MJ News for 07/01/2014


Jul 25, 2008
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Colorado recreational marijuana industry begins major transformation

Only six months old, Colorado's recreational marijuana industry starts a transformation Tuesday that could add hundreds of new pot businesses to the state and reconfigure the market's architecture.

Previously, only owners of existing medical marijuana shops could apply to open recreational stores, and all businesses had to be generalists, growing the pot that they sold. The model matches what is required of medical marijuana dispensaries.

Starting Tuesday, newcomers to the industry can apply for recreational marijuana business licenses. What's more, when these new businesses begin opening in October, all recreational marijuana companies will be allowed to specialize — as wholesale growers without a storefront, for instance, or as stand-alone stores that don't grow their supply. The only requirement is that owners be Colorado residents.

"We are going into uncharted territory," said Sam Kamin, a University of Denver law professor who has tracked developments in Colorado's marijuana industry. "It's something that hasn't happened in medical (marijuana), and it hasn't happened in recreational."

As of mid-June, 292 people had filed optional notices with the state saying that they planned to apply for a recreational marijuana business license starting July 1. The notices don't say how many of the would-be business owners want to open stores versus cultivation companies.

It also remains to be seen where those businesses will all go. Many cities — including the state's second-largest, Colorado Springs — still have bans on recreational marijuana businesses. Denver, home to the majority of recreational stores in Colorado, has a moratorium on applications from newcomers until 2016.

Aurora, which currently has no marijuana stores, will for the first time accept applications for recreational shops starting Tuesday. But it has capped the number of stores in the city at 24.

Mike Elliott, executive director of the Marijuana Industry Group, said zoning restrictions and real estate crunches will further squeeze the space that new businesses can go. "It's tough to know how many people are really going to apply," Elliott said. "Running a marijuana business is much, much more difficult than it might initially appear."

Elliott said it's also uncertain whether the market has room for new recreational stores, which have seen lower-than-expected demand.

Of the more than $200 million in sales at all Colorado marijuana stores during the first four months of the year, two-thirds of it has been at medical marijuana dispensaries.

"Right now," Elliott said, "we don't really know what the market can bear."


Jul 25, 2008
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Analysis: Why legal marijuana stores won’t matter much in Seattle

Except for tourists and the pot curious, who will each buy a few grams at most, the appeal of state-licensed recreational marijuana won’t go much farther than novelty in Seattle. Especially under the current tax and regulatory structure pushing prices up … but not just because of that.

The strongest reason is cultural: Regular users already have a cornucopia of choices and law enforcement around here has spent years getting used to marijuana as a low-priority, creating in the Emerald City something akin to an open market for cannabis.

Consequently, it’s easy to get.

“Oh, you mean the scary dude skulking in the alleyway?”

Not exactly.

Just Google “deliver marijuana Seattle” or pick up a copy of The Stranger and look at the back page … and you’re on your way. Or, take the afternoon off and get a medical card. Then your options for delivery or in-store shopping are nearly limitless, with hundreds of MMJ storefronts throughout Seattle.

And, because of Initiative 502, once you have weed — no matter where you got it — you’re golden. The worst that can happen to you in Seattle is a $25 ticket for “open container” or “displaying” … but then you’d pretty much have to blow it right in a cop’s face while stealing candy from a child.

The Liquor Board screwed it up!

One person who thinks so told the Associated Press, “Our company is bleeding money, and I haven’t sold a single joint.”

Pete O’Neil, the AP wrote, struck out in Washington’s lottery for coveted pot-shop licenses. He has unsuccessfully tried to buy companies that scored a lucky number. In frustration, he’s turning what would have been his Seattle retail store into a medical marijuana dispensary.

So, could the LCB have done more to turn O’Neil and others away from the MMJ market?

Maybe. But the board seems to be following the intent of the initiative and building a respectable, though bureaucratic, market that will well serve much of Washington — just not Seattle.

(Of course, many cities and counties in the state have moratoriums, bans or strict zoning blocking the legal market, pretty much making every black and gray market dealer snicker, but that’s another story.)

