Cannabis Economy

For U.S. Congressman Jared Huffman, the passing of the SAFE Banking Act says a lot more than merely where we are on banking; he believes that it is an indicator that we are well past the tipping point on ending cannabis prohibition. He notes that we are definitely not finished with cannabis reform, especially because so many members of Congress represent states that need such reforms. Huffman also believes that if he were representing a state in the Midwest, he would be focusing on states' rights and the medical applications of cannabis, as it's hard nowadays to argue about the importance of those aspects. Unfortunately, Huffman reminds us that Congress rarely gets ahead of public opinion, which is why Congress still has so much catching up to do regarding cannabis reform.

For U.S. Congressman Denver Riggleman, the SAFE Banking Act is about both freedom and controlling criminal activity; passing the bill was simply a matter of common sense. Although the bill isn't perfect, we should be welcoming of iterative change. When discussing the social justice element of cannabis reform, Riggleman brings attention to the Opportunity Zones Program from the Tax Cuts and Jobs Act of 2017 -- the program encourages long-term investments in low-income and rural communities across the country, and would be an effective means of catalyzing business. Riggleman suggests that this may be a better way to foster equality than the terms outlined in the MORE Act. Riggleman also discusses tax cuts vs. spending, NATO, jobs, and more.

U.S. Congresswoman Dina Titus discusses the passing of the SAFE Banking Act -- the first standalone cannabis bill to pass in the House while also being bipartisan. Titus believes that the topic of banking will appeal to Senate Republicans much better than issues of civil liberties or criminal justice would. Titus discusses some difficulties that initially came with pushing the SAFE Banking Act forward: "some people in the industry didn't want us to pass this because they said it might keep us from passing the big bill. Others of us said, 'No, we've got to have a win. We've got to get this. Don't let the perfect be the enemy of the good.'" From here, Titus believes that we can move on to other types of cannabis legislation, such as taxing cannabis for grant programs, getting the VA to allow for medical cannabis prescriptions, and sponsoring more scientific research. Titus also discusses the benefits of a regulated market, the opioid crisis, and more.

Although U.S. Congressman Thomas Massie is typically against too much regulation, he is glad to see the SAFE Banking Act pass in the House, as it will help to undo other ineffective laws. Massie notes that the bill passed with the support of 91 Republicans, which is quite indicative of how far Congress has come as far as cannabis is concerned. Ideally, Massie would want the federal government to stay out of cannabis regulation and leave it all to the states to decide for themselves, which accounts for the Second Amendment Protection Act, a bill that he is cosponsoring. Although people often believe that getting a bill passed is all about cosponsors, Massie notes that there are many other factors involved, such as the speaker and the majority leader, the speaker in the House, and the majority leader in the Senate. Massie also discusses drug testing, the STATES Act, taxation, and more.

U.S. Congressman Darren Soto joins us to discuss the passing of bills, such as the SAFE Banking Act that just recently passed in the House. As well, Soto tells us about some environmental bills and bills related to disaster recovery that are in the works. Because Congress is so divided, it has been extremely difficult to improve certain laws -- while passing bills in the House is usually doable, passing them in the Senate is much more trying. Despite this frustrating process, Soto does, in fact, believe that the SAFE Banking Act has a good chance of making it through the Senate during this upcoming election year. Soto strongly believes that the lack of safe banking for cannabis businesses is actively hurting everyday Americans: "If we're trying to legalize and normalize this industry, making it all cash is the exact opposite of that." Additionally, Soto discusses the necessity of taking care of our veterans, which includes being able to prescribe them medical cannabis.

U.S. Congressman Dave Joyce discusses the STATES Act and how local economies would play out if cannabis reform were treated as a states' rights issue. Although the STATES Act is not a full solution, Joyce believes that it's very teed up to go, as it is compact and easy for people to understand. Joyce notes that, unfortunately, the Judiciary Committee is pretty backed up at the moment, but that the Moore Act is another bill that people are talking about in Congress, especially because it addresses the issue of expungement. "Moore Act, obviously, is fully fleshed. The trouble is the more flesh you put on that, the harder it's going to be to move that." Joyce talks about the complications and gray areas that come when discussing expungement, and how one must be very delicate when setting such important precedents.

