Tag: Industry

Investors, Beware of Cutesy Names and Unsustainable Run-Ups

Cannabis stocks have performed exceptionally well over the past few months. While the overall market broke a streak of ten consecutive weekly gains last week, the Cannabis Stock Index still remains up year-to-date by 7% through January 12, and has advanced 168% since late October:

The legalization of adult-use cannabis in California on January 1st and anticipation of Canada’s legalization for adult use later this year fueled a speculative rally, which ran into a brick wall when Jeff Sessions rescinded the Cole Memo on January 4. That surprise move opened the cannabis industry to greater risk of federal enforcement of the Controlled Substances Act.

The end of the Cole memo halted the current rally, but a number of companies remain at prices that aren’t justified by their fundamentals.

For those not familiar with the Cole Memo, issued in 2013, it was federal guidance that allowed states to move forward with legalization without fearing federal intervention. As long as the states followed eight rules, then Uncle Sam would essentially look the other way. Without those assurances and guidelines, local US attorneys have much more freedom prosecute if they see fit.

Despite the risk to the industry, many stocks have run up, even with the recent pullback, to levels that aren’t likely sustainable. Instead of high-fiving, holders of many of these stocks should be thinking about hitting the sell button in my view.

This is the third big rally since I began following this market sector in 2013. One thing I’ve learned is that new investors entering the market often gravitate to stocks with “cannabis” or “marijuana” in the name. They also tend to favor cute trading symbols. With this in mind, I would like to discuss three cannabis stocks that share these features and look quite risky to me.

NUGS

Cannabis Strategic Ventures (OTC: NUGS) is a relative newcomer to the space, having recently changed its name from Cascade Energy in early December. The company doesn’t file with the SEC, but its disclosure at OTC Markets for the quarter ending 9/30/17 indicated 277 million shares outstanding, giving the company a market capitalization of $835 million as of January 12th. According to the disclosure, 42.9 million shares were sold at $0.0167 in the six months ending September 30th. The company had total assets of just $673,651 and lost $1.5 million on sales of $104,310 during the quarter. Over the past month, NUGS has increased 3710%.

CANN

General Cannabis (OTC: CANN) is a Colorado-based provider of security services and consulting. According to its 10-Q for the quarter ending 9/30/17, the company generated sales of about $980K but produced an operating loss of $1.467 million. The company’s assets of $2.8 million were dwarfed by its debt before a recent capital raise of $4 million.

While CANN is a lot more legitimate than my other two examples, investors should understand this recent capital raise by the company, which now has 36.5 million fully-diluted shares (including warrants and options) that give it a market cap of $252 million as of January 12th. While the stock trades at $6.90, the company sold shares as recently as December at $1.00 along with warrants to buy additional shares at $0.50. In addition to the 4 million warrants at $0.50, the company had 5.6 million warrants at an average of $0.69 outstanding as of September 30. The holders of these warrants stand to reap over $60 million in profits at the current price, and this could pressure the stock. Over the past month, CANN has increased 97%.

MCOA

Marijuana Company of America (OTC: MCOA) has been operating in the cannabis space since late 2015 but only recently began filing with the SEC. Its 10-Q for the quarter ending 9/30/17 showed sales of just $2,927 for the quarter and an operating loss of almost $700,000. It ended the quarter with total assets of just $487,336 but liabilities of $3.4 million. With 2.066 billion shares, the market cap as of January 12th was $99 million. The company has seen significant selling by its insiders on almost a daily basis, a good indication of what they think about the company’s prospects. Over the past month, MCOA has increased 43%.

Look to the Fundamentals

I am hopeful that the new policy of Jeff Sessions is checked by Congress, but, even if so, the three companies I have highlighted appear to be at unsustainable prices. For those holding these or other stocks that don’t appear to have fundamentals to support their valuations, this is not a time, in my view, to be aggressively buying.

Bottom line: Investors are still piling into cannabis stocks, particularly ones with cute names or trading symbols, despite the change in risk to the sector. Many of these stocks look quite risky at the moment given the big run-up in prices and the lack of solid fundamentals.

Next up: The Canadian cannabis producers have captured investor interest ahead of legalization. I will help break down the 27 publicly-traded companies that are licensed by Health Canada.

As an owner of New Cannabis Ventures, Alan works with several publicly-traded and privately held cannabis companies as he discloses here. In the event he mentions a company that is a client, he will disclose it in the article as well.

Oregon Cannabis Stores Get Failing Grade on Latest ID Test

Portland, OR – During the winter holiday season the Oregon Liquor Control Commission conducted additional minor decoy operations across Oregon, and found that some licensed marijuana retailers are selling marijuana products to minors.

  • On Dec. 20, 2017, in the Eugene-Springfield area, marijuana inspectors visited 19 licensed marijuana retailers, and three failed a check for prohibiting sales to a minor volunteer. Compliance rate: 84%
  • On Dec. 21, 2017, in the Keizer-Salem area, marijuana inspectors visited 23 licensed marijuana retailers, and five failed a check for prohibiting sales to a minor volunteer. Compliance rate: 78%
  • On Dec. 21, 2017, in Portland, marijuana inspectors visited seven (7) licensed marijuana retailers, and four failed a check for prohibiting sales to a minor volunteer. Compliance rate: 43%
  • On Dec. 28, 2017, in Central Oregon, marijuana inspectors visited five (5) licensed marijuana retailers, and none failed a check for prohibiting sales to a minor volunteer. Compliance rate: 100%
  • On Dec. 29, 2017, in Southern Oregon, marijuana inspectors visited 12 licensed marijuana retailers, and four failed a check for prohibiting sales to a minor volunteer. Compliance rate: 67%
‘These overall results are unacceptable.’

Steve Marks, Executive Director, Oregon Liquor Control Commission

“These overall results are unacceptable,” said Steve Marks, Executive Director of the OLCC.  “One of the basic tenets of Measure 91 is the protection of children by discouraging their use of marijuana. Oregonians who voted for legalizing recreational marijuana implicitly told the cannabis industry to abide by public safety laws.  Clearly they’re not, and we need to continue this type of enforcement activity.”

In Washington State, by contrast, the cannabis retailer no-sales-to-minors compliance rate is 92 percent. Brian Smith, spokesperson for the Washington Liquor and Cannabis Board, said the compliance rate is about equal to the state’s most responsible alcohol retailers.

The Oregon Liquor Control Commission conducts the decoy operations to make sure marijuana licensees are complying with state laws and OLCC regulations to keep minors from entering licensed retail businesses to purchase marijuana products.

