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Cover Story

The Plot Thickens

Even in a normal year, Feb. 29 is an odd date to open a business.

“We really won’t have an anniversary for another four years,” Thomas Winstanley, director of Marketing at Theory Wellness, joked about his company’s third cannabis dispensary, which opened in Chicopee on that leap-year date almost six months ago.

Of course, 2020 is no normal year, and a couple weeks after opening, Theory closed its doors as part of a statewide shutdown of ‘non-essential’ businesses due to the COVID-19 pandemic.

“It’s been an interesting six months, to say the least,” Winstanley told BusinessWest. “We had a brand-new team in place, the final approvals had come through, and that team was just getting their sea legs on the retail side when the shutdown came.”

When dispensaries were eventually allowed to open, it was only for medical marijuana at first, while the vast majority of business — recreational sales — remained shut down.

And now?

“It’s dynamite,” he said. “A lot of money is coming back to the market, and our team hasn’t missed a step since coming back — and we’ve seen the team continue to grow. We’ve come back a lot stronger.”

The line that forms outside the shop each morning testifies to demand that certainly didn’t go away during the weeks when product was unavailable.

It’s a story taking shape across the state, with cannabis businesses continuing to launch and grow even as the pandemic still rages and the economy nowhere near returning to its 2019 condition. Take Holyoke, for example — a city whose leaders fully embraced the cannabis trade from the start, and where two more businesses opened in recent weeks, Canna Provisions on Dwight Street and Boston Bud Co. on Sargeant Street.

“It’s been an interesting six months, to say the least. We had a brand-new team in place, the final approvals had come through, and that team was just getting their sea legs on the retail side when the shutdown came.”

“I’m not going to lie — I was very nervous as the economy took a downturn,” said Marcos Marrero, Holyoke’s director of Planning & Economic Development, about the cannabis hub city leaders have worked to cultivate, one that now includes a handful of cultivation, production, and retail businesses, with more on the way. “Oddly enough, we haven’t seen a significant stoppage in stores’ actions at this point. I can only speculate why that is.”

One reason, quite simply, is that some sectors do better than others during recessions. Marrero compared it to when prohibition was lifted during the Great Depression, and smart entrepreneurs immediately saw the long-term (and pent-up) demand for alcohol, even during tough economic times.

Theory Wellness in Chicopee

Theory Wellness in Chicopee closed in March just a few weeks after it opened, but customer traffic has been solid this summer.

“Today, we have a very robust alcoholic-beverage industry,” he said, reflecting demand that has never subsided over the decades. “So I don’t think there’s anything remarkably special about cannabis in that regard.”

Another apt comparison is the financial crisis of 2008, when the fundamentals of the economy were coming apart — a different story than in 2020. “Now, the economy is tanking because there’s no consumption, and the labor force is contracting.”

Those investing in the cannabis sector, however, are looking beyond that; they know demand for these products is likely to remain high — no pun intended — in the long term.

“This may be as good an investment as anything,” Marrero said. “We’re still seeing investments going forward at the local level; it’s a very positive outlook, even during the pandemic.”

Creating a Pipeline

The proliferation of cannabis businesses across the region, with the promise of more to come, means jobs, and that potential isn’t lost on area colleges and universities.

First, Holyoke Community College (HCC) and the Cannabis Community Care and Research Network (C3RN) announced the creation of the Cannabis Education Center last fall, to provide education, training, and other business resources to individuals in the region who want to work in the cannabis industry.

HCC and C3RN are designated training partners through the Massachusetts Cannabis Control Commission’s (CCC) Social Equity Vendor Training program, which was designed to provide priority access, training, and technical assistance to populations and communities that, traditionally, have been negatively impacted by the drug war.

Soon after that, American International College (AIC) dipped a toe into the sector by launching a three-course certificate program called Micro-Emerging Markets: Cannabis, offering an overview of cannabis entrepreneurship, business operations, and law and ethics.

This fall, AIC is launching a master’s program in Cannabis Science and Commerce — with a one-year online program or a two-year hybrid model — that takes a deeper dive into preparing students to work in this field, said Jennifer Barry, AIC’s director of Continuing Studies and Special Projects.

She cited some striking statistics — 15% job growth in the legal cannabis industry in 2019, $404 million in legal cannabis sales in Massachusetts that same year, and 245,000 full-time-equivalent jobs created nationally by early 2020 — to explain why the program is necessary.

JENNIFER BARRY

Jennifer Barry

“We want to provide opportunities to connect students with an industry where there’s a lot of room for employment growth. The idea is to connect students with experts in the industry.”

“We want to provide opportunities to connect students with an industry where there’s a lot of room for employment growth,” Barry told BusinessWest. “The idea is to connect students with experts in the industry.”

To that end, the program will be taught collaboratively by faculty members, cannabis-industry professionals, and occasionally guest lecturers, either in person or by video.

“We’re taking the academic rigor of an AIC course normally taught by faculty members and keeping it current and relevant by pulling in industry experts,” she explained, noting that classes cover topics from law and policy to the chemistry of cannabis.

“It’s hard for people who work full-time in the cannabis industry, which is such a demanding field, to make time,” she added, but quickly noted that they recognize the need to create a pipeline of talent in the region so the sector can continue to grow and avoid a skills gap. In that way, she noted, this master’s program is a win-win — helping graduates access a solid career while helping area businesses grow.

“That’s the real benefit of our program,” Barry continued, noting that it’s the first program in the U.S. that blends business, science, and the legal aspects of the trade. “What we’ve found, speaking with cannabis professionals, is you have to understand the chemical components of the plant to be prepared to sell it, package it, speak about it intelligently in the field.

“That’s why we have a chemistry course, and one that talks about cannabis from seed to sale, how it makes it through the pipeline, giving students a broad understanding of the process. Then, through individual courses, they can dig through each individual element.”

The goal, again, is to support both opportunities for job seekers and business growth, and Marrero sees elements of both in Holyoke’s enthusiastic adoption of the cannabis sector. He said Holyoke officials don’t “game the system” with host-community agreements, trying to squeeze as much from license applicants as possible. Instead, it’s a standard template that can be approved in a day.

“The CCC does its due diligence on businesses; we regulate things like land use and how businesses are integrated into the community,” he said of the city’s approach to license approval. “For us, it’s been about how to create jobs, how to help businesses get into the cannabis industry.

“It’s about creating a cluster,” he went on. “We’ve made a concerted effort to make it smooth, to work with industries to create a cluster. What it gets us is more than the sum of its parts; it’s how many jobs are created by these companies — and we have a dozen already special-permitted.”

Those services run the gamut from plumbers and pipefitters to security, delivery services, cleaning services, lawyers, and more.

“Any new company produces opportunities for other types of other businesses, and those businesses have to employ people. It’s that economic contagion that’s also attractive,” Marrero explained — one of the few times one might hear the word ‘contagion’ these days in a positive light.

A Social Contract

Winstanley said Theory’s experience setting up shop in Chicopee went as smoothly as it could have, considering the built-in rigor of the process, especially at the state level.

“We’ve always known there were a lot of policies in place at the state level and the local level. It’s a long process,” he told BusinessWest. “But we want to make sure we get it right and operate in ways that are beneficial to the local population, and we want to make sure to set an example for what legal cannabis should look like in this day and age.”

One way Theory — which also has locations in Great Barrington and Bridgewater, and employs about 200 people in its cultivation, manufacturing, and retail divisions — does that is through the kind of social-equity program the CCC made a point of emphasizing.

It recently accepted applications from ‘economic-empowerment’ applicants as designated by the commission and will select a qualified applicant to partner with, guiding and mentoring the entrepreneur through the process of opening their doors, from financial assistance to professional services to zoning and regulatory hurdles.

That financial commitment will total up to $250,000, $100,000 of which will be offered in the form of 0% interest debt financing, with $150,000 worth of initial cannabis inventory to be offered on consignment, providing a boost of capital to help get the operation off the ground. Theory will also connect the successful applicant with professional services like banking, legal, insurance, and HR.

“This is something we felt really strongly about,” Winstanley said. “We felt it’s the future of the industry, to make sure everyone has an opportunity to get into it.”

Barry is well aware of the social-equity component as well, saying it aligns with AIC’s mission to provide access and opportunity to a diverse student population.

“Each course will have a social-equity component; students will get exposure to the business through the lens of social equity, and by the end of the program, they’ll be entrenched in how we can potentially undo some of the disproportionate harm done in the past, while creating a workforce that meets the needs of the industry.”

Because, again, the opportunities appear to be increasing.

“They’ll build a network of professionals they can use as resources as they create their careers, whether they start out working for someone else or start their own business,” she added. “They’ll know it’s not limited.”

That’s true in Holyoke right now, where the next site to open will likely be True Leaf, located near the Holyoke Dam, Marrero said. “They’re a pretty sizable operation — they would be the biggest in Holyoke by square footage, and they’re near completion of construction.”

Winstanley said Theory learned a lot from its original store, in Great Barrington, the first dispensary to open in the Berkshires. Now, competition is springing up across Western Mass., but he says the company still has plenty of room to grow.

“It’s not only the growth of our company, but the significant tax revenue that’s definitely needed,” he said. “Right now, we’re just really happy to see cannabis is back, and hopefully we can continue to contribute, and the industry will provide some much-needed life in these strange times.”

Joseph Bednar can be reached at [email protected]

Features

An Uphill Battle

By Mary Bonzagni

Federal trademark registration is viewed as an attractive form of property-rights protection for most industries. The benefits of such a registration are numerous.

A federal trademark registration serves to recast what would normally be localized common-law trademark rights into nationwide trademark rights. It provides the owner with the right to use the ® designation, to enforce the owner’s rights in federal court, and to file the trademark registration with U.S. Customs to block infringing imports. A federal registration also provides a basis for registering the trademark in foreign countries and jurisdictions.

Unfortunately, members of the cannabis industry have faced an uphill battle when trying to protect their brands on the federal level.

