Continuity, Discontinuity, and Contingency between Legal and Medical

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July 2014 map by Steve Hyde, of then-pending Legal retailers and advertised Seattle Medical access points

by Dominic Corva, Social Science Research Director

Legal Cannabis Phase I, for our interview subjects, overlapped with another State legal regime, Initiative 75, which was codified as RCW 69.51.A in 1998. Washington State medical cannabis laws were first passed by citizen initiative in 1998 and amended legislatively multiple times until 2011. The 2011 amendment, SB 5073, was a legislative bill requiring the State to regulate and tax commercial medical cannabis. It was the culmination of over a decade of then-Senator Jeanne Kohl-Welles collaboration with Washington State medical cannabis patients and stakeholders. Those efforts continued for four years, until SB 5052 swallowed them up by folding medical cannabis regulation into the I 502 framework in 2015. First, let’s clarify this timeline, and then let’s discuss how this is relevant to our study of Legal Cannabis Phase I.

The timeline goes something like this.

  1. Medical Phase I: 1998- April, 2011. Key legal framework: affirmative defense for possession; evolving criteria for authorizations; and evolving plant counts.
  1. Medical Phase II: April 29, 2011 — July 1, 2016. Key legal framework change: commercialization tolerated in policy, especially in Seattle and King County, via a noncommercial clause, “collective gardens.”
  1. Legal Phase I: I 502 (December 2012/13 — April 28, 2015/July 1, 2016). Key legal framework: an explicitly non-medical system regulated by the WSLCB.
  1. Legal Phase II: July 1, 2016- .  Key legal framework: a single integrated medical and non-medical system regulated by the WSLCB, plus other reforms to the 502 law. 

      5. Overlap: April 28, 2015-July 1, 2016. Medical Phase II and Legal Phase I co-exist.

This timeline could easily be broken up further. For instance, the 2008 liberalization of authorization authority had a significant impact on the availability of authorized consumers for access points. And the 2011 legislative vehicle was the first of Senator Kohl-Welles’ reform efforts that sought to regulate patient access, rather than improve patient access. Between 2008 and 2011, something or some things happened to centralize legal reform efforts away from “more cannabis and more patients” to “discipline unruly State cannabis markets.” This is the subject of another book or chapter, however.

Instead, we want to understand the dynamics of Medical policy and markets as continuous and parallel to the dynamics of Legal policy and markets. And to do that, we have to unpack the evolution of both processes in relation to and separate from each other. We want to use Medical Phase I to break up and analyze Legal Phase I as the upstart — or start-up — framework with messy and unanticipated dynamics, not a homogenous legal time in which one thing logically followed another until it was time for Legal Phase II in Washington State.

In fact, the reason they evolved separately had less to do with the passage of I 502 than the way the WSLCB chose to implement it. And the way they chose to implement it was to create a completely different system rather than to use State Medical markets as a foundation. This is probably the defining characteristic of the “Washington model,” since no other state has chosen to do it that way.

The WSLCB took about 10 months to go from figuring out what cannabis was at the most basic level to implementing a “starting from scratch” model. For the first six months or so, that process was dominated by public and private meetings across the state so the Board could learn from existing cannabis market stakeholders a few things about the commodity they were charged with regulating. Starting in about April 2013, that process overlapped with a more academic exercise, in which BOTEC was contracted to estimate the size of the cannabis market, its potential environmental impacts, and so forth.

By the fall of 2013, the WSLCB had decided on a course of action that may or may not have been understood by the bureaucracy itself as a model for starting from scratch. There would be a one month window for applications, some time to process producer and processor applications, and then a lottery for retail applications, then some time to process those, and then by June 2014 Legal Phase I would open for business. This is a well-known timeline, but we emphasize two things about it that are poorly understood.

First, the applicant pool was much larger and different from what the WSLCB expected. Instead of a few hundred experienced applicants, they received a few thousand applications, many of whom were “gaming the system” by forging real estate claims and creating rings of applicants from friends, family, or straight up business associates to maximize their odds in the retail lottery or gain control of more canopy than they could otherwise.

And second, applicants to the 502 system were applying to a system that was legally forbidden from making any medical or therapeutic claims about cannabis. Although some of our interview subjects anticipated that this would change, it was a great disincentive to existing Medical Cannabis stakeholders against joining the I 502 system. This applies especially to retail access points, whose products and customer base revolved centrally around making those claims. But it also applies to producers and processors, since medical markets themselves continued to evolve away from simply growing high THC sinsemilla flower, towards CBD-rich cultivars, extracts, and edibles of much greater potency and diversity than would appeal to “recreational” consumers in the new system.

The takeaway for this post is that while the WSLCB may or may not have intended to “start from scratch” with I 502 stakeholders that were overwhelmingly new to cannabis, that’s how it worked out. This is most clear for the retail side of things, in which the lottery system could have by chance favored existing Medical Cannabis access points, but the odds were pretty slim given the amount of applicants and the way they gamed the system.

This is how it shook out for our interviewees. One of them “won” a lottery position outright, but was derailed repeatedly over real estate and business partnership issues. One of them acquired a Shoreline lottery position very early, and once a few of the winning lottery positions failed to take advantage, had their Seattle number come up. They have a Sodo location now. Two others drew extremely low lottery numbers whose numbers never came up. And one did not apply at all, figuring that the two systems would remain separate given that the 502 system was not allowed to be medical in any way. We will address who these are, and how this process shook out, in the book.

