A Summary Of The First Day Of The 2012 National Marijuana Business Conference In Denver
The first day of the 2012 National Marijuana Business Conference was one of the funnest days I've ever had in my life. I knew there would be some big time industry leaders at the event, but my expectations were blown away after barely 30 minutes into the presentations. I've been lucky enough to attend a handful of events around the Western United States, but I have never been to an event like the 2012 National Marijuana Business Conference, where the focus is entirely on cannabis business.
The Conference was timely - after all, Colorado and Washington State just legalized marijuana, and Massachusetts became America's 18th medical marijuana state. I think Cassandra Farrington, producer of the National Marijuana Business Conference, put it best. "There is a tsunami coming," Farrington told the audience in her opening remarks. "It was building before election night, and now that tsunami wave is about to crash over our heads." I couldn't agree more. The cannabis industry is already huge, it's growing exponentially, and the future looks very, very bright.
Chris Walsh from Medical Marijuana Business Daily was the first keynote speaker. He shared information that was gathered from MMJ Business Daily's annual nationwide survey of medical marijuana patients. I encouraged TWB readers to participate in the survey, and I've been anxiously awaiting the release of the information, even if it was just a sneak peak. The data will be fully released as part of the 2013 Marijuana Business Outlook And Factbook, and I encourage everyone to swoop it up when it drops. I know I will!
The first panel discussion of the day was 'Solving the Banking Conundrum' which is a very, very important issue to all cannabis businesses, even non-dispensary based businesses. The panel was hosted by Lance Ott (CEO Guardian Data Systems), Hilary Bricken (Canna Law Group), and Shawn Coleman (former staffer for Jared Polis). It was interesting to find out that "there is no law stopping banks from doing business with medical marijuana professionals, they're just risk averse" according to Hilary Bricken. Shawn Coleman offered up this advice for getting banks to change their policies - "make a lot more money." Lance Ott pointed out that it's not just banks. Major credit card companies won't work with medical marijuana businesses either. Mr. Ott stated that the best way to work around the banking conundrum is to "use cashless ATMs and other closed loop systems" and to "never use offshore cash processing." His last point was stated with quite a bit of emphasis!
The second panel was 'Risky Business' which was an overview of the unique challenges that the medical marijuana industry faces. The panel was hosted by Christian Sederberg (Vicente Sederberg LLC), Khurshid Khoja (Greenbridge Corporate Counsel), and Chris Lindsey (Montana Cannabis Industry Association). Hearing Christian Sederberg speak about Colorado pre and post Amendment 64 was outstanding, considering he was part of the campaign. My favorite part of his presentation was when he pointed out that marijuana is "coming back to Fort Collins," after which the crowd erupted with applause.
Khurshid Khoja gave an in-depth presentation on the differences between 'for profit' and 'non profit' dispensary regulations and structures, as well as the benefits and drawbacks of each. I hope his entire presentation is put down in words or recorded someday so that everyone in medical marijuana states can see it. The differences are significant, and I know for a fact that many dispensary owners have no idea what those differences are, which is sad, because knowing those differences could be the difference between success and failure for any dispensary.
Quite possibly my favorite (and saddest) part of any of the panels was when Chris Lindsey took the podium. Chris Lindsey helps TWB report about issues in Montana, and is also in the middle of the nastiest medical marijuana case in Montana. Chris Lindsey is part of the same case that involves Chris Williams, which loyal TWB readers know a lot about. Something that was chilling was when Chris Lindsey pointed out that the DEA investigation against him and his partners started the same month that the federal DOJ issued the now infamous memo that claimed the feds would respect state laws. The brutal irony of that is still hard for me to fit my head around, and it's something that all cannabis business owners should take into consideration. I plan on writing a separate story about Mr. Lindsey's presentation, as there was just too much in there that I wanted to follow up on.
The next keynote speaker was Rob Kampia from the Marijuana Policy Project. His presentation was titled 'Election 2012: How National State Results Affect Your Business.' Rob's summary of the election was fantastic, mainly because his organization was directly funding and assisting the Colorado legalization effort. As Mr. Kampia pointed out, legalization will definitely expand the marijuana industry in Washington State and Colorado, and now that Massachusetts has become a medical marijuana state, there is obviously a lot of incentive to start businesses there. Rob put up a map of the United States during his presentation and talked about what to anticipate in the future. According to his predictions, medical marijuana could be coming to states like New York, Illinois, and Idaho, and legalization could be coming to other states via the legislature. I sure hope so, because initiatives that would achieve the same result aren't possible in 2013. The only thing that I would ad to his presentation is that Oregon will be the next state to legalize marijuana via the initiative system (Oregon pride? Maybe a little bit!).
