The Supreme Court issued a landmark ruling today, paving the way for states to legalize sports gambling. This will have massive reverberations across the country, and not just when it comes to betting on sports. This case is a distillation of the tension between state and federal governance in America. Sports gambling was illegal in the United States thanks to the 1992 Professional and Amateur Sports Protection Act that made Nevada the only state where someone could wager on the results of a single game.
The Supreme Court today decided that federal law violated the 10th Amendment, which was the founders’ failsafe as a way to guard against unforeseen circumstances. Effectively, the 10th Amendment means that the states have powers which are not expressly delegated to the federal government, and because the constitution doesn’t say anything about gambling on sports, seven of our nine justices agreed that the Professional and Amateur Sports Protection Act doesn’t line up with our constitutionally stated principles. This is where marijuana legalization comes into play.
The United States federal government has declared marijuana to be a schedule one narcotic—meaning that it has “no currently accepted medical use and a high potential for abuse,” according to the Drug Enforcement Administration. Other schedule one narcotics include peyote, meth and heroin—proving beyond a shadow of a doubt the utter insanity of this position. The list of states who have defied this classification is longer than those who adhere to it.
Colorado, Washington, Oregon, Alaska, Nevada, California, Massachusetts, Vermont and Maine have legalized it for recreational use, while Montana, Arizona, New Mexico, North Dakota, Minnesota, Michigan, Illinois, Arkansas, Hawaii, Ohio, West Virginia, Pennsylvania, New York, New Jersey, Connecticut, Delaware, Rhode Island, New Hampshire, Maryland and Florida have legalized medical marijuana. Eventually, a court will have to choose who gets to take the lead on this issue, and it’s difficult to see how banning marijuana is a power explicitly given to the federal government.
Like sports betting, the constitution didn’t leave any room for marijuana legalization, so the DEA’s position should seemingly be a 10th Amendment violation by the United States federal government. Plus, there are other cases that buttress marijuana legalization’s case on this issue. Precedent is the most important predictor of how our Supreme Court will act. Per Justice Sandra Day O’Connor on behalf of the majority opinion of the Supreme Court in New York v. United States (emphasis mine):
This case implicates one of our Nation’s newest problems of public policy, and perhaps our oldest question of constitutional law. The public policy issue involves the disposal of radioactive waste: in this case, we address the constitutionality of three provisions of the Low-Level Radioactive Waste Policy Amendments Act of 1985. The constitutional question is as old as the Constitution: it consists of discerning the proper division of authority between the Federal Government and the States. We conclude that, while Congress has substantial power under the Constitution to encourage the States to provide for the disposal of the radioactive waste generated within their borders, the Constitution does not confer upon Congress the ability simply to compel the States to do so.
So the logic would go: if the Supreme Court has already found that Congress is not allowed to order states how to dispose of their radioactive waste—a power obviously not delegated in the constitution—how can they compel states to comply with federal law on a similarly ambiguous topic? Not to mention, the Supreme Court has already deemed one federal marijuana act to be unconstitutional, and you can draw a direct line between that and current law.
The Controlled Substances Act made marijuana illegal in 1970, which had to be created because the Marijuana Tax Act of 1937 was unanimously deemed unconstitutional in Leary v. United States. Marijuana prohibition is actually a very recent phenomenon, and stop me if this sounds familiar, but it arose out of a panic from Mexican immigration. The law effectively banning it in 1937 was accompanied by a litany of racist imagery and utterly insane lies. White America effectively argued that they needed to ban the drug in order to protect white women. This wasn’t some fringe belief either, as exemplified by the first commissioner of the Federal Bureau of Narcotics (the predecessor to the DEA), Harry Anslinger, when he said:
“There are 100,000 total marijuana smokers in the U.S., and most are Negroes, Hispanics, Filipinos and entertainers. Their Satanic music, jazz and swing result from marijuana use. This marijuana causes white women to seek sexual relations with Negroes, entertainers and any others.”
“Reefer makes darkies think they’re as good as white men.”
Marijuana prohibition is an explicitly racist law that has already been repudiated by most states. However, as Jeff Sessions’ Department of Justice has demonstrated, so long as federal law is in place, enforcement agencies can assert that it supersedes state law. If you’re confused, welcome to the federal government’s hypocrisy surrounding the 10th Amendment, where states de jure should already have these rights, but in order to obtain them de facto, they must present the case to a judge.
Prior to today’s Supreme Court ruling on sports betting, 18 states already drafted bills to legalize betting on sports. The fact of the matter is that states are battling budget crunches across the country, and marijuana and gambling are the two most immediate sources of serious revenue that states can tap into. It’s crazier to keep them illegal given our hyper-inequality, low taxation and even less funding for social services. Today’s Supreme Court ruling ensures that it’s just a matter of time before some well-funded group gets in front of the highest court in the land to prove the hypocrisy and illegality of America’s marijuana prohibition once and for all.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.
As expected, Colorado’s legal marijuana revenue rose from February to March, according to the Colorado Department of Revenue, with one of the sharpest monthly increases seen yet. After seeing the lowest overall revenue in a year in February, pot sales set a record for retail earnings the next month, bringing in nearly $106 million to top the previous record of $101.5 million in August 2017.
Overall sales in March hit just north of $135 million, according to DOR data, with medical sales barely crossing $29 million. Medical revenue’s rise of a little less than $3 million from February was hardly a break in the dry spell such sales have seen in the last year. Colorado marijuana sales dropped from January to February, only to shoot back up in March every year since 2014, but medical sales earned about $8 million less this year than in March 2017.
