California Cannabis SeminarOn Thursday, September 28th, our San Francisco office will host an event on investing in California’s newly regulated cannabis industry. The California Cannabis Investment Forum will bring together top investors and leading companies in California’s cannabis industry and its related technologies to talk about California cannabis investment issues. The Templar and GBDS will be sponsoring this event and the NCIA will be an associate sponsor.

Early bird pricing of $20 ends tonight at midnight! 

Hilary Bricken of our Los Angeles office will begin the Forum at 6:15 p.m. with a short keynote discussing the many recent changes to California’s medical and adult use cannabis laws. From 6:45 p.m. to 8 p.m., Carlton Willey of our San Francisco office will moderate a panel comprised of the following early and late stage investors and debt and equity financiers with experience in California’s cannabis industry:

Alejandro Di Tolla, CEO of GBDS and a leading angel investor in cannabis businesses

Allen Gold, Principal at Templar Capital Management

Sherri Haskell, Founder and CEO of CannaAngels

Emily Paxhia, Managing Director of Poseidon Asset Management

Tom DiGiovanni, CFO of Canndescent

Our panelists will cover cannabis industry investing, deal structures, cannabis business concerns in the context of investing, and investor red flags in the cannabis industry, with a focus on California’s expected $8 billion plus legalized cannabis marketplace. We will take questions from the audience during the panel discussion and we also encourage you to send us in advance any questions you may have for our esteemed panelists. You can send us your questions via email to firm@harrisbricken.com.

The California Cannabis Investment Forum will be at the Covo Event Space in Downtown San Francisco. Doors open at 5:45 p.m., and a cocktail networking session will commence from 8-9:30 p.m. Hors d’oeuvres and drinks will be served.

To purchase a ticket for this event, please go here. And remember, today is the last day for the early bird rate, so act fast!

Over the weekend, I attended CanEx Jamaica in Montego Bay. The event focused on the business and policy of cannabis in Jamaica and abroad. Jamaica decriminalized cannabis in 2015, imposing a fine for possession of less than two ounces of cannabis rather than possible jail time. Jamaica also has legalized cannabis for medical use, but is still in the process of implementing a regulated program.

Jamaica is facing challenges in regulating a plant that has long been celebrated in Jamaican culture despite legal prohibition. Ganja, as it is known on the Island, has deep cultural and religious significance. It is a sacred herb in the Rastafarian religion. Its religious and recreational use on the island has been widespread for years. As a result, many Jamaicans are not excited about it being regulated. I went to this event for two reasons. One, because Hilary Bricken, our lead cannabis lawyer out of our Los Angeles office would be speaking there. And two, because our cannabis practice has always been an international one, and that has been accelerating in the last few months as Barcelona, Spain, (where we have an office) continues to liberalize.

Dr. Jalani Adwin Niaah, a professor at the University of the West Indies at Mona and Rastafarian, gave a presentation on Rastafarian Dispensing and Advocacy. He noted an increased interest in ganja from local business leaders after it was decriminalized. He fears though that commercialization of Jamaica’s medical cannabis will leave Rastafarians behind and cannabis as a sacrament will become marginalized. Dr. Niaah suggested Rastafarian’s hosting “herb camps” where they could grow and dispense ganja for religious purposes while also providing guidance to Jamaicans and visitors who want to use ganja for healing and wellness. Dr. Niaah proposed these camps would give Rastafarians a place in Jamaica’s regulated cannabis market. Jamaican law allows cannabis for religious purposes, but it is not clear these sorts of camps would qualify under this exemption.

Hilary Bricken hosts a panel on Cannabis Policy in Jamaica.

Hilary Bricken from our office moderated a panel on cannabis policy that included Florida attorney Michael Minardi, entrepreneur Sidney Himmel, Dr. Lorenzo Gordon of Jamaica’s Ministry of Health, and Greg Douglas, CEO of Jamaica’s Cannabis Licensing Authority.

Dr. Gordon and Mr. Douglas provided insight into the challenges Jamaica faces as two of its regulatory bodies work together to establish Jamaica’s medical cannabis scheme. The Ministry of Health regulates cannabis processing, strains, and products. It looks at the scientific side of cannabis, studying the percentage of CBD and THC in each strain. This Ministry also requires a microbiological analysis of each product and provides training for physicians who wish to recommend cannabis. The Cannabis Licensing Authority focuses on location, security, and cultivation. As the title suggests, it also will eventually provide licenses to cultivators and dispensaries.

