Leading the way...

Smoke Stacks Leads the Way After Implementation of Harsh Regulations

California’s cannabis testing regulations became effective July 1, 2018, increasing the cannabis test thresholds to levels never before experienced in the California market. Most California producers believed the state would, yet again, extend the regulatory implementation period another six months. Grupo Flor however, took a contrary view. We organized our processes and lab partner relationships so that our in-house flower and concentrates brand, Smoke Stacks™,  would hit shelves July 1, 2018 being fully tested, labeled and packaged in full compliance with the law.

The July 1, 2018 implementation impact was massive and sudden. Whole swaths of California wholesale supply chain producers were unable to meet the new test standards and Facebook and Instagram posts went viral of empty dispensary shelves across the state. One winner emerged: Smoke Stacks™.

While certainly exciting in terms of validating and testing our products and business processes, the most thrilling aspects has been relationship development and the acquisition of market share. The cherry on top is the great response to the quality of our product from shops throughout the state.

While betting on July’s implementation and preparing to mobilize may not seem genius, consider that Grupo Flor’s distribution company had to source goods from a small and diverse archipelago of farms that were themselves producing compliant cannabis.

Quite a feat in the absence of a robust and standard supply chain.

Distributing the highest quality cannabis throughout California

Regulatory compliance and accountability is the “What” we do; but when it comes to distribution, it’s really the “Why” and “How” we do that sets FlorX apart. FlorX is the distribution arm of Grupo Flor and it’s run by cannabis retail veterans, supply chain logistics experts and straight-up process nerds whose combined efforts create a killer distribution service with one singular goal: reduce back-end hassles so shop owners can focus on the front of shop.

“FlorX is paving the way with cannabis distribution by embracing forward-looking supply chain strategies. The team at FlorX is obsessed with procuring quality product and delivering world-class customer service.  The team at FlorX is also very focused on compliance with local and state regulations. This has allowed FlorX to be there for dispensaries when others were not prepared,” said Steve Podell, President of Distribution.

New Faces Join the Grupo Team

FlorX welcomes new Bay Area sales team members Ashley Palma and Vittorio Lagorio.  

Ashley joins FlorX from Riverview Farms, where she successfully built relationships with dispensaries in San Jose, Santa Cruz, and Monterey County. Her experience selling flower, pre-rolls, topicals, and edibles will continue with FlorX and we look forward to seeing her thrive with us.

Vittorio joins FlorX from W.M Dickerson and Farmers Produce, where he excelled as a broker for the past ten years.  He is excited to take his sales experience to new heights in the cannabis industry as he covers wholesale sales for the East Bay and San Francisco.

Federal Legislative Look

Could A New Bill End Federal Prohibition of Marijuana? A bipartisan group of lawmakers introduced new legislation that highlights the growing divisions within the Republican Party on the nation’s current patchwork of marijuana laws. The effort to allow states to decide their own marijuana policy potentially pits President Trump, who has voiced support for the state’s right to choose their own policy, against his own staunchly anti-marijuana attorney general. Additionally it highlights the chasm between anti-marijuana GOP leaders in Congress and the growing number of rank-and-file Republicans who are demanding federal protections for their state’s burgeoning marijuana businesses.

After Sens. Gardner and Warren introduced the legislation, advocates called it the “most significant piece of marijuana-related legislation ever.”

State Legislative Look

Flash Sales Throughout the State at Dispensaries not Compliant by July 1

Since the state of California fully legalized cannabis on Jan. 1, the industry had a six-month transition period to adopt new testing, packaging, and ingredient standards. Any leftover products that didn’t meet the new requirements were destroyed or sold in lash sales on June 30.

The deadline had many in the cannabis industry scrambling to sell tens of thousands of dollars worth of old, non-compliant stock by the end of June, touting discounts and parties to lure customers.

First Look at California’s Proposed Final Marijuana Regs

California regulators released the first draft of permanent adult-use and medical marijuana regulations on Friday, July 13, starting the clock on a process of hearings and public comment that will end later this year with a final set of rules governing the nascent industry.

The proposed rules are contained in 315 pages of documents issued by the Bureau of Cannabis Control, the Department of Food and Agriculture and the Department of Public Health.

The changes that were most apparent were:

  • Deliveries anywhere. The new language will allow licensed marijuana deliveries in any city or county in the state, even those that ban retail outlets, processing and cultivation. The provisions are similar to legislation, now shelved, that would have barred local governments from stopping state-regulated companies from delivering to their residents. That bill drew opposition from cities and counties, which argued that local control is a key tenet of Proposition 64, the 2016 voter initiative legalizing recreational marijuana. Companies including WeDrop Cannabis Delivery, CannaWagon and Weedmaps lobbied for the bill.
  • Advertising restrictions are increaseded. New rules expand restrictions on marijuana advertising that might appeal to children, such as the use of inflatables, toys and cartoon characters. Additionally, outdoor advertising must be affixed to a building or a “permanent structure.” That would appear to bar roving billboards attached to trucks or truck trailers. As for billboards, “It would depend on the billboard,” said Bureau of Cannabis Control spokesman Alex Traverso. “We’d have to look it at case-by-case.” The bureau’s proposal also offers guidance for how advertisers can show that 71.6 percent of their audience is 21 years of age or older.
  • Attention events-holders. Changes will require cannabis event-holders to provide more details about where licensed retailers will be set up, where attendees can light up or consume marijuana and where sales will occur. Cannabis-focused events have proven challenging for organizers working under the state’s emergency regulations. Organizers of the Chalice Festival sued the Bureau of Cannabis Control and the city of Victorville in June after they declined to issue permits for the event planned for the San Bernardino County fairgrounds this month.

View the proposed text of regulations by clicking here.

Local  Look

A New Beginning
Jennifer Rosenthal Iverson, Esq.
Jennifer is a local cannabis and criminal defense attorney and Vice President of MCCIA. The views and opinions expressed in this article are those of the author and do not reflect an official position of the Association.

July 1 marked the beginning of new and exciting times at both the State and local levels.  The most impactful regulations facing operators are the testing and packaging requirements.  These requirements have had a substantial effect on the market. Across the state dispensaries and retail facilities are experiencing the fallout of the supply chain.

The County of Monterey is gearing up on enforcement for all cannabis operators.  As indicated in the County’s recent memorandum released June 29th, in order to remain in good standing you must submit your conditional use permit application by August 1, 2018.  If you do not submit your conditional use permit application you will not be able to continue cultivating on site.  Further, the County is conducting both canopy audits and inspections for building code violations. Any building code violations found on site could have a substantial negative impact on the operator’s ability to continue cultivating and moving forward through the regulatory scheme.  If you are conducting structural improvements to buildings and greenhouses it is critical to go through the required permitting process.

In addition, the County and State will be issuing enforcement actions against all entities that are currently operating with over 25 employees and do not have a permitted public water system. If you are operating with more than 25 employees it is critical to start the process of the State Public Water System application.  The process alone can take up to 6 months and your conditional use permit application will not be deemed completed until you have submitted your application.

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