A Brief Review of CASP and introduction to CASP 4.0

by Dr. Dominic Corva, Social Science Research Director

This post reviews the evolution of our nonprofit think tank since we earned our own 501(c)(3) Federal designation last July, after being fiscally sponsored by Americans for Safe Access Foundation (ASAF) between Fall 2013 and July 2015.

Since founding the organization in May 2013, we have gone through three major organizational structures, all part of bootstrapping an idea about a nonprofit service into an actual, functioning think tank with a focused identity. Since January 2016, we have been busy nailing down that sustainable identity, which you can read about in our new About page. The web site itself is a bit behind, but we will gradually catch up as bandwidth permits. The constant process throughout this time was Dr. Corva’s ethnography of cannabis agriculture especially as it relates to legalization in Washington state, where the Center is centered; and Dr. Sexton’s ongoing academic research and presentation to many national and global audiences especially the International Cannabinoid Research Society.

CASP 1.0 was the rough draft, the seed from which our possibilities could be assessed for further selection. Primarily, it was comprised of Dr. Michelle Sexton, myself, and Dr. Sunil Aggarwal as founding Board members, meeting a few times a month on Google Hangout and exchanging information about the field as we saw it opening up amongst us. Dr. Sexton had a particular vantage point as a state subcontractor on cannabis rule development before and during this period; Dr. Aggarwal was finishing his NYU residency and had a more East Coast and global perspective on developments. And Dr. Corva’s perspective was informed especially by his then three-year ethnographic project on policing cannabis agriculture in Humboldt County, California. For this period, our main focus was on learning the new landscape, especially in Washington State.

CASP 2.0 overlapped with 1.0 to a degree, as it emerged from our fiscal sponsorship agreement with ASAF in Fall 2013. During this period, a melange of volunteer energy pulled CASP in many different directions, depending on what the volunteers wanted to do. This was a period in which, absent resources, we discovered and engaged community development interests to sharpen our understanding of the embryonic field. This period concluded in late spring 2014, when Dr. Aggarwal accepted his NIH fellowship and officially took leave of the organization with our best wishes. At that time we took stock of our network and composed a Board to help develop the organization. Dr. Sexton remained on the Board, but for this period served a similar role to other Board members, as a real economy portal into the State’s accredited lab industry. The other Board members for this time period were Naz Victoria, I 502 producer/processor and drug war POW; Don E. Wirtschafter, lawyer, I 502 prospective applicant, museum founder, general cannabis history participant OG; Aaron Varney, Dockside Co-op (medical and I 502 retail); Joy Beckerman, Hemp Goddess, Woman of Weed, and general cannabis history participant OG; and Rachel Kurtz, I 502 business lawyer and Washington State cannabis organizer and drug policy activist OG. Locally, during this time period Dr. Corva was especially engaged in the Health Before Happy Hour legislative campaign (spring 2014); from which he developed a steady working relationship with the Coalition for Cannabis Standards and Ethics (CCSE, a nonprofit industry self-regulation group); the Washington Cannabis Commission Project (Oct 2014-present); and continues to serve a think tank function with the Cannabis Alliance, a recent integration of CCSE with three other industry standards group. There were lots of talks delivered and meetings held along the way.

In California, Dr. Corva was invited to serve as a cannabis agriculture and policy expert and observer for California Cannabis Voice Humboldt’s explosive and often controversial ordinance development campaign, which was ultimately successful as a County Supervisor-finished process. This meant not just regular visits but formal accompaniment for two CA State official tours of cannabis farms: the first Lt. Governor Gavin Newsom in the spring of 2015, and not long after the CA Board of Equalization (or half of it — Fiona Ma and George Runner).

California Board of Equalization crew, featuring Fiona Ma, at the end of the Light Dep tunnel on the Tour.
California Board of Equalization crew, featuring Fiona Ma, at the end of a Light Dep tunnel on the Tour.
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Ma and Runner visit Wonderland Nursery

At the same time, I served on the informal board of the Humboldt and Mendocino Marijuana Advocacy Project (HUMMAP), a coalition of heritage farmers drawn mostly from the ranks of the back-to-the-land movement that pioneered the domestication of sinsemilla cannabis agriculture — and were the first subjects of its policing — in the United States.

CBD-rich breeding pioneer Lawrence Ringo, may he rest in peace, was a HUMMAP member.
CBD-rich breeding pioneer Lawrence Ringo, may he rest in peace, was a HUMMAP member.
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Christopher Larson, Lawrence Ringo’s partner in Lost Coast Botanicals, was also a HUMMAP member.

These old timers were some of the first people I met and interviewed in Humboldt County; and they also served as CCVH’s main foil during the ordinance push. Their general opposition to the ordinance process was grounded in the feeling that it was insufficiently attentive to the needs of truly small Humboldt back-to-the-land heritage farmers. I saw this as an opportunity to develop and bridge community dialogue, but left he Board of HUMMAP when the decision to litigate the ordinance was made, as I could not be party to formal legal proceedings that pit some of my friends against others. I did try to mediate by providing clear information to both sides up to that time.

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Kevin Jodrey and Reverend Jeff Cannabis talk terpenes and the market at the Terpestival.
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Ganjapreneur content producer and Vashon Island community organizer Shango Los in the audience at the 2015 Original Terpestival.