And, other than making big, probably illegal exceptions to I-502 and its voted-in tax structure, I doubt there’s much the board can do. Even if the state lifted all the quantity restraints on growers and limits on retail stores — a situation that would be impossible to regulate, so why bother — the result would be an environment here even more hostile to I-502 licensed stores.

Again, the key obstacle to I-502 stores in Seattle vs. the rest of the state is that Seattle is already an island of weed.

In fact, one black market grower I talked with recently thought I-502 will be a boon to his business because there will be even more weed-buyers around and he’ll have good stuff that will cost far less.

Outside of Seattle where law enforcement hasn’t been told by voters to make marijuana busts their lowest priority — on the east side of the Cascades especially — I-502 stores will do much better. Those stores will likely do as much local sales as tourists sales.

Crack down on MMJ and dealers?

The state Legislature will try again this upcoming session to rein in and regulate the medical marijuana market in Washington. If they restrict the qualifying conditions, limit collective gardens and do away with dispensaries and force all sales through I-502 … that could push more business to those $25 grams.

But, again, Seattle’s black market with $8 grams and ounces as low as $160-$200 will pick up at least some of those buyers (plus, many MMJ growers will switch to the black market, increasing supply).

Should we Seattleites fire up the War on Marijuana battle cruisers and start making mass arrests again?

“Your stash weighed in at 1.01 ounces! Book ‘em Danno!”

Somehow I get the feeling Seattle voters and politicians would frown on that. And, using police arrests to shore up I-502 businesses seems down right un-American.

I think, we simply need to accept that I-502 marijuana retail in Seattle will primarily be for tourists and the pot-curious who will buy far less than an ounce a year, and that the “black market” will be more and more a de facto part of our free-market economy.

Seattle’s open market for weed is once again foreshadowing the evolution of marijuana in the U.S.


Jul 25, 2008
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(Iowa) State's new medical marijuana law takes effect today

Quinn Stumpf's first two years of life have been painful for her and heartbreaking for her family.

She's endured 150-plus doctor visits and eight hospitalizations. Her nights are sleepless, often getting just a couple hours of rest. And she suffers from seizures off and on throughout the day.

"She's in pain, it seems like, all the time," April Stumpf said of her daughter, who has a severe neurological disease and is on a long list of daily medications.

Starting today, however, the rural Riverside family will have a new option they hope will ease Quinn's seizures and pain — a treatment they and other parents have been lobbying for for months at the Statehouse to make legal in Iowa.

Iowa's new medical marijuana law takes effect today, a month after Gov. Terry Branstad, who like many Republican lawmakers had previously been a steadfast opponent of medical marijuana legislation, signed a bill allowing parents to purchase a cannabis oil extract to lessen the effects of their children's seizures.

Quinn and her parents, April and Chad Stumpf, played a role in the passage of the legislation, a narrowly defined law that marks Iowa's first foray into medicinal marijuana. The family made several visits to Des Moines in recent months, including the parents sitting down with Branstad in his office and Quinn making an appearance on the Senate floor.

"They haven't given us the best prognosis for Quinn, but to know she's helped make a difference in so many lives and touched so many people, for her to have done that at such a young age is something we're really proud of," April Stumpf said. "No matter what happens with her, we know she's made an impact in so many lives."

Under the new bill, people who receive a recommendation from an Iowa neurologist will be able to purchase the special marijuana extract in other states for the treatment of intractable epilepsy — the medical term for seizures that standard treatments have failed to control.

Although the passage is being hailed as a victory by parents like the Stumpfs, they say the logistics of obtaining the medicine for their children will be a challenging one for many and a prohibitive one for others.

First, a neurologist who has treated the child for at least six months must determine that alternative treatment options have been exhausted before recommending the cannabis oil. Families must then apply for a cannabidiol registration card from the state. Then, because law does not allow the production of cannabidiol in Iowa, families must find an out-of-state source to procure it and navigate that state's requirements, potentially behind a long waiting list of other families.

