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(00:02) so it’s a couple minutes after um this is Brian Vicente the law firm is sente Cedarburg I’m going to go ahead and kind of dive in I want to make sure we make the most of this power packed hour um this will be recorded if folks want to send it to their friends and we’ll be uh sending that around sending that around later um you know the title here is is new cannabis opportunities Upper Midwest as I was saying it’s a second ago I think some of the most exciting cannabis policy activity in the world is actually

(00:30) going on right now in in the midwest in the Upper Midwest and sometimes it gets overlooked by those of us that get Coast Central and are looking at California or New York and I’m not saying there’s not cool things happening there but um Cutting Edge stuff going on in the Midwest and we have the best experts in the country on this panel and we’re going to dive into it uh very quickly uh Sentai cedarburgs the law firm we’ve been around for uh you know about 12 years I’ve been doing this work for

(00:55) almost 20 years and uh we have attorneys Coast to Coast some work on cannabis issues all day long um I rarely get surprised having done cannabis policy for for two decades but there were two events that happened in 2022 that like kind of knocked me out of my chair one uh was for those of you that have been following Washington DC they’ve been trying to legalize weed there forever and try to implement it and the mayor just kind of out of the blue issued an executive order and said guess what Congress if you’re not going

(01:25) to let us Implement legalization we’re going to allow patients to self-certify a dispensary so you can just show up if you’re 21 years old and sort of fill out a piece of paper at a dispensary in DC and you now have access to cannabis or medical cannabis that was mind-blowing the other activity or the other policy change in 2022 that blew my mind was in Minnesota and you know again we have the foremost expert Jason teresek to talk about that today but in short the legislature whether on purpose or not uh

(01:54) allowed for hemp derived THC so not not our normal candidates but hemp derived THC to be so via gummies sodas and things of that nature from many many different types of facilities across the state of Minnesota and obviously those are two different kind of ways to approach skinning the Cannabis policy cat but for someone that’s like me has been doing this for a long time I’ve worked with a lot of medical marijuana patients over the years and knowing that they now have access in Minnesota via this law is truly remarkable is

(02:28) there more to be done is there incredible things happening at the Capitol in Minnesota this year certainly we’re also going to talk about some other issues that have been are going on in the midwest I’m from Ohio so this is all kind of near and dear to my my heart we’ll be talking about Illinois Ohio we talk about Michigan we’ll be talking about the Dakotas so really uh hyper focus on the Upper Midwest and we’re going to plow through a lot of these exciting activities so um let’s maybe let me just say quickly

(02:57) who our speakers are you can see it on paper here uh Travis uh we’ll be talking about a bunch of states he also has an incredible weird which is on showcase here who leads our Ann Arbor office which we actually recently doubled in size so we’re very committed to Michigan uh we’ll be hearing from Scott O’Malley uh Scott is a friend of the firm and an owner of the and CEO of clarity which is a beverage THC beverage company that currently is I’m doing wonderful work in Minnesota and some other places he’ll be

(03:28) speaking and then Jason tarasek who I spoke about uh Jason of course with the um covers uh both hemp and cannabis law in Minnesota as well as other states and has been very active with the Hep Association in that state as well as the marijuana policy project a wonderful wonderful non-profit that does great work Statewide so those are our speakers I’m going to talk about the agenda that I’m turning over the experts so if we can move to the next page um so we’re going to hit Minnesota hard uh we’re then going to talk about some

(03:56) recent changes including a new head of the uh the uh um regulatory agency of Michigan we’re gonna hit Illinois Michigan Michigan I said Ohio and then we’re going to kind of kick it over to North Dakota South Dakota Wisconsin throughout this we’re going to hear as well Scott as uh you know Jason Travis and I are lawyers we have our own take and wrinkle on things Scott is a business person right he’s operating in this space and I think we’ll provide some really unique insights so with that I’m going to turn

(04:23) it over to Jason Jason if you could uh talk to us about all things Minnesota and take some here or there that’d be wonderful yeah thank you Brian um for that nice introduction I’m Jason tarasek with Minnesota cannabis law in Minneapolis I have been practicing law for 20 years uh practicing cannabis law for almost five years started out as a citizen lobbyist in 2018.

(04:49) one thing led to another I became the marijuana policy project Minnesota political director in 2019 and helped lead a adult use legalization Bill to a hearing in April 2019. that went down in flames uh on a party-line vote all the Republicans voted against it all the Democrats voted for it but it sort of set the stage for a lot of what we’re going to talk about today it really started a conversation around cannabis and um Majority Leader uh the House Majority Leader Ryan Winkler really took it upon himself from that day to to try to push

(05:26) for cannabis legalization and I don’t want to give away everything but we may be on the cusp of something really really exciting here in Minnesota up next slide please I don’t have the ability to to change these thank you okay so uh yes Brian was alluding to the very strange law that we passed in uh I guess it was uh late June of I get well technically early June of of this year 2022 where Minnesota passed hemp derived THC product uh a hemp derived THC product statute so the odd thing about that and I’ll touch on this a little bit

(06:03) more is that it’s open to interstate commerce uh and it truly is a quasi-adult use program right now um but the more recent exciting news here is that um to the surprise of virtually everyone the Democrats have now seized control of both chambers of the legislature which hasn’t been true for a long time and the Democratic governor got re-elected so the Democrats control the entire legislature and the governor’s mansion and there is a lot of talk about legalization of adult use marijuana here um next slide please