Mr. Douglas expressed the need for the two agencies to work together to send a unified message and provide a consistent process for applicants hoping to obtain a cannabis license. He also acknowledged the importance of cannabis in Jamaica saying “in Jamaica, ganja is cultural, not just a matter of money.” Mr. Douglas maintains that the emotional impact of ganja in Jamaica must be taken into account in creating a regulated industry.

The elephant in the room was the impact United States Government policy has had and will continue to have on Jamaica’s cannabis regime, especially considering the Trump administration has been hostile to cannabis. Both Jamaica and the US have entered into treaties prohibiting the manufacture and distribution of cannabis and other drugs. The US wields significant influence over international trade and could force its will on a small nation like Jamaica. At one point in the panel discussions, Hilary asked whether Jamaican government officials see the US as a bully. Both Jamaican officials gave diplomatic answers, acknowledging they are aware of the United State’s position on the subject and how it is necessary to “consider” the international environment when implementing Jamaica’s regulatory regime.

Though over half the states in the US have legalized medical cannabis and eights states (plus Washington DC) allow cannabis for recreational use, the United States is still viewed internationally as somewhat of a drug law dinosaur with sharp teeth. Many of the speakers and attendees talked of how Canada and Israel (and to a lesser extent Uruguay and Spain) are model nations for cannabis research and policy. Dr. Gordon stated he hoped Jamaica could be an international leader in cannabis as well. See Marijuana Legalization: The International Edition

 In addition to Hilary’s panel, CanEx hosted Montel Williams for a keynote address, held a job fair for individuals interested in working in cannabis and hosted a number of other panel discussions on topics like “Women in Cannabis”, “Finance and Trade”, and “Arts and Entertainment.” The event was well attended and very informative. If you regret missing it this year, I highly recommend attending in 2018.
Great locale and great speakers. What more could you want?
Daniel Shortt and Hilary Bricken at CanEx Jamaica.

On Thursday, September 28th, our San Francisco office will host an event on investing in California’s newly regulated cannabis industry. Sponsored by the  Templar, GBDS, and the NCIA, the California Cannabis Investment Forum will bring together top investors and leading companies in California’s cannabis industry and its related technologies.

Hilary Bricken of our Los Angeles office will begin the Forum at 6:15 p.m. with a short keynote addressing the recent (and many) changes to California’s medical and adult use cannabis laws. Then from 6:45 p.m. to 8 p.m., Carlton Willey of our San Francisco office will moderate a panel comprised of the following early and late stage investors and debt and equity financers with experience in California’s cannabis industry:

Allen Gold, Principal at Templar Capital Management

Alejandro Di Tolla, CEO of GBDS and a leading angel investor in cannabis businesses

Sherri Haskell, Founder and CEO of CannaAngels

Tom DiGiovanni, CFO of Canndescent

Emily Paxhia, Managing Director of Poseidon Asset Management

Panelists will cover cannabis industry investing, deal structures, cannabis business concerns in the context of investing, and investor red flags in the cannabis industry, as well as matters of increasing importance in the cannabis investment world as we head into 2018 and California’s expected $8 billion legalized cannabis marketplace. Audience questions will be taken during the entirety of the panel discussion and if you’d like to submit a question to the panel beforehand, please write us at firm@harrisbricken.com.

The California Cannabis Investment Forum will be held at Covo Event Space in Downtown San Francisco. Hors d’oeuvres and drinks will be served. Doors open at 5:45 p.m., and a cocktail networking session will commence from 8-9:30 p.m.

To purchase a ticket for this event, please go here. The early bird rate lasts until September 12, so act fast!

Cannabis business transactionOur cannabis attorneys see many cannabis deals and on a daily basis we see term sheets, pitch decks, prospectuses, fund summaries, etc. Though we’re always on the legal side, we are also often asked for advice we’d label “business advice” — ranging from the specific (here’s our deck, what valuation can we demand?) to the very general (as investors where should we put our money ahead of what’s going to happen with California cannabis in 2018?). In this post I offer our thoughts on some common issues.

