Oh Canada

Scotts Miracle-Gro homing in on ‘big vision’ for hydroponics as state-legal cannabis grows

Published: • Updated:

By , The Cannabist Staff

The wet weather may be dampening sales for Scotts Miracle-Gro’s core lawn-and-garden business, but the company has its sights on the grow lights at the end of the tunnel.

CEO Jim Hagedorn on Tuesday underscored his firm’s “big vision” for hydroponics and the seriousness with which Scotts is approaching that sector as more states adopt medical and recreational marijuana laws.

“We have no sense of humor about that” potential maturation of the hydroponics business, Hagedorn told analysts during the company’s fiscal second-quarter earnings call. “This is a space we understand really well. We’re growing-people.”

And if other deep-pocketed companies or private equity want to step in, Scotts is ready to step up, he said.

“We intend to succeed in that space,” Hagedorn said. “I would say to anyone who wants to rumble with us, come on, let’s do this.”

The Marysville, Ohio-based Scotts has emerged as one of the biggest players in traditional business to publicly establish a foothold in the ancillary wings of the cannabis industry. The company has acquired several sector-leading firms across hydroponics areas such as lighting, soil and nutrients, and wrapped those into its Hawthorne Gardening Co. subsidiary.

Scotts has a few more acquisitions waiting in the pipeline, but some are taking longer than expected, Hagedorn said, attributing any delays to the logistics of these firms being smaller, family-owned businesses.

“We expect to complete most of these deals by the end of the year,” he said.

The buyouts inked to-date have resulted in revenue growth that has “significantly exceeded expectations.”

Hawthorne’s total sales were not disclosed in Scotts’ earnings report and initial related public filings made Tuesday. However, the subsidiary’s growth spurt was evident in the company’s top line for the second quarter and six month fiscal-year-to-date, which ended on April 1, 2017:

U.S. consumer sales dropped 7 percent to $962.5 million for the quarter, and fell 6 percent to $1.09 billion over the past six months; consumer sales in Europe fell 8 percent in both the quarter and fiscal six months to $105.3 million and $129.7 million, respectively.  The “Other” category — consisting of lawn-and-garden business outside the U.S. and Europe, a supply agreement with Israel chemicals, and the hydroponics and urban gardening businesses — saw a 50 percent sales spike in the quarter to $135.7 million and a 59 percent jump for the  fiscal year-to-date to $232.6 million.

Most of those growth spikes came from acquisitions, Hagedorn said, noting that Hawthorne also is experiencing strong, organic growth.

Each of the hydroponics businesses within Hawthorne — including General Hydroponics, Gavita and AeroGrow — had double-digit sales growth in the quarter, bringing the hydroponics portfolio’s quarterly sales growth to 22 percent and fiscal year-to-date sales growth to 13 percent, Hagedorn said.

“The overall landscape continues to look positive for Hawthorne,” he said.

Separately, Scotts on Tuesday announced plans to sell its European and Australian business operations, a deal that would result in 95 percent of the firm’s sales and profits being derived from the United States.

The transaction, which could result in $150 million in cash proceeds to Scotts, signals another significant aspect of the transition for the “quintessential American company” as it looks to counter a slowdown in its core business, Hagedorn said.

“We love our core business, but I think we view it as somewhat mature and slow-growing,” he said.

The ventures into areas such as hydroponics allow Scotts to start “buying growth” in categories with greater potential.

As that hydroponics market evolves from the recreational grower to the professional grower, Scotts has that lineage and technical sophistication that could serve the needs of both smaller and larger growers alike, Hagedorn said.

“I’m very comfortable where we’re going with this,” he said.

Alicia Wallace joined The Cannabist in July 2016, covering national marijuana policy and business. She contributes to the Denver Post’s beer industry coverage. In her 13 years as a business news reporter, her coverage has spanned the economy, Sports…

Yoga and cannabis: New philosophy melds plant medicine and an ancient tradition

Published: • Updated:

By , The Cannabist Staff

Cannabis and yoga are very trendy at the moment and it’s not hard to find a yoga class in marijuana-legal states that in some way incorporates cannabis use.

