Author Archives: bde

An industry in limbo: Recreational Pot in 2017

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What will the new Administration in Washington DC do?

With recent changes in Washington DC, the future remains uncertain for the fledgling Recreational Cannabis industry across the nation. Time will tell if our incoming Attorney General, Jeff Sessions will go after the cannabis industry. My gut tells me they won’t, but that’s coming at it from a logical standpoint, and from what I’ve seen so far coming from DC,  logical deduction and hard facts seem to have been tossed into the dumpster.

Given the dollar amounts we are talking about in terms of taxes generated ($185 million in FY2016 for WA state), and the ensuing lawsuits that would follow, coupled with the enormous negative economic impact (jobs and productivity lost – especially in rural areas), I genuinely hope the incoming AG respects states’ rights and does not interfere with the legal Cannabis industry.

Changes in Washington State

Here in Washington state, there are a number of interesting proposed changes coming out of Olympia this session that would have a significant impact on the industry at large.

HB 5102 – Out of state ownership and investment

The first change has to do with allowing outside sources of funding (non WA residents) for i502 Businesses. Currently there are funding and lending restrictions that limit the amount of investment capital can flow in from outside the state. House Bill 5102, clarifying residency requirements for licensed marijuana businesses, has been introduced and is in committee. There is a public hearing scheduled for

The key changes in verbiage in HB5102 have to do with limiting the percentage ownership by out of state interests to 50% ownership and allowing “managers or agents” aka owners who are exempt from the residency requirement.

…with the exception that only those holding fifty percent of all ownership interests must meet the residency requirement;

A person whose place of business is conducted by a manager 21 or agent, unless the manager or agent possesses the same 22 qualifications required of the licensee, with the exception of the residency requirement.

Source: http://app.leg.wa.gov/billsummary?BillNumber=5102&Year=2017

HB 1092 – Allowing “Home grows”

House Bill 1092 would amend the i502 Legislation to allow any Washington state resident 21+ years old to cultivate up to 6 marijuana plants and possess up to 24 ounces of dried plant material from the personal cultivation. For any single residence if there are 2 or more adults 21+ or older, you may have up to 12 plants and 48 ounces of dried plant material. You may only leave your residence with up to an ounce of “home grown” at a time.

(4)(a) Subject to the requirements in this subsection (4), the possession by a person twenty-one years of age or older of no more than six marijuana plants and up to twenty-four ounces of useable marijuana harvested from lawfully grown plants is not a violation of this section, this chapter, or any other provision of Washington state law, provided:
(i) The plants are grown and possessed only within the premises of the housing unit in which the person resides; and
(ii) The useable marijuana has been harvested from plants lawfully grown within the premises of the housing unit in which the person resides and is not removed from the premises in amounts exceeding one ounce.
(b) No more than twelve marijuana plants and forty-eight ounces of useable marijuana may be possessed, in the aggregate, by the adult residents of a single housing unit, regardless of the number of persons twenty-one years of age or older residing in the housing unit.
(c) This subsection (4) does not apply to marijuana plants or useable marijuana possessed at a location other than the premises of the housing unit in which the marijuana plants were lawfully grown.

Source: http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/House%20Bills/1092.pdf

Regardless of where you stand on legal cannabis, please take a minute to acknowledge that there are tens of thousands of business owners, employees, and fellow Washingtonians who are pouring their blood, sweat, and tears into being successful in this industry. As we have in the past, we continue the journey into uncharted waters. Onward we go!

BDE -∞+

The constant struggle for legitimacy in the legal cannabis industry

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For many i502 business owners, it’s been an uphill battle to get fair (and easy) access to the Federal Banking system. As a result, i502 businesses have gotten creative in their approaches to managing money. In some cases, this puts them at odd with the Feds, with the Banks, and with consumers. It’s a no win situation that needs to change.