The 23 percent rise in recreational sales month-over-month still spurred March toward one of Colorado’s best for overall sales, the DOR says, only being topped by July, August and September of 2017, all of which earned anywhere from $135.8 to $138 million. However, each of those months also made at least 17 percent more in medical sales than March 2018.
If 2018 follows trends from 2014, when recreational sales began, then the industry should expect rising revenue on the retail side as the summer nears. That spark started in April thanks to the 4/20 holiday, according to dispensary sales tracker Flowhub, which reported that nationwide, dispensary sales were around 50 percent higher than the daily average on April 20, 2017.
Colorado’s record-breaking month in retail sales shows continued growth despite more regional competition, as Nevada and California began recreational marijuana sales in July 2017 and January 2018, respectively. According to the Nevada Department of Taxation, Nevada earned roughly $33 million in revenue per month through the first eight months of retail pot sales, while a recent report from dispensary analytics firm BDS Analytics says California dispensaries sold around $339 million of products through February 2018.
Thomas Mitchell has written about all things cannabis for Westword since 2014, covering sports, real estate and general news along the way for publications such as the Arizona Republic, Inman and Fox Sports. He’s currently the cannabis editor for westword.com.
Even in a room filled with spine specialists and neurosurgeons, Priscilla Vilchis never feels out of place.
In her 20s, Vilchis managed some of Southern California’s top physicians, helping them navigate regulations and negotiate with insurance companies as a medical practice consultant. She credits that experience for providing her the self-assurance and the know-how to participate in the cannabis industry.
“I looked at myself like an equal, if not better, every time I sat at the table,” Vilchis says. “Everything I said I would do, I executed… [It’s] imperative that everyone delivers with everything that they say. I think that’s a huge part of gaining respect.”
Now 31, Vilchis is the owner and CEO of Premium Produce, a medical and recreational cultivation and processing company with operations in Las Vegas, Nev., and Lynwood, Calif., and additional delivery and distribution licenses in California.
Her seemingly rapid rise to industry notability (she was the first licensed female minority in L.A. County as well as the youngest female minority to be licensed in Nevada) has earned her the monikers “Priscilla Queen of the Desert” in Nevada and “The Hollyweed Queen” in California. Asked how each of those nicknames captures her character, Vilchis has her answer ready. “Well, that’s simple,” she says. “I’m a queen.”
Convincing the Skeptics
Vilchis exudes a regal confidence. She speaks in a soft, but assertive tone, her voice passionate yet composed. She clearly expresses her objectives and details exactly how she is going to complete them. It’s no wonder that one of her greatest strengths is lobbying for herself.
She is skilled at persuading county boards and city councils to trust her with cannabis business licenses, so much so that they have, in turn, asked for her help in convincing skeptical community members. Vilchis comes in to talk to them knowing that by the end of her time, she will have convinced those community members to believe in cannabis, and in her.
She’s especially effective in majority minority-communities, like Lynwood. She has a special connection to these communities because her mother raised her the same way many of the parents she addresses raise their children, she says: by telling them that if they try marijuana, even once, they would die.
“That’s how brutal she was, and I was in my early teens,” Vilchis recalls with a chuckle.
Vilchis says most children from minority communities, especially Latino communities, are raised with that fatalistic mentality on marijuana. Many of those parents and community members don’t know about the plant’s medical benefits. “A lot of them don’t understand that CBD is being given to kids with epilepsy, and it’s helping them operate on a day-to-day basis,” she says.
And Vilchis’ persuasiveness is also what convinced Premium Produce’s lead cultivation consultant, Nathan Race, that joining Vilchis’ project was the right decision. “She is a fierce woman, and she knows how to get things done,” he says.
Race, a British Columbia native with more than 15 years of experience in the medical cannabis space, has known Vilchis for many years, thanks to mutual friends—Vilchis even attended Race’s engagement. When they reconnected years later, Vilchis shared her plan with him.
“She let me know what her aspirations were in the industry, and I let her know that I would be very happy to lend her my expertise,” he says. Race does not regret the offer.
“Working for her has been an everlasting experience of how to operate. I have sat and watched other people in other industries and also in the cannabis industry, both in the United States and Canada, and she has a particular gusto to get things done.”
That gusto was absolutely vital because Vilchis’ project almost never became reality. Had it not been for a phone call and quick decision made when she was in Italy, the Queen of the Desert may never have been crowned.
Cutting It Close
Vilchis filed her application for her Las Vegas cultivation and production center well before the May 31, 2017, deadline: She began the process in 2014, a few months after the state rolled out regulations covering the sale and distribution of medical marijuana.
Over the next three years, she made all the right moves, including making arrangements with the bank to close on what she calls the “perfect” property, and instructing her team on how to handle the next steps of the process. Thinking everything was under control, she headed to Italy for a well-deserved vacation in the middle of May 2017.
That’s when the wheels fell off.
Her lawyer called in the middle of the night, waking her from sleep. “We have an oversight,” he said.
“What do you mean?” she asked.
“I mean, there are no banks that are going to finance a marijuana company. You’re going to have to buy the building and close escrow in 15 days to qualify for this license that you’re applying for,” he replied.
With both time and distance against her, Vilchis was left with only one option: to buy the building herself. Cash. “I call that the $2 million day,” she says with a laugh.
As frustrating and stressful as that situation was, Vilchis views it as a crash course on the complexities of the marijuana business. “This goes to show how new our industry is. It was something that I think no one really could have prepared for.”
It was also a lesson in one of the basic principles of real estate: Buying is almost always better than leasing.
“Our intention was to try and get [the property] leased. I’m now happy that I didn’t do that. … The property value now went up to, I believe, $5.56 million.”
