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Dozens in Colorado accused of trafficking pot outside state

Dozens in Colorado accused of trafficking pot outside state

The Columbian / Associated Press

DENVER — A mammoth marijuana trafficking ring that pretended to be growing weed for sick people was instead illegally shipping the drug to a half-dozen other states and bilking investors, including former NFL players, Colorado officials announced Wednesday.

A Denver grand jury indicted 62 people and 12 businesses in the case that involved federal and state agents executing nearly 150 search warrants at 33 homes and 18 warehouses and storage units in the Denver area.

“The black market for marijuana has not gone away since recreational marijuana was legalized in our state, and in fact continues to flourish,” state Attorney General Cynthia Coffman said in a statement.

The indictment targets the largest illegal marijuana operation discovered since Colorado legalized recreational pot in 2012, Coffman said.

It says the enterprise produced more than 100 pounds of illegal pot each month for shipment to Kansas, Texas, Nebraska, Ohio, Oklahoma and other states.

The ring operated from 2012 until 2016 and raked in an estimated $200,000 a month, Coffman said.

The defendants were charged with 31 felony counts of money-laundering, tax evasion and other financial crimes. Most are now under arrest awaiting trial dates in Denver District Court.

Prosecutors say that one of the conspirators, Connor Brooks, duped friends, including two former pro football players, into investing in his scheme.

Brooks got money from Erik Pears, a free agent most recently with the San Francisco 49ers, and Joel Dreessen, a former Denver Broncos tight end, the indictment says.

Neither football player is accused of a crime, and the indictment does not say how much the two invested in what they thought was a legal marijuana business. Other investors gave money, too, the indictment said.

“These individuals each provided tens of thousands of dollars to Connor Brooks to fund an allegedly legal grow operation, and they did not receive any of their invested funds back from Connor Brooks as promised,” the indictment said.

It was not immediately clear if Brooks or any other defendants had an attorney.

In addition to growing black-market pot in private homes, the indictment says, some defendants ran phony marijuana consulting businesses or leasing agencies.

Some held partial ownership in a suburban Denver store that sells marijuana growing supplies, which the indictment says allowed them to have ready access to nutrients, pesticides and other supplies. The name of that store was not listed.

The U.S. Drug Enforcement Administration, along with the Kansas State Patrol and Nebraska State Patrol, participated in the investigation.

“Since 2014 there has been an influx of these organized criminal groups to Colorado for the sole purpose of producing marijuana to sell in other states,” said Barbra Roach, special agent in charge of the DEA’s Denver Field Division.

In a statement, Roach said “the marijuana black market has increased exponentially since state legalization.”

The indictment was returned June 9 and announced Wednesday by Coffman.


Published at Thu, 29 Jun 2017 20:45:23 +0000

MedReleaf Reports Fiscal Year 2017 Results

MedReleaf Reports Fiscal Year 2017 Results

Fiscal 2017 Adjusted EBITDA of $14 million on $40 million in sales; phase 1 Bradford Facility expansion complete and in production

MARKHAM, ON, June 28, 2017 /CNW/ – MedReleaf Corp. (TSX: LEAF) (“MedReleaf” or the “Company”), Canada’s first and only ISO 9001 and ICH-GMP certified cannabis producer, today announced financial and operating results for the fourth quarter and fiscal year ended March 31, 2017. All amounts expressed are in Canadian dollars unless otherwise noted.

“We doubled revenue in fiscal 2017 and we did it profitably – growing Adjusted EBITDA more than threefold,” said Neil Closner, CEO of MedReleaf. “With the successful completion of our IPO in June we have $74 million in financing to help fund our strategic growth initiatives including: expanding our capacity more than five times to support up to 35,000 kilograms of production; scaling our domestic business; developing our recreational brand portfolio; and international expansion, which we believe positions MedReleaf well for future growth and profitability.”

Fourth Quarter and Fiscal Year 2017 Financial Summary

Three Months

Twelve Months

March 31,

March 31,

CAD$ (in 000s, except grams sold)










Gross Profit





Adjusted Product Contribution Margin*





Adjusted EBITDA*





Grams sold*





Adjusted product contribution per gram sold*





Cash cost per gram produced*





*Non-IFRS Measures

Through fiscal 2017, MedReleaf successfully increased production capacity, reduced cash production costs, and launched new cannabis oil products at its production facility in Markham, Ontario (“Markham Facility”), resulting in the following highlights:

Fiscal Year 2017 Highlights

  • Sales of $40.3 million, an increase of 109% from the prior year
  • Adjusted Product Contribution Margin of $30.9 million, an increase of 159% from the prior year
  • Adjusted EBITDA of $13.9 million, an increase of 200% from the prior year
  • Sold 3,668.1 kilograms of cannabis products, an increase of 117% from the prior year
  • Adjusted product contribution margin per gram sold of $8.42 compared to $7.06 in the prior year
  • Cash cost per gram produced of $1.73 compared to $3.23 in the prior year
  • In July 2016, completed the purchase of a 210,596 square foot production facility in Bradford, Ontario (“Bradford Facility”)
  • In November 2016, obtained a Health Canada Licence for the production and sale of cannabis extracted oils, and became the first Canadian Licensed Producer to bring cannabis capsules to market

Fiscal 2017 Fourth Quarter Highlights

  • Sales of $10.4 million, an increase of 51% year-over-year
  • Adjusted Product Contribution Margin of $7.4 million, an increase of 67% year-over-year
  • Adjusted EBITDA of $1.6 million, a decline of 17% year-over-year, as a result of increased investment in long-term growth initiatives and $0.6 million in one-time costs
  • Sold 1,167.3 kilograms of cannabis products, an increase of 97% year-over-year
  • Adjusted product contribution margin per gram sold of $6.34 compared to $7.49 in the prior year period
  • Cash cost per gram produced of $1.53 compared to $3.11 in the prior year period

Subsequent to the fiscal 2017 year end, MedReleaf completed the first phase of its Bradford Facility construction project, which included drying, trimming, packaging, shipping, storage and grow rooms with an estimated annual production capacity of 2,800 kilograms of cannabis products. In April 2017, MedReleaf received a cultivation licence from Health Canada pursuant to the Access to Cannabis for Medical Purposes Regulations in respect of the Company’s Bradford Facility and the Company has commenced production at such facility.