This article will focus on strategies for protecting trademarks used on CBD products, which may be grouped into two categories: marijuana-derived CBD products and hemp-derived CBD products.

Mary Bonzagni

Mary Bonzagni

“Unfortunately, members of the cannabis industry have faced an uphill battle when trying to protect their brands on the federal level.”

Marijuana is still treated as a controlled substance and is illegal under the Controlled Substances Act (CSA), regardless of its legality under certain state laws. As such, trademarks for marijuana-derived CBD products cannot be federally registered. The U.S. Patent and Trademark Office (USPTO) has issued trademarks for goods and services that are indirectly related to marijuana, but the closer the description of goods and services is to the sale or distribution of marijuana, the less likely it is that the UPSTO will allow the application.

Hemp was previously regulated as an illegal substance under the CSA. It was removed as an illegal substance under the Agricultural Improvement Act of 2018, also known as the Farm Act, which federally legalized hemp and hemp-derived products that contain no more than 0.3% THC (by dry weight). The 2018 Farm Act legalized CBD derived from hemp not from marijuana, so, at least for now, the federal government will view the source of the CBD as decisive in determining its legality under federal law.

To recap, marijuana-derived CBD products are illegal under federal law, and, thus, trademarks for such products cannot be federally registered. On the other hand, products infused with CBD derived from hemp, which have a low-THC content, are now legal under federal law, and the trademarks under which they are used are capable of federal registration. Being capable of federal registration, however, does not guarantee registration.

The U.S. Patent and Trademark Office’s current policy is to refuse trademarks for foods, beverages, dietary supplements, and pet treats containing hemp-derived CBD that have not been approved by the Food and Drug Administration (FDA). These goods raise lawful-use issues under the Federal Food Drug and Cosmetic Act (FDCA). Trademarks for the following goods, however, can be federally registered:

• Hemp-derived CBD products that are not consumed (e.g. salves, ointments, and skin oils) which contain less than 0.3% THC on a dry-weight basis; and

• ‘Generally recognized as safe’ (GRAS) products (e.g. hulled hemp seeds, hemp seed protein powder, and hemp seed oil). On Dec. 20, 2018, the same day the 2018 Farm Act took effect, the FDA approved the sale of hulled hemp seeds, hemp seed protein powder, and hemp seed oil, and the use of these products in human food. Therefore, trademarks for these hemp products are eligible for federal registration at the USPTO.

In addition, trademarks for hemp advocacy groups and trade associations, and for services such as consulting and advertising services and the like, can also be federally registered. It is legal for advocacy groups and trade associations to educate the public and advocate for changes in hemp and marijuana laws. Thus, the USPTO is willing to issue trademarks to those groups and to others providing services to the legal hemp industry.

Let’s assume for purposes of this article that your trademark is being used on goods that do not fall within one of the above categories, and thus your trademark cannot be federally registered. Here are some options for proceeding.

Federal Registration for Permissible Ancillary Products and/or Services

The first area to explore is whether you also sell goods or offer services that fall outside the restrictions of the CSA or FDCA. For example, do you sell goods without CBD as an ingredient, or provide a website featuring blogs and publications (e.g. articles, brochures, etc.) advocating for changes in hemp and marijuana laws, which constitute lawful goods or services? By obtaining a federal trademark registration in relation to any such lawful goods and services you provide (i.e. registering around the edges of the CSA or FDCA), you may still be able to protect your brand.

Alternatives to Federal Registration

Whether or not you pursue federal registration, you should also consider proceeding within the common-law and state-law frameworks so that you can protect your mark within your geographical trading area. You may also consider copyright protection to protect your logo or design trademark.

Common-law Trademark Rights

By using your trademark in commerce on select goods and services, you will develop common-law rights in that mark. Common-law rights are based solely on use of the mark in commerce within a particular geographic area. Your common-law rights may be used to stop infringers.

State Registrations

Another option to consider is seeking one or more state registrations for your trademark in states that recognize the legality of your goods or services. While state registrations confer the benefits of registration only within the boundaries of that state, registering on the state level can be an effective way to protect your mark and to prevent third parties from using the same or confusingly similar mark on the same or similar goods or services in that state.

Copyright Registrations

Copyright protection may constitute an alternative route to protecting your logos or design trademarks, provided they contain original authorship and are not just familiar shapes, symbols, or designs. Copyright is a form of protection provided under U.S. law to ‘original works of authorship,’ once fixed in a tangible form. A copyright registration establishes a public record of a copyright claim as well as offering several other statutory advantages.

In Conclusion

CBD-based businesses should start using their trademarks on their goods and services as soon as possible in order to establish common-law trademark rights, seek federal registration for trademark uses that are legal under the CSA and do not raise lawful-use issues under the FDCA, seek state registrations in states where trademark use occurs and where cannabis use is legal, and seek copyright registrations for eligible logo and design trademarks.

Please contact us for further information or to set up an initial consultation. We look forward to assisting you in protecting your valuable IP.Please contact us for further information or to set up an initial consultation. We look forward to assisting you in protecting your valuable IP.Please contact us for further information or to set up an initial consultation. We look forward to assisting you in protecting your valuable IP.

Mary Bonzagni is the IP partner with the Springfield-based law firm Bulkley Richardson; (413) 272-6200.

Opinion

Editorial

In the 21 months since recreational marijuana became legal in Massachusetts, the industry has raked in about $150 million in tax revenue for state and local coffers.

Of that, $30 million — about 20% of the total — has poured in just since Memorial Day, when the state ended several weeks of COVID-19 restrictions on dispensaries as part of its reopening plan.

Talk about pent-up demand.

And talk about an opportunity.

In our cover story this month, Marcos Marrero, Holyoke’s director of Planning & Economic Development, drew a comparison between current demand for cannabis with the lifting of prohibition during the Great Depression. Though times were still tough, alcohol sales surged, and have rarely let up since.

In short, some industries are more resilient amid shifting economic tides than others, and cannabis — judging by these latest tax-revenue numbers, and by the customer lines outside dispensaries even as more competition springs up around the region — may be one of them.

Indeed, cannabis sales in the Bay State have totaled $785 million since November 2018, when adult use became legal here. The tax rate in the state is 6.25%, with a 10.75% excise and a 3% local tax in most areas. It adds up.

“This tax-revenue milestone is a big moment for the Massachusetts cannabis business community because it shows not only the great demand for safe, regulated cannabis, but also affirms the meaningful value this industry brings to cities and towns every single day,” David Torrisi, president of the Commonwealth Dispendary Assoc., noted in a statement following the news.

“We know the hardship that COVID-19 has imposed on local and state budgets,” he added, “and we are proud to help provide steady revenue streams that can hopefully reduce the need for difficult choices and maintain services.”

Such talk cheers Marrero and other municipal officials in Holyoke, the city that, more than any other in the region, has fully embraced the economic potential of cannabis, with a few businesses already open and many more in the pipeline.

And it’s not just tax revenue, although that is critical right now. It’s also jobs and business growth — both in new and growing enterprises that grow, manufacture, and sell cannabis products, and at companies that provide services to those entities, whether legal, security, maintenance … the list goes on.

It’s what Marrero called “economic contagion,” a positive and kind of delightful use of that latter word during this time of pandemic. Holyoke wants to create a cannabis cluster that will boost the entire city’s — and region’s — economy, and other communities might take heed of the lessons learned so far.

The main one is that cannabis appears to be a hardy sector, no matter what the broader economic conditions are. At a time when communities are looking for bright spots, this one ranks high on the list.

Community Spotlight

Community Spotlight

Tessa Murphy-Romboletti

Tessa Murphy-Romboletti says the addition of a Spanish-speaking accelerator program will enable EforAll Holyoke to become an even more impactful component of the region’s entrepreneurship ecosystem.

It’s been more than three years now since Holyoke Mayor Alex Morse told a TV reporter, tongue in cheek (or not), that he wanted to rename Holyoke ‘Rolling Paper City,’ in a nod to its past — and its potential future as home to businesses in the cannabis industry spawned by a ballot initiative in the fall of 2016.

Things have moved slowly as the city has looked to take full advantage of both its red-carpet treatment for the cannabis industry and vast supply of old mill space — ideal for cultivation as well as other types of businesses in this sector — more slowly than most would have anticipated.

But by most accounts, 2020 should be the year this sector begins to, well, light things up in Holyoke.

Indeed, while Green Thumb Industries, better known to most as GTI, is the only cannabis-related business operating in Holyoke at the moment, that is certain to change soon. True Leaf is ready to commence cultivation operations in the large building on Canal Street that was formerly home to Conklin Office, said Morse, and there are other businesses moving ever closer to the starting line.

“Unfortunately, the length of the process at the state level has slowed things a bit, but 2020 seems poised to be the year we see some concrete results from our embrace of and leadership in the cannabis industry,” said Morse, who, while filling his role as CEO of the city, is also running for Congress this fall. “We’re looking at hundreds of jobs between cultivation and dispensing, and we’re seeing the growth in commercial property values as a result of these investments.”

Meanwhile, there are large tracts of real estate either sold to or under option to a number of other cannabis-related businesses, said Marcos Marrero, the city’s director of Planning and Economic Development.

“We have about 20 companies that have approached us for a host-community agreement; a few of those are no longer proceeding, but we have probably close to a dozen that are still in some part of the process, and we expect a couple to open at some point this year,” said Marrero, who noted that, for decades, Holyoke’s problem was that it had far too much unused or underutilized old mill space. It’s certainly not there yet, but some are starting to think about the possibility of actually running out of that commodity.

But cannabis is certainly not the only promising story in Holyoke at the moment. Indeed, progress is evident on a number of fronts, from the development of several co-working spaces in the city to a thriving cultural economy; from the prospects for a new retail plaza in the vicinity of the Holyoke Mall to Holyoke Community College’s culinary-arts center in the heart of downtown; from Amazon’s new distribution center just off I-91, which has brought more than 100 jobs to the city, to Holyoke Medical Center’s recently announced proposal to build a new, standalone inpatient behavioral-health facility on its campus.