Building for the Future
In addition to her $2 million Las Vegas property investment, Premium Produce put forth an $8 million investment for the Nevada facility. And what does $8 million get you in Nevada? “A state-of-the-art facility,” Vilchis says.
Premium Produce’s facilities feature a custom-made Link4 environmental control system. The system for the Las Vegas facility, which is more than twice the square footage of the Lynwood site, cost the company more than $1 million to purchase and install.
“Each panel has been tailored for the size and the square footage [of canopy] of each room and what we intend to do in it,” Race explains. In addition to standard controls, such as temperature and humidity, the system utilizes automated louvers to control airflow; monitors the irrigation system to warn staff when parts per million (ppm) levels are too high and when filters need to be changed; and plugs into light sensors, alerting the team when a light bulb needs to be changed before grow room light levels become uneven.
The company’s lighting is set on a variable ballast system. This allows Race to ramp up the lights slowly to avoid creating large electricity spikes. He can also lower light levels during the vegetation period, again saving on operating costs. The hybrid high-pressure sodium (HPS) and metal halide (MH) lamps (manufactured by the Canada-based P.L. Light Systems) are set at 1,000 watts during flowering. As Race explains, “We dial our ballast down to 600 watts during vegetation periods to save energy. … We’ve done tests where we’ve put it at 1,000 watts the whole time, and there was really no benefit in growth.”
A point of pride for Race is the company’s CO2 system. Race has consulted on several large-scale grows throughout North America and has seen less-than-ideal CO2 system setups, including some where high-pressure CO2 bottles were simply tied to racks in high-traffic hallways.
“We have one of the most failsafe CO2 delivery systems known to man,” he says. “It’s all electronically controlled. It monitors the amount of CO2 that is being provided to the plants and adjusts accordingly.” As for safety features, “We’ve got an actual air gas cylinder that’s monitored remotely for pressure and how much it contains.”
Race says Vilchis differed from most other CEOs he’s worked with in that she worked closely with him to understand the intricacies of the cultivation business. “Priscilla makes that time,” he says. “And that’s very rare, to see a CEO wanting to know what plastics you’re using.”
Having a long-term focus is another factor differentiating Vilchis from other cannabis cultivation business owners Race has encountered—especially when it comes to environmental sustainability. “Everything that Priscilla has put toward her environmental controls is environmentally responsible,” he explains. For example, a state-of-the-art reverse osmosis water filtration system grants Premium Produce the ability to condense the water from air conditioners and air handlers and reuse that water in the grow. As Race puts it, “At the end of the day, we’re growing marijuana in the desert, and every drop of water is precious.”
Another example of the company’s long-term focus is its in-house testing protocol, which allows the company to test its products for potency and contamination. That testing program, which Race pitched and developed “essentially costs me more money,” Vilchis says, and it is not a requirement from the state. But she is OK with the investment: The last thing Vilchis wants is to have a failed test on her record.
“We definitely want to get only premium products into peoples’ hands,” she says.
Something Old, Something New
Growing a premium product sometimes means doing things the old-fashioned way.
Despite a nearly $2 million investment in automated control systems for both facilities, large swaths of the production process, such as watering, are done by hand. Race believes there’s a risk with automated feedings and waterings, namely system errors or failures, and workers who neglect system maintenance tasks.
“What our [employees] do is … hand-water the plant every day,” Race details. “They inspect the plant every day, and they chart that plant every day, and that way we can tell if there’s been any hermaphrodite weird anomalies, any kind of pests or deficiencies that the plant has, and we can address it right away.”
Currently, the Las Vegas location has three, full-time cultivation employees covering roughly 5,000 square feet of canopy space: Race; a cultivation manager; and an organic cultivation specialist, who, in addition to helping with daily watering and feedings, is tasked with developing the company’s organics program.
The company is still weighing whether to convert to all- organic inputs, Race says, “but at this time, there are specific strains that are more receptive to organic grow [inputs], such as Silver Haze, Sour Diesel, and the Blue Cherry Diesel.” The company is currently studying its strain offerings and testing different inputs to maximize both yield and flavor.
Race compares the needs of different cannabis varieties to different human dietary preferences. In his experience, he says, he’s found that “some strains just don’t like organic food.”
Research isn’t limited to the cultivation rooms. Most of Premium Produce’s research and development takes place on the business’s production side. For example, Race is exploring new formulations for vape cartridges without “glycerins and oils, and things that are not natural to the plant.” In the company’s soon-to-be-released vape line, only cannabis profile-matching terpenes are used.
“This way, we’re not putting anything into the vape juice that is not already found in the plant,” Race explains.
Both facilities focus on different products. For example, the Las Vegas market is still fairly new to cannabis, and flower makes up a large chunk of the retail market. However, Vilchis says the Lynwood facility is much more focused on the production of vape products and edibles. (Editor’s note: For more information on the state of California’s recreational market, see Sales Trends on p. 14.)
Two Brands, One Face
Vilchis plans on carrying over some of her products from the Nevada market, especially her Queen of the Desert edible line; however, in California, the line will be branded under her California moniker, Hollyweed Queen. Vilchis decided to use different branding in both states in which she operates to capitalize on the momentum and media recognition she has gained in each state.
By focusing on the local brands, Vilchis is betting that she will be able to reach more customers and patients in each market. She predicts what will keep those customers and patients locked into the brand is the quality and variety of products each banner will offer, and loyal customers are more likely to know about the company’s other brands and go out of their way to stay loyal when out of state.