MedReleaf also became the first medical cannabis producer to receive an International Council on Harmonization certification for Good Manufacturing Practices (“ICH-GMP”) for Active Pharmaceutical Ingredients. The ICH-GMP certification is a significant milestone supporting the Company’s international expansion strategy and R&D initiatives to help the pharmaceutical industry more fully explore the benefits of medical cannabis through clinical trials.

On June 7, 2017, MedReleaf closed its initial public offering and secondary offering for aggregate gross proceeds of $100.7 million and the Company’s common shares commenced trading on the Toronto Stock Exchange under the symbol “LEAF”.

Financial Review


Sales were $10.4 million for the fourth quarter of fiscal 2017, an increase of 51% from $6.9 million in the prior year period.

On November 22, 2016, Veteran’s Affairs Canada (“VAC”) announced a new Reimbursement Policy for Cannabis for Medical Purposes (the “VAC Policy”). The key points of the policy include a maximum reimbursement rate of $8.50 per gram of dried marijuana or the equivalent amount of fresh marijuana or cannabis oil, and coverage limitations to an amount of three grams per day, subject to a process that potentially allows for the daily limit to be exceeded by individual Veteran patients by way of an exemption request to be submitted to VAC by a medical specialist. The reimbursement limitations became effective immediately and the coverage limitations became effective May 21, 2017.

In response to the pricing changes introduced by the VAC Policy, the Company began to offer price discounts to qualifying Veterans to assist with the non-reimbursable portion of their medication. This resulted in a reduction in average selling price for the fourth quarter of fiscal 2017. Following the VAC Policy change the Company has continued to see strong patient growth in both veterans and non-veterans, as demand for premium cannabis products has sustained average price above the $8.50 VAC Policy cap.

During the fourth quarter of fiscal 2017, a total of 1,167.3 kilograms of cannabis products were sold at an average selling price of $8.87 per gram. This represents an increase of 573.9 kilograms sold, or 97% from the prior year period at an average selling price of $11.56 per gram. On a sequential basis, volume sold increased by 174.1 grams, or 18% from the third quarter fiscal 2017 at an average selling price of $10.50 per gram.

For the year ended March 31, 2017 and 2016, sales were $40.3 million and $19.3 million, respectively. This resulted in a $21.0 million, or 109%, increase in sales when compared to the prior year.

During the year ended March 31, 2017, 3,668.1 total kilograms of cannabis products were sold at an average selling price of $11.00 per gram (2016 – 1,688.8 kilograms at an average selling price of $11.43 per gram). This represents an increase of 1,979.3 kilograms or 117% compared to the prior year.

Sales and volume growth for the year was primarily the result of increased production capacity, patient demand, yield improvements, and the introduction of cannabis oil extracts for sale.

Cash Cost Per Gram Sold (Non-IFRS Measure)

The following are the Company’s cash production costs, on a total and per gram sold basis, for the three and twelve months ended March 31, 2017 and 2016, as compared to reported production costs (excluding costs resulting from the fair value of biological assets), which represents cost of sales, in accordance with IFRS:

Three Months

Twelve Months

March 31,

March 31,

CAD$ (in 000s, except grams sold)





Production costs





Amortization included in production cost





Recovery of production costs

Post production costs





Cash production costs





Equivalent grams sold





Cash cost per gram sold





Through the course of fiscal 2017, increased production volumes and higher yields resulting in improved efficiencies in labour utilization and allocation of fixed costs have allowed MedReleaf to produce premium, indoor-grown medical cannabis on a comparable cash cost per gram basis to greenhouse peers.

The cash cost per gram sold for the fourth quarter of fiscal 2017 was $1.53, compared to cash cost per gram sold of $3.11 in the prior year period. Cash cost per gram sold for the fourth quarter of fiscal 2017 decreased $1.58 or 51% compared to the prior year period.

The cash cost per gram sold for the years ended March 31, 2017 and 2016 was $1.73 and $3.23, respectively. Cash cost per gram sold for the year ended March 31, 2017 decreased $1.50 or 46% compared to the year ended March 31, 2016.

Adjusted Product Contribution Margin (Non-IFRS Measure)

The following is the Company’s Adjusted Product Contribution Margin as compared to the reported gross profit, which includes the gain on changes in fair value of biological assets in accordance with IFRS, for the three and twelve months ended March 31, 2017 and 2016.

Three Months

Twelve Months

March 31,

March 31,

CAD$ (in 000s, except grams sold)





Gross profit





Cost of finished harvest inventory sold





Gain on fair value changes in biological assets





Net gain on fair value measurement of biological assets





Adjusted Product Contribution Margin





Grams sold





Adjusted product contribution margin, per gram sold





Adjusted Product Contribution Margin for the fourth quarter of fiscal 2017 was $7.4 million or $6.34 per gram sold, compared to $4.4 million or $7.49 per gram sold for the prior year period.

Adjusted Product Contribution Margin for the year ended March 31, 2017 was $30.9 million or $8.42 per gram sold, compared to $11.9 million or $7.06 per gram sold the year ended March 31, 2016.

