll be they may change the name of Detroit from The Motor City to The Canna City or something?

Joseph Ori: I mean, if the car companies continue to do what they’ve been doing over the years, which is pulling out, coming back, pulling out-

TG Branfalt: Yeah.

Joseph Ori: … I think that that possibly could be the case. There’s… One of the things that Michigan has that’s a little strange is that there’s a lot of municipalities that haven’t opted in, so-

TG Branfalt: What’s the ratio there? I know in Maine it’s pretty out of control. It’s like 2:1.

Joseph Ori: Yeah. It’s pretty close to that. I haven’t checked the numbers, but I know that there have been… There’s I don’t want to say numbers because I haven’t checked in a while, but there were some 300 municipalities that still hadn’t-

TG Branfalt: Wow.

Joseph Ori: … opted in. Yeah, and only 200 or so that had. That’s the numbers that stick in my head, but like I said, I don’t want to…

TG Branfalt: Well, I’m sure that also affects the illicit sales. I mean, when you have all these communities that have no access, right?

Joseph Ori: Yeah, exactly.

TG Branfalt: You obviously are really passionate about this. You go from being a successful trial lawyer to being a successful cannabis entrepreneur. What advice would you have for entrepreneurs and especially people who had careers before they decided to enter the space?

Joseph Ori: I write on this a lot and I published some articles recently about different subjects. The first thing I would say is that you’re never too old to be an entrepreneur, and the only thing that the difference is between a younger entrepreneur versus an older one is that younger guys, in their minds they have less to lose. It’s sort of the youthful exuberance of blind, you know, understanding that. I started my law practice the day that I graduated law school and I read a book while I was studying for the bar exam called How to Start Your Own Law Firm and Not Miss a Meal. I read the book and I’m like, “Wow, I could do this. I could do this. I could this.”

Then, I get to the last chapter and the last chapter basically tells you, “Okay, so I’ve been practicing law for five to seven years now. Go out and do it.” I’m like, “Holy shit, wait a minute.” I was  because it was basically assuming that you knew a little bit about being a lawyer, that you were going to do that. I was like, “Oh, I was like, “Shit.” I said, “I can’t go do this,” but you know what I said? I said, “Listen, I can figure this out. I’ll out how to be a lawyer along the way.” I went and applied the same equation in how they told you how to go about getting to that point of opening your own law practice. I did exactly what it said, and so in the beginning, I had to co-op a lot with older lawyers who I met and said, “Okay, I’ve got this case. I’ll give you a cut of this if you help me with it.”

I made it work, but I could see how now that same guy is like… If I’m reading that today, I’m like, “Damn, that’s super risky. You know, I’ve got a good job.” I’m like, “Am I really going to be able to pull this off?” When in reality, you have a way better shot at pulling it off because you know about being a lawyer. You actually know how do the cases yourself. A lot of it depends on your risk tolerance, and I read an article the other day in Psychology Magazine about resilience.

Resilience is something that people think is you’re born of it. Sure. Are there some character traits that you might be born with that make you somewhat… give you the ability to be more resilient? Sure, but resilience is based a lot upon your social setting and your surroundings and who you are in bed with, sometimes literally and figuratively. Who is your support group? Who are you surrounded by? Who’s going to pick you you if you fall? Entrepreneurship is an incredibly cool concept and everybody wants to talk about it, but the reality is is that you have to be able to pivot, man.

That’s the one thing that I will tell you, anybody who’s doing it. If you have a plan, you say, “This is my plan. This is what I’m going to do. This is what the book said.” Shit doesn’t go that way, man, and if you don’t have the ability to say, “Okay, that didn’t go exactly how they book said it was going to go. I’m going to figure it out, though.” If you don’t have that ability, if you’re somebody who’s just linear, you’re going to have a tough time being an entrepreneur because very, very rarely, and I’ve yet to see anyone who says, “I read the book. I applied what it said, and it worked out exactly how it said it was.”

You have to be able to be resilient and you have to be able to pivot, and if you’ve got those qualities and you’re not afraid to lose and to pick up the pieces and try to keep it going, then you’re built for it. That’s what I would tell people.

TG Branfalt: I… That’s really, really great advice, man, and you can just sort of tell even before you read the book when you get injured playing football and that doesn’t really work out and you still end up going on to be successful. I mean, being an attorney and then a sports agent and all of these sort of things. I mean, it’s a really, really incredible story and I’d like to definitely get into those details with you at some point a little bit more, man.

I really thank you for sharing your story, and I know that we may not have gotten… talked too much about craft cannabis as it were, but it’s a really incredible story and I loved having you on the show and appreciate you coming on. Where can people find out more about you and more about Six Labs?

Joseph Ori: Just go to @sixlabscannabis and we have all of our updates. We have several brands that are out right now. We have Six Labs Flour we sell direct. We have Candela, which is a line of solvent lists concentrates that we recently just won the Michigan Cannabis Cup. We have MI6, which is your no frills quality brand available in larger quantities. Popcorn and shake. You can get strollers, which are mini, mini high-quality pre-rolls that are smaller than your average one, because that’s why they’re called stroller. Or, if you take a little walk on the beach or walk your dog. We definitely thought that’s the perfect one where you can actually smoke the entire thing and finish it-

TG Branfalt: Dog walkers.

Joseph Ori: … and yeah, yeah, dog walker. In fact, with… Then we have… We’re working still to bring out what we discussed earlier, which is ritual, which would be the occasions/sensation-based. We’re hoping to have that to the point where we can say, well, what discussed earlier that you can rely on this giving you this for this particular occasion.

That’s where we’re at and, you now, obviously, six-labs.com and, obviously, six-labs.com. I’m on Twitter and Facebook and LinkedIn and all those places. I publish a lot of articles. I do a lot of these podcasts. So hopefully your listeners will start following us.

TG Branfalt: That’s Joe Ori, man, and really, I appreciate you coming on. I had planned to make it back to Detroit one day and we’ll definitely take it… Be on the lookout for the lockout for the dog walkers, especially-

Joseph Ori: Yeah, sure

TG Branfalt: … that dog likes to walk.

Joseph Ori: Well. Yeah, for sure, and if I make my way up skiing in the Lake Placid area, I’m going to definitely hit you up.

TG Branfalt: Oh, it’s a… Then, by the then, cannabis should be completely legal and what I grow in my backyard is no longer a crime. He is Joseph Ori, the co-founder. General Counsel and Government Relations for Six Labs, one of Michigan’s largest craft cannabis cultivators with a focus on quality and precision and an obvious passion for advanced research, development, and technology. Joseph, thanks again, man. We’ll talk soon.

Joseph Ori: All right, TG. Thank you, buddy. Thanks for having me. Bye, bye.

TG Branfalt: You can find more episodes of the Ganjapreneur.com Podcast in the podcast section of Ganjapreneur.com on Spotify, and in the Apple iTunes store. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily, along with transcripts of this podcast. You can also download the Ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. I’ve been your host, TG Branfalt.

From transitioning out of a self-described “boring” career in finance, to heading one of the East Coast’s biggest multistate operators to eventually moving to California to focus on team- and brand-building for Lowell Farms, few people have experience in the cannabis industry like George Allen.

In the latest Ganjapreneur.com Podcast interview, George and our host TG Branfalt discuss George’s exit from a Wall Street finance career to join the cannabis industry, his time as the President of Acreage Holdings (during which he approached the former Republican Speaker of the House John Boehner about endorsing the cannabis legalization movement), as well as the eventual transition from working for an MSO to joining up with the California-focused Lowell Farms. The interview also covers advice for building a strong team in the cannabis space, the differences between medical and recreational cannabis markets, the importance of being passionate about the industry, and more!

