Matthew: Hi. I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. We’ve talked about CBD or cannabidiol on the show many times. Just to review thought, CBD is a non-psychoactive compound from the cannabis or hemp plant that has many benefits. Now our friends at Treatibles have put together a one list chew that can help your dog or cat become more calm and balanced. Valerie wrote in to tell us about her experience with Treatibles.
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Hi CannaInsider’s. I just wanted to let you know before this interview starts that the audio quality is not perfect on here. I kind of rushed to get this out to you as quickly as possible so you could get an update on the ballot initiatives that took place yesterday, Tuesday, November 8th so I apologize that the audio is not perfect but it will return to great quality in the very near future thanks and here’s your program.
Yesterday there were many ballot measure that affected cannabis legalization. Here to help us digest all that happened are Diane and Jay Czarkowski. The husband and wife team manage a boutique cannabis consulting firm in Boulder, Colorado. Diane and Jay welcome back to CannaInsider.
Diane: Thanks for having us.
Jay: Matt thanks for having us.
Matthew: I know you’re busy in Orlando right now welcoming in the good news with clients there in Florida. I want to jump into all the ballot initiatives that took place yesterday and what happened but before we do Jay can you tell us again what CannaAdvisors does and what states you’ve been involved in?
Jay: Sure thing Matt. So CannaAdvisors was really born of Diane and I’s early entrance and experience in the cannabis industry in Colorado. We received one of the first licenses in the state. I think it was state license #7 back in the day. A few years later we started CannaAdvisors when we were approached by a group of guys in Connecticut that wanted to know if we could help them win a competitive license there. Connecticut was really the first state to have a competitive application process. Four years into this now really Matt the majority of the work that we do is we win competitive licenses and whatever it takes to make that happen the application side, the facility design side so that’s most of what we do but we’re also a collection of a lot of smart people mostly former operators so we do a lot of compliance work, facility work, operations, SOP’s. We’re a full service cannabis consulting and services company.
Matthew: Well let’s jump right in and talk about the biggest market. Jay what was on the ballot in California and what happened?
Jay: Well sure Amendment 64 passed and it was quite contention certainly not within the industry. There were a lot of folks in the industry in California that were very much against Amendment 64 but I think it was probably the majority of the population there that was certainly ready for cannabis legalization and they passed that with flying colors by a wide margin. It’s quite a complex amendment. Certainly the most complex amendment or bill or set of rules that I think any states going to ever see. From what I understand there are 19 different types of business licenses including 13 different types just for cultivation of various sizes and that kind of thing. The state intends to build upon what already exists in the medical industry. Licensing begins January 2018.
Supposedly there’s provisions in there to prevent monopolies but it’s certainly going to be a brave new world in California and there will certainly be many, many existing operators that will probably have trouble complying quite frankly just like we had the shake up when we began to get rules in Colorado six years ago.
Matthew: Just the cost of compliance you think is going to be very hard.
Jay: Well some of that and building compliant facilities and adhering to building codes and yada yada yada. Just like any business when government gets involved all of our costs go up.
Matthew: Yeah. You’re saying it’s just basic organization skills and business skills and transitioning from no regulation to some regulation or high regulation is just not a journey everybody can make.
Matthew: Okay. Well next up Jay is Florida where you’re at right now and where I’m at right now. I’m in Destin, Florida right now. Tell us what happened here yesterday? What was on the ballot? What happened, how many people voted and got out there? What’s the big news here in Florida?
Jay: Florida two and a half years ago the legislature passed a very weak CBD Only Oil Bill. It was really put in place so the politicians could say what do we need Amendment 2 for we already have medical marijuana. Well the program here stinks. It’s very limited. The people spoke yesterday. As you probably remember in order for this to pass they needed to pass by 60%. Two years ago the people of Florida voted for this 57.8% in favor yet it failed. So I think everybody was adamant this time and it passed. It’s full on medical marijuana with a good list of conditions for CBD, THC, oil, pills, infused products, dried flower the works. A very robust medical marijuana program.
Matthew: Wow. That is huge and for such a populace state. Florida now more populace than New York. So that’s really big. Now in terms of how long it will take to digest this ballot initiative and have it manifest into this market that has now been voted on how long does that journey take?
Jay: Well it’s going to happen rather quickly. We’ve already been working on the draft regulations with United For Care. Those will be ready to submit to the State House I would think by January at the latest. Per the language in this law we have to have send draft regs out in six months. We have to begin accepting license applications and begin registering patients in nine months. So it’s going to happen quickly. There will be a competitive license application process in Florida probably fall of 2017 and this program will develop. The people have spoken. I could tell a little bit about the numbers if you’d like.
Matthew: Yes. Dive in.
Jay: So when we got to the watch party last night everybody was pretty mellow. I mean they were happy and excited of course but there was polling numbers on the screen that showed how many people voted and what the percentages were. By the time I looked at it it says that eight and a half million people had voted which is close to half the population of Florida.
