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Fashion Archives - Hemp Market Report

Julie AitchesonJulie AitchesonDecember 2, 2019
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5min00

Skateboarding has long been considered an “outlaw” sport on the recreational spectrum, attracting those for whom the structure and homogenous culture of organized athletics holds little appeal. Its anti-establishment origins, outlined in greater detail in this 2013 Skateboarding Magazine article, can be traced back to surfer culture, as wave riders realized there might be a way to surf city streets with the same élan and excitement that they applied to hanging ten in the water.

Both snowboarders and skateboarders have been associated with having a friendly relationship with cannabis. There is speculation that the original California high schoolers that met at 420 to get high, most likely rode on skateboards. Snowboarding’s admittance into the Olympics made many athletes ponder kipping the event if they had to give up smoking pot. The Olympics seemed to look the other way. Many professionals in both sports made no effort to hide their love of cannabis, which kept the rebellious nature of skateboarding intact.

But in recent years, skateboarding has moved away from the fringes and into the limelight with the popular X Games, an extreme sports event produced, hosted, and broadcast by ESPN, and demonstrated by the fact that skateboarding will be an official Olympic sport in Tokyo in 2020. This has given rise to some concern that the stereotype of the stoner skater will be proven true enough to keep some of the sport’s top athletes out of contention, as it did skateboarder Corey Juneau. Ranked seventh in the world, Juneau was suspended for six months after testing positive for THC in 2018.

As skateboarding’s competitiveness, popularity, and main street respectability grow, some of the sport’s biggest names are stepping out in front of companies that promise clean, potent, risk-free performance enhancement through CBD. Michael Apstein, a founding partner of Primary Growth Partners, says that “There is a long history of outlaw brands from other market segments breaking through to the general market – from surfing and skateboarding to extreme sports and certainly in music, apparel and recreation brands.” As the benefits of CBD gain visibility in all corners of the marketplace, skateboarding’s top athletes are endorsing products that provide low THC or THC-free alternatives to marijuana. Old school skateboarding legend Tony Hawk has even developed Birdhouse CBD Balm by producer Canna Hemp, a line of CBD recovery creams that target the epic aches and pains of the action sports market.

Professional skateboarder Andy McDonald, 23-time X Games medalist and 10-time world champion, recently partnered with CBD manufacturer Extract Labs to spread the word about the benefits of CBD for extreme sports athletes. McDonald, who used his platform as a professional skateboarder to take an anti-drug message all the way to the Clinton White House, credits the pain-alleviating benefits of hemp-derived CBD for helping him manage the cumulative effects of over 35 years of skating.

Social CBD, a company that markets a range of hemp-derived CBD products that guarantee a 0.0% THC content, recently hooked X-Games Skateboarding gold medalist Nyjah Huston as a spokesperson. Huston stakes his legacy as the winningest skateboarder in history on Social CBD’s promise to deliver a product pure enough to endure the scrutiny of the Olympic committee.

As skateboarding continues to move deeper into the mainstream of competitive sports, its shining stars will no doubt continue to seek out the healing benefits of CBD and the sponsorship dollars of those companies intent on making it the must-have, performance-enhancing supplement for extreme athletes.


Julie AitchesonJulie AitchesonNovember 19, 2019
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4min00

CBD products are finding a robust market among yoga moms, career women with boho-chic sensibilities, and social media lifestyle mavens alike. These are busy women with the means to incorporate wellness and lifestyle elements into their daily routines that might have once been the exclusive purview of L.A. celebs or NYC fashionistas. Their purchasing power is real, their willingness to put money down on the latest trend to achieve inner peace and outer glow bottomless, and the lengths to which manufacturers are willing to go to win their business boundless.

CBD Workout Gear

Behold athleisure company Acabada, which markets active lifestyle clothing similar to that sold by Lululemon (NYSE: LULU) and Kate Hudson’s Fabletics line. Acabada is the first brand to offer workout wear laced with CBD oil. At $160 for a pair of leggings, the company’s claim that this line decreases soreness and shortens workout recovery time bets hard on the dedication of women in their late twenties to mid-forties to optimal health in a booty-boosting package.

