elevateNV
Jul 27 2019 . 8 min read
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July. ’19: Inhale/Exhale with Shoshanna Silverberg

July. ’19: Inhale/Exhale with Shoshanna Silverberg

Mother-daughter duo want to spread gospel of cannabis by starting a CBD product line

Mother-daughter duo want to spread gospel of cannabis by starting a CBD product line

Dear Shoshanna,

I have had an utterly magical experience with cannabis. It has improved my life beyond words. I sleep better, I have much less anxiety, and I am just an all-around calmer person. I believe so strongly in its healing abilities that in addition to shouting about it from the rooftops, I’ve been playing with the idea of starting my own line of cannabis products so that I can help others. My mom thinks it’s a great idea and wants to partner with me so our friends and family can enjoy its benefits. What do you think? How much of an undertaking is this going to be for us? We have no experience in this arena but are deeply passionate about this plant.

 

Dear Reader,

Carl Sagan, the American scientist, author and thought leader, is to have said he found the illegality of cannabis “outrageous, an impediment to full utilization of a drug which helps produce the serenity and insight, sensitivity and fellowship so desperately needed in this increasingly mad and dangerous world." It sounds like you, your mother and I, would all agree. And so, thanks for your advocacy, first of all. There is still a lot of work to be done around de-stigmatizing cannabis and expanding access to folks who are not able to purchase it for themselves (for some the cost of legal weed is prohibitive, while others simply do not live in a jurisdiction where there are dispensaries or delivery services available).

Granted, it is getting easier for consumers to purchase hemp-based products—those that contain .3% or less THC which are labeled “hemp-based” CBD—but what if you are looking for treatments that contain more than trace amounts of THC? And what if you are a stickler for knowing that the products you are consuming—THC-containing or pure CBD—are what their packaging says they are and have been lab tested, certified by the state, etc.? What if you are contending with a compromised immune system and need to ensure that your product is not being treated with certain pesticides or fungicides? As you’ve discovered, one option is to grow your own.

As always in the world of cannabis policy, there are a number of ways that we can get confused. The important piece though, is to be clear about what we are discussing. With that said, whether we are talking about hemp (.3 THC or less) or marijuana (.3% THC or more), we are in general terms looking at a system that requires a license from the state in order to grow for commercial purposes. Hemp laws are very different at this point from the laws governing marijuana, so we’ll start there and then get to what it means for you to be growing (and preparing) cannabis at home.

As far as hemp goes, to grow it for commercial purposes you need to register your activities with the state. And in a number of states, hemp licensing programs are in place much like they are for marijuana. These licensing programs, for both hemp and marijuana, are now in place in about half of the country. There are separate application processes for medical versus adult-use (“recreational”) marijuana businesses, and while in some states it’s an incredibly competitive process to achieve licensing by the state, in others it’s not. All you have to demonstrate is the general ability to do what you say you are going to do, in compliance with all rules and regulations… Note: I did not say this was easy, I just said some states are more or less competitive. 

So, if what you wanted to do was be part of a team that was going after a license in a jurisdiction that has legalized and implemented a permitting process, theoretically, this is possible. The caveats, though, are many. For one thing, these are capital intensive endeavors. We are talking about A LOT of money just to get to the point of submitting an application (just the fees to the state, let alone the fees needed so that experienced application writers can work on your behalf can easily cost hundreds of thousands of dollars). Then there are the costs associated with demonstrating you have enough capital on hand to finish the project if you do get licensed, and the costs of actually building out and operationalizing your facility. We are talking millions. And that’s regardless of whether you are “vertically integrated” (where you grow, process and sell your own stuff, rather than just engage in one of those activities along the supply chain).

Let’s be clear though—what you are proposing is that you become involved commercially in the cannabis space and not go through a permitting process, which is NOT legal. What you are describing is growing and manufacturing at home and selling those products to others. This is NOT something you should do. However, there are some other ways to think about your participation in this burgeoning marketplace, and, if sharing what you are growing at home is what you would like to do, there are also avenues for this depending on the specific laws of your state. In Nevada, if you live farther than 25 miles from a licensed dispensary, and especially, if you cannot afford or there are no delivery services that can supply you with what you need, there has been a safe harbor carved out since cannabis was first legalized. Nevada law says that if you are a registered patient, you can grow up to 12 plants at home. Under the adult-use policy that went into effect after the ballot initiative of 2016, even if you are not a registered patient, you may grow up to six plants at home, if you live 25 miles or more away from a licensed dispensary.

The next question in Nevada, and in every state, is what you are allowed to do with those plants once you’ve grown them. And the conditions under which you are allowed to share your flower, or products you’ve created with them (such as salves, soups or brownies). This leads to the rules around manufacturing. What is considered “manufacturing” activity that requires a license? Across the board, creating extracts is considered activity that must be licensed. When you see oils and other substances at dispensaries that consist of cannabinoids that have been extracted from cannabis, those are products that may not be derived at home, unless you are a licensed facility. Concentrates are a bit of a different animal though. Making brownies or a salve for yourself is not an extractive process and may be considered part of the scope of what you are allowed to do with your marijuana plants within the privacy of your own home.

In this situation, we are also looking at a fairly gray area of law. In states where recreational cannabis is legal, if you were to have guests over to your house and you shared your “infused” brownies with them, you are safe. If, however, you charged any of your friends for these brownies (beyond the cost of what it took to bake them), you would very possibly be engaging in commercial activity that is prohibited under law. And because consuming cannabis in unpermitted public spaces is also illegal, if you were to bring these brownies to a potlatch barbeque in a park and you or others ate these brownies, you would also be committing a crime.

While commercial cannabis activity is reserved for licensed operations at the state level, it remains illegal at the federal level. This means that trafficking marijuana carries hefty criminal penalties and not having all your paperwork in line is more than a white-collar offense. Marijuana is still a Schedule 1 Controlled Substance and any effort to expand the reach of your products with friends or establish a brand may be interpreted as signs that you are endeavoring to engage in commercial activity. For these reasons, my best advice is to continue sharing your story with friends and family, advocate for brands and specific products that you love, activate your network via social media so that you can play a role in de-stigmatizing cannabis further, and do not engage in unlicensed commercial activity.

Should you have a question or ethical conundrum you have been struggling with, please drop Shoshanna a line at info@elevatenv.com so she can offer her sage and practical counsel.

 

Shoshanna is a partner and Director of Strategy for a national consulting firm in the cannabis space, Pistil + Stigma. She holds a Juris Doctor from Elon University School of Law, a Master of Arts in Holistic Thinking, and a bachelor's degree from Hampshire College. She is a true believer that compassion and critical thinking, together, are what drive positive social change.

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