The increase in Adjusted Product Contribution Margin for the quarter and the year was as a result of growth in production capacity and sales throughout the year.

The decline in Adjusted Contribution Margin per gram sold for the fourth quarter of fiscal 2017 compared to the prior year period is a result of the impact of the VAC Policy resulting in lower average selling price per gram, partially offset by lower production costs as reflected in a reduction in the cash cost per gram sold.

Improvements in Adjusted Product Contribution Margin per gram sold for the year are primarily attributable to sales volume increases that allow for better utilization of, and the spread of cost allocations attributable to, labour production and overhead costs.

Adjusted EBITDA (Non-IFRS Measure)

Three Months

Twelve Months

March 31,

March 31,

CAD$ (in 000s)





Income (loss) before income taxes











Stock based compensation





Interest income





Finance costs





Initial public offering related fees



Net impact, fair value of

Biological assets





Adjusted EBITDA





Adjusted EBITDA for the fourth quarter of fiscal 2017 was $1.6 million, a decrease of $0.3 million or 17% from $2.0 million for the prior year period.

The decrease in Adjusted EBITDA in the fourth quarter of fiscal 2017 compared to the prior year period was driven by higher Adjusted Contribution Margin, offset by increased operating expense as the Company invests in long-term growth initiatives, specifically hiring for domestic expansion, creating the recreational brand portfolio, and developing international opportunities.

For the fourth quarter of fiscal 2017, bad debt associated with VAC receivables, accounting adjustments within the Tikun Olam agreement, and severance totaled $0.6 million. While MedReleaf believes these expenses were extraneous and isolated within the quarter, the Company did not alter for them in the Adjusted EBITDA calculation.

Adjusted EBITDA for the year ended March 31, 2017 was $13.9 million, an increase of 200% from $4.6 million for the year ended March 31, 2016. Adjusted EBITDA increased for the year as a result of operational growth in production capacity, patient demand, and sales.

Balance Sheet and Use of Proceeds from Offering

At the end of March 31, 2017, the Company had cash and cash equivalents of $12.9 million and working capital of $24.7 million.

On June 7, 2017, the Company closed its initial public offering and secondary offering for aggregate gross proceeds of $100.7 million, with MedReleaf receiving gross proceeds of approximately $80.7 million and the selling shareholders receiving proceeds of approximately $20.0 million. After the deduction of associated fees and expenses, the Company received net proceeds of approximately $74.0 million in connection with the initial public offering.

Approximately $55.0 million of the funds received by the Company in connection with the initial public offering are expected to be allocated to manufacturing capacity expansions at the Markham and Bradford Facilities, as the Company is now fully funded to increase production capacity to up to 35,000 kilograms annually. Approximately $2.0 million in proceeds are expected to be used for clinical research and product development and the remaining $17.0 million in proceeds are expected to be used for working capital and general corporate purposes.

Fourth Quarter and Fiscal Year 2017 Conference Call & Webcast

A conference call and webcast to discuss MedReleaf’s fourth quarter and fiscal year 2017 results will be held on Wednesday, June 28, 2017 at 8:00 a.m. (ET). The call will be hosted by Neil Closner, Chief Executive Officer, and Igor Gimelshtein, Chief Financial Officer, followed by a question and answer period.

To participate, interested parties are asked to dial (647) 427-7450 or (888) 231-8191 prior to the scheduled start of the call. A replay of the conference call will be available by dialing (855) 859-2056 and using the reference number 41045544. The replay of this call will be available until July 5, 2017.

The Conference Call will also be webcast live at

Financial Statements and Management’s Discussion and Analysis

This news release, along with the audited consolidated annual financial statements and the Company’s corresponding management’s discussion and analysis, are available on the Company’s website at and on SEDAR at

Non-IFRS Measures

This news release refers to certain non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing additional information regarding the Company’s results of operations from management’s perspective. Accordingly, non-IFRS measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. All non-IFRS measures presented in this news release are reconciled to their closest reported IFRS measure.

(a) Adjusted Product Contribution Margin

Management makes use of an “Adjusted Product Contribution Margin” measure to provide a better representation of performance in the period by excluding non-cash fair value measurements as required by IFRS. The Adjusted Product Contribution Margin used by management is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management believes this measure provides useful information as it represents the gross margin for management purposes based on the Company’s complete cost to produce inventory sold, exclusive of any fair value measurements as required by IFRS. The metric is calculated by removing all amounts related to biological asset fair value accounting under IFRS including gains on transformation of biological assets and the cost of finished harvest inventory sold, which represents the fair value measured portion of inventory cost (“fair value cost adjustment”) recognized as cost of goods sold.

(b) Equivalent grams and kilograms

Equivalent gram or kilogram refers to the equivalent number of dried grams or kilograms of cannabis required to produce extracted cannabis in the form of cannabis oil. The Company estimates and converts its cannabis oil inventory to equivalent grams using the combined Tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”) content in extracted cannabis products. Any reference to grams in this news release includes the combined dried cannabis and equivalent grams of extracted cannabis.

(c) Cash Cost Per Gram Sold

The cash cost per gram sold is used by management to measure the estimated amount of direct production costs, on a per gram sold basis, that are required to produce dried cannabis and cannabis oil. Management uses this measure to track production cost trends and assess the sensitivity and tolerance for pricing changes. Management believes this measure provides useful information by removing non-cash and post production costs and provides a benchmark of the Company against its competitors. This is not a defined term under IFRS. The metric is calculated by: removing from production costs incurred during the period, all non-cash based costs (including amortization and inventory write-downs or impairments) and all post production costs; and dividing such amount by the approximate number of grams of cannabis sold during the period. Post production costs include indirect overhead expenses such as: equipment rentals, payment processing fees, indirect labour expenses, shipping expenses, quality control expenses, and other order fulfillment costs included in production costs.