License Suspensions & Fines

Sale of marijuana products to anyone under the age of 21 in Oregon is a violation that for a first offense could result in a 10 to 30 day license suspension, or a fine of $1,650, depending on whether or not the sale is intentional. Failure by a marijuana licensee, or its employee, to check a customer’s identification before the attempted purchase of a marijuana product is a violation that could result in a seven-day license suspension or a fine more than $1,100.

The framework for regulating recreational marijuana was established in Oregon’s Measure 91, which was approved by voters in 2014, using the OLCC alcohol regulatory structure. The penalties for marijuana licensees’ violations were established based on the criteria used for penalizing alcohol licensees.

‘This Is a Wake-Up Call to Retailers’

During the sales checks, a minor volunteer attempts to enter a licensed marijuana retailer and/or purchase marijuana products from a licensed business to see if staff are checking ID’s correctly and refusing entry to anyone under 21. Commission inspectors supervise the minor volunteers.  The volunteers carry their own legal ID that identifies them as under 21 and do not disguise their age or lie to encourage the sale of cannabis. The Oregon Driver license for a minor carries a red border around the picture with the words “Under 21 until” followed by the date of his/her 21st birthday.

The OLCC tests licensed marijuana businesses throughout the year, with each licensed retailer receiving a minimum of one visit per year. The OLCC offers a free training course on how to check ID’s and identify false identification.

“This is a wake-up call to our licensed retailers.  Oregonians have entrusted you with a responsibility that includes NOT selling marijuana to minors.  By doing so you tarnish the cannabis industry and put your business in jeopardy,” said Marks.

Results from the Marijuana Decoy Operations can be found on the OLCC marijuana website under the Recreational Marijuana Sales section and under the OLCC Public Safety Division Minor Decoy Operations.

The Canadian Government’s Curious Cannabis Slang

Wax, errl, purp, keef, rosin, boom, doobie, and budder. These are the words identified as “cannabis slang” in a recent social-media campaign by Health Canada. In the campaign, the government tweeted an image of a chalkboard covered with the terms, adding that “some words may not mean what you think.” The explicit moral: “Learn the slang terms for cannabis.”

If the campaign means to help parents decipher their kids’ lingo, it may not work if the terms aren’t widely used in the first place.

Ostensibly part of the government’s $10 million multimedia educational push before adult-use recreational cannabis becomes legal in 2018, the post faced scrutiny on  Canadian Twitter, with many commenters characterizing the featured words as uncommon, or at least not be as widely used as Health Canada suggests. If the campaign means to help parents decipher their kids’ lingo, it may not work if the terms aren’t widely used by Canadians in the first place.

First, “doobie.” This is indeed slang for cannabis, so the government got it right. However, whether it’s actually widely used by Canadians is up for debate, as is its status as a word that “may not mean what you think.” Almost everyone already knows that a doobie refers to cannabis. But maybe that’s just in my universe.

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“Purp” ostensibly refers to the “purple strains of cannabis”: purple kush, purple haze, purple dragon, etc. But outside of referring to these particular strains, one would be hard-pressed to hear the term among Canadian tokers.

Keef is actually spelled “keif,” and denotes the resin-packed trichomes that collect within cannabis grinders. So this time the government got the word right but the spelling wrong.

‘I’ve never heard of any of these terms before,’ said one Twitter user.

As for some of the other terms, many commentators on Twitter were stumped.

“I’ve never heard of any of these terms before,” said one Twitter user.

Personally, I’ve never heard the alleged cannabis euphemisms “errl” and “boom”—and I’m not the only one. “Errl, boom… new to me,” wrote one Twitter user. And so I sought to find the basis of the Canadian government’s insistence that errl and boom are totally widely-used slang for cannabis in the Great White North.

It appears that “boom” comes from a 2003 United States Office of Drug Policy list of drug slang terms, which is no longer posted on the official government website but remains archived by a third-party site. Otherwise, there’s not much mention of this term online.

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I was, however, able to find the mention of errl in a few different places, including Urban Dictionary and the Cannabist, which classify the word as slang for “hash oil.” Maybe it’s just not used in my neck of the woods.

By reaching for uncommon if not outrageous synonyms for cannabis, and putting them in the forefront of its public education campaign, Health Canada risks making itself a laughingstock within the established cannabis community. But if their goal was to get people talking, mission accomplished.

And it looks like the government may be listening. A new Twitter post from Health Canada on January 3 refers to blunts, pipes, and spliffs, terms that are much more familiar to the lexicon of cannabis consumers.

Saskatchewan to Sell Cannabis Through Private Retailers With ‘Good Character’

Breaking with precedents set by Ontario and Quebec, the Saskatchewan government will not have a monopoly on legalized cannabis, choosing instead to sell the drug through the private sector. The prairie province is the latest region to announce its approach to cannabis distribution, as Canada’s vague summer deadline for legalizations approaches. Here’s what we know about how things will be done in Saskatchewan when it comes to legally selling cannabis.

The Saskatchewan Liquor and Gaming Authority will issue up to 60 cannabis retail permits to private retail outlets in as many as 40 municipalities and First Nation communities.

* The Saskatchewan Liquor and Gaming Authority (SLGA) will issue up to 60 cannabis retail permits to private retail outlets in as many as 40 municipalities and First Nation communities across the province. The permits will be given to communities of at least 2,500 people, with larger districts given additional permits. CBC reports that the province’s largest city, Saskatoon, will be given the option of having seven licences, while Regina will receive six and cities with smaller populations—such as Moose Jaw, Prince Albert, and Lloydminster—will receive two. Eligible First Nations communities and municipalities will be given the chance to opt out from having a cannabis retailer in their community. The number of retail permits will depend on how many community leaders choose to opt out.

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* Retail cannabis stores in the province will follow a similar model as private liquor stores. The private sector will be responsible for wholesaling and retailing cannabis, which will be regulated by the SLGA. Stores selling cannabis must do so from a standalone storefront, with the option of also having an online store. Stores are limited to only selling cannabis and related accessories. They also must be able to track and report cannabis inventory to help assure that customers have access to safe, legal product from regulated wholesalers.

Liscencees will be expected to meet ‘good character’ criteria as part of the permitting process.

* The SLGA will work with an independent third party to choose retail operators through a two-phase process. The first phase will screen candidates for financial capacity and the ability to track and report inventory. Phase two will see qualified applicants selected at random through a lottery. Those chosen will be expected to meet ‘good character’ criteria as part of the permitting process. Makowsky told the CBC that stores already selling cannabis might lose their means to the market under a lottery system. The province has not stated whether retailers will be able to buy supply from wholesalers outside Saskatchewan.