But the tradition of cannabis and yoga actually goes back centuries, according to Rachael Carlevale, founder of the Colorado-based Ganjasana yoga system.

“If we look at the roots of yoga practice you can see that ganja was a part of that,” she says during a telephone interview with The Cannabist. “In India you see the Sadhus (Hindu holy men) sitting in meditation; they are smoking ganja. And if you look at the ancient Vedic texts there is evidence that they used a (cannabis) drink called bhang, for example.”

Ganjasana is a combination of ganja, a word with Sanskrit roots that’s now universally used for cannabis, with asana, another Sanskrit word that describes yoga postures. Carlevale describes her system as a blending as well; what she calls a “conscious pairing of regenerative cannabis plant medicine with the practices of yoga, meditation and mindfulness.”

The 29-year-old Carlevale has been involved with both cannabis and yoga for more than half her life. And those two passions ended up combining in unexpected ways.

“When I started practicing yoga as a teen, I was also using cannabis,” she says. “It was really something that came together for me, gave me a sense of purpose in this world.”

And her world at the time was disciplined and purpose-driven. A native of coastal Massachusetts, Carlevale performed with the Boston Ballet and while at the University of Massachusetts-Amherst was pre-med with a biology concentration, studying plant and soil sciences. “It was all about getting good grades, serving the world, wanting to become a good doctor,” she recalls.

But then she decided to go on a different path. She spent part her senior year doing plant studies with the Shipibo, an indigenous tribe of the Peruvian Amazon. During that time she was introduced by local shamen to another psychoactive plant, ayahuasca, although she didn’t try it personally until later.

After returning to Massachusetts and graduating in 2010, Carlevale decided to obtain her yoga certification instead of going forward with a medical degree.

“I saw that to be my path as a healer,” she said in an email from Costa Rica, where she was teaching at a yoga retreat.

Rachael-Carlevale-Ayahuasca-PreparationRachael Carlevale studied plant medicine in Peru with the Shipibo, an indigenous tribe. (Courtesy of Rachael Carlevale)

She soon moved West with the man who would become her husband and settled in southwest Colorado, “where the laws suited our needs” to legally grow organic cannabis, she says.

Around that time she was also diagnosed with uterine cancer. Living at altitude in Colorado’s high country, she became severely anemic and ended up in a hospital emergency room. It took several months of tests with traditional doctors, she says, before they came up with the proper diagnosis.

But rather than proceed with a doctor-recommended hysterectomy, Carlevale chose to forego conventional treatments.

“I worked with a naturopathic doctor in Durango, who supported natural plant medicine,” she said.

Along with that doctor she developed a health plan with a team of specialists in acupuncture, kinesiology and nutrition.

“I also worked with my professor who brought me back to Peru for an ayahuasca ceremony,” she adds. “I had quite the dream team of support, and am forever grateful that I canceled that surgery appointment.”

Her tumor, she says, has shrunk down to a fraction of its original size.

During the time she spent working to heal herself, she also began to put together what would become Ganjasana.

“I ran two years of pilot studies,” she says. “With my educational background I always like to make sure that the programs are actually being effective and efficient. I did clinical studies; tested different cultivars and strains to see what would really work for one and doesn’t work for another.”

Ganjasana, she says, became part of a mission: “to help people build a relationship with the plant medicine.”

Before her Colorado classes, or “ceremonies” as she calls them, Carlevale requires her students to show up sober and with clear, open minds. For the class she supplies the cannabis, which she says is pesticide-free and grown as part of a philosophy of a regenerative, living soil system. She favors two particular strains: The White, a “heavy indica that I like to use in ceremonies,” and a hybrid called Holy Headband.