(d) Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (“Adjusted EBITDA”)

Adjusted EBITDA is used by management as a supplemental measure to review and assess operating performance and trends on a comparable basis. The Company defines Adjusted EBITDA as EBITDA adjusted for the impact of any unrealized expenses or gains, stock based compensation, fair value gains or costs arising from biological assets, expenses related to readying the Company for its initial public offering and other non-recurring costs the Company deems unrelated to current operations.

Adjusted EBITDA does not have a standardized meaning under IFRS and is not a measure of operating income, operating performance or liquidity presented in accordance with IFRS and is subject to important limitations. The Company’s definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies. The Company believes that Adjusted EBITDA provides a useful tool for assessing the comparability between periods of its ability to generate cash from operations. Adjusted EBITDA is presented in order to provide supplemental information to the Financial Statements included elsewhere in this prospectus, and such information is not meant to replace or supersede IFRS measures.

Cautionary Statement Regarding Forward-Looking Information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are statements other than statements of historical fact and which can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would”, “could” or “will” happen, or by discussions of strategy. Statements in this news release containing forward-looking information are based upon the expectations, estimates, projections, assumptions and views of future events of management at the date hereof and that management believes to be reasonable in the circumstances, including those relating to: general economic conditions, the expected timing and cost of expanding the Company’s production capacity, the expected timing of cannabis legalization in Canada, future growth of the Company’s business and international opportunities, the development of new products and product formats, the Company’s ability to retain key personnel, the Company’s ability to continue investing in its infrastructure to support growth, the impact of competition, trends in the Canadian medical cannabis industry and changes in laws, rules and regulations. Statements containing forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications as to whether, or the times at which, such events, performance or results will occur or be achieved. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties, including but not limited to those risks and uncertainties described under the heading “Risk Factors” in the Company’s annual information form dated June 27, 2017 (which will be available on the Company’s SEDAR profile at, any of which could cause actual results to differ materially from those expressed or implied by the forward-looking information disclosed herein. Accordingly, readers are cautioned not to place undue reliance on such forward-looking information. Statements in this news release containing forward-looking information speak only as of the date on which they are made and MedReleaf does not undertake any obligation to update or revise any forward‑looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

About MedReleaf Corp.

MedReleaf sets The Medical Grade Standard™ for cannabis in Canada and around the world. The first and only ICH-GMP and ISO 9001 certified cannabis producer in North America, MedReleaf is a R&D-driven company dedicated to patient care, scientific innovation, research and advancing the understanding of the therapeutic benefits of cannabis. Sourced from around the world and perfected in one of two state of the art facilities in Ontario, MedReleaf delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis.

For more information on MedReleaf, its products, research and how the Company is helping patients #livefree, please visit or follow @medreleafcanada.

SOURCE MedReleaf Corp.


Published at Wed, 28 Jun 2017 12:45:44 +0000

Sticky’s Pot Shop gets a reprieve in court ruling

Sticky’s Pot Shop gets a reprieve in court ruling

The Columbian / Associated Press

The owner of Sticky’s Pot Shop, a cannabis retailer that was shuttered last year after defying Clark County’s ban on recreational weed businesses, said he will reopen the store after a recent victory in the ongoing legal conflict.

On Friday, Clark County Superior Court Judge Daniel Stahnke issued an order allowing Sticky’s, 9411 N.E. Highway 99 in Hazel Dell, to reopen for business while its owner, John Larson, appeals the county’s ban on recreational marijuana businesses in unincorporated areas.

The order requires Larson to file a $205,000 bond with the court before reopening the store. Mark Nelson, Larson’s attorney, said that the bond is intended to cover the $92,000 in fines the company has already accrued for defying the ban and to cover the additional penalties and costs it would owe the county if it loses its appeal.

“This is an important issue that goes beyond just Sticky’s and one that will have an impact on many other licensees and business owners throughout the state,” Larson wrote in an emailed response to questions.

Larson wrote that he expects to file the bond this week and that the store will be in the same location. According to Larson, it will take time to get the store running again and he didn’t have exact dates for its soft and grand openings.

In December 2015, Larson opened the store under the name Emerald Enterprises LLC. After opening he ran into Clark County’s prohibitions on such businesses, facing fines and a revocation of the shop’s building permit. In September 2016, the store shut its doors after Stahnke denied Larson’s request and ordered the defiant business to close.

In February 2017, Larson appealed Clark County’s pot shop ban to the Washington State Court of Appeals, Division II. Larson’s case concerns an ongoing legal dispute that’s arisen since Washington voted to legalize recreational marijuana in 2012: whether local jurisdictions can pass restrictions on cannabis-oriented businesses. According to the Municipal Research and Services Center, 86 cities and counties in Washington have either moratoriums or prohibitions on state-licensed marijuana businesses.

Nelson, in his brief filed on behalf of Larson, argues that prohibitions on marijuana shops by local governments are illegal. He points to a section of the state constitution that blocks local jurisdictions from passing ordinances that violate state law and argues that the initiative that legalized marijuana doesn’t provide counties and cities with a mechanism to prohibit pot shops.

The state Attorney General’s office has taken a different stance arguing that nothing in the marijuana legalization initiative overrides the ability of local governments to regulate or ban these businesses.

“The jury is still out if those bans are constitutional and that’s what we are waiting to hear from Division II,” said Nelson, who expects a decision next year.

