ROLLING LEGAL: How a Brazilian is Blazing Trails in Uruguay’s Hemp Industry

fabio

All photos by Fabio Bastos

An interview with Brazilian ganjapreneur Fabio Bastos, CEO of Sediña

by Ras Stephen Charles Flohr

10/6/15

Sao Paulo, Brazil

Sometimes the grass really is greener on the other side. At least that’s been the case for Fabio Bastos, 35, a prominent Brazilian journalist who decided to pack his bags and transplant himself in neighboring Uruguay in pursuit of entrepreneurial conquest in the country’s fledgling hemp/cannabis industry. In collaboration with the Brazilian cannabis portal Smoke Buddies, I had the privilege to catch up with Fabio and pick his brain regarding his journey into greener yet unchartered pastures. At first, Fabio was leary about talking with me and responded to my initial journalistic requests with a dismissive if not brash demeanor. “We at Sediña aren’t interested in such partnerships, he replied”. Yet once I reassured him that my intentions were purely literary and not commercial, he quickly warmed into the gracious, forthcoming and charismatic personality that suited his glimmering reputation as Uruguay’s alien hemp pioneer. “You’ll have to excuse me for being so closed and short with you”, he explained. “It’s just that I get so many requests on a daily basis from people wanting personal information just so that they can set up shop and be my competition”. I assured him that I understood. It’s no doubt that everyone and their grandmother is clamoring for a piece of market share in the fertile yet still uncertain landscape of Uruguayan legalization.

 

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Fabio established his corporation Sediña (translated as rolling paper in Portuguese/Spanish) with the launching of a rolling paper which is advertised as the “Paper of Legalization” and is currently being sold throughout Uruguay and Brazil. Fabio recruits local representatives who are interested in furthering his mission of inspiring the legalization debate in his native country, which he sees languishing in the ice-ages of prohibition, and to give inroads to Sediña’s products in the Brazilian market. He made it clear to us that our work as journalists is in direct alignment with his aspirations of expanding the debate to a broader segment of society so that a more common-sense based, socio-political approach towards cannabis, could flourish. May this interview serve as a rallying point for discourse in unpacking the regional intricacies and entrepreneurial challenges posed by nascent markets in the spectre of global legalization.

How did this idea come about of you becoming a legal and registered grower of cannabis? Was it something that you envisioned implementing in Brazil following a future legalization measure or did this only occur after legalization took place in Uruguay?
Fabio: The path was natural for me because I am a natural born entrepreneur. When I was 18 years old I was already working as an executive producer and director for television programming. When I created the first season of CurtoCircuito ten years ago, I was already in my fifth television contract and it was just me going at it alone, going there, buying the space and showing what I wanted to the public audience that followed my work without any censorship. Little by little I started dealing with herb-related issues in a time when nobody even thought of dealing with such a controversial issue publically. Well, things started closing up, program managers didn’t want to have anything to do with me, I wound up without any work. It was around this time when the issue started gaining steam in Uruguay, people were taking the streets and it seemed like it was really going to happen in that country. Given the way things were turning out for me as I mentioned, the first thing that came to my head was: I have to be a part of this! So I started to study about growing, reading everything about marijuana, watching all the videos I could, I studied the market, legalization, etc.
I went to Uruguay and I was able to follow the entire legalization process firsthand. I made trips back and forth and ended up meeting many Uruguayans who had the same business goals. I started seeing the growth of the market like growshops for example, you know, watching everything unfold right before my very eyes. Without space and, above all, without motivation to continue in the media sector in Rio de Janeiro, I prepared myself to go live and work with cannabis in Uruguay. That’s how it was and before I knew it , I was already super involved.

What was the first step you took after your decision?
Fabio: Once I went to Uruguay, setting myself up as a legal resident and starting the process of getting all the paperwork together in order to start commercial activity was an adventure. Bureaucracy, that seemed small at first, little by little became more and more tedious, although tolerable (after all, I am Brazilian!), until there came the day of registering the business with the DGI (legal organ authorizing business activity in the country). I went with Gerardo, my accountant, and when we explained our business intentions to the very nice clerk who was helping us, she let out a big laugh, excused herself, and then called some of her colleagues to come help her with the process; the system wasn’t even ready to deal with this new segment of the market that the country just established. After a lot of being laughed at and doubts, Sediña became the first industrial hemp business in South America.
In Uruguay, have you experienced prejudice because you are a foreigner investing in a neighboring country after the change in law?
Fabio: Uruguay has a very large elderly population and the majority are against legalization. The youth are super liberal, free from prejudice and thirsty for life. It’s a very interesting combination that teaches us the lesson of how different ideas and points of view can exist side by side. Montevideo is loaded with foreigners and the people there are more used to it. They are receptive, excellent hosts, and they respect cultural differences while demanding respect for their own traditions. Uruguay is a beautiful country, very advanced in infrastructure and very advantageous in terms of opening a new business. Prejudice in Uruguay, with regards to the current generation, doesn’t exist.
What are some of ‘Sediña Marihuana y Derivados’ products that have or will be presented to the market?
Fabio: Sediña entered the market in 2015, and then gradually came along its’ product line. We started with the rolling paper which is now available and soon we will launch CanabidiOIL (CBD oil with 22% concentration), a line of genetics in partnership with BCN Seeds in Spain, specially developed by Karulo Abelan, founder of the magazine Cañamo (Hemp) and the owner of Barcelona’s first growshop. We will also sell the excess production of hemp to industries.