“Unfortunately, the length of the process at the state level has slowed things a bit, but 2020 seems poised to be the year we see some concrete results from our embrace of and leadership in the cannabis industry.”

Then there are the city’s efforts to foster entrepreneurship, especially through the agency known as EforAll Holyoke, which last year cut the ceremonial ribbon at its facilities on High Street.

The agency, originally known as SPARK, will graduate its third accelerator class on March 26, said Executive Director Tessa Murphy-Romboletti, adding that EforAll will soon be expanding with a Spanish-language accelerator, something that’s definitely needed in this diverse community.

“Many people can understand English, but to learn in the language you’re comfortable with … that makes such a difference,” she noted, adding that other EforAll locations have offered programs in Spanish. “There is a need for this here.”

For this, the latest installment of its Community Spotlight series, BusinessWest puts the focus on what is still known as the Paper City, a community that has greatly diversified its economy is looking to continue that pattern in the coming years.

In Good Company

Murphy-Romboletti says she won’t be leading the Spanish-speaking accelerator — she’ll be hiring someone to assume that responsibility — but she is taking steps to be better able communicate in that language.

“I’m using Rosetta Stone, and I’m basically telling the people in my life who speak Spanish that they should only speak Spanish to me so I can learn,” she said. “Just growing up in Holyoke, I feel like I understand it fairly well, but I’m still struggling to communicate.”

These language lessons are just one of many items on her plate, including final preparations for the March 26 graduation ceremony, at which accelerator participants will showcase their businesses and many will receive what Murphy-Romboletti refers to affectionately as “those big giant checks” — facsimiles in amounts that will range from a few hundred to a few thousand dollars, as well as some seed money.

Those awards may not sound significant, but to small-business owner, they can provide a huge boost, she went on, adding that they can cover the cost of forming a limited liability corporation (LLC), buy a new copier, or perhaps purchase some insurance.

“Those are the little things that a startup often has a hard time attaining,” she said. “That money is very important to them.”

As for the seed money, provided by an array of sources, it is awarded based on how well businesses meet stated goals for growth and development.

“We have them set goals for each quarter, and the entrepreneurs keep meeting monthly with their mentors,” she explained. “We survey them before we meet, and there’s a peer-ranking process based on the progress they’ve made toward the goals they set at the beginning of the quarter. It’s a combination of mentor feedback and peer feedback, and it’s a good way to keep the momentum going.”

Summarizing the breakdown of the first several cohorts, Murphy-Romboletti said there has been a good mix of businesses, including several food-related ventures, some professional services, a few nonprofits, and some construction-related endeavors. None are large in size or scope, but most all of them have promise, and many are already contributing to vibrancy in Holyoke by leasing real estate, buying goods and services, and providing them as well.

“When an entrepreneur is getting started, it can be a very lonely process, and we want people to know they don’t have to go through this whole thing alone,” she said. “And I think we’re starting to see the impact this has on the local economy, when there’s new businesses registering and they’re getting bank accounts for their business, and they’re doing things the right way so they can be legitimate businesses that will contribute to the economy.”

Marrero agreed, noting that the companies fostered by these efforts to promote entrepreneurship have created more than 100 jobs, most of them in Holyoke.

“Not everything is a home run — there are a lot of singles, but that’s another way of getting into the Hall of Fame,” he said. “We’re continuing our efforts to create a culture of entrepreneurship, and we’re starting to see some results.”

Thus, promoting entrepreneurship is an economic-development strategy in Holyoke, said Morse, adding that, while it’s good to attract large corporations like Amazon, growing organically by fostering small businesses is usually a more reliable path to growth.

But there are several other growth strategies being executed, and the cannabis industry, and the city’s pursuit of it, could certainly be considered one of them.

Indeed, while some communities were somewhat cautious in their approach to this sector and others (West Springfield, for example) decided they didn’t want such businesses within their boundaries at all, Holyoke has, seemingly since the day the ballot initiative was passed, been quite aggressive in pursuit of cannabis businesses — and jobs.

Ned Barowsky

Ned Barowsky

“I’m working with a development group that wants to put in more retail — perhaps a few drive-thrus, a coffee shop, and maybe some fast food, with some traditional retail in back. The plans are still coming together.”

And, as the mayor noted earlier, 2020 is shaping up as a year when many of the businesses that have been putting down roots, to use an industry phrase, will start to see their efforts bear fruit.

True Leaf has been aggressively building out its massive space, said Marrero, and it is expected to employ more than 100 people when it that cultivation and processing operation opens later this year. Other similar businesses are also in the process of readying spaces, including Boston Bud Co., Solierge, and Canna Provisions, which will soon be opening a dispensary in downtown Holyoke.

“Once they open, that will create a lot more economic activity, including hiring, and as soon as they have sales, that will also generate income for the city,” he went on, adding that there will be a ramp-up period for the cultivators as the first crops grow. But when these companies are fully operational, he expects that more than 200 jobs will be added.

Meanwhile, mill space continues to be absorbed by this sector, he said, adding that 5 Appleton St. was recently acquired for cannabis-related uses, bringing the total amount of real estate sold or under option to roughly 500,000 square feet, by his estimates, thus creating speculation, and even concern, that no one could have imagined even a decade ago.

“Eight years ago, the concern was that there was too much empty space,” said Marrero. “The long-term proposition and concern for someone in my position is that we might be running out of inventory, which is funny to think, but it could happen.”

What’s in Store

Meanwhile, retail is also an economic-development strategy, or at least a key contributor to the city’s tax base and overall vibrancy. It remains so, but that sector is changing, primarily because of the city’s new corporate citizen, Amazon, and others like it. The landscape is changing — figuratively, but also quite literally.

Evidence of this change is evident at Holyoke Mall Crossing, a retail center just off I-91 at the intersection of Holyoke Street and Lower Westfield Road. Actually, it’s more a former retail center, said owner Ned Barowsky, who acquired the property in 1996. Indeed, a number of former retail spaces now have different uses, as homes to professionals, healthcare facilities, and service providers, as evidenced by the current tenant list.

It includes Baystate Dental, Rehab Solutions, Ross Webber & Grinnell Insurance, ServiceNet, Vonnahme Eye, Great Clips, and H&R Block. It doesn’t include Kaoud Oriental Rugs and Pier 1, two long-time tenants that became the latest retail outlets to leave that location, leaving 13,000 square feet of contiguous space on the ground floor that Barowsky is now working aggressively to lease with ads touting this as “the best location in Western Mass.” And he expects that there will be more healthcare and professionals in this space instead of traditional retailers.

“Slowly but surely, I’ve been converting my building, which was once 100% retail, into office and medical uses,” he said, adding that he expects this trend, which started roughly a decade ago, to continue. “The only true retail left is Hunt’s Photo and Video, which is doing very well.”

Because of the location at the junction of the turnpike and I-91, he said, the site would be ideal for medical practices and other healthcare-related businesses, and he’s already talked with several interested parties.

While spending most of his time and energy working to fill Holyoke Mall Crossing, Barowsky is in early-stage work on a new retail development on a five-acre parcel adjacent to that property that he acquired from the mall. His primary motivation was to create more parking for the healthcare and service-oriented businesses now populating the Crossing, and he will keep one acre for that purpose. As for the rest, a vision is coming into focus.

“I’m working with a development group that wants to put in more retail — perhaps a few drive-thrus, a coffee shop, and maybe some fast food, with some traditional retail in back,” he told BusinessWest. “The plans are still coming together.”

Meanwhile, at the Holyoke Mall, which recently marked 40 years of dominating the local retail landscape, the landscape is shifting there as well, from traditional retail — although there is still plenty of that — to family entertainment and recreation.

“They’re been very savvy about remaining relevant, not like other malls,” said Marrero, citing recent additions such as a Planet Fitness and bowling alleys, as well as new theaters now under construction in the site once occupied by Sears. “They’re integrating a lot more lifestyle entertainment.”

Barowsky, who, as noted, has been a neighbor of the mall for a quarter-century, said that facility is still thriving because of its ability to adjust and put emphasis on entertainment at a time when traditional retail is struggling.

“They’re doing a lot of entertainment-related things to get people in, and hopefully people will shop while they’re there,” he said. “They’re doing a great job of adjusting — the parking lot is still full all the time.”

While the mall is evolving, so too is the downtown area, said Marrero, adding that several new businesses have opened in recent months and more are in the planning stages, including a restaurant, Jud’s, along the Canal Walk; a high-end salon called the Plan, which describes itself as a “sustainable, mission-driven beauty company” and “a force for positive change”; and the Avalon Café, a lounge and game café expected to open soon on Dwight Street.

Most of the growth involves small businesses, said those we spoke with, noting that this organic growth will likely inspire additional vibrancy across many sectors.

“When a forest burns, the forest doesn’t grow back by planting a giant oak tree in the middle of it,” said Marrero. “You have to organically grow an economic ecosystem that feeds off of itself and allows bigger businesses to come in; it’s the small businesses that start putting together the foundation for a place where people want to work and live and enjoy the surroundings.”

Building Blocks

This is what Holyoke has been building toward, said all those we spoke with — building that economic ecosystem that feeds off itself.

There are, as noted, a number of moving parts, from cannabis-related ventures to the small businesses in the accelerator cohorts at EforAll, to the new entertainment options at the Holyoke Mall.

As with the cannabis sector itself, the pieces are coming together slowly but surely. And 2020 is shaping up as a year when it all comes together.

George O’Brien can be reached at [email protected]

Education

Joint Effort

Jeff Hayden says the Cannabis Education Center is a much-needed training ground that will support the growth of an industry on the rise in Holyoke and across Massachusetts.

Investment, job creation, and tax revenue.