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* The CBC reports that an online survey set up by the province showed 45% of respondents wanted to see the stores run by SLGA. However, Gene Makowsky, the minister responsible for the SLGA, said the government didn’t want to spend millions of dollars establishing the infrastructure needed to sell cannabis. “It de-risks the taxpayer, certainly,” he said. “It’s an ill-defined market right now. We’re not sure what the future of that is going to be.” He added that the province would gain revenue from taxation and licensing fees, although those details have not been finalized.

* Details about application criteria and timelines, along with permit licensing fees and other related matters, will be finalized in the coming weeks. The province, which has a legal drinking age of 18, is expected to announce its minimum age for cannabis consumption by spring.

In the Fight Over LA Weekly, Cannabis Companies Are Caught in the Middle

In 2008, a year after graduating from Loyola Law School in Los Angeles, David Welch watched a close friend get sent to prison for three years for selling marijuana to an undercover cop. The experience set his legal destiny.

“Watching my friend handcuffed and led away to lockup gave me my inspiration to change California’s cannabis criminal laws through litigation, political activism and policy,” he would later recall.

The new owners need cannabis ads to keep the paper afloat. But their initial missteps put that plan in jeopardy.

Welch signed on as a member of NORML, the National Organization to Reform Marijuana Laws. He built a law practice focused less on criminal justice than on legal cannabis capitalism, representing businesses and investors seeking legitimacy in state-regulated marijuana economies.

Along the way, he boldly injected himself into fights against local governments and even between competing marijuana business interests. Welch represented scores of dispensaries that sued the City of Los Angeles when city officials denied them operating permits. When unlicensed dispensaries undermined the customer base of city-permitted operators in neighboring Santa Ana, Welch went to court for the permitted companies, seeking to shutter their unlicensed competitors.

Now, after establishing himself as a high-profile leader in the California cannabis bar, Welch finds himself embroiled in an unlikely–and particularly bitter–scrum over the future of Los Angeles’ venerable alternative newspaper, the LA Weekly. And the cannabis industry is playing a surprisingly central role in the battle.

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Banking on Cannabis Ads

Welch is the general counsel and an investor in Semanal Media, the upstart company that purchased the LA Weekly late last year from the Voice Media Group.

A cultural institution since the 1970s, the paper built a loyal readership base that prized its hard-edged reporting, its progressive voice and it close community connections to the Los Angeles scene, from music to cinema, haute cuisine to taco trucks.

Welch: LA Weekly ‘was going broke.’ (Photo: ggtriallaw.com)

While the paper has slimmed considerably from its economic heyday in the 1990s, cannabis was until recently considered the paper’s ace card, a bulwark against the advertising losses that have sunk countless media outlets over the past decade. The pages of LA Weekly brim with ads for medical marijuana dispensaries, delivery services, cannabis physicians and consumption accessories.

The Weekly, and particularly its new owners, were banking on the already huge Los Angeles cannabis sector surging with retail sales of adult-use marijuana that began on Jan. 1.

“The sale wasn’t about a political agenda, it was about money…pot money to be exact,” wrote Lina Lecaro, a freelance contributor who has written about nightlife, music and art for the LA Weekly for over 25 years and intends to continue writing for the paper. In a Dec. 11 article on the sale for the OC Weekly in neighboring Orange County, she wrote: “When recreational cannabis becomes legal there is tons to be made in advertising for the LA Weekly.”

That was clearly the thinking of the new owners, including Welch who–in lieu of a direct interview–agreed to respond to Leafly’s email questions forwarded to him through a public relations representative.

Welch described the Weekly as being in danger of being unable to meet payroll “without a significant cash infusion” from new investors–in addition to staff reductions.

“The publication was going broke,” he said.

Staff reductions aren’t uncommon in the media world. But the reductions at the Weekly weren’t cutbacks so much as the complete elimination of the editorial staff. And the blowback caught Welch and his fellow investors by surprise.

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Hello, You’re Fired

On Nov. 29, a few days after Thanksgiving, the LA Weekly’s new ownership group gutted the paper’s editorial staff, firing nine of the newspaper’s 13 editorial staff members. Editor-in-chief Mara Shalhoup (who was among those let go) compared it to a notoriously bloody episode of Game of Thrones.

At the end of the day, the only recognizable name left standing was staff writer Hillel Aron, who was promoted to acting editor-in-chief.

Despite the new ownership group’s embrace of cannabis economics, the layoffs did not spare veteran journalist Dennis Romero, one of California’s most respected cannabis culture and industry reporters. (Romero, who is now a freelance contributor to Leafly, declined to comment for this article.)

The mass firing sent shockwaves through the city, and generated outrage among media professionals nationwide. The laid off staffers didn’t even know exactly who had fired them, because at that point the identity of the investors who made up the Semanal Group had not been disclosed.

For 10 years, Jeff Weiss contributed stories to LA Weekly, including a regular underground music and culture column, Bizarre Ride. After the layoffs of full-time staffers, including his editor, he resigned in protest.

April Wolfe, the paper’s suddenly exiled film critic, joined Weiss in mounting a Twitter campaign calling for boycott of the Weekly, its website and advertisers. Blasting the new owners, she railed in a tweet: “They have the nerve to say that their publication will ‘speak out against injustice’ after they fired all of us and broke our union while reprinting our stories.”

The battle for LA Weekly was on.

Meet the New Boss

Two days after the mass firing, Semanal Media revealed its principal members.

Protesters picketed the alt-weekly’s offices, carrying #Boycott LAWeekly signs and hauling a coffin filled with paper copies of the newspaper.

Leader of the group was Brian Calle, former opinion editor of the Orange County Register, a paper renowned for its mix of bedrock conservatism and devout libertarianism. His fellow investors included Welch; Orange County real estate developers Mike Mugel and Paul Makarechian; Los Angeles biotech entrepreneur Kevin Xu; and two Orange County executives, attorney and technology CEO Steve Mehr and businessman Andy Bequer. Additionally, Calle said Erwin Chemerinsky, dean of the University of California Berkeley law school also planned to invest.

“There is a lot of talk about who owns L.A. Weekly,” Calle wrote. “We’ve seen all the speculation. Is it a Russian oligarch? Is it some Trumpista? Is it Lord Voldemort?

“Rumors are rampant and the assumption is that someone bought the Weekly for some nefarious reason. But that’s not the case.

“Our new ownership team is a patchwork of people who care about Los Angeles, care about the community and want to once again see an incredibly relevant, thriving L.A. Weekly with edge and grit that becomes the cultural center of the city.