(06:40) so um this this is probably going to be true for a lot of our listeners in whatever States you’re in but um you know hemp sort of set the stage for where we are today uh as you know in 2014 the federal government passed a farm bill that allowed State pilot programs Minnesota um the Department of Agriculture working with the University of Minnesota adopted a pilot program to comply with that um to start growing hemp legally for the first time in quite a long time probably 100 plus years um building upon that at the federal

(07:18) level um in 2018 the federal government passed the farm bill that as I’m sure a lot of you know legalized Hemp and hemp extract so long as they didn’t contain more than point three percent Delta 9 THC and of course it removed him from schedule one um of the federal Controlled Substances Act and Minnesota followed suit basically passed a copycat statue here in 2018 and the green Rush was on uh CBC CBD stores started popping up all over the place uh licensees for our hemp program skyrocketed and you know at that

(07:55) point the market was largely for CBD and I think you know I think a lot of markets go through this there was this big rush into the space and then maybe too many that were there so some of the guys filtered away and then the pandemic hit and we’re still sort of emerging from that next slide please foreign like a lot of other states um we had a thriving Delta eight Market um particularly I guess during the pandemic 2020 2021 I think as a lot of you know Delta eight um sort of falls into this loophole where the federal farm bill and

(08:32) Minnesota’s hemp statute it defines um or I should say regulates legal hemp and defines hemp as with regard to the percentage of Delta 9 THC so someone got creative somewhere and figured out hey there’s this thing called Delta 8 THC um which can be I think it’s largely derived from CBD and you know people were calling it marijuana light I know that’s still prevalent in a lot of States um but we have questions here about that about the health uh impacts of that about the safety impacts of that and our

(09:07) regulators and our legislature we’re watching that closely I think nervously um there were a lot of questions about you know yes Delta 8 appears naturally but in very small amounts so is it still natural is this still really derived from hemp if you’re putting it through this sort of pretty intense chemical process um to extract enough Delta a to actually be useful for a consumer so it was really in the in the crosshairs for our regulators and our legislators particularly because a lot of people here thought and continue to think that

(09:38) it’s really synthetic it’s really not naturally occurring um and so that led to a Crackdown next slide please um by our Regulators um and it was sort of a patchwork of regulators that had control over this um our our state board of Agriculture runs our hemp program so they issue licenses to hemp farmers and hemp manufacturers we don’t have any licensing at the retail level um so it was kind of at that once the manufacturers were done there wasn’t a whole lot of Regulation after that and it got pretty confusing as to who really

(10:17) had authority over retail um so the Minnesota Department of Agriculture Food Safety Division started to step in particularly particularly in the sale of hemp derived gummies whether they contain CBD or Delta 8 in particular and they would send out cease and desist letters to to some CBD shops throughout the state local law enforcement start started stepping up its enforcement in Park Rapids in particular they shut down a CBD store that was selling Delta 8 Vape cartridges um and our Board of Pharmacy here that probably had the authority uh over those

(10:58) retail products that’s that’s an agency of roughly two dozen people and they just weren’t really ready for this hot potato that was dropped in their lap um so cities like Stillwater Minnesota um started Banning uh any new CBD stores and of course you know there was a wave of sort of warning letters from the federal FDA warning about potential dangers of Delta eight um so interestingly uh that next slide please that led um to let me look here sorry I’m just timing up my my slides here to to this strange

(11:40) law that we have so um our Board of Pharmacy along with the bill author um sort of got together and we were trying to solve a few problems um number one was the fear about these Vapes these sort of Black Market Vapes uh we all know we had a vape crisis a few years ago people were going to the hospital I think a lot of that could be traced to then vitamin E acetate uh that that additive that probably wouldn’t exist if it came from a regulated legal Market but there was some fear that these these new Delta eight Vapes might

(12:16) be getting people sick as well um and there was a bit of a compromise here so I lobbied actively for this bill uh this is remember this is at the time last session when Republicans had control of our state Senate and the dfl as we call the Democratic party here had control of the house so it was pretty aggressive um we were proposing to allow um hemp uh edible cannabinoid products don’t call it food right because then the FDA will be upset but it’s an edible cannabinoid product uh up to five milligrams per serving in gummies and

(12:53) beverages uh up to 50 milligrams per package of course the compromise here is that it essentially does a way that Vapes and topicals by limiting the percentage of THC to 0.3 percent so the market really for Vapes and topicals at least the legal Market has disappeared but um I don’t know if you’ve seen the stories uh July 1st when this went legal here in Minneapolis there were lines around the block at the CBD stores people were eager to to purchase legal THC products um these products have to be derived

(13:26) from hemp uh quote unquote certified hemp meaning they would pass they would quality either did go through the Minnesota hemp process or would qualify under our rules of course there’s no marketing to Children it is an adult use bill um we require child proof packaging but you know we do all these things and at the same time we don’t require a license of any sort there’s no special tax there’s almost no enforcement because again that that Board of Pharmacy with roughly two dozen people they cannot

(13:58) enforce this thing Statewide and they don’t have a budget to um so it’s been a little wild um cities townships municipalities throughout the state have enacted moratoriums saying no you cannot sell this stuff here of course the cities of Minneapolis and St Paul have not done that and I would be shocked if they do and online sales are continuing so it’s been a little bit of a game of whack-a-mole for um for the regulators and law enforcement to try to Tamp down on our black market which frankly is flourishing right now