According to Jeff Hayden, vice president of Business and Community Services at Holyoke Community College (HCC), these are the three keys to economic development.

They’re also precisely what the cannabis industry is bringing to the state of Massachusetts, which is why HCC has created the Cannabis Education Center, a new series of non-credit courses that provide skilled workforce training to prepare participants for a career in the cannabis industry.

HCC has partnered with the Cannabis Community Care and Research Network (C3RN) to create the first-ever cannabis training center in the state, and classes and programs are in full swing.

Hayden said the conversation about a cannabis training course started two and a half years ago, when discussion was heating up across the Bay State about the prospects of legal, adult-use cannabis — and how the Cannabis Control Commission would handle an expected proliferation of businesses. Once word got out that the commission would be licensing companies — and, therefore, creating jobs in the state — HCC jumped into action.

“Right now, there are about 75 employees in Holyoke who work for cannabis companies, but the projection is that, within a year of those licenses being granted to them, there will be somewhere between 400 or 500 employees in Holyoke.”

“When we heard that, we started to look around for different resources to try to learn more about what was going to happen, and especially what was going to happen in terms of the workforce training and how does someone get ready for the jobs that are going to come in this field,” he told BusinessWest.

About 14 companies have already applied for 21 licenses, and counting, in Holyoke alone. Two are active, both run by Green Thumb Industries on Appleton Street, and the rest are provisional or pending. But that won’t be the case for long.

“Right now, there are about 75 employees in Holyoke who work for cannabis companies, but the projection is that, within a year of those licenses being granted to them, there will be somewhere between 400 or 500 employees in Holyoke,” Hayden said.

Soon, the demand for trained, qualified employees in several different cannabis careers will skyrocket, and there needs to be people to fill those positions.

That’s where HCC comes in.

Growing Like a Weed

Hayden says there are currently five key pillars under the Cannabis Education Center’s umbrella: community education, meaning teaching people all about the cannabis industry; social-equity training; occupational training; custom contract training to cannabis businesses, including communication, leadership, and mentorship skills; and developing different trainings that would be useful for the industry.

Sage Franetovich says there’s a lot of curiosity around the subject of cannabis, and she expects the career prospects to draw people from different backgrounds.

“In all these pillars that we have, we hope that we’re providing a broad-based approach to the industry to either the job seeker or the business so that they can get the training and skills they need either to get on that career track or to be able to be a successful business,” said Hayden. “The hope, really, in terms of what they walk away with, are stackable credentials.”

A few examples of rising careers in this industry are cannabis culinary assistant, cannabis retail/patient advocate, cannabis cultivation assistant, and cannabis extraction technician assistant.

But HCC’s cannabis education doesn’t stop at the center. The college is also soon to offer its first credit-based cannabis-related course, called “Cannabis Today,” through its Sustainability Studies program. While no cannabis will be allowed on campus, the programs will use off-site locations for programs that require practice with the plant.

Sage Franetovich, Biology professor at HCC, will be teaching the class and said she has been working on developing the curriculum for the fall of 2020, and hopefully sooner, in the summer, if all goes well.

“With a response to the growing market and job market, we decided it would be a good fit to offer a course on cannabis cultivation with a focus on hemp,” she said.

The class will target topics such as the cultivation of hemp, indoor growing versus outdoor growing, and plant diseases and pest management.

Franetovich said she has been working with several people in the cannabis industry to develop the best possible curriculum for the class. “I think there’s a lot of curiosity around the subject, and I think that will be a draw for people from different backgrounds.”

All this activity comes in response to what will soon be incredibly high (no pun intended) demand for a cannabis workforce.

“When you start to think about that many new people coming in, that’s the equivalent of some of the large things that have happened regionally, like the CRRC company in Springfield, or MGM,” Hayden said.

And this center is striving to prepare people for careers in cannabis with everything from knowledge of the cannabis plant to knowledge of the industry itself, to understanding the commission’s regulations and how those impact the way they’ll do their jobs.

For example, a culinary technician working with edibles needs to know some of the ways the chemicals impact the edible product, specific measurements, levels of dosing, and more.

In the end, all this training is an investment that will, hopefully, bring the city of Holyoke a lot of jobs, and a lot of revenue.

High Expectations

Hayden estimates that between $20 million and $30 million has already been invested in the cannabis industry in Holyoke alone, despite only two operating licenses so far. He says the taxes going to the state will be significant, but 3% of sales also goes to the municipality. That means $1 million in sales equals $30,000 in taxes for the city of Holyoke.

“It’s a significant amount of money that the town can garner,” he said. “This past year, we’ve already received over $100,000 from cannabis-related companies for the city of Holyoke with only two licenses.”

And, so far, the response to the center has been positive, he noted. One of the first programs, a one-time class on the business and accounting side, drew 15 participants, and more than 100 people have expressed interest in training.

The first occupational training course began on Jan. 25 at the HCC MGM Culinary Arts Institute and will continue for five more Saturdays for eight hours a day. C3RN will then place those who successfully complete the course in internships with local companies.

The ultimate goal of all these trainings is not simply to hand participants a diploma, but give them several certifications that will allow them to thrive in every aspect of the field.

“That’s really what we’re shooting for, someone who’s got multiple pieces of paper,” Hayden said. “It’s not just one diploma, it’s multiple pieces of paper that show to an employer that they’re ready for the job and that they can learn from the employer in terms of the skills they need for the future.”

Kayla Ebner can be reached at [email protected]

Law

Cannabis, Marijuana, and Hemp

By Chris St. Martin and Sarah Morgan

Late last month, the U.S. Department of Agriculture published regulations on domestic hemp production. However, there remains significant confusion surrounding the legality of cannabis, marijuana, and hemp.

Chris St. Martin

Sarah Morgan

This confusion comes from state and federal governments’ shifting approaches to regulating these industries. It is even more difficult to understand the legal framework surrounding retail sales, which include hemp and CBD products, as well as marijuana products sold by state-licensed dispensaries. In this article, we hope to provide some clarity regarding what the laws say about cannabis and how they are being enforced.

What Is Cannabis?

Cannabis is a plant genus, or family, composed of three species: Cannabis sativa, Cannabis indica, and Cannabis ruderalis. The species have physical variations between them that allow them to grow in different environments, flower at different periods during the growth cycle, and contain different chemical properties (see discussion on cannabinoids below) that produce different sensations when ingested.

Strains (think, ‘flavors’) produced from the Cannabis sativa species tend to incite feelings of euphoria, boost energy and creativity, and lead to a more head-focused high. Cannabis indica, alternatively, primarily affects the body, and is often helpful in reducing muscle aches and pains and inducing sleep. For these reasons, strains cultivated from indica plants tend to be more useful for medicinal purposes.

“THC, or tetrahydrocannabinol, is the cannabinoid responsible primarily for producing the psychoactive effect, or the ‘high,’ commonly associated with ingesting cannabis.”

Cannabis ruderalis is somewhat between sativa and indica, and has lower yields, but can often be cross-bred with other species to create medicinal strains. The stems of this species can also be used to make clothing and textiles.

The flowering buds of the cannabis plant produce a resin that contains cannabinoids, which are unique chemical compounds found only in cannabis and interact with different receptors in the user’s central nervous system to produce the effects described above.

The ratio of the cannabinoids in a particular strain depends on the genetics of the plant from which it is derived — in other words, how the plant has been bred by selectively combining sativa and indica plants to emphasize particular cannabinoids over others and create a unique strain with individualized characteristics.

More than 100 cannabinoids have been identified, most notably THC and CBD.

THC, or tetrahydrocannabinol, is the cannabinoid responsible primarily for producing the psychoactive effect, or the ‘high,’ commonly associated with ingesting cannabis. Although THC is most notable for its psychoactive properties, it has also been purported to have medical benefits on the user and can be used to treat a variety of conditions, including seizures, inflammation, pain, nausea, depression, and anxiety.

CBD, or cannabidiol, has anti-anxiety effects on the user and is utilized primarily for its purported medicinal benefits. It does not produce psychoactive effects (in fact, it may lessen the psychoactive effects of THC), and, for this reason, although CBD and THC have similar medicinal benefits, some people may choose to ingest only CBD to avoid feeling the ‘high’ brought about by THC.

CBD can be extracted from the resin of the cannabis plant and can be processed into essential oils, tinctures, and other non-smokable forms. CBD can even be added to body-care products and applied topically.

Marijuana or Hemp?

The term ‘marijuana’ is generally used to identify cannabis that is cultivated for its intoxicating effect on a user. Marijuana was made effectively illegal under federal law with the passage of the Marijuana Tax Act of 1937.

The Legislature later classified, and criminalized, marijuana as a Schedule 1 narcotic under the Controlled Substance Act of 1970, during the nascent ‘war on drugs’ declared by President Nixon. Classification as Schedule 1 — alongside heroin, LSD, and ecstasy — means that marijuana is deemed to have no currently accepted medical use and a high potential of abuse.

Public sentiment has recently begun to reject this classification of marijuana and the total federal prohibition. Although, at this writing, marijuana remains illegal at the federal level, 11 states, including Massachusetts, and the District of Columbia, have passed laws legalizing marijuana for recreational use, and 23 others have legalized the use of medical marijuana. Since 2016 in Massachusetts, individuals age 21 or older may possess up to an ounce or more on their person and up to 10 ounces in their homes without violating Massachusetts law.

The Cannabis Control Commission (CCC), the agency tasked with regulating the state’s marijuana industry, provides further information regarding the Massachusetts law on its website.

Cannabis that is selectively bred for non-intoxicating properties is considered ‘hemp.’ Industrial hemp is one of the oldest cultivated crops in the world and is useful in formulating textiles, rope, paper, plastics, insulation, oil, and body-care products. Because of this selective breeding, hemp plants contain only trace amounts of THC, but their CBD levels are unchanged.

“State and federal legal developments have created a confusing CBD marketplace. Stores everywhere are selling CBD products intended for human consumption and making health claims about such products. However, both types of sales are illegal, according to state and federal agencies.”

