Cannabis Industry Daily News

Shake-up at National Cannabis Industry Association

A longtime board member has resigned and a newly hired chief of staff has been let go.

That’s all happened in the past week at the Denver-based National Cannabis Industry Association.

  • Kayvan Khalatbari, a co-founder of Denver Relief Consulting, told Marijuana Business Daily that he submitted his resignation as an NCIA board member Monday.
  • Genifer Murray, a marijuana industry veteran, was removed from her position as chief of staff last Wednesday, NCIA executive director Aaron Smith confirmed in an email.

Khalatbari said he’s stepping down – effective in April – to focus on his campaign for Denver mayor in the May 2019 municipal election.

Both Smith and Murray declined comment on her ouster, which appears sudden since she was hired only two months ago.

However, Smith said NCIA is “in a stronger and more stable place than we’ve ever been” and cited the organization’s roughly 1,500 members.

He also added that 2017 “has been our largest growth year since 2014.”

Khalatbari, however, indicated there’s room for improvement at NCIA and that the organization may be facing internal upheaval.

For instance, he said, the board hadn’t been told about Murray’s removal until she reached out to the members to discuss the situation.

“As far as NCIA turmoil, I’m under (a nondisclosure agreement) with regard to things we’re dealing with internally,” Khalatbari said, “but there are certainly things that are out there that I have no doubt are going to be coming to the surface pretty soon.

“How bad they are, whether they’re true or not, I think is still up for debate.”

Cannabis software company raises $3.2 million

A Florida-based company whose software helps marijuana retailers implement customer relationship and loyalty strategies has raised $3.2 million.

Boca Raton-based Springbig has now raised a total of $6.3 million, according to a company news release.

The company’s latest funding round was led by Green Acre Capital and Halley Venture Partners, according to Springbig, and members of The ArcView Group and other strategic investors also participated.

Springbig will use the capital to double its workforce with new hires in technology development, product management, sales, support, finance and analytics.

The company also plans to set up new offices in Western states, beginning with growing sales teams in California, Washington state and Nevada, a spokeswoman told Marijuana Business Daily.

Springbig, which claims more than 300 retail clients, will also make improvements to its software platform and expand its distribution channels, according to the release.

The software program provides SMS, loyalty marketing and other tools to encourage repeat business for retail locations.

Last month, the company announced a partnership with Green Bits that will make it easier for the cannabis compliance software firm’s customers to integrate Springbig’s software.

Alaska shuts down marijuana edibles maker for multiple alleged violations

In an unprecedented move, Alaska’s marijuana control agency is revoking the license of a marijuana edibles manufacturer that was accused of selling moldy products.

The state’s Alcohol and Marijuana Control Office board voted unanimously to revoke the license of Fairbanks-based Frozen Budz and to fine the company $500,000, the Juneau Empire reported.

Erika McConnell, director of the control office, said the company’s products will be seized from retailers across the state in the next couple of weeks.

The revocation vote marks the first time Alaska’s marijuana regulators have revoked a license.

The control office’s action followed an investigation that was backed by testimony from former company employees.

The office found that Frozen Budz violated multiple state regulations relating to testing, improper labeling, operating out of compliance, producing unapproved products and failing to track the source of its marijuana.

Frozen Budz’s manufacturing license was suspended Dec. 1, when the investigation began.

The company will have an opportunity to appeal the license revocation.

An administrative law judge will rule on the board’s action, and the judge’s decision will be brought back to the board for adoption, modification or rejection.

If Frozen Budz is unhappy with the board’s final decision, company owners can appeal to the Alaska Superior Court.

– Associated Press

‘Dumbfounded’: Kentucky official blasts DEA’s hemp position

Add Kentucky and Colorado agriculture officials to the list of people who disagree with federal drug authorities about hemp.

Kentucky Agriculture Commissioner Ryan Quarles has written to the U.S. Drug Enforcement Administration requesting a meeting about hemp, according to the Louisville Courier-Journal.

“I was dumbfounded” to read about the DEA’s position that hemp-derived CBD oils are illegal, even if they contain no THC, Quarles wrote to the DEA.

“Consumable hemp products are legal to buy,” Quarles said.

Colorado’s industrial hemp chief, Duane Sinning, told the newspaper he agrees with his Kentucky colleague.

“Agriculture laws are not really that hard, unless you get the DEA involved and they want to make it hard,” said Sinning, who is assistant director of Colorado Department of Agriculture’s plant industry division.

Quarles requested a January meeting with the DEA’s acting administrator, Robert Patterson.

But the DEA seems unwilling to talk.

“He’s knocking on the wrong door,” DEA spokesman Melvin Patterson told the Courier Journal. “Unless Congress changes (the Controlled Substances Act), we’re going to continue to do our jobs.”

