A big shout out goes to Neal Levine, Senior VP of Government Affairs of LivWell Enlightened Health and the Chairman of the New Federalism Fund (NFF) for the work that they have done lobbying Capital Hill and, specifically Senator Cory Gardner to fix the 280 E and banking problem that the Cannabis Industry faces. The STATES ACT bill submitted by Gardner and Elizabeth Warren yesterday is extraordinary and the inside scoop is that NFF and its new parent organization, The Cannabis Trade Federation had a lot to do with yesterday’s announcement.
Levine and NFF released the following statement yesterday. “We applaud Senator Gardner, Senator Warren, Congressman Joyce, Congressman Blumenauer, and the rest of the cosponsors for their bipartisan leadership on the STATES Act. Conflicts between federal and state law are creating untenable issues for the state-licensed and regulated cannabis industry. The STATES ACT amends the Controlled Substances Act to bring federal drug policy back into alignment with the 10th Amendment, allowing each state to determine the best cannabis policy for their citizens. This is as the Founders would have intended, making the STATES Act an important step towards a humane and constitutional federal cannabis policy.”
On a less positive note, in a major setback to Colorado cannabis licensees and their efforts to access outside capital, on Tuesday, Governor John Hickenlooper vetoed HB 1011 which would have allowed out-of state investment. CBE published “Colorado House Bill 1011 could have ramifications world-wide in the Cannabis Industry” on April 30th anticipating his decision by June 15, but the Governor issued a letter to lawmakers yesterday outlining his rational behind the veto.
The letter cited federal illegality, banking limitations and a need for updated federal securities and banking laws and Hickenlooper indicated that Colorado wasn’t equipped currently to regulate out-of-state capital investment. The letter is a slap in the face to the already highly regulated and in many cases under-funded operators that compete with other states that have no such restrictions to establish multi-state footprints, impeding their ability to compete. His letter reads like someone planning run for President and not as the Governor of the first state to legalize adult-use marijuana that is looking out for his constituents and the jobs and taxes that they have added in-state during his tenure as Governor.
The bill is dead until the next legislative session unless the Governor calls the body back into session, which is highly unlikely. So much for leveling the playing field with other states to allow your constituents to build war chests that would allow Colorado operators to compete for cannabis consumer dollars and domestic and international market-share anytime soon…way to have their backs Governor.
More of the Same at NCIA
Its been roughly 6 months since CBE first reported about the problems at NCIA, specifically with executive director Aaron Smith. The announcement this week of the newly elected board members raised CBE’s eyebrows again, not because the 3 additions to the board lack qualifications, but because of the lack of action by the current board to correct organizational deficiencies, due in large part to what past board members and others describe as Smith’s dictatorial style and lack of accountability.
Two of the newly elected members, Taylor West, who served as Communications Director of NCIA for several years before leaving for a private sector public relations job and Michigan dispensary operator Mark Passerini has close ties with ArcView’s Troy Dayton, another NCIA board member. Add to that, John Davis, a long-time board member and past board chair (and a past contributor to CBE), was not re-elected based on the vote tally. Six of the seven other incumbent board members were re-elected according to New Cannabis Ventures, the other exception being Eric Pierson CEO of SPARC. It smells like more of the same old, same old NCIA standard operating procedure to this reporter. So much for term limits.
After CBE and Marijuana Business Daily reported about problems at the top of NCIA and bylaws that seem outdated and intended, in my opinion to support the needs of a few, nothing has changed. After fired NCIA Chief of Staff Genifer Murray reported irregularities to board members, a committee was reportedly set-up to evaluate the Executive Director and sources tell CBE that nothing has been reported to the current board to date.
A sense of urgency would have seemed to be the way to go after a spirited NCIA board debate late last year about a Smith’s self-reported, pro-ported “Love Contract” between him and a female employee that he claims protects the organization from liability. Sources tell CBE that a copy of the contract has never materialized or been shared with the board even though sources tell CBE Smith himself claims that one exists to protect the organization and board members of any potential liability or other repercussions if the employee in question decides to ever pursue a case of sexual misconduct by Smith. Ironically, long-time board member and NCIA co-founder Rob Kampia was removed from the board after an evaluation committee reported that he had made an NCIA contractor feel uncomfortable for asking her out on a date before Kampia was even on the board. Sources tell CBE no statement was presented about that allegation before the 19-1 vote to oust Kampia (sources tell us that Davis cast the lone vote to keep Kampia on the board) was conducted and nothing has happened to hold Smith to the fire for actually admitting to pulling a Harvey Weinstein by having an affair with a staff subordinate. So much for due process and equal treatment, go figure.