 

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You are currently in China. Can you tell us why?
Fabio: In China, they produce 50%, that’s half of hemp production globally. That’s why I came here. My main objective here is hemp. Since China is a major producer of so many things like electronics, we are also producing here things like vaporizers and other electronics that we work with. So I opened an operation here so that we can work from both sides of the globe, in Uruguay and China, and facilitate our operations. So here’s what I’m going to do, I am going to plant the hemp in Uruguay, then I am going to send it here to China and have it processed, and from there on we will produce our products. From hemp we can do everything, we can make biofuel, clothes, plastics, all in all a great deal of products, and this is my purpose: hemp and hemp derivatives. Sediña doesn’t work with nor has the interest in working directly with smokable marijuana. Since there exists the cannabis market we use this as a marketing strategy, so we made the rolling papers, lighters, vaporizers and these types of accessories, but this is more of a marketing tactic. Our business is hemp. We have our hemp plantation and the idea is to generate products from it.
Can you speak a little about the role that you and Sediña are playing in Brazil and how you are trying to stimulate the debate here regarding legalization?
Fabio: Yes, I am working hard in the area of activism with regards to legalization in Brazil, however, more from the standpoint of industrial hemp and medicinal marijuana, not recreational. I don’t deal with recreational marijuana. I smoke, I enjoy it, we got our own thing going of course, but we don’t work with a recreational focus. Therefore our activism in Brazil is aimed at separating these two things, to make the people understand that industrial hemp is different from marijuana, that one doesn’t have anything to do with the other, and that hemp needs to be legalized in Brazil in order to generate wealth, to drive the economy, to substitute products, less dependence on petroleum, etc. I believe that soon all Brazilians will be able to grow in their homes and have unrestricted access without being subject to heavy firearms nor will they be considered criminals for seeking out a cure for their illnesses. I defend this right of the people and I work so that people who may not have the time, knowledge or willingness to grow their own, can buy these products from specialized businesses.
What is your opinion regarding the Uruguayan model in terms of its’ cultivation and distribution scheme compared to other models that we see, for example, in the United States? Which would you like to see implemented in Brazil?
Fabio: As far as the Uruguay model is concerned, I think it’s right on the money. It’s not completely liberated, it’s something that is very controlled, yet it is a type of control that leads things in the direction of professional development. On one side it is going to generate resources, it’s going to generate jobs in the field and for the industry. In the end, it’s really going to move the economy of the country. Regarding the distribution of marijuana through pharmacies here in Uruguay, I think it’s pretty cool even though it’s not happening yet. It might happen, it might not. The only detail is that I don’t really see a market for it. Why? Because the market is already being supplied by homegrowing and by cannabis clubs. So I don’t see the possibility of a large clientele of Uruguayans for the pharmacies; I think its small. So I don’t see the opportunity for the people and businesses that are investing millions of dollars to enter into this market to see a return on their investment in the short term. And so I don’t see commercial viability for these businesses that are going to sell marijuana in the pharmacies. But this is only a personal opinion and we’re only going to see what will happen after it’s been put into practice. And so I really hope that Brazil adopts the Uruguayan model and not the American model. I think the American model is too liberal and in Brazil, for our culture, I don’t think it would work. The American model is very open, it has less restrictions, it is more accessible. The Uruguayan model is more closed, it has more governmental control. I think for the Brazilian culture, a more controlled model would work better. The American model in Brazil would turn out to be a mess.

What are some of the difficulties and challenges that you have faced in moving forth with Sedina?
Fabio: The main difficulty that we face is overcoming the negative stigma associated with marijuana, even here in Uruguay. And this is my greatest challenge, making the people separate hemp from marijuana and eliminate the inappropriate drug stigma. Sediña is a hemp business and the idea is to produce hemp products using its fiber and such, and so it’s difficult and we are always struggling with this. In Brazil it’s the same thing, the stigma barrier. But Brazil is very, very, very much behind Uruguay at this moment. The business and market of marijuana in itself is something very simple. There is no mystery to it. The mystery is in the taboo that is created in people’s heads. And so our main marketing objective is to demystify the various uses of cannabis, from recreational to medicinal to industrial. Yet for the most part, people here are very open and want to see it work. We’re still in the very beginning of things and so things need to happen step by step. But everybody who I am in contact with and show our projects to are very excited and want to know how they can help. You need to have the soul and predisposition for this type of thing which is something ancient yet new at the same time.

