The National Cannabis Industry Association held its Business Summit last week at the Oakland Marriott City Center and it had a similar buzz as last year’s Marijuana Business Convention in Las Vegas. There were almost 5000 attendees and about 250 exhibitors with keynote speaker, Mexico’s former Presidente Vicente Fox and high profile industry celebrities around every corner. A highlight of my week was high-fiving Harborside’s Steve DeAngelo as I came down the escalator into the main reception area.
While the electric vibe and strong industry showing was present, the venue was ill-equipped for the number of attendees and exhibitors. There were a number of workshops that were held, and more than one became standing room only well before the seminar was set to begin. One in particular, a discussion covering the roadmap for licensing under the Medical Cannabis Regulation and Safety Act (MCRSA) Regulations and Adult Use Marijuana Act (AUMA), set to take effect in 2018, was held in a small room with no A/C. It was lucky for Dave and I that we arrived in the room 30 minutes early to get a seat. Unlucky as it turned out when two aging marijuana dinosaurs took our seats while we were in the bathroom.
Conference etiquette…”Please don’t take anyone’s seat. It’s just rude, and you never know whose seat you’ve just stolen.”
By this time, there wasn’t a seat left and we quickly found room in the back by the PA equipment. The temperature climbed steadily north of 100 degrees with every body that attempted to jam in to hear the speakers. What made it worse, was the facilitator’s choice to close the room doors in order to bar additional people from entering the room and muffle the clamor that was audible from within the sweatbox conference room. The distinguished panel included:
· Khurshid Khoja – Principal at Greenbridge Corporate Counsel;
· Lori Ajax – California’s BMCR Chief;
· Avis Bulbulyan – CEO at SIVA;
· and Lindsay Robison – Executive Director for the CCIA
After the speakers had taken the podium, within five minutes the mass of bodies began to simultaneously combust with perspiration. By the sixth minute I had no choice but to lead the mass exodus from the room, and the fresh, clean air that met my face as I cracked open the door was like the first glass of wine after crossing the desert. I was ok leaving Dave in the room to collect information because he had it covered. I don’t think that any thought was given to the organization of the workshops, which was regrettable because this conference cost attendees $900 per ticket. The actual showroom floor also felt cramped as many exhibitors were placed in random hallway areas in and around the main hall and workshop rooms.
Otherwise the NCIA Business Summit was everything we had hoped to experience. The after parties did not disappoint either, from the opening of the summit on Monday evening, Cova Soft’s launch party, New Frontier Data’s reception, and the Cannabis Marketing Association’s Tuesday Night Fundraiser Reception, there was no shortage of alcohol or opportunities to mix it up with industry heavy hitters.
Dave attended the Continuing Legal Education Seminar on Monday which focused on both current and emerging regulations in the banking, Insurance, accounting, and corporate structure for cannabis businesses. Here is a quick synopsis of each of the main topics:
1) BANKING – Currently there are 368 banks in the United States that are openly banking cannabis businesses. These banks are filing the mandatory Strategic Risk Associate (SRA) documents with the Federal Reserve even though cannabis businesses are illegal on the federal level and are considered high risk. The result is that the federal reserve is either not caring about these banks offering financial solutions to cannabis businesses or they are just being over looked. My thought is that it’s the former.
2) INSURANCE – As demands for insurance are growing in the cannabis industry so are the vendors offering it. However, they are running in to the same problems directly related cannabis vendors are, banking. Some of the top insurance brokerages are losing their banking relationships by insuring cannabis businesses. The good news is more and more brokerages are offering insurance and the policies are growing regrinding what can be insured. Yay!
3) ACCOUNTING – 226 U.S.C 280(e) currently prohibits certain deductions from being taken in a business that traffic’s schedule 1 and 2 controlled substances. What does this mean? Many cannabis businesses cannot deduct certain costs of goods sold (COGS) on their tax returns. However, there are loop holes for everything.
4) CORPORATE STRUCTURE – Medical Marijuana businesses are supposed to be operating as a California Mutual Benefit Corporation at this point. Its a type of non profit designed only to benefit the members or patients. However, with recreational use being on the forefront businesses will be allowed to operate “for profit” and file under a traditional corporation or LLC. Yay!
Our stand-out, top exhibitor picks were:
COVA SOFT – Cova, headquartered in Vancouver BC is redefining what a POS and tracking system in this industry should look like. The product is built for the future of this industry and Cova’s exhibit architecture was beautiful, and it was clear their interior designer worked hard to make attendees forget that they were standing in the middle of a crowded conference hall.
W VAPES – Both this product and booth were well-marketed and this exhibit was a brilliant example of what an exhibit should look like. A ping pong table, corn hole contests, and swag for days kept this booth on fire. The founder, Amber Abbott has grown this company from the ground up and the future for this MJ vape manufacturer is bright.
CANNAGUARD SECURITY – This cannabis operation security exhibitor was a favorite for their automated ground security drones, which looks like the equivalent of a robot pit bull on steroids. If I were to sneak into a large grow to steal something and was approached by this machine, I’d void my bowels.
All around it was a great show and we can’t wait to exhibit at The California Cannabis Industry Association Business Summit in our backyard at the Anaheim Marriott in Orange County September 21-22, 2017. http://www.californiacannabisbusinessconference.com/
*They have held a block of discounted rooms if you reserve before August 29. See you there.