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The New Frontier – THC and CBD Concentrates

The time has finally arrived!

It has been confirmed that concentrates are now legal to produce and sell in Montana dispensaries. Although the rules on producing them have not been established, the implementation of SB333 allows for the possession and sale of these products.

In light of this fantastic news, I cancelled a vacation so that I could drop off my first ever batch of Butane Honey (BHO) at Flower downtown this Monday, June 18. When Brooks St. opens on Tuesday, we will have it there as well. While we are waiting on some packaging and supplies to arrive, we will only carry a limited amount of shatter in .5g and 1g amounts. It is going to be popular, so make sure and stop by soon so you can try some!

I have vapor pens ordered which will have cartridges of BHO as well as terpene infused distillate. I am also working on Rick Simpson Oil (RSO) in suppository form at the request of some of  Flower’s cancer patients. I will also carry Rosin in small batches. Also, I am processing high CBD versions of all these products.

If the previous paragraph sounds like a foreign language to you, don’t worry!

I am going to talk a little about these products in this newsletter and I will have some handouts as well as videos playing in the waiting area which will help educate you. I am going to keep things pretty simple for now – we have plenty of time to dive into specifics as we walk down this road together.

Concentrates are basically the separation of the active compounds from the plant matter in Cannabis. There are many different extraction methods and each one produces a unique product. I will give a brief overview of the ones that Flower will be carrying to start with.

Butane Honey (BHO)
As the names suggests, BHO uses butane as a solvent for extraction. The butane is then removed with a vacuum oven. The end product is smoked by itself (dabbing) or by simply adding some to your cannabis and smoking it out of a pipe or bong. When BHO is firm (like the picture above) it is called shatter. When it is super sticky and cloudy, it is called budder. They are both the same thing, but shatter is more easy to deal with. Regardless, the stuff is sticky, and should not be left in hot cars. The best method is to store it in your freezer so that way you can handle it easier. THC content is normally 75% to 90%.

Distillate is the process of taking BHO and refining it even further. Distillate is top shelf product, with THC levels up to 99%. It is clear oil with no taste or smell, because all of the terpenes and flavonoids have been removed along with other impurities that may be present. Because the product is flavorless, it is common to add terpenes back into the product. Distillate is typically used in edibles or in vapor pens.

Vapor Pens 
Because concentrates are sticky and hard to deal with, many people like using them in vapor pens. There are two main types of vapor pens – the disposable wick based pens and coil based pens which are meant to be reused. There are advantages and disadvantages to both. The disposable wick pens must have the product thinned with Proapaethylene glycol in order to work, and many times these pens leak when they get too hot. That said, they are super easy to use, discreet (they look like regular vape pens), and require no maintenance. The coil pens use coils so you can use the product without a thinning agent. This means they are stronger in potency and have more flavor. The downside is that they require lots of maintenance, are expensive, and are many times rather large.

Rosin uses pressure to extract. This all natural process retains all the compounds and comes out looking much like budder. Yields are very low on rosin, so prices are very high.

Rick Simpson Oil (RSO) 
RSO is essentially distillate. Maximum potency and purist quality. RSO is not generally used recreationally. It is used when patients want to slow the progression of diseases like cancer, multiple sclerosis, parkinson’s, etc. It is generally injested.

Rest assured, our knowledgeable staff will be able to help you with all the new products as they come out. We also have one of the finest accessory shops right around the corner who can assist you in finding a system for medicating with concentrates that will best suit your needs.

I would like to say thanks to all of you for your loyalty to Flower. We are committed to quality and compliance, and as such, would not produce or sell concentrates until there was a legal way to do it. Even though we have not sold them until now, we are well aware of the importance and medical benefit these products bring patients. As always, Flower is committed to offering every product legally available and is excited to expand into concentrates (even if it means maxxing out a credit card and missing a vacation or two).

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SB333 has been signed into law by the Governor

Most of 333 will not go into effect until April 2018 
SB333, the bill to generally revise I-182 (the current law regarding medical cannabis in MT), has been signed into law by the Governor. Stay tuned for a detailed breakdown of the implementation dates of I-182 and SB333. Please note that even though the legislative process has concluded, there are still many rules which will come out of DPHHS that are yet to be determined. The ongoing establishment of the cannabis industry in MT will continue throughout much of 2017. However, with 182 and 333, a solid framework has been established, so mostly it will be details from here on out.

