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When Will Israel Enter The Global Cannabis Industry?

Written by Marguerite Arnold on . Posted in Business.

The global markets are opening up for the overall cannabis industry. Despite all of the bumps and setbacks, when will the Israeli cannabis market finally make its global debut?

Right now the question is largely a matter of not just “regulations” but also politics. Donald Trump delayed the entrance of Israel into the global market in a deal with President Benjamin Netanyahu in exchange for moving the nation’s capital to Jerusalem.

In fact, that entrance seems to have been deliberately slowed until the pending European-US pharmaceutical trade deal went into full force this July.

Now, with no more capital swaps on offer, and the U.S. entrenched first in the global trade pathways for medical cannabis at least that are opening up (certainly on the CBD side of the equation), Israel seems next up to the plate.

It is not as if Israelis in the biz do not know this. With external cultivation, production, tech development, and even stock deals on offer now in places like Canada, Eastern Europe, Africa, and the U.S., Israelis are already in the global market.

This despite those in Israel still being bound by a frustrating denial of market entry for what seems, at this point, to be a final stutter as no more excuses can be found.

Why Is Israel Significant?

No matter the leaps and bounds made in cannabinoid research over the last decade just about everywhere reform has hit, as well as widening recognition of medical efficacy, Israel remains where “it is at,” on the medical cannabis front.

The country’s medical research program is decades old. Wider rollout and impact on society is also more established. Israelis these days can go to their regular doctor and a fairly accessible pharmacy system to obtain a drug that costs them $100 a month.

Nobody else on the planet has achieved such an overall equitable medical path to access.

There are other places that Israelis are going to show up (if they have not already) in a cannabis market near you. Namely, the impact of cleantech (growing with little water or energy use) is coming, if it has not already.

The largest legal recreational markets on the planet right now are all deserts and Europe is not shy about its assertion that global warming, indeed, exists.

In Germany, in fact, a new Israeli medtech development deal has just been signed with the country’s largest research hospital (Charite in Berlin). 

While the Israelis have yet to move actual product, they will be soon. And as far as their global impact on the industry currently? It is already here.

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Cross Border Cannabis Trade In Europe?

Written by Marguerite Arnold on . Posted in Business.

The newest announcement that Tilray has arranged the largest cross-European border transfer of medical cannabis to date is cause for celebration for more than just the two firms on either end of the deal. Cannamedical, the second oldest cannabis specialty distribution firm in Germany was on the other end of the deal.

The news is actually bigger than just this one announcement. It officially marks a new day in the greater cannabis industry in general.

There are many swirling currents in the international environment right now – perhaps the biggest of which are both CETA and the EU-US MRA Trade Agreement, which just kicked into full swing in July. That along with the 1961 Convention and existing MRA (pharmaceutical trade) agreements mean that there are new pathways for canna products opening up as reform hits on either or both ends of established pathways. 

But as of this fall, much like the now melting icebergs are creating new transatlantic pathways through the Arctic, the cannabis industry is entering the marketplace through all sorts of interesting passageways, and there are plenty of treacherous, mostly submerged hazards to navigate.

Who Is Coming Up To The Plate?

‘Who is getting involved’ is an interesting question, as European farmers are realizing, pretty much all over the map, particularly on the large commercial greenhouse side of the equation, that they are also in the running for the medical business. If your main business is tomatoes or peppers, for example, medical cannabis crops sound like a compelling idea right now.

Cross European trade of EU certified crops is on the upswing in other words, just as South African and Australian producers are also entering the market. And Israel is, of course, waiting to pounce.

Certification Is Key

While EU GMP regulated CBD producers in the U.S. right now are lining up for a bonanza on the medical side, there are many in Europe who see the writing on the wall and are aiming to play the game too. Greek produced medical CBD for example, may well beat anything out of the U.S., at least on cost. And who knows? Most of Eastern Europe is still in the running as a dark horse candidate in the medical market as the attention of the big players shifts towards recreational reform.

Regardless, for those with the right certs and audits, the map is opening, and further on a fairly global way, for a new trade whose day has most certainly come.

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How Popular Will Pick-Your-Own Hemp Fields Be In The Future?

Written by Johnny Green on . Posted in Business.