The DEA will defend its hemp position in February, when the Hemp Industries Association and businesspeople challenge the agency’s position in federal appeals court.

To sign up for our weekly hemp business newsletter, click here.

Maryland approves a dozen more medical marijuana dispensaries

Maryland regulators have given final approval to another 12 dispensaries to begin selling medical marijuana, bringing the number of formally approved retail outlets to 22.

But finding enough cannabis to supply those retailers remains a challenge.

Regulators told the Baltimore Sun the supply issue likely won’t be ironed out until at least March.

Here’s what you need to know:

  • After a more than four-year wait, Maryland’s first dispensaries started selling marijuana a few weeks ago and quickly ran out product.
  • The Sun reported that ForwardGro, the first cultivator to start growing, has sent flower to processors to be made into infused products.
  • Maryland has granted preliminary approval to 102 dispensaries, and given them a December deadline to begin operations or lose their license. So far none has lost its license.

The newly approved dispensaries:

  • Charm City Medicus (Dundalk)
  • Freestate Partners (Howard County)
  • Freestate Wellness (Jessup)
  • Harvest of Maryland (Rockville)
  • Maryland Compassionate Care and Wellness (Montgomery County)
  • Maryleaf (Germantown)
  • MCNA Wellness (Prince George’s County)
  • Medical Products and Services (Baltimore City)
  • Nature’s Care & Wellness (Perryville)
  • Positive Energy (Ocean City)
  • Pure Life Medical (Baltimore City
  • Temescal Wellness (Pikesville)

Online marijuana marketplace Tradiv to shut down at end of year

Online cannabis marketplace Tradiv is closing its doors on Dec. 31 after the once promising Colorado tech company stumbled badly.

Co-founder Geoff Doran said in an email to Marijuana Business Daily the company is closing because of the “missteps along our journey, some of our own making and some beyond our control.” He declined to elaborate.

The Boulder-based company was founded in November 2014 and quickly shot to prominence. Companies use its online wholesale platform to buy and sell cannabis.

In 2016, Inc. magazine named co-founder Aeron Sullivan as one of its 30 under 30 founders “taking on some of the world’s biggest challenges.” At the time the company had 21 employees and $1.1 million in raised funds.

Doran said the company currently employs six, with about 65 buyers and more than 60 sellers participating in its marketplace.

The company’s distribution platform connected cultivators, infused product manufacturers and dispensaries.

Inc. quoted Sullivan as hoping to build the “Amazon of the marijuana industry.”

He was an alumni of CanopyBoulder, a well-known marijuana-centric business accelerator in Colorado.

Sweet Leaf undercover sting targeted budtenders for cannabis sales practices

The Denver Police Department’s undercover sting operation targeting Denver-area Sweet Leaf marijuana dispensaries netted 13 arrests involving the retail chain’s employees, some of whom may face felony charges for alleged improper sales practices.

Many of those arrested were budtenders. They are accused of selling adult-use marijuana in amounts exceeding the 1-ounce limit allowed under state law, according to arrest documents provided by the Denver Police Department.

The police on Thursday shuttered all of Sweet Leaf’s Denver-area stores as part of a wide-ranging sting operation. Authorities initially said they had arrested a dozen employees and later revised that to 13.

Authorities also suspended 26 of the vertically integrated company’s licenses. Sweet Leaf has retail, cultivation and extraction licenses for both rec and medical marijuana products.

Sweet Leaf’s website lists 10 retail stores in the Denver area.  The Denver company also has a retail outlet in Portland, Oregon.

According to the arrest documents, Denver police sent undercover buyers and detectives into eight Sweet Leaf Denver-area dispensaries over the course of the year. They purchased multiple ounces of recreational marijuana in one day.

The arrest documents detail how buyers would enter the store and purchase an ounce of cannabis, put it in a car in the parking lot, and then reenter the store to make another purchase.

Buyers were allegedly able to purchase up to 16 ounces in one day. Some of the stings were conducted with the buyers wearing video recording devices.

Some of the employees have been charged with a felony for distribution of more than 4 ounces of marijuana, while others were arrested on misdemeanor charges.

No top Sweet Leaf executives were among those arrested.

The arrest affidavit states “the investigation was conducted to investigate whether, as reported by complaints, the Sweet Leaf store and the Sweet Leaf employees are in compliance with Colorado law concerning the sale of retail marijuana.”

The Colorado Constitution allows for the personal use of marijuana – specifically the possession, use, display, purchase and transport of 1 ounce or less.

Four arrested in Nebraska CBD case

A vaping shop in Nebraska has been shut down and the owners and two employees charged with crimes for selling cannabidiol, which Nebraska considers a controlled substance.