Hemp is cultivated to enhance its distinctively versatile qualities, such as longer, more fibrous stalks and shorter leaves, rather than for the leaves and flower buds for which marijuana plants are cultivated. Because of this, hemp cannot be consumed as an intoxicant. Nevertheless, the Controlled Substances Act did not distinguish between marijuana and hemp (since both are technically cannabis) in classifying marijuana as a Schedule I substance; therefore, hemp was swept up in the heyday of the war on drugs and made illegal.

Changing Legal Framework

Under the Farm Bill of 2018, the U.S. Congress, for the first time, legalized the production and sale of hemp at the federal level, eliminating its status as a Schedule I narcotic. The Farm Bill and regulations define hemp as cannabis containing not more than 0.3% THC. Cannabis plants containing any quantity of THC above that amount are classified as marijuana, and remain illegal under federal law. In late October, the USDA published interim regulations on hemp production, which means they are subject to change after a public comment period but were effective immediately.

These regulations also set forth licensing requirements, procedures for testing THC levels and disposal of non-compliant plants, and rules governing other aspects of the industry.

The FDA has taken a more cautious approach, citing concerns about whether CBD is safe to consume in food and supplements. In an April 2019 statement, the agency sought to clarify its position on hemp products. The statement indicated that enforcement resources are directed toward illegal sales of CBD products that claim to prevent, diagnose, treat, or cure serious diseases, such as cancer.

However, it also stated that it is unlawful to introduce CBD-containing food into interstate commerce or to market CBD products as dietary supplements.

This means that effectively all CBD food products, including those derived from legally grown hemp, are unlawful, according to the FDA. The only hemp products that can be legally added to foods are hulled hemp seed, hemp-seed protein powder, and hemp-seed oil, because the seed of the hemp plant contains neither CBD nor THC.

The FDA has undertaken to develop CBD regulations, but despite repeated urging from the USDA and members of Congress, the former FDA commissioner indicated that that the rule-making process around CBD food products would be more complex than conventional products and could take years.

Massachusetts legalized hemp production as a component of the same 2016 law that legalized recreational cannabis. However, after the change of law at the federal level, both the state Department of Agricultural Resources and Department of Public Health issued policy statements on the same day imposing strict rules on hemp products. These two statements echo the FDA’s prohibitions on adding CBD to food products and making health claims about CBD.

What Can We Buy and Sell?

These state and federal legal developments have created a confusing CBD marketplace. Stores everywhere are selling CBD products intended for human consumption and making health claims about such products. However, both types of sales are illegal, according to state and federal agencies. Consumers, retailers, growers, and other stakeholders are looking for information about what is legal, what is not, and why there is so much ambiguity.

CBD derived from marijuana remains illegal under federal law. However, the U.S. attorney in Massachusetts has indicated he will not direct his office’s resources to federally prosecute cannabis companies that are permitted under state law, a move that has allowed the cannabis industry in Massachusetts to flourish. Under this state’s regulatory regime, marijuana products containing CBD, as well as THC, can be bought and sold at cannabis dispensaries that are licensed by the CCC.

Retailers in Massachusetts sell cannabis flower, edibles, concentrates, and other forms of marijuana containing both THC and CBD. CCC regulations do not classify edible marijuana products as food, allowing dispensaries to sell CBD-infused edibles without contravening the state Department of Public Health’s policy.

In contrast, despite the federal and state legality of producing hemp, some of the most popular hemp-derived CBD products — food and supplements — cannot be sold under either state or federal law. Nevertheless, the CBD industry may avoid total extinction, since CBD can be added to topical lotions and other cosmetics without defying the laws.

Non-food CBD products, however, represent a small percentage of the potential uses of CBD, and the loss of a valuable opportunity for introducing additional, more profitable products containing CBD into the marketplace adds further demand for the FDA to promulgate its promised CBD rules. Furthermore, hemp can be legally sold for rope, clothing, building material, and other non-ingestible uses, but hemp farmers have stated that Massachusetts currently lacks the manufacturing infrastructure necessary to process the plant for these purposes.

Chris St. Martin and Sarah Morgan are both litigation associates at Bulkley Richardson; (413) 781-2820.

Banking and Financial Services

Growing Concern

The American Bankers Assoc. argued it’s critical that legal, cannabis-related businesses have access to the regulated banking system as it urged the Senate to advance the SAFE Banking Act in recent testimony before the Senate Banking Committee.

Joanne Sherwood, president and CEO of Citywide Banks in Denver and chair of the Colorado Bankers Assoc., testified on behalf of ABA. Sherwood explained how current federal law prevents financial institutions from banking any money derived from cannabis-related businesses and how a narrow, banking-specific remedy to the cannabis banking problem will reap immediate public-safety, tax, and regulatory benefits.

“Because cannabis continues to be illegal at the federal level, handling funds associated with cannabis businesses can be deemed money laundering,” said Sherwood. “That federal/state divide has particularly severe repercussions for banks and communities like mine, where the cannabis industry is fully operational, but it also impacts banks in every state.”

With limited access to banking services available, large amounts of cash remain on site in many of the cannabis-related businesses, which creates significant safety concerns for the communities where they are located. For example, on average, more than 100 burglaries occur at cannabis businesses each year in Denver, according to the Denver Police Department.

“Providing a mechanism for the cannabis industry to access the regulated banking system would help those businesses and their surrounding communities by reducing the high volume of cash on hand, thereby reducing instances of cash-motivated crime,” Sherwood said.

Additionally, since many cannabis businesses do not have a bank account, they are forced to pay their taxes in cash at local IRS offices. Processing paper-based returns costs the IRS nearly 17 times more compared to an e-filed return — a cost borne by taxpayers. Cash-based taxpayers are also more likely to underreport income than those who receive payment by check or those subject to third-party reporting or withholding.

“Banking the cannabis industry is a straightforward way to ensure that businesses have the means and motivation to remain fully tax-compliant,” Sherwood said.

The SAFE Banking Act, which is currently before the committee for consideration, would help address this urgent problem. The bill specifies that proceeds from a state-licensed cannabis business would not be considered unlawful under federal money-laundering statutes or any other federal law and directs the Financial Crimes Enforcement Network and federal banking regulators to issue guidance and exam procedures for banks doing business with legitimate cannabis-related businesses.

“Although the SAFE Banking Act does not cure all of the cannabis-related banking challenges, it would help the 33 states that have legalized cannabis in some form to make their communities safer, collect their taxes, and regulate their cannabis markets effectively,” said Sherwood. “ABA supports the SAFE Banking Act and urges the committee to mark up and advance this legislation as soon as possible.”

Cover Story Uncategorized

Cannabis Ink.

Michael Kusek

Suffice it to say the cannabis industry in Massachusetts is growing and changing at a torrid pace, and it will continue at this speed for some time to come. There are myriad aspects to this sector, from the many different kinds of businesses within it to the dizzying number of products now on the shelves. Michael Kusek, a veteran journalist, has now made it his business — literally and figuratively — to help the public understand all it needs to know.

$20 billion.

That’s the number Michael Kusek offered — somewhat reluctantly and after some hemming and hawing — when he was asked to try to guesstimate how big the still-fledgling cannabis industry might become in the Bay State.

He was reluctant because no one really knows the answer to that question at this point, and they may not for some time. And Kusek knows that better than anyone, which is why he was asked in the first place.

Indeed, Kusek has established himself as the pre-eminent journalist in these parts when it comes to the broad, as in very broad, subject of cannabis, status earned by starting a publication devoted entirely to that subject.

It’s called A Different Leaf, with the subtitle A Journal of Cannabis Culture, and it hit the streets — that’s an industry term — just a few weeks ago. This will be a quarterly publication, sticker price $7 ($10 in Canada), and it now carries the tagline “Bringing You the Best of Cannabis in Massachusetts.”

It is, as Kusek will tell you himself, just the latest of many entrepreneurial endeavors rooted in (yes, that will be the first of many puns you’ll read) the cannabis industry. And he obviously believes it will be a success.

The first issue provides ample evidence of the fact that this subject matter, and this industry, are now quite broad, and Kusek and his team will have plenty to write about. Story headlines include these:

• “Tale of Two Cities: Cannabis may be legal statewide, but what gives with certain cities?”;

• The Grandfather of Cannabis: If you want to learn Massachusetts cannabis history, start with Lester Grinspoon”;

• “And Justice for All: The cannabis industry holds huge promise for new jobs, but who is getting to start companies?”;

• “The Women of Cannabis: These women are shaping the industry”;

• “Going Gourmet with Cannabis: Chef David Yusefzadah’s gourmet take on cannabis edibles and fine dining”; and even

• “Sex & Cannabis: Strategies for combining sex and cannabis.”

To put out such a publication credibly, Kusek has obviously had to set himself up as an authority on this subject, something few other individuals can claim. And as BusinessWest talked with him, he certainly spoke the part.

The cover of the first issue of A Different Leaf, featuring a piggy bank with the word ‘weed’ on it, sends a strong message about the industry and its potential impact in and on the Bay State.

When asked about the pace of businesses opening and some of the latest additions to the landscape, he rattled off the names of new dispensaries in far corners of the state. He knows which communities have voted to ban such enterprises, and he’s even put together a color-coded map to show people the breakdown, a map he says is quite revealing and shows a different twist on business in the Bay State when it comes to east-west dynamics.

“Start on the Cape, and at Provincetown and work your way west — from Provincetown to the elbow, all legal; from the elbow to the armpit, all banned,” he explained. “You get to the South Coast, there’s a smattering, a few banned, and then you get to the suburbs of Boston: the majority of ‘banneds’ in the state form a giant red ‘C’ around the city of Boston, which is this green dot right in the middle.

“That ‘C’ ends at Route 495,” he went on. “And from there to the Berkshires and the New York border, it’s all green with the exception of a handful of towns. So in a state where the gravitational pull of Boston for industry is so strong, the cannabis industry is 495 west.”