CASP 3.0 began in July, 2013. This was the month we put on our first popular education fundraiser, the Original Terpestival, which changed our outlook on what was possible both for the focused mission of our think tank and for our annual budget. The event featured Dr. Ethan Russo, the world’s foremost cannabinoid and terpene scholar as well as Vashon Island resident, as its keynote lecturer. The science of terpenes is a significant resource of industry development, both medical and recreational, and the terpene-focused Cup was the first of its kind. The overwhelming show of support from industry for learning real science was incredible, and we raised over $7,000 due to sponsorships and the donation of testing by the Wercshop.

This pulled us out of a serious budgetary hole, almost; and proved the concept of popular education could be practiced through events that combined public and private interest in an uncontroversial fashion. Board members Joy Beckerman, Aaron Varney, and Michelle Sexton were especially key to the event’s success, with special credit to Joy. By then Rachel had moved to Oregon; Don had concluded his I 502 efforts; and Naz was spending most of his time concluding his business interests in his home state of Pennsylvania until the I 502 market matured enough to be worth getting into as a processor.

During all iterations, Dr. Corva continued his work in California and Washington, without much concern for documenting and promoting what he was doing. Until we have resources to do this, Google will have to suffice. These included a paid trip to Berlin for a cannabis legalization conference keynoted by the mayor of the city; Seattle Town Hall appearances; Seattle Hempfest panel moderation, participation, and organization, and many others. I was particularly active as a public intellectual and scholar around issues pertaining to the political economy of cannabis agriculture and policing. Dr. Sexton was also extremely active as a public intellectual and scholar, especially around the subject and practice of cannabis as herbal medicine.

CASP 3.0 provided two major developments. First, Dr. Sexton’s permanent relocation to San Diego and full time commitment to full-time research (rather than running an industry lab) opened up considerable possibilities and focus for organizational restructure. This move has been especially facilitated by her work consulting for other States as they develop new medical and legal regulations.

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Dr. Sexton in Humboldt with Heritage Women Growers after the 2015 Emerald Cup
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Dr. Sexton with her fellow contributors to the American Herbal Pharmacopeia, taken at the 2015 ICRS conference in Italy.
Dr. Sexton presenting at the 2015 Emerald Cup in Santa Rosa, CA.
Dr. Sexton presenting at the 2015 Emerald Cup in Santa Rosa, CA.

Second, Dr. Corva was enlisted at the last minute to teach two courses at the University of Washington in Fall 2015, which actually substitute-paid his salary for the year. This completed our return from budget impossibility, and fulfilled CASP’s mission to provide public sector education. It was a one-off thing, great for the organization financially but difficult to reconcile with continued organizational development. For Winter 2016, Dr. Corva was engaged even before the Fall appointment to teach “Cannabis, Law and Social Change” for the University of Washington’s Evening Degree Program. This was much more in-line with CASP organizational development, and was a sequel to a similar course developed in graduate school with Dr. Aggarwal in 2008. That 2008 class received an award from the College of Social Sciences, and we were delighted to get a second crack in an even more relevant and rich state context. Unfortunately, the University has decided to close down the Evening Degree Program in favor of online classes, and so it is unlikely to happen again unless championed as a regular day class by a tenured faculty member in a Social Science Department. And that is also quite unlikely, for many reasons. The availability of salary from that class for the first quarter of the year opened things up, however, to the engagement of two interns for a four month project. We are halfway through a book about Phase I of Washington legalization (I 502-5052).

CASP 4.0 has a razor-sharp, minimal-financial-overhead focus. Our goal is to finally be able to produce journal articles, chapters, and books based upon our experience in a field that, in practice, stretches from Washington to San Diego, California, where Dr. Sexton is setting up shop as CASP South. For this period, Dr. Sexton and Dr. Corva will serve as co-Research Directors (he’s Social Science, she’s Medicine) and share Executive Director responsibilities as they are needed. This organization will not go out of our way seeking large donors, because we don’t need them and don’t need Big Money Agendas driving our research agendas. See our new About section for more!

We are also pleased to have Dr. Aggarwal and his partner, Dr. Tapoja Chaudhuri, informally back in the circle as they have moved back to Seattle and are exploring research development opportunities. This period will see us further develop our Board, given that it has already been geographically and otherwise dispersed. Dr. Corva is looking for more community-oriented local portals to the real economy, now that Aaron Varney is the only full-time local Board member; and Dr. Sexton will be developing Board members that can support her needs as a medical cannabis researcher in California.

One final note: we have recently signed our event planner and are now producing the second Original Terpestival, a collaboration with Project CBD, in Hopland, California.

Martin Lee of Project CBD is third to the right; co-collaborator Jerry Whiting of LeBlanc CNE second to the right; and medical cannabis documentarian Michael Scott is fourth to the right. This picture was taken after Martin's guest lecture to Dr. Corva's Cannabis, Law and Social Change class Winter 2016.
Martin Lee of Project CBD is third to the right; co-collaborator Jerry Whiting of LeBlanc CNE second to the right; and medical cannabis documentarian Michael Scott is fourth to the right. This picture was taken after Martin’s guest lecture to Dr. Corva’s Cannabis, Law and Social Change class Winter 2016.

This is both a great opportunity to collaborate with a trailblazing cannabis knowledge nonprofit, and the outcome of Washington State’s criminalization of cannabis events at the end of the 2015 legislative session (this takes effect July 1, 2016, but was in law for our first iteration).

In the meantime, you can look forward to more consistent updates on this web site now that Dr. Corva’s teaching responsibilities are on indefinite hiatus. Also, don’t forget to follow our Facebook page, which has served pretty well as a micro-blog and newsfeed this whole time — we have over 2,000 likes now.