 

Company Founders Ask: What are Investors Looking for?

If you spend too much time and thought reworking the numbers on a term sheet, or even believing those numbers play a big role in driving investor interest, you’ve got it wrong. I for one have never heard an investor say “the product misses the mark and the team is mediocre, but with these investment terms I’d be crazy not to jump in!” Though Shark Tank isn’t what life is really like out in the trenches, it does get the investment decision process in the right order: first the sharks meet the team and get their pitch, then they discuss and negotiate numbers.” If you’re too focused on the numerical terms, you’re better off not having a term sheet — a pitch deck (or even a one-pager) that focuses on the following is much more likely to drive an investor discussion forward:

  • the size of the opportunity
  • capturing the imagination of the investor
  • selling the investor on the team – the people – as the right ones to execute and seize the opportunity

 

Investors Ask: Where are the Big Returns?

Many investors assume higher risk companies will mean higher returns. And with this assumption often comes another one: companies that “touch the [cannabis] plant” (and are therefore unsuitable for nearly all institutional capital) will generate the highest returns. For investors using debt instruments and looking purely at interest rates as their ROI, this may be true. But for equity investors, it’s all about scale, and companies whose primary business is one that “touches the plant” rarely have the highest scalability. Though there aren’t nearly enough company exits to say for sure, the big returns are far more likely to be found in business-to-business ancillary cannabis companies – software, data metrics, equipment leasing, and other business services.

 

Everybody Asks: How can we insulate ourselves from federal criminal liability?

You cannot, not with 100% certainty. You cannot be involved in the cannabis industry and be completely insulated from federal criminal liability. That said, there are tiers of risk, and they generally break down as follows:

Tier 1 (highest risk):

  • Business operators that cultivate and sell cannabis
  • Business operators that process, test, extract or otherwise “touch the plant”

Tier 2:

  • Investors in Tier 1, above

Tier 3 (lowest risk):

  • Advisors and service providers to Tier 1 businesses and Tier 2 investors
  • Vendors and others that enter into “arms-length” transactions with cannabis companies

 

Company Founders Ask: Where do we meet investors?

  • Introductions
  • Industry associations
  • Conferences and networking events
  • Not cold-calling

Speaking of great places to meet investors, keep your eyes and ear peeled for our California Cannabis Investment Forum, coming soon in San Francisco!

On September 1st, I’ll be joining Hilary Bricken in Montego Bay for the CanEx Jamaica Business Conference and Expo. This two-day event features a conference on day one and a job expo on day two. Hilary will speak at the conference alongside cannabis entrepreneurs, doctors, and fellow cannabis industry leaders, including Montel Williams, an outspoken advocate for medical cannabis. CanEx will connect professionals across the Caribbean, Latin America, Europe, and North America interested in opportunities and developments in the cannabis industry.

Jamaica is a fitting locale as cannabis has played a significant role in its history and culture. Starting in 1655, Jamaicans were subject to slavery under British rule until an abolitionist uprising ended the practice in 1838. The end of slavery created a demand for labor on the island. Workers from India traveled to Jamaica and brought the cannabis plant with them. Linguistic scholars determined that the term “ganja” is rooted in Hindi. Cannabis quickly spread around the Island as the Jamaican climate is ideal for cannabis growth, allowing multiple harvests in a given year. Cannabis use became a tenet of the Rastafarian religion which emerged in the 1930s and rose to prominence in Jamaica.

Despite cultural associations with cannabis, Jamaica outlawed cannabis by passing the Ganja Law of 1913. Jamaica’s government pushed back against its international reputation as a pot-friendly nation by strictly enforcing cannabis prohibition until recently. But Jamaica’s attitude changed in 2015 when Jamaica decriminalized marijuana. Jamaica then legalized medical cannabis the following year.

