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In our past discussions on Colombia, one topic that came up was Colombia’s perfect setup for marijuana cultivation. The Financial Times also points out how Colombia’s advantages – cheap labour, better climate and plenty of experienced workers – help keep prices down and give the Colombian cannabis industry its competitive edge.

But in order to provide medical marijuana to outside licensed producers, having the aforementioned advantages means nothing. The country may have the tools, infrastructure and labour force to get started, but these individuals are used to the unregulated black market.

Colombia is about to get hit with some rules. Their ability to follow them will ultimately decide the Colombian cannabis industry’s fate.

 

A Bombardment of Investors

 

Colombia’s up-and-coming medical marijuana breakout has not gone unnoticed. Major Canadian producers – including major LP Canopy Growth – have connections with South America.

This is hardly surprising. Uruguay, after all, was the first country to legalize marijuana, making its home continent Ground Zero for major cannabis expansion.

Colombia’s position in the industry generated enormous hype, thanks to the influx of business. The Financial Times explains:

 

“The excitement over cannabis in Colombia has reached fever pitch with some local media reports suggesting the country could supply two-fifths of the world’s marijuana and earn more from it than it does from coal or cut flowers. Farmers have been encouraged to switch out of traditional crops like coffee and bananas to grow weed instead.”

 

Marijuana may be a lucrative opportunity on the surface, but there are several conditions that could put the industry out of reach for some time.

 

Strict Regulations

 

Colombia is entitled to impose its own rules on cannabis cultivation, processing, distribution and sale – as long as those sales stay in their home country. But exporting to other locations means that the South American partners and subsidiaries will have to play by their clients’ rules.

Consequently, staff with black market experience will effectively have to be retrained to follow certain standards and growing practices. South America needs safe, reliable growing materials, cannot use certain pesticides, needs to meet cleanliness and safety standards, etc.

The checklist is endless, but every box needs to be marked. According to the Financial Times:

 

“…industry experts sound a note of caution. The production of pharmaceutical-grade cannabis is a highly specialised process — it is not as simple as planting a few marijuana seeds, harvesting the crop and turning it into medicine.”

 

Andrés López, former director of Colombia’s National Narcotics Fund – a regulating body for legal drugs – also explains:

 

“It might be true that Colombia is the best country in the world for cannabis cultivation because of the climate and sunlight and because land and labour are cheap. But that isn’t enough. To produce medical cannabis you need the very highest quality standards.”

 

Major Obstacles

 

Unfortunately, the high standards required to put medical cannabis in compliance means smaller cultivators are effectively out of luck. If they lack the capital to build operations that pass inspections, then entering the industry is impossible.

Security is another concern. However, this goes beyond the risk of break-ins or robberies. Instability and corruption pose a serious threat. Some individuals fear that the rising industry will eventually fall under the control of organized crime.

The outcome still remains uncertain. However, ready or not, the industry is developing rapidly. Hopefully, it will be able to enjoy real success either immediately or after some adjustment.

 

WeedAdvisor’s Involvement in the Colombian Cannabis Market

 

With Colombia’s rise in the medical cannabis industry, WeedAdvisor is proud to be among the many businesses investing time and effort into a promising country.

Regulations will be difficult to meet and maintain. This is why we offer a variety of business solutions for functions like POS, compliance, inventory tracking, safety and real-time data monitoring.

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Things continue to look bleak for CannTrust, the embattled licensed producer who made headlines over its five unlicensed, hidden grow rooms.

The company certainly carved its name in the industry, winning or being nominated for multiple product awards. However, no amount of recognition will save them from an ever-worsening situation, as they face the very real possibility of losing their license entirely.

This spells bad news for the company’s employees, along with its shareholders, who have seen the stock take a nosedive. At this point, CannTrust cannot save itself, but according to BNN Bloomberg, hope comes from the outside.

In their opinion, an outside buyer could conceivably save the company from being shut down. But given the situation, whoever purchases CannTrust would be doing something heroic – a “white knight” willing to get the LP back on track.