Sales Tax 
There is a sales tax of 4% on cannabis purchases for the first year, and a 2% tax for the following years. They call this a “provider tax” but the reality is that there is already a fee structure for providers and this tax will filter down to patients, particularly to the patients whose providers operate dispensaries. This tax is meant to administrate the program and that is why the tax is less after the first year. Estimates on the cost to set up a program that has yet to be clearly defined, are pretty difficult, so it does make sense they would cover their bases.

Fees on Providers
The fee structure for providers is to be determined by DPHHS, but the the suggested amounts are between $1000 and $5000 per year.

This is significant for two reasons –
1. There is no “cap” to the fee structure as there had been in all previous versions.
2. They are allowing DPHHS to determine the fees based on the needs of administering the program.

Although they have left the window open for an unlimited fee structure, they have clearly stated that these fees are not meant to generate revenue for other programs or the general fund. It seems they heard the message about not taxing medicine and realize that if they attempted to impose a revenue generating, recreational type tax, it would not be well received by the public. Although it would be naive to think that they don’t have ways of quietly funneling some money out if there are excess funds.

Testing Labs
Under 333 testing of cannabis for pesticides and other contaminants is required, except for providers who have less than 10 patients. For those providers, they will have a three year exemption from that rule. As for what types of tests will be required, that has been left up to DPHHS to determine. Lab managers must have a BA and some experience rather than the PHD that was required by 182.

Pretty much everyone agreed that testing should be mandated for the sake of patient safety. And although I personally believe that testing should be required no matter how big or small your farm is (do small chicken farmers get a free pass on salmonella testing?) – it does show that the legislators were thinking about the small providers out there and giving them time to adapt to a regulated environment, which is pretty cool. Not so much for patients perhaps, but the small provider in me approves. Also, rather than completely caving in to Trace Analytics and requiring a plethora of testing that would raise prices for providers and ultimately patients, they are leaving it to DPHHS. Although it is worth noting that the less strict requirements for lab managers was a direct request from the lobbyist that works for Trace. This paves the way for a big, central lab and multiple satellite labs coming to a town near all of us. Let’s just hope Trace does not buy their way into DPHHS like they did in Helena (although my guess is that they have already taken the right officials out to dinner and let them tour their big, impressive facilities.)

Residency Requirements 
The residency requirement has been raised from one year to three years. I would like to applaud the committee on this one. Raising the requirements gives local businesses some much needed time to adapt and get ready for out of state competition, at least in theory. This should help prevent an out of state green rush, although I am sure Big Canna has plenty of workarounds.

182 requires a minors parents to be their provider, meaning the parent must grow for them. SB333 allows for a parent to choose a professional provider to grow on the child’ behalf.

Seed to Sale Tracking
Under SB333, SOS tracking is mandated. This means that every plant must be documented and accounted for from the time it is rooted until it is sold. This system, which is common in recreational states, is effective at preventing diversion (selling medical cannabis to the black market, oftentimes out of state). This system will be the single biggest expense of administering the program, so much so, that it is mentioned as the main reason for the tax. While SOS can be a daunting affair (closed circuit cameras in every grow room, central databases, etc), there is no standard on what it actually entails. All the details are being left to DPHHS to decide. While I believe the good of SOS far outweighs the bad, this is the part of the program which could make or break it. If the regulations are too strict, then small providers get run out and prices soar. I hope that DPHHS forms a simple, workable SOS system that reflects the small population of the state and honors the conservative values of many Montanans. I should note that in committee they added language that puts the cost of implementation on the program and not on individuals. To be honest, I do not exactly know what this means (are they buying computer hardware for every provider?), but it does show, yet again, that they are considering how this may affect small businesses in the state and allowing DPHHS the freedom to find a workable system.

Canopy Limits 
This replaces the one ounce per patient possession limits that have been the law of the land for providers since the beginning of time (2004). Basically, it establishes a canopy size for providers based on the number of patients a provider has. This does away with weight limits and ensures that a provider will not be punished for how much cannabis they grow and harvest. In my mind, this provision is the single most important and necessary part of SB333. It allows a path to compliance, whereas the old law made it impossible for a provider to be compliant 100% of the time.

SB333 establishes a licensing system to allow for the production of concentrates. Concentrates, also called hash, honey, BHO, oil, RSO, etc are preferred by many patients in medical programs because they are easy to use, potent, have little to no smell, and have long lasting effects. Concentrates are also used to make many edible products. Some concentrates, like Rick Simpson Oil (RSO), are used by cancer patients for curative therapy, as they have shown to reduce cancer cells in some instances. In Minnesota, the most restrictive medical program in the nation with only 1,500 patients statewide, the law requires that all plant material be processed into concentrates before being administered to patients. They do not even have the option of purchasing flower.

