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Environmental Awareness

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Cannabis companies across the nation are proving to make a very positive impact on their surrounding communities. Tax revenue is being given to schools and local programs, and crime rates are going down due to the decrease in black market activity. But one under-the-radar issue still remains in certain instances; some cannabis companies consume a lot of energy or produce a lot of runoff.

Fortunately, many cannabis companies are deciding to actively make a change in the way they do business, using sustainable practices and taking advantage of energy-saving initiatives to save money and make a positive impact on the environment. CULTURE B2B talked to a couple businesses who are utilizing energy initiatives to help ensure that they’re serving as a positive role model in the industry, being mindful of their businesses’ impacts on the environment.

 

The Green Solution

Colorado is one of the pioneer states for legalized cannabis, and it continues be a leader in sustainable practices, which other states are now emulating. The Green Solution, one of the biggest cannabis chains in the state, uses the most sustainable practices possible and takes advantage of local initiatives from Xcel Energy.

“We care deeply about the environment, and as such are working day in and day out to ensure we cut every possible waste out of the manufacturing process,” Kyle Speidell, CEO and co-founder of The Green Solution, told CULTURE B2B. “In fact, we have led the charge on everything from utilizing more organic and natural methods for eradicating bugs to only using a growing medium that can be cleaned and reused. At The Green Solution, we are looking each day to cut waste and find new ways to protect the environment. We also work with our government relations team to find ways to partner with government entities in their work toward more efficient business solutions.”

The company takes advantage of rebates that Xcel offers due to efficiencies they installed in The Green Solution’s facilities. Because the company has been transparent and vocal about its efforts, The Green Solution has been able to reap the benefits of local energy initiatives. Dedicated to continuing his business’ focus on energy-efficient practices, Speidell plans to take even more advantage and further improve his company’s carbon footprint during the coming year.

“TGS works with every regulatory agency to do our best around energy consumption, and we have many new focuses in this area that will be realized in 2019,” Speidell added. “From energy saving lights, to proprietary, hydroponic growing systems, reusable growing mediums and a dedication to collaboration with government, we are working hard to find solutions that can be replicated.”

“At The Green Solution, we are looking each day to cut waste and find new ways to protect the environment.”

Eco Firma Farms

Another leader in the cannabis industry, Oregon offers initiatives to businesses with healthy environmental impacts, and local grower Eco Firma Farms takes advantage. The company works with Energy Trust of Oregon to use renewable wind energy to help power its farm.

“They set my account up, and they have a certain amount of electricity they will allocate, and it has to be a certain amount of metering” explained Jesse Peters, CEO. “They went in and audited all of our usage, found that we qualified and set up our accounts, and immediately started us towards being carbon neutral. We have now been authorized a grant to convert to solar as well, so the next phase would be to put a solar grade on the roof of our building.”

Energy Trust of Oregon is well aware that cannabis businesses are taking advantage of its program, and it is happy to assist interested companies.

“In 2017, Energy Trust supported the efficiency of Oregon’s cannabis production industry through 44 efficient lighting upgrades—up from 16 in 2016,” explained Becky Engel, senior communications manager for Energy Trust of Oregon. “Lighting upgrades at cannabis facilities accounted for approximately 21 percent of our overall lighting savings. Energy Trust programs also supported our first three non-lighting projects for cannabis growers, including HVAC, dehumidification and insulation.”

In addition to complying with energy regulations, Eco Firma Farms is aiming to be a zero-impact company, but says the effort is harder than many realize.

“The steps we are taking with the electricity are obviously our largest steps, and the fact that it is an indoor farm,” Peters explained. “We also have our recycling program, and the next step for us is getting into a position where we can eliminate all waste from the farm. When it comes to becoming carbon neutral, the first 90 percent is easy, and the last 10 is hard. You have to consider how you get your nutrients, how you store things, if your employees bring their lunches to work and what happens to that waste. It’s easy to go pretty far down the rabbit hole with this, so our biggest step is figuring all of that out.”