CanEx Jamaica reflects an emerging interest in cannabis on a global scale. America has taken much of the media spotlight when it comes to cannabis reform, but it is important to realize that the push for legalization extends far beyond US borders. It is truly a global movement and my firm’s international attorneys are constantly answering inquiries from business people from around the world interested in cannabis across the globe. Our lawyers in our Spain office often represent foreign businesses that want to expand to Spain and Spanish and Catalon businesses that want to expand beyond Spain. Countries like Australia, Bangladesh, Cambodia, Canada, Chile, Colombia, Costa Rica, the Czech Republic, Germany, India, Israel, Jamaica, Mexico, the Netherlands, Portugal, South Africa, Spain, and Uruguay have all legalized cannabis to some degree. Israel has long been a leader in researching medical cannabis and has its own robust medical program. Canada has begun the process of legalizing recreational cannabis across the country and Uruguay has already done just that. An international cannabis marketplace is quickly developing as more cannabis businesses look to take their expertise beyond their own borders. CanEx is a great opportunity for entrepreneurs from across the world to meet and connect the emerging market and we hope to see you there.

You can find more information on international cannabis on the following post.

 

Last week, three of our California cannabis attorneys gave a one hour presentation on California’s Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”). Topics discussed included vertical integration, multiple license ownership, major changes between the MAUCRSA and the MCRSA, and what license applicants can expect as rulemaking continues. Though more than 1500 of you signed up, we also received a large number of requests to post it on our blog from many who could not attend, and we do so now, below.

You can also find the handout we distributed during the webinar here.

Enjoy!

California Cannabis rules

Sign up now for TODAY’s free webinar on California’s Medical and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), which will take place from 12-1 pm Pacific. MAUCRSA, which effectively repealed the Medical Cannabis Regulation and Safety Act (“MCRSA”), combines both medical and recreational cannabis into one regulatory scheme. Presented by Hilary Bricken, Alison Malsbury, and Habib Bentaleb (three of our cannabis lawyers who work out of our offices in Los Angeles and San Francisco), this webinar will address what this new legislation means for your California cannabis business. The attorneys will discuss:

  • Vertical integration
  • Ownership of multiple licenses
  • Distributorship
  • Major changes between MAUCRSA and MCRSA
  • What we can learn from the withdrawn MCRSA draft rules
  • General expectations for license applicants as rule-making continues

They will also take audience questions.

Please register for this free webinar here. We look forward to your attendance!

California cannabis eventSign up now for tomorrow’s free webinar on California’s Medical and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), which will take place from 12-1 pm Pacific. MAUCRSA, which effectively repealed the Medical Cannabis Regulation and Safety Act (“MCRSA”), combines both medical and recreational cannabis into one regulatory scheme. Presented by Hilary Bricken, Alison Malsbury, and Habib Bentaleb (three of our cannabis lawyers who work out of our offices in Los Angeles and San Francisco), this webinar will address what this new legislation means for your California cannabis business. The attorneys will discuss:

  • Vertical integration
  • Ownership of multiple licenses
  • Distributorship
  • Major changes between MAUCRSA and MCRSA
  • What we can learn from the withdrawn MCRSA draft rules
  • General expectations for license applicants as rule-making continues

They will also take audience questions.

Please register for this free webinar here. We look forward to your attendance!

California cannabis eventYou’ve got only a few days left to register for Tuesday’s free webinar on California’s Medical and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), which will take place from 12-1 pm Pacific. MAUCRSA, which effectively repealed the Medical Cannabis Regulation and Safety Act (“MCRSA”), combines both medical and recreational cannabis into one regulatory scheme. Presented by Hilary Bricken, Alison Malsbury, and Habib Bentaleb, this webinar will address what this new legislation means for your California cannabis business. The attorneys will discuss:

  • Vertical integration
  • Ownership of multiple licenses
  • Distributorship
  • Major changes between MAUCRSA and MCRSA
  • What we can learn from the withdrawn MCRSA draft rules
  • General expectations for license applicants as rulemaking continues
  • Audience questions

Please register for this free webinar here. We look forward to your attendance!

One week from today, on August 8, from noon to 1 pm Pacific Time, three attorneys from our Los Angeles and San Francisco offices will present a free webinar on California’s Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”) and what that new legislation means for your cannabis business. If you are involved in the California cannabis industry or even just considering getting involved, you should attend this.

In addition to addressing audience questions throughout the webinar, our California cannabis business attorneys will cover the following:

  • Ownership of multiple licenses
  • Distributorship
  • Vertical integration
  • Major changes to the Medical Cannabis Regulation and Safety Act (“MCRSA”)
  • What to expect from the Bureau of Cannabis Control moving forward

To register for this free webinar, please go here. Space is limited so sign up today!

We look forward to seeing you there.