(14:33) because there is no enforcement all of my clients of course are complying with the law but you know they’re being undercut by the black market um who aren’t and one of the problems is that um I think consumers are walking into head shops and and seeing gummies uh seeing beverages thinking oh well that’s legal now not realizing that not everybody’s complying with the law and and the news earlier this week the Minnesota Board of Pharmacy is suing um I guess it’s a hemp derived gummy Uh manufacturer who thought it’d be a great

(15:12) idea to name his product death by gummies uh 100 milligrams of THC in these things according to the the Chrome or the Civil complaint um some kids got a handle on this uh a 23 year old guy handling this and they were got really sick um the 23 year old died uh they haven’t said that actually is because of the companies but I mean not exactly great for the hemp slash hemp derived THC Market as we enter the legislative session in January next slide please and while you’re while you’re transitioning I just want to say too I

(15:53) think most people on the webinar get this but you can’t die from THC it’s like essentially impossible so I mean this is a tragic story right uh so there had to be some other Factor um which I’m assuming that board Pharmacy will dig in and sort of figure that out but there could be some really negative ramifications from stories like this beyond the immediate tragedy I mean this this could be the type of thing that you know uh policy in a pretty negative way for legitimate operators yeah really unfortunate incident and the

(16:25) complaints pulled no punches I mean it was almost like this this operator was trying to break the law he was not cooperating with the government anyway so not good not a good look for us right now um but so shifting away from the empty right uh THC market for a second as I said Democrats now control legislature in the governor’s house um it’s got to go through our legislature because unlike a lot of States like Colorado and other places we do not have a citizen-led ballot initiative process so it’s got to go

(16:55) through the legislature um and in fact we the the the house actually passed a a full adult use legalization Bill about a year and a half ago called HF 600 it’s a really remarkable Bill uh it could be a model for the country and now I think we’re going to start there I would expect you know spend a little talk about sort of the nervousness of our Senate even though it is controlled by the dfl it’s only a one vote majority uh I actually tabulated it uh the morning after election night just to make sure yeah we do actually have

(17:31) control okay cool um but you know beyond the sort of benevolent public policy motives that the Democrats may have to pass a legalization Bill we have two major political parties in Minnesota that are single issue marijuana legalization which is unusual um and what has happened is they often run candidates in swing districts and the dfl the Democrats have been losing races because arguably parties from those uh I should say candidates from those parties may be siphoning votes from the Democrats so you know like I said the dfl has made

(18:10) this a top priority we expect this bill to move soon um but they they really have an electoral politics motivation too to put those pop parties out of business because they uh you know it’s hard to conclusively demonstrate it but it certainly looks like they have lost races um in swing districts because those pop parties exist um so next slide please I will say there’s going to be a question about whether the hemp derived THC products survive even if we legalize adult use marijuana that’s going to be there’s

(18:47) going to be a lot of tension there um I know that debate is going on other places Colorado in particular you know the adult use Market a lot more regulations typically around that a lot more Capital necessary and you know the hemp derived people can often come in sort of with lesser capital and and compete so I’m not taking a position on that I’m just pointing out that that’s going to be a fight next slide please okay yeah that’s me um I’ll be back to talk a little bit about North Dakota South Dakota

(19:22) Wisconsin I think I’m passing the Baton to Mr O’Malley thanks thanks Jason um I’m Scott O’Malley uh the CEO of clarity uh Minnesota based uh Beverage Company um previous to this I was in the CBD and Delta 8 business in Minnesota and quickly pivoted when this new law took place we went as fast as we could to get to producing beverages uh with uh with hemp Drive THC in them um and now I’ve been at that for uh for about three and a half months um next slide please so it’s been an explosion of growth

(20:09) since July 1st um frankly none of the beverage Brands were ready to go on July 1st I think the first one hit the market the beginning of August we were the third ones in the market and we were there about August 20th but there’s over 30 beverage brands in the state currently there’s over 50 gummy Brands some of those obviously were ready to go right away on July 1st and then the plethora of other products all kinds of different products from chocolates and caramels to um pixie sticks and all other kinds of

(20:41) of delivery methods and it is really the wild wild west of because there’s limited guidelines and parameters from the state so you literally can sell this just about anywhere um and there isn’t really any governance um there’s a lack of control uh simply because the Board of Pharmacy is tasked with with trying to regulate it but they’re a little understaffed and they weren’t ready for for this to be put on their plate um so if we can go to the next slide that’d be great so the current market is there’s a lot

(21:19) of growth there’s a lot of activity a lot of excitement there’s also some chaos that comes with it um you can sell it anywhere but there’s some gray areas uh liquor store in Minnesota we call them liquor stores if you’re from a different part of the country you may call it a package store or a party store um but in this particular photo that you see this was taken in September um so really at the beginning of the brands but you can see quite a few there the way this is set up is liquor stores

(21:47) there’s some gray area there whether they can sell the product or not in the liquor store if you’ve got a grocery license with your uh liquor store you can do it um but there is a lot of confusion and in Minnesota a um a liquor store can’t sell food products in a grocery store can’t sell wine and full strength beer so it’s a little bit different than a lot of other states but in this particular case the photo that you’re looking at that is a coffee shop turning its display around into the

(22:18) liquor store so that when you’re in the liquor store you can see what you want to buy but you technically have to go into the coffee shop to buy it so it’s it’s really kind of a strange situation but it’s happening all over some liquor stores do have a grocery and there are some on and off-premise locations mainly outside of the metro area where you can have both on sale and uh and to go but it’s been confusing and although there are a lot of liquor stores currently carrying products there has been a