The Stumpfs hope to make a trip to Colorado — the closest state to Iowa to legally obtain the oil — in July, and will travel by car because the extract can't be transported by airplane under federal law.

Between travel expenses and obtaining the medicine, the family expects it to cost about $1,000 for each trip. Because a patient cannot possess more than 32 ounces of the oil at a time, the Stumpfs are uncertain how frequently they will need to make the trip. They estimate it could be every three to six months.

"We're hopeful it reduces some of the seizures and some of the pain, and help her have a better life than she has right now," April Stump said.

State Sen. Joe Bolkcom, D-Iowa City, a vocal medical marijuana proponent at the Statehouse, said families like the Stumpfs played a critical role in the passage of the bill by sharing their stories with lawmakers. He said that after seeing firsthand the benefits medical marijuana could have for children like Quinn, it was hard for lawmakers "to not respond positively."

"I think the success can be attributed to the Iowa moms and dads who fought tenaciously for their kids," Bolkcom said. They wouldn't accept 'no,' and their stories were quite compelling. They saw the benefit of this medicine that's not available to them in Iowa legally, and they made a case that they should have access to it like people in 21 other states."

State Rep. Jarad Klein, R-Keota, who served as the house floor manager for the bill, said that as a father of three young children, the Stumpfs' story was a touching one.

"It was a unique opportunity to get government out of the way and give families and their neurologists and physicians the ability to make the best medical decision in an almost impossible situation," Klein said.

Klein said this bill is as far as he's comfortable taking medical marijuana use in Iowa for now, however.

"I really want to keep watching this issue, keep watching the other states to see how they react, because the issue reaches so far," Klein said.

Bolkcom said it's unclear how many Iowa children could benefit from cannabis oil treatments, whether it's a few dozen or a few hundred. He called the bill a welcome first step, but far from perfect because Iowans will still have to travel out of state to obtain the oil — something many families won't be able to afford.

"Iowa families will pay more and struggle harder to get the medical cannabis oil they need," Bolkcom said. "Many Iowa families will be unable obtain the medicine they need because they'll have to travel to another state to get it. The law simply provides legal protection to families and patients who possess cannabis oil in their home."

Bolkcom is pushing for the state to explore how medical marijuana can be used to help Iowans suffering from other debilitating diseases, including cancer, multiple-sclerosis, HIV/AIDS, spinal cord injuries, glaucoma and PTSD.

"I think our family and friends here should have the right to effective medicines that are currently available in 21 other states," Bolkcom said.

Last week, the legislative council approved the formation of an interim committee that will examine the implementation of the new law. Bolkcom said there also is interest from some lawmakers to look into expanding the state's program to address more conditions that could benefit from medical marijuana.

Quinn's grandmother, Mary Jane Stumpf, was among the friends and family who have rallied behind the medical marijuana cause. She's hopeful the law not only benefits her granddaughter, but she also would like to see it broadened to help Iowans with other conditions.

"I'll be the first to raise my hand and say when they started talking about it, I had no idea. But it didn't take me very long, three or four days on the web doing some research, and it opened my eyes," Mary Jane Stumpf said. "There's no reason Iowa can't be a leader in this. We've got the resources, we've got the knowledge, we've got the education facilities."


Jul 25, 2008
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Ypsilanti Township wins 'seminal' case against couple pumping intense marijuana fumes into neighborhood

A two-year dispute between neighbors over whether or not an intense smell of medical marijuana exists - or was actually caused by skunks or pine trees – has been resolved by a Washtenaw County Circuit Court judge.

The court also made a significant ruling on whether or not municipalities can enact zoning laws limiting where caregivers can operate.

Judge Archie Brown ruled that the smell of unburnt marijuana pumped out of the home at 1397 Crestwood Ave. indeed exists and was strong enough to constitute a public nuisance per Ypsilanti Township’s noxious fumes ordinance.

In his order, Brown wrote that there was ample evidence from Washtenaw County Sheriff’s Office deputies, township officials and neighbors to conclude that a “nursery” produced an intense odor that disrupted the lives of next door neighbors Kenneth and Judith Foster.

