What can the end of alcohol prohibition teach cannabis entrepreneurs?

As the United States crawls slowly toward the end of the cannabis ban, the end of alcohol prohibition may provide a roadmap for entrepreneurs.

Nearly 100 years ago, Congress passed a law banning the sale and import of alcohol in the U.S. People who had been drinking all their lives didn't simply quit, as those pushing for the law had hoped. That led to a spike in organized crime, speakeasies and homemade liquor. Thirteen years later, Congress ended the failed experiment by repealing prohibition in 1933.

Cannabis and its byproducts have faced a much longer road. In the late 1800s and early 1900s, a few states placed restrictions on the sale and use of cannabis products. After the Marijuana Tax Act of 1937, cannabis became de facto illegal in the United States. Successive laws, such as mandatory sentencing requirements, reinforced that position.

Prohibition’s Clues For Cannabis

Americans’ relationship with marijuana has come a long way since the days of “reefer madness.” Pew Research Center found that 62 percent of Americans in late 2018 advocated for legalization, up from 16 percent in the 1990s and 32 percent in the 2000s. 

Several states now allow businesses to sell cannabis products legally. Federal legal reform could occur within the next few years, which means companies looking to get ahead of the cannabis craze need to know what to expect.

Still, as Oregon startups learned, cannabis products don’t sell themselves. The post-Prohibition 1930s showed that markets take time to adjust. Whether you’re already in the industry or plan on joining it, be sure to:

1. Prioritize Education

At the end of Prohibition, a generation of people who had been told alcohol was an illegal poison suddenly found themselves able to buy it at supermarkets. Some reacted recklessly, drinking too much and at inappropriate times, while others’ worries kept them from purchasing it at all.

Create a stable customer base by emphasizing education, even for non-psychoactive products. Hawke Media, a marketing agency that works with CBD brands, suggests appointing a chief education officer. This executive’s role should span marketing and product development, using content and packaging to describe the drug’s effects, how to consume it, when to take it and more.

Just as importantly, the chief education officer should ensure compliance with federal and state regulations that prohibit cannabis companies from making medical claims. Despite the fact that people use CBD and cannabis medicinally, there isn’t enough research available yet to sell them as solutions for particular conditions. Be cautious with your phrasings to stay on the right side of the law, especially as that law evolves. 

2. Skip Traditional Marketing Strategies

Even after Prohibition ended, most alcohol companies followed a semi-voluntary advertising ban until the 1990s. Long barred from advertising on television and radio, the internet gave alcohol companies a new form of media to explore. Shortly thereafter, Seagram opted to break the longstanding arrangement, and the rest of the industry followed along. 

Although a similar relaxing of restrictions may be coming for cannabis companies, entrepreneurs in the space shouldn’t count on traditional media. Because the drug is in a legal gray area, many digital and print platforms opt to avoid the controversy entirely. 

Bypass advertising bans by exploring alternative channels. Invest in tactics that promote positive word of mouth, such as influencer, email and social media marketing. Not only does getting your fans to do your marketing for you save money, but it means you don’t have to worry about where the line is with each media outlet. 

3. Welcome New Audiences

Young people may be the poster children for legalization, but Millennials aren’t the only ones interested in cannabis. Other market segments, including aging Boomers, are curious about whether cannabis derivatives like CBD can alleviate their aches and pains.

A recent Cision study that reviewed social media content about CBD suggested its audience may range from working professionals to cancer patients. More than 280,000 posts mentioned pain management, including joint pain, inflammation and chronic cancer-related pain. About 250,000 spoke to CBD’s effects on mental health issues like anxiety, depression and insomnia. 

By the end of Prohibition, campaigns against alcohol use had painted drinkers in a poor light. People who’d only been exposed to anti-alcohol content would not have believed safe, moderate drinking to be possible. Cannabis products face the same battle, so be ready to combat stigmas and embrace skeptics. 

Research, regulations and consumer sentiments move more quickly today than they did in the 1930s. When federal regulators finally give cannabis the green light, get ahead by applying these lessons from Prohibition's aftermath. 

Mandatory testing now required for medical marijuana sales in Oklahoma

The content of your weed could be a lot more than just THC.

