#5- Coast to Coast: Comparing & Contrasting California vs. New Jersey Cannabis Markets

 
Cannalaw Connections
 
One challenge we’re facing right now [in New Jersey] is supply and demand, actually.
- Tyler D'Angelo
 
 
Complete Transcription

Chris: Hello everyone, welcome to another addition of Cannalaw Connections I'm your host Chris Hoo. I'm an attorney who's been licensed in the state of California for over ten years and opened Evergreen Law about two, two and a half years ago. Today I have the pleasure of introducing to everyone my lovely operations manager Veronica Steel, Veronica welcome.

Veronica: Thank you. My name is Veronica Steel, I grew up in Northern New Jersey born and raised, also attended the college of New Jersey. And for the most part I've always dreamed of moving out to California, so I decided to move out after graduation. And there I met Tylor DeAngelo. So, I'm pleased to announced Tylor DeAngelo the assistant manager of the biggest New Jersey dispensary, and he's in charge of manufacturing and processing. Thank you so much for being on our podcast today Taylor, welcome.

Taylor: Chris, Veronica, thank you both so much for having me, I'm really excited to be in a space where I can share my experiences and knowledge and do some comparing and contrasting with the both of you.

Veronica: Yes, absolutely, it's going to be a coast to coast discussion. And moving forward I think everyone involved in the cannabis industry sees it as a national industry of course, but also an international industry. So, it's important for us to have this conversation today and to, you know, really learn what it's like for you on a day to day operation basis.

So, tell us about your responsibilities that you have?

Taylor: So, I was able to start working in the legal cannabis, well medical cannabis industry in New Jersey through getting involved in activism in Trenton, New Jersey. I was able to get a job as a part time on call trimmer, and this led me, you know, over time occurring more personalities. And here I am two years later, a little over two years later and I'm the assistant manager of manufacturing and processing one of our four departments that we have at our facility. And some of the things that I take part in and oversee are harvest, packaging, quality control, data collection, and everything related to that nature. In our department since we're the middle of the house we have to get everything ready for sale, so there really are a lot of responsibly even inventory evaluation that fall under the umbrella of responsible that I have.

Chris: Very interesting Taylor, thank you for sharing. So, from what you're describing it sounds like every dispensary, your dispensary at least, have to do everything, processing, manufacturing, cultivation. That's a little bit different then it is here in California. We have the options of vertical integration. We can do all the processes together if we want to except for testing labs, but we can do each individually. So, we can get a testing lab manufacturing license, you can get a cultivation license, you can get a dispensary license, how is that different, or how is that- And also, we have recreational cannabis here in California.

Can you tell me how that's a little different from what the licensing structure is in New Jersey?

Taylor: Sure, in New Jersey all of our facilities there are six in total. The bill that was passed in 2010 that set up our medical program, it actually only allowed for six facilities, which I'm sure is quite different from the amount that there are in California, but all six of our facilities here in New Jersey they follow the same policy, vertical integration, so you know, the plant is grown here, my department processes it, and then it is also sold on-site. So, that is not an option, that is a requirement. Also, in New Jersey we are required to grow indoors as opposed to having an outdoor option. You know New Jersey is the garden state so you would assume that outdoor growing would be at least an option because we grow many things here in New Jersey, but the reality is indoor growing is the only option that is allowed at this time.

Veronica: Great, so Taylor you talk about everything is pretty much in-house besides the disposal of the actual plant. And I believe the state actually comes in for New Jersey and disposes.

Taylor: Mm-hm, that's right.

Veronica: So, I just wanted to ask you what are the main challenges the you are facing right now?