Listen to the podcast interview below or through your favorite podcast listening platform, or scroll further down to find a full transcript of the episode.

Listen to the podcast:

Read the transcript:

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Cara Wietstock: Hi, I’m Cara Wietstock, culture editor at Ganjapreneur and host of our YouTube show, Fresh Cut. The best way to understand cannabis business is to speak directly to those who work within it. Fresh Cut was created to shine recognition on the people who fill these roles. In this interview series, we focus on those with their hands in the dirt, both literally and figuratively. From cultivators to bud tenders, educators to advocates, activists to lobbyists, we aim to illuminate the workers who keep this industry thriving. Enjoy one-on-one conversations with me and guests by watching along on the Ganjareneur YouTube channel and follow our social channels to keep up with the latest episodes. Have a great day.

TG Branfalt: Hey, there, I’m your host TG Branfalt. And thank you for listening to The Ganjapreneur.com Podcast where we try to bring you actionable information and normalized cannabis through the stories of ganjapreneurs, activists, and industry stakeholders. Today I’m joined by George Allen, he’s the chairman of the board for Lowell Farms, founder of cannabis industry investment firm, Geronimo Capital LLC, and former president for Acreage Holdings. Allen has been involved in multiple financing rounds, dozens of acquisitions, executive recruiting, and an initial public offering. How are you doing this afternoon, George?

George Allen: Hey, great. Thanks so much. I’m really grateful for the opportunity to talk to you today and really have enjoyed your podcast. So thanks for having me.

TG Branfalt: Thank you so much. You have done a lot in this industry, man. I’ve had a lot of guests on this show. I’ve been doing it since 2015. Somebody with your sort of breadth of knowledge, I’m really delighted to have you on. Before we get into sort of all these little things or big things that you have done, what is your background, man?

George Allen: I got to say it’s a little bit of a crime of fashion I got involved. I got involved in the industry after a pretty boring career in finance on Wall Street. I spent a lot of time, started out in finance and then moved into private equity. I did some fun stuff in software. I did a software roll up in a public company. And then more recently before getting into the industry, I ran a family office for a group of high network individuals in New York. And that’s when I first started getting exposed to cannabis because the family offices were the only investor group that was looking seriously at cannabis back only as short four, five years ago. And that’s when I started getting into it. I really saw the scale of the opportunity and how much blue sky there was. That’s what drew me in. And from there I was hooked.

TG Branfalt: So you described your life sort of before cannabis as boring and in finance. What are some of the biggest differences sort of culturally that you had to sort of deal with moving from something as boring as finance as you put it to the cannabis space?

George Allen: Well, I got to say the biggest challenge you’ve got in cannabis, there’s really two that I point to, but first is there’s no precedent for how to do things in cannabis right and how to do the med scale because it’s such a young industry. I don’t know that you’ve got a lot of precedent for that in other businesses where there’s a big industry that happens overnight but it has no analogs to it. And I think that’s the first challenge.

The second challenge that is just crazy is you just only have to walk 2 or 3 feet in this business before you find another stumbling block that is imposed by the federal policy in this business. That’s just super strange working with banks and trying to figure all that out, as well as employees and employment practices. There are a whole bunch of service providers that are available to most businesses that cannabis can’t avail themselves to. It’s a workable problem, but it takes clock cycles for sure.

TG Branfalt: Tell me about sort of the learning curve, right? I mean, you talked about these stumbling blocks. Maybe can you tell me about a specific instance sort of early on in your career that you had to sort of navigate through?

George Allen: Well, I’ll tell you, I’ll give you one that was kind of fun. Back in the early days at Acreage, the precedent of Acreage was a company called High Street Capital Partners then. It was very challenging to raise money. Back then Donald Trump had just been elected president. He put in a pretty anti-cannabis attorney general named Jeff Sessions. And Jeff Sessions had come out with a pretty militant view on cannabis. Raising money in that environment just to pay payroll was very challenging. I think it was about one year to Trump’s presidency where Jeff Sessions had come out and he pulled down a document called the Cole Memo. The Cole Memo had been some resting piece for cannabis entrepreneurs who were trying to make sure they weren’t going to jeopardize their career and their net worth by being involved in the industry.

And so, when he pulled down the Cole memo, it created a whole bunch of problems for everyone in the industry. That was actually when we first approached John Boehner about being on the board of a cannabis company, because I felt that you had to fight fire with fire. If Jeff Sessions was coming out arm swinging against cannabis, that we had to show the world that it was going to be okay to participate and invest in cannabis businesses.

It felt like we could do all the arm wave when we wanted to, but if we really wanted to punctuate that point, we had to bring somebody in that people knew and understood. Convincing Boehner to be on the board of a cannabis company was the best way we felt to do it. That was a fun conversation trying to get John to do it. But it really did save our schemes back then at the company, because it had made it a lot easier. In the wake of making that announcement and going on Good Morning America and doing all those stuff we did, it really did make it a heck a lot easier to get financing for a cannabis company.

And so that’s just one of the many stories we’ve had fighting this fight. In a lot of respect, it’s made the businesses better. It’s made the business a better because we’ve all watched what’s happened in Canada and the excess cause by capital euphoria that we haven’t seen that kind of capital euphoria in the United States. I think that’s made it harder, but it’s definitely made the businesses healthier and the industry healthier.

TG Branfalt: I just want to go back to a minute. This John Boehner thing, I wrote that when that broke. It was a big story at that time. I don’t know how much detail you can give me, but can you just tell me what was his reaction when you approached him with this?

George Allen: Actually to be honest with you, he was leaning pretty heavily in favor of it. He’d been trying to figure out his position on reconsidering where it was, where he wanted to come out on it, because he saw the shift. I mean, John has always been… He’s always been a center-driven Republican. I don’t think you can be Speaker of the House without doing that. And so I think he saw the writing on the wall, saw the shift, saw 64% of Americans in favor of legalization one form or the other. But largely, I think that there are many aspects that they convinced him to do it. There was the veteran angle and how much relief it was bringing veterans who were desperately in need of some relief from PTSD, from just a horrific amount of PTSD haunting our veterans, to the opioid epidemic and how much relief cannabis could pose for the opioid epidemic.

So it was a series of discussions that we had sitting down with John and walking him through the data and walking him through where he felt there was sufficient science and sufficient sort of public support. And eventually he said, “Yeah, I’ll lend my name to this cause and this in this journey.” It was a ton of fun. I’ve never experienced anything like it in my career and it was really exciting.

TG Branfalt: And I think to your point, it did help sort of change some of the rank and file more centrist, sort of maybe not the people in Congress, but certainly people that I know that are older than me that are sort of your moderate Republican. I think that changed their thinking a bit to see sort of one of their own somebody that they admire and in some respects enter the space.

You’ve been in this industry since 2017, which to a lot of people doesn’t seem like that long. I mean, if you think about it. But I mean for the cannabis industry, it’s a lifetime if we just sort of look at what’s happened with legalization since 2017, how many states have gone online through the legislative process, that sort of thing. Can you tell me how the industry in your estimation has changed since your entree into it?

George Allen: Yeah, that’s a great question. And it’s not that long. It’s not that long. There are people who have been doing this for a long time. And frankly, our success has really been on the backs of people who have fought a much harder fight for a much longer period of time. But you’re correct in saying the industry’s also shifted a lot, because acceptance has changed. I think there’s a couple things that are really going on in the industry that I find sort of investible trends. I think the first is, if you really look at what was going on cannabis, medical was the sort of the horse that everyone rode in on, right? It made a ton of sense. There’s a ton of injustice around the medical side. It made a ton of sense to wrap ourselves in the medical story originally because it really exposed the hypocrisy and the insensitivity that 75 years of terrible policy had implemented.