Going to a farm or orchard to pick your own fruits and vegetables has many benefits. The most obvious one is that consumers know where their food comes from. Pick-your-own crops are typically cheaper for consumers compared to stores and farmer’s markets. It’s also a fun activity that consumers enjoy doing.

Just as people can pick their own strawberries or apples, so too can they now pick their own hemp in the state of Maine. Per the Portland Press Herald:

With pruning shears in hand and a laundry hamper on her hip, Khadijah Tribble roamed rows of waist-high cannabis in search of the perfect hemp plant – robust foliage, no bugs, and enough flowers to make CBD lotions and tinctures for the elders in her church community.

The community activist made the six-hour, 300-mile round trip from her home in Salem, Massachusetts,  just to visit Sheepscot General Farm in Whitefield, which on Wednesday opened the first pick-your-own hemp field in Maine. It is believed to be only the second publicly accessible hemp field in the U.S.

The price of CBD products will largely affect the popularity of pick-your-own hemp in the future. Going forward hemp will basically be treated like any other agricultural crop, albeit with crop-specific regulations, so the option for hemp farmers to allow pick-your-own offerings to consumers should be widespread.

Only time will tell if it will be more popular, less popular, or equally popular compared to other pick-your-own crops. In the immediate future demand will likely outpace supply due to the novelty of the concept. As more farms offer pick-your-own hemp across the country it should balance things out.

CBD-products can be expensive. For savvy consumers that know how to make their own balms, tinctures, and other wellness products, it’s far cheaper to pick their own hemp and process the raw hemp into something of their choosing.

If the price of CBD products drops significantly, that could result in fewer people wanting to pick their own hemp due to the convenience of making a reasonable purchase of a finished CBD product from a store. With a record amount of hemp being planted in 2019 in the U.S., prices for hemp-derived products could certainly take a dip in 2020.

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Report: Cannabis Vape Cartridge Sales Are Down In The U.S.

Written by Johnny Green on . Posted in Business.

In recent weeks a number of stories have come out regarding illnesses attributed to vape pen use. Some cases involved consumers that have reported using cannabis vape pen cartridges and others involved consumers that reported having only used nicotine-based vaping products.

Some of the cases involved THC cartridges and others did not. Some cases involved the dilutant additive vitamin E acetate and others did not. All of the cases are unfortunate. Regardless of what is to blame for each case, the popularity of cannabis vape cartridges has declined according to a report by USA Today:

Amid the health scare, the amount of the legal pot industry’s revenue that comes from vape products has dropped by 15% nationwide, with some states seeing decreases of more than 60%.

“It’s having an impact on how consumers are behaving,” said David Alport, owner of Bridge City Collective in Portland, which in two weeks this month saw a 31% drop in sales of vape cartridges that hold the oil that vaporizes when heated. “People are concerned, and we’re concerned.”

Vape pen cartridges have grown exponentially in popularity in recent years. They are convenient, discrete, and create far less odor compared to smoking cannabis. It will be interesting to see if sales continue to decrease. That will ultimately depend on what additional information comes out about the health cases.

Unregulated cannabis vape pen cartridges should be 100% avoided by consumers. Without testing, there’s no way to know what is contained in the cartridges. As for regulated cannabis vape pen cartridges, if they are purchased from regulated outlets that require testing, products should be safe. However, consumers proceed at their own risk.

Stringent regulations are likely on the way for cannabis vape pen cartridges. In Massachusetts, a 4-month ban was recently announced, which is an unfortunate public policy approach that will likely result in many consumers turning to the unregulated market, which is where the health risk is the greatest.

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Australian Capital Territory Becomes First Jurisdiction To Legalize Adult-Use Cannabis

Written by Johnny Green on . Posted in Politics.

Advocates have long stated that if national cannabis reform cannot be achieved in a particular country, to aim for a more localized victory. That’s not to say that efforts to reform national laws should be abandoned, however, racking up victories at the local level helps build momentum for a nationwide victory.

A localized win occurred this week in Australia, where lawmakers in the Australian Capital Territory passed a measure that legalizes cannabis for adult use. Per BBC:

Lawmakers in the territory passed a landmark bill on Wednesday allowing adults to possess up to 50 grams of the drug and to grow four plants at home.