Taylor: Well Veronica, I can tell you one challenge we're facing right now is the supply versus demand actually. I know this is an issue in other states, but I think it's a very interesting issue in New Jersey due to the limited number of facilities that we have, you know, the amount of producers that we have in New Jersey is very unlimited. So, you know, it takes time for these facilities to build out, but our conditions for approval, you know, to get into the medical program here in New Jersey they continue to expand, you know, which is great we want the accessibility to continue to become more accessible for people. However, the supply has the potential to be not, you know, not overrun, but at least out weighted by the amount of people who need it. So, one challenge we're facing is keeping a variety, a deep variety of strains and products available for our patients, you know, who suffer from various aliments anything from HIV to terminal cancer, glaucoma, PTSD was actually, oh it was signed into law recently and that caused a huge spike in our patient base. So, I think keeping up with all these new patients, keeping everything informed is a challenge that we're facing because we have to make sure we're, you know, getting this medicine to so many people in a reliable way. So, it is burdensome in some ways to face a larger demand.

Chris: Right so, you're talking about keeping the patient demand, and making sure that your supply is sufficient for all the patients and the challenges you're facing here in California when we're developing the regulation structure and the licensing structure we had basically a law-making process going on. We had city council meetings, we had state council meetings, and emergency regulations came out we were able to comment on them and go to hearings to really be involved in the process. Can you tell us how the process in New Jersey? Or how it is in New Jersey for making these regulations, for getting them updated?

How is it different from the process I described to you here in California?

Taylor: Well, here in New Jersey, besides having the compassion use of medical marijuana act passed in 2010 our initial legislation that setup all of the foundational rules that we had for all our dispensaries in terms of legalization the one I think issue I can say we'd be facing is that there are many similar bills that are being debated, and because of that there's a real lack of consistence. And it's a little bit frustrating because it's apparent that many of these law makers are trying to get the same message across. And so, I think finding something that is universally agreeable shouldn't be as difficult as it is, but it seems like there are like small parts of each bill that could be all putting the certain law makers, or rather there are too many similarities, or perhaps it's that the tax structure included in the bill to generate revenue for the government that's not intense enough. For example, the most popular bill in terms of legalization in New Jersey that was purposed in May of 2017 it calls for seven percent sales tax on the first year, and then a raise I think to ten percent sales tax on the second year, and then another five percent on top of that for every year until it reaches twenty-five percent. So, I think I find it hard that there's not something that everyone could agree on.

Veronica: Yes, absolutely, and that's what we're discovering right now as Chris and I always refer it to the wild west out here as many of the people in the cannabis industry right now are figuring out the regulations. You know, there's constant updates on the day to day basis. So, I wanted to ask you how often are your regulations updated?

Are there any emergency regulations that are ever released?

Taylor: That's a good question. You know regulations they seem to change slowly in that there have been no emergency like, you know, stop what you're doing, these things are changing now regulations. I think since the laws were setup in 2010 the law makers intended for them to stay like that. I know for example there will be satellite facilities, satellite dispensaries that will be allowed to operate, you know, owned by these companies that already have these licenses. And so, while that's not an emergency update in terms of policy it's something that now that it's allowed it's something that more companies are looking into. So, it really- The changes strike me as being more subtle than changing all at once.

Chris: That's very different from what we have here for sure Taylor, thanks for sharing that because in California like they really do say stop everything we have emergency regulations out come and comment on them. And that can be frustrating definitely because like it's slow. Here we're in the city of L.A. it's the second largest city in the country, it's the largest in California, and we still don't have a- We don’t have applications available for your average normal commercial cannabis business. We're still working through those tier systems and waiting around periods and all of that. So, yeah, it's definitely different and the results are different too. So, backpacking on that a big part of here when you're applying for your license at the city and state level is that you have to submit your standard operating procedures, your SOPs. And I know that coming from the wild wild west whether it's New Jersey, or California, people weren't writing down their SOPs for the longest time, it really was like just you get an employee you tell them this is what we do and then you expect them to follow it, but now we're actually telling people write it down, and we need them to submit them to get your application, and use it as your employee handbook, and this is the document that's going to keep you in compliance.

Can you tell us a little bit about how you developed your SOPs over there in New Jersey? And where are you in terms of training your employees and developing your SOPs? And how big of a deal are they in comparison to what I've described to you in California?