“If anything, people are curious to try both. It gives them an opportunity,” Vilchis says. That said, top-selling and unique products will be carried in both California and Nevada under one brand name. For example, “We’ve got a very extravagant lubricant coming out, and we’re still working on the branding, but it is going to be able to relate with both markets,” she adds.
Ultimately, Vilchis is the face of her company. In fact, she has become one of the most prominent new figures in the cannabis industry, especially considering the headlines she’s made in the past few months in publications like LA Weekly, Crain’s or Bloomberg, and she is not shying away from the attention.
“It’s very flattering,” she says. “The fact that I’ve been almost branded as the female face of cannabis, and people tend to just refer to me as the ‘Queen of Cannabis,’ … I am humbled.”
As for the dealing with the pressures of being in the limelight, she’s got that covered, too.
“As long as I deliver, as long as I follow through with everything that I say, I have no fear,” she says. “I genuinely feel we are going to be able to put up the best product out there.”
Brian MacIver is the associate editor for Cannabis Business Times.
The marijuana industry is growing like a weed, and investors can’t seem to get enough of pot stocks. Over the trailing-two-year period, the vast majority of marijuana stocks have risen by a triple- or quadruple-digit percentage.
But, truth be told, not a lot is definitively known about the weed industry, which still operates behind a cloud of uncertainty. After all, marijuana is still illegal in every country around the world, save for Uruguay. Within the U.S., despite 29 states having legalized cannabis in some capacity, the federal government maintains a Schedule I classification on the drug, meaning it’s entirely illegal, prone to abuse, and has no recognized benefits.
Image source: Getty Images.
In an effort to provide industry insights to Wall Street, investors, and the general public, Marijuana Business Daily publishes its “Marijuana Business Factbook” each year. “Factbook,” as the report is better known, provides a plethora of estimates on U.S. cannabis job and sales growth over the coming five-year period. This past week, the latest edition of Factbook was released, which spanned growth estimates between 2017 and 2022. Here are the seven most awe-inspiring statistics provided in that exclusive report.
1. U.S. legal weed sales could rise by nearly 50% in 2018
As is often the case with this annual report, the headline statistic is the expectation of legal weed sales growth in 2018. After generating between $5.8 billion and $6.6 billion in legal sales in 2017 — Marijuana Business Factbook often lists sales and growth estimates in ranges as opposed to a single projection — legal pot sales are expected to reach between $7.9 billion and $9.7 billion in 2018. At the midpoint of both estimates, we’re looking at 42% year-on-year growth.
The bulk of this increase will come from recreational cannabis sales, and more specifically, from California opening its doors to legal adult-use consumers. Factbook assumes minimum recreational cannabis sales of $500 million in California this year. Additionally, the launch of recreational sales in Massachusetts by this summer, along with Nevada’s burgeoning adult-use market — recreational sales in Nevada kicked off in July 2017 — should help lift sales.
Image source: Getty Images.
2. Legal sales could hit more than $22 billion by 2022
Over the longer run, legal marijuana sales in the U.S. are estimated to grow by more than 27% per year through 2022 (assuming peak sales estimates each year). After hitting a peak of $6.6 billion in legal sales in 2017, Factbook estimates that between $18 billion and $22.1 billion worth of cannabis could be sold to consumers through legal channels in 2022.
The push to potentially more than $22 billion in sales would be the result of new states legalizing pot in some capacity, as well as organic growth within already legal states. For instance, legal weed sales in Colorado have more than doubled from $699 million in 2014, the first year of recreational marijuana sales in the state, to $1.49 billion as of 2017, according to the Colorado Department of Revenue.
3. Recreational pot sales could double medical sales by 2022
Also of note is the breakdown of expected legal cannabis sales by 2022. According to Factbook, medical marijuana sales are expected to account for between $5.9 billion and $7.3 billion in sales in 2022. Meanwhile, recreational weed should tally between $12.1 billion and $14.8 billion in sales that year. Even though medical sales will have doubled since 2017, recreational marijuana sales will have quadrupled over the same time period. This suggests that recreational customers are a priority for growth-oriented cannabis companies.
Image source: Getty Images.
4. Total U.S. cannabis demand is $52.5 billion
Just how big is the U.S. cannabis market? According to Factbook, legal channel and black market demand combined work out to $52.5 billion. That’s a massive number, which has played a big role in pushing marijuana stock valuations ever higher.
Then again, this figure also shows just how far the legal weed industry has to go to stomp out the underground cannabis market. Assuming a midpoint of $6.2 billion in sales last year, this suggests that more than $46 billion in sales were conducted outside the scope of legal channels. Some folks would view this as an opportunity for legal businesses, while others would say that the black market is simply too powerful to overcome. Personally, I believe both views could be right.
5. Marijuana jobs growth to average 21% a year through 2022
Expansion of the cannabis industry in the U.S. isn’t just about sales — it’s also about the jobs that are directly and indirectly tied to marijuana. As of today, an estimated 125,000 to 160,000 people are employed within the cannabis industry. By 2022, Factbook predicts that figure could soar to roughly 340,000 jobs. Assuming the current peak estimate of 160,000, this works out to jobs growth of 21% per year through 2022. By comparison, the healthcare industry is only expected to see jobs growth of approximately 2% per year through 2022.
Image source: Getty Images.
6. A greater than $75 billion annual economic impact by 2022
According to Factbook, the cannabis industry could generate an economic impact of between $28 billion and $34 billion in 2018 and surpass an economic impact of $75 billion by 2022. The report notes that: “Estimates for the industry’s economic impact are based on retail marijuana sales and incorporates a multiplier of 3.5. For every $1 consumers or patients spend at dispensaries or [recreational] stores, another $2.50 in economic benefit is created in cities, states, and nationwide.” Once again, this is about more than just sales. The expansion of the legal cannabis industry could generate jobs and help prop up local economies.