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Protests Grow Into a Boycott

The uproar over the mass firing quickly turned into a public relations crisis for the new ownership team.

The identity of the new ownership group—in particular, its conservative Orange County Republican slant—only added fuel to the fire.

On Dec. 8, protesters picketed the alt-weekly’s offices in Culver City carrying #Boycott LAWeekly signs and hauling a coffin filled with paper copies of the newspaper.

The demonstrators seized upon a tweet from the new owners that asked “passionate Angelinos” (misspelling Angelenos) to “share stories about their life and culture in L.A.”—a signal, the protestors said, that the Weekly’s new owners intended to stock the paper with free content. The tweet has since been deleted, and the new owners said in a statement that they will continue paying current rates to freelancers, while working to build contributor ranks.

Calle: Conservative OC editor now leads LA Weekly. (@briancalle/Twitter)

On Dec. 9, Calle and Welch penned a letter of apology on the Weekly’s Facebook page.

“Our missteps have allowed rumor, conjecture, and misinformation to eclipse fact,” they wrote. “False narratives have snowballed in part because we have not adequately provided our vision and plan for the Weekly’s future to the public.”

They went on to assail “media outlets perpetuating the false narrative that we purchased the Weekly to turn it into a right-wing propaganda machine,” writing: “Nothing could be further from the truth.” They also said, “The new ownership is made up of people from many different backgrounds: progressive, conservative, African American, Asian, Persian, Latino, Caucasian, gay, straight, and immigrant. We believe our diversity gives us strength.”

Then, three days later, they announced the unpaid suspension of LA Weekly’s interim editor Hillel Aron – the only staff member who wasn’t laid off on Nov. 29 – after Spin reported on Aron’s past tweets mocking gay men, feminists and women. Aron apologized for what he said were poor attempts at humor. The new owners said the Twitter posts were out-of-touch “with LA Weekly’s values.”

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Same Outlook, or a Whole New Angle?

Weiss and other critics of the sale have charged that Calle’s investment group is poised to turn the Weekly into a GOP and Trumpista house organ. The owners claim no such intent.

Harold Meyerson, LA Weekly editor from 1989 to 2001, wrote that the new owners are out-of-touch with the values of both the paper and Los Angeles. He pointed to Calle, “the editorial page editor of the right-wing Orange County Register” and investors who are “chiefly Orange County Republicans, some of them major donors to the party’s campaigns.”

In a Dec. 24 op-ed in the Los Angeles Times, Meyerson wrote: “At the Register, Calle’s editorials had promoted the kind of cultural and economic libertarianism that some teenage Ayn Rand acolytes carry into adulthood. Clearly, his hope has been that his cultural libertarianism — in particular, his laissez-faire stance toward marijuana — would enable him to find some common ground with the Weekly’s always disproportionately young readers.”

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Actor Mark Ruffalo and director Ava DuVernay embraced the boycott call. Amoeba Music stores announced it would pull a full-page ad and reconsider its future business relationship with the paper. Bill Esparza, a renowned Los Angeles writer on all things tacos, announced he was pulling out of the “Tacolandia” festival he helped create and ran in partnership with LA Weekly.

“I’m taking this #TacoTuesday to announce that after 5 years as the curator and host of @LAWeekly’s Tacolandia, I can no longer be a part of this event,” Esparza wrote on Twitter on Dec. 12. “I won’t support @briancalle or his band of LA hating investors.”

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‘Working to Save LA Weekly’

The new owners pushed back. They have a strategy for the paper’s comeback, they insist, and cannabis is part of their strategy.

‘We have been targeting dispensaries’ because the new owners ‘represent the opposite of what I think marijuana is supposed to be.’

Jeff Weiss, boycott leader

“We believe we can develop a business model that works to save LA Weekly,” Welch said. “We see opportunities to expand our business events (and) cannabis advertising as legalization moves forward in California.” He said the new ownership hopes to increase cannabis revenues from ads for cannabis products while improving the Weekly’s online traffic and media partnerships.

That could be difficult, though, if the paper’s cannabis advertisers abandon the Weekly.

Weiss and others upset with the Weekly sale have been contacting Los Angeles cannabis businesses, urging the very advertisers the new owners counted on for the paper’s revival to join the boycott.

“We specifically have been targeting dispensaries–because these men [who bought LA Weekly] represent the opposite of what I think marijuana is supposed to be,” Weiss told Leafly. “It is supposed to expand your mind and relieve your anxiety. It’s a benevolent medicine. But these men represent toxicity. Their actions have been nothing but toxic to the citizens of Los Angeles and the writers of Los Angeles.”

Dispensaries: Caught in the Middle

The LA Weekly’s new owners are counting on cannabis ads to help sustain the paper. MedMen, one of the LA area’s best-known cannabis companies, is weighing its options. (AP Photo/Richard Vogel)

So far, cannabis industry advertisers don’t appear to be pulling their prized display ads out of the paper. But the turmoil and turnover at the Weekly is stirring concerns in the cannabis sector over whether the paper can remain a productive vehicle for advertisers wanting to reach its hip, culturally connected audience.

‘Unless we feel some confidence the LA Weekly will be able to retain its readers in this progressive, cannabis-friendly community, we will have to reconsider’ doing business with the paper.

Daniel Yi , Communications Director for MedMen

“California is about to legalize pot and Los Angeles is going to be the capital of this industry and the LA Weekly has been ahead of the curve in covering this legitimate industry,” Daniel Yi, communications director for MedMen, told me last week, prior to the Jan. 1, 2018  start of adult-use sales. MedMen operates two cannabis dispensaries in the Los Angeles region, with a third L.A. store about to open downtown.

MedMen, which also has retail dispensaries open in West Hollywood and Santa Ana, has an advertising contract with the LA Weekly that runs through early January, 2018. Yi, a former reporter for the Los Angeles Times, says the company is sympathetic to the boycott calls and may reconsider doing business with the Weekly after the current contract expires. Key in the decision, he said, is whether the paper’s editorial quality and readership diminish.

“I appreciate what the boycott people are saying,” Yi said. “I think they have reason to be concerned about the ownership…Unless we feel some confidence the LA Weekly will be able to retain its readers in this progressive, cannabis-friendly community, we will have to reconsider.

“They just laid off all but one staffer in the newsroom–and that should give anybody pause.”

Decision Time When the Contract Expires

Also concerned about the tumult is Michael Garganese Jr., co-manager of California vaporizer cartridge company, Lola Lola, which hopes to expand its market reach through Los Angeles’ retail cannabis stores. Based in San Francisco, Lola Lola recently began advertising in the Weekly, its first ad partnership with an alt weekly. Lola Lola paid for ads through this month, but now the controversy is unsettling, Garganese said.