 

“Take Them Out of Their Misery”

 

On the surface, it appears CannTrust wants to go it alone to get themselves back on track. In fact, they have been rather dodgy about whether they intend to consider selling to another organization. Bloomberg explains:

 

“When CannTrust CEO Peter Aceto was asked by BNN Bloomberg earlier this week to comment on whether he had any current offers on the table to sell the pot producer, he stated his focus remained on getting the firm back to compliance with the federal regulator.”

 

However, Norman Levine, a managing director at Portfolio Management Corp., disagrees – rather bluntly – with Aceto’s approach, saying, “I think it’s in everybody’s interest for someone to take them out of their misery.”

 

Levine’s comments, according to Bloomberg, appeared after rumours of two LPs being approached by bankers regarding a possible sale of CannTrust. But based on a recent revelation, those rumours are likely based in truth. Bloomberg reveals:

 

“…one cannabis producer has reached out to Health Canada to inquire if the federal regulator would be amenable to another company taking control of CannTrust to ensure the company becomes fully compliant with growing and processing legal pot.”

 

Although the baggage of the current situation makes CannTrust less palatable to potential buyers, Levine does add that the company still has many assets, facilities and resources that give it some appeal.

He is correct, of course. Aside from the physical equipment, CannTrust also owns three different recreational brands with plenty of products to choose from (assuming they start selling again).

 

Who is to Blame?

 

The inevitable result of disasters like these involves a substantial amount of finger-pointing. Someone obviously ordered these then-unlicensed grow rooms at CannTrust’s facility. Norman Levine is under no illusions (nor are we) – the process had to have involved management.

Levine says that he cannot imagine CannTrust’s upper executives not knowing what was going on. These are not the actions of employees cutting corners. This was deliberate. He says:

 

“It just seems too blatant to have happened. I think ultimately senior management would have to go, no matter who owns the company or if it remains independent. You need to start getting these acts cleaned up. Not everybody is going to survive.”

 

The expert warns that companies like CannTrust and Canopy Growth (who recently ousted its CEO), need to be able to impress major shareholders. Obviously, changes are necessary before that happens.

 

WeedAdvisor’s Emphasis on Compliance

 

WeedAdvisor has made it perfectly clear on multiple occasions that we favour the legal industry and adherence to its requirements. Man of our services are dedicated to policy compliance.

The real victims here are the over 70,000 clients who need to find new licensed producers, in addition to the employees whose positions could be in danger, buyout or not.

Ultimately, we wish CannTrust and any of its future partnerships the best of luck and only hope that they do not make the same mistake twice.

For those interested in following the rules, however, WeedAdvisor provides a variety of business solutions aimed at following regulations, documenting procedures for audits and real-time data tracking to catch potential violations before they become an issue.

 

 

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A common argument we often hear (and use) is that the health risks of cannabis are much less than those associated with tobacco and alcohol. The question, then, is just how important is this to the average consumer?

Alcohol and tobacco are widely consumed and accepted in our society to some degree. But apparently this does not mean marijuana will eclipse them both.

Nonetheless, according to Science Daily, cannabis could give some illicit substances a run for their money, while others are actually safe.

 

Multi-Billion Dollar Industry

 

A commonly-cited statistic is that the cannabis industry will be worth $22 billion in the coming years, only to keep growing as time goes on. While this is certainly no small number, it pales in comparison to its competitors in the tobacco and alcohol sectors.

Science Daily says that the combined value of the alcohol and tobacco industries is about $300 billion – over ten times more than cannabis is predicted to be.

However, this advantage is rather lopsided.

 

Impact on Tobacco

 

First, we should look at marijuana’s impact on the tobacco industry. Again, marijuana has the advantage of its euphoric THC experience, medicinal uses and lack of harmful additives found in tobacco.

