Week in Review: Cheers & Jeers for MPP Head, Delivery App Asks for Help + Final New York Regs

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

By John Schroyer

Members of the cannabis community weigh in on a controversial move by the director of the Marijuana Policy Project, an embattled ancillary company seeks help for its legal bills via crowdfunding, and final MMJ regulations in New York disappoint potential licensees.

Here’s a look at key developments in the marijuana industry this week.

MPP Head Attacked, Defended by Commenters

Marijuana Policy Project Executive Director Rob Kampia has his defenders and his detractors. He has inspired followers and donors, and he has made his share of enemies.

That has never been more clear than during this past week, when Kampia made headlines for threatening to spend $10,000 to harm a pair of Arizona dispensaries after negotiations fell apart over wording in a proposed 2016 ballot measure to legalize recreational marijuana.

Kampia took aim at Gina Berman, the medical director at The Giving Tree Wellness Center, which runs dispensaries in Phoenix and Mesa. She was also the chair of MPP’s Arizona campaign until she decided to found her own legalization committee. (For details on the dispute, check out our story from April 1.)

Commenters on social media and Marijuana Business Daily’s site leapt to both condemn and defend Kampia. A small selection of comments:

– “It sounds like Berman might want to reconsider her actions; she’s sounding much more like a profiteer and much less like a cannabis advocate.”

– “This approach to spending other people’s money on a personal vendetta rather than campaigning should go over real well with (Kampia’s) fund raisers. When is the last time a non-profit engaged in these tactics?”

– “Rob Kampia is fighting for the people not business, he should be commended and supported by all those who believe in freedom. He is protecting the well being and livelihood of all Americans. Support the man who fights for human rights!”

– “The industry deserves better than this from the MPP leadership. The stakes are too high for this type of scuttle.”

Others called for a truce. One commenter on Marijuana Business Daily’s Facebook page wrote, “Stop the infighting!” Another commented on the story, “Jeez… talk about a much-needed peace pipe session.”

One industry consultant with firsthand knowledge of the dispute agreed to comment, however wished to remain anonymous. The insider suggested that neither Kampia nor Berman has the strong high ground.

“I would place blame on both sides,” the consultant said. “It feels like to me that people are letting their emotions get the best of them, rather than keeping their eye on the prize and doing what’s best for the issue.”

The problem now, the consultant said, is that recreational legalization in Arizona is at risk.

Delivery App Seeks Help for Legal Fight

The embattled smartphone app Nestdrop has been in a holding pattern since late December.

That’s when the Los Angeles Superior Court issued a preliminary injunction preventing the company from fulfilling a primary business activity: facilitating delivery transactions. Medical marijuana delivery is not allowed under Proposition D, the bill approved by city voters in May 2013 to regulate the industry inside Los Angeles city limits.

Nestdrop has been forced to suspend its business operations until the legal case is settled. The company is now running low on funds as it continues to fight both the injunction and the related case the city attorney’s office has filed.

Now, Co-founder Michael Pycher has started an online fundraising campaign via GoFundMe to ask the cannabis community for help.

“The stance that the city has taken is not only overreaching – because the law does allow for it – but also sends a very alarming message to the community and the medical cannabis industry as a whole, which is, ‘It doesn’t matter what the law is. We will do what we feel like, regardless of what the voters intended,’” Pycher said. “If this case goes the way of the city, they’re going to be encouraged to continue this type of behavior against others.”

As of Thursday afternoon, Nestdrop had raised $1,944 from 15 donors of their stated $70,000 goal. And the company has already spent in the “low five figures” out of its own pocket, Pycher said.

“It requires resources, and for a young business, it can be a heavy hit,” Pycher said of Nestdrop’s mounting legal bills.

Disappointment in New York

The New York Department of Health issued its final and definitive list of regulations for the state’s upcoming MMJ industry this past week.

It’s not precisely what many potential business license applicants were hoping for, but that’s not a surprise.

“Truth be told, it’s what I was expecting,” said Evan Nison, the founder of the New York Cannabis Alliance. Nison also works as the east coast director of the cannabis division of Terra Tech, a company that’s planning on applying for one of the state’s five business licenses.

“I’m glad we have a law on the books, and I’m glad it’s actually being implemented,” Nison said. “But the program also needs to be workable, and we need to make sure that patients have access, the business side can be profitable, and I think the application process will shed more light on how that can happen.”

Though there’s no set timeline yet for when companies can start filing applications for licenses, the department is expected to post more information on that in the next month or so, Nison said.

The final rules, which are contained in a whopping 121-page document, aren’t substantially different from the draft rules that were released in December.

Also, if the department had made significant changes, then they would have had to hold another 30-day comment period for the public and stakeholders to weigh in. As that would have delayed the implementation even longer, perhaps it’s better that major changes haven’t yet been tackled.

Currently, the state is aiming to get dispensaries up and running by early 2016.

There’s also the possibility that the department can decide to make big changes unilaterally down the road, Nison said. Important areas to target for rules changes include allowing dispensaries to sell actual marijuana flowers that can be vaporized by patients, or significantly increasing the number of dispensaries which is currently capped at 20.

And plenty of questions remain for businesses. The only thing hopeful MMJ companies in New York can do right now is wait.

John Schroyer can be reached at johns@mjbizmedia.com