Yoga Lovers 

An article by Rochelle Bilow on Wanderlust.com (a website popular with both aspirational yoginis and those already at the leading edge of wellness trends) proposes that CBD is the perfect way to take your yoga “to an entirely new level of chill”. According to Bilow, CBD is a shortcut to the “zen mind” that is the golden goal of yoga practice.

Luxury CBD

Christine Yi (who was profiled by marie claire magazine as one of fifteen women to watch in the CBD industry) is co-founder of Potli, a company that focuses on CBD-infused food and cooking essentials. She conceptualizes her business as one that creates “ingredients for the elevated life.” The concept of “the elevated life” aptly defines the CBD promise to the same affluent women, median age 34, who follow goop, Gwyneth Paltrow’s popular lifestyle brand. Prone to jumping on the latest trend to offer a make-up free glow, fit body, and buddha mind, this population will happily plonk down $55 for a Lavender Sleep Mask from Kana Beauty for an “elevated” sleep experience.

According to a Gallup poll conducted in August of this year, the top three reasons that Americans use CBD products are pain, anxiety, and sleep. In a study conducted by the National Institute of Health Research in the UK, it was found that women are twice as likely to be affected by anxiety as men while The National Sleep Foundation claims that not only are women more likely to have sleep disorders than men, but also more likely to experience nighttime pain.

These statistics suggest that it is not just slick marketing that is driving the charcoal lemonade-sipping, Gwyneth glow-seeking crowd to the marketplace in search of the next best thing in CBD (Votary Super Seed Facial Oil anyone? A bargain at $110!). However, when it comes to finding ways to lure women with a wellness bent to open their wallets and minds to the benefits of CBD, Madison Avenue seems to understand that it’s the promise as much as the product that matters.

 


StaffStaffOctober 22, 2019
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9min00

Today the innovative startup MoonCloth Designs announced the launch of ‘MOMENT’, a Hemp Wellness Collection focused on bringing more eco-friendly hemp-based bath + body products to market. To understand the value and importance of this move, one must look no further than the numbers involved in the hospitality industry.

The total retail value of the global hotel industry was projected to cross $500 Billion in 2018. The Total revenue of the hotel industry in the USA alone was projected at $200 Billion for 2018. So, introducing hemp to this industry is not only a smart move for the bottomline, but it also provides a solution to an industry that is thirsty for more sustainable products.

 

“We are driven to bring hemp into the sustainability spot light as an eco material solution. We started off working with hotels and spas to provide more sustainable solutions to their environments. We are now launching our own hemp wellness collection which showcases are beautiful hemp robes and hemp seed oil body products, which is now available on our online store and select retail partners,” explained Founder & CEO Sarah Harf.

Working with boutique and luxury hotels and hospitality brands like Soho House, Design Hotels, and Sensei Resorts, MoonCloth Designs is redefining the meaning of the word “wellness” by crafting elegant and sustainable solutions to hospitality environments, including custom hemp textiles design services and hotel room/spa amenities.

“By designing sustainable solutions using hemp, we can find beautiful and luxurious alternatives to synthetic body products, plastics, textiles, and positively change the future of our environment,” says MoonCloth Designs CEO & Founder, Sarah Harf. “Hemp seed oil and hemp fabric are great eco materials that allow us to create natural experiences without sacrificing design aesthetic.”

The critical component to MOMENT is the robustly regenerative plant hemp. Hemp purifies the soil of toxins like nitrogen and selenium, restores nutrients into the ground, and can sequester 1.62 tons of carbon dioxide for every ton harvest. Fibers made from hemp are anti-microbial, hypoallergenic, and free of synthetic materials and microplastics. Hemp seed oil is rich in omega-3 and omega-6 fatty acids, which help reduce inflammation and cell growth. It is also naturally hydrating and regulating the skin’s oil production.