7. Fully legalized cannabis could eventually top U.S. cigarette sales
Lastly, and perhaps most aggressively, Factbook offers up the idea that if marijuana were made legal in the U.S., we could see legal cannabis sales surpass cigarette sales. For context, The Wall Street Journalreported in April 2017 that cigarette industry sales in the U.S. hit an estimated $93.4 billion in 2016. This assumption likely assumes strong pricing power for cannabis products, as well as ongoing weakness in cigarette volumes as consumers quit tobacco products altogether or move away from tobacco in favor of cannabis.
However, the important thing to remember above else, at least for the time being, is that cannabis remains illegal in the United States. As long as ardent cannabis opponent Jeff Sessions heads the Justice Department, there appears to be little chance of altering the drug’s scheduling. That’s bad news for investors looking to take advantage of the green rush in the U.S., as well as a growth inhibitor for the industry itself.
Pot sales soar in Las Vegas, but few get in trouble for smoking in public
LAS VEGAS (KSNV) —
The number of people ticketed in the Las Vegas area for illegally using marijuana in public pales in comparison to other cities during their first year of legalized pot, according to a News 3 review of legal records.
In Nevada, legal marijuana sales continue to outpace the states that came before it – averaging more than $1 million a day. However, fewer people are getting in trouble for lighting up in public.
During the first year of legal pot, at least 41 people were ticketed in the entire Las Vegas metro area. By comparison, Denver cited 762 people in their first year.
Citations in Nevada can carry a $600 fine for use of marijuana in a public space.
Nevada State Sen. Tick Segerblom said he sees the number of citations issued as a sign that law enforcement is looking the other way when it comes to enforcement.
“Police are trained to let tourists enjoy themselves. If they get too rowdy, they’ll step in. The fact is if they aren’t bothering anybody else, who cares?” said Segerblom, who is often considered the Godfather of the marijuana movement in Nevada.
Before voters legalized recreational pot, opponents feared marijuana would become a public nuisance.
“People do not want to spend $300 for a hotel room at one of our nice properties and then smell marijuana oozing out of their rooms,” Pat Hickey told News 3 in 2016.
One citation was issued when someone smoked marijuana in front of officers at the Bellagio Fountains.
However, marijuana is still banned at casinos and the hotels attached to them – leaving millions of visitors with no place to legally light up.
Segerblom is continuing to push for marijuana lounges, which have been stalled at the local level and state level.
“We need to have places where people can use it socially,” said Segerblom.
News 3 contacted the Las Vegas Metropolitan Police Department for input on their enforcement policies when it comes to public use of marijuana. However, our calls were not returned as of press time.
Since relocating to Las Vegas, Chicago native Zairilla Bacon has become the go-to chef for stony celebrities like Snoop Dogg and Tommy Chong. Her secret ingredient? Lots of high-priced pot, naturally.
Prior to making a mark with her cannabis-infused concoctions, Bacon graduated from Waukegan High School and studied at the College of Lake County before starting her own catering business, Zairee Lee and Company. Bacon, who has remained an avid cannabis user since her teens, started cooking for her large family at a young age.
“I was raised in the kitchen,” she said.
Snoop Dogg and Zairilla Bacon | Provided photo
In 2012, Bacon moved to Sin City at her best friend’s urging and took a job as a delivery driver for a dispensary. Medical marijuana has been legal in the state for over a decade, and a law that allows the use of recreational cannabis went into effect last June.
As part of the job, Bacon handed out a free cannabis-infused edible with every order she dropped off. That’s when she saw an opportunity to combine her love of cooking with her proclivity for pot.
“I told my boss, ‘I know how to cook, I would love to get into that,’” Bacon said.
Joe William, her former boss and the owner of a chain of dispensaries known as the California Care Group, then taught her how to make cannabis-infused butter, and the rest is history.
“Once I got on board, their sales for edibles went up tremendously,” she added.
After finding that initial success and getting a raise at the dispensary, Bacon realized she wanted to combine cannabis with more traditional fare, like chicken wings, macaroni and cheese and collared greens. Thus, she started her latest venture, Z’s Menu, which caters homemade munchies and her signature “Z Juice” to state-registered medical marijuana patients.
“I try to make you not be able to taste the cannabis whatsoever, so that you almost forget that there’s cannabis in there because I want you to still enjoy the food,” Bacon said.
Since launching her latest venture, Bacon has cooked up pot-laced meals for a growing list of celebrity clients, including former heavyweight champion Mike Tyson and rappers Method Man, Redman and Paul Wall.
Last year, Bacon appeared on an episode of 2 Chainz’s Viceland show, “Most Expensivest,” where she cooked up a pricy medicated meal for the Atlanta rapper and his guests, Chong and stand-up comedian Hannibal Buress (who is also a Chicago native). After getting word that 2 Chainz was interested in having her on the show, Bacon dropped everything she was doing and prepared the lavish meal on two days notice.
During an appearance last year on Viceland, Bacon serves cannabis-infused dishes to Tommy Chong (left), Hannibal Buress (middle) and 2 Chainz.
On the menu were lobster tails ($525 per pound), crab legs ($225 per pound) and chicken wings (roughly $20 per wing). Bacon noted that the high costs were dictated by the price of the “top shelf” cannabis she used, which can run up to $75 per gram.
