In this edition of "Rising High," The Fly conducted an exclusive interview with Michael Klein, chief executive officer of God’s Greenery and askCMD, on the Marijuana Opportunity, Reinvestment, and Expungement Act. Here are some of the highlights:
THE MORE ACT: The House of Representatives is expected to vote this month on the MORE Act, a comprehensive cannabis legalization bill that would federally deschedule cannabis, expunge prior cannabis convictions, and impose a 5% federal sales tax to be reinvested in communities most impacted by the drug war. “I think there’s a very good chance that it will pass Congress, likely to go down party lines,” Klein said. “There will be less of chance that the senate will actually take the bill to the floor this session.” The CEO added he expects the passage to yield several benefits for the future of cannabis in America. “There’s a lot of positive advantages. One, the fact that this conversation of descheduling cannabis on a federal level changes the game across the entire United States,” he said. “Right now you have the patchwork of state laws that vary from state to state and are basically clear as mud because of that federal schedule so that in and of itself is a huge move.” Klein said the descheduling will also change banking and research for the cannabis industry. “With the SAFE banking you still have reticence from the financial community to get involved in cannabis because it remains a Schedule I drugs” he said, adding, “Coming off schedule does change it for research institutions too. Right now they have to go through a very tough process to get access to government grown cannabis where if it’s no longer on schedule, they have infinite other places they can go. Timing wise, there are lots of pockets of research going on around the country I’m sure that would accelerate.” The CEO said unless the bill goes to law, there will still be “a big hill to climb.”
RACIAL INJUSTICE: When asked about how the coronavirus has changed perceptions about the cannabis industry, Klein noted how COVID-19 has caused huge budget deficits for states leading them to look for more incremental revenue. “I think that’s the wrong reason to legalize cannabis to the extent that they should be looking at legalization as an opportunity to have a positive impact on communities that have been affected by outdated laws, particularly people of color,” he said. The CEO added the MORE ACT signals a step towards fixing systematic racial injustice that has plagued communities of color. “Obviously the scheduling, the ability to erase minor criminal offenses, expunge records, the fact that it also includes a 5% tax going towards those that have been impacted in the past by the war on drugs, all very positive steps.” As states look to implement legalization and combat systematic injustice, Klein said they will need to ensure that their taxes are being funneled in a way that support the affected communities. “The industry at large needs to make this front and center in terms of pipeline of talent and individuals that are coming into companies,” he said, adding diversity is important in every business. “For me, it’s all about having a unique set of distinct voices,” Klein said. “The fact is that time and time again, blacks and Latinos have been affected on all levels of the cannabis industry and yet they’re such important part of the growth and acceptance of cannabis within culture.”
GOD’S GREENERY & ASKCMD: God’s Greenery is a wellness line combining organic hemp-derived CBD with other plants and herbs with healing properties, designed for the Christian community. “It is very much centered around distribution to a Christian audience who view cannabis-derived CBD as part of a wellness regimen,” he said. “But CBD in and of itself is not a product, it’s an ingredient and combined with other plants and herbs taken from God’s Greenery it creates the entourage effect to have efficacy for individuals.” askCMD.com is a proprietary recommendation engine that uses user input to guide shoppers to CBD products that fit their needs. “The goal in the case of AskCMD is how do you help people navigate through the clutter to help solve their problem with a product and a form factor that can make sense for them?” he said. When asked about the key differentiators of the two platforms, Klein said he sees lab testing and verification as a competitive edge. “CBD is an unregulated market as the FDA has been slow to have any formal guidelines for companies,” he said “In the case of askCMD we wanted to fill that gap by being an authority voice to help consumers navigate this confusion but also service products that are verified and tested by third party labs.” Klein said lab reports can be very different depending on those you work with so askCMD goes through those extra steps for consumers. “In the case of God’s Greenery, we formulated these products with some of the best formulation experts in the country to make sure we are delivering a premium product to this audience,” he said. “In fact, we double lab testing to ensure consumer safety through every part of the process.” Klein added askCMD has found through that the most important reason that people are coming to askCMD is they’re looking for lab-verified products placing that over price or form factor.
CHALLENGES: When asked about the biggest challenges facing the industry, the CEO said there is still a degree of stigma within the marketplace as well as confusion surrounding the space. “Cannabis and hemp are in the same family,” he said. “It’s like the citrus family, it’s an orange and a lemon. They are two very different things, but you still run up against consumer confusion.” Klein, who added that consumers still voice concerns over CBD causing a high, also said that banking is a hurdle from a regulatory perspective. “You can still have a very difficult time if you have a CBD business to open a bank account or to have a credit card processor,” he said, noting he has seen shifts in the market towards resolving these issues in the last few months. “Banks across the country are now looking at CBD companies with edibles in a new light versus just topical and trying to find a way to bring them on as clients because they see the revenue opportunity there,” he said. “And on the consumer side, Martha Stewart just launched her line of products. It doesn’t get more mainstream than that.” However, Klein said there are still a lot of bad actors in the industry due to the unregulated market and that issue needs to be addressed. “Until the FDA can create a set of guidelines that puts consumer safety first that’s going to be a really important barrier to overcome,” he said.
OPPORTUNITIES: As the cannabis space develops, Klein said askCMD is really excited about the opportunity to service products in or coming into the marketplace. “Our goal is not volume, our goal is quality,” he said. “Our team is constantly surveying the landscape to see what’s out there and what’s coming so we can use the platform to help amplify the voices of some of the companies.” For God’s Greenery, the aim is to provide all natural products to consumers to support body, mind and spirit. “The great thing there is that a percentage of our revenue is donated to not for profits that are chosen by our customer base,” the CEO said. “In addition, it’s sold through a direct channel so you can sign up to become a God’s greenery ambassador, share your referral code with your community and be rewarded with a commission for each sale. It’s an opportunity to earn extra income at home and to give back and both are really important messages right now particularly in the time of COVID.”
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Akerna (KERN), Aleafia (ALEAF), Aphria (APHA), Aurora Cannabis (ACB), Auxly Cannabis (CBWTF), Biome Grow (BIOIF), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), Delta 9 (VRNDF), FluroTech (FLURF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb Industries (GTBIF), GrowGeneration (GRWG), Harborside (HSDEF), HEXO (HEXO), Hemp Inc. (HEMP), India Globalization Capital (IGC), Indiva (NDVAF), Indus Holdings (INDXF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MediPharm (MEDIF), MedMen (MMNFF), MJardin (MJARF), Neptune Wellness (NEPT), Omnicanna (ENDO), Organigram (OGI), Planet 13 (PLNHF), Sproutly (SRUTF), Sunniva (SNNVF), Supreme Cannabis (SPRWF), Valens (VLNCF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Vireo Health (VREOF), Wayland Group (MRRCF), WeedMD (WDDMF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).
APHA
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Aurora Cannabis
-0.09 (-1.28%)
CV Sciences
+ (+0.00%)
CannTrust
+ (+0.00%)
Canopy Growth
-0.08 (-0.49%)
Cronos Group
-0.14 (-2.59%)
Trees Corporation
+ (+0.00%)
IGC Pharma
-0.06 (-4.92%)
Tilray
-0.215 (-3.81%)
Trulieve Cannabis
+ (+0.00%)
ZYNE
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