(22:50) little bit of enforcement but all of it I think as Jason had mentioned earlier it’s all complaint driven so if someone down the street doesn’t want a competitor selling the products they simply to make a complaint and then the enforcement will come in there’s also a question on the liability for restaurants and bars it’s not going to be covered under liquor liability but it should be covered under general liability but some of the carriers are excluding it I know that there are a couple of brokers in

(23:25) Minnesota that are currently looking for carriers to uh to put an endorsement or a rider together so that these bars and restaurants feel comfortable selling the products and that they’re covered in case uh someone over indulges and and has a problem the lack of enforcement does open up the door to Illegal dosages I think Jason gave us a little glimpse of that uh with this story but there’s a lot of them out there if you can go even go into a lot of different shops and find dosages that are well above what the legal limits for the

(24:02) state of Minnesota are um but eventually that’s going to get taken care of we just don’t know if for how long and then you’ve got some untested products uh that don’t follow the uh the regulations um and don’t follow the label requirements and that’s really about it uh in Minnesota it’s it’s labor requirements and dosage requirements and for the most part there aren’t a lot of other parameters set up currently I think most of the uh most of the companies that are in the space right

(24:33) now would prefer to have some parameters and some rules and guidelines put in we expect that that’s coming in the new legislature but we don’t really know and of course we are concerned about how um recreational legalization will affect our ability currently to uh to do business to the way that we are we are doing it um and then we’ve had some issues with the testing companies not having uh the machine calibrated for low dose products you took a 12 or a 16 ounce can with five milligrams and it’s much less than

(25:05) than 0.01 percent um and so they were having trouble having consistency in this so we’re on our fourth uh lab right now and we’re getting uh some results we have our own hplc testing equipment so we can test it and know where it is but when we send it out and it comes back differently or we send it to three different labs and three different Labs come back with different numbers um we understand and we’ve had our scientists talk to their scientists they know that they’ve got some calibration issues and that they need to deal with

(25:37) those and I think that they’re going through there are a couple of them that that put a little bit of money and capital into making those changes so the calibration can work um but that’s all coming along remember this came about really quickly it was passed in June we had products on the shelves in July um so it really did uh move fast and I don’t think there weren’t very many people that knew this was coming um so it was a heck of an opportunity but it came with some challenges along the way

(26:06) too and we can go to the next slide please um yeah so the crew of some of the positives are this opportunity for the public and not everyone is comfortable going into a uh a dispensary to uh to to buy THC products uh the benefit of the law right now in Minnesota is you can buy it anywhere so you can buy in grocery stores you can buy it in in liquor stores you can buy it at bars restaurants Convenience Stores um salons massage places so there’s a lot of different Avenues to get it it makes it from a medicinal standpoint the

(26:44) access is is really great for people who want to try to use it there’s another thing that that comes with having a metal card in Minnesota um you can’t uh own a gun and so there are a lot of people a lot of hunters in Minnesota a lot of Outdoors people who won’t necessarily get a medical card because they’d have to give up that right and so that this new law allows a lot of people to be able to have access to the product that might not have been able to do it open distribution allows for a lot of these different types of

(27:16) stores and it’s really you know for the most part most of the products that came out were low dose they were two three five milligrams there’s a few 10 milligram products right now we’re not really seeing some of those higher dose products currently but I expect that they will be coming but it’s a nice opportunity for someone who’s curious or wants to experiment a little bit with it um to come in and try it and see how it works for them to to give them whatever they’re looking for whether that’s to

(27:45) just kind of chill out or or you know handle some pain or some anxiety or whatever reason they would want to want to participate uh next slide please one of the other things that has been a positive is that the provides Farmers so farmers in Minnesota grew an awful lot of CBD CBG and other um cannabinoids and it’ll give these Farmers an outlet for these products that they currently don’t really have um and so hopefully that’ll help them there’s people sitting on some warehouses that are full of a product

(28:21) that they grew last year and the year before the other thing is that the laws has allowed for some innovation in routes to markets um there’s a lot of people trying to get these different products into retail outlets using non-traditional methods because it’s not a dispensary model you can sell it pretty much anywhere so there’s a lot of unique ways for people to be trying to get this and they’re looking at you know for instance we use beer distributors to uh to handle our products but there are people looking at

(28:57) people who deliver all kinds of different products and have the distribution centers to get these different THC products into the marketplace that should be clear hemp derived THC products they’re also I think Jason had touched on this also there currently isn’t a state syntax which makes the products more affordable we certainly expect that that’s coming um but as of right now um it’s simply the sales tax uh that generates revenue for the state of Minnesota with the center at THC products well there are some parameters

(29:30) uh you have to have testing in a valid COA from a third party regarding dosage and that it doesn’t contain um any metals or pesticides somewhere in the in the chain of custody of the active ingredient um and then there’s some label issues or at least some parameters about not making claims but for the most part um that’s the extent of it so there’s not a lot of extensive testing there’s not multiple tests along the way so you know you can have your your plant material all the way through to your end

(30:08) product oftentimes in other states there’s multiple tests along the way in Minnesota It’s The End use um now we use obviously the test from the distillate that we use to to make our Emulsion um but for the most part that’s it gotcha um and then an enforcement side what do you see in there you know the enforcement side really is complaint driven um they are they just don’t currently have the Staffing to handle enforcement so unless someone makes a complaint there isn’t really any enforcement there

