How to Navigate Cannabis Industry Compliance Regulations

How to Navigate Cannabis Industry Compliance Regulations

The Colorado cannabis industry compliance regulatory landscape has changed dramatically over the last decade here in Colorado. Long gone are the backpack days, when anyone with a closet and a green thumb could cash in on the fledgling market.

Pre cannabis industry compliance

Retail cannabis sales for recreational use threw a whole new set of rules and regulations into the mix. For anyone who has worked in the industry and tried to maintain within marijuana grow compliance, it sometimes feels like the rules are written arbitrarily by people who have never worked in cannabis cultivation. Running a profitable grow and maintaining compliance along the way in an ever-shifting legal landscape is as challenging as it sounds.

Once upon a time, talented home growers could walk into a dispensary with absolute fire, and flip it on the spot for upwards of $4500 per pound. There were no safety checks, tests for pesticides, microbes or anything else for that matter. They were the days aptly labeled the wild west era of the Colorado cannabis industry. Those pre cannabis industry compliance days didn’t last long, and it was a miracle they happened at all.  New states hopping on the legalization bandwagon have bypassed that phase entirely and seemingly learned from Colorado’s mistakes.

The evolution of cannabis industry compliance

By late 2010, Colorado mandated that medical dispensaries grow at least 70 percent of the cannabis they sell. This forced dispensaries to hire growers of their own. Along with that came a slew of new cannabis grow rules, regulations and the modern era of compliance was born. Nowadays, every last detail of a grower’s day is mapped out. Each plant is tagged, numbered and monitored by the state. Every bag of waste is counted, weighed and the contents are shredded beyond recognition before disposal. Every step of the way, the eye of the Marijuana Enforcement Division documents everything.

There are a few cannabis industry compliance areas which all operations struggle with, and it isn’t really their fault. The vast amount of regulation hoisted upon this burgeoning industry is a lot, even for seasoned professionals to swallow. The biggest shortcomings of dispensaries are in the areas of physical inspection, security, licensing,  inventory and financial issues. Physical inspections are akin to the health inspector looking for cat fur at the neighborhood Chinese restaurant. Anyone who has worked in a service industry knows that inspectors always find something.

Security & inventory compliance

Security is a bane of every cannabis business owner. Adhering to the Marijuana Enforcement Division’s strict security regulations, which include specific numbers of cameras per facility in very specific locations, is no easy feat. Security compliance mostly revolves around documentation of who went where and when, and keeping logs on specific security activities.

When it comes to inventory, the Marijuana Enforcement Division has done everything they can to eliminate the possibility of a black market forming right out the back door of legal grow operations. Inventory compliance is one of the biggest concerns for dispensary and grow owners. Compliance errors involving innocent mistakes, such as placing a recreational plant in a medical room could result in an entire crop being destroyed. The government wants to know where all of the weed is all of the time, and has implemented a system to achieve just that.

Pesticide compliance

Lately, the trends in grow compliance have mostly fallen to the regulation of pesticides. Understanding pesticides is a complex topic, so to make it easy, the state issued a list of approved organic products. Here we are years after the list was finalized, yet business who are established and should know better, are continually getting busted using banned pesticides. This example alone shows the need for increased regulation and the need for every grower and dispensary owner to want to remain in compliance. The last thing we want is to fall victim to is a company that wants to take shortcuts with our health.

For more information on compliance within the Colorado cannabis industry, make sure to listen to The Real Dirt with Chip Baker episode featuring Matt Bickel of Bickel Consulting.

What do you think about cannabis industry regulation? Let us know on social media.

Five 420 Friendly Ways to Enjoy a Holiday Weekend in Denver

Five 420 Friendly Ways to Enjoy a Holiday Weekend in Denver

It’s a holiday weekend in Denver and it’s time to figure out what you’re going to do with that extra day. In an amazing city like Denver, there are so many fun activities and strains to smoke that it might seem overwhelming. Good news, we did the decision making for you. Here are our top five choices of fun things to do on your holiday weekend and the strains to bring along.

1. The Ogden Theater with Durban Poison

Concerts are the one of the best ways to celebrate life (and long weekends). Luckily, Denver‘s local music scene is always popping. For a good show, you’re going to need a strain that will energize you and won’t burn you out. This weekend Drive By Truckers are playing two nights at The Ogden Theater. You’re not going to want something that will let your mind wander with the music while your eyelids stay wide open. Durban Poison is a great choice for lofty head highs that won’t drain you of energy.  Durban Poison is a pure sativa that is strong and flavorful. It’s a popular choice among cannabis enthusiasts making it pretty easy to find.