This should bring the public up to speed on our organizational fine-tuning. We are excited about this phase, which clearly defines what we do and how we do it, because the field has developed well enough for us to understand how to provide unique and focused content while maintaining our general mission of public and policymaker education.

Call for Help from WA Medical Cannabis Access Points

Estimating the medical cannabis market for the WSLCB:

Left to right: CASP Board member Don E. Wirtschafter, esq; Don Skakie; Reverend Jeff Church; NORML President Kevin Oliver; Medical Cannabis Producer Shawn DeNae; and Dr. Corva. Panel from 2014 Seattle Hempfest Hemposium.

Photo by Steve Hyde

by Dr. Dominic Corva, Executive Director

CASP requests assistance from all Washington State Medical Cannabis Access Points! We have been contracted by BOTEC to help develop and administer an anonymous, 10-question survey to this part of the medical cannabis industry. The surveys will be aggregated and run through a BOTEC-developed econometric model to estimate the size of Washington’s medical marijuana retail market. The results will be presented to the Washington State Liquor Control Board, who will then use the results to make big decisions about the new 502 retail window and the issuance of medical “endorsements.”

In addition to being anonymous, a further step has been taken to insulate the information providers from identification. We have received a letter from the WSLCB stating that they will not have access to the raw data. It is available here: BOTEC – Letter on behalf of LCB – FINAL.

In the interest of transparency, I am fully aware that our information network is being used in exchange for money. I have two observations about that: our network tends toward the collaborative side, and it’s tough to ask people for money just because. The value of our community’s interest in knowledge-based policy makes this a public service, not just a policymaker service.

This contract breaks new ground for CASP, and we are humbled to be invited to steward the production of useful knowledge. The better informed policy is, the better the policy is. We make no grand claims about this knowledge: it will have to be refined and undoubtedly will be used for many purposes.  We only claim that it will be better for your participation.

If you are an access point owner in Washington State, please contact Dr. Corva at dominic@caspcenter.org to receive the survey and answer any questions.

Thank you very much for your time and consideration. We hope to hear from you soon! We have a small window of time to do this, as the LCB will need processed results in just a few weeks.

 

Brazil: To Be or CBD? Not the Question.

Executive Director’s Note: CASP is proud to share authentic journalism from our friend Ras Stephen Charles Flohr, reporting from where he lives in Sao Paulo, Brasil, on the way new CBD-specific politics intersect with inequality. It is part of an ongoing interest CASP has in educating the public about the realities of Cannabidial as it relates on the one hand to the whole plant, and therefore herbal medicine; and as it relates to the politics and economics of global cannabis prohibition — Dominic Corva, September 2015

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Photo by Stephen Charles Flohr

By Stephen Charles Flohr

July 5, 2015 – Sao Paulo, Brasil

Football, Carnival, beach life and lots of beautiful women. Sounds like fun, right? Yet in the country where cachaca (national spirit)  is the bloodstream fueling all of its major cultural and economic norms of engagement, burning a spliff is a surprisingly tense and taboo affair.  One would think that with all of the natural beauty abounding that Brazil would have a more sensitive, relaxed and tolerant attitude regarding the herb.  But this is not the case.  Ganja is viewed and treated as a social ill which perpetuates the nation’s greatest plague, drug trafficking, and is inextricably linked to the violence which devastates primarily the poor, yet undoubtedly shapes and haunts the lives of every citizen. These are the front lines of the “drug war” and they’re ugly.  And so the weed is ugly, most often in the form of a pressed and condensed brick, desiccated and sometimes moldy, more often than not from Paraguay. The aftertaste has a distinctively chemical hue.  And if you want some, you must head to the spot in a local favela (ghetto/slum) and deal with armed youth whose livelihood is the drug game, and be prepared to deal with the militarized and notoriously heavy-handed police force who are always in hot pursuit of potential slingers.  Even speaking about cannabis is a risky enterprise.  Brazil has a history of arresting entertainers on the charge of “drug apologetics”, a crime punishable by 1-3 years in prison if convicted. The most recent incident took place during a show in June where “Cert”, vocalist for the band ConeCrew, known for their progressive cannabical posture, was arrested by police on stage as he performed.  And if you are thinking about wearing a cap or shirt brandishing the leaf, be forewarned.  Police routinely arrest youth for displaying images of marijuana (maconha) under the same auspices of drug apologetics.

However, with the undeniable global, medicinal and economic potential of the herb, especially in light of recent medicinal and legislative milestones forged in the U.S.A., it is proving too difficult and costly for Brazil to remain so tragically aloof from science and common sense.  Users of marijuana and patients in particular are demanding a change in federal policy which currently criminalizes even the most minor possession and often results in the prosecution of mere users/growers as if they were traffickers. But the tide is turning, and with neighboring Uruguay on “all systems blow”, the stage is being set for a radical cultural shift that could be at least part of the solution to  Brazil’s pandemic violence and abject poverty, not to mention a bolstering influence on  its’ precarious health care plight.  

CBD Legislation and Access

Earlier in 2015, the Brazilian federal regulatory organ responsible for the importation/exportation of internationally sanctioned drugs, ANVISA, reclassified the isolated cannabinoid CBD, a  medicinal derivative found in the cannabis plant, and liberated its importation in strictly specified cases of chronic epilepsy.  The decision came after a long push from several families who pursued successful treatment of their children’s deadly epileptic conditions using CBD oil. A documentary entitled “Illegal” by journalist Tarso Araújo, takes a deep look into the challenges these families confronted  and brought national attention to the issue and the possibility of “medicinal cannabis”.  But cannabis still remains illegal under federal law and it is still therefore illegal to grow it and thereby impossible to produce a legal CBD extraction domestically.  And so critics are lauding this supposed “advancement” in cannabis policy as bittersweet.  They argue that the CBD Import-Only legislation, while an absolute victory for families and children in immediate need of medicine, is also a major victory for foreign markets, mainly in the USA, who are all too eager at sinking their claws into the emerging market that it proliferates.  