Jay: And with that many people voting Amendment 2 was in the lead by 73% to 27% and I asked somebody has any
Matthew: That is massive especially when it was so close last time and now this time it was just overwhelming. I guess people had an opportunity to think about it and they saw it happening in other states so it just wasn’t so bad. I mean what do you think the reason Jay was for why there was such a big difference between the last ballot initiative and this one?
Jay: Well first of all I think a lot of people were certainly aware. This has been in the news and it’s been out in front of people for years now since we tried passing Amendment 2 in 2014. People are a lot more educated. People see this a lot more. The studies are coming out that this is not a bad thing. I think there’s two additional years of looking at this in Colorado and other legal states not that its rec here but it’s still a good bill weather for what’s to come and the people are sick of the drug war, they’re sick of all the issues we have from opiates. It’s time to legalize this plant so the people have spoken.
Matthew: Great points. Di let’s pivot to Nevada and Nevada is such a big deal even though it gets over shadowed by California or Florida or some other states but it really just can’t be overstated that it’s such a huge recreational market with people visiting and so forth. Dive into what was on the ballot there and what happened in Nevada?
Diane: Well Nevada in my opinion Nevada already had a really good medical marijuana market and a lot of that was because the political vibe around that was very supportive. They had representatives that were really working with the industry. People like Dina Titus and others that really worked with the businesses to make sure this program rolled out well and they made some changes along the way to make sure that they ironed out some of those initial bumps. So I think that’s really a key to for making sure that a program can be successful is that you have that local cooperation but gosh the legal market. The ability for people who go there already for this giant tourism market, the canna tourism market that could be available now to places like Las Vegas and Reno is just; it’s enormous and I think that this will be a really good program.
They’re going to add something that we haven’t seen in a lot of states that certainly I think has a play and that is a distributor category. Typically we see licenses that are broken down more like dispensary, processor, cultivation, and labs but this will have a distributor category added which I think will allow for a more robust kind of wholesale and distribution market and then of course they have people from neighboring areas that can still come and get it for medical purposes as well. Another good thing about this program is that it does still give those who went through the process of going through the licensing process for medical marijuana a good 18 months before they’ll be accepting new licenses for people that are new to the market. So it’s good for the people that have already been invested with their businesses there.
Matthew: That’s interesting. Yes I mean Nevada is just enormous. So thanks for that update there. Let’s move on to Massachusetts. Jay what was on the ballot in Massachusetts and what happened and why is it important to talk about?
Jay: Well Matt it certainly gives me a great pleasure to talk about Massachusetts because as you know we’ve been out there for a long time although we personally put the majority of our effort into the Florida campaign this year and there were a lot of other great folks out there spearheading the effort in Massachusetts. Two or three months ago Matt it was not looking good in Massachusetts. It was maybe polling 50/50. The governor was against it. The Mayor of Boston was against it. There was a lot of pressure on folks not to come out for it quite frankly but I think a couple of things happened that changed everybody’s mind.
First and foremost there was a 2.1 million dollar donation into the campaign by a private donor that really gave the campaign a shot in the arm. Number two you may have seen this Matt. There was a National Guard, State Police raid on an 81 year old woman in Amherst, Massachusetts.
Jay: They came in with a Blackhawk helicopter from the air and a state SWAT team from the ground to seize her single marijuana plant she was growing out by her raspberry bushes. So I think when that came out it cost 60,000 dollars to eradicate that one plant. I think when that came out on the news that probably gave the campaign a 10 to 15 point bump right there. People are sick of that kind of thing and they want change. In terms of what the people vote for; cannabis is legal there. They don’t have the right to grow it at home like we do in Colorado but for the most part cannabis is now legal in Massachusetts; not now but once the law takes effect then we will see additional dispensaries, we will see additional cultivation facilities, lots of additional opportunities for business, and lots of opportunities of course for the people of Massachusetts to have access to this plant which of course is most important in all of this.
Matthew: You mentioned that the powers that be in Massachusetts really didn’t support this Jay. Do they drag their feet then in kind of getting this implemented or do you think it will be measured in months how long it will take to make recreational or adult use a reality in Massachusetts?
Jay: You know I’ll tell you I don’t know the specifics of the bill and what if any timeline it requires. Kelly Cross at the Marijuana Policy Project really spearheaded the effort and is probably the most knowledgeable but again Matt the people have spoken. They want this. Massachusetts voted for rec just like wow it was exactly four years ago Matt that the people of Massachusetts voted for medical and four years ago in the 2012 election they passed medical by roughly maybe 64% in favor so it was a wider margin. It’s certainly a narrower margin this time but it’s a clear winner so I would suggest that the officials in Massachusetts they get with the right side of history, get behind this, and make it happen.
Matthew: Yeah. Great points. Di let’s move to some of the smaller markets that don’t get as much attention but there are some developments there. What can you tell us about North Dakota, Maine, Montana, and Arkansas and Arizona? Let’s machine gun through them really quick.