2. Skiing adventures with Northern Lights

We know it’s a little cold out, but the crisp Denver air is just a little sweeter this time of year. Rent a little cabin, hit a bed and breakfast, or go skiing for the day. If you want to stay close to Denver and still enjoy that fresh pow, check out Arapahoe Basin. Enjoy the very best of the winter season and don’t forget to bring a little nug of cheer. A nice indica will help take the edge off of that winter chill. Nothing goes better with winter than Northern Lights. Northern Lights is a popular indica hailing from the Pacific Northwest. The sweet and piney flavors will go well with your wintertime outdoor activity of choice.

3. Gaming with Blue Dream

For those of us who are scared of a little frostbite and prefer to spend the day indoors, cozy in our Denver homes, plugging into an Xbox or Playstation can be just as satisfying, especially since you don’t actually need to leave your house to hit the ski slopes anymore. Video games have become a perfectly good way to spend your time…or all of your time. Now just which strain do you need to go along with a day in front of the tube? You want to stay focused so a nice hybrid like Blue Dream will do the trick. Blue dream is sweet and fruity strain with a high THC count that will keep you elevated game after game.

4. La La Land with Death Star

Everyone loves going to the movies. In Denver, there are a series of historic Landmark Theaters that make the move going experience even better. Playing this weekend at The Mayan in Denver is “La La Land,” which is quickly cleaning up in awards and accolades.  You’ll want to stay focused enough to follow the plot, yet relaxed enough to really enjoy yourself. Regardless of what movie you go to see, Death Star is what’s going to get you there. Death Star is a pungent indica dominant hybrid known for its heavy diesel flavor. Use the force and grab some Death Star, the perfect compliment to a day at the theater.

5. Doing nothing and dabbing

You don’t have to succumb to the pressure of finding something to do in Denver on your holiday weekend. You can sit at home, relax and take advantage of not having to anything whatsoever. For the extreme tasks of sitting on the couch and staring off into space, skip the bud all together and get yourself a nice concentrate. Shatter, wax or butter doesn’t really matter, the concentrated dose of THC will put you in a place that will make doing nothing feel great.

What are your favorite strains for long weekends? Let us know on social media.

How Section 280E Affects the Cannabis Industry

How Section 280E Affects the Cannabis Industry

One of the benefits of owning a business in the U.S. is the leeway one has in writing off business related expenses to reduce your overall tax burden. Unfortunately, when it comes to the cannabis industry, business owners are not afforded the same luxury.

What is Section 280E?

Under section 280E of the U.S. tax code, tax credits are not available for incomes derived from substances listed as either Schedule 1 and Schedule 2. In other words, cannabis industry entrepreneurs are drug dealers in the eyes of the feds and therefore get no breaks.

Where did Section 280E come from?

Section 280E came about in September of 1982, after a cocaine dealer was busted, but maintained he had the right to write-off non-drug related expenses as part of his business operations. Nice try, but the court disagreed and shortly after, the IRS adopted 280E. Fast forward thirty plus years and the situation has changed. The overwhelming consensus among Americans is that marijuana should be legal. A small faction of individuals in various parts of the government whose careers are dependent on marijuana prohibition are doing everything they can to delay the inevitable, including the IRS.

How 280E affects the cannabis industry

The IRS has not made any progress in softening the burden for cannabis entrepreneurs as they continue to do everything in their power to make operating a cannabis business a difficult as possible. While most entrepreneurs freely write-off just about everything, cannabis business owners are restricted to a handful of deductions including labor and limited costs surrounding production. The failure to progress with the attitudes of the populace and create new regulation for cannabis entrepreneurs demonstrates the resistance of the old guard.

The cannabis industry is raking in cash hand over fist. While the IRS can do nothing to stop the industry from growing, they can do everything in their power to maximize the amount of money they extract from it before more comprehensive, cannabis industry specific tax law can be written. Efforts have been made to reign in the IRS in as far as cannabis goes. In 2013, legislation was introduced that was meant to remove cannabis business from federal tax regulation while new cannabis specific law could be written. While legislation like this seems to go nowhere, the reality that cannabis must be dealt with under its own tax parameters is becoming harder to ignore.

Section 280E successes in the cannabis industry

There have been incremental victories won, including the 2007 CHAMP decision. CHAMP, a medical dispensary in California was taken to court over its tax bill. The lawyers for CHAMP argued that despite the strict guidelines of section 280E, cannabis businesses still had a right to deduct the costs of operating a business that were not related to the trafficking of controlled substances. Ultimately the ruling allowed cannabis entrepreneurs who ran multiple businesses under one roof to deduct some of the operating costs of both companies. As example, CHAMP ran a dispensary which sold marijuana, but also ran a consulting and patient referral business.

The CHAMP ruling allowed many cannabis businesses to split their operations into multiple companies as a way to get around many of the 280E regulations and still remain in legal compliance. The intent of section 280E was fundamentally to prevent cocaine dealers from writing off mansions and yachts, but the emergence of industries that overlap with the previous law just doesn’t square.

