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Exploring Program Opportunities in

a Developing Industry, Marijuana


Dispensary Management

Leo L. Trudel, Ph.D.


University of Maine at Fort Kent

Questions about Marijuana

With the current environment of this


industry constantly changing, please raise
your hand if you feel you understand where
the industry is today?

Do you know someone who uses medical


marijuana and finds relief as a result?

Should marijuana be legalized and taxed for


recreational use?

Current Environment

Still Illegal by the Federal Government,


classified as Schedule I Drug (same as
heroin)

Medical Marijuana is legal in 23 states,


Washington D.C., Guam & Puerto Rico

Recreational Marijuana is legal in 4 states

Relationship with
Agriculture

Purchased first farm at age 22, 2nd at 26


Associate Professor of Business
(finance/entrepreneurship) UMFK
Doctoral Dissertation: Exploring Relationships
between Business Plan Development and
Meeting Projected Goals for Maine Farmers
Framed the current Maine Hemp Law (Title 7)
Executive Director/Owner of the first licensed
dispensary to open in Maine and on the east
coast (October 2010)

Full Disclosure

Colleagues Opinions

How to meet and make friends in prison

What really is the difference between


probation and parole

Offshore accounts is the new banking model

Introduction

Purpose: Demonstrate rationale for the development of a


Specialty Business Program in Marijuana Management.

Problem Statement: The nascent marijuana industry is


seeking a skilled workforce to meet its current
management objectives while pursuing creative workers
for its ever changing demands.

Methodology
This study took a mixed methods approach to
assessing the current environment of the industry, its
needs and its future.
Empirical, Focus Group, Literature Review, Survey

Research Limitations &


Opportunities
Research on the subject of marijuana
management is scant
Little to no peer reviewed research on the
subject
Big difference between running a lemonade
stand and a commercial juice factory
Sentiment is changing slowly and there
seems to be few researching the industry
needs from a business/academic
perspective

Various Management
Programs
Health Care Management
Sports Management

Winter Sports Management


Golf Management

Casino Management
Hospitality Management
Project Management
Supply Chain Management

Why not Marijuana


Management?

History

2900 BC, Emperor Fu Hsi credits Cannabis for


its yin & yang medical qualities
200 BC-500 AD, Literature reveals the use of
medical cannabis throughout the Middle East
Early 1800s Medical qualities are touted in
the West, France, England & U.S.
1850s, Cannabis is introduced to American
Pharmacies
1905, twenty nine states regulate cannabis
19251970, series of laws passed with
various legal implications including taxes,
fines and imprisonment

Cannabis Tincture (1906)

History continued
1968, University of Mississippi becomes the
official federal marijuana growing facility
1973-1978, nine states decriminalize
1976, Randall sues federal govt and wins
because he needs cannabis for his
glaucoma
1980, Marinol is created, synthetic
marijuana used on cancer patients
1990 Scientist discover CBD receptors
1995-Presently 23 states MMJ & 4
recreational states

State

Year
Passed

Possession Limit

1. Alaska

1998

1 oz usable; 6 plants (3 mature, 3 immature)

2. Arizona

2010

2.5 oz usable; 12 plants

3. California

1996

8 oz usable; 6 mature or 12 immature plants

4. Colorado

2000

2 oz usable; 6 plants (3 mature, 3 immature)

5. Connecticut

2012

2.5 oz. usable

DC

2010

2 oz. dried; limits on other forms to be determined

6. Delaware

2011

6 oz. usable

7. Hawaii

2000

4 oz usable; 7 plants

8. Illinois

2013

2.5 ounces of usable cannabis during a period of 14 days

9. Maine

1999

2.5 oz usable; 6 plants

10. Maryland

2014

30-day supply, amount to be determined

11. Massachusetts

2012

60-day supply for personal medical use (10 oz.)

12. Michigan

2008

2.5 oz usable; 12 plants

13. Minnesota

2014

30-day supply of non-smokable marijuana

14. Montana

2004

1 oz. usable; 4 plants (mature); 12 seedlings

15. Nevada

2000

2.5 oz usable; 12 plants

16. New Hampshire

2013

Two ounces of usable cannabis during a 10-day period

17. New Jersey

2010

2 oz. usable

18. New Mexico

2007

6 oz usable; 16 plants (4 mature, 12 immature)

19. New York

2014

30-day supply non-smokable marijuana

20. Oregon

1998

24 oz usable; 24 plants (6 mature, 18 immature)

21. Rhode Island

2006

2.5 oz usable; 12 plants

22. Vermont

2004

2 oz usable; 9 plants (2 mature, 7 immature)

23. Washington

1998

24 oz usable; 15 plants

Opportunities

Need a Career Change? Here are 16 Jobs in


the Marijuana Industry (Money & Career,
2016)
Why Legal Cannabis Is 2015's Best Startup
Opportunity (Forbes, 2015)
More Than Just Revenue: The Social Capital
Benefits of Legal Cannabis (Huffington Post,
2016)
College students working in the marijuana
industry: Brief results (Humboldt, 2014)
Buffetts Berkshire has unit that helps
marijuana growers (Bloomberg, 2014)

Opportunities
(NORML, 2015)

U.S. Marijuana GNP (in Billions)

(Marijuana Business Media, 2015)

$35.0

$30.0

$25.0

$20.0

$15.0

$10.0

$5.0

$0.0
2013

2014

2015

2016

2017

2018

2019

Economic Growth

For every $1.00 of legally sold marijuana


there is a minimum of $2.60 of economic
value that enters the American economy.

At full legalization industry employment


estimates are as high as 250,000.