Cannabis can also be consumed in safer ways, such as vaping or ingestion. That alone should suggest a threat to the tobacco industry. But according to Science Daily, a recent study indicates the opposite:

 

“The study shows…tobacco products were searched online nearly 8% more often [after legalization]”.

 

Although this is far from definitive proof that marijuana leads to tobacco use, it should put aside some of the tobacco industry’s concerns. If anything, it might serve them to get involved with cannabis, rather than oppose it.

 

Impact on Alcohol

 

Compared to tobacco, alcohol’s fate at the hands of legalization could be quite different. After analyzing the searches for alcohol, the study actually showed an 11% decrease, indicating that cannabis may be preferred by some users.

There could be a multitude of reasons for this. Perceived safety, for instance, is a common motivation for people to see marijuana in a more favourable light.

Cannabis is also less likely to cause unpleasant things like hangovers – although it can have its own share of bad side effects if used improperly or to excess.

Regardless, alcohol manufacturers stand to lose the most with legalization.

 

Other Effects

 

As the alcohol and tobacco industries get a taste of what might be in store post-legalization, we also should consider some other unexpected results. Specifically, they have to do with teen use.

According to Science Daily:

 

“The study also found the legalization of recreational marijuana increases online searches by adults by 17%. There is actually a decrease in searches done by those age 19 years and younger after the substance is legalized.”

 

This may be surprising to some opponents, but those tracking recent research are fully aware of this trend. In fact, it has been researched on a much larger scale in recent months, with the same results. More information on this can be found in our article here.

 

WeedAdvisor’s Desire to See a Competitive Cannabis Market

 

We are under no illusions that marijuana is overshadowed by tobacco and alcohol in the open market. Factor in illicit sales, and it is easy to see how cannabis will really need to fight for its place among the aforementioned commodities.

Although it would be nice to see marijuana overtake arguably more dangerous products, chances are that this will not be the outcome. At best, we can offer a viable alternative to those who are tired of their main options.

As demand for cannabis grows, so too does WeedAdvisor’s dedication to giving it the publicity it deserves.

 

 

 

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Colombia’s 2015 rise into the medical cannabis market may have the momentum, but the country has several obstacles to face before its projected success comes to fruition, according to The Motley Fool.

Although Colombia has all of the necessities to make it a world leader in cannabis cultivation – ideal climate, abundance of skilled labour and lower average pay rates – making the product is just one part in a large process.

Until Colombia finds a way to mitigate the threats facing legalization (and society at large), it is possible that their marijuana industry may not take off.

 

Legal Roadblocks

 

One problem that hampers the legal marijuana industry in Colombia involves legal obstacles both inside and outside the law. According to The Motley Fool:

 

“…well-armed and organized criminal groups remain a recurring hazard for legal cultivators, which is worsened by a weak state and lack of security in more remote cultivation areas. The fact that marijuana remains a U.S. federal government schedule one drug prevents local financiers, banks, investors, and other financial institutions from becoming involved in marijuana cultivation lest they be caught up in sanctions and the war on drugs.”

 

With legal apprehension on one side and illegal activities on the other, it is no wonder that marijuana growers are not reaching their full potential.

 

Regulatory Issues

 

Even in a country a different from ours as Colombia, regulatory issues appear to be a universal thorn in everyone’s side.  As The Motley Fool explains, bureaucracy is demonstrably legalization’s most common enemy:

 

“While there is plenty of hype regarding Colombia’s potential, red tape, a significant lack of access to capital, and confusing regulations, including multiple regulators, have all prevented the burgeoning industry from taking off. The reality is that despite the hype and claims that Colombia has been authorized by the International Narcotics Control Board (INCB) to grow 44% of world medical marijuana, only a small amount of dried flower has been exported to Canada for research purposes. There has been no large-scale exportation of legal cannabis from Colombia, and this is unlikely to occur for some time.”

 

Much like Canada and several U.S. states, regulations throw a wrench into an otherwise functional machine.