Nelson said that the process in this case has been particularly delayed. In May, the Washington State Court of Appeals, Division II issued an order directing Clark County Superior Court to allow Sticky’s to open until the appeal has been settled.

County Council Chair Marc Boldt said that the order puts the county in a relatively good position.

“It really puts (Larson) in jeopardy because if we do win he will have to pay all this money,” said Boldt. “And it in a way it’s easier for the county so we don’t have to go after the property.”

He said that if the county loses the case the council will revisit its ban, which he said there has already been some talk of regardless.

County Councilor Julie Olson, whose district encompasses the shop, said she’s not immediately worried by Sticky’s reopening. She said she doesn’t have strong feelings either way regarding the ban and is open to revising it. But she said any decision would need to be informed by data on legal marijuana’s impact on youth, law enforcement and public health.

“I don’t want to make decisions on anecdotal stories,” she said. “Everyone’s got one.”


Published at Tue, 20 Jun 2017 01:03:31 +0000

Clark County cannabis market booming

Clark County cannabis market booming

The Columbian / Associated Press

It’s been three years since Clark County’s first cannabis businesses appeared, and this corner of Southwest Washington has grown into the fifth largest cannabis market in the state, according to sales and excise taxes collected. What started out as a chaotic industry with major supply-side issues has dramatically changed and matured into a both a revenue generator and a job creator for the region.

“Locally Clark County stacks up quite well (in the Washington cannabis market),” said Gareth Kautz, co-owner of the High End Market Place dispensary in Uptown Village. “We have some of the best weed in the state, some of the best low-cost product in the state and one of the best medical processors (Fairwinds Manufacturing) — if not the only one — in the state.”

Clark County today has 23 growers and processors and 13 stores clustered in Vancouver and Battle Ground, the only two jurisdictions that allow cannabis businesses. Those operations employ 250 or more, although there is no formal tally.

By excise taxes collected, Clark County ranks fifth in the state, behind King, Spokane, Pierce and Snohomish counties. From 2014 through 2016, Clark County residents paid about $34 million in excise tax, which helps fund addiction health services, research and public schools, among other things. In comparison, King County, the largest market, paid about $116 million over the same time period.

Clark County’s retail stores have done especially well, capitalizing on their close proximity to the Portland market. Vancouver’s largest dispensary, Main Street Marijuana, is also the largest store in the state, with $41 million in sales since 2014. That store expanded last year with new locations in Vancouver and Longview. The Herbery also expanded to three stores — all in Vancouver — since its first location opened in 2015. Together those stores have netted $23.1 million since opening. New Vansterdam had the third-highest sales in the area, with $22 million since 2014. And a host of other dispensaries including High End Market Place, High 5 Cannabis and the Cannabis Country Store are all in the $5 million to $7 million range since opening.

The story is a bit different on the grower/processor side, however.

A maturing industry

A maturation and sorting out of the grower/processor industry has led to stiff competition for dispensary shelf space and basic survival — and some smaller farms are starting to get crushed.

“It’s definitely changed,” said Brian Stroh, owner of Cannaman Farms, the first licensed grower in Clark County and the third one in Washington state. “There’s so much supply. You have to stay relationship driven with stores, otherwise you may not get shelf space. It’s a very capital-intensive business, and there’s constant downward price pressure.”

Originally the Washington State Liquor and Cannabis Board limited the canopy — the amount of cannabis allowed to be grown — to about 2 million square feet total. The agency also licensed the first stores in 2014 before there was enough product on the market to sell, which led to spikes of $40 a gram for a product that now generally sells for between $8 and $14.

Since that time, WSLCB has further expanded canopy to about 12 million square feet, and has allowed growers in its three-tiered canopy system to expand production as well. But that, in turn, has led to a bit of an oversupply, Stroh said.

“Family farms, small farms, are having problems unloading everything they grow,” Stroh said. “And in general if you lose one crop, you lose too much money to stay in business.”

Cannaman Farms, for instance, had problems with crop loss after an electrical fire broke one night. It’s taken a long time to recover, he said.

“We’ve had a lot of failures,” Stroh said. “It’s a very capital-intensive business for sure. But we’re in the same boat as a lot of people. It’s a struggle. Payroll, rent, bills, these things aren’t just a given. There’s not a lot of people making money right now.”

At least two small Clark County growers have gone out of business already. One failed after burglars stole a harvest; the other closed due to pesticide issues.

Kautz said he sympathizes with the struggles small growers face.

“Most of these growers are one harvest away from going out of business,” Kautz said. “I’m talking about the big guys, too. If you lose one crop, you’re in a lot of trouble.”

Still, not all small farms are struggling. Skord, a Tier 2 grower in Battle Ground, has been successful using a slow roll-out strategy, said owner Joshua Anderson.

“We’re trying to not oversaturate stores, so our plan is to have one store in each community,” said Anderson, who in Vancouver sells through High End Market Place.

“So far, that’s worked out for us. It’s been advantageous for us to demand the price we want and to have some exclusivity in stores. Our reputation is spreading and we’re doing very well.”

Growing big

Two of Vancouver’s larger grower-processors also are doing very well — Cedar Creek Cannabis and Fairwinds Manufacturing. Each has its niche.

Cedar Creek, operated by Clark County native Mark Michaelson, has found its niche by providing consistent quality, which has led to an unusual problem. Its products are now found in more than 20 stores statewide, but at least a dozen more stores want to buy product from the company. Michaelson doesn’t have enough supply to meet all the demand.

“We can’t expand fast enough,” Michaelson said. “We’re afraid of losing market share if we don’t expand faster. We’re actually hoping to buy more grower licenses at some point.”