News 4 went to the labs responsible for testing medical marijuana in Oklahoma and found out some distributors in the industry are skimping on their safety procedures.

Just drive down North May Avenue and you can't look left or right without seeing a medical marijuana dispensary.

Some are even calling it "The Green Mile."

But are the products you're buying safe?

The industry was unregulated in Oklahoma until the Unity Bill went into effect recently, making safety testing at licensed labs mandatory.

"We're talking about $40 a pound," Wendy Hampton, CEO at Express Toxicology Services, said.

Their Edmond facility mostly tests marijuana sent to them by growers and processors.

"This is medicine, and lots of people with compromised immune systems are using this as a true form of medicine," Hampton said.

That's why it'd be dangerous if the products are not tested for everything, such as metals and pesticides.

And according to some labs licensed to test everything, some in the industry are doing the bare minimum.

"The heavy metals, the pesticides, the microtoxins, all can be lethal things if not looked at properly, and that's the one testing that's not going on right now," William Webb said.

Webb owns Quality Cannabis Laboratories in Edmond.

With a limited number of state agents enforcing the new laws, Webb started going to dispensaries himself.

"Out of approximately 55 dispensaries I went to, only one of them had the correct testing, the full panel," Webb said.

Dispensaries should be able to provide you test results.

Labs are required to keep results for two years and allow the Oklahoma Department of Health access to them.

A look at Canada's cannabis legalization, one year later

REGINA -- Vatic Cannabis Company was the first pot store to open in the Regina area when marijuana was legalized one year ago.

Since then, there have been ups and downs, but CEO Allen Kilback says the first year has been a great learning experience.

“A year ago, you couldn’t walk in this place, we had a lineup to get in, so the industry has changed quite a bit, obviously there’s more stores open, but the novelty of legal cannabis stores has worn out now,” Kilback said.

Many of their customers are regulars with ages between 19 and 91.

Kilback added they’re continuing to look at ways to lower prices and they’ve recently joined together with other independent cannabis stores to form the Saskatchewan Weed Pool.

“We’re operating as a buying group, so we get together once a month, share ideas, talk about consumer trends, we’re really trying to come forward with some positive change,” Kilback said. “We can’t advertise, so there’s quite a disadvantage – especially with our location – so we’re looking at different ways of campaigning/educating the consumers to come support a local business.”

For the Regina Police Service, the first year of cannabis legalization went fairly smoothly.

“It’s had a minimal impact on operations, certainly on day-to-day operations we haven’t seen a huge increase, we haven’t seen a lot of impaired driving incidents with regard to it and even our day-to-day possession or consumption illegally is not something that we’ve seen increase, we have done a bit of work on dispensaries, but generally the impact has been minor,” Chief Evan Bray said.

There were 51 cannabis stores licenses issued by the province and 39 have opened to date. There are currently six licensed stores operating in Regina.

Bray said their biggest issue has been with the illegal dispensaries that have opened up over the past year.

“We’ve taken a fairly public stance when it comes to illegal dispensaries,” he said. “We’ve consistently showed that if we learn of illegal cannabis sales happening in the city, in a location where a license is not possessed, we will take enforcement action.”

Edibles legalization adds another level

The police and Saskatchewan Government are now preparing for the second phase of legalization with edibles, extracts and topicals becoming legal on Thursday.

“It will be very similar to the dried side in terms of the amount of THC, in terms of carrying it with – 30 milligrams equivalent,” Gene Makowsky, Minister of Liquor and Gaming, said.

“It will present a challenge just that it’s another nuance to the legalization aspect,” Bray added. “The where you can possess, how much you can possess, who can possess, those type of things are parallel when it comes to consumption, so it doesn’t if you’re going to smoke cannabis or eat it in a cookie, there still are some rules and those are very similar.”

The Provincial Government expects that it will take about 60 days for edibles, extracts and topicals to be available in stores in Saskatchewan.

Nevada cracking down on marijuana businesses

Nevada officials have begun to crack down on marijuana businesses amid allegations of possible corruption and lax regulation in the state’s young but lucrative industry.