State Building Code Leans Away from Smaller Rural Cannabis Farmers

by Dominic Corva, Executive Director
As a political geographer, I understand the core policy and market geography of I 502 cannabis to be shaped by the intersection of Public and Private Real Estate interests. Not WSLCB approval, not taxes, not medical access points, not legislative “fixes” for I 502. The main Public Real Estate interest at stake here is Land Use Governance, which is shaped by Zoning and Building Code rules and regulations.
The latest struggle for inclusionary I 502 policy in that regard is the Washington State’s Building Code Council’s efforts to impose F1 Industrial (ie, Urban Warehouse) building standards on I 502 production and processing that is now and will in the future primarily be Rural and Agricultural.
The first collective efforts to change this are emerging, not surprisingly, by I 502 producer and community organizer Crystal Oliver on the I 502 google group. She has posted her letter  to the Washington State Building Code Council on the group for others to adapt and send. Her fellow community organizer Jamie Curtismith has responded with complementary guidance in support of Crystal’s call.
I reproduce these letters below in support of “Agriculturalizing” Cannabis Policy in Washington State. It’s a great example of the need to consider Cannabis as Social Policy, in this case on behalf of the need for Agricultural rather than Industrial Land Governance.
by Crystal Oliver, Washington’s Finest Cannabis
Dear Washington State Building Code Council,
I am contacting you to voice my opposition of building code proposal IBC 15-035 and my disappointment that this proposal is being considered without a financial impact assessment being completed as it will adversely impact my small business.
My husband & I own and operate a legal WSLCB licensed marijuana farm in Spokane county. We presently grow our cannabis underneath the sun in the soil of our 10 acre farm.  We are coming up on our first year in business and are working busily in the field ourselves from sunrise to sunset hoping for a good harvest this fall so we can pay our mortgage, electricity, keep working for ourselves, provide a few jobs to others in Spokane county, and continue supporting our local community through our commitment to buying supplies and materials from other small local businesses. We had hoped to save up enough this year to install a few greenhouses next year purchased from a local supplier.
Proposal IBC 15-035 will have an extremely profound economic impact on my small business, other small businesses in the area, and quite possibly the future of this new industry and the potential tax revenues the State of Washington hopes to collect.
F1 building code requirements, require fire flow, fire flow generally requires the existence of a municipal water district.  My rural lot, surrounded by farms does not have access to a municipal water supply.
The green house operation that we are dreaming of is far simpler than the greenhouses of my fellow farmers down the road who raise leaf lettuce, tomatoes, and petunias who don’t abide by F1 building codes.  It is extremely unfair to apply more restrictive zoning to the production of marijuana than the production of other plants and vegetables.
This proposal also suggests that processing of marijuana sometimes involves the use of hazardous materials and lists this as reason to prevent farmers from operating on rural properties, however, Spokane County Building & Planning department, in cooperation with our County Commissioners came up with a solution to that.  They permit only limited processing outside Industrial areas.  There are no hazardous materials in use at my processing facility, I simply hand trim the cannabis flowers from my plants, separating the flower from leaf and stem and place them in bags and jars for sale at the retail store.  Spokane County allowed for limited processing to protect the small marijuana farmers in our county who are operating on rural properties.
This proposal, if adopted would prevent small, family farmers, in rural communities from being able to join, compete in, and thrive in this brand new and highly lucrative industry.
Over 20% of the marijuana producers and processors currently licensed by the WSLCB reside in Spokane County.  Many of us are on rural lots where we cannot meet F1 building standards.  A proposal that negatively impacts that large of a portion of this new industry will have a significant impact on sales and tax revenues collected by the state of Washington.
I urge you to decline this proposal as the economic impact that it will have on many small business owners in rural areas throughout the state is too significant to ignore.
Highest Regards,
Crystal Oliver
Managing Member
Washington’s Finest Cannabis

 

by Jamie Curtismith

F1 code compliance is yet another in a long line of strategies to get marijuana operations off rural lands. In Snohomish County, our building inspector (who also happens to be our Fire Marshall) had an ‘IBC interpretation’ that mandated operators to upgrade to these rigorous standards on non-public buildings, which industrializes otherwise straightforward agricultural-use buildings, making them truly manufacturing facilities (not agriculture) and therefore, not allowed in many rural zones. He claimed that his use of F1 had nothing to do with cannabis and more to do with building type, but his application of code became inconsistent and arbitrary as the industry came online and he began to realize the variety of barns, pole buildings, and rigid greenhouses being used.  Of course, the real problem is (other than the expense involved), is that several of the F1 requirements, as Crystal pointed out, are impossible to comply with (and therefore are a defacto ban) because many rural parcels lack the necessary services (power, water, emergency services…etc) to support “industrial use”. Some rural zones allow for manufacturing/industrial, for example, we have a rural light industrial (R1) zone where F1 Buildings would be acceptable, but it is only 0.00013% of the county (or 182 acres) and hasn’t had a parcel available for a few decades!