“The court finds credible the testimony of Kenneth and Judith Foster, supported by other witnesses, including the testimony of various Washtenaw County Sheriff’s deputies, that the Fosters’ lives have been negatively affected by the offensive odor created and dispersed by the(1397 Crestwood Ave.),” Brown wrote.

He ordered the owners of the home, Ralph Engle and Deborah Klobuchar, to cease growing medical marijuana in their basement and further enjoined the couple from emitting any kind of “noxious” odor from their home.

The judge also refuted defendants’ claims that the township zoning ordinance prohibiting more than 12 plants for personal use in a residential zones contradicted the Michigan Medical Marihuana Act (MMMA) and is unconstitutional. In Ypsilanti Township, caregivers growing 72 plants as is allowed under the MMMA for personal use and for up to five patients must grow in light industrial zones.

Thomas Levigne, one of Engle and Klobuchar's lawyers, told the Ann Arbor News state law trumps local ordinances when it comes to caregivers and patients growing medical marijuana.

"It’s continuing the attack on Americans with disabilities who are trying to have their medicine of choice in peace. It’s very unfortunate and an erroneous decision," he said.

Klobuchar and Engle’s attorneys cited a previous case in which the Michigan Supreme Court struck down a city of Wyoming ordinance outright banning medical marijuana. They argued that it applied to the restrictions the township imposed prohibiting caregivers from growing 72 plants in residential zones.

Brown disagreed.

“In the instant case the township’s ordinance does not ban all uses under the MMMA. The ordinance merely regulates where caregivers do business,” he wrote. “The township ordinance does not conflict with the MMMA as all uses of the MMMA are permitted under the township ordinance.”

Township attorney Dennis McLain called the case a “complete and total victory for the township” and said he has been receiving calls from municipal attorneys across the state asking about what he described as a “seminal” case.

“Judge Brown declared the ordinance constitutional. He found Engle and Klobuchar were emitting offensive odors and he enjoined them from doing that,” McLain said.

The case was filed in December 2012 but original complaints stem back over two years. Kenneth and Judith Foster described the odor of medical marijuana being pumped out of their neighbors’ home as “offensive”, “intense” and like a “dead skunk.”

Judith Foster testified in court that the smell pumped out of a metal pipe from the basement of Klobuchar’s home was so strong at night that it made her cough, gave her headaches and caused her heart to race. Kenneth Foster said the couple occasionally vomited because of the smell.

Ypsilanti Township attorneys who brought the lawsuit argued that the odor violates the township’s noxious fumes zoning ordinance, which states that the "creation of offensive odors shall be prohibited" in any zone.

Court documents show Engle and Klobuchar testified that the odor couldn’t have existed because they installed a filtration system.

Brown wrote that Engle testified that an associate “created a system to remove the heat from the unit and would filter the air; that any odors should be within the property; and that the property has three vents with no offensive odor coming from the vents.”

The associate who installed the vents also testified that he no longer smells the odors outside the house and noted that he has the system in his own home.

"The odor issue was immediately redressed with installation of carbon filters. There was no odor anymore," Levigne told The Ann Arbor News.

But around ten Sheriff’s Office deputies and township officials testified to having smelled the odor of unburnt marijuana emanating from 1397 Crestwood Ave. at various times.

Some said they didn’t smell it on certain visits, but all said they did at one time or another. Others went inside the Fosters’ home and reported smelling the odor there.

A DTE Energy employee testified that the electricity usage at the house is higher than usual and a bill of over $15,000 is owed at the property. An Ann Arbor Police Department detective testified that the electricity usage is five to 20 times higher than what is considered normal for a house of that size.

Engle attributed that to an herb garden, growing his own food and an air conditioner.

In May 2012 , Engle entered into a plea agreement in which he agreed to stop the emissions after he was cited for a civil infraction in March. Officials say that agreement with the 14-B District Court has gone ignored. Township attorneys said Engle admitted that there was a disruptive odor being pumped from the home by entering into the agreement, but Engle testified that he was coerced into admitting responsibility.