Tax code 280E reform and progress

The failure to implement new tax code for the purpose of distinguishing between legal cannabis businesses and illicit drug dealers has done nothing but force legitimate businesses to resort to makeshift fixes, like the CHAMP ruling and other loopholes they can find. Much like prohibition created a black market, inappropriate tax law does nothing but force cannabis businesses to find new and creative ways to reduce their tax burden. As cannabis acceptance continues to grow, it would seem that these problems in the tax code are transitional. Let’s hope they are.

What do you think about Section 280E reform? Let us know on social media.

The Pros and Cons of Vertical Cannabis Grows

The Pros and Cons of Vertical Cannabis Grows

As people look for better usage of space for cannabis growing, vertical cannabis grows have come under the spotlight. To maximize yields, growers traditionally analyzed how many grams of marijuana were being produced per square foot. Taking your cannabis growing up, instead of out, seemed like the obvious solution.

How vertical cannabis grows work

But how exactly do you grow cannabis vertically as opposed to the traditional flat grow system that we have all become accustomed to? There are several types of vertical cannabis grows, but they all revolve around similar principles. They all look to increase production while maximizing efficiency of space using a system of vertical lights and reflectors.

Vertical cannabis grows can employ either traditional soil systems or hydroponics, however, the set-up for both of these systems is quite different. The one thing they have in common is that the vertical cannabis plant arrangement is circular around central light source. If you are considering a vertical grow, it’s a great way to produce quality cannabis but there are a few pros and cons to consider before making the switch.

The pros of vertical cannabis grows

One of the biggest benefits to vertical cannabis growing is the increase in yields. Vertical growers swear up and down that when done right, increased light distribution through the use of reflectors leads to heavy weights. Some have even claimed yields as high as 2.5 grams per watt. Achieving these kinds of yields through the cannabis growing stages takes practice and a precision not easily achieved. One of the major downsides of vertical growing is the setup cost. Building your own circular shell complete with reflectors and shelving can save you some money, but all-in-one vertical grow systems will cost you a chunk o’ change.

Extend your cannabis growing cycle

A vertical cannabis grow will also let you squeeze in one extra cycle annually which means more product at the end of the year. Often clones are only allowed to remain in the vegetative state for a couple of days which greatly increases their exposure to the twelve-hour light cycle. One idea of vertical farming is grow more plants of a smaller size.

Starting the cannabis flowering stage early helps vertical growers meet this goal. Small plants, however, do not necessarily mean small buds. The down side to this is that smaller plants means you need a lot more of them. A lot more, which means you’re going to want to keep a mother on hand or have access one.

The cons of vertical cannabis grows

Another thing to keep in mind is that balancing temperatures and humidity with plants literally stacked on top of each other can be difficult. The more plant mass located in a confined space means temperatures and humidity will go up. That triggers the need for excellent cooling and ventilation. The never-ending battle between environment and your HVAC can be exacerbated by the tight quarters of a vertical grow.

So what’s the consensus?

The single biggest benefit of a vertical grow is space. Arranging plants vertically and allowing them to bathe in a central light source utilizes the cubic feet in the room that would otherwise go ignored. Growing up instead of out increases efficiency and will ultimately lead to an all-around boost in production.

The single biggest challenge to vertical growing isn’t the method or the technique or even the price. The biggest challenge to overcome in vertical growing is you. Overcoming what you have learned before and reshaping your perceptions of what it takes to grow quality cannabis will be the hardest step you take on your venture into vertical cultivation.

What do you think about vertical cannabis grows? Let us know on social media.

Everything You Need to Know about HydroLogic Water Filters

Everything You Need to Know about HydroLogic Water Filters

Clean, fresh water is essential to carry the building blocks of life your plants need to grow. Public water sources, although filtered, still have remnants of contaminants like chlorine and a host of other nasty substances you won’t want to feed your cannabis plants. HydroLogic filtering systems are the perfect solution for ensuring your water is as clean as can be.

HydroLogic Filters

HydroLogic Purification Systems make a variety of top notch water systems, from home grow to industrial scale. They have earned their reputation as one of the top water purification systems manufacturers around. It’s hard to find a grow these days that doesn’t have a HydroLogic filter installed somewhere. HydroLogic’s SmallBoy and Stealth-RO200 water filtration systems are all you need to make sure your plants receive the very best in hydration.