 

Energy Initiatives Across the U.S.

In light of the success in places like Colorado and Oregon, other states are following suit. California has its own energy initiative for cannabis growers, where cultivators are offered affordable agricultural rates, which are aimed toward eligible growers who have a sustainable environmental impact.

“At this time, there is not a specific rate plan for residential customers who wish to grow cannabis for personal use,” Pacific Gas & Electric’s rate sheet explains. “But we are committed to providing choice for our customers, and you can still choose the rate plan that works best for you based on your changing budget and energy needs. First, make sure you have an online account. Next, log into your online account for a personalized rate comparison.”

Washington State offers a variety of energy saving programs overall, like Seattle City Light, which are intended to help with energy consumption. However, despite these efforts, the cannabis industry was reported to be using 1.63 percent of all the state’s electricity as recently as 2017, according to OPB. Hopefully, more companies are now taking advantage of energy-saving programs.

Nevada also offers energy programs like SureBet, a program that looks at lighting and other power costs, and would be a good fit for the cannabis industry. Alaska does not currently have any energy efficiency programs in place, but it does offer a disruptor program that gives clients a discount if they don’t mind their power occasionally going out. This would not be the best program for growers and other cannabis industry insiders who rely on sustained power.

As the industry continues to grow, it appears that even more companies will begin taking advantage of energy saving programs, and legal cannabis will get even greener.

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High Times Holding Corp. Announces Acquisition of Humboldt Heritage Inc

The acquisition signals continued growth for High Times.

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Nearly 500 Growers Receive Warning Letters from Humboldt County

The parent company of High Times announced a major expansion into the cannabis growing and processing industry on Friday, saying it has begun the process to acquire California-based cannabis holding company Humboldt Heritage Inc. and its subsidiaries Humboldt Sun Growers Guild and Grateful Eight LLC.

Hightimes Holding Corp. said it had inked a letter of intent to acquire Humboldt, which will give it “cannabis growing, processing and product manufacturing capabilities direct from the most coveted cannabis community in the world, Humboldt County.”

“High Times’ mission is to connect consumers to cannabis – not only the best access and experience, but by making the best products available to our consumers across the country, and eventually the world,” Adam Levin, Hightimes Holding Corp.’s Executive Chairman said in a statement. “This addition adds 200+ of the best cannabis-producing farms in the world, and the rest of the capabilities we’ll need to grow into the future as a larger High Times family!”

High Times They Are a-Changin’

It has been a busy year so far for this publication’s owner. In January, Hightimes Holding Corp. named Stormy Simon as its new CEO. Simon, who joined the company after previously serving as president of the online retailer Overstock.com, succeeded Kraig Fox. 

“The cost of customer acquisition has plagued the cannabis industry thus far, but utilizing the High Times brand’s global audience, we should be able to monetize our traffic by connecting consumers to cannabis products at an unprecedented scale,” Simon said at the time of her hire.

Later that same month, the company announced it will be opening two flagship retail stores in Las Vegas and Los Angeles. The first two stores will set up shop in a pair of the biggest cannabis markets in the United States. California legalized recreational marijuana use in 2016, while Nevada did the same a year later. Currently, there are 11 states in the country that have lifted the prohibition on recreational pot use.

Barry Nachshon, CEO of Humboldt Heritage Inc, said in a statement on Friday that the acquisition “allows our cultivators’ and their artisan brands unprecedented exposure to consumers as High Times reaches millions of people all over the world.”

“The farmers in Humboldt Country have been leading parallel missions to High Times over the past 45 years,” said Nachshon. “Knowing that we will be part of the High Times family, as well as a key manufacturing and supply chain partner as the company enters the retail and delivery markets in California is very exciting for our team.”

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Inspired Images

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Photo Credit: © Josh Fogel StockPot Images ®

There was a time—it may seem like ancient history given the tidal wave of cannabis legalization sweeping the nation—that to be photographed smoking or growing the plant was to risk being arrested.