But I think we’re past the medical story now. I really do. And I think the consumer adoption and consumer acceptance is really migrating across the country where there’s much more willingness to be open to trying cannabis, there’s much more willingness to accepting the fact that cannabis can be a part of somebody else’s life even if it’s not only part of your life. I think that changes behavior patterns in a way that is something that we, as as a service provider in the industry, we need to pay attention to.

One trend that I find really particularly interesting is that smokable flower in California is the fastest growing category by dollars in California. And that’s really interesting. What’s interesting about that is I believe it’s telling you that the consumer is moving from formats that we’re really good at hiding cannabis consumption to moving to formats that are no longer concerned about hiding cannabis consumption. And I think that’s super enlightening. I think the raw plant here is put by far the most interesting form factor for consumers. It offers a ton of variety selection and choice, which a recreational consumer cares a lot about, right? But if you listen to an MSO, most of the time they’re going to talk a ton about consistency, right?

Consistency is a great sort of end objective if what your business is medicine. But consistency isn’t necessarily what you’re looking for in consumer offering of recreational cannabis, because recreational cannabis consumers, they love the journey, right? They love sampling different products and different strains and different plants. They’re not loyal to one stream, right? If you’ve got chronic back pain and you found the stream that’s going to relieve you from back pain, then you’re very likely to be loyal to that. But in recreational cannabis, which is I believe the more exciting and larger market, we don’t pray to the same God of consistency. What you pray to is quality, right? You need to have the quality in the product offering that consumers want.

That’s something that I’ve really learned from coming out here to California and sort of skinning my knee on the market out here, because it’s a market where consumers have a couple thousand choices of SKUs than a typical dispensary. If you go into a New York MSO dispensary, you might see 12 SKUs on the menu. And so you’ve got to go to the place where consumers have several thousand options to really understand what they’re looking for and what they want.

TG Branfalt: I mean, and to your point too, I think that we’re starting to realize also that people who have been using recreationally their entire lives, a lot of times are actually using medically. I don’t think it’s wrong to say that just because something makes you feel good, I believe that’s a sort of medical purpose.

George Allen: No, I couldn’t agree more. I couldn’t agree more. By the way, I don’t think it is right for any of us to judge why people use it. I think that it’s no different than any time in the past. Everybody is responsible for their own individual behavior. But the choice of how you recreate, I think that’s something we’ve shown the science behind cannabis. The social costs relative to the social benefit is profoundly in favor of normalization, so I’m right there with you.

TG Branfalt: You spoke a little bit about MSOs, which we’re talking about multi-state operators. You’d mentioned earlier there’s a lot of people who have been in this industry a lot longer than I have, you have. And so one of the things that I see quite a lot is a lot of blowback against the multi-state operator. I mean, here in New York we have that monopoly system and there’s a lot of sort of progressive stuff that was in the bill. I mean, we can smoke anywhere we can smoke cigarettes, which is pretty fantastic. But I think a lot of the sort of, let’s say stoner community at large, has a problem with a lot of these big companies coming in. They take over. Not to say that it’s a green goop kind of takeover of what’s going on. But I got to ask you, what role should multi-state operators have in the cannabis space?

George Allen: Well, boy, I could talk a long, long line for that. I’ve been on both sides of the fence, right? I ran a multi-state operator for quite some time and then I decided to head out to California and focus on California because I really wanted to build a brand and understand where the consumer was going.

Now, if you really want to deconstruct what the multi-state operator’s all about, it’s really at its essence these limited concession rights that almost like gambling casinos the states have given out. The premise originally was that cannabis has just an enormous amount of social danger to it. You got to be very careful about how much wildfire you start with cannabis. So the idea was to keep it very narrow and contained because with 10 operators, a regulator can guarantee that he knows where every throat to choke is if something goes wrong, right?

TG Branfalt: Gotcha.

George Allen: And I think that was originally the premise here of how they started with these limited license concessions. The reality is though, I think we’ve seen where the social cost and where the risk is in cannabis. I think that experiment is showing us that there’s less inherent risk here in having more of an open market approach to cannabis. Now, I know that’s not popular because that has a major impact on margins and that has a major impact on pricing in the marketplace. But that’s probably why you hear from so many consumers that it’s frustrating, because as I said, it’s not that interesting to go into a dispensary where you got 12 options like the MedMen store on Madison Avenue. That’s kind of boring relative to the MedMen store that’s located on North Hollywood. So in my opinion, the market sort of learning it… And there was never any promise to the MSO model that these concessions were going to be enduring forever. No single statute does it prohibit the state from issuing more licenses over a period of time. And so I think what you’re going to see is a more open market approach.

I also take the point of view that the federal government when they legalize or they decriminalize the product, you’re going to see more of an open market approach here regardless of how the individual states behave, because consumers aren’t going to wait for state by state permission to enjoy the cannabis that they want when the federal government decriminalizes this. So I think in a lot of respects, the states are going to lose a fair amount of strength and negotiating leverage at the table as the market matures here and decriminalization happens in Washington.

TG Branfalt: That’s a super insightful sort of response, especially from you being on both sides of it. You had said that you had shifted your focus to California. And so I want to ask you a couple questions about California is, what have you found that a company has to do in that state to reach success? Because it’s so competitive. And then not just reach that success, but maintain that success.

George Allen: Yeah. It’s all people. It’s all 100% people. You need to have a great team. That doesn’t necessarily mean have like IEP between the ears of a grower who’s a “master” grower. It means people that are willing to really shed blood for the business. I mean, it takes that type of dedication in a competitive industry like this where there’s so many people that get into the business because of passion but don’t necessarily have the execution skills or the business skills to succeed. But you have a constant flow of people that thinking they can. And defending against that in California requires that you build a really, really solid team that can fit, can work cohesively together because there’s no way that one single individual can do it on its own. It’s just too competitive of a market and too large of an opportunity. So I’m very focused on team recruiting, building culture, keeping with working on retention. There’s a ton of other aspects that sort of make up California, but if you don’t have the right people, you’re not even checking into to the airport with a ticket.

TG Branfalt: And so what are some of the challenges when recruiting the sort of high level executives that you need to sort of help lead that team? What attributes do you look for when recruiting high level positions?

George Allen: I think it’s hard. I wouldn’t say that there’s attributes. A lot of people early on thought cannabis looked like alcohol, so let’s look for alcohol. A lot of people think it looks like CPG, so let’s look for CPG. I don’t think that there are attributes from a sort of like a resume standpoint. What I do think is desire and passion and ability to really commit themselves to a goal and a vision. I think that’s something that we look for. It’s hard to look for as a screening process, but you can find out pretty fast after the fact. I also think, from my standpoint, it’s very hard for people who don’t have any experience with the plant, although we’ve got a number of extremely talented people on our team who play roles in the organization who don’t have a personal relationship or the plan.

And so I’m constantly surprised by that, but in lot of respects, I think what motivates them isn’t necessarily their loyalty to the all the green goodness that’s inside a cannabis plant, but rather their loyalty or the thing that drives them is the excitement around building and creating. That’s an opportunity that you get in cannabis. Cannabis is more of a blank canvas then you tend to get in other industries, and that’s been really exciting. So some people respond to that really well and some people respond to it as, “Wait a minute. You mean there’s no building plan or there’s no roll out plan that I can just look to and implement?” But rather we have to be creative and create it ourselves. And that’s right for certain people and not right for others.

TG Branfalt: I mean, I’m sure that you find yourself in situations where you’re looking at resumes or recruiting people who don’t have that experience, that background in cannabis. What businesses in industries do you see a lot of sort of people you recruit or that or that apply to you come from?