Caution: When arguing code compliance (IBC) try to avoid muddling the argument with zone compliance. From a building inspectors perspective, they don’t care (or have control over) where the industry is zoned. That is the responsibility of the Local Council. Inspectors only care about the types of buildings used for the purpose of the businesses operating in them. An inspectors job is pretty straight forward; inspect a building and apply IBC. One of the challenges that the marijuana industry has posed to building inspectors is our unrelenting creativity and resourcefulness. The facilities where some grow operations take place have been the most innovative utilizations that most inspectors have ever investigated (cargo containers, converted prefabs, MHUs, storage pods…etc) so there has been a tremendous amount of room for code interpretation around our usage. Not having been officially declared an agricultural crop (and awarded Right to Farm protections), we are viewed as manufacturing, so they are interpreting code accordingly (industrialization). That is why it is IMPERATIVE to get cannabis declared as an agricultural crop, which again, the state building council has nothing to do with, but it doesn’t hurt to keep arguing the ‘cannabis as an agricultural crop’ logic.

Also, many inspectors (and especially Fire Marshals) are still completely oblivious to our processing needs, and still have exploding butane canisters in their minds when they hear the words ‘cannabis extraction’. Most local municipalities have not figured out that processing-only licenses are not tiered, and not all will be extracting, but I don’t think that will stop reefer mad councils from implementing heavy handed measures on them.

Bottomline: This fight is happening on many fronts, among many regulatory authorities simultaneously, and we need all hands on deck to get Cannabis Sativa recognized as an agricultural commodity and get it regulated accordingly, so that ALL producer processors will be protected, not just small and rural growers.

 

Jamie Curtismith

206-491-3802

curti…@hotmail.com

Southern Humboldt’s Kerry Reynolds Recent Interview with Dr. Corva (With Transcript)

 

by Dominic Corva, Executive Director

TRANSCRIPT BELOW

“Dr. Dominic Corva of the Seattle-based think tank Cannabis and Social Policy recently visited Southern Humboldt and talked with CCN’s Kerry Reynolds about lessons for California in legalization trends in Washington and Oregon.”

This is Cannabis Consciousness News produced at Redwood Community Radio in Redway, California.  I am Kerry Reynolds reporting for CCN.

 

Kerry: This is Kerry Reynolds with CCN.  I’m here with Dr.  Dominic Corva of the Cannabis and Social Policy Center, based in Seattle, Washington, correct?

 

Dominic: That’s correct.

 

Kerry: In terms of enforcement in cracking down on the black market, trying to pursued people into the above-the-ground market, are there any things you are seeing in Washington, in terms of cracking down more on the black market?

 

Dominic: So, you know, the black market needs to be defined, right?  We all assume we know sort of what the black market is but it’s also a term that gets used pejoratively to identify like mad people, as opposed to — the black market, you know, technically is, you know, the informal market essentially like un-taxed, un-regulated market.  So, the main thing you know in Washington that I suppose could be learned is that you really need to make sure that you’ve got plenty of retail outlets.  That is — you can have all of the best intentions and all the best designs for permitting growers but if their product doesn’t have a place to go, if there is a bottleneck because there is not enough retail stores then, you know, like you are looking at diversion from a, you know, regulated system.

 

Kerry: Yeah, then it’s going to be filled out at someone’s apartment.

 

Dominic: Yeah, so that’s — the distribution question needs to be worked out and whether that means necessarily like, you know, opening up retail permitting or coming up with farmer-to-consumer distribution, there are lot of different ways to I think create pathways to market from the field and California should consider all of them _____1:50 basically because it grows way more than California consumes and in that way it’s like Oregon, but on a much bigger scale, although I’m not sure how much bigger scale these days Oregon is.  There is a whole bunch of Californians in Oregon that are applying the lessons that they have learned.

 

Kerry: So, things are blowing up basically?

 

Dominic: Things are blowing up in Oregon.  You know, Oregon’s got the cheapest cannabis in the country now according to the latest map that came out of Cannabis Prices, and, you know, historically that’s the indicator of like, you know, where most of it’s coming from.  Of course, Oregon being right next to Northern California, it’s really — they should break it by county because it won’t be the whole state that will be cheaper.  It will be like, you know, that zone from the Bay area up to — that’s really, you know, a cannabis growing region that’s continuous.

 

In terms of certifying, you know, gardens as, you know, they have got their water permit and so forth, you know, the question is that, okay, let’s do that so that you know, we can get the environmental stewardship going, but on the other hand if you try to apply like a seed-to-sale tracking system in this area, you are throwing it all out the window because there is just too much products and it needs to go somewhere and they can’t all go into California, they just can’t; it’s not mathematically possible.  I think it should be interesting to see how that aspect of formalization happens in this area where, you know, attempts to shove people into a box that really like, you know, makes their lives too difficult and makes them not want to participate, gets kind of back to its first problem, which is like nobody wants participating from here because it doesn’t work with them.

 

So, there is going to be particularities to the area that’s going to be a little tough to work out in a nuance fashion at the state level, so I’m really hoping that — and it definitely seems to be the case the local government is much more interested in being involved in that.  Humboldt, you know, obviously had its head in the sand for a very long time just like everybody else.  I think that’s really, you know, one of the interesting things about Kevin using that all.  Kevin is like, that’s not head in the sand, that’s head out of the sand and actually looking around 360.  So, that’s promising to me.  It’s promising to me.  I think it’s easier to make sensible policy with people that like you’ve met face to face, you looked in the eye and you’ve talked to them and they talked to you.