“Our hemp-based products have tons of natural benefits for our bodies and our environment,” adds MoonCloth Designs Co-Founder Kelsi Lavicka.

Rooted in the daily practice of self-care and a love of natural beauty, MOMENT invites people to weave grounding moments into their daily lives by taking home the spa experience and aims to show the world that sustainability and high-end luxury are not mutually exclusive.

The MOMENT wellness collection includes a multitude of luxurious hemp-inspired products, such as:

Moon Glow Oil – This potent and luxurious oil delivers long-lasting moisture for smooth and supple skin. Offering an abundant dose of antioxidants and high levels of omega’s; this synergistic blend of Hemp Seed Oil, Calendula and Rose is calming and regenerative, leaving you luminous.

Sacred Space Mist – A spritz for higher spirits, this transformative facial mist is equal parts skin tonic and mood regulator. Brimming with the potent yet calming benefits Hemp, Lavender, Patchouli and Clary Sage, this plant remedy will tone and brighten the skin and refresh your aura.

Tradition Hemp Silk Blend Kimono – Devoted to the long-time use of hemp and Japanese bathing culture, this hemp silk robe is luxury at its best. Uniquely blended with hemp and pure silk, free of harmful synthetic and polyester materials. Soft to the touch, this robe has a lightly weighted feel creating a beautiful shape as it falls against any body type. Other hemp robes in the MOMENT collection include natural hemp terry robe and a hemp fleece robe for men and women.

In the MOMENT Kit + Hemp Cosmetic Bag – A complete hemp wellness package. The In the Moment Kit – Hemp Cosmetic Bag contains: 1 Meditation Oil in 10ml, 1 Moon Glow Oil in 30ml, 1 Sacred Space Mist in 30ml, 1 Restful Warrior Hemp Silk Eye Mask. All you need to take a pause and begin again. This kit features each item from the MOMENT collection, offering you a fully holistic experience. Designed to feed your skin, soothe your senses and keep you grounded on the go. Perfect for travel and whenever you need to focus and reconnect.

With every MOMENT kit purchased, they are given 25% as a donation to ANIWA, a non profit event, produced by the BOA Foundation. ANIWA is focused on indigenous-lead projects including strategic land buy back, restoration of native ecosystems, reforestation, cultural exchange and sustainable living solutions. Hemp as regenerative plant that is a great solution for deforestation. Hemp produces more paper per acre than any other commercial forest .


Anne-Marie FischerAnne-Marie FischerOctober 29, 2018
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3min00

As everyone who owns a cannabis retail store knows, compliance is key to running a successful legal cannabis business, and tech companies have seriously stepped up to make compliance a seamless process.

Metrc, is a well-known seed-to-sale traceability platform that helps cannabis companies manage their inventory and the movement of cannabis products through the supply chain. Operating in Colorado, Oregon, Alaska, Maryland, Michigan, Ohio, Massachusetts, Montana, Nevada and Louisiana, and Washington, D.C., Metrc helps fulfill state reporting requirements and has become known as the “de facto track-and-trace system” for government entities that regulate the legal cannabis markets.

Metrc announced its first outside round of funding in the form of $50 million from Tiger Global Management and Casa Verde Ventures, the 3-year-old, cannabis-focused venture firm co-founded by notorious cannabis enthusiast and investor Snoop Dogg, but managed largely by Goldman Sachs and Nomura Securities alum Karan Wadhera.

The partnership between Tiger Global Management and Casa Verde Ventures, where each entity “shares deal flow quite regularly”, funded Point of Sale software company GreenBits, which is designed to integrate into seed-to-sale systems like Metrc.

Metrc was formerly part of Franwell, focusing on cold chain management and fresh foods, which helped gain the supply chain management knowledge and expertise needed to transition into seed-to-sale traceability for cannabis.

Metrc CEO Jeff Wells says that the over 100-employee company plans to “look to expand our regulatory focus,” with the $50 million investment, including potential expansion into “other regulated markets and products that need the type of tools that Metrc has created.”

“Compliance is the backbone of the cannabis industry. If a license holder isn’t compliant, their business will cease to exist,” said Karan Wadhera.