As for that question about how big the industry might get in the Bay State, Kusek offered that number, $20 billion — the high end, he acknowledged — but quickly added a caveat.

“In a state where the gravitational pull of Boston for industry is so strong, the cannabis industry is 495 west.”

“It all depends on what our neighbors do,” he explained, noting that, while Massachusetts is alone in the Northeast when it comes to states that have legalized cannabis and also have mechanisms in place for selling it, this probably won’t be the case for long.

As for how big the playing field might get in terms of locations and how many might eventually become too many, Kusek said the market will essentially determine this.

“Right now, there are only 20 businesses in the state, and they’re all pretty much opening their doors to a reasonably healthy amount of traffic,” he said. “That’s going to change over time.”

For this issue, BusinessWest talked at length with Kusek about his new publication, but mostly about the business of cannabis what dimensions in might take in the years to come and how this ultra-intriguing development will change life in the Bay State.

Stirring the Pot

“I didn’t smoke pot until college, when one night my freshman roommate and a friend sparked up my first joint. Two things happened: I didn’t get high, but my fear of cannabis evaporated. This thing I had been taught would ruin my life didn’t seem frightening — and from there it became part of my social life.”

That’s how Kusek began his “From the Editor” piece that introduced his magazine to the reader on page 3 of the first edition. He would go on to talk about how he found that cannabis helped him sleep better, and a few sentences later, he hit at the heart of what this venture is all about.

“Much of the cannabis media is aimed at people who are knowledgeable about cannabis, work in the industry, and/or are in their 20s. Where was the magazine for the older occasional user looking to expand their horizon now that legalization is real?” he wrote, adding that A Different Leaf is the answer to that question.

This map, indicating which communities have banned cannabis businesses (red) and which ones haven’t (green), shows how Western and Central Mass. are the big players in this emerging industry.

It is, indeed, intended for those who, like Kusek in his freshman dorm room, may have overcome their fear of cannabis (that’s may) but still have questions about this product that until very recently was illegal in this state. And Kusek backed up his assumptions that there are many, many people in this category with some anecdotes.

He mentioned a woman in her 70s who was wondering, as he did, if cannabis might help her sleep better without having to resort to sleeping pills, while a younger man asked him if cannabis might provide some relief for his aching knees.

These are the kinds of questions, coupled with growing certainty that a publication targeted to the people who were asking them would be viable and profitable, that prompted Kusek to greenlight his media venture.

Actually, it’s his latest media venture.

Indeed, Kusek, who told BusinessWest he has ink in his veins, has an extensive background in journalism, a second career launched after years of working as a development professional left him looking for something new and different.

“People started running in the other direction when they saw me,” he joked, referring to the latter stages of work raising money for various institutions, including the Springfield Symphony Orchestra.

He changed course and went into public relations and communications work for several years, and while doing that was recruited to handle marketing for the Valley Advocate.

“I had been on the outside of media for a number of years, but this was my first professional stint inside the media, and I really liked it,” he said. “I thought I liked the journalism side of it, which I do; I’m fascinated by it. But what I really began to get interested in was the business side of media.”

He left the Advocate in 2008 with designs to start an arts magazine for New England, but quickly surmised that 2008, the climax of the Great Recession, wasn’t a good time to start any business, so he put those plans on ice and went back into communications.

When times were better, the start of 2014, he launched Take, an arts and culture magazine that, while well-received by readers and crtitics, “never found its niche with advertisers,” said Kusek.

By 2017, Take was winding down, and Kusek was again looking for another challenge. He found one, eventually, in cannabis and a need he identified to create something for older, as in over 50, audiences.

There is a need to stress eventually, because he Kusek certainly didn’t rush into this. He said he did his homework, in the form of extensive research concerning both the emerging industry and the press devoted to it.

“I went to the Barnes & Noble in Hadley and purchased every cannabis magazine they had on the stands, and then I drove to the one in the Northampton and did the same thing,” he recalled, adding that, by the time he was done, he had quite a pile.

He would break these publications down into three categories — the ‘legacy’ magazines such as the well-known High Times, a huge number of business-to-business magazines, and a smaller number of titles he labeled ‘bro’ magazines, aimed at a decidedly younger audience.

What was missing from this pile, he determined, was something devoted to those 50 and over and not exactly experts on this subject.

Growing Like Weed

He describes what he came up with to fill that void this way: “Wine Spectator meets High Times for the 45-to-50-plus crowd,” an intriguing combination editorially that he was reasonably certain would be well-received.

But he knew that solid content without advertising support wasn’t going to get him very far. So he said his next step was to Google ‘cannabis and advertising,’ and the first thing that came up was a Boston Globe article quoting sources talking about how businesses within the cannabis industry were struggling to find media outlets to take their advertising dollars.

“I said, ‘I can take their advertising dollars,’” he told BusinessWest, adding that laws prohibit such companies from advertising on the Google Display Network, Facebook, and other platforms. “I thought there was some space there from a revenue standpoint.”

The first issue gives some evidence of this space, with ads from a number of recreational and medical dispensaries, agencies such as the Mass. Recreational Consumer Council, a hydroponics outfit, and businesses that support the industry, such as Brigade, a Hadley-based company that has helped a number of cannabis-related businesses with branding.

“I think the biggest threat to what could be a really interesting and dynamic industry is if big money rolls over the small businesses. You have some large multi-state operators that could, with their capital, become like Dunkin, with locations on every corner; they have enough capital to make that happen.”

With enough of these advertisers secured — and it took some time to secure them — Kusek decided to let the presses roll. He’s optimistic about the venture and predicts that, as the industry grows and more businesses across the sector open their doors and then desire to market their goods and services, he will have a sustainable business model. And looking down the road, he said the venture could certainly be expanded into other states and parts of the country as legalization continues to spread.

While watching for business opportunities, Kusek is also watching the industry as it grows and evolves in the Bay State. And while watching, he noted that things are certainly happening quickly and the picture is changing almost every day, something he finds both intriguing and challenging as a journalist.

“What’s interesting about being in the industry as a relative newcomer is how dynamic it is and how it changes week to week and month to month,” he noted. “There are always new businesses coming into the pipeline, and there’s new people coming on to the scene. As a journalist sort of keeping an eye on that industry, it’s a lot — there’s a lot of info coming in.

“In this business, a week feels like a month, and a month feels like a year because things move so quickly,” he went on. “We’re in a state where highway improvements are measured in 20- or 30-year increments, so the idea that we have a state agency that got an industry up and running in two years is pretty amazing.”

Also intriguing is the high level of transparency in this new industry, something Kusek said is unique within state government — “you don’t see the head of the DMV writing any open letters right now” — which he believes is a byproduct of expectations.

“This is an industry that grew out of a political movement,” he explained. “Legalization was a political movement, so you have activists, even though it’s legal, continue to pay attention. You have patient activists continue to pay attention to the medical program to make sure it’s serving people really, really well.

“And that’s very different from saying, ‘we’re going to expand the alcohol program, and there are a bunch of activists making sure it’s done right,’” he continued. “Lobbyists, yes, but activists? That’s a different story, and that’s been the genesis for the openness you get from the cannabis commission. If you want to follow how this industry grows, you can look in and see how the sausage is made.”

Stirring the Pot

Kusek said he has been struck by, and quite impressed by, the entrepreneurs now doing business across this broad sector.

They are pioneers of sorts, he said, charting new territory in a fledgling industry, and they’re also survivors in what has become a rugged contest to gain a license and open the doors to a business, an assignment far more difficult than it might look to the casual observer.

“I spend a lot of time with people in this industry, and I have rarely met harder-working people,” he told BusinessWest. “The idea of these people being lazy stoners is far from the truth. These people work around the clock to make their businesses work, and you have to give them credit for that, because it’s not easy.

“They got a lot of curveballs thrown at them,” he added, referring to, among other things, the often complex and taxing host-community agreements and the many hurdles that must be cleared on the way to getting a license. “These people just keep slogging forward, and it’s pretty impressive.”

Elaborating, he said it takes at least a year to attain a license, and there are significant upfront costs and expenses to be incurred before one can earn a nickel.

“One of the challenges with opening a cannabis business is that the license is attached to an address,” he explained. “So once you get your host-community agreement and start the application process, you have to buy or rent a building. And it can take months before you get that license; there’s a pretty good burn rate on your capital before you earn any money.”

This hard reality was one of the factors that delayed the first issue of A Different Leaf, he said, adding that many of the businesses he was counting on to support that venture were still waiting to secure a license.

When asked to look down the road and project what the scene might look like in a year or two — or 10 — Kusek reiterated that this is difficult because Massachusetts certainly won’t be the only state in the Northeast doing this for much longer.

At present, large numbers of people are crossing over the borders to the Bay State to buy cannabis products, he said, adding that soon, a relative term to be sure, they may not have to.

When asked about what might go wrong as the industry expands and broadens its influence, Kusek this, too, is difficult to project.

“I think the biggest threat to what could be a really interesting and dynamic industry is if big money rolls over the small businesses,” he explained. “You have some large, multi-state operators that could, with their capital, become like Dunkin’, with locations on every corner; they have enough capital to make that happen.”

At present, the Cannabis Control Commission has governors in place to limit such a threat, he added quickly, noting that entities are currently limited to three stores. But moving forward, the state needs to keep such measures in place to prevent monopolies from developing.

Meanwhile, there is the state’s Social Equity Program, designed to provide a pathway for individuals and businesses in communities of “disproportionate impact” to enter the adult-use cannabis marketplace. That program is laudable, said Kusek, and it provides opportunities for certain demographic populations, but these individuals face stern challenges to enter the growing cannabis marketplace.

“Overall, I think the state is doing a commendable job, from where I sit, trying to balance fostering small businesses, fostering this cadre of businesses that are applying under the Social Equity Program, with the big companies that are coming to Massachusetts,” he said. “It’s a very delicate balancing act.”