The class begins with some breath-work. Students then consume cannabis before going through different asanas. But rather than cannabis elevating the yoga, Rachael says it’s the yoga that creates an elevated experience: one that expands concentration and develops “mindfulness,” the mental state of being aware of the present moment in a non-judgmental way.

“What we’ve seen as cannabis legalizes around the U.S. is a big understanding of how to use plant medicine mindfully,” she says.

Carlevale is working to expand access to her Ganjasana program outside of her home state, via a series of online classes, hosted by Green Flower. She also has plans to set up a school to train people in her system.

Carlevale says she’s used to skepticism when it comes to the concept of cannabis yoga. But she wants the skeptics to know that “there is science behind this, in that cannabis is a true medicine. I like to admit that this plant has literally saved my life. So we’re really passionate about letting everyone know that. No matter what you think, this plant heals.”

“I definitely don’t take credit for combining the practice of yoga with cannabis,” she adds, “but I would say that it’s an ancient practice that’s just starting to come back to modern times.”

Bruce Kennedy is a veteran communications professional and multi-media journalist who has years of experience in international and business news. He started covering Colorado’s cannabis industry in…

California regulators release first draft of revised medical marijuana rules

Published: • Updated:

By Brooke Edwards Staggs, The Cannifornian

California on Friday published detailed plans to regulate its multibillion-dollar medical marijuana industry for the first time since the Golden State legalized cannabis as medicine more than 20 years ago.

The proposed plan — drafted in three parts by three different state agencies — lays out standards for any marijuana business that wants to get licensed by the state, with rules for everything from how late pot shops can stay open to how big farms can be to how much weed shops will be allowed to sell to patients in a single day.

The 211 pages of regulations aren’t law yet. They’re now open for public comment. The state plans to take feedback in writing and through a series of public hearings over the next 45 days before getting a final set of rules in place in time to start issuing licenses by Jan. 1, 2018.

“The proposed licensing regulations for medical cannabis are the result of countless hours of research, stakeholder outreach, informational sessions and pre-regulatory meetings all across the state,” said Lori Ajax, chief of the Bureau of Medical Cannabis Regulation. “And while we have done quite a bit of work and heard from thousands of people, there is still so much more to do.”

A call to finally rein in the state’s unchecked marijuana market was set in motion in 2015, when Gov. Jerry Brown authorized a trio of bills known as the Medical Cannabis Regulation and Safety Act.

The bills mandate comprehensive regulations on medical marijuana, with requirements for all marijuana businesses to be licensed under strict criteria by the start of 2018. Those bills also created the Bureau of Medical Cannabis Regulation and the state’s first so-called “pot czar” — a position now held by former alcohol industry regulator Ajax — to oversee crafting specific regulations on the industry.

Ajax and her team have been working on detailed medical marijuana regulations for distributors, transporters, laboratories and retailers for roughly a year, gathering input from stakeholders at meetings held throughout the state to produce the 58-page document released Friday.

Meanwhile, the Department of Public Health has been crafting 95 pages of rules for companies that manufacture cannabis products, such as edibles and concentrates. And the Department of Food and Agriculture has been drafting regulations for the state’s thousands of marijuana cultivators.

The already tough task got more complicated in November, when Californians voted to legalize recreational marijuana under Proposition 64.

The state agencies now must also develop detailed regulations for that side of the market. Those plans are due out this fall.

Prop. 64 was shaped around the state’s new medical marijuana laws, so the two systems are largely similar. But there are some key distinctions, which have been causing turmoil in Sacramento between big unions, small business owners and entrepreneurs with big plans for the industry.

In April, Brown’s office released a 92-page plan for reconciling differences between the medical marijuana and recreational cannabis laws. In the budget trailer bill, he sided largely with free-market policies dictated by Prop. 64, drawing praise from trade groups such as the California Cannabis Industry Association and criticism from law enforcement and the League of California Cities.