And so who is really getting access to treatment with CBD?  As the ANVISA ruling currently stipulates, only patients with life-threatening epileptic conditions are permitted access to CBD and that only under stringent medical and bureaucratic exigencies.  And the cost?  A monthly supply for a patient at a dosage of one gram of CBD oil per day is a whopping $4,800 reais (about $1,600 USD).  To give you an idea of just how expensive that is, know that the minimum wage in Brazil is $788 reais (about $260 USD).  For this reason, it is obvious that the remedy is not accessible to a large percentage of eligible patients. Add the fact that the efficacy of CBD-only treatments is questionable when factoring in the unique specificities of different illnesses and when compared to whole plant applications, and the margin of those benefiting from this legislation becomes even slimmer. But that hasn’t stopped  HempMeds , subsidiary of Medical Marijuana Inc,  from cashing in on the situation and  using their success in Brazil as a platform to build support and infrastructure in American states where medicinal marijuana is in its fledgling state.  When it comes to hemp-based products in Brazil, HempMeds is basically the only show in town.  Its quasi-monopolic vicegrip on the CBD niche market coupled with its’s dubious corporate history has raised eyebrows and tempers amongst patients and activists alike.  Basing her argument on the findings of Israeli researcher Ruth Galilly which present compelling evidence for the superior efficiacy of whole-plant remedies, Susan Witte of the Multidisciplinary Association for the Study of Medicinal Marijuana laments, “It doesn’t make sense, therefore, to grant cannabidiol monopoly status to corporations that intend on selling these remedies at the highest possible profit, if that means offering a product which is less effective than the compound’s original source in nature”.  On the other end of the spectrum, Dr. José Alexandre Crippa, a stuanch advocate of CBD-only intervention therapies, currently holds several patents for a synthetic isolated form of CBD and plans on working in tandem with the pharmaceutical industry in making it available to the public as a domestically viable and more affordable option. As if CBD-only reform didn’t already completely miss the mark, I can’t help but cringe at the spectre of a  national “synthetic CBD-only” debate.

Fighting Back

In Brazil, there exists a politically strong and religiously motivated bloc of elites who assume a “ProLife = AntiCannabis” agenda and view the stoner (maconheiro) as one of the greatest threats to not only the peace and stability of society as a whole but also to the integrity of the family.  They most often have no qualms with current alcohol legislation yet wage their intolerant crusades against a plant based on their adherence to a myth of religious and racial superiority.  And so the masses aren’t holding their breath waiting for a political miracle to take place, especially those patients who are already finding it difficult to breathe. They’ve decided, instead, to take matters into their own hands.  Affirming their human rights and deciding that  medical necessity trumps the obligation to abide by unjust laws, patients of all types and their caretakers have taken to growing their own cannabis and preparing their own medicinal extractions.  

Joao is a 47 year old engineer from Sao Paulo. He suffers from rheumatoid arthritis and diabetes and is both patient activist and participant in the city’s  annual “Marijuana March. “We’re tired of supporting drug terrorism and risking ourselves for shit product time and time again”, he says.  “We’re not all epileptic and rich.  We have MS, Diabetes, Parkinson’s, Cancer, AIDS and God knows what else. We all have a right to treatment too.  Cannabis grows freely and if you take care of it, it can take care of you. Simple.”  This sentiment has proved to be the fertile soil from which a number of underground patient-caretaker initiatives have spread across several of Brazil’s major cities, especially Sao Paulo and Rio de Janeiro.  Joao comments about how a friend of his who has MS benefits from the network of stealth CBD providers. “It just shows up in his mailbox. He has no idea who makes it but he is grateful that they do. And he doesn’t pay a thing.”

“There is absolutely no commercial gain in this type of practice, its an issue of solidarity, its about helping people” affirms a young member of one of these clandestine groups in a report by the Brazilian news source Globo.  “Which is a greater crime, trafficking for love or letting someone die from 20-30 convulsions a day?”, he adds. The report brings to light several cases of financially strapped families in Rio who are desperate to provide CBD-oil to their gravely ill children and therefore seek out artisanal extractions performed in the homes of a brave bunch of outlaw pharmacists.  

Criminal Attorney Paulo Freitas confirms the severity of the legal risks involved:

“Anyone who plants ‘ganja’ is subject to the criminal laws of drug trafficking; it is an activity considered equal to that of trafficking. Yet beyond that you also run the risk of committing a more serious offense, namely that of fabricating and providing, even if the intent and practice of distribution is free of charge, a medicinal product without registration at ANVISA, punishable by a 10 year minimum sentence in prison which is double the minimum for trafficking.”

But love must sometimes flout the law. “Illegal, in my opinion, is the way that things are, to deny me the right to give a better condition of life for my daughter. This is what I think is illegal”, confirms Fabio, father of Clarian, who was born with Dravet Syndrome.  Fabio sought out homemade CBD- extraction for his daughter as the only feasible option as he and his family faced an $8,000 reais  (nearly $3000 USD) monthly expense in the procurement of enough medicine through existing legal channels.