George Allen: So a lot of it’s geographic, like where are you? We’re in Monterey, which is in one of the most prolific areas in the country for growing, so growing anything from leafy vegetables to tomatoes. You tend to see a lot of people come from agriculture who are interested both back office as well as out in the field who are interested. In a lot of respects, cannabis is pretty interesting in that some people are just bitten by the bug in one form or another. And just by virtue of the fact that they submitted their resume is enough of an indication that they’re curious and they’re committed to learning about a new industry. And I think in a fair amount of respect as I said before, there isn’t necessarily like a ministry that we say, “Hey, we want to recruit everybody from this CPG or beer or liquor space,” but rather it’s more about their individual story and what they’re seeking and what motivates them.

TG Branfalt: So I want to switch gears a little bit and talk to just about some financing stuff. You’ve done an IPO, which again in the cannabis space is not super common. What are some of the challenges for doing an initial public offering in this space? How does it differ from more traditional industries?

George Allen: Well, I think a couple of things. Not to be overly technical about it, but what we did at Acreage was a reverse public takeover. So we basically merged into an existing shell. In a lot of respects, there’s many parts of it that are similar to an IPO, but technically speaking it RPO. I actually don’t think the differences between cannabis and other industries really exist, but I think I’m in the minority there. I think you actually need to communicate your story to investors with the same amount of clarity and transparency and honesty that other businesses hold themselves accountable to, or other successful ones do. And if you’re not going to do that, but rather you’re going to expect that investors are more tolerant or more lenient with sort of grievances so to speak than they would be with a mainstream industry, eventually you’re going to get burned.

The self-correcting mechanism that exists with investors is that management teams and owners, they’re the last guys who get paid. And so it’s not about how you start your journey. It’s about the full extent of your journey and where you end up. The mistake that many people make in cannabis is the journey’s over once you get the company public. That is just the very, very beginning. The promises that you make, people are going to remember those for a long period of time. Investors have a very long memory. Depending on where the cycle is and where capital markets are at the moment where you’re trying to go public, the amount of benefit that they’re willing to give you of the doubt changes. But that doesn’t really change how they’re going to look at you in arrears. They’re always going to hold you accountable for what you said and what you did.

TG Branfalt: And what, in your opinion, makes for a good company that can raise money? What do investors… You have a capital company. What attribute to a business do you see, and you say, “This is a good bet right here?”

George Allen: Well, the bet to get involved within this was really around the team and the infrastructure that they had. And I think it really changes situation by situation, but ultimately we’re looking for is the ability to build enterprise value over a long period of time. Enterprise value is a function of profitability times multiple. And so it’s really your perception of where those ingredients are sort of going to be harvested in the landscape. There’s one approach to just go and try to maximize profitability by going to a limited license marketplace and selling hotdogs inside the hotdog stadium for as high price as you can for as long as you can until the concession runs out. My challenge with that is I don’t think there’s a lot of terminal value there. I don’t think there’s much at the back end. Instead, we’re focused on building a brand that consumers embrace and associate with the use of recreational cannabis in a way that nobody has done before. And that’s where I see the highest enterprise value over the long term.

So I’m committed to that journey and that mission. I’ve communicated that to all my investors. I’m grateful to have an investing group behind us that knows what we’re trying to do and is extremely supportive. I think the fundamental pillar of maintaining a relationship with your investors is giving them transparency. It’s something that I think people miss out a lot. I think the perception is that investors only want to hear good news. What happens when investors only hear good news is their bullshit meter starts climbing and they know that no company is made up of only good news, and so they start to doubt it. And it’s only a matter of time before their doubts get proven accurate.

TG Branfalt: I mean, you have such an insight into… I mean, I didn’t go to business school, but the economy of scale and that sort of stuff. I mean, a lot of people I don’t think that I’ve spoke to anyway, don’t sort of take this really pragmatic approach and I really appreciate that. What advice-

George Allen: Well, it’s been a lot of fun. Yeah. Sorry, go ahead.

TG Branfalt: No, no. What advice would you have for entrepreneurs who are looking to enter this space either as an investor or a high-level executive looking to enter a sort of exciting space? What advice do you have for those people?

George Allen: Just get involved. The honest to God truth is, get involved in any way you can. Learn about the business in any way you can. What’s going to happen… Because if you’re looking from the outside, it’s hard to be constructive. In a lot of respects, this industry is so immature that it shocks a new entrance into it, is to how many corners of this sort of like this new world haven’t been explored. But you don’t even see that from the outside until you get involved. So find an opening. Take a job, take a role. It’s not going to be a role you’re going to be at forever, but get involved. If you can get involved in a leadership capacity, great. If you can get involved in an employee capacity, great. It doesn’t mean that’s where the journey ends, but certainly you got to start somewhere.

TG Branfalt: What excites you most about sort of the future of the industry?

George Allen: Wow, there’s so much to that question. There’s so much to that question. Truth be told, I see… Cannabis is really fascinating. It’s a product that for the most part delivers on its promise. There are very few products out there that do that. I think it’s really fun to be engaged in the industry like that. It’s also a challenge. It’s also a challenge to build a brand in an industry where pretty much all brands and all products at some level are delivering on their promise, right? There’s so many businesses out there that really fail to deliver on their fundamental promise. And when you look at those, then it’s easy to differentiate the ones that’ll be successful because they are delivering than the ones that won’t. But cannabis in the most part does deliver on its promise. And that’s a challenge, but also what makes it so exciting. How do you get through to consumers on a brand basis where the product itself does such a great job of delivering?

I personally think that there’s a huge opportunity here to capture at the moment where everybody goes from being somewhat discreet about cannabis consumption, to being more open and casual about cannabis consumption, to build a brand that is really sort of about that transition and about that moment in history, because I think that’s an indelible brand that will be around for a long, long time. And that’s what I believe we’re trying to build it Lowell.

TG Branfalt: I will say that when it comes to branding, I think that it’s especially hard for cannabis companies, because I mean I’ve been smoking cannabis every day since I was 16 years old and I’ve never had to rely on a company. I had to rely on my boy who I guess could be a brand. But I think it’s going to be really hard when we’re not used to even making those considerations for 30 years, 20 years.

George Allen: Yeah, I couldn’t agree more. And I think that’s going to change over time, how it’s going to change. As I said, it’s going to be more of a journey. The brand is going to be… It’s going to be really fun. For me, the reason why I get so excited about Lowell and the reason why I was so drawn to the brand from early days, it was one of the first brands that in my opinion gave permission to the consumer to show off cannabis to everybody.

TG Branfalt: Interesting.

George Allen: You know your experience with cannabis as a user, you understand that for you, you feel a certain way about cannabis. But what Lowell is about is telling you that the world is going to look at you as mainstream and normal and as beautiful as you feel about the product itself. And that’s really what I think Lowell does so well. It makes everybody accept cannabis in a way that you and I have accepted it for so long. And that’s not easy to do. And so that’s a starting point for what I think is a really great brand equity.

TG Branfalt: This has been a really fascinating conversation. Not exactly what I would’ve expected just because of your background. And I’m not saying that as a detriment. It just went in a different direction than I had thought, which is really excellent. Where can people find out more about you, more about Lowell Farms? Give us the socials and that sort of thing.

George Allen: Well, I would generally say if people are trying to find out more about me, they’d be real bored. But I’d definitely point them to Lowell Farms. We’re on all of the major social media platforms. We got one of the largest footprints on Instagram in the industry. We’ve got a lot planned for the near future and super excited to keep moving forward. The way I view it is everything that we can do for Lowell, we’re going to do as well for the cannabis industry and for people who’ve been working real hard on this promise for a long time. I think we’re a good mouthpiece for it. We’ve got a great team that’s dedicated to the mission. We have lowellfarms.com. It’s got all the goodness around our financial reporting, which is fundamental to any investment decision. I think it’s all out there. And I look forward to talking to investors. We’re grateful for anybody who’s interested in either employee or investing in the business. We always love to hear from you.