In the old MMJ days, it wasn’t uncommon for MMJ dispensaries to be shuttling around garbage bags of cash in their trunk. Thankfully, now most i502 retailers have access to basic banking and credit unions that suppor – on premise ATMs, and even some basic debit transactions (with usual ATM-like fees per transaction). Most transactions are still cash and the vast majority of retail shops only accept cash.

One improvement over the past year or so were changes that allow 3rd party security and armored truck companies to pickup and transport cash from retail shops to their place of deposit.

Another recent development here in Washington state is a push by state legislators to block i502 businesses from doing transactions using Bitcoin. This news just broke in the past 2 weeks. Senate Bill 5264 effectively bans Bitcoin from being used in i502. I’ve seen a few “automatic” menu/ordering kiosks at a few retail shops that appear to take Bitcoin. I have not tried to conduct a transaction using Bitcoin. Read more on this issue here: http://www.geekwire.com/2017/washington-state-legislators-look-ban-bitcoin-pot-business/

Insurance underwriting.

Because I’m not an i502 business owner, I’m less up on how well (or poorly) the insurance companies do with underwriting i502 businesses. I know that Lloyds of London was a highly used insurance underwriter, but I also heard that they were getting out of the industry. I would be curious to hear from i502 business owners on your experience in securing and paying for insurance.

We live in uncertain times. I feel for each and every legitimate business owner working so hard to realize their dreams in legal cannabis. Onward we fight.

BDE -∞+

i502 Competitive Analysis and Intelligence Briefs

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As I transition my i502 data mining project from my laptop to the cloud, I’m working on a conceptual framework for offering competitive briefs, reports, charts, and drill-down maps on i502 Producers, Processors, and Retailers. This will include insight, commentary, and a sizeable chunk of data factoids about your closest competitors.

Here are some of my initial thoughts:

  • For Producer/Processors
    • Production/Processing
      • Products made
      • Products sold
      • Products destroyed
      • Products failed testing
    • Heat maps with layers for:
      • Retailers by location
      • Products by retailer
      • Wholesale Sales by product type, product, temporal (daily, weekly, monthly, yearly)
      • Retailer markups
        • By retailer
        • By product type
        • By Product SKU
  • For Retailers
    • Wholesale cost
      • By product type
      • By product
      • By producer/processor
      • By region/geography
    • Retail Sales
      • By product type (flower, oil, edibles)
      • By SKU (e.g. Skord Nightmare Cookies Live Resin)
      • By Producer/Processor
    • Top 10 Producer/processor sales drill down
    • Top 10 closest retailers (region/geography)
    • Top 10 closest retailers (aggregate sales)

Goals:

  1. Learn who your competition is.
  2. Understand the range of products your competitors produce/offer/sell.
  3. Understand the range of products that you or your competitors DON’T SELL (products sitting on shelf).
  4. Understand how much and when your customers sell.
  5. Understand where and to whom your competitors sell. ]

That’s all I can think of off the top of my head for now. Will update/edit post as I iterate and refine this conceptual framework.

If you made it this far, thanks for taking the time to read through this post. As a reward, here’s a pic of some Chem Dawg I grew back in the MMJ days.

BDE -∞+

Trademark Wars: Episode 2 – The Clear Strikes Back!

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I was wondering when this would finally makes it way into court. This is only the beginning. Here we go! #trademarkwars #pewpewpew

 

Arlington company hit with state’s first pot trademark suit | KING5.com

Marijuana company Podworks, based in Arlington, was hit with the state’s first-ever marijuana trademark infringement lawsuit over their product Top Shelf Clear.

Source: Arlington company hit with state’s first pot trademark suit | KING5.com

December i502 Report

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Hi guys. I’m working on a detailed analyst report on the i502 traceability data from December 2016.

Until I have it ready to publish, here are a few teaser factoids:

  • Largest concentrate wholesale sale: GreenRush sold 4000 grams of GreenRush Gold Standard Concentrate (Marijuana extract for inhalation) to Clutch Cannabis (in a processor to processor wholesale deal) for $48000 or $12/g.
  • Total concentrates sold (wholesale) to date: 8,688,860 grams
  • Total concentrate wholesale sales to date: $92,958,449
  • Average wholesale price per unit: $8.97

Much more to come. Tables, charts, commentary, analysis.

