Diane Czarkowski from ThinkCanna.Com gives us a state-by-state update on where we are in the legalization process. Diane reviews how key elections in November may allow medical and adult use in several states. Diane also reviews the common mistakes applicants make when applying for a license.
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Now here's your program.
And now for a brief on the state of cannabis legalizations. Since the pace of legalization is always changing, I thought I'd bring out an expert to help us understand where we are at this moment in time. I'd like to welcome Diane Czarkowski with CANNA Advisors on the show.
She is going to give us some background on what's going on with legalization, kind of state by state. Especially as we have ballots coming up here in November that promise some significant changes. Welcome, Diane.
Diane: Thanks for having me, Matt.
Matthew: Sure. How many states are there where medical marijuana is legal right now?
Diane: Right now there are 23 states that have some form of medical marijuana laws in place.
Diane: There actually might be a few more, but they're so restrictive in what conditions are recognized by the state that even the larger drug policy organizations like the Marijuana Policy Project and the Drug Policy Alliance don't even really recognize those states because they just feel that they're way too restricted to be able to count them.
Matthew: Right. So I think this is something a lot of people don't understand, is that there are states where medical marijuana is legal but because the bureaucracies and policies are so inept and unorganized that patients actually can't get medical marijuana. So that's an important thing to consider as we talk about the number of states where things are legal. Not every place is Colorado that's legalized. It's much different, state by state. Which ones do you think...?
Diane: Every state is so different in how they put together their form of decriminalization laws and regulatory structures and even the conditions that they recognize. It varies drastically from state to state.
One state could pass a medical marijuana law that might even restrict the actual flower from being used. It might only have the ability to have like a CBD-enriched oil. But if you go to another state it might be just limited to people with cancer and glaucoma or some severe conditions that don't address the broad spectrum of patients that could really benefit from it.
Matthew: Great points. What states are on the horizon for both legalization of medical marijuana and then adults use? Formally called recreational use?
Diane: Right. The ballots this November, we're seeing a lot of focus on Florida for medical marijuana. They did pass some legislations earlier to allow for five cultivation licenses, but I think that was an effort by some politicians to get a CBD-only type of law into place to see if they could appease the public vote, and then hopefully not pass this much broader and much more comprehensive medical marijuana law that comes out in November.
Then we also have Oregon and Alaska both going for adult use legislation. Then on the horizon beyond that, there are other states that are looking for either much more broad and all encompassing medical marijuana policies, and then also adult use legislation. So, Arizona, California, Maine, Massachusetts, Nevada, Montana, Rhode Island.
It's really becoming more and more popular to see some type of legislation going into place. We just hope that it doesn't all go down the road of being CBD-focused, which might restrict the availability of the medicine to patients as well as other cannabinoids that are very beneficial to patients that wouldn't be allowed to be produced.
Matthew: Great points. Now, Nevada seems to be a state that kind of sticks out because, at least in the early goings here, it seems like the politicians really want to get on board the legalization bandwagon, and in a significant way. Could you tell us a little bit about how you think Nevada is going about it differently than other states?
Diane: We're very excited about the Nevada regulations and what's coming out of that state. I think maybe because they've already embraced the other sins, if you will, that they're a little bit more open to a regulated market.
And one of the things that we really like about Nevada is that they will have a reciprocity component to it, where they will allow medical marijuana patients that have proper ID to be able to purchase cannabis when they're in their state. They won't have the ability to have delivery services like residents will, but they will have the ability to be able to obtain cannabis while they are in the state which is huge for Nevada because, you know, they have such a huge visitor profile.
Matthew: Yeah. Millions of tourists.
Diane: That's one thing that we really like about Nevada. Another thing that we like is that they're already getting a lot of leverage to put forth an adult use ballot on, I think, 2016 is when they hope to put that on the ballot.
Matthew: I think Nevada excites me the most because, as you said, they've kind of embraced other sins but in this case, cannabis use might be called a virtue so we won't include it in the sin category, but I think you're right.
Diane: Definitely not.
Matthew: I think they have the right attitude, it seems like. At least from my cursory glance.
Diane: They have a good attitude. Exactly. And they also realize that, like other states are coming to realize, that they could really benefit from taxing it and certainly they're getting tremendous amounts of fees for licensing the businesses there, and they can benefit from the sales.
Matthew: True. Now I know there's a lot of interest right now as legalization sweeps the country, where people are saying, "You know, maybe I want to throw my hat in the ring and I want to apply for a license." It's way more complicated than that, that I've come to find out.
It takes a lot of capital and paperwork and all these different things that most people don't consider. Can you just give us a brief summary of what you think people don't consider but should if they're wanting to invest in either a dispensary or a cultivation license, and what that all entails?
Diane: Well, it really varies so much from state to state, but one thing that we see that has pretty much proven true as each new state rolls out their medical marijuana programs for businesses, many of the states don't even have a business structure. They just kind of do the decriminalization for the patients. But then they don't give the patient a legal way to access their medicine. They still have to purchase from the illicit market.
And in states where they are putting together a business structure what people don't understand is this is like a giant government RFP. And it takes months and months and months of preparation, working with people, like ourselves, who are familiar with this industry and how other states have rolled out their specific procedures of planning.
It takes a lot of capital. Sometimes you have to show that you have over a year's worth of operational capital on hand to make sure that your business exists after they award you these coveted licenses.
And then building your team so that you have a lot of subject matter experts on your team, not just the "master grower." That's usually the first person that people think of to hire, but someone who's good with security, someone who really knows security, or someone who really understands logistics and facility design and things like that. And it really takes time for you to build the right team that a government regulator is going to look at and say, "They're going to be able to carry out things the way we want them to, and they're going to make us look good." They definitely don't want to choose a licensee that isn't going to carry out the regulations as they see them.
Matthew: Right. And it seems like the trend is even more so in this direction, because states have kind of learned from other states on doing things differently than was done in the past. Can you talk a little bit about how Illinois... they kind of did a private licensing application process. Did they do that because they had learned the lessons of other states that did a public license application process and all the fallout? Can you tell us a little bit about that, how Illinois did things a little differently?
Diane: Well, I'm not sure what you between public and private. I know that...
Matthew: I thought, like, Massachusetts, didn't they do it where it was open to the public, the application process? And then Illinois, it's private. So you can't really see all the people who applied. Is that accurate?
Diane: Oh, you're right. In those terms, yes, after the people submitted their applications, Massachusetts did post the name of the business organization and also the main point of contact, which I actually thought was odd. I think most places don't publish that kind of thing.
I think it's given Massachusetts a lot of heartburn because that whole rollout is falling apart because the licensees that they did award licenses to have been further scrutinized because of all this public access that they've given, and the program still hasn't rolled out, and it's been nearly a year since they awarded the initial licenses.
Illinois, contrary to Massachusetts, they have not published the names of the applicants. I'm fairly certain that they will post the licensees when they're awarded, but I'm not certain how much information they will actually disclose to the public.
Matthew: Great. Great information. Thanks so much, Diane. Well, we hope to have you on again soon, because everything is changing so quickly and we need updates. If listeners want to reach out to you, what's the best way to contact CANNA Advisors?
Diane: The best way to contact CANNA Advisors is to go to our website. It's ThinkCanna.com. T-H-I-N-K C-A-N-N-A.com, or you can call us at 720-708-3154.
Matthew: Thanks, Diane.
Diane: Thanks, Matt. Thanks for having me.
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