On a subsequent court-ordered inspection of the home by township officials, Engle set up a tarp tunnel throughout the home to prevent a township building inspector from seeing anything but several plants in the basement.

McLain said the ruling also now gives the authorities to inspect the full property with “minimal” notification and said he doesn’t expect further issues at the property.


Jul 25, 2008
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Proposal for medicinal cannabis trial rejected by Tas(manian) Health Minister

The Tasmanian Government has rejected a push for the state to host a trial to determine the medical benefits of marijuana.

Health Minister Michael Ferguson considered a proposal presented by a delegation from Tasman Health Cannabinoids.

The company had hoped to run a clinical trial with the University of Tasmania using medicinal cannabis to treat nausea and lack of appetite in cancer patients undergoing chemotherapy.

In a statement, Mr Ferguson said he "remains unconvinced" of the advantages of growing cannabis for medical use.

He expressed concerns regarding security, safety and the potential for social harm after discussing the company's proposals.

The company said in other parts of the world cannabis was proving to be of great benefit to cancer patients.

"It's been proven beyond any doubt overseas... that this works exceptionally well," said Dr Mal Washer, the company's chairman.

"But I think we've got to be realistic. We want to do the trials here in Tasmania using the Tasmanian university to prove it works as good as we tell you."

CEO of Tasman Health Cannabinoids Troy Langman believes the proposal to grow medicinal cannabis could be a windfall for the state.

"This is a billion-dollar business, there is no doubt about that," he said.

"But again, it's going to depend on what we are allowed to do at the end of the day, we will then determine how many people we can employ."

In Hobart on Wednesday, the company will meet a delegation from New South Wales featuring MPs, police, health professionals and legal representatives.


Jul 25, 2008
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Cannabis: A new job frontier for women?

Interesting coincidence. The White House Summit on Working Families last week issued some statistics that underscored continuing challenges of gender inequality in the workplace. At around the same time, at the Cannabis Business Summit in Denver, a group of female business executives pointed to some of the new opportunities available for women entering the burgeoning marijuana industry.

These women, many of whom have been working in the legal side of the cannabis business for years, have been making names for themselves not only as pioneers in a fast-evolving industry, but also as the vanguard for a rising female representation in the cultivation, testing, marketing and sales of marijuana.

"It's a brand new industry, and I feel like we have a great opportunity to strive and to reach out to women for opportunities they maybe they didn't think of, because it is marijuana," said Genifer Murray, CEO of Cannlabs (SDSPD), a full-service marijuana testing lab.

"This is, if you will, a land grab," she added. "There is a lot of opportunity here -- why not for women?"

As marijuana comes out of its outlaw past and into some form of legalized sale in at least 22 states and the District of Columbia, it is also attracting women from very diverse backgrounds.

"I think we're pretty square," laughed Jessica Billingsley, co-founder and chief operating officer of MJ Freeway, a firm that creates "seed to sale" tracking and business software for the cannabis industry. Billingsley and company CEO Amy Poinsett previously worked in software.

"I wouldn't describe ourselves as having come from a counterculture background, so to speak," Billingsley said. "When we first started, we got a lot of, 'Who are these two women in suits?' And now, if you look around at [the cannabis business summit], everyone's in suits."

And it appears many women with scientific backgrounds are also gravitating towards work in the marijuana industry.

"Yeah, it's crazy," said Cannlabs' Murray, who has a degree in microbiology. "When we were hiring for a senior lab position and our lab tech positions, the amount of resumes that came in from women -- I was so happy!"

Murray is also encouraged by the number of young women she's seeing who are getting into science, and in turn the cannabis industry.

"These women were able to look at the opportunities of a new industry and say, 'You know what? I will be a cannabis science expert by the time I'm 27,'" she added. "If I go through pharmaceutical or environmental, it's going to take me 25 years to do the same thing."

Brandy Keen, vice president of sales at Surna (SRNA), a company that purchases cannabis-related intellectual property, observes that her industry has a mixture of women from traditional and non-traditional professional backgrounds.