 

Major Social Issues

 

Unfortunately, Colombia has its share of social instability. Civil war, weak government and the common presence of drug organizations all pose a threat on every level.  Naturally, this interferes with its ability to develop a functioning marijuana infrastructure:

 

“A long-standing civil conflict fuelled by the proceeds of narco-trafficking, tremendous socioeconomic inequality, and a weak central government has dominated the landscape for decades in Colombia, costing the lives of over 200,000 civilians.”

 

Aside from slowing down its growth, the marijuana industry in Colombia is going to have a harder time securing investors with all of the current turmoil.

 

A Joint Effort

 

Based on what we observed here, it is safe to say that some of the obstacles to Colombia’s cannabis industry require international reform.

Canada obviously has to relax its grip and open the borders to imported cannabis, while the U.S. needs to legalize marijuana and remove it from the current schedule.

But the vast majority of its issues have to be dealt with internally. Considering the nature and complexity of the obstacles, it is more likely that the government will find ways to work around them before it is able to find a solution.

 

WeedAdvisor’s Desire to See Progress in Colombia

 

While we welcome cannabis industry growth from a business perspective, we also see it as a motive for the Colombian government to really step in and address its problems.

Hopefully, current and/or future administrations will be able to bust through these issues and pave the way for Colombia to become the cannabis leader it truly is.

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Despite California having the biggest head start, the black market still persists with full force. Unfortunately, these are partly fueled by pricing differences and availability gaps – with communities opting out in large clusters, effectively leaving “dry areas” where dispensaries are unavailable.

Consequently, law enforcement has its hands full with drug dealers and grey market dispensaries dominating marijuana sales in the state.

Marijuana Business Daily shows just how extensive this illicit industry truly is, telling us about a recent raid.

The sheer magnitude of the operation clearly demonstrates that California is a long way from wiping out the black market.

 

Huge Effort by Law Enforcement

 

California’s black market continues to proliferate, but it is not due to lack of effort on part of the authorities. They have been very effective and finding and stopping unlicensed production.

According to Marijuana Business Daily:

 

“This [recent raid] – which took place in wine country’s famed Sonoma County – is part of an ongoing effort against the illicit market…Sonoma County officials have shuttered 863 unlicensed MJ grows in the past two years, according to the Chronicle.”

 

Unfortunately, the problem is that shutting down an operation simply means that another one will eventually rise to take its place. Despite their best efforts, authorities simply cannot rely on force to curb illegal sales.

 

The Need for Support

 

Law enforcement has a large role to play in the elimination of the black market, but they cannot do it alone.

Frankly, California’s inability to compete is due to the same reasons affecting Canada and virtually every other legal marijuana state.

Regulatory limitations and poorly thought-out dispensary distribution make legal marijuana less accessible, both logistically and financially.

It is simply impossible to compete with the lower prices and convenience of the black market. We also need to keep in mind that even illicit cannabis has its own version of brand loyalty. Buyers who purchased from a single dealer for years are unlikely to drop them, simply out of social attachment or a sense of obligation.

But as usual, the fault for this situation ultimately lies squarely on the government. High taxes on cannabis dispensaries drive up the price of legal cannabis.

Getting started in the business poses its own list of challenges, such as the licensing process.

The irony is that, in its effort to establish a competitive legal marijuana market, California has effectively shot itself in the foot. Ultimately, the only entity actually capable of opposing the black market is law enforcement.

 

Massive Bust

 

The July 12th raid came after the property called attention to itself due to various code violations, including those related to cannabis growing equipment and production.

But when police raided the building, what they found was staggering. According to Marijuana Business Daily:

 

“…when county officials, including sheriff’s deputies, showed up Friday, they found 9,000 illegal cannabis plants and an unlicensed hash oil manufacturing laboratory…The bust is yet another indicator that California authorities have a long way to go before the legal MJ market fully replaces the demand for illicit cannabis.”