(30:45) are products that probably well that aren’t certainly not legal that are being sold and there are products that haven’t been tested that are being sold but um eventually the state’s going to get around and we’re going to figure out a way to uh to have enforcement I think all of us would uh appreciate that it would make our jobs particularly those of us who are trying to do it the right way it’ll make our jobs a little bit easier thank you thanks Scott I’ll stop peppering you with questions it’s super

(31:16) interesting I’ll I’ll let you complete your presentation thank you um so the sales and distribution um understanding this route to Market has been difficult with as many products as there are out there um trying to get the products uh into retail locations for some of the brands have been really difficult if you don’t have a distribution model or a sales model that’s beyond self-distribution which can be time consuming and onerous if you’re selling a product and making deliveries that can be pretty tough and there’s

(31:52) only so many uh that any one person can handle there’s over 8 000 potential retail outlets and that’s not counting some of the ones that you wouldn’t typically think of like salons or or yoga shops or that sort of thing um so there’s a there’s a lot of places that are interested in carrying the products and the distribution and the ability to get that product there uh has proven to be difficult for some of the brand chance I’ve heard a lot of talk about some companies starting their own

(32:25) distribution companies that would be specifically for him to buy products but it’s a lot of capital that you would have to put in for trucks or Warehouse people and not knowing for sure what the legislature might do um pertaining to legalized uh recreational I think that’s kind of a risk that other people are trying to figure out how to do it I think it’s going to be a little bit of time before we really figure out what’s going to happen on that and and which direction some of these bigger Distributors of all kinds of different

(32:59) products will go um you know in in Most states it’s a dispensary model um so you have limited uh that’s that’s not the case here um and so it just becomes a little bit uh more strategic on how you approach taking your brand to Market um the other thing is you know with all of these different retail locations the staff at these you know if you go to a dispensary generally speaking to Bud tender is pretty knowledgeable they’re knowledge about the products they’re knowledgeable about the the reaction uh

(33:31) what low dose or what particular doses will do to somebody um we’ve got a lot of Education to do with the people that are selling our products or any of the other companies products in Minnesota of trying to get um you know these people kind of up on on what they’re making recommendations to for people about how much to take and and how it might affect what they’re looking for so um there’s a lot to be done in Minnesota it’s certainly an exciting time it’s a lot of fun it is the Wild Wild West and

(34:03) if you Embrace that part of it you’re having a good time and I think we’re passing this over to uh to Travis now awesome well my computer played ball there we go I think I’m off mute now um so I’m trying to scope neighbor I am our attorney kind of managing our Michigan office for Vicente Cedarburg uh I have been uh practicing cannabis law in Michigan uh since about 2000 end of 2014 into 2015.

(34:36) uh for those of you who need a quick rundown on Michigan and how we can kind of compare what Michigan has done to what some of these new States might be able to do uh Michigan passed a patient caregiver non-commercial licensing kind of system law more just a uh a personal criminal defense based right in 2008 uh that market kind of came into maturity over the next two years really into about 2010.

(34:59) um in Michigan uh the government balance between like local municipalities in the state is pretty strong for municipalities and we saw a lot of municipalities in Michigan really from about 2008 to uh till we got to our commercial Licensing Laws I have like really regionally location-based uh opportunities for but we used to call Gray Market dispensaries or or you know business operated medical marijuana facilities uh with no regulatory structure in place and that created a lot of opportunities for folks in a lot

(35:29) of issues uh which is a whole presentation on its own but in in 2016 uh our you know at the time Republican control legislature really getting in front of what was likely to be a promising ballot initiative and placed uh put in place a medical licensing law we followed that up with a ballot Initiative for adult use recreational marijuana licensing in 2018 and since then we’ve seen both of those markets kind of in parallel mature into where we are today um for our system in Michigan it was really kind of a two-step approval process if

(36:02) you’re going to be operating commercial facilities uh you usually need to get approval for your physical location from a municipality and once you have that you go get the Stateside approval from our regulatory agency the Cannabis regulatory agency or CRA and over really since 2016-17 uh to present we’ve seen our regulatory agency go through a wide variety of challenges a wide reality a variety of Market influences to not only grow and adapt with the opportunities in Michigan but really kind of focus in on

(36:35) on efforts that were important to their role as regulators and adopting to not only the challenging uh political situations of the time things like covet hit Michigan hard in interesting ways as well but also rapid Market expansion in Michigan and to this day even in our last election we continue to see um you know cannabis items hit the ballot we’ve had 32 municipalities in our last election cycle consider cannabis proposals either to expand market opportunity or to limit them you know a lot of those you know kind of we’re on

(37:09) the air a lot of them made major impacts in their local markets 13 additional municipalities voted in favor of actually expanding or creating new business licensing opportunities we saw existing markets in some of our largest cities kind of either clarify or or learn lessons and Implement those lessons into the regulatory structure at the municipal level um and and we continue to every every time there’s a time period we learn in our state what’s working and what isn’t and we’re seeing legislatures both at

(37:35) the the state level and at local municipalities learn and adopt thank you you read my mind I was going to tell you to switch this slide um so uh recently uh we’ve had some pretty major overhauls in Michigan uh over the really 2021 uh to present we kind of had a redraft of uh like our administrative rules all the operating kind of requirements for our various license types that have gone into effect and just recently our governor appointed a new director Brian Hanna for the Cannabis regulatory agency Brian has

(38:06) been what we call a field inspector and kind of in charge of enforcement driven priorities for the Cannabis regulatory agency over the last five years at least someone I’ve met several times I have a lot of respect for but we’re seeing kind of leadership in that organization shift from turning on and learning how to adopt a completely new regulatory structure to one of the regulatory structure that you know with an agency that has experience knows what they’re doing and kind of prioritizing kind of