 


Debra BorchardtDebra BorchardtSeptember 10, 2018
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3min00

Apparel company Hoodlamb may have started using hemp as a tribute to cannabis by the founders, but now the company sees hemp more as an ecological choice, not a scandalous choice. The company began in 1993 in Amsterdam by Doug Mignola who wanted a better post surf jacket and also loved the idea of working with industrial hemp. The name is also tongue in cheek for the hoodlums that might consume cannabis.

The hemp comes from Northern China and is grown chemical free on family farms, some of which are owned and operated by women. The raw fiber is then spun into a durable fiber that is used to make the fabric for Hoodlamb jackets. Even the water-resistant coating on the jackets comes from natural cellulose taken from hemp stalks. Hemp fabric alone would be pretty stiff and scratchy, so it is combined with organic cotton to soften the feel of the fabric.

Not only will these jackets keep you warm, but they are also vegan and environmentally friendly. The Hoodlamb line comes from cruelty-free sources and uses no animal products. The faux fur trim feels amazingly real. “Some vegans don’t like the idea of faux fur trim at all, but it is practical for bad weather,” said a Hoodlamb spokesperson.

The thermal insulation is called EcoDown and each jacket recycles up to 10 bottles. The company said, “It’s the one part of the jacket that uses something synthetic, but since we are recycling we feel that it’s a positive thing. Otherwise, these plastic bottles would just be trash.”

The products do have some slight nods to its roots in cannabis culture. There are secret pockets sewn into the jackets that are really hard to find. Just in case the wearer may have some contraband they may want to conceal.

So far, Hoodlamb has produced over 80,000 jackets and can be found in over 20 countries. The company had  $2.6 million in sales in 2016. The surf crowd is especially fond of these jackets since it was created from a surfers point of view.

One thing the company doesn’t conceal is its commitment to Sea Shephard, a non-profit marine life conservation organization. The company exposes and confronts illegal activities on the high seas. 10% of every Hoodlamb X Sea Shephard purchase is donated to the mission and in addition to the Hoodlamb contributes at least one percent of its annual revenue to environmental causes.

 


Debra BorchardtDebra BorchardtJanuary 18, 2018
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11min00

There is a huge disconnect between how cannabis consumers use social media sites like Facebook (FB) and how social media sites treat cannabis users. Polls have shown over 60% of Americans approve of legalization, making it one of the few things that many Americans agree upon. This is a formidable group of people that are also users of social media channels.

In survey data from Consumer Research Around Cannabis, 2.4 million over the age of 21 said they had bought or used marijuana in the past month. Of that group, 83% had logged on to Facebook. However, Facebook is very resistant to cannabis companies having pages on the site. The company regularly states that cannabis pages are promoting illegal drug use even if they are businesses that don’t even touch the plant. Many companies have complained about their pages being shut down with no warning and little recourse other than asking for an appeal from a vague link.

“I talked to the Facebook people about two years ago and tried to explain that a lot of businesses in the industry are using social media to inform and educate medical marijuana patients,” said Olivia Mannix Co-founder of cannabis marketing company Cannabrand. “If pages are shut down, then patients can’t get information about products in the stores, or find networks like cannabis patients group.” Cannabrand, like other cannabis companies, has learned that by avoiding the use of hot words like marijuana, cannabis, and weed to name a few and making sure that images don’t contain pot leaves posts can get by Facebook’s watchdogs.

Facebook didn’t respond to a request for a comment, but it seems steadfast in its approach to the cannabis community, no matter the size of the group. Cannabis company pages are generally allowed but boosted posts or ads are not.

Instagram And Cannabis

Instagram, which is owned by Facebook had been more permissive towards cannabis companies with regards to allowing cannabis posts, yet tougher when it came to allowing the profiles. According to Consumer Research Around Cannabis, only 56% of cannabis consumers even log into Instagram. Cannabis companies might be able to make these posts to reach their clientele, but then they learn the accounts disappear when Instagram decides it wants to shut them down.