 

WeedAdvisor’s Support for the Legal Market

It is frustrating for us to watch the black market thrive in a place where it should be shrinking. While we applaud the efforts by law enforcement, it is quite clear that real change needs to come from the government and the consumer.

Regulatory changes need to take place and users need to deliberately support legal enterprises. These are the only ways to attack the black market.

One thing we hope to see is an improvement in the licensing process, which will allow more businesses to open and thrive. At that point, we offer an array of business solutions to maintain a dispensary. Some examples include POS, compliance, inventory management and even reward programs.

 

 

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The budding South American cannabis industry has gained a great deal of attention in recent months, with Colombia being no exception, according to Marijuana Business Daily.

As attitudes and policies develop across the continent, its countries prepare to – if successful – pose a real competitive challenge to their North American and (to a lesser extent) European counterparts.

With superior growing conditions, cheaper overhead and plenty of skilled labour already available, South American countries took the hint and are either considering medical/recreational legalization or – in Colombia’s case – refining existing policies.

The proposed Colombian reforms will provide a variety of new opportunities, be they social or economic.

 

Improving Trade

 

In its effort to carve a place in the legal cannabis industry, Colombia’s reforms include ways to facilitate the transportation and distribution of marijuana into foreign markets.

Marijuana Business Daily explains:

 

“Among other things, the proposed changes would make Colombian medical cannabis companies more competitive internationally by allowing flower to be exported into free trade zones.”

 

A free trade zone (a.k.a. “FTZ” or “foreign trade zone”) is basically an area without customs interference or financial roadblocks like taxes and tariffs. Things like manufacturing are not subject to the same monetary restrictions, greatly reducing the cost of production.

The aim is to make it easier for small and medium businesses to produce and distribute through these areas, giving them a competitive chance against larger companies.

Currently, cannabis can only be exported when produced in that zone. Up-and-coming companies will have to import the necessary equipment. However, lower corporate taxes and lack of tariffs give new companies the financial break they need to establish themselves.

 

Tighter Monitoring of “Non-Psychoactive Cannabis”

 

Colombian regulations define “non-psychoactive cannabis” as anything containing less than 1% THC. Under current regulations, companies do not require a manufacturing license.

With the new proposal, the Colombian government wants to ensure that these companies also require licensed. The aim is to have total control over the intoxicating substance found in marijuana and hemp (in trace amounts).

According to the former head of Colombia’s National Narcotics Fund Andres Lopez:

 

“The reasoning behind also requiring a manufacture license for the production of nonpsychoactive extracts is to give tools to the National Narcotics Fund (FNE) to control the residual THC in the production process.”

 

The regulations would also require a third-party lab analysis with a certificate proving that the final product contains less than 1% THC.

 

Benefits to Smaller Cultivators

 

A sad trend in many industries is how larger producers effectively muscle out smaller competition with their scope and resources. Colombia recognizes the value of these “underdogs” and currently has a law stating that at least 10% of their stock from “small-or-medium-sized growers” – defined as any grower with less than 5,000 square meters of space.

Unfortunately, many large companies find loopholes to avoid these partnerships, effectively preventing many otherwise successful companies from entering the medical cannabis market.

Colombia’s revised medical marijuana rules, however, will help address this:

 

“The new decree would create stronger ties between licensed producers and small- and medium-sized cultivators to ensure that they are legitimately included in the industry by transferring knowledge and technology to them.”

 

Tighter Overall Controls

 

Colombia’s regulatory framework is in dire need of an adjustment. The country hopes to achieve stronger industry control through tighter requirements and transparency.

These reforms include tracking funds through increased transparency, increasing the complexity and speed of the licensing process and demanding “more detailed documentation” from applications.

Additionally, growers involved in “nonpsychoactive cannabis” will have six months to start production. Marijuana producers get a quota, which they must reach in one year.

 

WeedAdvisor’s Involvement in the South American Market

 

It is abundantly clear that Colombia is serious about expanding its presence in the medical cannabis industry. Bold reforms like these are designed in a way that benefits everyone, which is why they are highly likely to work.