“There’s different ‘top shelf’ cannabis, like you have your cheaper kind then you have your presidential stuff Snoop Dogg and Tommy Chong smoke,” said Bacon, who also offers patients more reasonably-priced options that are made with lower-quality strains of marijuana.
The chef, who is known endearingly as “Bacon Bitch,” is now focusing on vegan dishes made with CDB, or cannabidiol, a non-psychoactive form of marijuana that holds a quasi-legal status in many states.
“I’m crossing over to the more legal side where [people] can have my products all over the world now,” she said.
As part of the effort to expand her reach, Bacon has partnered with William to create a signature line of CBD products that will be sold in dispensaries in California, Colorado, Massachusetts and Nevada.
According to businessinsider.com, nine states and Washington, D.C., have legalized marijuana for recreational use — no doctor’s letter required — for adults over the age of 21.
Here’s a summary of where Americans can legally use recreational marijuana in 2018:
Adults 21 and over can light up in Alaska. In early 2015, the northernmost U.S. state made it legal for residents to use, possess, and transport up to an ounce of marijuana— roughly a sandwich bag full — for recreational use. More than two million people visit Alaska annually and spend $2 billion.
It was the first state to legalize medical marijuana back in 1996. California became even more pot-friendly in 2016 when it made it legal to use and carry up to an ounce of marijuana. The law also permits adults 21 and over to buy up to eight grams of marijuana concentrates, which are found in edibles, and grow no more than six marijuana plants per household. Many cities in the Central Valley, including Fresno and Bakersfield, have moved to ban recreational sales.
In Colorado, there are more marijuana dispensaries than Starbucks and McDonald’s locations combined. The state joined Washington in becoming the first two states to fully legalize the drug in 2012. Residents and tourists over the age of 21 can buy up to one ounce of marijuana or eight grams of concentrates. Some Colorado counties and cities have passed more restrictive laws.
A ballot initiative gave Maine residents the right to possess up to 2.5 ounces of marijuana, more than double the limit in most other states. But that doesn’t mean residents can buy the drug. Maine Gov. Paul LePage dealt a major blow to the industry in November 2017, when he vetoed a bill that would have regulated and taxed the sale of recreational marijuana.
In 2016, Massachusetts gave residents the go ahead to carry and use an ounce of marijuana and grow up to 12 plants in their homes. But the future of the state’s legal market is hazy. Lawmakers delayed the opening of pot shops to July 2018, instead of the January 2018 date that voters approved in the election. Until then, there will be no sales of recreational weed.
Residents and tourists who are 21 and over can buy an ounce of marijuana or one-eighth of an ounce of edibles or concentrates in Nevada — while supplies last. Less than two weeks after sales of recreational weed began on July 1, 2017, many stores ran out of marijuana to sell. The state has earned nearly $20 million in marijuana tax revenue since the market launched. Nevada residents must live 25 miles outside the nearest dispensary in order to be eligible for a grower’s license.
Oregonians have enjoyed the right to carry an ounce of weed and grow up to four plants at home since 2015. It’s also legal to give edibles as a gift, as long as they’re ingested in private. Sales have exploded since legalization. In 2017, the state paid out $85 million in marijuana tax revenue to fund schools, public health initiatives, state police, and local government.
Vermont became the first state to legalize marijuana through the legislature, rather than a ballot initiative, when Republican Governor Phil Scott signed a bill into law on Jan. 22. Adults in the Green Mountain State will be able to carry up to an ounce of marijuana and grow no more than two plants for recreational use. The new law goes into effect in July. But the bill is limited in scope. It doesn’t establish a legal market for production and sale of the drug.
Dispensaries in Washington have raked in over $1 billion in non-medical marijuana sales since the drug was legalized for recreational use in 2012. The state allows people to carry up to an ounce of marijuana, but they must require the drug for medicinal purposes in order to be eligible for a grower’s license.
Residents in the nation’s capital voted overwhelmingly to legalize nonmedical marijuana in November 2014. The bill took effect in 2015, allowing people to possess two ounces or less of marijuana and “gift” up to an ounce, if neither money nor goods or services are exchanged.
Welcome back to Higher Law, our new weekly briefing about all things cannabis. I’m Cheryl Miller, reporting for Law.com from Sacramento, which is definitely not New Orleans. I know a lot of you are in the Big Easy this week attending The Cannabis Law Sessions at MJBizCon NEXT—while you’re not strolling Bourbon Street or feasting on beignets, jambalaya and red beans and rice. Yeah, I’m a little jealous.
One of the conference speakers tells us what’s on the mind of lawyers right now. Plus, the tricky issue of placing a value on marijuana companies. Scroll down to see who got the work in some of the new cases around the country.
Tips? Story ideas? What’s on your plate (and please don’t say gumbo)? Drop me a line at firstname.lastname@example.org or call 916.448.2935. Follow me on Twitter at @capitalaccounts.
Pot Law and Po’ Boys
New Orleans is the place to be this week for the MJBizCon NEXT conference and the National Cannabis Bar Association‘s cannabis law panels. This is one of the first major gatherings of industry experts since President Trump told Colorado Senator Cory Gardner that his administration wouldn’t go after marijuana-legal states.
To find out what folks are talking about, I checked in with the ubiquitous Steve Schain of the Hoban Law Group. Beyond any discussion about what’s for dinner, “the prevailing mood is cautious optimism,” Schain (at left) tells me. He adds: “Clearly people are placing great weight on the historic alliance between President Trump and Colorado’s Cory Gardner. But the skeptics say there’s nothing in writing and promising policy statements in the past have led to false optimism.”