TG Branfalt: Thank you so much. That’s George Allen. He’s the chairman of the board for Lowell Farms. He’s also the founder of cannabis industry investment firm, Geronimmo Capital LLC. Thanks again, George. I hope to hear from you soon and maybe we’ll see you out here in New York in a year and a half.

George Allen: We’ll be there. You can count on. Looking forward to it.

TG Branfalt: You can find more episodes at the Ganjapreneur.com Podcast in the podcast section of Ganjapreneur.com on Spotify and in the Apple iTunes store. On the Ganjapreneur.com website, you’ll find the latest cannabis news and cannabis jobs updated daily along with transcripts of this podcast. You can also download the ganjapreneur.com app in iTunes and Google Play. This episode was engineered by Trim Media House. And after what? Seven years of being the host of the Ganjapreneur.com Podcast, I am moving on to Cannabias where I will be helping to demystify some media bias coverage in the cannabis industry pertaining to the cannabis industry. Thank you so much for listening to me, rattle on for these seven wonderful years. I have been your host, TG Branfalt.

For decades, cannabis research in the U.S. was hindered by steep federal requirements, foot-dragging enforcement agencies, and an archaic rule limiting the source of research-grade cannabis to just one cultivator in Mississippi. But thanks to a lawsuit against the Drug Enforcement Administration (DEA) by Dr. Sue Sisley MD, a doctor who spent years trying to get federal approval for her study that sought to investigate the therapeutic effects of cannabis for veterans with PTSD, the path for real cannabis research has never been more clear.

Shane Pennington was the attorney who worked pro bono with Dr. Sisley to see that lawsuit to fruition. In this podcast interview, our host TG Branfalt returns to discuss those developments with Shane as well as other significant rulings. Shane also discusses his background before joining the cannabis cause, his current work with Vicente Sederberg LLP, his advice for lawyers or law students who are interested in cannabis, and more.

You can listen to the full interview via the player below, or keep scrolling down to find a full transcript.

Listen to the podcast:

Read the transcript:

Kevin Lance Murray: This episode of the Ganjapreneur Podcast is brought to you by The Sesh, a new podcast from the Outlaw Report, the essential news source for cannabis politics, business, and culture in the Mid-Atlantic region. I’m Kevin Lance Murray, host of The Sesh, and you can listen to all our episodes on Apple Podcast, Spotify, or by visiting the outlawreport.com/podcast.

TG Branfalt: Hey, there. I’m your host TG Branfalt and thank you for listening to the ganjapreneur.com podcast where we try to bring you actionable information and normalize cannabis through the stories of ganjapreneurs, activists and industry stakeholders. It’s been a long time since I’ve hosted an episode of the podcast, but recently I had the opportunity to interview Shane Pennington, the lead council for New York-based Vicente Sederberg LLP, which is a cannabis-focused legal practice, about a letter that he had written to the DEA that sort of sparked this controversy about seeds. But before we get into that, how you doing, Shane?

Shane Pennington: Doing great. Thanks for having me.

TG Branfalt: It’s a pleasure. Like I said, we had spoken about the seeds issue a couple of weeks ago, and we started sort of jawing about your history and how you got into the space. And I was really fascinated by that. And so I was like, “Let me host another podcast and get this on record.” So let’s start with you, man. What is your background?

Shane Pennington: Yeah, so I graduated law school in 2010 and went very kind of square route for several years, that I clerked for several federal judges, had a above top secret clearance with the federal government where I was doing FISA, which is like Foreign Intelligence Surveillance Act stuff in DC, and then went and joined a Supreme Court practice of a big law firm in Houston, where I’m originally from. And after several years of doing Supreme Court cases for companies like Halliburton and Valero and that kind of thing, I decided… I got offered this pro bono gig to help a scientist named Dr. Sue Sisley try to get her application to grow cannabis for research out of a delay hold at DEA. So it was kind of just stuck and DEA wasn’t getting back to her. And I knew nothing about cannabis policy, I knew nothing about the Controlled Substances Act, I had zero background. I mean, my dad’s a Methodist minister. I grew up very straight laced.

And there was no judgment, I’m actually kind of a libertarian politically. So I had no judgment, but just my life, it had just had never been an issue for me. But since what Dr. Sisley was doing was for vets, she was trying to research cannabis for veterans suffering from treatment resistant PTSD and chronic pain, I thought, “Well, I’ll try to help her,” and dug into it and ended up beating the DEA in a series of lawsuits from 2019 to 2021. And now she has a license to grow her own cannabis and her studies are going forward. And in the process of doing all of that, I became obsessed with… I mean, learned all about it, realized how meaningful the work was and so I was like, “Man, these cases for Valero and Halliburton just aren’t as interesting or as meaningful. I mean, to me.” And so I left the big firm and came and joined Vicente Sederberg and now do impact litigation for cannabis reform full-time.

TG Branfalt: So you say you had no experience in cannabis, what in your background did you draw from most to sort of enter this space or get really acquainted with it?

Shane Pennington: That’s a great question. So turns out cannabis law, and this is kind of nerdy, but I mean, it’s not really its own thing. People think of it as cannabis law, but it’s not. It’s actually administrative law because administrative law is the law of agencies, it’s how agencies regulate people. So your car is regulated by the Environmental Protection Agency, the food you eat is the USDA, the Department of Agriculture and so forth, your taxes are by the Internal Revenue Service, which is a federal agency, right? And so I specialized in suing those federal agencies on behalf of regulated parties, like Halliburton often has to deal with the EPA and the SEC and all of this. And even pharmaceutical companies, I would help them as well with FDA and FTC and all these different agencies.

That’s what I specialize in, it’s a very nerdy, very nuanced, very complex area of law. And it turns out that cannabis is governed by federal agencies, the Drug Enforcement Administration, the Food and Drug Administration, Alcohol Tobacco Firearms, Customs Border Protection, which is Homeland Security. So you just go down the list and I was like, “Man, that’s right up my alley.” Now the laws are different for each regulated industry, but it turns out that I was a specialist in exactly what these substances, the laws that govern them, and so when I got involved in it, even though I wasn’t familiar with the particular regulations and so forth, I was very, very, very prepared to sue the DEA. And that’s why… DEA’s not used to getting sued like that. I mean, I guess they get sued a lot, but it’s no offense to people who are practicing in this space, it’s just that I’m a specialist in this.

Most people who get a cannabis case are the ex-prosecutor or the guy from some local Bar Association who takes a traffic ticket case and then they do the best that they can with it and they… Look at what they do, they kick the shit out of me, but this is what I specialize in and I don’t think DEA was used to getting fastballs coming over the plate like that and so we got a series of quick victories. And I should say, I should add quickly, that I wasn’t doing this alone I had a lot of help from a lot of different people, but the point is it was really exhilarating to get to apply skills that I’d been using on behalf of refiners and Fortune 500 pharmaceutical companies to help a scientist struggling to do research for vets.

TG Branfalt: Is that why you made the switch, because to you it’s a bit more… I don’t know, friendly?

Shane Pennington: I mean, it’s a lot more meaningful to me and I don’t mean to say it’s not meaningful to help big companies, it’s just that there’s so many lawyers. I knew when I left the firm I was at, I was at a firm called Baker Botts, which is a great big Am Law 100 law firm, it’s a great law firm, great people, very, very, very talented lawyers there. And I went to another law firm called Yetter Coleman, which is a top boutique firm, it’s a few lawyers and they’re all very, very talented, very well compensated too and a lot of they’re all still my good friends. And look, the work they’re doing is tip of the spear of legal work, no doubt about it. But I knew when I left, there would be 20 very talented lawyers there to fill my spot, you know what I mean? Harvard and University of Chicago, et cetera, are going to keep pumping out lawyers and they’re going to keep filling those spots.