Eventually, the demand for licensed producers and retailers will grow. As this happens, WeedAdvisor will be available to offer a variety of business solutions for critical functions like compliance, POS and inventory-tracking – to name a few.

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The past week has not been good for Canada’s licensed producers, with two companies losing their place in the cannabis market.

British Columbia licensed producer, Agrima, fell under investigation in the fall of 2018 due to “unauthorized activities” during its time as a private entity. As of July 15th, the company lost its license to produce the drug.

At the same time, Ontario-based medical and recreational licensed producer, CannTrust, was caught with five grow rooms that had been operating for months before they were licensed in April.

An investigation showed that these actions were deliberate, with blatant attempts to cover them up. Originally, CannTrust voluntarily withheld part of its supply, along with the 5,200 kilos taken by Health Canada. But in the late hours of July 11th, CannTrust’s medical clients received an e-mail stating that, as of July 10th, CannTrust had stopped all sales and shipping of its products.

 

How Does This Happen?

 

Agrima and CannTrust are the most recent cases, but they are not the first to find themselves in trouble with Health Canada. The question we ask is “how can this happen?” How, in a country with the most restrictive legal cannabis regulations, can such blatant non-compliance occur?

The truth is that, no matter how tightly any government controls its cannabis industry, their rules are meaningless if the licensed producers refuse to follow them.

There is also the possibility of accidental non-compliance – although Canada is yet to see this happen.

Whether intentional or accidental, it is easy to break the rules – especially when they are so complicated and extensive.

 

WeedAdvisor Does the Work for You

 

Once a country develops its own medical and/or recreational cannabis framework, it will not be difficult for new licensed producers and retailers to struggle with compliance. Doing it directly takes a great deal of time, resources and manpower.

This is where WeedAdvisor’s compliance solutions make a difference. The services we offer not only make compliance more convenient, but also save millions in fines, lost inventory and could make the difference between keeping or losing a license.

WeedAdvisor’s approach to compliance is proactive. We believe in prevention as the best way to handle non-compliance. To that end, our business solutions offer the following:

 

  • Quality control from seed to sale, ensuring superior products that meet or exceed industry standards.
  • Production monitoring, which includes key areas like materials, equipment, facilities and staff compliance.
  • Auditing services to catch non-compliance at any level before it becomes a problem, along with solid documentation to prove that all necessary steps were followed. This reduces liability and demonstrates good faith to regulators.
  • Research and development for components like production systems, equipment, materials and more.

 

Having these systems in place could very well have saved CannTrust and Agrima from the predicaments they find themselves in today. Although both companies intentionally engaged in non-compliant practices, having a comprehensive system like WeedAdvisor’s would have detected these issues and alerted the appropriate staff.

Ultimately, we want to see the cannabis industry thrive all over the world. To us, nothing is more tragic than seeing it set back by preventable issues – ones that we effectively solve.

 

 

 

 

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Much to opponents’ dismay, marijuana reform continues to sweep the United States. These changes include everything from decriminalization to full-blown legalization.

But it appears that, as far as reform goes, medical marijuana is a safe medium. Seeing restrictions lifted under the pretext of improving therapeutic options typically sits well as a noble cause.

Now, the idea of legalizing medical marijuana has reached Kentucky lawmakers, as reported by Cincinnati Publc Radio. Experts, advocates and opponents will now gear up for what will hopefully be a productive upcoming public discussion.

 

Out in the Open

 

In a cautious – but hardly new – approach, Kentucky wants to see both sides’ perspectives on the safety and benefits of medical marijuana.

On September 23rd, a forum will on the topic will be available, hosted by The Foundation for a Healthy Kentucky. It is open to anyone, as long as they register ahead of time.

Proponent organizations and health experts will be there. As an open forum, they can also expect plenty of opposition – especially from medical professionals who, for the most part, are skittish about medical marijuana.