The state agencies used Brown’s recommendations as a guide in developing the regulations released Friday, though discrepancies remain. The proposed medical marijuana rules still call for having a third-party distributor take cannabis from growers and manufacturers to retailers, for example, and they still require anyone applying for a state license to prove they first have a local license — neither of which is included in Prop. 64 or recommendations from Brown.

If Brown’s budget trailer bill gets passed by the legislature, the state agencies will likely have to come back and tweak their medical marijuana regulations so they comply.

The three sets of proposed regulations include detailed rules for businesses to track all marijuana products from seed to sale, for how marijuana can be transported, for the type of security measures dispensaries must take and more.

Some of the regulations included in the proposals:

  • Dispensaries could only be open and deliveries could only take place from 6 a.m. to 9 p.m.
  • Shops could only sell up to 8 ounces of cannabis to one patient or caregiver on any single day.
  • Businesses would have to be at least 600 feet away from schools.
  • Edible products would have to be produced in serving sizes that have no more than 10 milligrams of THC and no more than 100 milligrams of THC for the total package.
  • Other manufactured products, such as tinctures and waxes, could have up to 1,000 milligrams of THC per package.
  • Shops could no longer give out free samples of weed or cannabis products.
  • Cannabis cultivators couldn’t farm on more than 4 total acres.
  • All products would have to leave shops in packaging that’s child resistant
  • The state would prioritize license applications for veterans and for businesses that were open in good standing with their local city or county by Jan. 1, 2016.
  • Applicants would have to list any past criminal convictions, plus provide a statement of rehabilitation for each one telling the bureau why they should still be considered for a license.
  • Businesses would get a six-month grace period. Anyone operating by Jan. 2, 2018 could continue to operate until July 2, 2018 if they’ve applied for a license and not been turned down. After that, they would need a license to stay open.
  • Shops could sell untested inventory for 180 after they get a license or until Dec. 31, 2018, whichever comes first, if they put a label on it saying that it hasn’t been tested in compliance with new state laws.

“We give them some time to get up and running,” Ajax said in a conference call Friday with reporters.

The bureau is also in charge of overseeing laboratory testing for all cannabis products. Detailed requirements for that process weren’t released Friday, but Ajax said they should be out May 5.

“The draft regulations represent a starting point for the state to begin to clean up what has become a highly unruly multi-billion-dollar unlicensed industry that is not subject to any regulations at all whatsoever,” said attorney Aaron Herzberg, who runs Santa Ana-based CalCann Holdings. He said more details are needed, but that the draft regulations “go a long way towards clarifying many issues that will be helpful for investors and the marijuana industry to better plan how to take advantage of the licensing opportunity that is now unfolding.”

The bureau also is in the process of putting together a cannabis advisory committee, which will help craft final regulations for both sides of the market.

Some lawmakers and industry insiders have expressed doubt that the bureau will get all of that done in time to start handing out licenses come Jan. 1. But Ajax insists they’ll meet that deadline, though she said they may have to issue temporary licenses in those early days while they wait to get background check results and to finalize other details.

“One of the big concerns was will the state be ready for this when we’re ready?” Nathan Whittington, secretary for the California Growers Association and a medical cannabis farmer just outside Ferndale, said after a quick review of the draft cultivation regulations Friday.

“We have a time to provide comment and really align those [regulations] with our county ordinance,” Whittington said. “It gives us a good opportunities to move forward as an industry, and I’m happy to see the state’s progress on this.”

Have an opinion?

The public can submit written comments on the draft medical marijuana regulations for the next 45 days. They can also attend public hearings that will be held throughout the state in coming weeks.