 

Kerry: It was startling as someone who covers the industry here to see Representative Huffman, meeting with people that were out-cannabis farmers just recently and I believe Senator McGuire as well.

 

Dominic: Yeah, that’s right.

 

Kerry: So, to have Luke Bruner, representative of California Cannabis Voice Humboldt, sitting at the same panel table with the Lieutenant Governor was really showing how much the cannabis producing community has gained respect in order — and legitimacy in a way before the full legality has come onboard.

 

Dominic: Absolutely.  You know, I think that the politicians are responding to the organizing.  They understand it’s — Hezekiah, obviously, was also at that table.  Hezekiah Allen.

 

Kerry: Yes, in their early meeting.  I really think — and in a public meeting I was like, yeah.

 

Dominic: Went to public meeting, that’s right.

 

Kerry: But Hezekiah Allen of Emerald Growers Association, also representing cannabis farmer.

 

Dominic: They are at the table and like that’s the first step.  It is like sitting down at the same table.

 

Kerry: And even John Corbett, the Chair of the North Coast Regional Water Quality Board sat at that meeting.  When we go to do our water inspections, we don’t check for 215s and we don’t care if it’s medical cannabis or just cannabis.  So, there is sort of our recognition of reality on…

 

Dominic: There is progress — there is real progress being made; just so much progress being made on dealing with what is actually there instead of what you wish was there or not there.  You asked me about, you know, lessons from Washington and Oregon.  Did you want to, you know, talk about the elephant in the room which is the tendency that Oregon has at least now kind of confirmed for legal cannabis to be an occasion to radically change, you know, essentially medical cannabis?

 

Kerry: Are the dispensaries of California going to go the same way as the dispensaries in Washington and by the way, what’s happening with the dispensaries in Washington?

 

Dominic: Yeah.  So, basically what’s happening with dispensaries in Washington is there is Senate bill they just passed 505(2), that was essentially sort of a comprehensive medical marijuana, you know, regulation act and if you will recall back in 2011 we had one of those.  And it established a system for, you know, regulating commercial, you know, medical dispensaries and our governor section vetoed every part of it that had to do with regulation.

 

Kerry: The Washington Governor.

 

Dominic: Washington Governor basically because any part that would have involved a government official like, you know, being a part of that regulatory process — what she said then was, subject to them to Federal prosecution and so section vetoed out, you know, every part of it that would have been regulation.  And so all the folks who were geared up to, you know, satisfy the regulatory conditions in that bill which came from legislature and not initiative, they know what to do and so they got the legal advice that pretty much became standard practice which was, to operate as collective gardens and there was collective garden language and of course, collective gardens in that bill did not have to be regulated.  They were non-commercial provisions.  They were appendages to the actual regulatory structure which involved commercial regulation.

 

So, what we have is essentially excess point system that was — that sprang up not overnight at all, but certainly under the new conditions basically, if you’re a collective garden them you weren’t regulated, so it’s really easy to open up.  All you got to do is find a spot in the strip mall.  That’s the — that was the legal interpretation that they were operating under for four years and until the cannabis decision from last year, which was the first like — sort of challenged, that actually was ironically brought by medical cannabis activists to essentially get a legal opinion that, in fact, excess points were legal in the State of Washington and of course, they got the opposite result.  And since then basically like all anyone has had to do was apply that decision wherever they were and if they want to, you know, basically declare medical marijuana illegal, and that’s essentially what happened.

 

So, with 505(2), it creates a medical aspect to the legal cannabis markets.  I don’t want to go too deep into those.  I think we have talked about that a lot before, but what’s happened to the existing dispensaries is that City of Seattle is now kind of leading the way in terms of a specific framework for it, because technically everybody’s got till July of 2016 to be open.  City of Seattle issued essentially a three-tiered process for dealing with all of the dispensaries within its jurisdiction.  So, the first tier is essentially, if you opened up your dispensary after January 1st, 2013, you are out.  So, you are regarded as a, you know, as an opportunist.  You are just showing your lack of good faith because you opened up after legal cannabis passed.  So, that’s a condition.

 

The second condition and that’s one — this one was unanticipated I think and a little bit surprising to folks, is that the laws for legal cannabis which are only for people 21 and over, just got applied to dispensaries.  So, dispensaries basically were now being investigated every time they sold to a patient that was under the age of 21; that’s ongoing.  And so as a result the dispensaries and dispensary system — any patient that they had that was under 21 which, let’s say, was a fair amount actually — a lot of their clients are…

 

Kerry: Children with epilepsy, for example.

 

Dominic: Yes.  But children with epilepsy were not coming and buying, you know, _____9:50 on a regular basis necessarily at the dispensaries.  But there is a current way in which actually people under the age of 21 can go to a dispensary and wouldn’t get the dispensary in trouble and that’s if they got essentially like a caregiver letter.  Now, under the new system basically which, you know, again it will take a while to kind of implement it, instead of collective gardens there are four-person cooperatives that you can register with the State, and I think it’s three plants per person so, like you know four times three is twelve.

