Cannabis business experts at MJBizCon discuss shifting regulatory climates, cultivation practices, vape issues & more

LAS VEGAS – Panelists at MJBizCon in Las Vegas this week took on various complicated issues swirling around the marijuana industry, including regulatory changes occurring in many states, best practices for indoor MJ cultivation, the vape health crisis and more.

Assessing regulatory challenges in new markets

According to a panel of marijuana industry experts at MJBizCon’s “Ensuring Continued Compliance in a Changing Regulatory Landscape” session on Dec. 12 in Las Vegas, cannabis companies must keep a careful watch on many intricate regulatory factors as they look to expand into new markets – including the number of licenses allocated, the specific structure of those various markets and more.

“Understand what you are going to do with that license in your portfolio of licenses” before applying, said Pamela Epstein, general counsel and chief regulatory and licensing officer for California-based Eden Enterprises.

Dina Rollman, senior vice president of government and regulatory affairs for Chicago-based Green Thumb Industries, reminded marijuana companies that they need a deep understanding of the communities they want to serve before they consider moving in.

“You’re committing to a community. What does the community care about?” she said.

Arizona-based Harvest Health and Recreation CEO Steve White cautioned attendees about resource allocation and noted “everything takes a little longer than it should, and it’s more expensive.”

MJBizDaily takeaway: Entering a new market can always prove risky, especially if upfront costs are high and the rollout occurs slowly.

Fully vetting the market can prevent businesses from expending unnecessary resources, the panelists stressed.

East Coast market expansion will follow New York’s lead

New York is the one to watch as East Coast states consider adult-use marijuana legalization, according to Andrew Freedman of Caldwell Capital.

If New York can get legislation through this year, Gov. Andrew Cuomo’s recent leadership has indicated the state will move forward. When it does, other states in the region such as New Jersey and Connecticut will follow suit, he said.

MJBizDaily takeaway: Freedman recommended businesses looking to expand into East Coast states should:

  • Pay attention to license structure as it rolls out – in particular license caps. “Where there is a complicated structure, it is litigious and stopping industry from immediate success,” Freedman said. “The more complicated, the less likely it is to roll out.”
  • Watch out for local control issues. These have become a bigger target of political tension and caused roadblocks for legalization in other states.

Advice on outfitting an indoor grow

Installing extensive infrastructure like additional water and power lines when outfitting an empty indoor cannabis cultivation space can save hundreds of thousands of dollars when it’s time to scale up, according to Brandy Keen, co-founder and senior technical advisor for Surna, a manufacturer of lighting and environmental control systems in Boulder, Colorado.

“Anyone who has built a cultivation facility knows that the building is the cheap part. The infrastructure is more expensive,” Keen said Thursday during an MJBizCon session about lessons from veteran cultivators.

“You don’t have to build out the extra capacity, but having the ability and making sure the utilities are available to you can (save your company from) a huge spend later.”

MJBizDaily takeaway: While it can be tempting to install only what is necessary to get a cannabis cultivation operation off the ground – especially considering all the other costs that go into starting a business – it’s much more expensive to expand utility lines later, when business is booming and such additions require ripping into the floor, walls and ceilings.

To instill confidence in vape products, educate consumers

Cannabis businesses in California are banding together to teach regulators, lawmakers and consumers about the safety of legal vaping products in the wake of the vape health scare, according to an MJBizCon panel of marijuana industry experts.

Part of the mission of Legal Cannabis for Consumer Safety is to combat the media coverage instigated by other large industries – like Big Tobacco – that have been pushing back against cannabis legalization, noted Cameron Forni, CEO of Oregon-based Cura and founder of Select.

Account executives need to provide demonstrations and training about vape products to budtenders, who are on the frontlines of interacting with consumers, Forni said.

But it’s a challenge to make sure all budtenders are educated because there is such a high turnover rate among them, Forni said.

MJBizDaily takeaway: Standardization of rules in the vaping industry would help to ensure everyone knows they have to meet the same high bar. But until cannabis is federally legal, it will be difficult for the industry to put those regulations into place, panelists said.

Exploring the international cannabis import and export market

At the MJBizCon panel “Importing and Exporting Cannabis Today and in the Future,” Katrina Glogowski, chief legal officer at TransCanAir, said Canada is still “by a factor” the leading exporter country in the world, and Toronto-based Cronos Group CEO Mike Gorenstein expects the country to remain that way for at least the next two to three years.

Left to right: MJBizDaily’s Matt Lamers, TransCanAir’s Katrina Glogowski, Cronos Group’s Mike Gorenstein, and Frank Robison Law Group’s Frank Robison

But Gorenstein added: “It’s going to take years before we see free-flowing imports/exports, because international trade is a lot of work.”

The transportation challenges facing cannabis exporters, Glogowski said, are that it’s an agricultural product and has to arrive in a fresh condition, and the regulatory burdens specific to cannabis.

For distribution, Gorenstein recommended finding specialists as partners.

MJBizDaily takeaway: The panelists recommended finding a distribution partner in the country of destination that has the infrastructure in place to distribute all types of pharmaceutical products to pharmacies.

And since they “split” the cost of distribution among many products, it’s more efficient than building a distribution business yourself solely for cannabis.

Watch for more session coverage from the staff of MJBizDaily through the end of the conference, which concludes today. Previously published MJBizCon 2019 stories are available here and here. A review of winners showcased at the MJBizDaily Awards is available here

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