"I think maybe this industry, being a little bit more of a liberal industry, it would segue into women maybe being more comfortable having a voice in the industry," she said, "so I think that probably contributes."

Keen's professional background was in semiconductor sales, but she was drawn into the cannabis industry because of a personal issue.

"My husband has epilepsy, and used to take a drug that said on the warnings, 'We do not know how this drug works.'" she remembers. "And that was always terrifying to me, that he had to take this drug that we really didn't know what it was doing to his brain. And so we moved to Colorado and he started using cannabis oil, and he has not taken that drug in three years."

Keen acknowledges not everyone will prosper as the cannabis industry expands. "And the only way to predict who the winners and losers are," she said, "are the people who have a solid business model and solid management, and are doing the right things."

But she's also encouraged by the number of women who are opting for a career in cannabis. "There are a lot of women who are very smart, very confident, running very difficult businesses to run," she said, "and doing a damn good job at it."


Jul 25, 2008
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CannLabs Executives Talk Expansion And Becoming The FDA Of Cannabis

One of the marijuana-based companies meeting with the public at this week's Weedstock Cannabis Investor Conference in Denver is CannLabs (OTC: SDSPD).

The cannabis testing service, state-licensed in Colorado, recently went public via a reserve merger and has ambitious expansion plans. (Its stock symbol is also expected to change on the OTC or about July 10, to CANL).

Benzinga spoke on Monday with three CannLabs executives, CEO Genifer Murray, CFO Scott McPherson and president and COO Steve Kilts, following their Weedstock presentation.

Can you explain the process you went through, in going public?

McPherson: We were looking to expand and the public vehicle was the way to get there faster. Obviously there's more capital with the public vehicle. And we could have done it through a private vehicle but with the public market it's much easier to achieve our goals and expansion plans.

Related: Brochstein: Marijuana Rapidly Developing Into A Real Industry

Explain your reverse merger?

McPherson: A reverse merger is when you have a non-public entity that wants to become a public entity. So what you do is you find a company that has little or no operations, or an operating company, and merge into that company, to make yourself a public company.

There are different ways to do it, you can do a registration statement yourself, but that takes more time and effort on your behalf, rather than just merging into a company that's already public.

Are there any risks or challenges for the company in doing this?

McPherson: No more substantial than anything else. Obviously you have SEC regulation now. We had to go through the FINRA process and get approved, but there's really no major obstacles, being a public company. More costs, obviously, but it provides a much better opportunity to expand nationwide, and that's what we want to do.

In terms of the SEC, there was its recent warning about marijuana-related investments. Did that affect you?

McPherson: It may have put a chill on the industry itself, but we've brought together a board that is very used to this kind of industry and being public. We put together our audit committee, all the foundations of a public company, so we're not worried about that becoming a problem for us.

Related Link: Brochstein Part 2: New Cannabis Industry Is A 'Once In A Generation Opportunity'

You describe CannLabs as the FDA of the cannabis industry. What do you mean?

Murray: CannLabs is really the seal of approval. We do testing and consulting and everything else around health and safety. That's what we stand for, we're a science company. And I just think that, once (marijuana) goes federally legal, that the FDA will be looking to us as the certification body – to really explain to them the data and how it's all working.

Looking at the expansion and operation of your company; things seem to be moving more rapidly than expected. How are you keeping up with this?

Kilts: We've been capitalized now, to basically carry out our plan to expand the core business of the labs and then also create these new verticals I was talking about at the (Weedstock) presentation.

And within the next five years, will you be playing to your core strengths?

Kilts: Yeah. So testing and the science is the core strength, and then we also have the information systems, the data analytics information. Because fundamentally we sell information.

If you look at all of our different business units, whether it's lab testing or consulting, or the web site monetization, in all cases it's data and information. That's one of our biggest strengths. And then also our credibility in the industry.

We're recognized as industry leaders; we're far ahead of our competition, and right now it's just a matter of maintaining that.

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