Nonetheless, CEO of the aforementioned foundation, Ben Chandler, claims that the form will be “balanced” and give all sides a chance to make their arguments.

 

Issues to be Addressed

 

With the forum still a few months a way, we know rather little as to what will be discussed. Based on previous instances in other states, chances are that the same talking points about safety, risk vs. reward and potentially tired arguments that have been debunked.

However, we do have a small list of major attendees and their respective contributions. According to Cincinnati Public Radio:

 

“Among the speakers will be Kentucky’s Public Health Commissioner, Dr. Jeffrey Howard and Louisville attorney Brian Higgins who will share how marijuana is regulated across the country.  Attendees will also hear from Andrew Freedman who is considered Colorado’s marijuana czar. He’ll talk about how public health has been impacted since Colorado legalized medical marijuana in 2000 and eased restrictions to allow recreational weed in 2007.”

 

Freedman is likely to score some serious points during the forum. The impact on public health thrown around by opponents actually never came to fruition.

According to The Reason Foundation, Colorado saw no increase in teen use, no increase in driving high and no major increase in adult use, among other statistics.

Given that medical marijuana – not legalization – is the subject of the September debate, Kentucky has even less to fear.

 

WeedAdvisor’s Support for Medical Marijuana Access

 

It truly surprising how medical marijuana is a hotter topic every day. Although it is by no means instantaneous, progress toward medical cannabis (and other changes) continues to pick up steam.

But with the emergency of an industry that, frankly, offers no knowledge on key things like dosing or proper strain selection, it is up to industry facilitators like WeedAdvisor to help provide guidance.

To that end, we regularly keep the public up-to-date with new developments in the cannabis industry, while also offering hundreds of product descriptions, along with their recorded benefits.

Once a retail and production system is established, WeedAdvisor will be available to provide customizable, effective business solutions to aid in key areas like POS, inventory tracking and compliance.

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As the stigma and laws around marijuana both relax, patient access to medical marijuana continues to broaden in many states. In cases like New Mexico, it did not take long for medical marijuana use to skyrocket.

The number of registered patients has notably jumped in the last few months, with an even larger overall increase over the past year.

But this surge in medical marijuana’s popularity may have unintended – albeit positive – effects. According to Grizzle, not only has medical marijuana increased in popularity, but it could also lead to further reforms.

 

Spike in Registered Patients

 

According to New Mexico’s Department of Health, the number of medical marijuana patients in the states rose by 10% since January. This is no small feat, but the bigger picture is even more surprising:

 

“New figures show that there are now 74,100 active patients in the state, which represents an increase of 35% over the past 12 months. The most common qualifying condition is post-traumatic stress disorder, accounting for more than half of the state’s patient count.”

 

While PTSD ranks first place in terms of marijuana prescriptions, chronic pain comes in second. However, autism, Alzheimers and opioid addiction were recently placed on the list of qualifying conditions. At the moment, these account for an almost negligible percentage. However, as time wears on, it is safe to say that they will make a decent contribution to the overall patient count.

Further reforms could be on the way, because medical cannabis patients will soon be able to attend a public hearing in the next few weeks. The aim is to effectively brainstorm ways to refine and continue building on the existing cannabis framework.

 

A Step to Legalization?

 

The rising popularity of medical marijuana appears to have inadvertently led to an opening for full legalization.

New Mexico, having decriminalized marijuana just weeks ago is already looking into moving further. Grizzle explains:

 

“Recreational cannabis use is prohibited in the Land of Enchantment, but Gov. Michelle Lujan Grisham has formed a taskforce to explore whether it should be legalized. The Cannabis Legalization Working Group is comprised of lawmakers, industry representatives, and law enforcement officials.”

 

Odds are that legalization proponents will have yet another uphill battle ahead of them. But given the apparent speed at which the state went from decriminalization to considering legalization, there are plenty of reasons to be optimistic.