What also remains to be seen is how and to what extent the cannabis industry and players within it become part of the business community on a regional and statewide basis, he said.

“Cannabis people are thinking, ‘are we going to be welcome?’” he said. “Traditional industry organizations like AIM [Associated Industries of Massachusetts]… AIM was not in favor of legalization, but now it’s like, ‘we have this multi-billion industry on our hands — how do we make them part of our organization?’ It will be interesting to see how traditional industries embrace this.”

Give and Toke

“One thing I’ve discovered about cannabis in the last year is that it is a topic full of evolution, learning, and change.”

That’s how Kusek chose to essentially wrap up his initial message to his readers.

To some, that might seem like understatement given how the landscape has changed over the past year and how it is destined to continuing changing in the months to come.

But it also a reality.

Kusek now has a front-row seat for one of the most compelling business stories in this state’s history, and he is really enjoying both the view and the challenge of trying to capture it all.

George O’Brien can be reached at [email protected]

Law

What’s Next for the Cannabis Industry?

The cannabis industry is off to a fast and quite intriguing start in the Bay State, and two new categories of license have particular potential to move this sector in new directions: one for home delivery of cannabis products, and another for social-consumption establishments, or cannabis cafés.

By Isaac C. Fleisher, Esq.

We are nearly three years into the Commonwealth’s experiment with recreational cannabis, and the industry is finally moving beyond an amusing novelty.

The Cannabis Control Commission (CCC) reports that retail sales in 2019 alone have already exceeded $190 million, and this is just the tip of the iceberg. To date, the CCC has issued only 72 final licenses for marijuana establishments, but there are currently another 400 license applications that are pending or have received provisional approval.

Isaac C. Fleisher

This all means that, over the next few years, the Massachusetts cannabis industry is set to grow at an unprecedented rate. What we don’t know is how this growth will change and shape the industry.

Much of the excitement and rhetoric around legalization has focused on the potential to create new business and employment opportunities for communities that have been disproportionately harmed by prohibition and for local entrepreneurs. Lawmakers attempted to pursue these goals (with mixed success) through the design of the original regulations, with provisions for local control by cities and towns, special categories for equity applicants, and caps on the number of licenses that a single business could control.

The CCC has recently been grappling with these issues once again as it revises its regulations.

On July 2, after months of policy discussions and hearings, the CCC released new draft regulations for both medical and recreational marijuana, which will be open for public comment until Aug. 16. While most casual observers will not find the draft regulations to be scintillating reading material, there are a number of interesting new provisions that can tell us a lot about what the future of Massachusetts’ cannabis industry could look like.

Two new categories of license have particular potential to move the cannabis industry in new directions; one for home delivery of cannabis products, and another for social-consumption establishments (i.e., cannabis cafés).

Social Consumption

A social-consumption license would authorize businesses to sell cannabis products to customers for on-site consumption. Just think of your neighborhood bar, but it serves cannabis instead of alcohol. Under the proposed regulations, cannabis could be consumed at a social-consumption establishment in almost any form, except for combustible (i.e. smoking it the old-fashioned way), but even that possibility is left open by a provision for an outdoor smoking waiver.

Cannabis edibles would have to be prepackaged and shelf-stable, but there is no prohibition on serving prepared food on site, so long as the food isn’t directly infused with marijuana. That means we could soon be seeing cannabis restaurants that offer gourmet food alongside gourmet pot.

“There is no prohibition on serving prepared food on site, so long as the food isn’t directly infused with marijuana. That means we could soon be seeing cannabis restaurants that offer gourmet food alongside gourmet pot.”

The CCC is taking an incremental approach to this new class of license by including provisions for a social-consumption pilot program that would be limited to only 12 municipalities. Towns that participated in a working group on social consumption — including North Adams, Amherst, Springfield, Provincetown, and Somerville — would be among those able to opt into the pilot program. Licenses would initially be available only to applicants that were already licensed as a ‘microbusiness’ or a ‘craft marijuana cooperative,’ or applicants certified by the CCC as an ‘economic empowerment’ applicant or ‘social equity’ applicant. The pilot program is an interesting attempt to address the demand for new cannabis markets, while still preserving access for small, local, and minority-owned businesses.

Home Delivery

A licensed ‘delivery-only retailer’ could deliver marijuana products directly to a customer’s residence. Advocates for home delivery have long touted its potential to level the playing field between large, well-funded businesses and the small, local entrepreneurs the CCC seeks to attract.

In theory, a delivery-only licensee wouldn’t need much more than a vehicle in order to begin operating. However, the draft regulations include a number of provisions that could create substantial barriers to entry for small-time operators. Home-delivery orders would still need to go through a traditional brick-and-mortar retailer, who would presumably not be particularly interested in providing their product to competitors at wholesale prices.

Additionally, the draft regulations prohibit deliveries to any residence in a town that has banned brick-and-mortar retailers.

Numerous security provisions included in the draft regulations create further costly (and controversial) requirements for delivery-only retailers. Each delivery vehicle would need multiple surveillance cameras, and delivery agents would need to wear body cameras to record the entire delivery, including the customer. This has predictably resulted in a number of concerns about privacy and regulatory overreach.

At a recent CCC meeting, Commissioner Shaleen Title pointed out that, “to the extent that home delivery to [medical-marijuana] patients has been ongoing, there may already be security in place that goes above and beyond our regulations, and to my knowledge there haven’t been incidents … That seems to be an argument that you should not be putting in additional burdens and regulations.”

While body cameras got the most attention at the CCC’s meetings, one provision in the proposed home delivery regulations with the potential to be far more consequential is the option to use a “third-party technology platform provider” to facilitate the ordering process. In simpler terms, we could soon be saying “there’s an app for that.”

While there is still a thorny tangle of federal and state laws preventing a true e-commerce for cannabis, it’s not hard to imagine startups racing to be the first ‘Uber for weed.’ This would certainly make the consumer experience even more convenient, but it would mean yet another blow to the delivery only retailer’s profit margin, and does not seem consistent with the goal of lowering the barrier to entry for small businesses.

Of course, excitement about new markets comes with the important caveat that the rules still need to be finalized and, in some cases, there would need to be a corresponding change in state law. Nevertheless, it is encouraging to see that regulators are willing to consider new ideas for Massachusetts’ cannabis industry. The lines around the block at the first retailers have everybody seeing dollar signs, but with no statutory limits on the number of licenses that the CCC can issue, it is only a matter of time before supply exceeds demand.

In states that are further along in this process there is already evidence of a boom-bust cycle, as oversupply causes wholesale prices to plummet and smaller operators are forced out of the market. In Massachusetts, where the cannabis industry is still relatively nascent, there is still opportunity for regulators, consumers, activists, and entrepreneurs to play important roles in shaping the future of the industry.

Attorney Isaac C. Fleisher is an associate with Bacon Wilson, P.C., where his practice is focused on business and corporate law, with particular emphasis on the rapidly expanding cannabis industry. An accomplished transactional attorney, he has broad experience in all aspects of business representation, for legal matters ranging from mergers and acquisitions to business formation and financing; (413) 781-0560; [email protected].

Opinion

Editorial 1

A year ago — and, actually, long before that — this region was awash in speculation about what the gaming industry might bring to the region and what its broad impact might be.

The industry was new to the state, and there were questions. There was also excitement, some anxiety, no shortage of opinions, and plenty of hope. A year later, most of those emotions are still in evidence, and there remain many questions.

But in the meantime, another industry has emerged that apparently has the potential to have far more reach and far more impact: cannabis.

As several different stories in this issue reveal, the cannabis industry has certainly put down roots in the four counties of Western Mass., and while it’s still too early to know for sure, it appears to have far more potential to change the landscape — in all kinds of ways — than gaming.

Why? Because this is a far-reaching industry with myriad moving parts and potential business opportunities — from cultivation to retail to real estate to, yes, a new publication (see page 6). Also, it is seemingly far more democratic.

Indeed, while the gaming industry is reserved for large, as in very large, players investing $1 billion or more, the cannabis sector offers opportunities for individuals and small groups of investors — not that getting into this business, let alone succeeding in it, would be considered easy in any way, shape, or form.

And, as Michael Kusek, founder of that publication, A Different Leaf, points out, this is one of the few industries in this state where the opportunities are in Central and Western Mass., not Boston and within the Route 128 beltway. That’s because the majority of cities and towns in this region are welcoming of this industry, while most of those surrounding Boston are not.

When Easthampton Mayor Nicolle LaChapelle said her community was “head over heels in love, I would think, with cannabis, and I don’t think that’s overstating it,” she wasn’t just speaking for many of her colleagues — remember, Holyoke’s mayor, Alex Morse, joked to a television reporter that his goal was to rename the city the ‘Rolling Paper City’ — but she was speaking about how this sector can be a real game changer in terms of everything from jobs to tax revenue to foot traffic on Main Street.

The cannabis industry is not an easy one to follow. As noted, there are a lot of moving parts, and the scene changes every month, if not every week, as new locations open, more host-community agreements are forged, and more real estate is acquired for the purpose of establishing businesses in this sector.

But as hard as it is to keep track of all that is going on, it’s a worthy endeavor, because this industry certainly bears watching. No one really knows how things will shake out as more and more locations are opened and, eventually, more states decide to follow the Bay State’s lead.

But it seems almost certain that this sector will bring more impactful change, from a business perspective, than anything this region has seen in decades.

Features

Hopes Are High

After recreational marijuana use became legal in Massachusetts in 2016, the expectation was that retail stores would pop up quickly within a couple of years. That hasn’t happened, as the state — and host communities — have taken a deliberately measured approach to permitting. But with early returns strong from a few shops, and towns reporting solid tax benefits and no real community disruption, the pace of openings should begin to increase — and so will the economic benefits of this new industry.