(38:34) that insight and knowledge into the challenges of the day Brian is going to be implementing a more enforcement and compliance driven approach where uh leadership before was just trying to make the structure work in the first place and learn the lessons that that entailed along the way um has the like I said as a regulatory agency continues to have the experience that you can only get through actually trying to implement the program they’ve learned a lot of lessons you know one of the the main kind of challenges for for

(39:02) Market entry in 2016-17 1819 was just bottlenecks to getting into the market we started with a very strict very difficult very expensive system to enter into it really created a situation where if you weren’t either very lucky to have all the factors kind of line up or financially backed uh it was very difficult to get market share early on into the system and by the time our regulatory structure learned how to focus on the issues of the day and learn like what the challenges were not only for making sure that their regulatory

(39:34) goals were met in in terms of you know vetting applicants running background checks making sure that the you know policies and and operational rules that they put in place not only made sense on paper but actually started working we saw a regulatory agency the kind of focus and simplify structures it created more insight and dependability and opportunities to know what types of positioning and structure applicants and business owners needed to do to kind of fit the mold our regulatory agency needed them to to operate in a compliant

(40:07) way and it also taught them kind of what the issues were that were keeping some of the stakeholders in this market that they wanted to support and adopt from entering into the market the first place we we started seeing our state kind of adopt social Equity driven policies and and creating financial assistance for the types of applicants that have been traditionally left out of the market I think the big lesson kind of being out boots on the ground as I watched my Stadium directly participated in this pay attention to Michigan is by the time

(40:35) our state learned what those priorities needed to be to help those types of stakeholders it was already kind of too late most of the market had been kind of approached by those who could move the fastest and adopt the easiest to take advantage of opportunities and you know we kind of see a state 8 looking at you know well all the licenses for for retail and cultivation kind of basically got issued over the first two three years of the program and now we want to encourage situations where new types of parties come in

(41:03) um but you know there’s not a lot of left that are still excited about the market now that we’ve shift to more mature kind of operational goals so we still continue to see wonderful opportunities for folks but as the kind of interest level moves from entrepreneurial driven excitement to business decision driven you know I got to keep these businesses afloat I need to pay for employees I need to you know adopt to the stumbles we’ve made along the way and deal with enforcement and compliance issues that we’ve done

(41:33) through operations in any new industry as our regulatory agency learns so do our business operators uh you know the benefit of hindsight is is obvious right um you know to this day we have the Michigan legislature continuing to consider ways to make this Market uh not only meet the their safety enforcement and public benefit goals but also to create a structure in a system that works we’re seeing bills pending to make changes to our licensing background check structure that left a lot of stakeholders out just to kind of explain

(42:03) the bullet point I have on the slide you know anyone with any sort of Interest any cannabis applicant in Michigan whether on a new license application or some sort of merger or financial investment into it would often draw your spouse into the background check process regardless of that spouse had any Financial or management connection to this in the first place and we had statutory required disqualifying factors for example if you have certain types of criminal history and you became what we call a supplemental applicant if I happen to be

(42:32) married to someone with one of these disqualifying features buying through that marriage alone my entire ability to participate in the Michigan Market was just prohibited uh you know the state of Michigan understood that but their priorities were so driven on making the market work getting the vast majority of people who wanted to participate in into it through the process that you know now that we have time to you know as licensing interests come down and operation interests go up they have time to see what worked what didn’t and

(43:00) continue to make uh marginal and significant depending on what they’re working on improvements to our overall structure um Michigan was an interesting system as it had both a statutory Foundation where our legislature adopted our medical licensing rules and then two years later we had a ballot driven proposal where we turned on adult use legalization basically kind of mirroring and making marginal improvements to the medical structure that was in place you could go ahead and move to the next slide for me

(43:27) if you like thank you so much one of the best things in my opinion that the state of Michigan’s regulatory system does is it it collects and Aggregates a large amount of very useful information for anyone interested in reviewing it in addition to licensing and quarterly reporting that we have built into our statutory requirements they released and publish a wide variety of data that you can use as someone interested in this market or someone participating in this market uh to just kind of see how you’re

(43:57) doing compared to other states that have similar systems and similar structures in place a lot of this Market data can help you make informed business decisions we can move through a few of them yeah you can just go ahead and Linger on them for a few seconds and then move on but you can kind of see how we can watch as our data change throughout the years you know really 2020 at the beginning of these graphs is when our adult use system was coming online and you can kind of see how the data helps you see what’s happening uh

(44:23) in in Michigan on the ground as one of the stakeholders in a variety of different positions in our Market but also see you know what those opportunities were and how you could have in hindsight uh made more informed decisions as that market came online you know we’re seeing a lot of what we call croptober or or you know saturation we have a lot of easy access to the market from a manufacturing side with a lot more competition and business just competitiveness and getting to the retail side so as that’s played out over

(44:55) the course of the last three years we’re seeing a lot of um you know product hitting the market and a lot of folks getting product into the market with a huge demand on the sales side from consumers and we’re watching what is probably an obvious resolution for everyone the price per pound you know starting to go down as demand continues to rise because getting access to to retail market share is still kind of slowly rolling out there’s still more people that want to buy cannabis in markets that well we don’t have retail

(45:24) stores opening up yet but our manufacturing side kind of outpaced our retail side so if you’re looking to come into the Michigan Market or kind of see how the Michigan program worked out we have a wide variety and I’ve I could give you a hundred slides on just different data presentations so you can kind of see all this work and you can kind of see where along the way different Market decisions both uh the industry as a whole and our regulatory kind of agency made and what that output was from a investment side or an