Taylor: Great question Chris. In New Jersey obviously there has to be certain SOPs in place for just basic levels of functionality, dispensing, transportation if that, that becomes something in New Jersey, basic operating procedures that keep the company running. But on a more technical level our SOPs for example that are developed in my department they're for reference for myself and my manager, other employees in our department in case procedure is unclear. Because when we take on new employees we take information right from our SOPs and we teach the how to do these processes. So, while the SOPs are valuable to the state, there are certain ones that they look for, you know, to let them know that his facility can function. But when it gets to more technical level about how we trim, or about how we package that is more a reference for ourselves. However, when we- Actually, when we get new machines, or you know, new equipment the state does request a standard operating procedure on how the new, you know, machine works and it's interesting, rather I find it interesting that they want to know about that specifically, but don't necessarily need our specific trimming, or you know, other policies that I think that they would find very important.

Veronica: Right, so it's so important to uphold these SOPs that we're talking about especially amongst peers. And you know, I know that your team is lucky to have you as a manager there because, you know, you're an incredible leader, and you know, very dedicated to the art of trimming, and to the art of producing a product where patients will be able to really enjoy it. So, I just wanted to ask you what is the typical background experience your team usually has? You know, what is your hiring process like? Because out here in California many manufacturers hire employees with backgrounds in the culinary industry and that is because they're used to following standard operating procedures with sanitation processes.

So, can you just share what your team has in terms of a background?

Taylor: Absolutely. So, because cannabis in New Jersey is legal only at the medical level, when we are hiring new employees we are not exactly hiring trimmers, you know, that's not something a lot of people have experience in. The community that we have here in New Jersey especially for the employees and people who are employed by it is very small, you know? We can convey information to each other, but outside of that New Jersey does not, you know, really have a cannabis culture, or at least one I would imagine that California, or Los Angeles would convey. So, usually we end up hiring people who have bar tending experience who have also been involved in the culinary industry, you know, fast paced industry, people who are like active and on their feet, people who have had packaging experience in one capacity, or another that's something that we'll look for, people with strong backgrounds in science, that's something that we definitely accept. But in in my departments specifically we are looking for people who are, you know, organized but production focused. And that really, it's amazing how many people we have hired from the culinary industry because I think that's an interesting overall because these are people that we really are hiring.

Chris: Absolutely. So, Taylor, another question in terms of regulations and compliance here in California, and it hasn't started yet, we're starting our enforcement period July 1st supposedly that's when the bureau of cannabis control is supposed to start really enforcing the regulations and start finding people according to what they laid out. Can you tell us a little bit about how their enforcing regulations in New Jersey? Is it self-reported? Is it self-discipline? Like how do they keep you with your pants down so to speak?

Can you explain the processes for us?

Taylor: So, self-reporting is a big part of it. I think most of the responsibility does fall on us, however we do have, you know, we're in the department of health here in New Jersey, so we do have a designated state regulated who will come and check on our facility, you know, unannounced so that we are, you know, always prepared for that. So, it really is on us to be ready for any kind of examination or walkthrough, or to present it, or to you know explain any of our SOPs, or any procedure to any capacity. So, while we are always ready for that there is a reliance on self-reporting because the program is small honestly, and I think since we're still in the infantile stages of it, it's not all completely laid out what to look for. And rather, you know, the laws are set, but as we spend more time in the program I think it becomes more impairment what is a violation worth pursuing, and what is not. So, I think honestly more data has to be collected to create a stronger answer for that.

Veronica: Yes, absolutely, and we're seeing that in California each and every day. I mean, we're developing a newly regulated market that is honestly combating a, you know, infrastructure that has been set in place for decades to come. So, it's important to share knowledge on many different levels, and I just wanted to ask you:

are there any collaboration efforts in the New Jersey space right now?