Whereas there was nobody really doing this work, that level of work, in this space because the federal government hadn’t been enforcing the law. So there’s no demand for it. Everybody was trying to avoid the federal regulators, not engage them. But Sue Sicily was this exception, because she’s this scientist who’s trying to do everything by the book. And she was getting stonewalled by the federal agency. And they’re not used to having people fight back against them cause nobody wants to screw with the DEA. But under these particular circumstances, we definitely did want to throw down and we did. And that was very meaningful. I felt like I was doing something that nobody else was doing at this particular moment in history and with federal legalization around the corner. And of course it’s a bigger corner than I thought at the time, it’s taken longer than I realized when I came in as a newbie.

Yeah. But I mean, like I said, I didn’t know that much about the politics. Anyway, I knew that it was coming and so I thought, “Man, I could get in here and start shaking things up right before legalization and maybe I’ll be able to have a practice out of this on the other side.” But it was worth it just to do all the impact litigation, all the pro bono work was very meaningful. It meant a pay cut for me, but the compensation in terms of bringing meaning to my life and making it possible for me to use my skills in a way that no one else was there… no one else was doing this. That was very exciting.

TG Branfalt: So when you get the call or however you get in touch with Sue Sisley, what is your initial sort of reaction? What’s your gut tell you?

Shane Pennington: Yeah, so it’s actually funny how I got the call. So I said I was at this firm Yetter Coleman just before I made this switch, and there’s a guy there named Matt Zorn, who is… he’s a very talented, very, very skilled litigator at this firm, too, in Houston and he went to Columbia Law School, brilliant guy. And we had never worked together on a case, but he went to South by Southwest in Austin and I didn’t go, he went. He met Dr. Sisley there, she gave a talk and she was like, “Nobody will represent me. My application to DEA is stalled out. Nobody’s going to help me. I can’t get a lawyer. I don’t have any money.” And Matt’s like, “Man, I know the guy who sues agencies, he’s the guy two doors down from me. That’s all he does is sue federal agencies. And he’s really good at it. I should go see if he’ll take it on.”

So he came back and he was like… I mean and he and I had talked and we got along pretty well, but we had never worked together, we had never spent that much time together, but he came into my office and he was like, “Hey man, there’s this scientist that I met at South by and she’s a cannabis scientist.” And I’m like, “Okay.” And he’s like, “Yeah, and she’s got this case and her thing is stalled, her application is stalled at DEA.” And so when he said that, I was like, “Look, man, it’s not going to work.” Because basically when you sue an agency, the first thing the court’s going to ask is, “What is it that the agency did that you’re saying they did wrong?” And if your answer to that is, “They haven’t done anything and I want them to do something.” In other words, it’s their failure to act that is illegal, you’re fight…

I mean, that’s like, it’s hard enough to sue the government when they’ve done something clearly wrong, right? They took your house from you because they said that it was on waters of the United States or something like that with the Clean Water Act. Even if it’s clearly wrong, it’s still very difficult to sue the federal government. When the federal government’s up against you in court, there’s a presumption that the government is right and you’re wrong. That’s just how it is and you’re fighting that uphill battle no matter what. But when you’re saying the government should have done something and it hasn’t, that is three times as hard. And the reason is because the court doesn’t want to tell an agency how to prioritize its duties. So say an agency has lot, and they do, they have lots of things to do, they have a limited budget, no court wants to tell them, “You’ve got to do this first and that second and third,” because that’s considered an agency’s decision, they get to decide. Even if they have to do it, they get to decide when they do it and how they do it.

And so I told him, I was like, “Look, dude, that’s a losing battle. You’re not winning that.” He was like, “Will you just look at it because it’s been years that they’ve been sitting on this. They won’t talk to her.” I was like, “I’ll look at it, but I’m telling you, it’s going to be very, very challenging and I don’t think we’re going to win. And that’s why she hadn’t been able to find a lawyer.” So I started looking at it and I knew it would be very, very difficult, but her story was just so compelling. I mean, she is a legit scientist, she’s never broken a law, she’s straight down the middle, trying to… I started looking at it’s like the government is saying cannabis needs to be in Schedule I because there’s no research. And so then she’s trying to do the research and they won’t let her.

TG Branfalt: And, I’m sorry, but if I’m not mistaken, this was during the period of time where they’d said that they were going to open more licenses.

Shane Pennington: Yeah. Yeah. In 2016, that’s right. Now, that’s a very important point. They actually solicited the application. And here’s the deal, it was at the tail end of the Obama administration. This is 2016, they solicit the applications as Obama is on his way out the door and in comes the Trump administration in Jeff Sessions and all of a sudden they slam the door shut, it’s radio silence and as somebody who works on these cases all the time, of course, I mean, you don’t have to be a rocket scientist to see this. It’s like, that’s obviously political. And so that didn’t look good and even though the standard was going to be very difficult to overcome, I felt like it was worth a shot at least to raise awareness of the issue. And so we went to court over it. And as soon as we did, we wrote a really scathing opening brief. And we went to a court I clerked on so I knew how things worked there and-

TG Branfalt: That’s smart.

Shane Pennington: Yeah. And pretty soon the DEA folded. They didn’t want to fight it, they just went ahead and started processing her application.

TG Branfalt: Really?

Shane Pennington: Yeah. Yeah. And actually a series of dominoes fell, man. It’s insane. I don’t know how much we’ll be able to cover, but suffice to say… Let me just give you the punchline first, okay? By the time it was said and done, it turned out, everybody wanted to know why were they not processing these applications? What was the deal? They said they wanted them, why are they not processing them? And they’d actually gotten letters from senators on both sides of the aisle and other lawmakers, right? Democrats, Republicans, what is going on? Tell us the explanation. They had hauled multiple acting attorneys general in front of different committees of the Senate saying, “What’s up, we need this. There’s a veteran suicide epidemic. We have heard that this cannabis is helping these vets, but we don’t know what the risks are, if it’s helpful. You guys say we need the research, what’s going on?”

And DEA would say, “We’re processing the applications as fast as we can. We’re doing everything we can.” For years this was said. So everybody wanted to know what the answer was. Well, our lawsuits uncovered the answer and it’s unbelievable how it all went down. But the answer was that there was a secret memo from the office of legal counsel, this like Jedi council of secretive legal ninjas that operate in the executive branch, and their whole job is to settle disputes within the executive branch. So if like DEA disagrees with FDA or something like that, they will send it to this OLC and this OLC is just very, like I said, most people haven’t even heard of them. And it’s this little group of brilliant attorneys who just sit in this room and write opinions that govern the executive branch. So no matter what any agency says, if OLC says it’s X, Y, and Z, that’s the law on the executive branch.

And so what happened here was… And oh, and all its opinions are secret unless they decide to publish them. So it’s this, if you remember-

TG Branfalt: Or they get leaked.

Shane Pennington: What’s that?

TG Branfalt: Or they get leaked.

Shane Pennington: They do get leaked. So if you remember the Torture Memos under Bush, that was OLC. When the Russia stuff was going on, the Mueller investigation, OLC got involved there. They’re in the background of all the biggest stuff that’s happening in the executive branch. I mean, this is very spy versus spy type stuff.

TG Branfalt: So was it your case that brought these memos to light?

Shane Pennington: A settlement in a case that we brought actually forced DOJ to release the OLC opinion, but explained why they were delaying the applications, were refusing to process them and the answer, get this. The reason they weren’t processing them was because DEA’s policy, called the NIDA Monopoly, had been violating international law for 50 years.

