Any column that begins with “Where are they now?” conjures images of teen heartthrobs, one-hit wonders, and television stars who have faded into obscurity. This is not that. Instead, acting on the belief forewarned is forearmed, let’s take a trip down memory lane and visit businesses and brands, successes and failures, and the mistakes and missteps that caused some rather notable companies to retrench, restructure, or retire.
In 1995, Craig Newmark began sending friends an email to keep them up-to-date about local events in the San Francisco Bay area. Today what once was a humble listserve is known as Craigslist, which reportedly generates hundreds of millions of dollars in profits annually. Despite employing only forty people and not substantially updating its interface for decades, Craigslist is one of the most visited websites in the world. While some may say Craigslist doesn’t care about branding, the fact is the site’s “old-school” look and somewhat limited functionality is exactly why it continues to succeed.
Also in the mid-1990s, a University of Maryland football player named Kevin Plank became frustrated with the heavy, sweaty shirts his team wore. So, he created an athletic undershirt that stayed dry. Initially, he sold the shirts out of his car’s trunk during trips up and down the East Coast. Within two years, the business moved out of the trunk and into a building. Today, the company earns nearly $4 billion annually. The name of this success story? Under Armour.
About ten years ago, Kevin Systrom and Mike Krieger created a check-in app that incorporated photography from smartphones. The company was called Burbn, and for a while it languished. The partners worked at their “side hustle” in the evenings and on weekends. Two years later, they figured out the secret to success and sold the company to Facebook for a cool $1 billion. The company? Instagram.
Companies are like sharks: They must keep moving and adapting or risk dying.
When pals and tech geeks Larry Page and Sergey Brin couldn’t find what they needed online, they set out to build a better search engine. Their company, called BackRub, has grown just a bit in the years that followed. You may know it by its newer name: Google.
Elliot Handler and his wife, Ruth, met at a dance in 1929, fell in love, and soon were married. They had two children, Barbara and Kenneth. The couple started a company and created a doll, which they named after their daughter. Shortly thereafter, they realized “Barbie” needed a boyfriend, so “Ken” was given life. The couple went on to develop some of the biggest selling toys in the world, including Chatty Cathy, Creepy Crawlers, and Hot Wheels. Their company? Mattel.
Childhood friends Ben Cohen and Jerry Greenfield started their business with an investment of just $12,000. Their small store in Vermont sold homemade ice cream they learned how to make from a $5 correspondence course. Unfortunately, neither of the young entrepreneurs was good at business. When they were forced to close the failing shop, they posted a sign that read, “We’re closed because we’re trying to figure out what’s going on.” Eventually they hired a chief operating officer who must have figured out the conundrum, because in 2000 Unilever bought the company for $326 million. Today Ben & Jerry’s reigns as the world’s second-largest producer of premium ice cream, with annual sales topping $200 million.
Just in case you thought this column would mention only success stories, consider the path of friends Adam Bierman and Andrew Modlin, who wanted to create the “Apple of cannabis.” They launched a brand of products and dispensaries that attracted more than half a billion in investment. Unfortunately, the pair reportedly squandered that fat pile of cash on personal enrichment including lavish homes, cars, and private jets. Revenues couldn’t keep pace with spending, which led to store closures, layoffs, and lawsuits. Eventually, the company lost 95 percent of its value. Today, the friends no longer are part of the company after being forced out, but they left behind a cautionary tale. This is the story of MedMen.
Whether you look at the examples of Ben & Jerry’s or MedMen or any other successes or failures, it’s important to remember that in the cannabis industry, as well as in mainstream, best practices make a difference. Money matters, and eventually a company will have to turn a profit, whether operating in the high-flying world of cannabis or making ice cream or selling dolls named after your children.
Companies are like sharks: They must keep moving and adapting or risk dying. Change is inevitable—especially in the cannabis industry—and should be embraced. The alternative is a slow, painful death.
Kary Radestock brings more than 20 years of award-winning print and packaging expertise to some of the top brands in the world. She launched Hippo Premium Packaging in order to fill a need for professional, compliant packaging, brand development, and graphic design to the emerging cannabis industry.
Cannabis and the 2020 Election
Next month, five states will be voting on seven ballot measures to legalize cannabis. A variety of proposals, including constitutional amendments, statutory initiatives, and alternative measures, could establish new medical cannabis markets in two states and expand legalization to include adult use legalization in four states. Three of these proposals would enshrine cannabis possession and consumption within state constitutions.
This article will explore the proposals themselves as well as the short-term implications of legalization on existing license holders and the industry.
Arizona voters have another opportunity to legalize cannabis next month, after narrowly defeating adult use legislation four years ago. In recent years, the Copper State’s medical cannabis market has seen significant MSO expansion, and new mandatory testing requirements launch at the beginning of November.