Mike Coleman, Dir of Marketing for Medical Marijuana Inc. (MJNA) said, “Instagram has been more aggressive in policing cannabis. Facebook doesn’t seem to shut down pages even if they don’t allow ads.” He added, “I’ve heard of companies building a following on Instagram only to wake up and have it shut down. Its a tough place for a marketer to go.” Businesses are estimated to have spent $36 billion in social media advertising according to eMarketer, so it’s a significant place for companies to reach their customers.

Twitter (TWTR) is another marijuana friendly social media channel. Companies are given the green light for profiles and free rein on what messages they want to send out. Still, only 52% of cannabis consumers logged on to Twitter in the past month, while only 48% use Snapchat. So, the sites that seem to tolerate cannabis consumers, aren’t the sites where they are spending time. Even fewer cannabis consumers log on to LinkedIn with only 41% choosing to visit this platform.


CBD (cannabidiol) products get caught up in this marijuana blacklist. Mannix mentioned several hemp-based CBD companies, whose products are legal, but have experienced getting blackballed on the internet. Amazon (AMZN) has over 9,000 listings to purchase CBD products. Facebook allows Amazon to keep its page, even though by its own standards Amazon is promoting illegal drug use by selling CBD products, whereas a consulting firm for the cannabis industry that sells no products is considered to be promoting drug use. 73% of cannabis consumers logged on to Amazon in the past month according to the Consumer Research’s data. Making this one of the few places where cannabis users aren’t tossed aside.

Cannabis Consumers Prefer Google

Moving on to search engines, cannabis consumers are overwhelmingly on Google (GOOG) as 85% have logged on in the past month versus 44% for Bing. Yahoo is apparently not a choice at all. Jeffrey Stein of Consumer Research Around Cannabis said, “Yahoo was not included in the survey because it hasn’t been deemed relevant by our database subscribers. The primary search engines they are currently interested in are Google and Bing. If there is a sudden surge in demand for Yahoo, we would, of course, consider adding it back into our questionnaire.” “Google also has a hot list of ad words they do not allow,” said Kyle Porter, President of CMW Media. “Even in metadata or in the description you can’t use the words marijuana or cannabis. This makes it hard to reach the consumer with a new brand. For publishers, it’s hard to monetize content or reach consumers through traditional digital marketing plays.”

Porter noted that for some businesses, these “hot” words are found in the company name makes it even more difficult to use Google as a way to steer customers to the business. Porter did point out there are several websites that have been created to help the cannabis community get around these roadblocks. The drawback to these sites is that marketers aren’t able to reach fresh customers. They are already “singing to the choir.”

Internet Radio Allows Drugs In Songs But Not In Ads

Music seems to be a bigger pleasure with 54% logging into Pandora (P), while 50% choose Spotify. I Heart Radio is at 45%. Only 19% chose Google Play Music and 8% listened to Slacker Radio. While music sites regularly play songs that sing about drugs, they aren’t so happy about running ads for cannabis companies. “We’ve avoided Spotify and Pandora as well because we can’t target them,” said Porter. The irony is that The University of Pittsburgh School of Medicine researchers found in a study, “116 of the 279 unique songs (41.6%) had a substance use reference of any kind. Ninety-three songs (33.3%) contained explicit substance use references.” In other words, its okay for the artists but not the advertisers.

Netflix And A Preroll?

Cannabis consumers do love their entertainment with 74% enjoying streaming video and TV shows. Netflix is the provider of choice with 58% using that service. Amazon Prime was used by 29% and Hulu was used by 27%. Only 18% used iTunes. Maybe Netflix is the channel of choice because of its embrace of the community. Netflix has created original programming around Columbian drug lords in Narco, a light comedy based in a dispensary called Disjointed and a drama simply titled Cannabis. Netflix also created its own collection of cannabis strains with names that pay homage to shows like Orange Is The New Black. The collection was sold at the Alternative Herbal Health Services in West Hollywood last summer. Netflix obviously doesn’t have the same issues that Facebook does.

