What happened between the NCIA and the Minority Cannabis Business Association?

January 25, 2018
robomayor
News & Insights, Spotlight
1 Comment

When Kayvan Khalatbari submitted his resignation letter to the National Cannabis Industry Association (NCIA) board back in December, it started an industry discussion about not only the alleged mismanagement of the association but also about alleged abuses of power at the organization both internally and externally.

One of the issues that Khalatbari raised in his resignation e-mail was Aaron Smith’s handling of, and CBE quotes, “Whether it be Women Grow, the conversations about minority inclusion” and new light has been shed on the issue of minority inclusion and partnering with NCIA by Tiffany Bowden, Co-founder and Founding President of the Minority Cannabis Business Association. Bowden has shared her resignation letter from MCBA with CBE (after co-founding the organization with Jesce Horton, recently resigned MCBA Chairman) authored in August 2017. Her letter includes allegations of abuses of power at that organization as well as her views on whether MCBA should have had any relationship with NCIA in light of Aaron Smith’s alleged heavy-handedness in those discussions.

To put this in the proper context, from the outset of state legalization movements, minority inclusion has appeared to be limited the cannabis industry, specifically in the area of state licensing for organizations led by people of color applying for either producer, processor or retail permits. In light of the disproportionate number of African-Americans affected by the War on Drugs and the clear need for criminal justice reform due to its uneven application in the United States of America, movements to level the licensing playing field have made their way into courtrooms around the country. Recent cannabis regulations in the state of California and its municipalities for its new regulated program as well as in Massachusetts and their rule-making commission for its voter approved adult-use program as well as claims of corruption and lack of minority inclusion in Maryland’s licensing process and other states have highlighted the challenges minorities have faced in becoming part of the growing industry.

NCIA has struggled with the issue of minority inclusion since day one of the organization. To date, only one African-American has resided on the NCIA board, Dr. Lakisha Jenkins, who served for one year in 2014 and a couple of other non-white board members, Khalatbari who abruptly resigned last week and current board member Khurshid Khoja. To stress the industry’s lack of progress regarding inclusion and as a matter of public record, CBE published a political cartoon back in May 2016 drawing attention to the problem.

And, NCIA’s lobby day photos of the year did nothing to dispel the problem that the industry faces. As they say, a picture tells a thousand stories.

It also sets the stage for the below excerpt from Bowden’s August 2, 2017 resignation letter that highlights the animosity that Bowden felt and her trepidation in having MCBA work with NCIA as well as inferences to heavy-handed tactics employed by NCIA Executive Director Aaron Smith against not only MCBA but also other state cannabis associations. Bowden wrote,

“I oppose a formal partnership with NCIA at this time:

Founders and founding board members made a decision not to partner with NCIA and for the orgs to work independently. NCIA had originally wanted to absorb MCBA and be a parent company. In the same space, they postured towards MCBA suggesting a name change from cannabis industry association. These introductions were patronizing and offensive. Outside of MCBA the organization has sent out cease and desist letters to other smaller cannabis industry associations threatening them on the basis of intellectual property claims over the usage of ‘Cannabis Industry Association’. Ask Texas Cannabis Industry Association about how NCIA threatened them and how Kayla Brown successfully defended herself as a law student against their attorneys IP claims. It was a true David v Goliath encounter. We changed the organization name to better align with our direction only however the fact that they approached this way in the first place was unacceptable and has yet to be addressed. Their intentions and disposition were revealed early on. NCIA also suggested a name change a second time to have us drop “association” for council in forming a partnership, historically. I have been told that Industry allies privately reprimanded Aaron Smith and leadership for their actions. No apology was ever given for this. There are several others who have had these strong-arm encounters. Also they continue to show a lack of diversity in their speakers, operations and a lack of understanding of inclusion within their structure. While I understand an advantage of combining ‘power’ with NCIA, we made the decision a long time ago not to be adopted by, or formally partnered with NCIA due to philosophical differences. Leadership has abandoned that thinking and it sends the wrong message about who MCBA is when NCIA has yet to address some of the fractures not just with our organization but with people of color. Once NCIA puts sustained action behinds its gestures for diversity on its own, and makes formal apologies to organizations it has imposed its power upon there would be a clearing for partnership. Until then, building independent platforms seems the most sensible while offering them support through challenging them where needed. Jumping into formative partnerships otherwise, send the message of complicity and could cause those who encounter some of the issues of NCIA to attribute this to MCBA. I remained open to working with NCIA, and believed MCBA should but not do so formally without critically addressing certain issues first. I am not anti-any organization that is attempting to move the movement forward, but I do draw a line on certain principled issues.”

Regarding Kayla Brown, she was the Executive Director of the Texas Cannabis Industry Association (TCIA) and her diligence and legal work shut down Smith and NCIAs heavy-handed tactics to have them change their name in 2015 with a cease and desist letter issued on behalf of NCIA by Randal Ivor-Smith of Greenbridge Law back in March 2015. What was odd about the exchange is that TCIA had originally reached out to NCIA to find ways to work together (as had the Nevada Cannabis Industry Association) only to have Smith and NCIA aggressively pursue a trademark claim that Brown so eloquently squashed; TCIA is still the Association’s name as we publish today and the organization.

CBE has removed the e-mail addresses of both parties to protect their privacy.

_______________________________________________________________________________________

Subject: Response to Unauthorized Use Letter

From: Kayla Brown

Date: Sun, March 08, 2015 6:53 pm

To: Randal Ivor-Smith

Dear Randal;

I was surprised by your letter of February 19th. We at TCIA admire the work NCIA has done. We view your client as a friend & ally in our shared efforts to end prohibition and create a responsible legal cannabis industry. In fact, we have been working diligently in good-faith to lay the groundwork for NCIA to enter Texas.