There are roughly 150 medical cannabis licenses in the state currently — all of which would receive priority status in the application process for adult use licensing. Additionally, diversity applicants and applicants in areas currently lacking cannabis retail access would be fast-tracked applicants.
Prop. 207 does include local control and opt-out provisions, and a new 16% tax would direct revenue to a variety of funds, while retail operators would be able to launch delivery services as soon as 2023.
Mississippi could become the 34th state to legalize cannabis for medical use, but two competing measures are creating complications on the ballot. A citizen-driven campaign led to the placement of Initiative 65, while the legislature responded with Alternative Initiative 65A.
Initiative 65 establishes a medical cannabis program similar to the program structure of many other states; with clearly defined qualifying conditions, possession limits, taxes, registration fees, and a regulator — the state health department. The alternative includes no definitions and only allows smokable cannabis products for terminally ill patients, leaving a highly restrictive market requiring enabling legislation.
Previous bills have been proposed, but never brought to a vote — leaving some skeptical that anything at all may come of Initiative 65A.
Montana’s existing medical cannabis program relies on a system of caregivers who cultivate cannabis and make manufactured products, including edibles and concentrates. Additionally, there is a limited number of licensed dispensaries throughout the state. Legalization would be a major evolution for Montana, which has seen multiple ballot initiatives and legislative interventions in recent years.
Two measures have been placed: one constitutional amendment to set the age of 21 as the minimum buying age and a measure to establish a commercial adult use market. While no early sales provisions are included, Montana companies would be the only businesses able to start sales for the first year after legalization.
New Jersey voters may make history, legalizing the adult use of cannabis and triggering a race among Mid-Atlantic states to implement sales first. While all of New Jersey’s neighbors have existing medical cannabis programs, none have taken steps to expand further. In recent years, numerous regional state legislatures have attempted to legalize, and Public Question 1 may tip the scales for an entire region with over 50 million residents.
The text of the amendment is brief, but it establishes a definition for ‘cannabis’ while permitting possession, use, and industry operations for adults ages 21 and up. The existing Cannabis Regulatory Commission would be tasked with regulating the industry, but the state legislature must first come to an agreement and pass enabling legislation.
Currently, New Jersey’s medical market includes roughly fifteen licenses, including cultivation and manufacturing, as well as a limited number of dispensaries. The next phase for cannabis in NJ is uncharted territory for now: it is unclear if existing licenses will be given the first opportunity to serve the general public.
Given licensing delays and a slow rollout in Illinois, lawsuits and delays could be in New Jersey’s future — with some analysts suggesting a four-year timeline from amendment passage to full implementation. This may be good news for MSOs, including Columbia Care, Verano, and Acreage Holdings, among others.
South Dakota has long been unfriendly to cannabis in all forms and has some of the nation’s strictest marijuana possession penalties. While other non-medical states have at least given a nod to low-THC medical hemp programs, the Mount Rushmore state hadn’t established any kind of hemp or cannabis program at all until the legislature passed industrial hemp legalization this past spring.
Now, the state could make history as the first to legalize cannabis for medical and adult use purposes at the same time. Two proposals are on the ballot: an initiated measure to launch a medical cannabis program, and a constitutional amendment to fully legalize cannabis, with provisions including adult use, a medical program, and expanded hemp legalization.
Medical use is enshrined in both proposals, while the constitutional amendment would prevent the legislature from any type of statutory tampering to limit a retail market. The constitutional amendment would establish a commercial market for both adult use and medical purposes. Medical use would include home cultivation. As there is no cannabis market in the state at this time, no businesses would be able to take advantage of “early sales” provisions, as seen in other states.
Previously, medical cannabis programs and commercial licensing schemes predated adult use legalization, and the majority of these proposals came into existence by way of the ballot. In most of the earliest states to fully legalize, this was the case: Colorado, Washington, Alaska, Oregon, California, Massachusetts, and Nevada all had some form of voter-approved medical cannabis legislation first.
Implementation of adult-use legalization has, however, varied across the states. In these proposals, Arizona, Montana, and New Jersey have existing medical cannabis infrastructures, but the implementation of adult use will likely lead to program changes.
Some legalization measures have allowed for existing medical dispensaries to launch sales to adults during a period of late-stage rulemaking. These businesses have operated under modified compliance rules, with track-and-trace requirements and varying tax rates until legalization rules are completed.
After Oregon voters approved legalization in 2014, the state’s medical market rapidly expanded with early sales on the horizon. At one point, there were more medical dispensaries in the state than Starbucks or McDonald’s locations. That number later dropped as businesses converted their licenses over.