Just Send Me A Text

Really, the best way for businesses to reach consumers is through their phones. The vast majority of Americans – 95% – now own a cellphone of some kind. The share of Americans that own smartphones are now 77%, up from just 35% in Pew Research Center’s first survey of smartphone ownership conducted in 2011. So since most people own smartphones, that means most cannabis consumers own smartphones. Loyalty programs from companies like Baker push out promotional notices to customers through text messaging. Dispensaries just skip the middlemen and go directly to the consumer. Coleman said, “We have engaged in push marketing and it’s been effective. It’s a great way to build a contact list.”

All of the marketers believe that at some point all of these social media channels will change their policies and begin to be more friendly to cannabis companies. Once cannabis is legalized, they will probably change their policies to accept some form of advertising. For now, none want to run afoul of federal law and are opting to take a conservative approach. The question will be whether cannabis companies will feel they need these outlets when that time comes. Most have been forced to work around them for years and may have little desire to dance with them once they are ready.


Debra BorchardtDebra BorchardtDecember 29, 2017
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4min00

MassRoots, Inc. (MSRT) has formed MassRoots Blockchain Technologies, Inc., a wholly-owned subsidiary of MassRoots, Inc. dedicated to developing blockchain-based solutions for the cannabis industry. 

We believe blockchain has the potential to enable the cannabis industry to operate more efficiently and with a greater degree of accountability and transparency,” stated MassRoots Chief Executive Officer Isaac Dietrich. “MassRoots looks forward to being a pioneer in exploring blockchain-based solutions for the multi-billion dollar cannabis industry.”

It’s a big move from Dietrich, who just recently regained control of the company he founded following a messy boardroom coup. Dietrich has been on a mission to keep MassRoots alive amid a failed acquisition of CannaRegs that triggered his ouster. He was able to gain shareholder support to get his old job back as CEO and may even resurrect the CannaRegs deal. Part of his strategy to save the company was to pivot from the original goal of becoming a social media giant like Facebook (FB) to becoming a software, tech brand for the cannabis industry.

The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value,” according to Dan and Alex Tapscott in the Blockchain Revolution (2016). MassRoots stated in its press release that the most well-known application of blockchain technology has been cryptocurrencies, which have grown to a market valued at more than $600 billion, according to CoinMarketCap.com.

MassRoots has made cryptocurrency transactions over the past year and has turned a profit on the investment. Entering the blockchain space is another way for the company to shift more towards becoming a cannabis software brand.

Plans For Blockchain In The Cannabis Industry

The company believes that blockchain will be useful in improving seed-to-sale traceability and will explore that with its new point-of-sale system called MassRoots Retail. This system was formerly known as Odava, a company acquired from the CEO Scott Kveton who orchestrated the boardroom coup.

MassRoots will also look into using blockchain to improve supply chain contracts. The idea is that with these smart contracts, dispensaries would be able to automatically order more product when the inventory is low for that product.

It could also eliminate third parties in various transactions and create a peer-to-peer system. MassRoots also believes that blockchain has the potential to streamline social network data while eliminating the security risk. The company said in its statement, “This would enable advertisers to better target consumers, reduce the risk of security breaches, and enable the development of solutions that better serve the MassRoots community.”

MassRoots Blockchain is also “exploring how distributed-ledger technology can be applied to proxy voting and giving MassRoots’ shareholders a greater degree of transparency and communication.” Clearly, Dietrich is inspired as a result of his experience in rallying shareholders to his side in his CEO battle. 

More information is available at www.MassRootsBlockchain.com.


Jack SmithJack SmithDecember 15, 2017
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3min00

Marketing automation platform Baker, the self-described “Salesforce of Cannabis,” has received $8 million in a new Series A funding round.

The new funding will let the Colorado-based Baker keep growing, particularly in California and Washington, where it recently acquired Seattle-based Grassworks, the second-largest customer relationship management platform in the cannabis industry. It will also use the funds to open an office in Los Angeles, starting next year.