From 2014 to 2016, Cedar Creek had $3.6 million in statewide sales. It sold $800,000 more in the first five months of this year.

To ramp up production, the company recently rented a 20,000-square-foot facility in Kelso, in addition to its current operations in Vancouver. The plan is to expand the grow operation at the Kelso site while also ramping up cannabis oil and concentrate production in Vancouver, he said.

“Probably the most important thing that gets you on store shelves is consistency,” Michaelson said of his success. “Consistency of the quality of the product. Consistency with the lab results. That, and relationships. The relationship you have with your retailer is critical. They take care of you and your customers, and you take care of them as well.”

Finding and retaining quality employees has been a good strategy for keeping his products consistent, he added.

“We don’t pay our help minimum wage,” Michaelson said. “When you find good people, you have to pay them well to keep them.”

Fairwinds may have found a niche by becoming the most diverse and unusual grower and processor in the state.

The company, owned by James Hull, a mechanical engineer who used to build military ships, is one of only a handful of Washington businesses that makes Department of Health-compliant medical marijuana wellness products.

Fairwinds got into the market early with cannabis infused coffee and K-Cup compatible beverage pods, which made a national splash on a handful of TV networks fascinated by the novelty factor. Since then the company has built a reputation for having very clean, easy-to-consume products like tinctures, pills and vapes.

At the same time, Hull has also worked with scientists and patients whenever possible to develop products for the medical side of the industry, although Fairwinds’ products are available through the recreational market as well.

Those products include Flow, a topical gel which can be used externally to alleviate pain; menstrual relief suppositories; rectal suppositories to relieve symptoms of irritable bowel syndrome and Crohn’s disease; and more recently a pill-based product called PTSFree, aimed at veterans and others suffering from post-traumatic stress disorder.

The PTSFree product was developed with Operation Ward 57, a veterans group based in Seattle. Fairwinds gives a portion of the proceeds to the group, and recently completed a fundraising effort with The Herbery which netted $5,000 for the nonprofit.

“We want to lead this industry with information, science and facts,” Hull said. “And we want to help people along the way.”

So far, Hull’s business model is paying off. Fairwinds is the largest producer-processor in Clark County, netting $6 million in sales from 2014 to 2016, and another $1.7 million through May 2017.

“Fairwinds has been blowing up — and they’re blowing up everywhere,” Kautz said. “They have everything down to a science.”

Both Fairwinds and Cedar Creek are likely immune from the shakeout that’s consolidating smaller growers and driving some out of business, but both companies also remain aware of the threat.

“Thousands of licensed growers are out there, but that’s going down,” Michaelson said. “I think we’ll end up with somewhere around 100 of them in the end, out of the 1,000 or so that are out there. Personally, I don’t want to be the biggest, or even the absolute best necessarily — I just want to be one of the biggest and the best.”

Clark County marijuana market

Local marijuana businesses

Growers/processors: 23

Retailers: 13

Total excise tax paid: $43 million

Note: Operations are legal only in Vancouver and Battle Ground

Clark County’s biggest grower/processors, total sales 2014-2016

Fairwinds Manufacturing, $6 million

Agrijuana, $3.9 million

Cedar Creek Cannabis, $3.6 million

Sunshine Farms, $2 million

Skord, $1.6 million

Cannaman Farms, $480,000

Local retail marijuana sales:

2014: $5 million

2015: $38 million

2016: $50 million

Total: $93 million

Local marijuana grower/processor sales:

2014: $0

2015: $4 million

2016: $10 million

Total: $14 million

Local marijuana excise tax collected:

2014: $2 million

2015: $14 million

2016: $19 million

Total: $34 million

Statewide marijuana dispensary sales:

2014: $31 million

2015: $323 million

2016: $696 million

Statewide marijuana grower/processor sales:

2014: $19 million

2015: $163 million

2016: $413 million

Statewide marijuana excise tax collected:

2014: $16 million

2015: $129 million

2016: $256 million


Published at Tue, 20 Jun 2017 23:54:47 +0000

Study links legalized pot with increase in car crash claims 

Study links legalized pot with increase in car crash claims 

The Columbian / Associated Press

DENVER — A recent insurance study links increased car crash claims to legalized recreational marijuana.

The Highway Loss Data Institute, a leading insurance research group, said in study results released Thursday that collision claims in Colorado, Washington, and Oregon went up 2.7 percent in the years since legal recreational marijuana sales began when compared with surrounding states. Legal recreational pot sales in Colorado began in January 2014, followed six months later in Washington, and in October 2015 in Oregon.

“We believe that the data is saying that crash risk has increased in these states and those crash risks are associated with the legalization of marijuana,” said Matt Moore, senior vice president with the institute, which analyzes insurance data to observe emerging auto safety trends.

Mason Tvert, a marijuana legalization advocate and communications director with the Marijuana Policy Project, questioned the study’s comparison of claims in rural states such as Idaho, Wyoming, and Montana with Colorado, Oregon and Washington that have dense population centers and how that affected the study’s findings.

“The study raises more questions than it provides answers and it’s an area that would surely receive more study, and deservedly so,” Tvert said.

Researchers accounted for factors such as the number of vehicles on the road in the study and control states, age and gender of drivers, weather and even whether the driver making a claim was employed. Neighboring states with similar fluctuations in claims were used for comparison.

Insurance industry groups have been keeping a close watch on claims when auto accidents across the country began to go up in 2013 after more than a decade of steady decline. Insurance companies found several possible factors at play in the spike that included distracted driving through texting or cellphone use, road construction, and an improved economy that has led to leisurely drives and more miles driven, as well as marijuana legalization.