For distributors, transporters, lab testers and retailers

  • 10 a.m. to 1 p.m. June 1 at the Adorni Center, 1011 Waterfront Drive in Eureka
  • 10 a.m. to 1 p.m. June 8 in the Junipero Serra Building at 320 W. Fourth Street, Los Angeles
  • 10 a.m. to 1 p.m. June 9 in the Department of Consumer Affairs hearing room S-102 at 1625 North Market Boulevard, Sacramento
  • 1 to 4 p.m. June 13 in the King Library at 150 E. San Fernando Street in San Jose

For cultivators

  • 1 to 3 p.m. May 16 at the Delhi Center, 505 East Central Ave., Santa Ana
  • 1 to 3 p.m. May 18 at the Visalia Convention Center, 303 East Acequia Ave., Visalia
  • 1 to 3 p.m. May 25 at the Ukiah Convention Center, 200 South School St., Ukiah
  • 1 to 3 p.m. June 14 at the California Department of Food and Agriculture Auditorium, 1220 N St., Sacramento

For manufacturers

  • 10 a.m. June 8 at 50 D Street, room 410A/410B, in Santa Rosa
  • 10 a.m. June 13 at 1350 Front St. in San Diego

Staff writer Will Houston contributed to this report.

Medical marijuana, hemp protections included in federal spending bill

Published: • Updated:

By , The Cannabist Staff

The congressional spending bill that would fund the U.S. government through September includes the continuation of provisions to protect industrial hemp and state-based medical marijuana programs.

The $1 trillion omnibus bill, likely headed for a vote this week, includes an amendment previously known as “Rohrabacher-Farr” that prevents the Justice Department from using funds to hinder the implementation of medical marijuana laws in U.S. states and territories.

The Consolidated Appropriations Act of 2017 also includes provisions that restrict the Drug Enforcement Administration and Department of Justice from using federal funds to prohibit the transportation, processing and sale of industrial hemp as outlined in the 2014 Farm Bill.

The extension of the provisions was applauded by Rep. Earl Blumenauer, D-Oregon, who has supported the medical marijuana amendment alongside Rep. Dana Rohrabacher, R-California.

“Medical marijuana patients and the businesses that support them now have a measure of certainty,” Blumenauer said in a statement. “But this annual challenge must end. We need permanent protections for state-legal medical marijuana programs, as well as adult-use.”

If approved, the spending bill would provide funding through September, the end of the government’s fiscal year.

Lawmakers have started to mobilize to include a comparable provision–now called Rohrabacher-Blumenauer–for medical marijuana states in the 2018 fiscal year spending bill.

A similar amendment protecting state-based recreational marijuana laws was previously sponsored by Rep. Jared Polis, D-Colorado. He recently told The Cannabist he will back the inclusion of the so-called McClintock-Polis amendment in the coming fiscal year’s spending bill.

Alicia Wallace joined The Cannabist in July 2016, covering national marijuana policy and business. She contributes to the Denver Post’s beer industry coverage. In her 13 years as a business news reporter, her coverage has spanned the economy, Sports…

Arkansas putting final touches on medical marijuana program

Published: • Updated:

By The Associated Press

LITTLE ROCK, Ark. — The Arkansas Board of Health has unanimously approved rules that govern the issuance of marijuana-user registration cards and the labeling and testing of the drug.

A final version of the regulations were submitted to the board on Thursday, after state Department of Heath staff made a few technical changes to draft rules approved in January, the department’s chief attorney, Robert Brech, told the Arkansas Democrat-Gazette.

Brech said the rules will go to the Legislative Council for permanent approval in May. Under the regulations, applicants will be required to have a driver’s license or another state-issued identification card. Patients under the age of 18 will need the consent of a parent or guardian to obtain a card. The regulations also will allow visitors from other states to use their medical marijuana cards in Arkansas.

Qualifying conditions for a medical-marijuana card include cancer, severe arthritis and Crohn’s disease, along with chronic conditions that cause symptoms such as “intractable pain,” severe nausea or seizures.

Arkansas voters approved the Arkansas Medical Marijuana Amendment in November, legalizing the possession and sale of medical marijuana in the state.

The Arkansas Medical Marijuana Commission, created by the amendment, approved rules in April that govern the licensing of marijuana-cultivation facilities and dispensaries. The Alcoholic Beverage Control Board has approved rules governing those facilities’ operations.