“We’ve built the industry’s leading CRM product, and now we’re truly focused on providing a platform to allow Baker and our partners to offer best-of-breed solutions to our massive retail network,” Joel Milton, CEO of Baker said in a statement. “This funding will allow us to continue to execute on our platform strategy, and help all of our clients grow their businesses — including those in California gearing up for adult use.”

The funding round was led by Poseidon Asset Management and includes other venture capital firms, such as Panther Opportunity Fund and Phyto Partners. It also included participation from previous investors. The $8 million in funding is on top of $3.75 million the company has previously raised.

Keeping Dispensaries Happy

Baker uses what it describes as unique “data-driven approach” to help cannabis dispensaries keep customers happy and boost revenue. The company boasts that its clients see a 40% boost in order size and a 300% return on investment in just six weeks. Its software is used by over 700 dispensaries across the country, helping the company attract the new funding.

Baker has also created a robust customer loyalty program that dispensaries are using to tap repeat business. Loyalty programs are relatively new to cannabis retailers but are quickly becoming a favorite way to communicate with customers.

“Baker has continued to grow at an impressive rate, and is breaking away from the pack in a big way,” said Morgan Paxhia, Co-founder and Managing Director at Poseidon Asset Management. “Unlike anyone else in the space, the team continues to cultivate and craft unique solutions for its customers and scale at a remarkable rate.”


Debra BorchardtDebra BorchardtOctober 31, 2017
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16min00

Washington State’s marijuana program is a hot mess and the state only has itself to blame. The state monitors its legalized marijuana program by tracking the marijuana from seed to sale. Every single plant is tagged from its point of conception to its final use and sale through a sophisticated software program. The program is used by every license holder and covers thousands of transactions daily.

One of the reasons for such an onerous tracking system is that marijuana is still federally illegal. States have been allowed to operate marijuana programs that have been legalized at a state level so long as they abide by guidelines listed in a document from the Department of Justice called the Cole Memorandum. The goal of the memo was to make sure legal marijuana did not make its way into the black market or in the hands of children.

The state is changing vendors and the transition has gone very badly forcing businesses to manually keep track of the marijuana plants until the new vendor can take over. The problem is that anti-marijuana forces could point to this debacle as vindication that legalized marijuana is a bad idea because it can’t be properly monitored.

 BioTrackTHC was contracted in 2013 to monitor the program with its seed-to-sale tracking, and by all accounts, it seemed to be working just fine. Then the state decided to open the program up to a public bid to see if there might be a better vendor for a better price. This isn’t such a bad idea because states should always try to see if they can save their taxpayers money and always seek to improve programs. However, the execution went horribly wrong.

In June the state selected Franwell’s METRC system to replace BioTrackTHC. However, when Franwell came to the table to begin the negotiations of planning the program takeover, talks quickly broke down. On June 9, Franwell walked away from the contract and never spoke publicly about it. One inside source said that basically, the state wanted more than they were willing to pay for from Franwell. Then the state tried to throw Franwell and the cannabis businesses under the bus by saying that Franwell wanted to charge too much money for RFID tags that the businesses didn’t want. Thereby deflecting attention away from its poorly managed transition.

Another theory from a blog PA Marijuana Medical Watch suggested that the state made demands on Franwell that weren’t in the original Request For Proposal (RFP) causing them to walk away. This blogger believes the state decided to pick MJ Freeway’s Leaf Data Systems, a seed-to-sale software company because it is getting advice from the advocacy groups National Cannabis Industry Association and Marijuana Policy Project, both investors in MJ Freeway.

Whatever the reason, Franwell walked away from a lucrative contract with the state of Washington in nine days. The state then chose MJ Freeway, which has had its own share of troubles this past year. The company has suffered hack attacks, alleged security breaches (which the company denies) and systems failures. It desperately needed a win this year. However, by winning the contract, it was also put in the position of trying to take over a multi-million dollar system with over 1,700 participants in a matter of months. No easy task for any software company. MJ Freeway issued a video response regarding the situation and trying to address market concerns.