Taylor: In terms of professional company to company collaboration it does not really feel like an environment where companies are coming together to not even just to create products together, but to share information and to share processes. The climate over here it does not feel like it supports that. As we move closer to a legalization effort though I feel like that will create more of a culture where people do want to share that kind of information, and it might even create stronger marketplace because if there are producers, you know, sharing information with other producers, or you know, any kind of collaborative effort, I mean, that just makes both parties involved, or however many parties that are involved more dedicated to getting answers and to get into a better product quicker because everyone’s success is at stake as opposed to more us versus them mentality if that makes sense.

Veronica: Yes, absolutely, I mean, you know, I always used to love to say the same to you as well, but you're stronger when you link arms with one another. So, that's so critical right now, I mean, this is why we are having this conversation with you here. We'd love to hear about your insights from New Jersey because we want to learn. And you know, Chris and I always see it as California is going to be a leader in this industry, but we need to understand the implementation policies that you have in New Jersey and how we can develop a national strategy, and hopefully an international strategy one day.

Taylor: Right, that makes sense. And I think a state like New Jersey who, rather the state is, you know, developing these policies they're figuring out what is acceptable, and what is okay, and how much is too much, you know? If we allow more companies to have licenses and we in the cannabis market becomes flooded, what sort of message are we sending to people who are many more conservative in their values when it comes to a matter like cannabis, you know? There's this idea that- And honestly, I think it has to do with the puritans spending a lot of time over here on the east coast, but you know, these are areas that we should be able to explore. I mean, our whole nation and everything is just moving forward, we're gathering more information. And as more information becomes available I think states that don't want to pursue a proactive medical and legal program they will look bad in comparison to other states that offer options in medicine and treatment to, you know, it's citizens. Who wouldn't want to provide relief to people who need it? And especially if it's aviaiable. That's something that I see as being an unavoidable, you know, an unavoidable force that will actually move the cannabis laws here in New Jersey forward because we continue to add new conditions to our list of qualifying conditions, and so our patient base continues to raise in New Jersey. I'm pretty sure that right around as of 2017 we reached eleven thousand patients in the state. So, you know, between six dispensaries that's a lot of patients. And so, we all have to grow together in order to find better ways to treat each other and to work together, and of course to treat our patients.

Chris: Wonderful Taylor, thank you. And I absolutely agree that's definitely part of the reason we're in this business, it's compassion. I think we're, as a society, as a country, as a world, we are trying to move toward more compassionate society. And that's what cannabis relief, and cannabis and pain relief is really about. To play off of that we come for different markets, your hands are kind of tied because you always are speaking patient terms, you're always speaking in medical terms, whereas in California we have a newly regulated market for adult use, I mean, it's only six months old, but we have it. So, even here we have different rules for adult use and medical market for example the dosages for edibles they're limited for recreational as opposed to with medical the sky’s the limit if you get a doctor recommendation. So, I know, I mean assume that one of your goals is to go into the recreational market if New Jersey, if that's in the cards for New Jersey's future. Can you tell me how, if you were in charge of legalizing the recreational market in New Jersey, what would you do differently?

How would you take your lessons from medical market and create the perfect recreational market in New Jersey?

Taylor: Great question Chris. First of all, I would love to have that kind of power because-

Chris: [Laugh]

Veronica: You do, you do.

Chris: You absolutely do.

Veronica: You've got it Taylor, take it away. [Laugh]