 

New Mexico as an Opportunity for Business Partnerships

 

WeedAdvisor has seen legalization progress to varying degrees. But New Mexico’s progress so far is arguably some of the fastest and smoothest cases.

This is indicative of some serious potential in a growing medical market and a potential recreational one.

Judging by the situation so far, it is a safe bet that this will move forward rather quickly. As a result, we look forward to offering our line of business solutions to easily cover critical areas like POS, inventory and compliance.

Our list of product reviews will also help bring patients and recreational users alike to the strains that suit their needs.

 

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Owning a business is never easy. But one thing U.S. businesses enjoy is the ability to deduct certain expenses, providing a notable tax break once the IRS comes to collect its due.

Unfortunately – according to the Los Angeles Times – this is not the case for cannabis retailers. Thanks to an antiquated law that the IRS is all-too-happy to enforce, taxes on legal marijuana dispensaries are astronomical. In fact, given the numbers, it is a miracle that any of these businesses actually manage to expand.

Yet they still endure, while the IRS uses (or perhaps abuses) its authority to milk these companies for everything they have.

 

Section 280E

 

Section 280E of the IRS tax code first appeared in the 1980s, during a time when the “War on Drugs” was in full swing (and had plenty of popular support).

Its origins are actually somewhat funny. The L.A. Times explains that, during the 80s, a cocaine dealer filed his drug income while doing his yearly taxes. Apparently, there were some parts of his “business” that were tax deductible. Naturally, the IRS was not happy and proceeded to challenge the deductions.

Yet despite the absolute absurdity of someone flat-out admitting their cocaine trafficking (especially given the penalties for such a crime), the dealer actually won his case in Tax Court.

Following the verdict, the IRS passed Section 280E, which states that illegal businesses cannot make claims or deductions.

This is where the problem of federal vs. state laws once again comes into play. Even though the dispensaries claiming deductions are legal in their respective states, the IRS is a federal entity. Given that marijuana is federally illegal, the IRS is required to operate based on those laws.

Of course, why would they not? Thanks to this law, cannabis businesses have to pay between 70 and 90% in taxes. As more states defy federal law, the income generated from this predatory tax regulation only keeps growing.

This proves how hypocritical the IRS is. They refuse to offer benefits to federally illegal businesses, but have no issue collecting tax money from them.

On paper, the IRS opposes legal marijuana enterprises. But in practice, the agency is willing to look the other way due to the tax revenue they generate.

 

 

A Broken System

 

The IRS may have taken a hard stance against illegal businesses, but the irony is that, in doing so, they literally destroyed a substantial chunk of the cannabis market – along with the jobs and tax revenue.

According to the Los Angeles Times:

 

“Consider that California was home to about 2,000 nonprofit dispensaries prior to 2018. Legalization introduced regulations that increased the cost of operation. Bigger dispensaries were able to go to Canada and raise funds on the public market, but most legacy cannabis businesses could not afford to do that, and more than 65% of dispensaries shut their doors, resulting in loss of jobs, sales tax and income taxes.”

 

Not only is Section 280E predatory, but it is also unsustainable in most cases. Had the IRS treated these establishments fairly, it is safe to say that the total tax revenue generated would exceed the amount provided under the current system.

Further compounding the issue is the fact that the surviving retailers were forced to raise prices, driving 75 to 80% of sales to the black and grey markets.

 

WeedAdvisor’s Support for Small Marijuana Businesses

 

Although WeedAdvisor offers solutions for large producers and government entities, we understand that dispensaries form the backbone of the industry. After all, growing and processing cannabis will be pointless without a way to sell it.

It truly is disappointing to see a tax situation in the U.S. where every honest party loses. Even the IRS is missing out on a lot of revenue. Sadly, the only winners are the very drug dealers that the IRS claims it is trying to stop.

Hopefully, changes to the political landscape will come soon, allowing WeedAdvisor to establish strong partnerships with legal dispensaries, offering critical business solutions once the burden of these prohibitive taxes finally lifts.