The commission is expected to begin accepting dispensary facility license applications July 1.

The AP reported Monday morning that state lawmakers are returning to Little Rock to adjourn their regular legislative session and begin a special session mainly focused on changes to the state’s hybrid Medicaid expansion. The special session’s agenda also includes “technical corrections” to medical marijuana legislation.

Information from: Arkansas Democrat-Gazette, http://www.arkansasonline.com

After meeting with Sessions, Colorado gov thinks AG unlikely to crack down on marijuana

Published: • Updated:

By , The Cannabist Staff

Following a face-to-face meeting with U.S. Attorney General Jeff Sessions, Colorado Gov. John Hickenlooper said he doesn’t think a federal crackdown is imminent for his state or others that have legalized cannabis.

Hickenlooper shared some details of his meeting with Sessions in Washington, D.C. during an appearance Wednesday on MSNBC’s “Meet the Press Daily” with host Chuck Todd.

Hickenlooper described Sessions as “very direct,” noting that the former Alabama senator and prosecutor made clear his anti-drug stance and his concern about a trend toward more drug consumption.

“But he certainly listened,” Hickenlooper said. “We (in Colorado ) haven’t seen a big spike in consumption. We haven’t seen a significant increase in teenage consumption or any of these things.

“And he certainly was very direct and clearly said they’ve got a lot of priorities. And, at one point, he said, ‘Well you haven’t seen us cracking down, have you?’ I said, ‘No.’”

Hickenlooper said he interpreted that to mean the drug enforcement priorities for the Department of Justice rest with substances such as heroin, methamphetamines and cocaine.

“Doesn’t mean that he feels in any way that he should be cutting any slack to marijuana,” Hickenlooper said to Todd.

Hickenlooper said he described Colorado’s approach to marijuana legalization, and how the state is accumulating data and using tax revenue to support law enforcement efforts against illegal activity.

“We’re spending $6 (million) to $10 million to support the U.S. attorney (in Colorado) but also local law enforcement to make sure that if there are illegal grows in Colorado and that marijuana is going out of state, we’re going to nail them; we’re going to prosecute them,” he said.

State legislation was introduced this session to fund law enforcement and prosecution costs to clamp down on gray- and black-market marijuana activity and to impose plant count limits
so as to help prevent diversion out of state or to the black market. Hickenlooper is expected to sign both bills.

Hickenlooper also seemingly proved influential in lawmakers’ moves to scrap proposals that would have broadened the state’s regulations and allow for social pot clubs and marijuana home delivery.

Hickenlooper told The Cannabist last month that if he were to speak with Sessions, he would explain his opposition and his oath to the state Constitution. Hickenlooper said he would argue that “the country has potential benefit to be able to see this experiment through to a natural conclusion. Let’s go a couple more years and see and get more data and really see, ‘Are we worse off or better off than we were before?’”

Days later, Hickenlooper and governors from other legal cannabis states sent Sessions a letter urging him to “engage with us before embarking on any changes to regulatory and enforcement systems.”

Hickenlooper told Todd that he made those points and others to Sessions.

“He certainly understood that we’re trying to pull together data, and he’s a pretty strong supporter of states being laboratories of democracy,” Hickenlooper said on “MTP Daily.” “He is very clear. He is anti-drugs in all forms and he’s not going to, in any way, encourage anyone to start a marijuana business to think it’s a great idea to do or even safe to do so.

“That being said, he didn’t give me any reason to think that he is going to come down and suddenly try to put everyone out of business.”

Hickenlooper was traveling Thursday and couldn’t be reached for further comment.

Watch Hickenlooper’s full interview with Chuck Todd on “Meet the Press Daily”:

Alicia Wallace joined The Cannabist in July 2016, covering national marijuana policy and business. She contributes to the Denver Post’s beer industry coverage. In her 13 years as a business news reporter, her coverage has spanned the economy, Sports…