This week, members of a new task force have conducted unannounced spot inspections at several of the state’s licensed marijuana testing laboratories. Those inspections follow allegations of marijuana testing manipulation and concerns over how cannabis products with unsafe levels of mold, yeast and other microbials were able to pass inspection and make it to the retail market in recent months.

And with federal charges levied last week accusing foreign nationals of trying to buy political influence to enter Nevada’s marijuana industry, the state’s Department of Taxation also announced Thursday that it was indefinitely freezing the sale and transfer of marijuana business licenses based on recommendations from the task force.

“Based on the recommendation, the department will not process any existing or new applications for these regulatory activities while this extended review is in place with the goal of ensuring a more thorough and appropriate vetting process within the industry,” the state said in a statement Thursday.

Will Adler, a marijuana policy lobbyist and consultant, said that it was fair to pause license transfers given recent controversies surrounding ownership of the businesses, including lawsuits over the licensing process and the recent federal indictment.

But Adler added he believes that the companies currently going through the license transfer process that have been vetted should be allowed to proceed.

The state announced last month that it would investigate the labs after two health advisories were issued for multiple batches of marijuana product sold in dispensaries but later found to have unsafe levels of mold, yeast and other microbials.

The governor’s office declined Thursday to comment on the inspections.

Randy Gardner, a managing member for Certified Ag Lab in Sparks, confirmed that investigators had been to his lab Wednesday and again Thursday collecting samples of marijuana products for further testing.

“They just wanted a couple samples,” Gardner said Thursday, adding that he believes the state has “every right” to conduct the inspections to ensure consistency and compliance from the businesses that are meant to act as the watchdog for the state’s marijuana industry.

“They’ve been very polite, very nice. It’s not confrontational at all. Their just doing their job,” Gardner said.

Adler, who also serves as executive director for Scientists for Consumer Safety, a marijuana testing lab association, confirmed that one of his member labs had been spot-inspected this week.

“It was a reasonable request that they were able to comply with in less than 30 minutes,” Adler said.

The creation of the task force was triggered by federal indictment last week that charged four men in a scheme to enter Nevada’s marijuana industry with $1 million provided by an unnamed Russian businessman, and hiding the foreign investor’s involvement due to his “Russian roots and current political paranoia about it.”

One of the men charged in the indictment made donations to Adam Laxalt and Wes Duncan, Republicans who ran unsuccessfully for governor and attorney general last year, respectively, with funds from the Russian investor. The campaigns for the two candidates said they would return the money.

The indictment said that the men knew they missed the September 2018 deadline to apply for a business license, “unless we change the rules” by electing a candidate to state office who might “green-light” their effort.

Marijuana companies selling off their state licenses has been a hot market in a Nevada retail cannabis industry that saw $640 million in sales in fiscal year 2019. Four cannabis businesses were sold in the the second half of 2018 for between $40 million and $290 million.

Gov. Steve Sisolak has also been critical of recent issues that have cropped up in the state’s still-growing marijuana industry, including allegations of manipulated product testing, lawsuits over the state’s licensing process and illegal sales to minors.

Denver efforts to clear marijuana-related convictions from criminal records starts slowly

Despite much fanfare, Denver’s attempt to help people shed the burden of minor marijuana convictions experienced a slow start.

Extremely slow.

In Denver, 60 people have successfully vacated their convictions in the city program’s first six months — less than 1% of the more than 13,000 eligible for expungement, according to city data. In Boulder, 11 people have cleared their record of the at least 4,000 people eligible, according to the Boulder County District Attorney’s Office.

Seven years after legalization and two years after state lawmakers passed a bill allowing expungement, city leaders and prosecutors are struggling to guide people through a complex process to erase minor pot convictions. The process can be lengthy and often requires digging through court records — if those documents can be found.

Ashley Kilroy, director of Denver’s Department of Excise and Licenses which oversees the city’s Turn Over a New Leaf program, said she is happy about Denver’s numbers. She expected turnout to be low based on the experience of other cities that have instituted similar programs.

“I think we did the best we could,” she said.

Hundreds more applied to the programs, but were ineligible because their case happened in other jurisdictions or because they were convicted of charges that don’t qualify for expungement. The city department has started working in the jails to contact people who may be eligible.