 

So, the new legality is, you know, one that is radically different from what was going on already, which makes it a pragmatic policy because what it’s doing is actually not really like working with what’s there and trying to shift it, it’s denying what’s there and burying your head in the sand and just saying, just go back to the black market basically.  So, that’s the interesting dynamic that’s going on right now and Washington’s dispensaries even if they are not shutdown because they are all getting letters in there — if they don’t shut down then they get like a huge fine and the other conditions are they have to be, you know, paid up on their taxes.

 

Kerry: How many dispensaries are we talking about here in Washington who are now illegal and being told to shut down because of this…

 

Dominic: Well, they are being told not necessarily to shut down unless they have — they meet their prior conditions already like you say — again, if they have not been paying their taxes, there is your letter you should shut down.  You have been paying their taxes, you were open before January.2013, we are going to leave you alone and also you now get to apply to be part of the rec system.  And let me say that the mathematics of this are not as severe as you would expect.  The City of Seattle counted something like a 106 dispensaries within its city limits and identified that about half of them actually have been open before January 1st, 2013.  So, like for their first cut half of them were still surviving as eligible to continue as part of the system.  Now, of course, then they are going to have to meet, you know, the zoning requirements and all the other things.

 

So, like how many of those people actually end up in the rec system, not sure, but again this is the good actor, bad actor, you know, a discourse.  It’s like let’s identify the good actors and then _____11:55.  Everyone else is a bad actor and has to go away except for that’s not how it’s ever worked within the context because really more people will just go away, they find other ways to do business.  So, what’s happening essentially is our, you know, not terribly regulated medical system in Washington is being actively downsized and dramatically changed.

 

Kerry: And at the same time production is increasing.

 

Dominic: Yeah, so the production side of things — of course, the rec side of things especially that’s an issue because Washington has never been obviously a big producing State.  It’s been, you know, an indoor producing State and importer of you know Oregon, BC and California cannabis.  But with the 502 system of course like that’s a native production, you know, system and that system we are getting up to about 800 pounds a month indoor basically.  It seems to be moving through the inventory.  Our outdoor season last year on a very abbreviated one again, you know, 14,000 pounds and created within the i-502 market, you know, a gloat and a problem with prices and so forth because we had 80 retail stores open in December.  We have like a 150 open now.  We are on schedule to have about 250 open in December of this year.

 

So, not even the full component of 335 that like the state has authorized there to be for a number of reasons, bans, inventory and so forth.  But what that says to me is that you got twice as many retail stores.  Let’s be generous and call that three times as many retail stores.  You are going to have at least 10 times the production.  So, what does that say for, you know, the outlets and the prospects of, you know, diversion or of folks who may even be actual growers who are growing buds but are not able to sell their stuff because there is not enough retail outlets essentially for it.  It’s a chokepoint.

 

So, this is all happening of course in the context of downsizing the medical dispensaries and so fewer medical dispensaries, not enough retail dispensaries, lots of production on legal side, plenty of production around in Washington State, I mean that’s legal side.  All that is recipe for, you know, what the state says it doesn’t want which is diversion in the black market.

 

Kerry: And it’s what the Department of Justice says, it doesn’t want through the Cole Memo.

 

Dominic: But that’s the funny thing about the Cole Memo.  The Cole Memo is actually relatively broad or vague and when it comes to talking about diversion and the conditions under which the legal experiment can go forward which is — which folks interpreted additionally, diversion meant out of the legal market into any other part, whether that meant out of the state, in the state.  If it was produced in the legal market, it needed to be sold in the legal market.

 

So, diversion was interpreted as being just about legal cannabis.  Since then diversion has been now applied to include essentially medical cannabis and so, medical cannabis is considered to be, you know, black market or diverted.  You know, if you don’t have a system regulation, it’s all diversion.  Diversion is the condition of not regulation according to the sort of latest popular sort of interpretation, which is why, you know, part of the justification for shutting down medical system is because Cole Memo.  And the Cole Memo, again, originally like did not at all apply to medical.  Why would you ask the states to be home to a standard that the Federal Government has never been able to actually keep itself, which is shutting down the black market.

 

If we interpret the Cole Memo to include that kind of demand, what we are doing is essentially saying the Cole Memo, you know, is absurd on its face and, you know, like how we are supposed to take it seriously at all.  If it sets an impossible condition and you are interpreting that impossible condition as something you have to meet even though you can’t, it would be totally impossible and you don’t have the funding to do it, it’s taking steps backward Kerry.  So, for me that’s a concern in Washington State.

 

It’s not like I’m here to defend, you know, unregulated or deregulated cannabis; I’m for regulated cannabis.  I’m for evidence-based regulation though.  You know, evidence that this works and that by the way is also part of the Cole Memo.  It has to actually work.  That’s a condition.

 

Kerry: Robust regulation.