Personal cannabis use remains prohibited elsewhere in Australia, but medicinal use was legalised in 2016.

The territory’s law could be overturned if challenged at a federal level.

The distribution of cannabis still remains illegal in the territory, and adult-use cannabis is still illegal at the national level in Australia. No challenges to the local law have surfaced as of this blog post, however, that could change as time goes along.

Hopefully it doesn’t have to get to that point. As time goes on other jurisdictions will hopefully see that the sky has not fallen over the Australian Capital Territory, and lawmakers in those jurisdictions in Australia will get on the right side of history and pass similar reform measures.

If enough local victories occur and the policy changes are successful, it will increase the chances of a victory at the national level in Australia. Cannabis prohibition is a failed public policy wherever it exists, including in Australia, and thus any efforts to end cannabis prohibition should be embraced by everyone including non-cannabis consumers.

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The U.S. House Passed A Cannabis Banking Bill – What Happens Next?

Written by Johnny Green on . Posted in Business, Politics.

Today was a truly historic day in the United States House of Representatives. The full chamber passed, for the first time ever, a stand-alone cannabis reform bill. The bill is the SAFE Banking Act (H.R. 1595). In its current form the bill would:

  • Prevent federal banking regulators from punishing banks for working with state-legal cannabis and hemp-related businesses
  • Protect ancillary cannabis industry businesses from being charged with certain financial crimes related to cannabis’ Schedule I federal status
  • Require the Financial Institution Examination Council to develop guidance to help educate credit unions and banks on how to work with state-legal cannabis companies
  • Allow traditional lending from financial service providers to small businesses, and require regular reporting on cannabis industry loan practices involving women and people of color

The bill passed with bipartisan support, with the measure passing by a vote of 321-103 and receiving ‘yea’ votes from nearly half of voting Republicans in the chamber. The National Cannabis Industry Association has been working on educating lawmakers about the need for this legislation for a long time and deserves an enormous hat tip for its efforts.

“Having worked alongside Congressional leaders to resolve the cannabis industry’s banking access issues for over six years, it’s incredibly gratifying to see this strong bipartisan showing of support in today’s House vote,” said Aaron Smith, executive director of the National Cannabis Industry Association (NCIA). “We owe a great debt of gratitude to the bill sponsors, who have been working with us to move this issue forward long before anyone else thought it was worth the effort.”

“Now, it’s time for the Senate to take swift action to approve the SAFE Banking Act so that this commonsense legislation can make its way to the President’s desk,” continued Smith. “This bipartisan legislation is vital to protecting public safety, fostering transparency, and leveling the playing field for small businesses in the growing number of states with successful cannabis programs.”

The historic nature of today’s vote cannot be understated. This is the first time that a full chamber of Congress has passed a bill that contained solely cannabis reform provisions in it, as pointed out by NORML Political Director Justin Strekal.

“For the first time ever, a supermajority of the House voted affirmatively to recognize that the legalization and regulation of marijuana is a superior public policy to prohibition and criminalization,” Strekal stated in a press release.

The logical question is now being asked, ‘what happens next?’ The U.S. Senate already has a cannabis banking bill introduced (S. 1200) in its chamber. The bill was introduced in April by Senators Cory Gardner (R-CO) and Jeff Merkley (D-OR). Banking Committee Chairman Mike Crapo (R-ID) has stated recently that cannabis banking legislation is being seriously considered in his chamber. Will it get a vote?

Larger political forces are at play, and that has resulted in a blockade of sorts for legislation coming from the House to the Senate. The provisions of this particular legislation could actually get fair consideration in the Senate now that the House vote has put the spotlight completely on the Senate chamber.

The bill received bipartisan support in the House, and a significant amount of it. Cannabis banking reform in the Senate also has bipartisan support. This bill would benefit the hemp industry, and that is a policy area that Senator Mitch McConnell supports, which is significant.

Will it all be enough to push the bill over the top? We have no choice but to wait and see. In the meantime, all cannabis industry eyes will be on the Senate. Step up and do your part and urge your Senators to get on board!

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David Branfman’s Report From The International Cannabis Business Conference In Vancouver

Written by ICBC Staff on . Posted in Vancouver.