Convictions of even low-level marijuana offenses can affect people’s ability to get a job, secure a loan, gain admission to educational programs and their ability to travel, Kilroy said.

It’s difficult to point out exactly what caused the low turnout, Kilroy said. The city attempted to address barriers such as transportation by providing ride-share coupons and scheduled the clinics at different times so people with different work schedules could attend.

In a Denver city report issued last month, city attorneys said it’s often unclear who is eligible for the program under the law. The law allows expungement of criminal actions that would not be considered illegal after legalization.

“Without detailed records the nature of the charged violation may be unclear,” the report states. “For example, a conviction for the possession of drug paraphernalia may be related to marijuana, or it may be related to methamphetamine or cocaine.”

States that recently legalized marijuana have included provisions that would automatically expunge low-level marijuana convictions, said Sam Kamin, professor of marijuana law and policy at the University of Denver. States such as Illinois have put the onus on the state to automatically erase eligible convictions. But Colorado, being the first state to legalize, did not.

“Tying expungement to legalization is a relatively new phenomena,” Kamin said.

Some California prosecutors decided to automatically dismiss or reduce more than 54,000 marijuana convictions after applications for expungement there were lackluster. The prosecutors will use a computer algorithm to quickly identify the cases that are eligible.

In Colorado, however, people with convictions have to initiate the expungement process. In cities where no program exists, people often must hire a lawyer to file a motion for them. And the court processing fee is $65. They also must pay $28 for the Colorado Bureau of Investigation to erase the conviction from appearing on background checks.

Boulder County District Attorney Michael Dougherty said it’s unclear whether Colorado prosecutors can unilaterally vacate convictions without defendants’ input.

“I don’t want to say it’s not possible but there are different schools of thought,” he said.

Expungement isn’t a simple process, Kamin said. Some people may have been charged with a crime that isn’t eligible for expungement — such as selling marijuana — but pleaded down to a lesser charge that is eligible. Some court files do not show exactly what drug the person was arrested for possessing, he said.

“You’re retrying this case many years later,” Kamin said.

One solution lawmakers could consider would be directing the Colorado Bureau of Investigation to clear all eligible convictions from their backgrounding system, Dougherty said. While it won’t affect the court cases, it would prevent the convictions from showing up on a background check.

Denver’s Department of Excise and Licenses estimated it spent $26,500 on staff time to plan and host five clinics. It also spent about $7,000 in court fees and for advertising. It did not calculate how much time staff spent processing applications.

Eric Escudero, spokesman for the Excise and License department, said the program is attempting to address some of the social injustices spawned by a decades-long war on drugs.

“It’s not going to take six months or one year to undo that,” he said.

Taxes from legal pot could subsidize weed for low-income patients in New Mexico

proposal unveiled Wednesday for legal marijuana sales throughout New Mexico would use taxes to subsidize medical pot purchases for low-income patients and set aside money for police and loans to cannabis startup companies.

A panel appointed by Gov. Michelle Lujan Grisham, a Democrat, published recommendations for legalization that take cues from other states that regulate recreational marijuana markets.

The proposal would prohibit local governments from banning marijuana sales, though they could apply restrictions on business hours and locations, said Albuquerque City Councilor Pat Davis, who led the governor’s task force on legalization.

The provision is aimed at curbing illicit markets and keeping marijuana shoppers from traveling long distances.

The recommendations will now go to the Legislature for consideration.

Davis said several elements would set New Mexico apart from other states, in part by protecting its medical marijuana program from a potential exodus of patients — an outcome that has been seen in several other states.

“We’re going to use some of the revenue from recreational marijuana to reinvest … so we don’t lose those patients,” he said.

Medical marijuana is currently taxed on average at 7% but would become tax-free under the legalization proposal. Millions of dollars would be set aside to subsidize cannabis for low-income patients with qualifying medical conditions such as cancer, post-traumatic stress disorder or chronic pain.

All licensed recreational marijuana business would be required to serve the medical marijuana market, with priority given to patients when supplies are scarce.

The recommendations from the 23-member task force set the stage for a new push to authorize recreational use and sales of marijuana when the state Legislature convenes in January.