Pushing the Envelope

It is evident from the developments in Brazil that people are willing to seek and provide wellness and healing at great personal risk.   Ignoring the fact that CBD has its origin in the cannabis plant and declaring the former as legal and the latter as not points to a deeper, hypocritical confusion.  Its like saying the red coloring of a strawberry is good but the berry itself is bad.  Astute activists remain adamant in their pursuit of whole plant liberation. Whole plant remedies with various CBD:THC proportions hold promising potential for a gamut of maladies.  But for any meaningful research to be conducted, domestic cultivation of the plant is a necessity.

It is frustrating that this so-called ‘baby step’ was wrought in almost complete dismissal of logic and panders supremely to a foreign profiteer.  This is a service and medical necessity which Brazil could easily carry out on its own on a much larger and efficient scale without having to resort to importation. The law also confirms the fact that Science, or at least the fraction of it which the government deems fit for public awareness, is an exclusive privilege afforded to the economic elite. But Brazil doesn’t seem to have a problem with conspicuous capitalism and I can think of few places which exhibit such a glaring disparity between the haves and the have-nots. And so even if you do happen to help people see cannabis as a medicine and not a plague, you will then have the challenge of its commercialization.  “Ok, so cannabis is good now how do we make the most money off of it.”  Health is a commodity and until ‘the haves’ devise a scheme to control its sale and maintain an underclass consumer base, the senate isn’t going to budge on real cannabis talk. And yet the grassroots continue to bloom in the shadows of obscurity, healing the sick and waking the sleepers, risking it all because, well, we are all worth it!

Forecast of I-502 Sales thru 2017: How lawmakers can make a difference (this session).

I-502 Sales Forecast
I-502 Sales Forecast

By Dr. Jim MacRae, CASP Research Associate

As we approach the 8-month anniversary of Washington’s market for State-legal Cannabis, a clear pattern of linear growth is emerging in the level of observed total daily sales. When one considers that, as of Monday Feb 23, 2015, the State-legal Cannabis market in Washington has generated over $100 million in cumulative sales, this growth suggests strong future revenue potential for the State.

Driven in large part by the steady approval of I-502 licenses and the associated structural growth in the market, the “best-fit” linear trend is currently predicting a daily increase in the level of sales of almost $2,660 (e.g., next Monday is expected to generate $18,600 more than this Monday did).

We assume that one of the primary determinants of the growth rate seen so far in State-legal Cannabis sales is the rate of licensing of new I-502 businesses (primarily Retailers). Under this assumption, current levels of sales growth are expected to increase until approximately March of 2016 (at which time, we estimate that the WSLCB will have largely completed processing the initial batch of I-502 Retail business applications).

Using the conservative assumption that sales will continue to grow at their current rate until March 27, 2016 and then will go flat, we estimate the following annual sales totals for 2015 and 2016:

In 2015, $392,200,400 in total State-legal Cannabis sales are expected (generating $98 million in excise tax revenue).

In 2016, sales of $645,789,342 are expected, (generating over $161 million in excise tax revenue).

For those currently considering legislation that will impact this industry, these estimates would serve well as a “floor” or baseline against which future projections could be compared.

If the punitive 25/25/25 tax burden continues, business failures will tend to decrease revenue (and taxation) expectations.

If local governments are allowed to continue the obstructionist position that many are taking, even more businesses will fail or fail to begin operations and these expectations for revenue (and taxation) will decrease.

If, on the other hand, restrictive regulations, inappropriate geographic restrictions, and obstructionist permitting processes are discouraged, this marketplace will develop and grow. With the institution of a taxation structure that allows at least the possibility of competing with unregulated Cannabis markets, this marketplace could well thrive.

Call your Representatives and/or Senator(s) today and let them know that you want to see this market thrive and that a vote supporting the State-legal Cannabis Industry is a vote against the black market and all of the unregulated behavior, nasty up-selling, and targeting of minors that tend to go along with it.

Initial Monthly Revenue for I-502 Businesses by Type and Tenure

By Dr. Jim MacRae, CASP Research Associate

Now that 2014 is behind us and Washington State is entering its second year enjoying a legal cannabis market, it is time to reflect on (and give a bit back to) the brave individuals at the vanguard of this nascent industry.

The attached chart is intended to stimulate thought and discussion amongst I-502 business operators, applicants, aspirants, supporters and legislators about the early revenue realities of operating a legal cannabis business in Washington State.  It is also designed to be a useful initial benchmarking tool for legal cannabis business operators*.  For example, if you are a Retailer that has been open for 3 months and you book $160,000 in month 3, you are in the minority (in a good way) vs. your peers.

As such, the only interpretation I’ll put on this (and your comments are welcome on what meaning YOU derive from the chart) is that both Tier 1 and Tier 2 producers that do not also have (or have not yet generated sales from) a processor license appear to be, on average, struggling in terms of generating reasonable levels of revenue. At a minimum, this suggests that having a very low cost of production will be crucial for such operations.

The chart contains averages, and there are businesses that are significantly exceeding these numbers. As such, if your business has sold more than these averages in any month since you opened, you can infer that you were doing better than the majority of I-502 businesses in the State at a similar interval following the month of their first sale.

All I-502 businesses that booked at least 1 sale in 2014 are represented in the attached chart. It is derived from individual licensee-level monthly sales reported by the WSLCB for calendar year 2014.

“Month” 1 on the chart is the first month in which each business booked a sale (so all businesses with a sale in 2014 are included here). Each subsequent “Month” is the next month of sales FOR EACH BUSINESS. As a result, each subsequent “Month” will include fewer businesses (e.g., “Month” 6 contains only those businesses that first reported sales in June or July).