By David Branfman, Branfman Mayfield Bustarde Reichenthal LLP

We have just returned from the International Cannabis Business Conference® in Vancouver, B.C., Canada – an action-packed one day conference with networking events at the front and back ends. All in all, the combination of a tight one-day conference with networking opportunities at the front and back ends made this event a very pleasant and worthwhile alternative to the now too common mega-cannabis conferences. The following are some of the highlights from the panel discussions we think you will find interesting and useful. (If your time is really short – and although we found it all very useful – we have highlighted in yellow some of the really interesting parts of the discussions).

Intellectual Property Is at the Forefront:

Several of the panelists mentioned how important intellectual property (“IP”) such as trademarks/copyrights/patents/trade secrets is to their businesses in particular and the industry in general. In fact, one of the panelists stated that developing and acquiring cannabis-related IP is one of his company’s top 3 core strategic initiatives in the next few years.

This is a very positive change from the reaction we received 10+ years ago when we first started providing IP services to cannabis entrepreneurs; back then we were looked at like we were visitors from another planet with two heads and six legs. So it’s gratifying to see that we accurately predicted the importance that IP and IP law would become as the legal cannabis economy evolved.

But like just about everything in business, nothing stays the same and it’s always critical to keep adapting and innovating. And so as we come closer to the end of 2019 and the beginning of 2020, now is as good a time as ever to look inward and take stock of your inventory of IP assets (trademarks, Internet domain names, copyrights/content, trade secrets and patents) and make sure you’ve taken appropriate steps to protect and monetize them. Let us know, of course, if you have any questions about how to gather the info you need and what to do with it.

Lori Ajax and the California Bureau of Cannabis Control:

Given that this conference was primarily focused on the Canadian market, it was interesting that Lori Ajax from the California BCC was the leadoff speaker at the conference. Why Lori? Because Canada can learn a lot from what California has done right and wrong these last several years as Canada expands its adult-use cannabis program.

Highlights of Lori Ajax’s interview:

  • Access to legal cannabis: Access still an issue; thus in California a licensed cannabis retailer can deliver anywhere in California. However, some anti-cannabis California cities are suing to prevent this. Others are accepting it. Encinitas – a suburb of San Diego – has revised its laws to allow cannabis delivery with the city even though it doesn’t currently have any licensed storefront retail shops. And….Encinitas has a ballot initiative coming in the November 2020 election to allow for up to four cannabis retail stores and some cultivation and distribution facilities.
  • Number of Licensed Cannabis Businesses in California: So far California has about 6500 licensees across the supply chain; but there are more distributors than retailers.
  • Number of California Local Jurisdictions: Because there are almost 550 cities and counties in California, BCC has a challenging job coordinating the state rules with local rules and regulations.
  • On-site Consumption: Some cities allow on-site consumption at retail shops, but it’s a city-by-city decision that requires approval by the local jurisdiction.
  • Educating the Public: In order to help educate the public about the importance of purchasing cannabis products from licensed retailers, the BBC is getting active on Twitter with #weedwise and has set up a website for consumers to be able to check whether a retailer they intend to buy from is licensed: www.CApotcheck.com. The BCC even created a PSA (Public Service Announcement) about how to obtain a cannabis license with Cheech Marin playing the part of a BCC official: https://youtu.be/jQ0OK06ZTP4
  • Vaping Illnesses: The recent rash of illnesses linked to vaping has been traced to the unlicensed market – not the legal market.
  • Conflicts Between Wine and Cannabis Industries:  A rift is developing between wine and cannabis: some grape growers are upset about “terpene drift” affecting the wine terroir while at the same time some cannabis growers are concerned about the pesticides grape growers can use that they can’t that may be affecting the purity of the plants they grow.
  • Banking: California is still struggling to get banks and credit unions to bank the industry, but banks are still resistant to get in. Last month the BCC collected $3 million in cash for licensing fees - the BCC wants out of the cash business too! Starting a state bank? Lori was not optimistic that’s going to be a solution any time soon: it will take too long to get up and running.
  • Criminal justice reform: San Francisco has retroactively expunged over 9000 criminal defendants’ records; a representative from San Francisco recommended that other jurisdictions call the SF DA’s office for info on how they can do the same thing.