How much has that changed? Just ask Ophelia Chong, founder of StockPot Images, the California-based agency that has become a clearinghouse of cannabis-related photos, some 20,000 of them, the first and largest such collection, available for use by magazines, websites and anyone else who needs a photo, but doesn’t have the time or resources to hire a photographer.

For a 58-year-old who avoided cannabis most of her life, it’s the culmination of a long career in the visual arts and major opening-of-eyes regarding the plant. And she’s on a very personal mission to show that the stereotypes that have long been associated with cannabis are very wrong.

“My whole passion is speaking for people who are on the outliers [of society],” said Chong. “That was always my specialty . . . How do you talk about this community and bring it into the mainstream in a powerful yet educational way?”

 

Family Connection

Chong (no relation to cannabis icon Tommy Chong) grew up in Canada, a child of first-generation Chinese immigrants. After graduating from the ArtCenter College of Design in 1989, she began photographing musicians for magazines and record labels.

“I believe everyone has at least six careers in your life,” she said. Her first career involved photographing and spending time with ’90s radio mainstays such as the Goo Goo Dolls and Alanis Morissette. Alcohol was very prevalent in the scene; cannabis, not so much.

She produced films. She taught art. She took photos. She marketed photography. But it took a personal experience to bring her into the cannabis industry.

Around 2015, Chong’s sister came to visit her in California, in search of help with the incurable skin disease scleroderma, which causes the skin to harden and tighten. In its most severe form, it can lead to organ failure and death.

Her sister wanted to try cannabis as an alternative to pharmaceuticals to treat the pain. “I said, ‘Oh my God, my sister is a stoner,'” said Chong. “I started to cry. Here I was stereotyping my sister into this thing, and I realized how wrong I was.”

StockPot Images ®

“My whole passion is speaking for people who are on the outliers [of society].”

Slashing Stereotypes

Her eyes thus opened to cannabis as a medicine and not a drug, and Chong began looking around at the types of stock images available related to the plant. Most were of addicts, convicts or drug dealers.

“I realized, ‘This is how the mainstream sees cannabis.’ I was first outraged by my own ignorance, and I was further outraged by how everyone else thought too. I wasn’t the only one.”

So, StockPot Images was born. She wanted a way to show cannabis as medicine, consumers as patients and not as criminals, and people like Dennis Peron, who founded California’s

StockPot Images ®

first public medical cannabis dispensary and fought for much of his life for legalization before dying earlier this year.

It took a lot of cold calls and a slow gaining of trust to get people to be photographed growing or smoking a Schedule I substance.

Said Chong, “I basically started from zero. I didn’t have a foothold in the community. I didn’t know anyone in the community . . . I didn’t even know how to roll a joint.”

Trust she built, as well as a large network of photographers, since most of the 20,000 images in the StockPot Images collection were taken by others, who receive a royalty when their photos are used. She said her royalties are much more generous than what other major stock photo companies offer.

The more she immersed herself in the industry, the more she wanted to convince others of its benignness.

Asian Americans, many raised by conservative first- or second-generation immigrants, have not always played a huge role in the nascent industry. Chong hoped to change that by co-founding the Asian Americans for Cannabis Education, to help change attitudes and invite more of that demographic into the industry.

The goal, she said, “was to reach out to my own people and tell them what cannabis is about. By highlighting Asian Americans in this industry, I can show that yes, we have families. We pay our mortgages. We have children, and we’re normal. And we’re in cannabis.”

After all, if she can change her own opinion, why can’t others? She even consumes cannabis now, strictly at night to help her sleep.

“That’s the great thing about the market. If I can market it to myself and bring myself around, then I can do it for my own age group as well.”

 

www.stockpotimages.com

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Foreign Financing

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As states continue to legalize cannabis, there has been increasing interest and questions in and about foreign investment into the U.S.’s booming cannabis industry. As would be expected, much of this interest is from Israel, Canada, Spain, Turkey, South America, the Netherlands, the United Kingdom and Germany. These investors are interested in certain states in particular, like California, because of the size of their markets, but also because certain states have no residency or citizenship requirement to be able invest in cannabis businesses.