We welcome your comments and discussion on what you see in these derived data. In the meanwhile, CASP is working on a comprehensive interpretive and predictive view of this marketplace, based on what happened during 2014.

Stay tuned …. It should not be too much longer coming.

 

*If you find utility in this that brings value to your business or plans and are able to, please find it in your heart to donate to CASP — we are a 501c(3), in case 280e doesn’t derail even that deduction.  Some of the stuff we publish might just help with your production and, arguably, be classifiable as COGS.

 

Std502Sales

I-502 Rural residential producers correlate with rising property values; question “emergency” nature of moratorium

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by Dominic Corva, Executive Director

Our strategic partner, Washington Bud Company’s Shawn Denae, is leading the struggle to reverse Snohomish County’s emergency moratorium, and has been gathering evidence to demonstrate the positive economic impact of rural residential I-502 license applicants in the County.

She writes, “I searched for property values trends in Sno Co in R5 heavy zip codes.  Results prove that values have increased double digits since the passing of R5 zones for MJ farming:  Read More: 


 

Religion and 502 moratoria: Are particular denominations a problem?

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I-502 rural property values rise; why does Snohomish County consider their marijuana moratorium an “emergency”?

by Dominic Corva, Executive Director, the Center for Cannabis and Social Policy
Our strategic partner, Washington Bud Company’s Shawn Denae, is leading the struggle to reverse Snohomish County’s emergency moratorium, and has been gathering evidence to demonstrate the positive economic impact of rural residential I-502 license applicants in the County.  She writes:“I searched for property values trends in Sno Co in R5 heavy zip codes.  Results prove that values have increased double digits since the passing of R5 zones for MJ farming:
Zip Code / Area Oct. ’13 – ’14 Ave/ Square Ft. Oct. ’13 – ’14 Median Sales Price
98223 / Arlington +15.1% +5.9%
98252 / Granite Falls +12.7% +32.5%
98290 / Snohomish +10.1% +5.5%
98294 / Sultan +18.1% +2.7%
98251 / Gold Bar +5.2% +23.3%
98272 / Monroe +6.4% +18.5%
6 Area Average Increase +11.26% +14.73%
DRAW YOUR OWN CONCLUSIONS!

 

While in desirable N. King County they rose only 3%”

The conclusion I draw is that I-502 cottage industry producers (mostly Tier 1 and Tier 2) found property in Snohomish County because it was perceived to be friendly to I-502 permitting.  But friendliness to I-502 did not translate into friendliness towards cottage industry production.

The cottage industry is organizing to present evidence that there is no emergency to justify the County’s emergency moratorium.  Tomorrow morning at 9 am is the public hearing at 3000 Rockefeller Avenue, 7th Ave, Everett WA.

In addition to the economic development argument above, Shawn shared with CASP the following arguments against the moratorium by highlighting the reality of the Snohomish County I-502 situation against its characterization as an emergency, authored by Shawn Denae Eddy-Wagenseller.  We at CASP are happy to amplify voices of reality-based organizing around I-502 implementation.

ISSUES:  Based upon emotionally charged testimony from a small band of NIMBY’s (Not In My Back Yard) folks flying the flag of N.O.P.E. (No Operational Pot Enterprises) complaining about 2 Tier 3 proposed operations, Council declared emergency action*:

  • Emergency Ordinance 14-086 : Council passed Oct. 1st with unanimous vote.  This ordinance puts a 6 month halt on acceptance by the Planning Dept. of any new building, remodeling or fence permit applications for all I502 business in R5 and CRC zones. (Emergency Ordinance 14-087 passed on 9/29/14 does the same for medical marijuana business).

* It is important to note that it is the right of Council to ‘Take Immediate Action’ when they deem there is an ‘emergency’ and their decisions are effective immediately, which is why the planning department is no longer taking new applications nor completing preliminary applications on R-5 or CRC parcels. Only the Council can reverse their previous action or the County Executive can veto this  implementation. The real issue is this recent action has proven that Council is willing to use the ‘emergency’ ruling (despite the evidence of no actual emergency) which means they could rule spontaneously on anything related to marijuana using this method (A complete county-wide ban? Cease and desist on all operations? Who knows how far they are willing to take this).

HEARING DATE IS OCTOBER 29th, 2014 – 9:00am – Council begins the meeting and will most likely discuss these ordinances –
Public Hearing begins at 10:30amIf you wish to speak show up before 9am to get your name on the list – prepare a 2 minute testimony (as they will most likely cut them short of the normal 3 minutes).
Please show up even if you do not wish to speak – Wear something GREEN for pro-cannabis business solidarity!
Expect to see a room full of NOPE’s with signs against MJ development – bring your own sign if you wish.  Keep all actions while listening to hearing quiet and respectful.
The meetings are held at 3000 Rockefeller Ave., Everett – 7th floor

  • Motion 14-318: Council passed on September 17th (attached) – This motion defers to PDS to rewrite the Ordinance 13-086 http://www.mrsc.org/ords/s61o13-086.pdf that was passed Nov. 2013 with these substantive changes:

R5 would change from Permitted Use to CONDITIONAL USE permit for producer/processor.  This would trigger hearings to address ‘compatibility’ for each applicant’s property (extremely subjective) and open the door to the appeal process; which will effectively stop development for an indefinite period. (We know the PDS and Council has already been threatened by J. Brent McKinley, an extremely wealthy developer, car and gun collector, to ‘appeal all the way to the Superior Court if R5’s are permitted ’.)