(45:52) operation side or a planning side um you know and I’m going to kind of shift from Michigan for a moment into some of our sister States you know Illinois had a very similar kind of uh timeline with us uh they are actually uh one of the you know for Minnesota here to learn some lessons one of the first days to have a robust uh State Legislature driven uh regulatory system put in place um and you know one of the big kind of selling points one of the big rallying cries in Illinois when they were trying to get these legalization efforts pushed

(46:22) through was a huge emphasis on trying to get some of what we call social Equity or or you know marginalized uh potential stakeholder interested into their system and and while that was a wonderful goal that we all should support you know how they chose to actually roll that out had mixed success um you know and you know as the Michigan Regulatory Agencies uh that that govern Camp uh cannabis and kind of learn lessons and continue to improve uh no one’s perfect you know the market demands and the kind of budget demands

(46:51) that you have to play ball with really just create outcomes that that are pretty predictable when you’re looking at the systems in place you know in Illinois for example we see a pretty light level of Manpower in their Licensing and Regulatory Agencies which has created delays uh it’s difficult to push applications through whereas in Michigan um you know some of our timelines might not be as fast as my clients want them to be but they’re pretty predictable you know predictability and consistency not

(47:18) only helps you make informed you know decisions but successful decisions when you can kind of rely on as much information as possible to make the best decision for you um you can go ahead and move forward uh I’m just some points about Illinois if you’re diving deeper into that state they’re continuing to uh make improvements but you know every state makes those improvements at different timelines to different degrees so you know in Illinois they’re currently discussing bills to make improvements to

(47:47) their regulatory system whereas in Michigan we’ve had kind of the opportunity for that regulatory system to kind of improve itself and kind of have more autonomy over itself Illinois has some amazing data but not as much as Michigan so if you’re in Minnesota or you have influence over some of the decisions you can make as that system comes together and hopefully not only gets passed but then puts into place I think the more data that you can collect and share not only helps you as a state kind of learn what you need to know to

(48:15) you know improve your own system but it helps a lot of business owners and and people that want to participate in this industry just kind of know when and how it’s the best time for them to do so down in Ohio we’ve had medical marijuana for a while now there have been efforts to to legalize you know we have house bills that were introduced that were kind of introduced a few a while ago we’re starting to see some movement on uh we just got you know some updates from the uh the state representatives

(48:40) that are kind of behind Ohio legalization efforts uh giving us updates just a few days ago you know the system that they’re currently contemplating in that bill looks very similar to Michigan there’s uh you know an emphasis on decriminalizing conduct that’s currently considered illegal you know placing excise taxes on sales uh creating a system of Commerce and Licensing uh that’s consistent you know from medical inductees programs um I think that’s probably my last slide but I just have a few more thoughts to

(49:08) share through the time here um you know Minnesota to me uh kind of with the benefit of hindsight has its own unique kind of issues but a very similar situation that Michigan had with a patient and caregiver system we have a lot of interest Market participation in a framework that doesn’t have a lot of structure right now that’s going to be some amazing Financial opportunities for the folks that can thread the needle and a significant amount of inconsistency and risk for the vast majority of people who might want to rules and structure

(49:38) are great not only for clarification but they just create Better Business Opportunities you’re going to as you grow businesses in any of these states have disputes rules and structure provide dispute resolution you’re going to want to you know invest in or exit from the Investments you’ve made into these businesses rules and structure create mergers and Acquisitions opportunities it creates uh you know Frameworks in which you can either merge your joint with other businesses and mature with your Market uh you know do

(50:08) what you’re good at which is turning a new market on and then you know passing it off to folks who are more operationally driven uh standardization uh is not only good for Consumer safety when we start making sure that the products that are hitting the market are tested and tested in a consistent way so that the north half of of Michigan has a different testing standard than the southern half you know patients anywhere in your state once you have consistency but that standardization and consistency is also important when you’re making

(50:36) business decisions and setting your business up if you’re in a cultivation business and there’s testing requirements that are unknown it’s going to be very expensive for you to change and adapt to a you know moving Target so the more consistency you can create and the more kind of evidence and and information you have about the trajectory of what your framework is going to look like is not only going to be better for the regulatory agency to actually enforce that structure but it’s going to be easier for businesses that

(51:03) want to enter into that market to know what they’re entering into to know what they’re signing up for so that they can take business risks and push Market Innovation and not take business risks that are well when we started you know the rules told us we could do this and they changed them on us two months later and now you know half of our investment is meaningless so you know when you’re in a new market if if the goal is stakeholder participation from uh disproportionately impacted businesses or or consumer safety or uh you know

(51:33) even just limiting kind of the influx of investment and and interest in a market like this with the new opportunities it creates the more structure that you can have in place creates predictability and that creates a an Avenue for dialogue that’s constructive you know the more that we can move people from whether or not we can legalize marijuana to now that we’ve decided to do it what’s the best way to do it in our state the more stability you’re going to have across the board and that’s what our goal here

(52:00) is you know as you know know if people are asking me what you can learn from Michigan it’s you know learn from our mistakes see what works well see what our priorities were after we got past the initial excitement and what they started focusing on you know as their priorities now that the industry is starting to enter into maturity you know Illinois had a great idea to try to implement stakeholder participation early on but did they actually do so effectively I’d say probably not you know Michigan did the same thing we