“It would appear, probably not to anyone’s surprise, that the use of marijuana contributes to crashes,” said Kenton Brine, president of the industry group Northwest Insurance Council that represents companies in Washington, Oregon and Idaho. He added: “It would be difficult to say that marijuana is a definitive factor, lacking a citation, in a significant number of crashes to say that what we’re seeing here is a trend.”

The Highway Loss Data Institute said its study examined claims from January 2012 to October 2016.

“The problem here is that it’s a pretty new experience,” said Carole Walker of the Rocky Mountain Insurance Information Association, an industry group that covers Colorado, Wyoming, Utah and New Mexico. “This is the first study that has been able to isolate legal pot as one of the factors.”

Eight states and Washington, D.C., have legalized recreational marijuana for adults.

Insurance Institute for Highway Safety spokesman Russ Rader adds that alcohol impairment remains one of the biggest concerns on the road.

“While we have proven countermeasures, proven strategies for reducing alcohol impaired driving, there are a lot of unanswered questions about marijuana and driving,” Rader said.

A study released last year by AAA’s safety foundation found legal THC limits established by states with legal marijuana have no scientific basis and can result in innocent drivers being convicted, and guilty drivers being released.

Moore of the Highway Loss Data Institute said they hope the study’s findings will be considered by lawmakers and regulators in states where marijuana legalization is under consideration or recently enacted.


Published at Thu, 22 Jun 2017 13:37:53 +0000

Investor Ideas Talks to Ian Tostenson, Director of ParcelPal and President & CEO of B.C. Restaurant & Food Services Association

Investor Ideas Talks to Ian Tostenson, Director of ParcelPal and President & CEO of B.C. Restaurant & Food Services Association

POINT ROBERTS, WA –(Marketwired – June 20, 2017) –, a global news source covering leading sectors including technology, cannabis, and food and beverage, releases an exclusive podcast interview with Ian Tostenson, Director of ParcelPal (CSE: PKG), (OTC PINK: PTNYF) and President & CEO of the BC Restaurant & Food Services Association.

Ian talks about how technology is changing the restaurant industry and how ParcelPal can play a role as an “Uber-like” company providing on-demand delivery to customers.

Hear the full podcast interview here:

Ian discusses his background in the sector, which spans over twenty-five years and included Cascadia Brands, who owned Granville Island Brewery, Kelowna Wines, Sandhill and a fifty percent interest in Burrowing Owl. He also chaired the BC Wine Institute for five years before entering the restaurant sector.

“The BC restaurant industry is a $12 Billion dollar industry with 180,000 employees and is a very significant contributor to our economy. As the business becomes more competitive, we have more technology being applied to make it more effective and more efficient.”

He went on to say, “We live in a world of immediacy and Amazon has wired our DNA so when we want something, we want it now. ParcelPal started off initially as business to business and was the first introduction of this Uber-like service here. Kelly, the CEO, has innovated and realized there is an incredible opportunity with business to consumer and it will have a profound effect on my organization to deliver a technology company like ParcelPal to the industry that could affect different streams of business like home delivery, which is becoming a more important part of the industry both in Canada and in the US. The US is ahead of us and we are seeing restaurants that are not opening up for retail operation but simply opening up kitchens to deliver food to people’s homes. I think ParcelPal is well positioned to seize on that trend.”

When asked what made ParcelPal different from services like Skip the Dishes or DoorDash Food Delivery he said, “I think it’s the fact ParcelPal is home-grown. They are good at customizing solutions, understanding what their values are, what customers want and are building their technology to adopt what customers want vs. a cookie cutter approach.”

Ian also talks about some of the current challenges facing the restaurant industry including labour shortages and how his passion project H.A.V.E. Café can help fill that gap, while also providing a much needed opportunity to the Vancouver Eastside community.

Mr. Tostenson is President and Chief Executive Officer of the British Columbia Restaurant & Food Services Association. He spent most of his career as President and Chief Executive Officer of Cascadia Brands Inc. In addition, Mr. Tostenson was British Columbia’s second chairman for the British Columbia Wine Institute, a finalist in the Ernst & Young Entrepreneur of the Year Award and a recipient of Business in Vancouver’s Under 40 Entrepreneur of the Year Award. He has served on the board as a director and was the President of the David Foster Foundation for over 22 years. He co-founded H.A.V.E. Café which focuses on helping people in the Downtown Vancouver Eastside.

About ParcelPal Technology Inc. (CSE: PKG), (OTC PINK: PTNYF)
ParcelPal is a technology driven logistics company that connects consumers to the goods they love. Customers can shop at partner businesses and through the ParcelPal technology receive their purchased goods within an hour. The Company offers on-demand delivery of merchandise from leading retailers, restaurants, medical marijuana dispensaries and liquor stores in Vancouver and soon in major cities Canada-wide.

How it Works
Through the ParcelPal iOS app, customers enter their address and view a list of merchants available in their neighborhood. Once the customer makes a selection, they simply place the order and pay online through ParcelPal secure ordering platform. The order is then prepared by the restaurant and brought directly to customers by a ParcelPal driver anywhere they choose to be in Vancouver. Customers will also have the option to order and pick it up themselves.

ParcelPal Technology Inc is a featured company on


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Published at Thu, 22 Jun 2017 20:22:16 +0000

Morneau and Provinces Talk Pot and Taxes

Morneau and Provinces Talk Pot and Taxes

Federal Finance Minister Bill Morneau met with provincial counterparts this week to talk pot and taxes, among other things.

With Ottawa delegating legal distribution and consumption details to the provinces, all eyes were on Morneau.

The twice-a-year meeting had to live up to its otherwise officially dull agenda — to facilitate a “co-ordinated approach to the taxation of cannabis.”