For some of the states with legalization on the ballot this year, the transition out of medical will pose challenges: product shortages, long customer lines, new tax rates, uncertainty over product offerings, and testing requirements on top of an already difficult pandemic business environment.
Overall, legalization measures promise to bring a significant impact to consumers and patients in Arizona, Mississippi, Montana, New Jersey, and South Dakota. It’s hard to quantify the short-term improvements to consumers and industry operators, as passage of these initiatives will set off a flurry of legislative and regulatory discussion over the holidays and into the spring. Existing licensees and hopeful applicants should keep an eye for new opportunities: public comment periods, application deadlines, and new sales opportunities on the horizon.
Jason Kikel is a Senior Data Analyst at Cannabiz Media, where he researches licenses across the cannabis marketplace and the policies behind them. He brings forth a variety of experience in urban planning, agriculture, and education, as well as enthusiasm for an expanding industry. Jason graduated magna cum laude from West Virginia University and recently completed his Master of Community + Regional Planning at The University of New Mexico. A longtime cannabis policy reform advocate, Jason first jumped into the cannabis economy as a graduate student while completing his master’s thesis, studying the legalization-land use-water policy nexus in Colorado. Jason recently delivered a presentation on this research, “Land Use, Water, and Policy Considerations in Emerging Cannabis Markets: Lessons from the Arid Mountain West” at the inaugural Institute for Cannabis Research conference at Colorado State University-Pueblo.
Cuomo advisor predicts New York will legalize pot in April
New York Governor Andrew Cuomo’s advisor on marijuana policy said this week the Empire State could legalize weed in April of next year with a bill that would serve as a model for other states looking to allow recreational pot in the United States.
Axel Bernabe, assistant counselor to Governor Cuomo, was a guest on the Under The Canopy series, recently launched by Canopy Growth, where he discussed cannabis legalization efforts in New York. According to Bernabe, a bill to legalize marijuana will be introduced through the state budget in January again, while he expects legalization to take effect by April.
As New Jersey appears ready to legalize marijuana this November, Bernabe said the Cuomo administration has been watching its neighbor “closely.”
“We’re watching New Jersey closely. We’ve always been confident that we’d get to this before New Jersey, so if they pass the referendum they still have to have an agreement between the governor and the Senate over there,” he said.
“If New Jersey can beat us to it, they’ll get a gold star but I still think we’re gonna set the model for this,” Bernabe added, referring to the bill’s social equity provisions, among other things.
During the interview, Bernabe also said that New York has been monitoring how legalization has been unfolding in Vermont, Maine, and Massachusetts, but has also consulted with states on the West Coast, where the legal pot industry is larger and more developed.
Regarding hemp, Cuomo’s advisor said the state will release its guidelines and regulations for CBD consumer products early next year as well.
“Those products are already out there, so there’s no sense in pretending they’re not,” Bernabe explained.
For this reason, the governor and his team have been working on guidelines, which will include maximum dose per serving labeling and warnings about potential THC content in various hemp-derived products. New York has copied a lot of Florida’s hemp regulations while crafting its own policies, Bernabe stated, before telling Canopy Growth’s David Culver that the administration is currently putting the finishing touches to the guidelines.
Although Governor Cuomo promised his state would legalize weed soon, marijuana legalization was left out of the New York state budget for 2020 due to the coronavirus pandemic, which hit the state particularly badly earlier this year.
Cuomo previously proposed working in conjunction with the neighboring states of New Jersey, Connecticut, and Pennsylvania on coordinating a recreational marijuana system for the region.
PURA Concludes Farmersville Meetings – Deal Imminent
Dallas, TX – October 20, 2020 – OTC PR WIRE — Puration, Inc. (OTC PINK: PURA) today announced that CEO Brian Shibley concluded a key meeting yesterday essential to finalizing the acquisition of 72-acre property in Farmersville, Texas central to the company’s recently announced Farmersville Brands strategy. “The acquisition is imminent. Look for an announcement very soon,” said Mr. Shibley.
PURA has scheduled the release of a comprehensive update this Friday, October 23, 2020, to provide the latest information on progress with the Farmersville Brand strategy. The Friday update this Friday will include the latest on the company’s planned dividend of PAO Group, Inc. (OTC PINK: PAOG) stock in conjunction with PURA’s sale of its cannabis cultivation business to PAOG.
For more information on Puration, visit http://www.purationinc.com
This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company’s current views with respect to future events that involve risks and uncertainties. Among others, these risks include the expectation that any of the companies mentioned herein will achieve significant sales, the failure to meet schedule or performance requirements of the companies’ contracts, the companies’ liquidity position, the companies’ ability to obtain new contracts, the emergence of competitors with greater financial resources and the impact of competitive pricing. In the light of these uncertainties, the forward-looking events referred to in this release might not occur. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.
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