Cultivation
CA marijuana growers ‘struggling across the board’: Q&A with industry insider Kristin Nevedal
For the past year, Kristin Nevedal, a former marijuana grower and consultant in California, has worked as manager of the Mendocino County Cannabis Program, allowing her to hear firsthand the frustrations cannabis business owners are experiencing.
“They’re struggling across the board,” Nevedal said. “They’re losing their shirt.
“There’s a lot of stress and despair out there.”
As part of the transition into program manager, Nevedal resigned her positions on the boards of the California Cannabis Industry Association and the International Cannabis Farmers Association.
Now she’s on the side of the regulators, trying to help those cannabis companies get annual licenses for a market beset with overregulation, too much production and onerous taxes.
“Applicants and our permit holders, they’re like, ‘I’m broker than I’ve ever been because of the economic situation in the market,’” said Nevedal, who is a member of the MJBizDaily Advisory Board.
“And we’re asking for a lot of materials to get them prepared for annual licenses. So, you know, I’m nobody’s favorite person.”
MJBizDaily spoke with Nevedal about the state of the market and how cannabis companies can work with regulators.
It sounds as if you’re in the hot seat.
On a regular basis. Staff is very committed here to getting people over the hill and their annual licenses.
If you can get us the materials and you can concede to our reviews, our goal is to get it done. So you can meet these deadlines and get your annual license.
But obviously, none of this is easy, especially for the applicants.
What can business owners do to help themselves through the process?
It’s really hard, because as an applicant or a consultant working on behalf of an applicant, it takes a long time for materials to be reviewed.
One of the things that I wish I had done better as a consultant is really prepare materials ahead of time, knowing what needs to be prepared and getting them together.
But the way these permits work, please stop changing the plan.
One of the things that really bogs us down as an agency – and I know as a consultant really slowed me down – was the ever-changing plan.
Growers who say we’re going to grow indoors, a little bit outdoor or mixed.
No, now we’re all mixed. No, now outdoor again.
Well, maybe we want to be 2,500 square feet now. Maybe 7,000 square feet.
Every time those changes happen, whoever is prepping those materials for the applicant is changing their entire application packet.
Then whoever’s reviewing those materials for the agency is back at the beginning of that review, and sometimes those changes trigger a rereview.
We might have already conducted a sensitive species-habitat review at 5,000 square feet of outdoor and someone is like, “Oh, I want to go up to 10,000 square feet and I’m changing everything.”
Not only are we then reviewing a whole new application, we’re also reprocessing it, which is at least a 30-day process.
If we’re bumping up against a timeline, and you want to move your material through, you got to make a plan and stick with it.
This is how you move your materials forward in a timely manner.
Every change, every modification is stepping backward.
Anytime you change your plan partway through that process, you’re not just taking a couple of steps back, you’re pretty much going back to the beginning.
The lower the number of corrections or deficiencies that are identified, the quicker that application is going to move forward.
What problems in how cannabis is regulated in California need to be fixed?
There’s a ton of them. Taxes are a huge issue.
Eliminating the cultivation tax and moving the excise tax to point of sale would be incredibly helpful.
We just have to be very mindful that the goal here is expanding, whether that means more shops, physically, or it means how to reduce the price to the consumer in the legal marketplace.
How do you drive consumers to the shops? You lower the prices to make the legal market competitive with the illicit market.
I’m a huge proponent for significant tax reform that’s meaningful in that it hopefully lowers the price to the consumer.
The second problem is restructuring the license prices. And I think this is most important for cultivators.
What I mean by that is the price of a license here is based on assuming that each cultivator will cultivate maximum square footage allowed under their license, that they will achieve the maximum number of harvests considered by the state that that license can pull off.
This really is only meaningful if you are in the Central Valley with copious amounts of agricultural land and you can develop your facility to meet those maximum licensing thresholds.
When you are a seasonal cultivator, outdoors or mixed-light, you’re relying on the weather to get to three harvests a year.
There’s not anyone in Trinity County that’s going to get three harvests out in a year.
Most existing cultivators in well-known legacy regions of the state will never get to expand beyond what they declared when they started their process.
A lot of them are in ecologically sensitive regions and in terrain that doesn’t necessarily allow for expansion.
These are the things that really give me a lot of heartburn about like, how do we help folks manage that? It’s really hard.
This interview has been edited for length and clarity.
Source: https://mjbizdaily.com/california-marijuana-growers-struggling-regulator-kristin-nevedal-says/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
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