There’s lots of talk about legal marijuana businesses’ enormous Section 280 E tax burdens but no real promise of an immediate solution, he says. Attendees are chatting, too, about bipartisan federal legislation aimed at improving marijuana businesses’ access to banks.
And there’s a lot of discussion about a Ninth Circuit ruling last week that rejected the hemp industry’s challenge to a U.S. Drug Enforcement Agency rule establishing a controlled substances code for marijuana extracts, including hemp oil. Hoban Law Group represented the Hemp Industry Association plaintiffs.
Although the ruling has been interpreted as an overall loss for hemp growers and manufacturers, Schain says the Ninth Circuit panel offered some positive news for the industry: The farm bill, which allows industrial hemp, trumps the Controlled Substances Act.
The language provides “rock solid” guidance for state and federal agencies “tortured by two warring definitions,” Schain says.
Anything else on Schain’s mind? “Well, Gene Simmons from KISS is going to speak at the conference today,” Schain says.
Mergers and acquisitions may be a growing sector of marijuana law work, but how do you derive an accurate price tag for a business that trades in a federally illegal product, attracts a lot of scrutiny from the IRS and has few historical benchmarks? Industry lawyers and analysts tried to answer that question this week on a program put together by Expert Webcast.
Here are some takeaways from the event:
>>> “There is really a tremendous exaggeration of the potential of the market in light of the fact that all of these legal policy and regulatory issues create inefficiencies that are almost unprecedented in any other industry,” said Emily Burns, an attorney at Offit Kurman in Baltimore. “So we haven’t achieved the economy of scale necessary for even disrupting the industry. We do not have any standardization.”
“People, I think are often unaware of how many known unknowns are significantly impacting what investors are actually hearing,” Burns said. “It’s a green gold rush now but you should have been in this industry five years ago and gotten an actual understanding first hand.”
>>> Vanita Spaulding, managing director of Cogent Valuation, said buyers have to look at the intangible assets of a marijuana business. An asset approach, she said, “is very valuable for the cannabis industry, especially when it’s so new and you’re looking at a make or buy decision.”
“Do they have a trade name that’s well known, either locally or perhaps nationally? Do they have management that’s doing a great job? Do they have customers that come and buy no matter what? Do they have a great customer list?”
>>> “It’s a global industry,” said Eric Foster, a corporate finance partner at Dentons in Toronto. “Right now I’m working with Dentons lawyers in the U.S., Colombia, Germany, Uruguay, Australia on transactions in the sector, a lot of them being M&A.”
“It’s a highly regulated industry but it’s not going anywhere,” Foster said. “The U.S. may be a little bit behind right now. I don’t think that’s going to last So I think a lot of the M&A activity we’re seeing here in Canada you’re going to see more of it here and you’re going to see more of it in the U.S. … The speed at which this industry and market has become legitimized has, I think, caught a lot of people by surprise. And it’s only going to get more established.”
Who Got the Work
Earlier this month we noted Weedmaps’ big lobbying and campaign spending in California. The federal lobbying database shows the online dispensary locator spent $65,000 on two D.C. lobbying firms in the first quarter. Nelson Mullins Riley & Scarborough, including lobbyist and former Pennsylvania Rep. Ron Klink, got $50,000 for work on banking restrictions, tax policy and other issues affecting the marijuana industry. Weedmaps also paid Liberty Government Affairs $15,000 for work on appropriations bills and “legislation promoting federalism in marijuana laws.”
Nevada state Sen. Richard “Tick” Segerblom has joined the board of directors of Freedom Leaf Inc. Segerblom introduced Nevada’s first medical marijuana bill, and he championed the 2016 ballot measure that authorized recreational sales in the state. Las Vegas-based Freedom Leaf operates marijuana media companies and hemp businesses.
Barton Morris, principal attorney at the Cannabis Law Group in Royal Oak, Michigan, is representing medical marijuana growers challenging a newly enacted city of Troy ordinance capping the number of licensed grows in the city’s boundaries at 36, according to the Daily Tribune News. Troy is represented by city attorney Lori Grigg Bluhm.
In the Weeds
Caesars Entertainment Corp. will stop testing some job candidates for marijuana use. “We felt we might be missing some good candidates because of the marijuana issue and we felt that pre-screening for marijuana was on the whole, counterproductive,” a company spokesman said. Driving jobs subject to federal regulations will still require pre-hire drug screens. [Las Vegas Review-Journal]
Marijuana Public Policy founder Rob Kampia is leading efforts to fund a super PAC that will target U.S. House Rules Committee chairman Pete Sessions, R-Texas, an ardent opponent of cannabis legalization. “Everyone knows who he is and that he’s our biggest problem on Capitol Hill,” Kampia told the Washington Examiner. A Sessions campaign spokesman said the congressman “will not be intimidated by liberal merchants of addiction.” [Washington Examiner]
California’s cannabis excise tax revenues are falling short of projections. The legislative analyst’s office says first quarter receipts came in at $34 million. The governor’s January budget proposal predicted revenues for the 2017-18 fiscal year would total $175 million. Gov. Jerry Brown will issue revisions to his initial budget on Friday. [California Legislative Analyst’s Office]
Meanwhie, in Colorado: “Denver has seen the tax collections from the nascent industry climb steadily, rising by 45 percent since 2015 to more than $44 million.” Orrick, Herrington & Sutcliffe partner Justin Cooper, co-chair of the firm’s public finance practice, predicts cities will issue debt backed by cannabis tax collections. [Bloomberg]
Is U.S. Attorney General Jeff Sessions the best thing that ever happened to the marijuana legalization movement? Let’s not go overboard. But Maria McFarland Sánchez-Moreno, executive policy of the Drug Policy Alliance, argues that Sessions’ rescission of the Cole memo in January has galvanized federal lawmakers trying to protect marijuana-legal states. [USA Today]
If you need more proof of how attitudes toward marijuana have changed, check out these photos of Assemblyman Reggie Jones-Sawyer, D-Los Angeles, sharing a vape pen with singer Melissa Etheridge on stage at a West Hollywood fundraiser for Jones-Sawyer’s campaign. The assemblyman chairs the Public Safety Committee. [Leafly]
What’s Next: Mark Your Calendars
—> May 17-18: Duane Morris hosts the NYC Cannabis Law Summit. Scheduled speakers include Shaleen Title, a member of the Massachusetts Cannabis Control Commission; Greenspoon Marder partner Heather Burke; and Duane Morris special counsel Patricia Heer.