If Western Mass. was full of people who thought the sky was falling when recreational marijuana was legalized, well, Mark Zatyrka thinks fewer of them are saying the same thing now.

“I knew it would change. But I feel like it’s changed at a more rapid pace than I would have expected,” he said of public perceptions about the new access to cannabis products in the Bay State. “When we held our public meetings, we had a few folks who thought we were going to destroy the world and everything would come crashing down once we opened. But the opposite has been true.”

Take the location of INSA, the cannabis dispensary he owns in Easthampton, which has sold marijuana for medical purposes since February 2018, but began selling for recreational, or adult, use in December. Tucked beside Eastworks at the rear of the Keystone Mills building on Pleasant Street, he said some may have worried about INSA’s proximity to a nearby park where people hike.

“But, really, we bring more people to the area, we have cameras all over the place, it’s well-lit, so it’s actually a safer place to be,” Zatyrka said. “If the perception was that customers are hoodlums who come in, go out back, and get high and do crime, well, look around — we serve almost every demographic you can imagine, from seniors to millennials, rich and poor, and they’re not violent criminals. They’re not here to cause trouble. Yeah, the perception has changed pretty rapidly.”

Perceptions — pro and con — of this new industry have undoubtedly shaped a permitting process, on both the state and local levels, that has moved more slowly than first expected when recreational use became legal in 2016. The state’s first adult-use retail shops were expected to be open last July, but instead, the first two opened in November, and the pace of new shops since then has been leisurely at best.

But they’re coming. And the ones that are open are changing those worst-case perceptions.

Mark  Zatyrka says INSA has attracted a diverse array of customers

Mark Zatyrka says INSA has attracted a diverse array of customers since starting recreational sales in December.

Take New England Treatment Access (NETA) in Northampton, the Bay State’s first retailer of cannabis products for recreational use.

“For us, it’s been a positive experience,” Northampton Mayor David Narcewicz told BusinessWest. “We’re starting to see some of the economic benefits in terms of taxes, and I know our local businesses have been creative in embracing the new industry. Businesses back in November were offering specials to people who came into town and showed a receipt for shopping at NETA. If anything, I think the business community has been receptive.”

He noted that Northampton’s voters were among the most enthusiastic in their support of legal cannabis, both during the 2012 statewide vote to legalize medicinal marijuana, then for adult use in 2016. As mayor, he said, his approach has been to respect the community’s voice.

“So we’ve been very open and proactive; we created zoning regulations that essentially treat this new industry like any other business, and we did not impose caps on the number of retailers like many communities did.

“We also had the experience of having one of the first medical dispensaries in the state,” he added, speaking of NETA’s original business plan. “We had a track record of seeing how they had operated and had the chance to see what the potential impacts were. They’ve been a good member of our business community; they worked with us to make sure their opening went smoothly, and have been working with surrounding businesses to make sure there’s no disruption.”

Stories like this are why, despite the slow rollout of pot shops so far — and state tax revenue well under early projections — proponents are confident that the trends toward greater public acceptance of this industry, and tax revenues to match, will soon accelerate.

“As an industry, we’ve done a good job to ensure that things are done correctly, and the state’s done a good job putting measures in place to help ensure it is a safe industry and people are getting a safe product and it’s dispensed in a safe way,” Zatyrka said. “The state did a lot of things right, which is why we’re seeing a successful rollout. I know some people wish it moved quicker, but I understand why it didn’t. There are thousands of applications, a lot of inspections, a lot to oversee. It takes time. It’s a new industry for everybody.”

Green Growth

As part of its new marijuana laws, Massachusetts imposes a 17% tax — a 6.25% sales tax plus a 10.75% excise tax — on cannabis businesses, while cites and towns take another 3%, plus whatever else they may choose to impose as part of their host-community agreements.

In Northampton’s case, that’s an additional 3%, called a ‘community-impact fee.’ The city received two checks recently: $449,825 from the Department of Revenue representing the 3% tax rate for recreational marijuana sales in November, December, and January, and $287,506 from NETA itself, reflecting the 3% community-impact fee on recreational sales for December and January.

“When we held our public meetings, we had a few folks who thought we were going to destroy the world and everything would come crashing down once we opened. But the opposite has been true.”

Other towns are seeing their coffers benefit as well. Theory Wellness opened in Great Barrington in December, paying $90,000 in taxes to the town in its first month.

“They opened to long lines, which should level off as they get more competition,” Ed Abrahams, vice chair of the town’s Select Board, told BusinessWest last month. “This is new for all of us, but so far, there have been logistically few problems.”

Southern Berkshire County communities that embrace the cannabis trade are sure to benefit from the continued illegality of the drug in both Connecticut and New York, though leaders in both states have been talking about whether that should remain the case. Brandon Pollock, CEO of Theory Wellness, told the New York Post last week that about 15,000 New Yorkers have made purchases there since its Jan. 11 opening.

“I’d say we get dozens, if not hundreds, a day from the greater New York City area,” he noted. “We get people coming up in Zipcars, people carpooling, people who say they hardly ever drive at all — but will drive to purchase cannabis.”

That sort of consumer response is intriguing to towns that see this industry as a new economic driver.

“Some cities have been great to work with, some a little more difficult to work with,” Zatyrka said. “Easthampton is very progressive city, and early on it was very obvious they wanted us here.”

That’s important from a competition perspective, he said, because the application process is already time-consuming, and communities that want to make it even more difficult to move through permitting and craft a host-community agreement can tie up a project for years, while other shops in more amenable towns are opening and picking up crucial market share and customer loyalty.

“Easthampton was great,” he went on. “Everyone wants to find a solution instead of putting up roadblocks. They want us to be successful, to get their name on the map, and they saw the benefits early on.”

He’s seeing a gradual shift, too, in where proposed projects will be located, noting that, when INSA started cultivating marijuana for medical use, most such outfits were setting up in old mill buildings or industrial parks. “Now it’s not so restrictive — people can open up on Main Street, and wind up in locations that are made for retail use, for people to come visit.”

That’s certainly the goal in Northampton, which is looking at myriad applications from cannabis manufacturers, cultivators, testing labs, and retail establishments, Narcewicz noted. It welcomes them because it sees value in how NETA, which isn’t even located downtown, has impacted business.

“NETA has created good-paying jobs in the community, and it’s an important way to expand our tax base and grow our local economy,” he said. “We have a local economy focused on retail, dining, entertainment, and a very vibrant cultural economy. And I think this complements it.”

There have been traffic and parking challenges, he added, “but if you talk to most retailers, downtowns having too many visitors is never a bad thing. We’re kind of equipped to handle a lot of visitors. And NETA has been very responsive in terms of renting additional parking from neighboring businesses, which helps them as well by providing an income stream. So far, it’s been a very positive experience, and there’s no reason to believe that’s going to change.”

Making a Name

BRIGADE has certainly benefited from this new industry. The Hadley-based brand-services company has worked with INSA extensively, including the creation of the designs for all its products and marketing.

“Everyone calls cannabis the wild west, and it is from a branding and design perspective, too,” said Kirsten Modestow, BRIGADE’s owner and executive creative director. “The rules for a whole category are being written overnight. That’s challenging, but it’s also some of the most exciting stuff we’ve ever worked on.”

With some cannabis businesses coming out with 100 or more products, it presents a unique branding challenge, she added, because the goal is not only to create a memorable look, but to help customers, many of whom have little experience with marijuana, navigate the products.

“One of the upsides of this industry is the impact it’s having on our communities, and it’s providing a lot of new opportunities and jobs,” she said. “It’s providing a lot of work for people, even tapping into farmers and other people who have services to offer and know what they’re doing.”

The education aspect Modestow touched on is one that continues in the store, Zatyrka said. The sales associates — he prefers that title to the flip industry term ‘budtenders’ — are the same ones who have worked with medical patients for a long time, and they have the training to dig deep into the science behind the products, so they can effectively explain them.

“We understand it’s a product that needs to be consumed safely, and we take that seriously,” he said. “We don’t want to be liable for someone who doesn’t know what they’re doing and eats an entire chocolate bar and has to go to the ER. We do all in our power to prevent that from happening.”

The coming months and years will see more education (and more tax revenues) as pot-shop openings pick up the pace — including Evergreen Strategies, LLC, which recently inked a host-community agreement with Belchertown to bring a facility to that town as early as this fall.

The Boston Globe recently cited industry analysts who say Massachusetts has a much slower local approval process and a more complex system to navigate than other states, and the state Cannabis Control Commission has placed a premium on an adult-use regulatory structure that supports public health and public safety. The measured pace ensures that stores pass inspections, sell lab-tested products, hire vetted workers, and track their products.

“It’s a growing industry, and will continue to grow,” said Zatyrka, who plans to open an adult-use dispensary in Springfield and has a cultivating and manufacturing license in Pennsylvania as well. Meanwhile, INSA is doubling its cultivation — located directly above the Easthampton store — and is looking to triple it in the future. “We’re still a few years out before we can meet the demands of the state. So it’s going to be hard work until then to keep up our supply with demand.”

The work is rewarding, though, especially for someone who treated his chronic pain for more than 15 years with oxycontin, oxycodone, morphine, and methadone, and suffered side effects that drastically outweighed the benefits.

“Thanks to cannabis, I was able to stop taking them,” Zatyrka said. “Cannabis helped with the withdrawals, and now I only use cannabis to treat my chronic pain, and it works 100 times better than all the opioids. I know firsthand the power of cannabis versus painkillers.”

He tells that story not because it’s unique, but because it’s representative of many people he comes across, with stories about how cannabis has helped them with seizures, Crohn’s disease, arthritis, and multiple sclerosis. And if legal adult use is helping to tear down the last bits of stigma around cannabis, he’s all for it.

“It’s incredibly gratifying to hear the stories and how grateful people are,” he said. “They’re able to get benefits from cannabis, and don’t have to hide it like they once did.”

Joseph Bednar can be reached at [email protected]m