Cannabis versus Other


Industries
Industry

Annual Revenue

Beer

$100 Billion

Recreational (estimated if legalized) $40 - $45 Billion


Wine

$36 Billion

Medical Marijuana

$1.9 - $2.1 Billion

E-Cigarettes

$1.5 Billion

Recreational (2015)

$800 - $1 Billion

M & Ms

$600 Million

Average Sales Per Square


Foot
Luxury Jewelry

$3,017

High-end athletic wear

$1,936

Recreational Marijuana

$1,773

Medical Marijuana

$1,143

Special Tea Store

$893

Boutique Shoe Store

$887

High-end department store

$508

Liquor store

$250

Pharmacy

$241

Top 10 MJ Global Companies


(MBM, 2015)

Company

Segment
Ancillary
Insys Therapeutics
Product/Services
Ancillary
GW Pharmaceuticals Product/Services
Ancillary
Cara Therapeutics
Product/Services
Crown Baus Capital Ancillary
Corp.
Product/Services
Canadian Cannabis
Corp.
Cultivator/Dispensary
Tweed Marijuana Inc. Cultivator/Dispensary
Pharma Cyte Biotech Ancillary
Inc.
Product/Services
Ancillary
Cann Labs Inc.
Product/Services
Infused
Cannavest Corp
Products/Extractions
Medical Marijuana
Ancillary
Inc.
Product/Services

Ticker
Symbol

Market
Cap

INSY

$1.88 B

GWPH

$1.80 B

CARA

$236.69 M

CBCA

$136.37 M

CCAN
TWD:CA

107.02 M
$101.91 M

PMCB

$97.32 M

CANL

$91.62 M

CANV

$91.51 M

MJNA

$89.87 M

Differences

Operations
Growing
Processing
Dispensing

Marketing
Accounting/Finance
Legal/Regulatory

Operations, Growing
Inventory, Seed to Sale
Various Methodologies

Mediums
Environments (Indoors, Outside, Greenhouse)

Ever Changing Technologies

Energy
Nutrients
Software/Hardware
Extraction equipment
Lab testing

Operations, Handling

Harvesting
Trimming
Processing finished product

Adding Value

Edibles/Capsules
Topicals
Rolling
Concentrates

Kief/hash
Tinctures
Cooking Oil
Vapor Oil
RSO

Operations, Dispensing

Customer service (bud tending)/Delivery service


Patient orientation
Inventory management
Patient management
Allocation
Physician certification
Side effects/special considerations/adolescents

Point of sale management system


Delivery management
Product knowledge/consumptions options
Various medical conditions
Unlimited number of strains

Marketing

Education

Qualifying conditions
Consumption methods
CBDs/THC (constituents)
Indica, Hybrid, Sativa
Hospital/nursing home regulations/hospice

Connoisseurship (wine)
Fear factor
Social networking limitations

Accounting/Finance
(compliance)
Treasury impacts the legality of industry
banking (Suspicious Activity Reporting
(SAR) & Bank Secrecy Act (BSA))
SEC suspends trading in 5 industry related
companies (U.S. SEC, 2014)
Insurance
HIPAA Compliance
Credit Cards

US Code 280E: Expenditures in


connection with the illegal sale of
drugs
No deduction or credit shall be allowed for any
amount paid or incurred during the taxable
year in carrying on any trade or business if
such trade or business (or the activities which
comprise such trade or business) consists of
trafficking in controlled substances (within the
meaning of schedule I and II of the Controlled
Substances Act) which is prohibited by Federal
law or the law of any State in which such trade
or business is conducted.

Legal, Conflict & Confusion

Federal

Department of Justice
National Institute on Drug Abuse
Center for Medicare/Medicaid Services
Food & Drug Administration
U.S. Department of Agriculture
Veterans Administration
Department of Education
U.S. Customs and Border Patrol

State

Legislature
Department of Health and Human Services
State & Local Police Departments
Attorney Generals Office

Management

Human Resources
Additional state requirements

Strategic

Board of Directors
Best practices
Changing environment
Banking/accounting regulations

Security requirements
Vary from state to state

Trends to Watch
(Cannabis Enterprise, 2015)

Lab Testing services using ISO/IEC 17025


standards
Greenhouse development that uses light
deprivation technology
Expansion of patents and trademarks
Expanding markets for CBD oils (Charlottes Web)
Marijuana tourism
More states adopting medical and recreational
legislation
Rescheduling of marijuana from Schedule I to
Schedule II

Ancillary Supportive Services/Products Needed

Regulatory
Financial and accounting acumen
Systems management/performance auditing

Operations
Lab testing
OUI measurements

Marketing
Branding/trademarks/patents/education

Finance/Accounting
Cost control/revenue recognition/joint ventures

Technology
Measurement/quality
Business intelligence

Legal
Medical acceptance

Management
Academic leadership

Unlikely Supporters
(Huffington Post, 2015)
Glenn Beck, Former Fox News Commentator
Rahm Emanuel, (Former Obama Chief of Staff)
Rick Perry, Republican Governor of Texas
George Soros, Investor/Philanthropist
Warren Buffett, Investor/Philanthropist
Dr. Sanjay Gupta, M.D., Charlottes Web
Dr. Raphael Mechoulam, Discoverer of THC
Juan Manuel Santos, President of Columbia
Sarah Palin, Former Governor of Alaska
Tony Bennett, Grammy Award Winning Singer

Note from the Tobacco Research


Team at RBS Capital Markets
Investors are champing at the bit. It is only a
matter of time until investors start asking
questions about how marijuana legalization
will fit into the bigger picture we believe
full federal legalization of marijuana in the US
would likely lead tobacco companies to
reconsider this space.
(Business Insider, 2014)

Questions?

Thank You