—> May 17: California’s Cannabis Advisory Committee meets in Oakland. Members will consider subcommittees’ recommended changes to regulations governing the state’s recreational and medicinal marijuana licensing systems.
—> May 19-20: The CannaGrow Expo takes place in Palm Springs, California. Speakers include Dana Cisneros of the Cannabis Corporate Law Firm; Jon Jacobs of the Jacobs Law Firm; and Travis Bliss, counsel at Buchanan Ingersoll & Rooney.
—> May 21-22: The Institutional Capital and Cannabis Conference will be held in Los Angeles. Scheduled speakers include Dickinson Wright partner K. Lance Anderson; Puzzle Group Law Firm partner Aaron Herzberg; and Jamie Nawaday, partner at Kelley Drye & Warren.
Mr. George’s comprehensive cannabis career has taken him around-the-world where he has attended numerous conferences and seminars to advance his knowledge of biology, genetics, and genotypes. More specifically, the effects of atmosphere, light cycles and nutrients in Desert, High Altitude and Northern climates. Additionally, he is an advocate of non-chemical pest management, and incorporates countermeasures such as employing companion plants and beneficial insects to prevent pests specific to cannabis. For the past several years, Mr. George has provided the highest quality medicinal cannabis to the medical community of Phoenix, Arizona.
Mr. Hunter, brings extensive experience in both commercial scale cannabis cultivation and management of facility operations. He has served as Director of Cultivation overseeing all aspects of facility management including the development of SOP’s (the “Standard Operating Procedures”) which are instrumental in providing elevated standards for all aspects of a heavily-regulated commercial production.
Mr. Hunter trained and managed teams of employees in effective commercialized methods of task completion, including overseeing crop management by strategizing perpetual harvest schedules, while monitoring the progress of crops for optimal quality, health and yield.
A principal focus of Mr. Hunter’s career has been perfecting his “Pheno-hunting”, a selective cannabis breeding technique used to ensure that “cream of the crop” genetics are passed along to future generations by breeding clone only strains to purebred males “hunted” for their vigor and potency. Mr. Hunter used his expertise in this field to champion our first genetics which will be transferred to their permanent location once all inspection approvals are granted.
As a team, they share a dedication to an organic living soil methodology which creates a higher quality, pure cannabis while reducing the cost of production. They are committed to the development of a triple organic certified product safe for consumption.
“Ryan and Justin have continually demonstrated their competency and passion for cannabis cultivation over the last decade. Their combined experience in commercial cannabis cultivation, including the selection of commercially viable varietals will bring an immediate impact to our bottom line. We look forward to having both Ryan and Justin lead the EcoNevada and PhenoFarm Cultivation programs.” Kurt Keating, Director of Operations.
Marapharm is a publicly traded company investing in the medical and recreational cannabis space, since 2014. Marapharm has rapidly expanded to include having cultivation, production and dispensary locations in the key North American states of Washington, Nevada, and California, and are seeking expansion opportunities worldwide.
Web Program: marapharm.tv
Marapharm trades in Canada, ticker symbol MDM on the CSE, in the United States, ticker symbol MRPHF on the OTCQX, and in Europe, ticker symbol 2M0 on the FSE. Marapharm also trades on other recognized platforms in Europe including Stuttgart, Tradegate, L & S, Quotnx, Dusseldorf, Munich, and Berlin.
Neither the CSE, the FSE nor the OTCQX® has approved nor disapproved the contents of this press release. Neither the CSE, the FSE nor the OTCQX® accepts responsibility for the adequacy or accuracy of this release.
MARIJUANA INDUSTRY INVOLVEMENT:
Canadian listings (CSE) will remain in good standing as long as they provide the disclosure that is rightly required by regulators and complying with applicable licensing requirements and the regulatory framework enacted by the applicable state in which they operate.
Marapharm owns marijuana licenses in California and Nevada. Marijuana is legal in each state however marijuana remains illegal under US federal law and the approach to enforcement of US federal law against marijuana is subject to change. Shareholders and investors need to be aware that adverse enforcement actions could affect their investments and that Marapharm’s ability to access private and public capital could be affected and or could not be available to support continuing operations. Marapharm’s business is conducted in a manner consistent with state law and is in compliance with licensing requirements.
Copies of licenses are posted on Marapharm’s website. Marapharm has internal compliance procedures in place and has compliance focused attorneys engaged in jurisdictions to monitor changes in laws for compliance with US federal and state law on an ongoing basis. These law firms inform any necessary changes to our policies and procedures for compliance in Canada and the US.
FORWARD – LOOKING STATEMENTS:
Certain statements contained in this news release constitute forward looking statements. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, ‘may”, “will”, “project”, “should”, ‘believe”, and similar expressions are intended to identify forward- looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward- looking statements are based on reasonable assumption but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.