 

In general, foreign direct investment (FDI) refers to any type of cross-border transaction where a company or investor from Country A invests money in a company located in Country B. It generally doesn’t refer to dumping money broadly into stocks and bonds—it is specifically about a concentrated, single-enterprise investment.

 

FDI exists in several forms. Foreign investors can start a new company and can finance and build it from the ground up. They can participate in a joint venture with U.S. partners. They can wholly or partially acquire a U.S. business. They can also take a lighter touch, where they provide primarily branding and process support while having U.S. parties take on the bulk of the financial risk—the basic franchise model.

 

In the cannabis industry, there are already large FDI projects in cannabis ancillary services (i.e., the companies that provide the goods and services that support the actual cannabis plant-touching businesses). Foreign investors have opened up domestic companies for the manufacture and import of cultivation equipment like grow lights and hydroponic equipment, processing equipment like automated trimmers and extraction machines, and associated inputs including soil, fertilizer, vaporizer batteries and cartridges. There have also been large amounts of foreign money invested into cannabis real estate projects.

“These investors are interested in certain states in particular, like California, because of the size of the market, but also because certain states have no residency or citizenship requirement to be able invest in cannabis businesses.”

 

In addition to buying the real estate, the foreign investors put money into greenhouses, grow lights, storage facilities and more to offer turnkey cultivation and processing facilities for lease to local businesses. These companies are largely unregulated at the state level, and their foreign investment issues are similar to non-cannabis businesses, dealing with things like registering as U.S. taxpayers for partnership taxed businesses, complying with the Foreign Investment in Real Property Tax Act and dealing with immigration issues.

 

For firms directly involved in the buying and selling of cannabis, state-specific restrictions become more of a concern. States like Washington do not allow anyone who is not a state resident (much less not a U.S. resident) from having any profit interest in a cannabis business. Contrast that with California and Oregon, which are extremely liberal with their cannabis regulations, and there is no residency or even citizenship requirement to participate. Still, state regulations and state laws are typically written with U.S. residents in mind.

 

In turn, things like criminal and financial background checks on foreigners remain in a bit of a grey area. Ultimately though, neither state officials nor the Federal Bureau of Investigation are likely to have any real information on foreign nationals who haven’t had prior contact with the United States. How the U.S. federal government will react to foreign ownership in terms of the Department of Justice (rather than via immigration through the Department of Homeland Security) still remains to be seen, though nothing’s been publicly reported that’s a red flag against foreign cannabis business ownership in states that don’t have resident or citizenship requirements.

 

As far as federal laws go, the Controlled Substances Act doesn’t differentiate between activities that are international, interstate or fully intrastate in nature. Possessing, manufacturing and distributing cannabis are illegal federally regardless of where the company’s owners live. Still, there are a couple of criminal statutes that add fuel to the fire when interstate and international commerce are involved. 18 U.S.C. § 1952, for example, criminalizes traveling or using the mail in interstate or foreign commerce with intent to distribute the proceeds of cannabis sales.

 

More questions arise when considering foreign ownership in the context of the Department of Justice cannabis enforcement memoranda that cannabis-legal states are working under. The main takeaway from the Aug. 2013 Cole Memorandum (which has been rescinded by U.S. Attorney General Jeff Sessions) was that if the states want to keep federal law enforcement away, they need to make sure their regulations prevent state licensees from violating the various federal enforcement priorities. One of those priorities was that state regulations need to prevent “revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels.” If the state and federal criminal background check databases don’t have extensive coverage on foreign crimes, how can a state, including California, have faith that the foreign investors don’t fall into one of those categories?

 

For now, with no broad pronouncements apparent, it appears that the federal government is taking a wait-and-see approach to foreign ownership of state cannabis businesses. That means it is up to state cannabis business participants and the states themselves to ensure that foreign owners do not violate federal enforcement priorities.

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