MJ Freeway insisted that its software problems were resolved in a matter of hours and that customers were back online quickly. They also point out in the video that the task they are taking on is very complicated and takes more time than what the state had allotted.

It’s a huge program with thousands of transactions every day and hundreds of businesses involved,” said Jeff Gonring, Director of Market and Communications for BioTrack. “This is not a simple transfer of data.”

MJ Freeway was set to take over from BioTrackTHC on October 31 but now isn’t expected to take over until January 2018. The state’s Liquor and Cannabis Board has come up with a contingency plan for November 1. It’s message to the businesses, “You must keep a record of all required activity associated with your business. If you have a third-party, commercial software provider consider contacting them to review your coverage. Some software systems may capture traceability transactions for later reporting which may minimize your manual reporting requirements.” In other words, sharpen those pencils for your spreadsheets. Not only do these businesses have onerous rules and regulations they have to abide by, they now have to manually track this information and then two months later transfer it to a new program.

“The whole situation is still pretty dynamic between the Washington State Liquor and Cannabis Board, many of traceability platforms active in the state and other marijuana licensees, new information seems to be coming through on an almost hourly basis,” said Mindon Win Special Operations Coordinator at BotanicaSeattle. “The marijuana industry here in Washington is banding together to come up with solutions that keep us in compliance and able to continue doing business.”

So, what about BioTrackTHC in all of this mess? The company was set to terminate its contract on October 31, but in early October the state began talking to BioTrackTHC to extend the contract. “Events occurred that brought up a potential security concern,” said Jeff Gonring, Director of Market and Communications for BioTrack. “We need resolution on that security concern before entering into an extension.” Gonring is referring to an email that was sent to Washington licensees last month from someone claiming to have sensitive data that seems to be proven as accurate.

We are concerned about the breach. We are currently in a co-mingled state and we need assurances from the LCB that it has been remedied. We can’t expose our system to that,” said Gonring. “There is enough smoke to give us concern there is fire.” BioTrackTHC is so concerned the company issued a public letter to the Washington State LCB. At this stage, BioTrach THC hasn’t officially agreed to the extension, nor has it declined.

The security breach that Gonring believes happened is outlined in the public letter. He noted that BioTrack began a data dump in August to MJ Freeway in order to assist in the transfer of vendors. Then in September, the licensees received emails saying that a hacker had gotten sensitive data from the Washington dispensaries and wanted to sell it. The data seemed to be real and the emails weren’t seen as an idle threat. BioTrack seems to suggest that the timing is not a coincidence.

In the meantime, the state has sent out spreadsheets to business owners.  The opportunity for human error is enormous. There are almost 20,000 pounds of marijuana that are produced each month in the state that must be tracked and traced. There were 3.8 million pounds of extracts produced in August in the state that must be accounted for and the state logged $1.3 million in sales for the fiscal year 2017.

The business owners seem to be the one group left out of this equation. They are at the mercy of the state and its mismanagement of the tracking system. “I don’t want to speak for everyone but we hope people recognize that marijuana businesses are invested in compliance with the state and it’s in everyone’s best interest to demonstrate our ability to run a regulated and monitored cannabis market under these circumstances,” said Win. 

It gives anti-marijuana forces fuel for their fire to claim that legalized marijuana can’t be properly monitored. They will argue that over the next two months, marijuana can end up on the black market because it can’t be properly tracked and traced. They could be right.

Washington State’s debacle could hurt the legalization efforts if this proves to be true, especially ahead of the holiday season which is when sales rise. The entire situation could have been either avoided by remaining with a program that worked without any hiccups or at least giving a vendor enough tie to properly prepare for a transfer of services. In the end, the problem must be owned by the state for creating this self-inflicted wound.



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The Hemp Market Report will target news from the fast growing worlds of cannabidiol (CBD) and hemp. As a sister site to the Green Market Report, HMR will cover financial stories, but also take a look at lifestyle news as well. The Hemp Market Report will also publish sponsored content as we seek to expand our content offerings.


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