Additionally, Shannon Fender from Native Roots, one of the largest owner operators in the industry, resigned her board position just last month, in a statement she provided to CBE Fender noted,
“After a great deal of consideration, I decided last week to resign from the National Cannabis Industry Association (NCIA) Board of Directors. While I was extremely excited to be voted onto this board a short year ago, which I saw as both equally a tremendous honor and duty, my time on the Board has led me to reassess my involvement as an individual, as a representative of Native Roots, and as a steward of this growing industry.”
Native Roots continues to be committed to the ideals that NCIA was founded on and will continue to work to move those efforts forward. Further, we continue to support collaborative nationwide efforts to progress the cannabis industry. We are a founding Board member of the Cannabis Trade Federation, a newly formed organization between the New Federalism Fund (NFF) and the American Trade Association for Cannabis and Hemp (ATACH) and will continue to be actively involved in the advancement of federal policy.”
CBE was told by sources in the past that Smith had suggested to some that ran for the board that he could guarantee that they would win; with several highly qualified board candidates like Gary Cohen, CEO of Cova and Dr. John MacKay of Synergistic Technology Associates among them, and the lapsing of the term of Glenn Peterson owner of Canuvo of Maine, it looks like Smith has successfully purged any dissenting voices from the board. In addition to Kampia, Fender, Peterson, and Davis, the above mentioned Neal Levine of industry leader LivWell Enlightened Health and industry pioneer and Denver mayoral candidate Kayvan Khalitbari round out the departed from the NCIA board which sorely needs new leadership and greater licensee participation. We will see if anything comes from his evaluation and the new board in righting the ship, I wouldn’t hold your breath.
The Press Crush at Cannabis World Congress and Business Expo
On a separate note, I attended the Cannabis World Congress and Business Expo in New York last week, primarily to meet Bruce Linton from Canopy Growth, the world’s largest market-cap publicly listed (on the NYSE) cannabis company. Linton’s presentation was easily the most attended presentation at the event and the New You media wasted no time in descending on him after the presentation. Linton, to his credit made himself available to the press and stayed to receive each and every one of them including yours truly.
What struck me about that and the event in general was the media crush as well as the number of cameras, microphones and members of the mainstream press that descended on the Javitt’s Center event to interview and glamorize Cannabis Industry executives. Linton and canna-celebs like successful entrepreneur Nick Kovacevich, CEO of Kush Bottles and other “real” celebrities like Whoopi Goldberg and Montel Williams were in high demand at the event which did have larger attendee and exhibitor base then in year’s past, but still lacked the vibe of a more sophisticated production like MJ Biz’s Las Vegas mega-show and even their New Orleans event this past May.
Canna Security America (CSA) Closes its Doors
On a sad note, Canna Security America (CSA) President Tom Siciliano shared the news with CBE that CSA had closed its doors. CSA, which was launched in 2009 by Dan Williams, was covered by CBE on two occasions, “Timing is everything and the time is now for Canna Security America” and “Turnaround Specialist Re-Primes the Canna Security America Pump” .
According to Market Exclusives, “On April 27th, 2018, the Board of Directors of CSA directed, instructed and authorized Tom Siciliano, President of CSA to instruct the company’s bankruptcy counsel to prepare such documents and papers as may be necessary to place the company in chapter 7 bankruptcy, to execute such documents and instruct that they be filed, and to prosecute and pursue such bankruptcy petition as may be necessary to obtain a bankruptcy discharge order.”
CBE was pulling for CSA; Tom fought the good fight in growing the revenue base of the full service security company that had struggled since going public but apparently lacked the capital to see the company to profitability. According to his Linkedin profile, Tom has accepted a position as Chief Branding Officer at Helix TCS and CBE expects to hear more from him in the near future. We wish our best to Tom and the rest of the CSA team.