-BDE

Bill introduced to allow marijuana grown at home – seattlepi.com

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I’m all for home grows and would absolutely fire up a garden again (don’t have my medical endorsement anymore).

A bill has been introduced in the state Legislature that would allow marijuana users to grow their own supply at home.

Source: Bill introduced to allow marijuana grown at home – seattlepi.com

Two of Washington’s largest recreational marijuana chains on the selling block – Marijuana Business Daily

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Why not shoot for the moon right? I bet this was a response to the news that there was legislation introduced in WA with a proposal to allow Producers and Processors to sell directly to the public and to allow big $$$ to flow into the industry. Why not let free market economics happen? Right?

Here’s a hypothetical (satirical) phone conversation I could see going down between between Ike’s and Main Street Marijuana:

Ian: “Hey Ramsey. You see that legislation where they are trying to allow producer/processors to sell direct to the public?”

Ramsey: “Yeah. And the other one where they are going to allow big out of state $$$ to flow in? That’s some real Cartel s%^t right there. Might start to cut into those nice retail profit margins we’ve been enjoying. Maybe it’s time we get out.”

Ian: “I know right! How about we try this then – Let’s put all of our Retail Shops up for sale for some crazy figure, say $50 million and see how people flip out.”

Ramsey: “Yeah, sure great. Let’s do it.”

…and we’re now off to the races.

Source: Two of Washington’s largest recreational marijuana chains on the selling block – Marijuana Business Daily

CONSULTING AVAILABLE: INTELLIGENCE, ANALYSIS, AND PERSPECTIVES ON RECREATIONAL AND MEDICAL CANNABIS

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Friends & Colleagues – I will be parting ways with Precision Extraction on January 27. We are leaving on mutually good terms.

As of Jan 28, I will be available for short and medium term consulting projects and related services in the Recreational and Medical cannabis industry across the US. Anything from data mining, market analysis and assessment, processing lab design, compliance, production and processing logistics, business plans, packaging and distribution, wholesale brokering, retailer relationship building, business process automation, software and hardware integration.

My depth of knowledge, 30 years of experience in cannabis, 20 years working in Enterprise Software, and passion for the industry are what I bring to the table with a proven track record and commitment to excellence in everything I do.

Now offering free 30 min phone/online consult and will let you decide if we are a good fit. Feel free to also check out my resume: Brian Daniel Eisenberg – Resume – 2017

Can reach me anytime at:
@eisenetics on Instagram and Snapchat
Brian.eisenberg@Gmail.com
206.294.8205 (8am-11pm pacific time)

-Brian Daniel Eisenberg
Jan 16, 2017

Eisenetics Rebooted for 2017

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I created this site as a place where I can drop some of my knowledge and experience working in the Recreational and Medical Cannabis industries for nearly 30 years. I expect to incorporate video, pictures, graphs, charts, data tables, business analysis, market and product breakdowns, and anything else I find of interest and relevant to the industry.

Be sure to hit me up on social media where I am most active on Instagram (@eisenetics) and Snapchat (@eisenetics).

–BDE

Calling out shady Producers and Processors

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I’ve seen my fair share of shady business in i502 and elsewhere in the black, grey, medical, and recreational markets, but this latest blatent disregard for the consumer has me shaking my head. Check out this “wanted” post on the 502data.com site – http://502data.com/kushguidewanted

 

So let me get this straight, there are processors looking to somehow broker deals for flower lots that failed to meet the state testing criteria and extract it into “live resinprocessors”? I thought all lots that failed testing/analysis had to be destroyed. This CLEARly doesn’t benefit the consumer. Shame on you shady Producers and processors. I’m coming for you. The data doesn’t lie.