Please refer to the attached email exchange between TCIA & NCIA, dated 1/2/15. NCIA acknowledged that they have never had any activity in Texas; thanked us; wished us luck; and suggested an affiliation in the future. We have openly communicated our hope for mentorship from NCIA leaders and our desire to strengthen the bonds between the two organizations. So it is particularly disappointing not only to receive threats, but to learn that NCIA’s leadership is aware that their threats have no legal standing.

Please refer to the attached USPTO correspondence to NCIA dated 9/5/14. “NCIA,” “National Cannabis Industry Association,” and “Cannabis Industry Association” are not registerable. In fact, NCIA is required to publicly disclaim exclusive right to any of those terms. Further, USPTO has been awaiting assurance from your offices that NCIA does not violate the Controlled Substances Act. The deadline to avoid abandonment of the entire application was March 5th.

Neither does NCIA have any claim under Common Law. “Absent appropriate federal legislation, the national senior user of a mark cannot oust a geographically remote good-faith user who has used the mark first in a remote trade area.” McCarthy on Trademarks § 26:4 at 26-9; see Ammon & Person v. Narragansett Dairy Co., 262 F. 880 (1st Cir. 19190). “Common law trademarks are generally only effective in the geographic areas where it has a presence.” Id.

Given these facts, it seems to us that the intelligent course of action would be for NCIA to embrace other Cannabis Industry Associations and build coalition, rather than the puffed-chest bullying attempts we and others have experienced. Please assure your client that we have no intent to cause confusion. We have absolutely no interest in impairing the value of NCIA’s marks or undermining its excellent work.

We do not understand why your client did not simply call us to discuss this issue amicably. If NCIA still prefers a divisive approach, please advise promptly so that we can engage appropriate counsel. That said, TCIA is happy to continue on our own separate, but compatible way. I reiterate our good faith desire for positive-mentorship and to work together in the future.

Sincerely,

Kayla Brown – Executive Director

Texas Cannabis Industry Association

_______________________________________________________________________________________

CBE reached out to several sources in the minority community to gain additional insight about Bowden’s comments. It is clear from these conversations that many minorities not only feel strongly that NCIA is not an inclusive organization but that it also promotes the best interests of a select few affluent white board members.

The minority community members that CBE spoke with echoed the Bowden’s feelings that Aaron Smith and the NCIA’s suggestion (and flat-out demands of state based cannabis associations in Texas and Nevada to change their names where cease and desist letters were issued by NCIA under Smith’s leadership) that the previously named Minority Cannabis Industry Association change their name was “patronizing and offensive”…especially in light of the limited if not token representation of minorities on the NCIA board. Ex-MCBA President Horton convinced the board over Bowden’s objections to comply with NCIA’s request.

CBE has attempted to reach Brown for comment but has not been able to reach her as yet. We were able to talk with Patrick Moran, TCIA Co-Founder/Board Member, Treasurer for comment. Here is what he had to say.

“From the first conversation TCIA had with Aaron Smith in early 2014 until today, our organization remains committed to establishing a functional national network of state based chapters. We seek partners who share the common goal of building an effective, safe and fair regulatory environment for the national cannabis industry. We accepted two years ago that the initial NCIA leadership, whom we had put on a pedestal and sought guidance, was simply not capable of that. So we built a second front to protect TCIA from NCIA. We have continued to evolve and excel without them. Aaron should be honored, not just cast aside, for the revolutionary work he has done – the foundation and inspiration he provided. But like a child who must get distance from her parents as she reaches adulthood, nature dictates NCIA must transcend Aaron’s authority if the Association ever expects to reach its full potential.”

CBE also has also learned that at least one other state based association, the now defunct Nevada Cannabis Industry Association, actually folded its tent after they received NCIA’s cease and desist letter after several months of discussions to work together back in 2015 and 2016.

Many other state organizations, as highlighted by last week’s announcement of the Western Regional Cannabis Business Association (WRCBA) have also moved forward on their own. At its formation, the WRCBA represents legal cannabis business owners in Alaska, Hawaii, Montana, Oregon, Washington, Arizona and has allied with the American Trade Association for Cannabis and Hemp (ATACH). They also have eschewed working with NCIA because of their belief that the organization does not deliver on its legislative lobbying promise and/or because of NCIA’s heavy-handed demands for working with state based chapters.

Evidence points to a “Our way or the highway” approach taken by NCIA leadership that is not resonating well with state based cannabis industry associations.

Rob Meagher

Rob Meagher, CBE’s Founder, President and Editor-in-Chief is a 30 year veteran of the media world. His career has spanned from stints representing the Washington Post, USA Weekend, Reader’s Digest, Financial World & Corporate Finance to the technology world where he worked at International Data Group and Ziff Davis where he was part of the launch team for The Web Magazine, Yahoo Internet Life, Smart Business and Expedia Travels before starting his own marketing and Publisher’s Representative Firm. He also ran all print and online media sales and marketing for the Society for Human Resource Management before partnering with Forbes and then Fortune to create Special Sections covering a variety of topics. Rob, who started CBE Press in 2014, can be contacted at [email protected].

This Post Has One Comment

Greg James says:

January 26, 2018 at 5:12 pm

Thanks you Rob for writing about this. When i launched Marijuana Venture four years ago, i did so to bring to this business a print publication that was no BS and focused on smart business practices. Essentially the same stuff I saw for 20 years in the CD ROM Software industry. It didn’t take long before I realized there are a lot of organizations and industry groups in the Cannabis space that are doing things that would have made them a laughing stock in any other industry. How do the get away with it? My guess is because there are a lot of folks in the pot world who have no idea how real businesses work and operate. And, a lot of people who are OK taking advantage of their lack of experience.

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