Or how the provinces interpreted the meeting: what can we squeeze from Ottawa?

Quebec Finance Minister Carlos Leitao said Quebec should have “equitable sharing of tax revenue,” which I take to mean legal equitable interest in the legalization model, rather than “fair” or “impartial” sharing of tax revenue.

Equalization payments clearly demonstrate why I would have my suspicions over his choice of words.

While Quebec sniffed around for federal funds like an anteater, Manitoba got wet feet like a duck.

“We’re not ready yet!” cried some bureaucrat in Winnipeg, his echo carrying through the office and on down the corridors. Eventually making its way to Manitoba’s finance minister who told Morneau that their government was feeling a bit “rushed” about the whole thing.

Just not ready, so to speak.

Interestingly enough, Ottawa didn’t care and instead pushed for a low taxation rate, fearing that too high of a tax burden would undermine their efforts to eradicate the “black market.”

Which goes to show how nefarious the Liberal deficit and tax hikes are. Morneau and the Liberals know exactly what grows an economy and what doesn’t.

Low taxes and minimal infringement on entrepreneurs generate prosperity. Throw in a frugal population and a high savings rate, and you’ve got yourself a pretty prosperous government since the Liberals would be getting more bang for their buck on the taxation front.

But Morneau and the Liberals have gone the opposite direction, anticipating a $23-billion year-end deficit and raising taxes on the middle class. Task Force Liberal Anne McLellan even said cannabis legalization would cost Canadians money before any revenue could be realized.

And don’t let these deficit numbers fool you, it takes 31 years to count to one billion. There is a staggering amount of debt in the Canadian economy and asset prices are only as good as the inflated stock market.

Government debt isn’t like household debt. Governments can endlessly borrow funds by putting a newer generation of taxpayers up as collateral. Yet, this scheme rests on a planet of finite resources.

So Morneau knows exactly how the economy works.

Meanwhile, federal-provincial coordination is nothing new nor unexpected. That cannabis legalization is on the agenda only goes to show how effective breaking the law can be.

So let’s keep overgrowing the government until we’ve freed the weed, and then let’s overgrow them some more.


Published at Wed, 21 Jun 2017 03:42:53 +0000

This July 1st, celebrate Canada and cannabis at Cannabis Day

This July 1st, celebrate Canada and cannabis at Cannabis Day

If you love Canada and cannabis, come celebrate Cannabis Day at Thornton Park this July 1st in Vancouver!

Cannabis Day has always been the perfect event for all of the proud Canna-dians out there, and this year there’s even more to celebrate because it is Canada’s 150th birthday.

For this milestone year, Cannabis Day has been moved from the Vancouver Art Gallery to Thornton Park, located on the northern corner of Terminal and Main, directly in front of Pacific Central Station.

It’s interesting to note that Cannabis Day 2017 will be somewhat historic as it will be going down as the last Cannabis Day to be held while cannabis is still technically illegal. That is all set to change Cannabis/Canada Day 2018. So if you’ve never checked Cannabis Day out before, this is your last chance to gain the bragging rights that you’ve been coming to Cannabis Day since before it was legal!

Be sure to check out all the goods and goodies at the famous Cannabis Day Farmer’s Market, groove to the live music, and listen to industry experts and activists such as Jodie Emery and Dana Larsen.

The Farmer’s Market always draws thousands of people, and if you’d like to be a vendor, tables are free and without reservations, but please keep in mind that space is limited and it’s first-come, first-served.

Cannabis Day goes from 12-7pm, but make sure to set your watch for the massive smoke-out at 4:20pm to enjoy a different kind of fireworks.

So let the good times and joints roll this Canada Day at Thornton Park with one of the best ways to spend your July 1st- celebrating Cannabis Day with thousands of fellow Canna-dians.

Also, be sure to check out our Vancouver 420 2017 videos- highlights and the full live show.


Published at Mon, 19 Jun 2017 18:31:54 +0000

Nevada judge mulls suit over July 1 recreational pot startup

Nevada judge mulls suit over July 1 recreational pot startup

The Columbian / Associated Press

CARSON CITY, Nev. — A judge in Nevada is trying to decide whether the state’s first sales of recreational marijuana should begin as scheduled July 1 despite complaints from alcohol distributors.

Lawyers for the liquor distributors and the Nevada Department of Taxation are expected to go before Judge James Wilson in Carson City on Tuesday to argue the case.

Wilson granted a temporary restraining order May 30 blocking licensing of pot distributors under the ballot measure voters approved in November.

The liquor distributors argue the law dictates they get the first shot at the equivalent licenses for recreational marijuana.

The state says it has the authority to license medical marijuana dispensaries to play that role on a temporary basis from July 1 through Dec. 31.

The Nevada Cannabis Coalition says any delay could cost the state millions of dollars a month in tax revenue targeted for schools.


Published at Tue, 13 Jun 2017 16:33:41 +0000

Researchers find increased pot use by college students

Researchers find increased pot use by college students

The Columbian / Associated Press

CORVALLIS, Ore. — A study by Oregon State University researchers has found college students at an undisclosed large public university in the state are using more marijuana since recreational pot became legal two years ago.

The Register-Guard reports the researchers’ study was published Wednesday in a journal called Addiction. The study found increased use is mainly by students who are binge alcohol drinkers and by students who are under the legal pot consumption age of 21.

OSU researchers also found increases at six out of seven universities around the country. But the unnamed Oregon university rose above the others with the highest increase.

Data for the study came from 10,924 undergraduate students ages 18 to 26. The researchers also used existing data, previously collected by the University of Michigan.


Published at Thu, 15 Jun 2017 16:11:21 +0000