Mergers & Acquisitions:

The panelists included Patrick Brauckman (Pasha Brands, Executive Chairman); Jamie Pearson (Bhang, COO); Paul Pederson (Nextleaf, Co-Founder & CEO); and Bobbi Koz Paley (Art Assets LLC, Founder & CEO). Dean Arbit of Wagner/Dimas and bud.com was the Moderator.

  • Bhang is now publicly traded after going public this past July. It was a painful process. It took a lot of paperwork and lawyers; it required very strategic plan They are looking to acquire companies that are value-add that fill in gaps that Bhang has needs for. They just acquired a beverage co.; it fit holes in their distribution plan.
  • What are investors looking for when thinking about acquiring a cannabis business? For Patrick, it’s all about looking at management and how much control they have over their business and where their outside investors are coming from. Bobbi also looks closely at management as a threshold issue. Bhang will look at both public and private companies; it depends on whether the potential acquisition fills a need that Bhang has. But….a publicly traded company acquiring or investing in another publicly traded co. is very complicated.
  • What sectors are growing the fastest? Paul’s co. is really looking at IP as a way of growing their co. Down the road, they believe more consumers are going to want more non-smokeable product. Dean believes that IP is going to really help differentiate products. Jamie believes consumers often don’t really know what they really want; it’s the cannabis company’s job to look and see what’s possible. For example, beverage companies are trying to figure out how to help consumers drink out with their friends and get high without getting drunk. Skin care and men’s grooming products are also likely to be significant sectors. For Bobbi, osteoporosis and endometriosis are real problems that need solutions.
  • How Far Along is the Industry in 2019-2020? Patrick’s analogy is that the cannabis industry is currently just in the third inning of a nine inning game.

Nic Easley on Vetting Domestic Investments to Ensure Viability:

  • Canadian Cannabis Market – State of:
  1. 2019 Estimated Cannabis Sales (Medical & Recreational): $2.6 billion ($U.S)
  2. 2024 Projected Cannabis Sales (Med & Rec): $3.4 billion ($U.S.)
  3. Cannabis prices are dropping:  In 2018 Aurora Cannabis reported 21% net selling price drop for dried flower and 25% drop for cannabis extracts.
  • Paying for shelf space:  In U.S. paying for shelf space at retailers is becoming much more prevalent.
  • Earlier this year WHO recommended rescheduling cannabis
  • Nic’s prediction: On the federal level, medical legalization will come first in U.S. before recreational.

***

Our Conclusions: It’s no surprise to anyone who has been in the industry that the era of the mom and pop cultivators and MMJ dispensaries is either over or rapidly coming to a close. Likewise it’s probably no surprise that a number of very smart and passionate entrepreneurs – some of whom are industry veterans with years and decades of experience behind them and some of whom are very new to the industry – are working hard to try to make sense out of nonsense in terms of the patchwork of sometimes competing local, state and federal laws and regulations that are making it extremely difficult for the industry to normalize. What is concerning – although also possibly no surprise – is that almost two years after California adopted its adult use regimen there is still no real solution clearly in sight to the big problems of: (1) no reliable/predictable banking solutions; (2) the inability of regulators to put a meaningful dent in the illicit unlicensed cannabis market which makes it even harder for legit licensed cannabis businesses to survive; and (3) the onerous patchwork of rules and regulations that are still making it hard for legit cannabis business to survive – much less thrive. But at the end of the day there is also no doubt that consumer demand for legit and clean cannabis and hemp/CBD products is thriving and probably on the rise. We are therefore cautiously optimistic that the consumer demand will encourage the serious cannabis entrepreneurs and businesses to push, pull and prod all the necessary levers and buttons to solve the big three issues. We are also pleased to see how many industry insiders are finally starting to talk about and acknowledge the role that IP is playing and will continue to play in helping to determine which of the thousands (or tens of thousands) cannabis and hemp/CBD companies are going to survive the current market flux and disruptions. Thus as we come closer to the end of 2019 and the beginning of 2020, now is as good a time as ever to look inward and take stock of your inventory of IP assets (trademarks, Internet domain names, copyrights/content, trade secrets and patents) and make sure you’ve taken appropriate steps to protect and monetize them. Let us know, of course, if you have any questions about how to gather the info you need and what to do with it.