Diane: Sure. Well Arizona sadly failed. I think their latest polls show it’s gotten about 47, 48% of the vote. So it looks like that one’s not going to pass which it’s a shame but my hope is that as the Marijuana Policy Project has projected there could be 47 measures in 2017 pass legislatively but who knows what happens with Arizona. Maybe they’ll be able to get it either back on the ballot or pass something legislatively in the future. I just think that as the more conservative states and I also think that the perception is that they have a decent medical program and that might be enough for people right now but that one looks like that was the only one out of the 9 measures for cannabis legalization this year that looks like it failed.
Arkansas that one I did not think was going to pass. They actually had two different issues on the ballot and even though the Supreme Court disqualified Issue 7 it was still on the ballot and I was concerned that that might divide the vote and be something to put in jeopardy Issue 6 but it actually passed. So that’s great for Arkansas. Maine Question 1 to legalize marijuana that passed. They’ll be able to have social clubs there which is something that we don’t have in Colorado. We’ve legalized cannabis but there’s no place to go and use it that’s not a private place so that was good for Maine; great for Maine. Montana had medical marijuana initiative I182 and that passed. That’s going to turnover a law that was established in 2011 that limited the caregiver’s to only being able to serve 3 patients each and it basically forced the industry to kind of shutdown.
But this will expand the program. Give more access to patients there and it will be better for the businesses there as well. North Dakota had a measure, Measure 5 to legalize medical marijuana and that passed. That passed actually I think by like 63%.
Diane: Quite a big gap there and that one looks like it’s going to be a program similar to Massachusetts in that they’ll be vertically integrated businesses, they’ll be a nonprofit component, they’ll be residents 2 requirements, and they’ll have some strict limitations on inventory. So all in all I think for the cannabis industry I think they’re estimating the wins of yesterday were equal to about eight billion dollars worth of new industry potential that we could see by 2020 because it will take some time for these programs to roll out.
Matthew: Wow that’s amazing. So Arizona was really the only state that it didn’t pass. The rec didn’t pass but they already have a robust medical marijuana market Di so it’s not like they’re in dyer straights necessarily considering everything else was a win.
Diane: Yeah I think there’s still room for that medical program to expand and like I said perhaps there could be something that could expand the market legislatively as well.
Matthew: Jay when you look at what happened yesterday with all these ballot initiatives on a high level what’s your general feel looking over the lay of the land and can you add some context into the big picture view of what all this means? Go ahead.
Jay: I would say no matter where you were in the country last night Matt, whether you were on the East Coast, the West Coast, the South, North Central, people across the country they voted positively for cannabis whether it be medical use, whether it be recreational use, adult use, whatever. People from all parts of the country voted yes last night and that’s huge. This is a huge turning point. We’re at that tipping point right now where I mean California alone sixth largest economy in the world legalized cannabis last night. The federal government has to listen. At this point they’re just being obtuse and their stance that cannabis is prohibited at a federal level that is just not a sustainable position anymore. So I think we’re going to see some change.
Matthew: Jay do you think all the ballot initiatives yesterday is going to accelerate the forum of banking or access to banking for cannabis businesses?
Jay: Well I won’t use the word accelerate. It would be nice if it was accelerated. I’ve been waiting for the banking issue to be fixed for seven years. Every year I tell people ha ha by the time you get your license next year it should be fixed and then another year goes by and another year goes by certainly again with California speaking, the rest of the nation speaking that’s going to get fixed one day. I don’t know when. I wish I did.
Matthew: Di as we close how can listeners connect with CannaAdvisors and learn more about what you do?
Diane: Well our website is www.thinkcanna.com and we’re on all the social media outlets and for the people that like the old school telephone our office number is 720-708-3154.
Matthew: Jay and Di thanks so much for jumping on the horn with us and doing a quick run through of the state by state initiatives. I really appreciate that.
Jay: Thanks Matt our pleasure.
Diane: Thanks for having us Matt.
Matthew: If you enjoyed the show today, please consider leaving us a review on iTunes, Stitcher or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on www(dot)cannainsider(dot)com, simply send us an email at feedback(at)cannainsider.com. We would love to hear from you.
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A quick summary of the state-by-state results of cannabis ballot initiatives.
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[2:33] – How Canna Advisors helps clients win Cannabis licenses
[3:38] – Jay talks about the California ballot
[5:42] – Florida’s ballot results
[6:53] – Jay talks about how long the process takes after an initiative is passed
[8:41] – How Florida’s ballot initiative differed from the last one that failed
[9:45] – Diane talks about what happened with Nevada’s ballot initiative
[12:13] – Jay talks about the Massachusetts ballot initiative
[15:29] – Diane talks about the initiatives in ND, ME, MT, and AR and AZ
[19:35] – Jay talks about what all these initiatives mean moving forward
[21:06] – CannaAdvisors’s contact information
Important: Read the cheat sheet The Five Trends That Will Disrupt The Cannabis Indusry