“We haven’t heard much about it, other than the staff got fired,” Garganese said. “I don’t know much about the shake-up or why it happened. I want to support the journalists. But I think it’s a little bit premature for us to make a decision on that.”

“We have our advertising campaign in,” he said last week. “It is set and done for December and January. We will be monitoring the situation and making choices as it all plays out.”

‘Breeding Is an Art Form’: An Interview with Cannabis Cup Champion, Exotic Genetix

When it comes to quality cannabis, it all begins with a quality seed created by a breeder. In the last decade, Washington State’s Exotic Genetix has taken a strong hold on the cannabis breeding community. Most recently, Exotic Genetix won Best Indica for their strain Tina in addition to Best Hybrid for Cookies & Cream at the 2017 High Times SoCal Harvest Cannabis Cup. Having claimed numerous awards since their beginning in 2008, Exotic Genetix is widely recognized for their consistent quality. Other notable strains include Kimbo Kush, Trap Star, and Lemon Meringue. Leafly was given the opportunity to catch up with Exotic Genetix’s founder, Mike, and get a look into to what fuels their success and where they’re headed in the years to come.

Exotic Genetix’s award-winning Tina in bud-form. (Trevor Hennings/Leafly)

Leafly: How did you find yourself breeding cannabis?

Exotic Genetix: I started out doing this for myself and friends about ten years ago. I made a few new strains and handed them out to friends, and they would bug me to make more new genetics. Before I knew it, I was making seeds for everybody.

I got into it because almost everything out there was junk. The cannabis clone market and low-grade genetics you’d find were insufficient–not to mention the bugs, pests, and diseases you’d find on the clones. That’s what got me started and gave me motivation. Back then, I wouldn’t say it was a passion, but now it is.

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Which strains are you most proud of? Do they express any traits you find yourself striving toward with other strains?

Exotic Genetix: There are a lot of strains I’m proud of. Early on, I would always focus on frost. Plenty of good strains have frost, but when we throw our twist on genetics or come out with new strains, they glisten and that is what we’ve strived for since day one.

“If you are going to take breeding seriously, it’s my belief that you should make something of your own first. It’s all about making it into your own art form.”

How do you look at breeding? Is there something you could compare it to?

Exotic Genetix: I look at breeding as an art form. I’m not the best out there, however I might be your favorite. People buy Picasso or Van Gogh paintings because of their fame, but there are great artists who aren’t famous and don’t cost as much. For these reasons, people go out and purchase those paintings because they like their style. It’s the same thing when breeding cannabis. People support us and stick with us because they like the product. Either they like your style or they don’t. It just depends on what you are into.

Tina, the award-winning indica strain, grows in the Exotic Genetix garden. (Trevor Hennings/Leafly)

As with all artists, there are opinions about how they created their art and its originality. What are your thoughts when it comes to “pollen chuckers” and the overflow of new genetics?

Exotic Genetix: We all start somewhere. If you want to produce seeds and chuck pollen, I say go for it. However, if you are going to take breeding seriously, it’s my belief that you should make something of your own first. Make your own male, make your own lineup. It’s all about making it into your own art form.

Once you’re an established breeder or seed bank, you can go out there and grab a little bit of this and a little bit of that, and try to put it into a different product. But it’s unfair to take something from Exotic and something from DNA Genetics and say, “I’m going to cross these two together and call this X,” and sell that under a new seed company name for a large profit. It’s an insult to the community.

“The largest influence for me would be the strong love and appreciation for cannabis in the community.”

Do you have any specific breeding stories you’d like to share?

Exotic Genetix: I went to Amsterdam about five years ago, and a friend of mine at Hortilab gave me some seeds that he had created with Karma that were never released. He said they were a cross of his Starbud x Karma’s Biker. It was such an amazing strain that I used it in my Tripple OG lineup. Then I took this special indica that had a great fuel smell, and I crossed that into the Triple OG lineup and came up with the strain called Tina.

She’s colorful, potent, high in THC, and smells like jet fuel. If you’re going for a Kush, this is the mother of all Kushes. All the hard work paid off because we won Best Indica with Tina at the 2017 High Times SoCal Harvest Cup.

Tina is an indica strain bred and grown by Exotic Genetix. (Trevor Hennings/Leafly)

What outside influences have affected how you run your business or breeding projects?

Exotic Genetix: I was always a fan of growing forums back in the old days. Looking at all the backyard growers, secretly working to get their genetics out there–it was inspiring to see what could be done. I never thought it would be like this nowadays. The largest influence for me would be the strong love and appreciation for cannabis in the community. No matter what forum or website it is, when you start to meet and talk to these people, you realize they’re just like you. You realize we’re all out here trying to do what we love and not get persecuted for it.

Has legalization changed anything about how you operate?

Exotic Genetix: 100%. We used to just run medical cannabis out of Washington before recreational cannabis came around. We would go from state-to-state and follow their medical rules, and would partner with farms to produce our seeds in different states. We still use these practices in legal medical states.

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However, in legal recreational states, it’s been a little tough because we’re confined by strict regulations; the only genetics we see in the recreational states are through licensed producers. In Washington State, we have Green & Gold Brands which exclusively runs our Exotic Genetix products. In California, we have another program based out of Long Beach so we can hit the California market strong right out of the gate. We’re just trying to follow the rules everywhere so we don’t get in trouble for doing what we love.

Cookies & Cream is bred and grown by Exotic Genetix, and it won 1st Place Hybrid at the 2017 SoCal Harvest Cup. (Trevor Hennings/Leafly)

Can you speak to the farming practices that you stand by?

Exotic Genetix: Washington State requires a list of any pesticides you used when you sell that packaged product in a retail store. It has to be disclosed. You’ll find that Exotic Genetix doesn’t use pesticides or products that are going to hurt you. If we do use anything, it would be organic and applied very early on so that doesn’t linger. Something with a short half-life.

There are natural, organic pesticides out there that aren’t harmful to humans. However, it’s important to remember there are also organic pesticides that have half-lives that aren’t good for you. But at this point, we anticipate that no pesticide use will be necessary. We believe if you have a clean environment, there’s no reason to need that stuff to begin with.

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Outdoor growing is a completely different scenario. That’s why they make organic, natural pesticides that aren’t bad for humans. No matter how talented of a grower you are, you can’t keep nature off of nature, so to speak. In a controlled indoor environment, you really have no excuse for pest issues.