The requirements for getting a license to produce concentrates is being left to DPHHS. Since many concentrates use flammable solvents for extraction, I anticipate some stiff requirements. This will most likely give rise to commissary labs, where space is leased to providers to do extractions. If you are looking for a way to invest in Cannabis, commissary commercial kitchens and extraction labs are worth a hard look.

I said in my first newsletter that a good law is generally one that finds a compromise. It should be a collaborative effort that addresses the needs of many groups and does not leave any one group feeling alienated and another jumping for joy. By that definition, this bill does that. Although if you follow social media alone, you may think otherwise. To be honest, this idea of regulation kind of scares me, particularly after I decided to open a coffee shop at my second dispensary location. I have seen firsthand what the DPHHS is capable of – I secured the dispensary permit in a matter of days, the coffee shop, even though it had already been one before, took months. It turns out there is a rule and a code for everything. It was expensive, frustrating, and time consuming – but it forced me to slow down and start to realize the responsibility I was taking on to ensure the safety of my customers. Although it would be easy to dismiss “big government” and rant to my friends about how pointless it is, the truth is that, for the most part, it was pretty important stuff. It was in that moment that I realized how utterly easy selling cannabis has been up to this point.

I cannot think of a time that I have been more nervous since the election as I was on the day of my “pre-operational inspection.” But an unexpected thing happened. My inspector was a really nice guy. He let me know that he would be a resource for me and that he would help me to stay compliant and to run a good business. He even acknowledged how difficult the process could be, and praised me for going through it. When that inspection was over, I felt a great sense of pride. I felt like I had earned something. I also felt better prepared to open my little coffee shop and to not completely screw it up.

In the end, the Brooks St store showed me not how over regulated a coffee shop is, but how under regulated cannabis is. And although, ethically speaking, I face far more inner turmoil selling caffeine and sugar than a non addictive herbal remedy to sick people, I can still clearly see the need for some regulation and guidance on selling any product that people consume.

Anecdotes aside, I think it is fair to say that everyone agrees that regulation is necessary. But the real question is does SB333 go to far to fast. After this bill left the House, I started to have some big concerns that it did. In fact, I was very close to withdrawing my support. But a crazy thing happened. The conference committee removed the worst aspects of it. Not just for large providers, but for small providers and even patient growers. They covered their bases to make sure the program would be self funding, and even gave the power to DPHHS to set the fee structure so that it would not become a revenue bill for the state. The surprise champion of this common sense approach was, wait for it……Jeff Essman.

Ok. I need to stop there. As I type I can hardly believe these works are coming off the keyboard. The sponsor of SB423, the root cause of the debacle that has plagued this state the last six years, actually stood up for patients and providers and was instrumental in making SB333 a workable solution. I am not making this shit up, I swear. Turns out Essman running for mayor of Billings was a good thing for the cannabis movement (although it remains to be seen if its a good thing for Billings).

In short, I have to say I cannot imagine a scenario where this would have played out better for us. The legislature has given a path to compliance for providers, a head start to local businesses, a buffer to smaller providers, retained the ability for patients to grow for themselves, protected the interests of patients by requiring testing and inspections, discouraged diversion and abuse (which protects compliant providers from federal government crackdowns), gave sick minors and their families the same rights as all patients, allowed for potentially life saving concentrates against the will of the state supreme court, given the DPHHS the authority to enact rules, and ensured that the medical program only serve itself and not fund other programs.

This bi-partisan bill stands in stark contrast to pretty much everything I have come to know and expect from our state government. The hard work of the MTCIA, Kate Cholewa, DPHHS, Mary Caferro, and all the committee members in the Senate and in the Conference Committee, shows on this bill. We have a solid foundation to work on, and it will be interesting to watch as the hard work begins as DPHHS establishes the details and implements the will of the voters.

Make no mistake, there is still a long way to go. Full implementation of SB333 will not happen until April of 2018, at the earliest. And although there are still plenty of ways to screw this thing up, I am feeling cautiously optimistic. All signs have been that DPHHS is preparing to approach this with intelligence and an open mind. But don’t worry, I plan on keeping my ear to the ground closely and making sure to get all of you accurate information, good, bad or indifferent.

The last six months have seen resounding victories for the cannabis community in MT – at the ballot box, in the courts, and now in the Legislature. I have never been more hopeful and proud to be a provider and a patient in our MMJ program. Although challenges remain, I can say with confidence that we are here to stay. We have earned a place in our community. And that feels really good.

Bobby Long