 

Dominic: Robust regulation, which is interpreted as regulation that actually like does what it’s supposed to do and that’s not a reinterpretation of the Cole Memo.  That’s an original interpretation of the Cole Memo and it still applies and I believe that, you know, our legislature has fallen down you know, on their faces when they are ignoring — they are ignoring that part of the Cole Memo.  Cole Memo says it’s got work.  They are doing stuff that’s the opposite essentially and I feel like…

 

Kerry: Probably not their intention to do it.

 

Dominic: Yeah, probably not.

 

Kerry: So, we have got a long — we have got a lot of issues in Washington and I think you have given us a real good overview of that.  I know you have also been doing more analysis of the Oregon recreational market.  What’s the status today in Oregon, please?

 

Dominic: Well, what’s happening in Oregon is that’s — although Oregon had a regulatory system, you know, the Oregon Medical Marijuana Act, they were cruising along after initiative passed, there was a joint taskforce, you know, bipartisan, you know, both members of the _____17:14, and what they were tasked to do is writing rules to create the legal market and it had nothing to do with medical, nothing.  Somewhere along the way that joint taskforce essentially stumbled over, I think increasingly like the fact that it wasn’t addressing medical and essentially dissolved and we are left now, instead of the joint taskforce that actually has been listening and trying to figure things out, we are now seeing in Oregon the position of an agenda that looks a lot like Washington’s.  It’s an agenda that claims that Oregon needs to be concerned about the Cole Memo’s diversion situation.  Again, the diversion thing is really — it’s getting hammered home as a common sense discourse and is being redefined in my opinion.

 

Kerry: By whom? Who is doing this?

 

Dominic: Well — so, you know, it’s usually hard to tell but you know we do have a white paper that was produced by a Privateer Holdings Incorporated, same folks who own Leafly.  They are an investment group.  They are based out of Seattle.  They have run Tilray, a big cannabis warehouse in British Columbia and, you know, they are essentially venture capital firm that invests, you know, in and around the cannabis industry.  Now, what this really means right now is that, you know, they invest in real estate, they invest in things like Leafly, you know, really safe things or you know what…

 

Kerry: Things that are directly touching…

 

Dominic: Right.

 

Kerry: The plan, the dangerous plan.

 

Dominic: Yeah, except in Canada, right Tilray.

 

Kerry: Okay, and that’s a producer and seller.

 

Dominic: So, Tilray is a production facility, so — exactly.  So, like they want to get into that.  They think very highly of their ability to do so and they think essentially — obviously, what works for the Canadian system is, you know, the fact that it’s a centralized sort of warehouse production predominant system.  And that is not the system that works on the West Coast United States because to do that — even if they were able to capture the market that they think they can capture, we don’t need more people growing cannabis here on the West Coast.  We have got a lot of people who have been doing it for a while and doing it pretty well.  Freezing those people out of the legal regulated market basically by, you know, making it harder and harder for them to meet conditions to be in it, which is — the white paper is very much, you know, there’s a very explicit like a medical market needs to be reigned in and, you know, legal market needs to be _____19:40 them, right said.  Centralized warehouse production and so it’s a white paper, right.  So, that means it’s for policy makers and it’s like this is your issue in Oregon and this is — but it’s very…

 

Kerry: But it’s being written by someone it sounds like or an entity that has a very obvious agenda.

 

Dominic: It has a private interest.  Yeah, it’s a really-really naked agenda, you know, like it’s not even pretending.  They are basically saying — there is a certain kind of attitude there that’s — it’s a little incomprehensible to me.  But that’s public documents and it was meant to guide policy makers and very recently, you know, that’s the direction Oregon policy is going which is to remove protections from medical cannabis growers that currently exist for them, and that’s the key thing.

 

So, for Oregon — like California, Oregon is a big exporter.  You know, Oregon system — the concept of diversion like has to be treated very pragmatically because you cannot mathematically fit Oregon production into an Oregon consumption system.  It’s not possible.  What you do with everybody else there…

 

Kerry: Well, come on doctor, if everybody started smoking pot from morning to night maybe.

 

Dominic: I’m not sure actually.  Like — possibly, I don’t know, but certainly…

 

Kerry: Yeah.  Okay, so Oregon is also an exporter?

 

Dominic: Also, a huge export — so, the question is in terms of the social ecology is that, okay, they are producing a lot of cannabis and they have been doing under the legal protection of Medical Marijuana Act.  So, they get X amount of plants and they grow outdoor plants in Southern Oregon and they grow big ones, right.  So, the problem is that the protections are being talked about as that’s what they need to take away.  So, that would leave these folks without a pathway into the rec system, (a) because they can’t fit into it and (b) kind of leaves them back in the space of vulnerability that they haven’t, you know, had to — they have been able to be integrated members of society in many ways obviously because they have been left alone.

 

Kerry: So, the celebrated legalization of cannabis in Oregon is now making medical growers in Oregon more illegal.

 

Dominic: It is — vulnerable, that’s right, yeah.  That’s the trajectory right now.  It could change next week.

 

Kerry: So, who would they expect to grow the cannabis in Oregon?