TG Branfalt: And you’re talking about the farm in Mississippi?

Shane Pennington: Yep. Yep. In particular, there’s a treaty called the Single Convention on Narcotic Drugs and it says that a single government agency has to govern marijuana cultivation if a country’s going to allow marijuana cultivation. This is ’61. So this is back when international… and it still is, this still is international law. But it sounds crazy because all these countries now allow marijuana cultivation, it’s obviously happening. That’s still the law under this treaty that the US and all these other countries are signatory to. It says a single government agency has to govern, but in the United States, NIDA and DEA, NIDA is the National Institute on Drug Abuse and DEA, which is of course two agencies, violates the convention and so the OLC said, “We are not in compliance with this treaty because of your NIDA Monopoly and so we can’t move forward with anything until you fix that.”

So DEA had to make all new rules. That’s why these new rules came out in 2020, or I guess it was 2021 by the time they actually were final, and then they got the process going. But they were just sitting on it because DEA… Nobody was very eager to tell Congress, “Yeah, we’ve been violating international law for half a century.” And what’s crazy about it too is… but that’s true. You can look it up. You can look it up, it’s on DOJ’s website. It’s called Licensing Marijuana Cultivation and Compliance With a Single Convention. If you Google that, you will find the OLC opinion that they publicized as part of a settlement. I’ll send it to you. I’ll send you the settlement.

TG Branfalt: This is unbelievable.

Shane Pennington: Right. Yeah. No. And I mean, it’s one of those things where you just start pulling the thread on the sweater and you just keep pulling it and pulling it and pulling it, and finally the emperor’s just standing there naked.

TG Branfalt: Were you just floored by all this? I mean, you’ve been doing administrative law, was there anything even close to this that you’d ever…?

Shane Pennington: That’s why I quit my lucrative, high-powered job to come do this all the time. I was like, “Listen, if it’s low hanging fruit like this.” And there is. There is a lot of stuff. And I mean, dude, this was a secret opinion. So what’s crazy is no one will ever understand this is such nerdy stuff when I try to explain it to people that their eyes kind of glaze over, but for me as an administrative law nerd, this was like… I’m sitting there, Matt and I are in the office and I honestly can’t remember which of us… how it happened… what the exact conversation was, but we’re sitting there and we’re trying to figure out what the answer to this question was. And one of us, and I don’t remember whom, said, “It’s got to be an OLC, I think.” Because it’s…

TG Branfalt: So you just knew that in your gut?

Shane Pennington: Because that would be the only thing that could be secret that they wouldn’t want to tell that could cause DEA not to move forward because they can’t, because PLC said so and yet it wouldn’t be public. And so what we did was we sued under the Freedom of Information Act and we said, “Listen, if you’ve changed the policy that’s governing our client, you’ve got to tell us that policy.” Which is true. And so we sued them and we said, “And also we need to do it on an emergency basis because we shouldn’t have to wait.” And at first the DOJ attorney on the other side was like, “You guys are insane. This is not happening. I don’t know what you think you’re talking about, but nobody gets…”

TG Branfalt: Really?

Shane Pennington: And then a week later, two weeks from the day we filed the lawsuit, the FOIA lawsuit, Freedom of Information Act, two weeks later, the guy called us and he was like, “Okay, yeah. We’re ready to settle it. We’ll post it on the website.” And we were like, “Oh man.” That’s like zero to 60 instantly. That never happens. And yeah, we were totally floored. I was like… I thought we were going to… Honestly I was like, “Dude, we’re going to be famous, man. This is big time.” But of course it happened during COVID and nobody cared and that’s stuff that I think people care when you tell them, but it’s so hard to understand it. And the federal government did everything they could do. They didn’t go to Congress and say, “Hey guys, remember all those times we testified to you and told you we didn’t know what the reason was. We’d like to correct the record.” Nobody ever did that. Nobody ever followed up.

TG Branfalt: Well, and from… I mean, a settlement’s also a lot quieter. You don’t go through all the motions of a trial and dates.

Shane Pennington: And we didn’t want to go blow the lid on it too much at the time, because we were trying to get our client her license. I mean, at the end of the day, this was cool for us. It’s like the little tiny highlight reel that my mom plays at family reunions or whatever about her son doing cool stuff or whatever. It is cool for me, but ultimately we have a client, we wanted her to get her license. So the settlement was we’re not going to press this. You published it, we get access to it. We’ll move forward. And our client got the license, but now years later, obviously it’s… Not years, but a year later, I can talk about it and it’s not violating the settlement agreement.

But another funny thing about it, the guy who wrote the OLC opinion, his name is Henry Whitaker. This guy is now the Solicitor General of Florida, he clerked for the same judge that I clerked for on the DC Circuit so I’d see him at law clerk unions and stuff, and the judge that we clerked for, David Sentelle, he’s this legendary DC Circuit judge, and one day we were out, he smoked cigars in DC with his clerks, and it’s the chance to get to talk to the judge, ask him for life advice or whatever. So one day I asked him, I was like, “Who’s your best clerk ever? Who’s the best, the smartest, the brightest, the best writer or whatever?” He’s like, “Henry Whitaker by far is the best clerk I’ve ever had.”

So when I saw Henry Whitaker wrote this thing, I was like, “Oh my God.” And of course it’s brilliantly reasoned, it’s perfect and it says, yeah, “DEA, since the very first day the NIDA monopoly ever existed, it was illegal and it caused the United States to be out of compliance with international law for half a century and it’s got to be corrected.” So yeah, I mean, that’s just insane. And I actually was giving a talk to a bunch of solicitors general last week about cannabis policy because all the states are very interested now in what’s about to happen, right? And so I was talking to them and I was talking about this case and I was looking out, I was like, “Man, is Henry Whitaker here?” Cause that dude still… He still intimidates me because this is legend to Sentelle clerks everywhere. But yeah, pretty crazy.

TG Branfalt: So what’s interesting is that the reason we sat initially was for your letter and about the seeds and I’m not going to rehash that, but that seemed to have got sort of a lot more traction than the sort of mind-blowing OLC opinion and that sort of thing.

Shane Pennington: Which is crazy. What does that say about our industry and the law? Everybody notices more a seed letter than they do this OLC thing, right?

TG Branfalt: Yeah. And I mean, one of the things that really struck me when we first talked was you had one very, very straight message that you wanted to send. Why was it so important for you to make sure that it was out there the way that you wanted it out there?

Shane Pennington: Well, because… So that seed letter… I mean basically long story short on that was after the 2018 Farm Bill, we figured out that seeds, tissue, cultures, genetics, because they’re below 0.3%, they’re hemp, not marijuana and their federal law, therefore at least at the federal law part, there’s no barrier to interstate shipment of them, which is a huge deal to people out there who, everybody under the state legal markets who are having to… they can’t get IP and genetics. There’s no way if you have genetics in California to get them to New York, for example, without breaking federal law, the assumption was and so you had to have all these work arounds. So we knew that was a big deal and so we wanted to let people know, “Hey, federal law is not a barrier here. I wrote to DEA, got them to say on the record that seeds are hemp and therefore they’re not marijuana under federal law.”

And that created this big splash, but I also knew that the law is incredibly complicated. And so just having DEA say that about federal law doesn’t mean that you can now just go put a bunch of seeds and clippings in a box, take it to Amazon and have them ship it all over the country and advertise it online. That is a much more complicated question cause you have to look at state law and all this, it gets incredibly complicated. But I knew as soon as we let that drop about what DEA had said, that all the folks out there who that was big news for were just going to immediately start shipping stuff and ignore all of the complexities and just say, “Yay, we can ship things everywhere.” And so I wanted to get it out there that that’s not true. There’s a lot more to it than that, you have to be very careful.