Taylor: So, one thing I see being a big limiting factor would be the necessity for a vertical integration because that really cuts out the amount of people who can participate in that kind of market because that is a big operation. Taking care of all of those facets is just, that's everything, you know? It's from seed to sale, every step in-between. So, I think it would be really nice in the legal market in New Jersey to see, you know, specific processors, specific manufactures, people who, you know, are in charge of the kitchen and the edibles and then creating a market in-between everyone because then all of our commerce will keep everyone afloat. And I think that will create more incentives to develop, you know, niche products, and products that are just, you know, that are advanced because someone comes up with one new product, but there's more people involved so and idea gets taken and it gets tweaked a little bit and it gets turned into something that's, you know, a step better. I think having more people involved in the actual effort of production, that will really, that will really spike the ideas and all of the information and the imagination that goes into putting this together because I think that's one of the things that's beautiful about the cannabis market is, especially in California there's so many different products available. But New Jersey right now we don't have edibles for sale, we don't have like vape cartilages, or anything like that. Concentrates are something that is, you know, hopefully around the corner but not like shatter, or things like that, that's not something that we can do right now, but in a legal market I think it would be, I think no stone would be left unturned basically. I think there would be so many people who were involved and who were just interested and focusing in on something specific that all our basis would be covered. And then when all of our basis are covered we create this level of demand that just keeps increasing and changing and it's not that it's never satisfied, but people are always looking for new innovations, you know? And when someone creates a new innovation, it only causes other people to want to innovate more. So, I think having the market allow, you know, companies to have different levels of licenses, that would really create a thriving and flourishing recreational market because it would just be all encompassing. We would have access to everything at that point.

Veronica: Yes, and we will be showing you around Los Angeles when you comes out and visit late July I believe. So, Chris and I will be taking you to as many cannabis events that we attend as possible. And Taylor will also be attending our own Cannalaw Connections on July 10th.

Taylor: Yeah, I'm so excited. I can't wait to see the differences in the culture of cannabis between Los Angeles and New Jersey because when you walk outside in New Jersey there's nothing about it that really screams we have cannabis here, you know? And I'm sure there is a certain level of, you know, we need to keep this separate from children and such, but I know California is just notorious for having such a free mentality about cannabis and for portraying it in a much more, you know, cultural and positive light in that matter because it's not a substance that has any inherent, you know, negative moral qualities, it's just all about how it's presented. And I think one thing New Jersey will continue to work on is how it's presented in the media and just culturally, it's something that all other states are working towards, you know, shedding light on in some degree. Obviously, some states much faster than others, but New Jersey has a lot to learn from a state like California because we don't portray cannabis in nearly the same way I don't think.

Chris: And your passion and your excitement about the product is very, very evident Taylor. So again, I'm very grateful for you being here sharing your experience with us. And I absolutely think you touched on a lot of great points about how- You were describing your ideal market which will create better and better products and the sky is the limit. And when you have a free open market like that, I mean, there really is nothing that's going to stop this from getting better, and better, and better, and more diverse like you said. One issue that I wanted to touch back on was you were talking about how you don't have the opportunity to get different licenses in New Jersey whereas you do here in California. And I absolutely agree, I think that creates this whole licensing system where everyone's incentivized to look out for each other, work with each other, and follow the rules, right? And again, even when you're applying for your application, every single person is signing a declaration saying I'm only doing business with other licensees. So, no more of this illicit market anymore, there's no more back hand deals, no more unsigned, unwritten contracts, it's all supposed to be completely regulated, boring even, completely bureaucratic. And of course, the governments getting their taxes in it as well. But one of the things I was going to ask you about here we have the opportunity to get a license for being a testing lab, and you were telling me that the testing lab, the test lab structure over there is completely different.

Can you tell us a little bit about that?

Taylor: Yeah, absolutely. So, whenever we have a new strain that, you know, is grown in-house and we want to produce it on a larger level so that it can be available for our patients, we do a certain level in-house testing involving gas chromatography, but rather the state has to do the official testing that will determine the percentages for our products. On our labels we have to test for, and the patients, you know, have this visible information in regarding to cannabinoids, CBDA, CBN, THCA, and CBGA, those are the four cannabinoids that we need to make sure that we have on our label so that we are okay to sell the product. I think in terms of having a different lab structure I see having third party, you know, independent labs as that's a great resource. That, you know, the more of those we have then the higher rate of reliability that we get. And that's what our patients want, and I think ultimately that's what everyone wants because it's so weird knowing that like not having enough labs is, how is testing done? We want to have a standard that involves more labs so that we can obviously check each other in that sense and we can create something that's so universal that when we see test percentages, you know, we are like that is exactly what they are because we trust them.