U.S. Congressman Ted Lieu has been fighting for cannabis reform for many years; in fact, he was one of the authors of the ballot guide statement supporting cannabis legalization in California. Congressman Lieu believes that the U.S. should not spend a single cent more trying to eradicate cannabis: "My opinion is that the federal government should completely decriminalize cannabis, take it off the schedule controlled substances. It makes no sense for the federal government to spend any taxpayer dollars trying to prosecute cannabis related issues." Lieu reminds us that it is important to consider the practicalities that go into getting a bill passed and making it bipartisan; because of this, bills like the MORE Act and the STATES Act may not be completely perfect. Lieu also discusses expungement, data, safe banking, automation, and more.

Narbe Alexandrian, President and CEO of Canopy Rivers, discusses the ins and outs of the cannabis investment space. Alexandrian notes that, when a company goes public, there's a lot of pressure in terms of growth, and, unfortunately, a lot of companies simply can't meet those lofty goals. He believes that cannabis companies today should be focused on product market fit; because cannabis is treated as somewhat of a homogeneous product, investors tend to look for who has the right brand and distribution: "The difference between Coke, and Pepsi, and every other soft drink manufacturer out there, isn't that they have this secret recipe, or this secret can, or it pops when you pop the can, nothing like that. It's because of distribution." Alexandrian also discusses the future of hemp, the growing interest in biosynthetic cannabinoids, and the possibility of cannabis entering the pharmaceutical industry.

Cat Packer, Executive Director of the Los Angeles Department of Cannabis Regulation, is working to transition medical cannabis operators over to California's new commercial framework. Although the state has had medical cannabis for years, it has not been regulated by the city of Los Angeles until this point, so a lot of catch up is required to make sure the industry is unified and regulated. Packer also discusses the risks that still persist when entering the market, as well as the city's steps toward addressing social equity: "The city of Los Angeles passed a social equity program back in 2017 in an attempt to try and acknowledge and address some of the harms of the drug war that particularly low income and minority communities had experienced." Soon, Packer tells us, Los Angeles will have more social equity licensees than anywhere else.

A dietary revolution is happening all over the world, Roxanne Dennant, CEO of Fruit Slabs, points out. From veganism to gluten-free diets, a higher consciousness about quality choices regarding food is certainly taking hold. Despite how widespread this consciousness seems to be, Dennant noticed a lack of health and wellness options being offered in the edible market, which is how Fruit Slabs was born. Dennant notes what makes Fruit Slabs products so special: "Our product is so different than any other edibles because fruits have natural goodness in them. They're locked full of natural terpenes, they're also packed full of other, just good things for you, potassium, melatonin, altriptofan." Dennant also discusses the tricky licensing process back in 2016-2017, the environmental impact of agricultural farming, and what Fruit Slabs has been doing to support veterans and the LGBTQ+ community.

Dr. Cristina Sanchez, a molecular biologist at Compultense University in Madrid, Spain, is working to uncover whether or not cannabinoids are useful tools for fighting cancer -- not just to combat the negative side effects of chemo, but also with actual anti-tumor activity. She notes that, in her and her team's pre-clinical studies with mice, cannabinoids do, indeed, kill cancer cells as well as many other things that block the progression of cancer. Although we don't have studies studying the effects of cannabinoids on cancer in humans, there are many testimonials from patients that claim the use of medical cannabis has, in fact, slowed down their disease. Although anecdotal evidence is not enough on its own to start treating patients with cannabis, Sanchez believes that it is an incredibly useful perspective, especially in conjunction with clinical studies.

Because Washington state's cannabis economy began with such an excess of operators, there is currently a massive consolidation process taking place, according to Alex Cooley, co-founder of Solstice. Because of that excess, there was a number of operators who conducted business poorly, and, as a result, collapsed Washington's market and price point (luckily, the economy has balanced out since then.) Cooley also touches upon the Oregon export bill and believes that legal export will ultimately lead to a better, safer cannabis industry. While limiting licensures may not be the best idea, Cooley suggests a merit-based system: so long as you can meet the standards that are put forward by the state, then you can receive licensure. And I think as more and more these states have come online, we've got a firmer and firmer grasp of what that merit looks like."