Where do you see Exotic Genetix heading in next decade?

Exotic Genetix: I see Exotic Genetix becoming a household name. I want to be like a craft beer that you go and grab off the shelf. I want to be that consistent, top quality product that isn’t going to break the bank. I don’t want to be the guy that raises prices when the product is mediocre. I want to be the strong name that you know is a good price for a great product.

Random Testing, Million-Dollar Fines: Canada’s Cannabis Pesticide Crackdown

In the last days of 2017, most of the national news coverage was devoted to the bone-chilling cold that was sending even the hardiest souls in the Great White North running for cover indoors. But news of a different sort garnered some attention, too.

Prior to 2017, Health Canada wasn’t testing cannabis produced by LPs—the companies were trusted to monitor themselves.

The federal government announced it would fine licensed cannabis producers as much as $1 million per violation for using banned pesticides. It is among several penalties to be enshrined in the Cannabis Act, which is set to legalize recreational cannabis in July.

Health Canada’s response to banned pesticides will be “proportionate to the level of risk posed to the health and safety of Canadians, the degree of cooperation offered, the compliance history, the likelihood of the reoccurrence of the activity, and whether any other non-compliant activities are also observed,” Andre Gagnon, the agency’s media relations officer, told Leafly.

“I think it’s a positive step forward,” a consumer who had suffered health problems after smoking licensed cannabis told The Globe and Mail. “You would think the companies are all going to think twice before they use anything they’re not supposed to.”

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The Health Canada announcement capped a 13-month period in which a handful of the licensed companies produced cannabis that was found to be tainted with banned pesticides — a development that forced regulators and producers alike to evaluate and change the way they did business.

In May, Health Canada announced that LPs’ cannabis would be screened for banned pesticides by an independent laboratory before being put on the market.

Ontario-based producer Mettrum announced recalls in November 2016, later confirming suspicion the product had been tainted by myclobutanil—a fungicide that, when burned, produces hydrogen cyanide, which interferes with the way oxygen is used in the body and can cause problems ranging from headaches and nausea to seizures, fainting and even death depending on the amount inhaled. That discovery was made during a second round of testing. Evidence of another banned chemical, pyrethrin, had been discovered in the first round of testing.

New Brunswick-based Organigram and BC-based Aurora announced recalls a few weeks later, when myclobutanil and bifenazate, another banned pesticide, showed up in shipments consumers had received from those producers. Aurora had purchased its tainted product from Organigram and discovered the pesticides through testing.

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At the time, Health Canada wasn’t testing the cannabis produced by licensed companies—the companies were trusted to monitor themselves on that front — but the recalls spurred the government agency to action.

In February 2017, it announced it would start conducting random testing for the use of banned pesticides to ensure Canadians were receiving “safe, quality-controlled product.”

Health Canada ordered Mettrum and Organigram to submit their products to regular testing for banned pesticides and suspended, at least temporarily, the latter company’s organic certification.

Organigram and other LPs have launched investigations into how their product got contaminated and they’ve improved their testing measures.

Two months later, Health Canada conducted random spot tests of cannabis belonging to seven producers, taking leaf samples from plants in various stages of growth. Samples from two producers, Quebec’s Hydropothecary Corp and Ontario’s Peace Naturals, in Ontario, revealed the presence of myclobutanil or a known ingredient in pesticides (piperonyl butoxide).

In response, Health Canada revised its monitoring policy yet again. In May, it announced that licensed producers’ cannabis would have to be screened for banned pesticides by an independent laboratory before being put on the market.

Reaction to the pesticide revelations have ranged from heightened skepticism about the nascent cannabis industry to legal action.

A few months after Mettrum’s recall a Toronto law firm launched a class-action lawsuit against the producer’s parent company, Canopy Growth, alleging breach of its contract and negligence.

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Shortly after the recall of tainted Organigram product, a law firm based in Halifax, Nova Scotia announced its intention to launch a class-action lawsuit against the producer, claiming it had breached its contract with customers by using unauthorized pesticides in product purported to be organic.

The claim was amended last month to include allegations that Organigram products made users sick before it was recalled. The law firm said it had been contacted by more than a hundred people saying the tainted cannabis had made them sick. The lawsuit will proceed to trial if it is certified in a motion next June.

To restore consumer confidence, Organigram and other producers have launched investigations to determine how their product got contaminated and they have improved their testing measures.

“Organigram has identified seven key initiatives to help ensure the quality and safety of its product,” Organigram CEO Greg Engel told Leafly. “These initiatives include steps to randomly test input materials received from outside suppliers, a comprehensive screening process for existing and new suppliers, pesticide testing of every lot of final product prior to packaging, installation of cameras within mixing areas and a full training program for all employees,” he said, adding that the company has also implemented a comprehensive quality management system.

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Engel also told Leafly that the company’s product has undergone independent third-party testing, as per its agreement with Health Canada, and that Organigram has given patients access to test results.

Despite the recent problems with pesticides, he is optimistic about the future for his company and for the country’s cannabis industry, predicting dramatic advancements in mass indoor growing technology and is enthusiastic about the legalization of recreational cannabis.

“The adult recreational marketplace will roll out beginning in July of 2018 and it won’t be perfect,” he says. “But much like our friends in legal US states, we’ll learn, adapt and improve with incredible pace.”

A Top Cannabis Lawyer on What Losing the Cole Memo Means

Jeff Sessions’ decision to rescind the Cole memo, considered by many to be the founding document for legal cannabis, came as a major shock to the cannabis community. But that memo was just a memo—not a law.

“Today the shops are open, the dispensaries are open,” said Carlos Blumberg, a Nevada cannabis lawyer and the founder of the Nevada Dispensary Association. “There are state laws that allow them to be open, there are state laws that allow cards to be issued, there are state laws that allow for cultivation and edibles.”

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The same disparity between state and federal law that existed before the Cole memo was rescinded still exists, he noted, and the feds have the same authority to crack down on cannabis now that they did before. All the Cole memo did, he pointed out, was give guidance on ways to avoid that crackdown.

“You need to get to know the US attorney in your jurisdiction, which you should have done anyway!”

Hilary Bricken, cannabis attorney

“What we’ve had with the Cole memo was a certain amount of clarity as to what the federal government was looking for,” said Daniel Shortt, a Seattle attorney at the cannabis-centric firm Harris Bricken and founding member of the University of Washington law school’s Cannabis Law and Policy Project. Federal law on cannabis hasn’t changed significantly since the Marihuana Tax Act of 1937, Shortt said, but he still cautioned that Sessions’ move wasn’t something to take lightly, legally speaking.