***

About David Branfman: David Branfman has been practicing law in San Diego County for over thirty years. Mr. Branfman’s practice focuses on intellectual property and entertainment law, including trademarks, domain names, copyrights, trade secrets, licensing, motion pictures & TV, and music. Find out more at: Branfman Mayfield Bustarde Reichenthal LLP

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Report: U.S. House To Vote On Cannabis Banking Bill This Week

Written by Johnny Green on . Posted in Politics.

The SAFE Banking Act would reform federal law to allow for better access to the nation’s financial system for cannabis companies.

Many cannabis companies have had their assets frozen and/or accounts closed simply because they were involved in the cannabis industry. Other cannabis companies were unable to open an account in the first place due to the policies of many financial institutions.

Local credit unions have been increasingly filling the void in the United States, however, the situation is still far from optimal. A reported vote in the United States House of Representatives for the SAFE Banking Act could change that. Per NORML:

Majority Leader Hoyer on Friday announced that members of the House are anticipated to hold a floor vote next week on The SAFE Banking Act (HR1595), which explicitly permits banks and other financial institutions to work directly with state-legal marijuana businesses.

“The upcoming banking vote is an important first step by Congress, but in no way should it be the last,” said NORML Political Director Justin Strekal. “Much more action will still need to be taken by lawmakers, in particular efforts to move forward and pass comprehensive reform legislation like The MORE Act — which is sponsored by the Chair of the House Judiciary — in order to ultimately comport federal law with the new political and cultural realities surrounding marijuana.”

Only time will tell if the vote actually occurs. The bill is co-sponsored by over 1/3rd of the entire chamber, so if the bill actually does get a vote its chances of passing are strong.

It’s unclear what appetite the United States Senate will have for the bill. Senate Majority Leader Mitch McConnell has famously opposed virtually every bill that has come out of the House. Will this bill be different?

The first step to finding out will be if/when the House votes to pass the SAFE Act. All eyes from the cannabis community will be on the House this week to see if the historic vote takes place.

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Ecuador Sets Hemp THC Limit At 1.0%

Written by Johnny Green on . Posted in Business.

Hemp reform is sweeping across the globe. The hemp plant has always been a versatile, useful plant but prohibition policies kept it from being put to widespread use for several decades in many countries all over the world.

In recent years the walls of hemp prohibition have been crumbling across the planet as more and more nations reform their outdated laws to allow for the mass production of industrial and floral hemp.

Floral hemp has been particularly popular with consumers in the last few years, driven by the rise in demand for CBD products. Nations are finally coming to the sensible realization that farmers should be allowed to benefit from cultivating the hemp plant.

Ecuador is one of those countries. The South American nation is working towards implementing a legal hemp industry, and adopted a THC standard this week. Ecuador followed in the footsteps of a handful of other countries by setting a 1% THC limit. Per Hemp Today:

The Ecuadorian government has set the maximum THC level for industrial hemp at a full 1%, following the lead of Uruguay, Switzerland and Australia.

The limit was set in policy changes outlined during a legislative session this week that legalized industrial hemp by removing it from the Ecuadorian criminal code. The 1% THC limit is based on dry weight of hemp green matter. The reformed criminal code states clearly that hemp under that limit is no longer a prohibited crop, and that regulation of THC levels is the responsibility of the National Agrarian Authority.

A 1% THC limit may not sound like much, but it’s a very progressive standard compared to other countries’ standard, including the United States. The United States has a limit of just 0.3%.

Numerous studies have found that CBD is more effective when consumed with THC. If the studies are correct, it’s better for Ecuador’s future CBD industry to have a higher THC limit because presumably, CBD products would be more effective and thus more desirable to consumers and patients.

A higher THC limit is also better for farmers, which have to destroy their harvests if they are tested and found to exceed THC standards. The higher THC limit allows all hemp farmers, both industrial and floral, more flexibility when looking for genetics to cultivate.

The hemp plant should not be limited to only being processed into CBD products, but consumer demand is going to be a deciding factor in what hemp gets turned into.

Supply and demand is going to drive public policy, and if demand for CBD results in improved policies for industrial hemp that is turned into non-CBD products, so be it.