(52:26) didn’t really focus on that when it was time to create opportunities for them we focused on creating opportunities after you know it was really too late so you know you have an opportunity here in Minnesota and some of these other states that are going to be coming online to you know figure out what your priorities are and create systems to facilitate those priorities it’s it’s kind of a higher level question than whether or not you should do it in the first place and that’s where data I think is really

(52:49) useful you know Michigan has a robust set of data you can kind of see well politically this was happening in 2019 and here’s what our Market looked like and when those policies and procedures were put in place here’s our Market responded to it you know and that’s the type of data that I would hope you know legislatures in uh in Minnesota and other markets that will be doing this over the next few years can learn from you know so we’ll always answer more questions well said yeah I I feel it we gotta we have uh three states left

(53:18) which are frankly not as exciting as Minnesota sorry something going on and I want to make sure Jason has a few minutes to cover those the good thing is we’ve people we do have a q a chat we’ve actually been able to address a lot of those questions live during the webinar but Jason do you want to kind of bring us home yeah uh thanks Brian so I am um based in Minneapolis I’m Minnesota cannabis law but I’m licensed and I represent clients in Wisconsin North Dakota and South Dakota as well um before the election I was predicting

(53:49) North Dakota and South Dakota we’re going to be legalizing adult use marijuana through the ballot and um neither of them passed unfortunately so North Dakota continues to have a medical program but their voters have decided they’re not ready for adult use marijuana there um we spoke Brian Vicente and I did a seminar with um Jared moffatt of the marijuana policy project MPP was running both the North Dakota legalization plan and the plan to decriminalize marijuana in South Dakota I think um in hindsight perhaps they would have

(54:26) focused on just one state because they lost both unfortunately next slide please um South Dakota you might recall um the voters did approve a medical program and an adult use program on the ballot in 2020 the medical program continues to exist and and is coming on board but um you may have heard that the adult use program um was challenged into courts and ultimately uh struck down so this ballot initiative wasn’t quite on that level it wasn’t in a full adult use of marijuana legalization bill it was just to

(55:01) decriminalize and the plan was to then attempt to legalize through the legislature but even that was voted down so um that was a surprising result to me it’s unfortunate um I think MPP or someone else may take a run at one or both of the Dakotas again but I think they’re licking their wounds and regrouping right now um Wisconsin yes even I’m sorry our state of affairs for cannabis policy um you may know that Wisconsin’s one of the most gerrymandered uh states in the country um they re-elected the Democratic

(55:38) governor to a second term um through the Statewide vote right but the the legislature itself is overwhelmingly controlled by Republicans close to 70 percent I think so just put put your head around those numbers if you’re electing a Democrat Statewide your legislature is roughly 70 Republican kind of odd but it’s a long way of saying that the Republican party in in Wisconsin has shown very little interest in moving forward with medical marijuana adult use marijuana um there may be some thought that you

(56:08) know um their neighbor to the South Illinois that the fact that they have legalized adult use marijuana may be putting some pressure on legislators in Madison Wisconsin Minnesota like like we’ve discussed maybe legalizing and don’t use you know Wisconsin’s missing out on a lot of tax revenue um by not legalizing adult use marijuana perhaps that message will start to hit home for the GOP but that remains to be seen um one more last thing I’ll say about um Minnesota and then Brian I’ll hand it

(56:39) back to you and we can ramp up you know I think the point is if we are left with a hemp derived THC um uh Market here I am almost certain that the legislature will be tightening that up a bit they’re going to enact some additional licensing taxing regulations Etc so um frankly my clients want that they when I go to the Capitol I Lobby the legislators are often surprised to say yes please regulate us we do not want the Bad actors in this space we want consumers to feel safe so I expect the legislature we’ll tighten that up a bit

(57:14) that’s it Brian back to you thanks uh Jason and um it’s been really excellent presentation from all the speakers here um we do have a couple quick questions I’m gonna we’re gonna get those in kind of a lightning round fashion um and then we’re gonna get out and get out the out the door just to be respect for people’s time um we uh there’s one question about Ohio Travis I’ve been following this too and we’ve been we’ve been uh we’re pretty close uh with uh the trade associations

(57:41) Etc but you know thoughts I don’t know Travis you have thoughts on a ballot initiative on 2023 in Ohio uh or if we see something through the legislature I think you spoke about how you know we there are bills being discussed at the legislature but uh what’s your what’s your I mean I personally of the opinion that until a Bill’s passed uh it’s it’s just talking so I think a little pressure behind it is only helpful uh but you know you need to appreciate the realities of the political situation

(58:09) there I mean I don’t know if you can speak to it more closely than that Brian but you know I think it’s important to make sure that there’s that ballot kind of coming behind the bill just in case something doesn’t go the way that with with the bill that you wanted to so yeah gotcha yeah and I do think the polling’s there right I mean it’s tough to win these measures in non-presidential years and we saw that pretty pretty heavily in The Dakotas right um but I think you know if you wait two

(58:32) more years and run it in Ohio you win if you run in 2023 I think it’s a little risky um yeah that I think that’s about the the the summary I’m kind of getting ushered out the door here but I did want to say you know speakers have been wonderful um all of us are available if people have questions we will be sending around uh there’s people’s information as well as these slides and we’re happy to chat either from a manufacturer’s perspective like Scott or from the lawyer perspective like the rest of us so

(58:58) thanks so much for your time thanks to our speakers appreciate y’all thanks everyone yeah feel free to email us if we didn’t get to you thank you thank you