“For people who are advising these businesses or working with these businesses, it’s important to explain what’s happening here,” Shortt said. “This is a significant change. It’s important to make sure people are aware of the impact of the Cole memo.”

To get a sense of that impact, Leafly consulted Hilary Bricken, also of Harris Bricken, who is one of the nation’s foremost experts on cannabis law. She spoke about about what the decision means and what the cannabis industry and its customers can do to protect themselves.

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Leafly: If you’re a business owner or a member of the industry, what should you do and what should you be concerned about?

Bricken: Well, number one, you shouldn’t panic. Number two, it’s business as usual. You stick to state-law compliance, you have a good relationship with your regulators, you pay your taxes. At the same time, you should not ignore this, and you need to get to know the US attorney in your jurisdiction, which you should have done anyway! And I don’t mean a meet-and-greet with tea and sandwiches. You need to find out what their prosecutorial record is and what they care about. Some of them have made their names on certain sectors of enforcement, and you need to know if they’re super drug-focused or not.

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Are there different concerns for medical cannabis and adult-use cannabis businesses?

In the 9th Circuit, certainly, because of the Rohrabacher–Blumenauer amendment. We have good case law for the 9th Circuit that says [the federal government] can’t spend money to interfere with state-law-abiding medical cannabis operators. [Eds. note—states in the 9th US Circuit Court of Appeals are California, Oregon, Washington, Montana, Idaho, Nevada, Arizona, Hawaii, and Alaska.]

I wouldn’t put it past the DOJ to try their hand in federal court in some of these other circuits to get a different result. Because that [amendment] on its face does not say that operators are protected in any way.

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From an investment standpoint, do people stand to lose the money they’ve put into businesses?

You could see a really zealous prosecutor go from employees at the store or principals of the company to the investors to the ancillary businesses that support them in order to try to wrap it up in a big criminal ring. But it would totally depend on the US attorney. Some of them I don’t think are going to care at all. They’re seasoned pros and vets and they’re not going to do anything politically volatile. These other ones in more conservative places—like, for example, the Eastern District of Washington, with [former US Attorney] Michael Ormsby and the Kettle Falls Five—in a jurisdiction like that, yeah, you could stand to lose majorly.

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Would they be prosecuted under conspiracy law?

Aiding, abetting, conspiring to violate the Controlled Substances Act. White-collar crimes for money laundering. I think that’s what they would look at. And I say “zealous prosecutor” because those are not easy charges to bring. You’d really have to build that case and be totally dedicated.

So maybe if you’re an investor, you’re worried last?

I would say in the line for getting punched in the face, you’re not first. You’re certainly not last.

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What does this mean for people who just want to smoke and possess cannabis?

Y’know, technically, legally, if they’re in possession of it or consuming it, they too are involved in a federal crime. However, based on the recent past, it is highly unlikely that certain U.S. Attorneys would ever prioritize the prosecution of state-legal consumers. So, while prosecution is legally possible because of current federal laws, it’s still not very likely.

In California, numerous people are in the midst of the legal-cannabis licensing process. Would you, as a lawyer, encourage such people to continue participating in that process? Is it a smart move?

It’s funny, I never really give any advice about encouraging or not encouraging clients. My position is, “Can you sleep at night?” If you’re afraid and uncomfortable, you don’t need to be doing this. But if you can tolerate the risk, it may work for you. And you should proceed in the face of that risk, cautiously. It’s such a personal decision, whether you view this as being about civil liberties or a business opportunity or whatever.

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How much does the rescinding of the Cole memo increase that risk they’re taking?

Well, it depends on where they’re located. If I were in LA County, San Diego County, or Orange County, I would definitely be researching my US prosecutor in the Southern District. If I’m in San Francisco, Oakland, San Jose, maybe less so. Even then, like what happened with Harborside, they kind of got a rogue US attorney in the Northern District. So I would say the risk is definitely there. It’s always been there, but now it’s crystallized, in that your independent US prosecutor is completely in charge. So you have to know what they care about if you want to mitigate your risk.

Pennsylvania Approves First Medical Cannabis Dispensary

HARRISBURG, Pa. (AP) — Pennsylvania officials on Thursday announced the first all-clear for a medical marijuana dispensary in the state to begin providing cannabis once it becomes available from a licensed grower.

The Keystone Canna Remedies dispensary in Bethlehem received the state authorization, a major milestone in Pennsylvania’s new medical marijuana program.

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“It means there’s going to be safe and effective access to a new medicine that can help (patients) in a wide variety of ways,” said Victor Guadagnino, the company’s co-founder and chief of business development. He said the company sees cannabis as a way patients can take a more active role in their own health care.

“We are one step closer to providing medical marijuana to patients with serious medical conditions who desperately need this medication.”

Gov. Tom Wolf

Nine entities have been approved to grow and process medical marijuana, and their products are expected to be available to patients in the coming four months.

Gov. Tom Wolf said the approval is good news for patients and their caregivers.

“We are one step closer to providing medical marijuana to patients with serious medical conditions who desperately need this medication,” the Democratic governor said.

Guadagnino, who lives in New York City, said the dispensary in Bethlehem will open this month for educational workshops and registration assistance, but he does not expect to have the product available until mid-February.

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The Bethlehem dispensary, which Guadagnino said is part of their multimillion-dollar medical marijuana investment in the region, will start with four or five employees and grow based on patient demand. The company also plans to eventually open two other dispensaries in the Lehigh Valley.

Wolf vowed to do whatever he can “to protect Pennsylvania patients.”

Acting Health Secretary Dr. Rachel Levine said officials expect more dispensaries to open in the coming weeks.

The announcement of the first dispensary came as the U.S. Justice Department said federal prosecutors are being given more latitude to pursue criminal charges involving marijuana. In response, Wolf vowed to do whatever he can “to protect Pennsylvania patients.”

A 2016 state law legalized medical marijuana for people suffering from one of 17 qualifying conditions, including AIDS, autism, cancer, epilepsy, post-traumatic stress disorder, chronic pain and Crohn’s disease.

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More than 10,000 people have signed up. Among them, about 1,200 patients already have been certified by physicians to use medical marijuana. About 570 doctors are being trained or have completed training to be allowed to certify patients.

The law permits pills, oils, vapor or liquid marijuana, but not marijuana in plant form or what are considered edibles.

‘Whatever They Throw at Me, I’ll Figure It Out’: Abi Roach, Grey-Market Cannapreneur, Preps for the Legal Future

Abi Roach lives her life on the edge of the law. As the founder of Toronto’s popular cannabis lounge the Hot Box Café (tagline: “Serving potheads since ah…we forgot”), she’s become exceptionally familiar with the grey zones of current marijuana legislation.