The HydroLogic SmallBoy

The HydroLogic SmallBoy is a de-chlorinator and sediment filter that will rid your water of up to 99 percent of chlorine and as much as 90 percent of other contaminants like silt and rust. The SmallBoy attaches to any water source, from a hose to your kitchen sink. They are durable and can be permanently affixed to your already existing nutrient-doser. Better yet, the SmallBoy can pump out 60 gallons per hour of pure H2O, filtered down to 5 microns. The SmallBoy is great for removing chlorine and sediments, but isn’t built for removing heavy toxins like pharmaceutical residues and other chemicals. Each SmallBoy comes with the following accessories: SmallBoy Filter Housing; Filter Housing Wrench; Green Carbon Filter; Garden Hose Connectors; White Sediment Filter; 1/4” Ball Valve Shut-Off; and 1/4” Blue Tubing. You can watch this video to learn how to replace the SmallBoy filter.

The HydroLogic Stealth-RO200

The HydroLogic Stealth-RO200, on the other hand is a reverse osmosis system that will strip your water of any potential toxins that could affect your grow. Fluoride, lead, iron and excess calcium are caught by the Stealth-RO200’s membrane element, keeping them out of your garden. The Stealth-RO200 utilizes the same basic filters as the SmallBoy with the addition of the membrane element.  It can pump up to 100 gallons per day of purified water and just like the SmallBoy, is a snap to set. With the Stealth-RO200, you can even adjust the ratio of waste to product water. The Stealth-RO200 comes with the same accessories as the SmallBoy plus a few extras: Stealth-RO Membrane; 3/8” QC X Garden Hose Connector; Double Ended Wrench; Pressure Gauge Assembly; RO200 Eco-Waste Reducer; and RO200 Flow Restrictor. You can skip the instructions and watch this video to learn how to assemble the Stealth-RO200.

To grow hydro, get yourself a water filter system

HydroLogic’s water filter systems are the best in the business. There’s a reason they can be found in cannabis grows around the world. Growing quality cannabis is about ensuring your plants get the very best nutrient mix and that starts with clean water. If you want to grow-hydro, either in your basement or in a 44,000 square foot grow house, you’ll need a HydroLogic water filter system.

What are your tips and tricks for using a HydroLogic filter system? Let us know on social media.

What Does Jeff Sessions Mean for the Cannabis Industry?

What Does Jeff Sessions Mean for the Cannabis Industry?

Donald Trump is now President Elect and along with that comes the grip of fear for what he may do to our beloved cannabis industry. Now we face with the reality that Alabama Senator Jeff Sessions is going to be heading up the Justice Department as Attorney General. Sessions is a hard right conservative that has made no qualms about his disdain for cannabis.

What’s the deal with Jeff Sessions?

The electorate sent some perplexing messages on November 8. They overwhelmingly declared that marijuana legalization is the will of the people while simultaneously electing the one man who could put an end to it all. Donald Trump has previously come out in favor of medical marijuana, however, we have no way to gauge whether or not the truly terrific words being strung together at any given moment by this man have any substance to them whatsoever. The first sign that he could really care less about cannabis and legalization is his appointment of Jeff Sessions as Attorney General. Sessions believes marijuana destroys families, fuels crime and has even claimed that it has caused nothing but problems in the states that have legalized. I’m not sure where our future top law enforcement official gets his information, but he must not have heard about the billion dollars in revenue that the state of Colorado has generated in sales through the end of October.

The saving grace: cannabis’ economic stimulus

Cannabis businesses have created tens of thousands of jobs not only in Colorado, but in California, Oregon, Washington and over two dozen medical cannabis states. This translates into tax dollars for governments and text books for children. But like the rest of Trump’s administration, Jeff Sessions fits the mold: Ultra conservative and not afraid to show it. This does not bode well for the booming cannabis industry which has received the green light from voters in eight states this voting cycle. There is a glimmer of hope, however, that Jeff Sessions will not unleash the hounds, otherwise known as the DEA, on the will of the people. While there is no doubt that Jeff Sessions couldn’t care less about what you, me or the American people think, he does care about money, the one thing the industry seems to have no shortage of. Cannabis sales reach new heights every year. With the number of recreational states nearly doubling, the overall impact of the marijuana industry on jobs, education, and the overall economy could be staggering.

Cannabis is good for society

It is obvious to everyone who live with their head out of the sand, that marijuana legalization not only creates jobs and helps kids, it changes cultures. Crime rates drop, health care usage decreases, and new hope is brought to communities where perhaps industry and a chance at a better life had gone. Cannabis itself eases pain and can heal the individual. Legalization can heal whole communities. It is hard to predict what will happen under President Trump and Attorney General, Jeff Sessions. Trump has made a point of noting the financial crisis we are in and has harshly criticized wasteful spending. The country can no longer afford to throw away hard earned tax payer dollars on a war against cannabis. Hopefully Donald Trump will agree.

How do you think Jeff Sessions will affect the cannabis industry ? Let us know on social media.

Social Share Buttons and Icons powered by Ultimatelysocial

Like The Real Dirt? Please spread the word :)