 

Dominic: Privateer and — Privateer Holdings Incorporated perhaps.  Who do they expect to grow?  The people who get in on the system basically, who are able to get into the rec system.  Again, like those rules are still being sort of written, they are still being hammered out.

 

Kerry: So, there are no licenses now yet, it’s still in process; sounds like it’s getting pretty butchered from the original voter concept.

 

Dominic: Absolutely…

 

Kerry: Spirit of the law.

 

Dominic: I’m sure that that is the case and so for me it’s very interesting to watch this sort of medical cannabis versus legal cannabis like antagonism develop because it’s framed in a one way and it can’t be framed another.  It’s framed as, you know, these people are not worthy citizens because they are all gaming the system anyway.  Medical marijuana is a fraud, is the discourse, right and that’s why essentially these things are happening in Washington and Oregon because policy makers have been convinced by someone or someone’s such as Privateer Holdings that medical marijuana is a fraud.

 

Now, what I understand obviously, you know, all cannabis, especially medical like _____22:56, but on the other hand I understand that _____23:00 doesn’t really fly necessarily to the American public.  What I would say, you know, to the American public is that actually, you know, medical marijuana laws are not just about the right to health and therefore about whoever is being fraudulent about claiming that right to do things to make money for example.

 

It’s also about legal protection from an insane drug war and especially for growers that is the case.  Why is it that like — it’s not okay for folks to grow, you know, herbs in their backyard, why is it that we have to track this like it’s nuclear waste instead of an herb.  Why is it criminal to grow a plant and to me like — medical marijuana instead of fraudulent I would say that it has been a shield and I think it’s been human right shield for, you know, a more ecologically, you know, in-tune population essentially to carryout direct civil disobedience against an unfair, unjust, racist and genocidal law.  The threat to our society has come from the drug war not from, you know, people growing plants.

 

Kerry: And in the meantime, these people that they are —

 

Dominic: They need those protections, they need to keep them.

 

Kerry: They have also been providing the medicine that has been saving children with epilepsy from 200 seizures a day, etc., so that sort of recognition we saw in Garberville because of the organizing in education that’s been done by the grower population here in Northern California.  That’s not coalescing as well in Oregon yet, and would have to pretty quickly to reverse this trend would you say?

 

Dominic: Well, you know, to be honest Oregon is incredibly organized and, you know, they have had _____24:35 in the room like I spoke to the Oregon Sun Growers Guild, you know, last year when they were like, you know, what do we have to expect coming up, you know, I was talking about well, this is the rule making process and Jonathan Mann was in the room _____24:45 and he was like, and this is how it’s going to work in Oregon, you know.  He gave the very specific thing.  So, they have been there.  They have been in the room.  They are talking to each other in a way that never was the case in Washington and still this is happening and that’s what scary about it, is that, this is not, you know, defenses population that’s been mobilized against; these were activated citizens who were already calling their, you know, representatives and being very engaged in the process and they are still getting shoved out.

 

So, it’s difficult to say, you know, like — obviously, I don’t have the answer for you know, how it’s going to be reversed.  I’m hoping that by presenting, you know, evidence in the base policy recommendations that I’m hoping that that can help; it didn’t help in Washington, so I don’t know.  But, you know, either way the upstart of this is the whole thing is going to move forward one way or the other and it’s either going to be moving forward with, you know, more social antagonism because of the policy that’s been created is going to be less.  Either way we are going to have legal cannabis and we are going to have medical cannabis and one shape or form we will have a black market, but the fact is that people are making decisions that are changing the landscape in a way that is potentially, you know, productive of more conflict in society rather than less and that’s my main concern.

Kerry: Thank you for all the work you are doing with Cannabis and Social Policy in Stanford.

 

Dominic: Thanking you for getting the word out.

 

Kerry: Cannabisandsocialpolicy.org, correct.  Any closing remarks?

 

Dominic: Yeah, I do actually want to, I want to give a plug for the women’s groups that are starting to proliferate here in Humboldt, CCVH Women’s Group and the Women Grow.  There are meetings that happen in Northern Humboldt, meetings happen in Southern Humboldt.  This is — honestly, if there is anything I can tell you about Washington that’s really positive is the women’s groups have been, you know, incredible.

 

Kerry: In Washington?

 

Dominic: Yeah, they have been, you know, powerful and humane and forces of good and I see that happening here too and I’m really starting…

 

Kerry: Yeah, Normal Women’s Alliance also.  So, we have three different, four different women groups that are really gaining momentum here in the region which is also very promising.

 

Dominic: I’m really excited about that.  I think they will make the difference honestly.

 

Kerry: Yeah, bringing women to the table always helps the discussion.

 

Dominic: Yeah, absolutely.

 

Kerry: All right.  Well, thanks Dr.  Dominic Corva.

 

Dominic: Thanks Kerry.

 

Kerry: Okay.

 

That’s all for today’s show.  Thanks for listening and join me again next week 5:30 p.m. for another special edition of Cannabis Consciousness News.  You can also find links to this and past programs on the Facebook page Cannabis Consciousness.  Reporting from the heart of the emerald triangle, this is Kerry Reynolds.

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?

Mormons

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