NOTE:  Even if you are deemed ‘vested’ with your building permit application submitted prior to 10/01/14, if you ever want to alter or add to your operation, you would not only have to go through this lengthy ordeal of permitting but your existing MJ operation would then be subjected to the Conditional Use requirements.  This process requires a Public Hearing and the ability for anyone to appeal the decision, which means anti-pot folks can continuously appeal and tie up your business from moving forward indefinitely.

o   All cannabis business would be restricted within 1000 feet of all airports and airparks (for ultra-light planes).
NOTE:  This affects all the permitted use commercial and industrial zones that surround most airports.  Nobody we know has a clear reason why this is a ‘compatibility concern’, if you do, please share. 

Medical Marijuana business would be forced to locate 1 mile apart.

Note: This prevents clustering of MJ business within business parks that are already being specifically designed to accommodate this industry.

Medical Marijuana business would be forced to locate 1 mile apart and medical grows (collective gardens) would be restricted to 1 – 45 plant grow per parcel.

Note:  How could this be enforced?  Who is deemed okay to stay and who would have to move? How could they possibly know where these medical collective gardens are since there is no registration?

Planning Commissioners meets to specifically discuss this Motion on November 18th5:30pm – 2nd floor – 3000 Rockefeller Ave.
There is also their regular 4th Tues. meeting 10/28/14 but the agenda, at this time, does not state any MJ topics will be discussed, although ZONING is on the agenda. http://snohomishcountywa.gov/164/Planning-Commission   It is logical the issue will come up.

  • Discussions of SUNSETTING R5 zoned MJ P/P: Ordinance 13-086 (passed 11/13) sunsets MMJ business on 12/31/15.  During the 10/01/14 council discussions, this type of sunsetting  of R5 zoned I502 business was brought up.  WE MUST PREVENT THIS discussion going any further for healthy, long term business development!

ACTIONS:  The proactive cannabis business community has some ideas and talking points.  Your participation is vital to a favorable outcome. Think in terms of SOLUTIONS!

  1. Meet with your Council representative prior to 10/29 (find here:http://snohomishcountywa.gov/906/Council-District-Maps)
    Call 425-388-3493 to be directed to their aid for appointment.
  2. Write your Council representative prior to 10/29 – tell your story of investment and objectives, address compatibility of your property – Show pictures!
  3. Prepare your fact based testimony for hearings –  http://snohomishcountywa.gov/626/Public-Hearing-Procedures – Bring pictures!
  4. Show up for the hearings even if you do not wish to give testimony – WEARING SOMETHING GREEN so they know you are on the PRO MJ side!
  5. Bring a friend – any testimony from a Sno Co resident that is OK with MJ operations on R5 is worth 10 of ours!
  6. Speak with Commissioners – these folks are volunteers, appointed by Council and they do sway opinions.  (find here: http://snohomishcountywa.gov/164/Planning-Commission )
  7. We are putting together a tour next week of operational Sno Co Producer/Processor facilities so Council and Commissioners can witness how they REALLY look.  If you have a facility that you are willing to show off, please let us know.
  8. VOTE IN NOVEMBER for progressive candidates – NO MATTER THE PARTY – We are filtering through them to find out who is pro-canna business and will share soon, your help is appreciated in this effort.

TALKING POINTS:

  1. If you are against the establishment of legal marijuana business you are in default FOR illegal marijuana – no oversight, no taxes, no ID checks, no boundaries, no quality control, etc.
  2. Marijuana is ALREADY growing all over Sno Co – speak to ‘compatibility’ of your area.
  3. We are following the law, the rules and regulations as responsible small business owners.
  4. MJ business owners have invested $100’s of thousands in Sno Co based upon Council’s 2013 zoning ordinance; personally you have invested $_______
  5. 54.6% of Sno Co votes were FOR I-502, Council’s job is to follow the will of voters and make this work.
  6. LCB rules for Tier 1,2,3 were designed for the small business person to be involved in this industry.  Halting  R5 development is taking out the small business person’s chance of success.
  7. Council is creating emergency ordnances based on a small minority of scared folks that do not have the correct facts.
  8. We are business people with families and investments in Sno Co, not threatening ‘cartels’ nor huge unfeeling corporations.
  9. We will enhance Sno Co economic development with jobs and thousands of dollars spent in local purchases and this action undermines this BtoB commerce.
  10. Fill in the blank!  There are so many – read 13-086 and use their words to remind them of the original goals.

SOLUTIONS:

  1. Rescind the ordinances since there IS NO EMERGENCY!
  2. Pull T1 & T2 from the Emergency Ordinance 14-086 since they and R5 are specific for small business; leaving T3 to Conditional Use on R5 since they are significantly larger  & the Tier that triggered these actions.
  3. Establish a Cannabis Task Force with representatives from applicants, PDS, Commission and Agriculture so FACTS are the basis for decisions moving forward.
  4. Create a new Zone for R5 properties that have been developed into suburban type housing clusters – RR (Rural Residential) has been suggested.  Is there already a R1? This may be moot.
  5. Create Separate Processing Zones – Type 1 for just flower and ice hash processing in association with a Tier 1 or 2 Production / Type2  for concentrates and commercial kitchen with Tier 3 Production.
  6. Fill in the blank – what is a solution for you?

Thank you for your involvement, who you are matters.

Shawn DeNae Wagenseller

206-362-0203 Office

206-919-6755 Shawn Cell