We let it drop, I said it a million times every time we would publish something, I’d be like, “Listen, this is complicated. This only resolves one piece of it.” And still the next day I wake up, I’m drinking my coffee and I’m looking at the news, and of course I have a lot of Google alerts for cannabis, marijuana, whatever, and I’m looking and sure enough, the first thing up there is One Simple Trick to Mail Cannabis. And I was like, “Oh no. The plane is crashing into the mountain.” And so I was glad that when we got to talk, I was able to tell people, get a bigger megaphone to be able to say, and let me say it again now that we’re on this podcast, do not think that you could just open up a seed business and start shipping interstate. It may be possible, but you need a very, very talented team of lawyers to help you do that. And I’m not just saying that because I mean, I got plenty of work, it’s not that, it’s just you will get arrested probably so be careful.

TG Branfalt: I do want to ask you too, because we only have a couple minutes, what role do you think that you and other cannabis-focused attorneys have in sort of relegating in some way information and disinformation in this industry?

Shane Pennington: Yeah. I mean, I think that right now, unfortunately, and, dude, it sounds like I’m bashing on other attorneys, I do not mean to do that at all, but I do need to say that attorneys need to know how to stay in their lane. I stay in my lane. I’m not an IP attorney. I told you my buddy Matt Zorn is and he’s an intellectual property attorney. I don’t tell him how to practice intellectual property. He doesn’t tell me how to practice federal administrative law.

In cannabis though, there has been no federal stuff going on for so long that there have been these shops that have opened up that are just do-it-all kind of attorneys. And frankly, the people in this industry are not risk averse and their attorneys have an appetite for risk too. And so these are the type of people who will be like, “Yeah, we can do it. Let’s do it.” There’s an F1 car sitting out there on a track and they’d be like “I can drive it, just give me the keys. I’m sure I can handle it.”

Whereas I come from a different way of thinking where I’m never going to go outside my lane. And I think that as the industry-

TG Branfalt: No F1’s for you?

Shane Pennington: What’s that?

TG Branfalt: No F1’s for you?

Shane Pennington: Not without a lot of lessons, man. Do you know how expensive an F1 car is? I think they light on fire easily, too, like, nah, that ain’t for me. So anyway, I think that as we get more sophisticated, more money pours into the industry, things start to open up, there are going to be a lot more attorneys with more areas of specialization who are going to come in and they’re going to discipline things. They’re going to tell their clients what I’m telling them, “Pump the breaks, let’s think this through.” And that’s going to be very important as things get more sophisticated.

I mean, that was a shock for me coming from big law where every client I have has a general counsel’s office with a hundred attorneys in it who then hire outside council for specialized things. Here, it’s just like everybody’s just Wild West, “We want to sue the government. Okay, let’s just do it. Let’s just write the complaint and just throw it out there.” And I’m like, “Man, we should think about this.” And I think there’s going to be a lot of that kind of self-regulating, learning to think before we leap more as the industry progresses and becomes more above ground, basically.

TG Branfalt: Dude, this has been so much fun and I know that you have very important lawyer things to do. So I don’t want to keep you too much longer. But let’s say that a law student who’s interested in taking sort of… going into the cannabis side of law, what would your advice to them be?

Shane Pennington: If you’re in law school and you’re wanting to do this kind of stuff, get in contact with me because I need help. And what I need is… Well, what I need is I need people who can write and I need hard workers. That’s the main thing. And I guess that if you’re not in law school and you’re thinking about doing this, or if you’re early on, I guess there are a couple of things. First thing is, you need to know your business and you need to have a business sense, because this is an up and coming industry and it’s going to start getting plugged into new things like the Amazons of the world are going to start getting involved, all these new regulators are going to come online. You need to learn economics, you need to learn business, you need to be kind of a Jack of all trades, but you really need to know your business.

We need people who understand this plant and how it works, and frankly, better than I do. I don’t know anything about it. That’s my weakness. That’s why I went to Vicente Sederberg where there are all these experts who do know. But that’s something you’re going to need to know. And then you’re going to have to work on writing. Writing is going to be a premium. I mean, I’m a pretty good writer and we need a lot of good writers and we need people who have experience in the federal government, too. So taking a few years to be a prosecutor, taking a few years to work at DOJ or being a public defender and then coming back would be very helpful because all my years clerking have helped me to understand how things work inside the government. That way, now that I’m on this side, I’m able to have thoughts like, “Oh, that’s probably an OLC opinion,” and then how to get it.

So I guess the bottom line is there’s no straight line to success as a lawyer. Everybody kind of takes all their experiences and they use them all and we all have different things we bring to the table. And so I would encourage people who want to do a practice like the one that I have to go do something else, honestly. Go get other experience and then come back to this. Because, again, I mean the biggest lesson that I’ve learned and the secret that I know that a lot of people don’t, is that there’s no such thing as cannabis law. There’s just law. And everybody who wants to do it because it seems cool or whatever, I mean, this is a complex area of law. You need to screw your thinking cap on tight and you need to really dot your Is and cross your Ts.

Cause I’ll tell you, one thing you’re going to find is that courts are very skeptical of cannabis cases. Every lawyer needs to look legit when they walk in the room, they need to look very professional. But if you’re representing a cannabis client, you need to look four times more professional. If the person on the other side of you has gold plated credentials, yours need to be platinum, you know what I mean? Because it’s almost like there’s still this stigma, especially among federal judges, some of whom are older. I’m not saying that they’re…. I don’t think they intend to do anything corrupt or unfair, it’s just there’s this latent bias that I think people have. I had it, man. When that case came across my desk, I had my eyebrow raised from the get-go cause I was like cannabis, what? What is this Bill and Ted’s Excellent Adventure or something. We take serious lawsuits here at this law firm. What is this all about?

And I had to read for a long time to realize that there are kids with epilepsy, there are people terminally ill with cancer, it’s not all… There’s a lot more to this and that the federal government for many, many years was blocking science, which is insane to me, science on things that could help people. And I think that once you get to where you can communicate that message in the right way, that’s when you can start making progress. But in order to do that, you need to work hard, get your grades right, get your experience right and then get hooked up with the right mentor, which would be me. So holler at your boy whenever you’re ready.

TG Branfalt: If people were trying to holler at your boy, Shane Pennington, how would they get in touch with you?

Shane Pennington: So they could email me at S.Pennington@VicenteSederberg.com, that would be the easiest way. And you can just go to Vicente Sederberg’s website, look me up, Shane Pennington, you’ll see my phone number there and all that. So, that’d be the easiest way.

TG Branfalt: Awesome. Dude, it’s been a pleasure. I’m really delighted that we got to do this after, cause when we were hanging up the phone last time I was like, “I want to talk to this guy for like another 45 minutes to an hour.” So I really…

Shane Pennington: Yeah. No, I’m glad you did it. I really am. I mean it’s important stuff and I appreciate you shining a spotlight on it.

TG Branfalt: No, thanks so much for being on the show and I’m sure I’ll find something with your name on it in the future come across my desk.

Shane Pennington: Absolutely. I hope so. If not, then something bad’s happened to me.

TG Branfalt: I’ll be in touch to make sure nothing bad happens to you.

Shane Pennington: All right, man. Good talking with you.

TG Branfalt: You can find more episodes at the ganjapreneur.com podcast in the podcast section of ganjapreneur.com on Spotify and in the Apple iTunes store. On the ganjapreneur.com website, you’ll find the latest in cannabis news and cannabis jobs updated daily along with transcripts of this podcast. You can also download the ganjapreneur.com app in iTunes and Google Play. This episode was engineered by us. I’ve been your host TG Branfalt.