The arrests in Herman, about 35 miles north of Omaha, come two months after Nebraska Attorney General Doug Peterson declared CBD products illegal because they haven’t been approved by the U.S. Food and Drug Administration.

The Dec. 5 bust at DJ’s Vapes came after Washington County authorities got community reports that the shop was selling CBD along with tobacco products, according to the Washington County Pilot-Tribune & Enterprise.

The co-owners, a manager and an employee were arrested and face charges including conspiracy and possessing a controlled substance.

Authorities hinted at more arrests if CBD sales continue in Nebraska.

“To those people who continue to possess or purchase these items, they are on notice that we will enforce the laws of the state of Nebraska and prosecute those individuals to the fullest extent of the law,” county prosecutor Scott Vander Schaaf told the newspaper.

Retailers across Nebraska have reported taking CBD off their shelves because of the attorney general’s decision. But the Herman arrests are thought to be the first Nebraska cases of criminal charges for selling CBD.

A North Dakota tobacco-shop owner faces similar charges in that state.

To sign up for our weekly hemp business newsletter, click here.

Denver marijuana tech firm Baker raises $8 million

Baker, a marketing automation software company serving marijuana dispensaries, has secured $8 million in Series A funding, bringing its total capital raises to $11.75 million.

Denver-based Baker will use the money to fuel growth in California and Washington state, according to a company news release.

The company – which some dub the Salesforce of cannabis – plans to open an office next year in Los Angeles.

The latest funding round was led by Poseidon Asset Management, a cannabis-focused venture capital firm, and included two more venture capital firms, the Panther Opportunity Fund and Phyto Partners, as well as investors who previously invested in Baker.

Baker recently acquired Seattle-based Grassworks, a customer-relationship management software platform targeting the marijuana industry.

According to the news release, the company’s software is in more than 700 dispensaries in 16 states, while its staff grew from 18 to more than 50 full-time employees.

California hands out first 20 temporary state cannabis business licenses

California has issued the first of what will likely be many temporary business permits, in advance of the Jan. 1 launch of the state’s regulated cannabis industry.

The 20 licenses granted Thursday include temporary permits for nine different companies, and all but one applied for multiple license types.

For instance, eight of the permits went to Santa Cruz-based KindPeoples and include distribution, retail, microbusiness licenses for both recreational and medical cannabis.

Department chief Lori Ajax said in a news release her agency plans “to issue many more before Jan. 1.”

The licenses can be viewed on the Bureau of Cannabis Control’s website.

Temporary permits will be good for 120 days while applicants undergo permanent licensing.

So far, the agency has received more than 200 applications for temporary permits, while over 1,900 users have registered with the online licensing system.

After Jan. 1, it will be illegal for any company to operate in the cannabis industry without at least a temporary permit, if not a full-fledged permanent state license.

Push continues in Las Vegas for public marijuana consumption

Las Vegas is inching toward public cannabis consumption lounges, which would be a boon to marijuana businesses selling to tourists with no legal space to smoke.

According to the Las Vegas Review-Journal, Councilman Bob Coffin has proposed an ordinance that would allow the city to permit marijuana consumption lounges.

Here’s what you need to know:

  • Bryan Scott, the assistant Las Vegas city attorney, said lounges could be granted approval as soon as March.
  • The lounges could sell paraphernalia but not marijuana.
  • State law bans marijuana deliveries to anywhere other than a home, so consumers would have to take their own cannabis to a lounge.
  • In September, the state’s Legislative Counsel Bureau released an opinion that state law does not prevent local municipalities from allowing such lounges.
  • Nevada officials are holding off on public consumption until they see how a social-use initiative plays out in Denver, where regulators just received their first social-use applicant.

Massachusetts advances recreational cannabis diversity plan

Massachusetts regulators have approved a draft proposal that would give priority review in the recreational marijuana licensing process to business applicants from economically disadvantaged communities.

The state’s Cannabis Control Commission will vote next week to finalize those and a slew of other regulations the group has been working on in recent weeks.

Adult-use license applicants must meet two of the following requirements to be eligible for priority review, according to the State House News Service:

  • A majority of the entity’s ownership belongs to people who have lived in economically disadvantaged areas for five of the past 10 years.
  • At least 51% of current employees or subcontractors live in economically disadvantaged areas, and that number will increase to 75% by the beginning of business.
  • At least 51% of employees have a prior drug-related conviction.
  • A majority of owners can demonstrate significant, past experience of economic empowerment.

Qualified applicants will enter the review process ahead of others, potentially allowing them to open before competitors.

Regulators haven’t yet defined what the thresholds for economically disadvantaged will be.

Los Angeles’ marijuana regulations include a similar program that requires the city to license applicants that were adversely affected by the war on drugs.