Louisa Mojela, the incoming chair for Halo Labs, Inc., joins us from Cape Town, South Africa. Within South Africa is the nation of Lesotho, which is on its way to becoming a global cannabis leader. Mojela explains that, because Lesotho was the first African country to legalize both the cultivation and manufacturing of medical cannabis -- and because cannabis grows freely in Lesotho -- the country has become a very desirable location for many worldwide cannabis operators. Hopefully, this new industry will create many much-needed jobs for the country. In order to create this desired "fourth industrial revolution", as Mojela calls it, "the Kingdom of Lesotho must make sure that it really harnesses and leverages these opportunities for the betterment of the people in Lesotho."

The Berkeley Patients Group is the oldest continually operating dispensary in the country, and has historically been a model for how the industry should operate and what corporate social responsibility should look like. Sabrina Fendrick is the Director of Government Affairs for BPG, which means that she is in charge of the policy side of things. Fendrick notes that between January and July of 2018, the entire supply chain had to be restructured, which was difficult because so many temporary licenses were expiring. Because this is the only industry - and California is the only state - that has four agencies regulating one supply chain, there have been lots of extra challenges and limitations present, especially amidst all the changes that occurred last year. Although 2019 hasn't been completely smooth sailing, the regulatory landscape has certainly improved since 2018.

Being able to quantify, harness, and ultimately control the psychoactive effects of cannabis is key in making cannabis accessible to as many patients as possible, according to Perry Davidson, founder and CEO of Syqe. When Davidson was first founding Syqe, he noticed that a majority of patients were using cannabis to treat their chronic pain, and that inhalation was the most beneficial route of administration. Since that realization, Syqe has been working to perfect their inhalation system and make it controllable enough to be deliverable to a small child. Davidson notes that "a metered dose inhalation system would allow patients and physicians to be comfortable in that treatment paradigm of cannabis." In the end, the Syqe team decided to keep the flower in its full, raw form - no chemical alterations, no extractions.

Jeff Chen, Director of the UCLA Cannabis Research Initiative, has learned that "the average physician really is, in many ways, powerless to navigate the healthcare system." Because of this, Chen decided that the best way to change the system was to learn the business side of it as well. Chen also notes that, even today, the endocannabinoid system is not being taught in medical school, as it is a very long and difficult process to change med school curricula. Luckily, UCLA is currently doing a rehaul of their med school curriculum, so Chen is hoping that this will provide an opportunity to insert some cannabis content. Chen wants future doctors to understand "some of the patterns and trends around usage and what the regulatory and policy landscape looks like" and hopes for more double-blind placebo-controlled studies in the very near future.

Pavel Pachta joins us to discuss the history and current state of international drug control treaties. Pachta shares that these treaties were drafted in order to prevent drug abuse and addiction - because of that, Pachta believes that there is no sense in controlling a cannabis product that contains no THC. Pachta also believes that it is crucial to abide by international law; failing to do so sets a bad precedent for other nations. Finally, Pachta discusses what the International Narcotic Control system must do to remain credible, and offers his advice to those in business and academic science.

Chris Call, of the Northbay Credit Union, begins by discussing public safety by way of safe banking; after all, Northbay Credit Union is one of the only financial institutions in the Bay Area that accepts cannabis money. Call is committed to offering safe banking options in order to reduce the number of operators walking around with duffel bags full of cash, though unfortunately, this is still a reality for many. Call also discusses the nebulous legal status of accepting cannabis money: "There's still a law that says you can't aid and abet an illegal operation, which is what we're doing technically, but we are actually providing a really significant resource to law enforcement. We're providing a paper trail that otherwise would not exist."

New York State Senator Diane Savino joins us to discuss legislative procedures in New York and how, unfortunately, New York was recently unable to pass adult use. Savino notes that, when drafting a bill, it is important that you don't allow the perfect to be the enemy of the good: "You compromise and you start with what you got. And then you spend time working to improve it, because that's why laws are amendable." In this business, it is important that a bill has more than just a slim majority, as that is an indication to the courts that the support isn't truly there. Savino hopes that, over the next couple of years, New York can begin to stabilize, grow, and expand its medical program.

Based on her personal experiences, Mara Gordon, co-founder of Aunt Zelda's, has become passionate about using cannabis to treat patients with illnesses and injuries. Gordon notes that, based on her data, THC is the most medically useful cannabinoid, although she is also a strong proponent of medical-use CBD. She also points out that, typically, younger patients require higher doses, whereas older patients require lower doses. This could be due to number of cannabinoid receptors, metabolism speed, or mere differences in psychology. Besides science, Gordon believes that products need to be well understood with everything printed on the label.