Bipartisan legalization legislation stalled in the state Senate earlier this year. The measure proposed state-operated marijuana stores as a way to limit the proliferation of storefront shops in small towns. It encountered resistance from existing medical dispensary owners.

Lujan Grisham has made her support for recreational marijuana contingent on finding ways to protect children and ensure roadway safety and effective workplace regulation.

The task force recommendations include a ban on marijuana ads on television, radio and mobile devices.

Nonsmoking marijuana products would be tested and labeled to show the concentration of psychoactive THC to try to reduce hospital visits linked to unintentionally high doses of THC.

Legal cannabis would be treated much like alcohol when it comes to the workplace. Workers currently must demonstrate that a long period of time separates intoxication and job duties.

To pay for safety and other initiatives, a 10% excise tax on recreational pot was suggested, with proceeds divided equally between state and local governments. Combined with taxes on sales and business transactions, that would mean an average markup of 17% for marijuana.

Initial annual revenues of $55 million were anticipated, a figure that officials have predicted could double within five years.

A cannabis venture fund would provide loans to low-income and small family owned businesses to start marijuana businesses and provide cannabis-industry job training at community colleges.

The recommendations would continue the state’s prohibition on growing marijuana at home without a specialized medical authorization, while decriminalizing minor violations. The task force endorsed automatic expungement of past cannabis possession convictions.

Currently, medical pot patients must register for a personal production license to grow up to 16 plants at a time — a figure that includes just four mature plants with ingestible flowers.

As the Presidential election looms, where is Florida in their legalization of marijuana?

Florida already has a medical marijuana program in place, but the consensus seems to be that unleashing the leaf from its prohibition standard is the next logical step.

The presidential election is just about a year away from either making America great again, again or sending it down the path to a long recovery from the clown shoe politics of the past four years. In the midst of the madness, there is marijuana. Some claim the issue has achieved great strides in 2019, more prominent than ever before, while those of us who reside in a more real place has clearly noticed that legal weed is not really in any better position than it has been in a long time.

But 2020 is supposed to be when the powers that be across the country (whomever they may be) are supposed to get serious about taking the next step to ending a nation of prohibition. Some think that Florida could be one of those states to carry the movement forward in a big way. But just how likely is it that the Sunshine State will pull it together? 

There are a couple of groups (Make It Legal Florida & Regulate Florida) doing an admirable job seeing that the question of legalizing marijuana makes it on the ballot in 2020. Make It legal Florida seems to have the best shot at getting it done, however, since it is the initiative drawing the largest financial support. That’s the thing about trying to legalize weed through the ballot initiative process — it’s super expensive. It can cost millions of dollars to break through to the people and secure their support. Some reports show that it could take $10 million to usher in a recreational weed law next year. As of September, Make It Legal Florida has amassed around $1.1 million.

Make It Legal Florida is also doing exceptionally well at collecting signatures. It gathered somewhere around 100,000 within the first 20 days of its campaign. Still, Regulate Florida isn’t doing too shabby either. The group announced in August that it had collected 77,000 signatures. All either one of these groups has to do is secure 76,632 verified signatures to get a review by the Florida Supreme Court (a weird step that Florida has in its ballot initiative process). 

But they would have to show 766,200 verified petitions by February to be cleared for the 2020 general election. So, it stands to reason that it is going to be grind time for the next few months for Florida to have a shot.

Florida lawmakers are already preparing for the voters to be presented with the question of legal weed next year. It was earlier this week that the House Health & Human Services Committee spent some time discussing the possibility. “We’re all going to be asked by our constituents where are we on this,” said Committee Chair Rep. Ray Rodrigues, (R-Estero), according to ABC News. “We need to be equipped to take a position and articulate why we’ve taken that position.”

The goal of both petitions is to legalize marijuana for adult use the same as 11 other states have done. Florida already has a medical marijuana program in place, something that was pushed through in a ballot measure in 2016, but the consensus seems to be that unleashing the leaf from its prohibition standard is the next logical step. Some of the latest polls show that Floridians are all about it, too. Sixty-five percent of the population is in favor of legalizing for recreational use. In Florida, it will take 60 percent of the vote to pass. But the biggest challenge, as of now, will be getting one of the groups to submit the required signature count before the February deadline. 

It’s time to kick it into high gear.