Veronica: Yes, and that's why we are specifically focusing on testing labs here because it's a critical point of the supply chain. And I mean that is why we are fighting the black market right now. Cannabis should be tested, cannabis should be regulated, and that's what we thoroughly believe in and fight for every day.

Taylor: I think that's honestly something that New Jersey is also fighting for, it just it might not seem like that because the legislation to move towards a legalization effort is just moving, you know, slowly, but it's evident that it's an effort that so many people want. I mean, facilities want to open more locations, the demand is raising, and the supply is having a hard time meeting that. So, I think ultimately a state like New Jersey and state like California are moving towards the same goal, and it's so interesting to watch them move at different rates and in different ways while knowing that the end goal is ultimately very similar.

Chris: Absolutely, I think the end goal for everyone is a, like Veronica said a national and an international standard, so whether it's going to be New Jersey, whether it's going to be California, let's start setting it, let's start setting it and see what works and let's adopt it, and let's spread to all fifty states. And like Veronica was also saying it's really exciting to have you come out and see how it is out here in California Taylor, I think you're going to be very pleased, very happy with some of the events you're attending and the cultural you're experienced with cannabis. Because like you said, we do come from like a history of like being open-minded, or being progressive on this issue, but now it's become, because we have a licensing structure now and we have adult use, it's now become, it's becoming kind of that evil corporate like- Has that sort of evil corporate look that people are talking about whether you like that, or whether that excites you, you know, that's your preference. But it just means, it shows you how mainstream it's becoming, and in L.A. San Francisco especially you're definitely going to see it, you're going to check it out.

Taylor: Absolutely, in terms of the "corporateness" that you're speaking of I think that it seems like it's inevitable to some degree to have a consolidation of power like that, but hopefully there are cycles and fluctuations because I firmly believe that the more innovators are involved, the more innovations that can occur. And that feeds ideas to bigger companies so that they can, you know, latch onto similar trends and begin to product products that are similar to that of smaller companies. And then we can create this loop where there are smaller companies creating products, and then bigger companies taking them and maybe putting the final touch on them, or figuring out, you know, how to improve them at least a little bit, and then making them aviaiable for more people. So, it's interesting to see how a smaller company that is specialized in a smaller license and something that is not vertically integrated that would be really nice in the legal market. So, it's interesting to see how a smaller company could affect the growth of a bigger company and vice versa, you know? At the end of the day I think they're only helping each other, and it's so interesting.

Chris: Absolutely. Alright then, well thank you so much again Taylor for joining us on our episode of Cannalaw Connections. And thank you Veronica Steel operations manager for co-hosting.

Veronica: Yes, yes, I'm so happy to be here, and you know, I thank you so much Taylor for spending time with us, and you know, just as you pointed out the more that we communicated with each other and the more that we collaborate, the further that this industry can travel, and you know, the sky is the limit really. So, thank you Taylor, and thank you for all of your experiences and sharing them with us.

Taylor: Of course. Chris and Veronica thank you so much for having me on, I think it's a really valuable opportunity to be able to share information over this platform that other people can connect to, and to show everyone that, you know, states that might be on different coast are still working towards the same goals and that we really at the end of the day do have the same values. And despite going about this sort of progress through these different means, or at these different speeds it's still apparent that we're working towards having better products that are more reliable in terms of testing and such for our customers, and our patients. And I think that it's going to be so interesting to watch states develop new policy, and then copy policy from each other, and improve upon them, and then, soon enough, you know, we'll end up in this place where we have such similar standards that it we'll look back and it will be amazing to see how we didn't see this coming in the first place.

Veronica: Yes, we are making history. [Chuckle]

Chris: Very well spoken. Thank you, Taylor.

Taylor: Thank you.

Chris: And that concludes another episode of Cannalaw Connections. Join us next month, and every month for an episode of Cannalaw Connections, thank you, bye-bye.