After a brief lunch break, the panels started up again, in two different rooms. I wanted to watch all the presentations, so I had to get a little crafty and bounce back and forth. A panel that was very popular was 'How to Find Startup Money and Secure Investments' hosted by one of my heroes Troy Dayton (Arcview Group) and James Slatic (MedWest). James started out the presentation by asking how many people in the crowd needed investments, and then asked how many people in the crowd were looking to invest. I think this was a good visual for the crowd, as it showed that there are a lot more people looking for investments than people looking to invest. That's not meant to be discouraging - I say this because it should highlight to people that the market is competitive, so make sure your idea is as refined as possible to ensure the best chance of securing start up funds. As always, Troy Dayton was electric. I will never get tired of hearing the story of why he started ArcView Group. Essentially, he saw people throwing money at the cannabis industry with little to no return, because the investors didn't understand 'the nuances of the cannabis culture and industry.' Troy started ArcView Group to bridge that gap, and help investors link up with good investments, rather than blindly try to get in on the 'green rush.'
The 'Potency, Dosage, and Labeling of Edibles' presentation was hosted by Ralph Morgan of Evergreen Apothecary and Organa Labs. The room was absolutely packed, which is a testament to the exploding popularity of edible marijuana products. If there is one thing that Ralph wanted the crowd to know, it was to 'learn all you can about local regulations.' There are regulations specific to medical marijuana, and regulations that are specific to food in general. The FDA does not have guidelines for edible marijuana products, and as a result, local governments have filled the void, and they are rarely the same. Whether the government requires it, or patients just demand it for quality assurance, labeling and dosage recommendations are here to stay, so get out ahead of the regulations as much as possible.
I bounced between the 'Tips for Buying, Selling a MMJ Business' hosted by KC Stark (MMJ Business Academy) and Charles Houghton (Charles Houghton, P.C.), and 'Testing: Why it's Important and How to Find a Credible Lab' hosted by Genifer Murray (CannaLabs) and Sytze Elzinga (The Werc Shop), both of which were extremely interesting. As someone that was once trying to sell a cannabis business, I know that finding a buyer can be very difficult. The main tips that I took from that panel was to have your idea as refined as possible, and know where to find buyers. Finding a buyer in Denver or Los Angeles is going to be much easier than finding a buyer from Idaho, simply because the industry is established, and investors have been there for several years now. To be honest, the testing panel was a bit over my head due to the large amount of chemistry involved, but if there's one thing that the hosts wanted the crowd to take away from the presentation was that testing is EXTREMELY important, and that not all testers are created equal. Patients are already suffering, and smoking foreign items such as mold and mildew can be very harmful to the patient. Testing is becoming a requirement in more and more medical marijuana states, so it is recommended to start doing it even if it is not required in order to be ahead of the curve and provide the best product to your patients.
A panel on taxes, hosted by Henry Wykowski, Jim Marty, and Greta Carter was going on the at the same time a 'Infused Product Makers' presentation was going on, which was hosted by Tripp Keber of Dixie Elixers. Henry Wykowski stated that "taxes are the most important issue facing medical marijuana dispensaries today." All levels of law enforcement are in on the action, and the feds are "just a pig at the trough" as Mr. Wykowski explained. Steve DeAngelo once explained to me that it's harder to get people fired up about taxes than it is to get them fired up about recent raids because taxes are boring to most Americans. When cops kick in a door, people want to cry foul. But when someone gets audited, way less people realize what's going on. In the infused product presentation, a lot of the labeling, potency, and dosage information was overlapping, but the market projections for infused products was a lot higher than I had expected. One thing that I took from the presentation was Tripp's statement - "This is a once in a lifetime opportunity. You don't want to be a grandparent explaining to your grand kids that you missed out on the greatest opportunity in your lifetime because you decided to sit on the fence. The time is now."
The final panels of the day were 'Insurance Options' hosted by Doug Banfelder, and 'New Opportunities for Ancillary MMJ Businesses' hosted by Khurshid Khoja. Getting insurance on your medical marijuana business is something that a lot of owners don't always think about, and when they do, they don't think about every factor that should go into deciding what coverage to do. Mr. Banfelder pointed out that if a business has a drive thru in their parking lot, that will take extra insurance. He also pointed out that if you are doing deliveries, to make sure to get cargo coverage. The more prepared a person is, the lower their insurance rates will be. If there was one thing that the speaker wanted the crowd to take away from the discussion it's to call your insurance agent before calling your accountant when filing a claim. It will save a lot of headache!
The ancillary business presentation was something I was looking forward to all day, since as Troy Dayton stated earlier in the day, "they are more likely to get investors than dispensaries due to less risk involved." Mr. Khoja discussed various sectors of the marijuana industry that are thriving, and are completely legal, such as security systems, growing equipment, consultants, lawyers, etc. The room was packed and by the end of the question and answer session, I think there were people in the crowd that were originally looking to open a safe access point, but instead might be looking into other areas. Something that wasn't covered was media, but I'll make sure to recommend that for the next event!
I plan on expanding on this article as I get more time - the event was jam packed with so many informational opportunities that I'm still trying to fit my head around all of it! Considering how awesome day 1 was, I can only imagine what's in store for day 2. I will say this over and over again - if you want to get involved in the marijuana industry as an investor, or have a marijuana idea that you need an investor for, THERE IS NO BETTER PLACE TO FIND INFORMATION AND NETWORK WITH PEOPLE THAN THIS EVENT. If you attended the event, you know exactly what I'm talking about. If you didn't attend the event, and are now feeling kind of lame, don't worry, they are having another one next year! Stay tuned for my day 2 summary!