“That’s the highlight of my life, to have the freedom to be me and make my customers happy by giving them what I love.”

“I’ve lived my life and operated this business by the white-grey line of the law,” Roach tells Leafly. “Whatever they throw at me, I’ll figure it out. Nothing I’ve ever done has been legal and nothing I’ve ever done has been illegal. Where there’s a will there’s a way.”

The cannabis advocate and business owner spends a lot of time talking to local politicians and lobbying for the rights of cannabis users. It’s a role she stepped into out of necessity nearly two decades ago when she opened her first head shop.

Now, Roach runs a mini empire that includes Hot Box, a hydroponic store she co-runs next door, Spliff magazine, and a bud-and-breakfast and tour company in Jamaica. Unsurprisingly, she’s also a member of the Cannabis Friendly Business Association. And as Canada moves towards the legalization of cannabis, Roach suspects her overflowing plate will only get fuller.

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From Street Fairs to a Kensington Storefront

Roach’s introduction to the world of cannabis started with hemp jewelry. Originally from Israel, Roach moved to Canada with her family as a tween, after her dad was offered a job in computer engineering. While attempting to assimilate to Canadian culture, she changed her name to Abi, which rhymed with her real name, and was partially inspired by the Beatles’ album Abbey Road. (The Roach part, also not her real name, came later.) Though she knew little English upon arriving in her new country, Roach says she picked it up in a matter of months, and now has no trace of an accent.

After regularly getting busted by the cops for illegally hawking her wares, Roach became a roaming kiosk.

As a teenager, she grew bored of her remote neighbourhood, so on weekends she’d head to Queen Street, which was a hub of stylish independent boutiques and popular bistros. There, she met a group of rogue vendors who’d illegally sell their wares on the corner of Queen and Soho. It didn’t take long for Roach to discover her entrepreneurial spirit, setting up a blanket on the street corner and hawking handmade jewelry. She soon learned about hemp, through other vendors who used the material to macramé necklaces and bracelets. Roach quickly cottoned on to the fiber’s other uses, thanks to a vendor named Robin Ellins, who now owns the Friendly Stranger head shop.

“I used to vend beside him and learned from him all about the informational side of cannabis,” she says.

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After regularly getting busted by the cops for illegally hawking her wares, Roach became a roaming kiosk. She’d show up at concerts, raves, and events with her jewelry, and often cannabis, to sell or barter. Sometimes, she’d swap her goods for an interesting story.

“It helped me perfect my retailing art over the years,” she says.

After years of unconventional hustle, Roach eventually went to art school, followed by a stint studying audio engineering. As the only women in her class, Roach felt isolated and decided it wasn’t the path she wanted to follow.

Roach now runs a mini empire that includes Hot Box, a hydroponic store she co-runs next door, Spliff magazine, and a bud-and-breakfast and tour company in Jamaica.

When she learned about a subsidized business program through Jewish Vocational Services, she applied and got accepted. Her pitch was for a music promotions company, but Roach mainly wanted to learn how to write a business plan.

After she completed the program, she took out a university fund her parents had set up in Israel and used it, along with her business plan, to apply to a bank for a government co-sign loan to start a business. She decided that business would be a head shop, since there weren’t many in the city at the time. To her surprise, the bank approved her pitch.

“I was totally open about what I was going to do, which was sell bongs and pipes and rolling papers,” she says. “They gave me the loan.”

In 2000, Roach-A-Rama was born. The head shop was located on a sleepy street in Kensington Market. After a discouragingly slow year, Roach was ready to close and find a new path, but a storeowner around the corner on Baldwin Street asked if she would be interested in sharing his space. She decided to give it another shot.

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The new location proved to be blessing, with a spike in sales and customers. In the two years she worked out of the Baldwin location, she visited Jamaica and Vancouver, regions that had a more relaxed attitude towards smoking cannabis in public spaces.

“I went to [Vancouver cannabis lounge] Blunt Brothers and I was so impressed you could just show up, bring your weed, and smoke it,” she says.

When her retail-space partners announced they’d be pulling out of the lease with two weeks’ notice, Roach sprung into action. She applied for a food license, renamed her business The Hot Box, and turned the space into a lounge, which would eventually move to its current location on Augusta.

Fighting for Space to Safely Smoke

These days, Roach spends a lot of time meeting with local politicians about how Ontario’s cannabis legislation will affect businesses in the city. As it currently stands, the Ontario government will have a monopoly over cannabis sales, with all privately owned dispensaries and cannabis lounges deemed illegal.

“By eliminating lounges, you’re pushing people into more dangerous situations. You need us to stay open.”

Roach is working hard to get the message out that cities need private spaces for people to smoke their cannabis. She says the government isn’t keeping the streets safer by removing cannabis lounges, since they’re much more than places to hang out and consume weed.

“We also provide education, and by eliminating lounges, you’re losing that aspect of it,” she says. “You’re pushing people out into the streets and alleys, and their cars. You’re pushing people into more dangerous situations. You’re creating an unwelcoming environment for tourists and an uncomfortable home situation for families. You need us to stay open.”

Ontario recently passed its Cannabis Act with no amendments—any dispensaries operating illegally can face fines up to $1 million. As for cannabis lounges, the topic remains in bureaucratic limbo. The province has generally addressed cannabis in Bill 175, all-encompassing legislation that includes a prohibition on smoking in public places. Since lounges fall under that category, smoking cannabis inside one will technically be breaking a by-law.

Roach says the City of Toronto moved a motion that would give the Board of Health time to examine the impact cannabis lounges have on public safety.  Until that happens, nothing will change, and Roach appears unbothered when talking about how these impending changes will affect her business.

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“Everything takes time,” she says. “Even for them to come and hand out fines, that will take time. And there are loopholes we can use to get around—but I’m not going to reveal anything like that.”

As for the future, Roach plans to continue fighting for the rights of cannabis users while expanding her brand. Although she describes her business as “one of these stupid companies that never took anyone’s money and has built everything from nothing,” she suspects that will change over time.

“Now we’re on a different level and I’m ready to find the right person who wants to invest in this brand,” she says. “Our next mission is to find that perfect union.”

If she had to do it all over, there’s nothing Roach would do differently. When asked about career highlights, she says everyday is a highlight because she simply loves what she does.

“I can do whatever crazy things I want to do,” she says. “There is no board, or boss to tell me what to do. That’s the highlight of my life, to have the freedom to be me and make my customers happy by giving them what I love.”