CVIndependent

Thu11142019

Last updateTue, 18 Sep 2018 1pm

Robin Goins

Last month, I examined the economic boom expected in the city of Desert Hot Springs as a result of its decision to embrace the cannabis industry. It was the first Southern California city to allow legal cultivation—and economic opportunities from the cannabis industry are helping turning the city around.

As for the other eight Coachella Valley cities … almost half of them so far have yet to welcome any sort of marijuana businesses.

The five that have opened the door in some way to the cannabis industry understand that it can help create a diversified economy that is less dependent on tourism and the resulting service-oriented businesses. Anyone who owns a business in the Coachella Valley knows that summers can be tough—but the new cannabis industry offers more year-round business and increased professional opportunities.

Dirk Voss, a lead cannabis consultant for Urban Management Strategies, is a former chairman of the Desert Hot Springs Planning Commission. He was directly involved in the approval processes for many of the cannabis businesses in the city and has watched the industry evolve throughout the valley. Voss said the cannabis industry can offer cities a “multiplier effect,” because the year-round economic stability of cannabis bolsters other business sectors, including entertainment, recreation, housing and more.

Because Coachella Valley cities have each embraced—or eschewed—cannabis in different ways, Voss predicts each city will eventually have its own cannabis “flavor” or “culture.” For example, Palm Springs has approved lounges, which makes sense for the city and its downtown tourist culture. The city is positioning itself to become a cannabis tourist destination based on its distinct assets, much like Desert Hot Springs has by promoting health and its mineral spas.

In contrast, Cathedral City has positioned itself for large-scale cultivation. The city has utilized vacant land and existing yet unoccupied shopping centers for such facilities, helping revitalize portions of Date Palm Drive, Highway 111 and Perez Road. Because Cathedral City had a lot of vacant buildings—with existing utilities and infrastructure—new marijuana businesses were able to save money by locating there. In other words, city leaders found a great way to utilize the city’s specific assets to accommodate the cannabis industry.

The city of Coachella has taken a different approach, mandating that projects have a five-acre minimum and be part of a master-plan development with specific cannabis zoning. Voss said these mandates have presented challenges to some interested cannabis businesses, “especially since power has been an issue. However, the city is evolving and expanding its plan to get the best economic development possible. The city has some catching up to do, but it is also in line to have a culture of major cultivation opportunities in the city.”

Palm Desert, meanwhile, has taken a slow, methodical approach to introducing cannabis businesses to the city—limiting the number of licenses to allow for slow growth. While this means the city may not see the economic windfall that, say, Palm Springs and Desert Hot Springs will, it also means the cannabis industry can be carefully incorporated into the city culture, thus avoiding over-saturation and allowing for manageable growth while the cannabis industry evolves.

At this point, cannabis businesses are not allowed in the cities of Indio, La Quinta, Indian Wells and Rancho Mirage—and this isn’t necessarily a bad thing. Because surrounding or nearby cities have embraced cannabis, residents and visitors can still enjoy the benefits of the cannabis industry without dealing with the hassles and costs of regulating it in their cities.

Because the cannabis industry is so new, it’s also somewhat unstable—meaning there may be growing pains for the cities that have embraced marijuana. Voss cautions some organizations will be bought out; some will close; and others will try to sell their licenses while the industry adjusts. It is crucial, according to Voss, that each city “design their ordinances and codes around their ability to adapt in an industry that is constantly changing.”

There is no doubt that marijuana can help the Coachella Valley evolve from a seasonal tourist-driven economy into an area with a stronger year-round economy.

“Each city will eventually find its fit, which will only lead to an overall economic boom within the entire Coachella Valley,” Voss said. “The industry is naturally designing its own characteristics for each city based on the needs, wants and use of cannabis by its residents.”

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

The Coachella Valley continues to grow as a cannabis destination—and no city is more prepared to reap the benefits than Desert Hot Springs.

The city has experienced an often-turbulent history, but when it comes to cannabis, it’s been the little city that could, because of its proactiveness and foresight in realizing the potential it has, because of what it has—land, and lots of it, as well as a natural mineral aquifer. Given that the state of Colorado just announced it had brought in $1 billion in revenue since marijuana legalization there in 2014, the potential for tax revenues is huge.

Most people in the Coachella Valley rarely go into DHS, given its reputation and its location on the opposite side of Interstate 10. In its heyday of the 1960s and 1970s, Desert Hot Springs was known for its restaurants and mineral spas; people came from around the world to enjoy the waters. However, in the 1990s, the city began to morph from a retirement community into a city of commuting working-class people—making the city less than attractive economically.

Desert Hot Springs’ mayor, Scott Matas, was born and raised in the city and has seen it change dramatically during his lifetime. The city has filed for bankruptcy—and almost did a second time; those financial challenges motivated DHS to take part in the formation of cannabis-cultivation policy for the state of California. The city at one point not long ago had literally $400 in the bank, and more than 70 percent of the city’s voters decided to approve dispensaries and large-scale cultivation facilities.

The city’s first cultivation facility was Canndescent; when it opened three years ago, it was the first in Southern California. Since then, the cannabis landscape has grown dramatically: There are currently 78 approved large-scale cultivation and dispensary sites. Eighteen are in the process of construction permitting; 12 are under construction; 21 are operational and producing tax revenue. These locations range in size from 2,000 square feet to more than 1 million square feet.

“In the next two years, we have 51 projects we expect to be producing and have seen $1 million in cannabis construction in the last year,” Matas said. “By 2021, we expect to see $3 million in tax revenue, and by 2025, we expect to see $5 to $6 million coming from these 51 operating locations within the city.”

One of the largest—and most fascinating—proposed projects is Tyson Ranch. The massive resort is slated to include glamping (glamorous camping), the world’s largest lazy river, a high-end hotel, a large event facility for conventions, a “university” dedicated to education about cannabis cultivation, and sports stadiums. It’s slated to be built over the next decade, and plans for the glamping facility should be soon submitted to the city—with a groundbreaking following not long after.

Desert Hot Springs calls itself as “The Spa City,” but has struggled since its heyday to attract the tourism that the mineral waters once did. Matas said marijuana is helping change that.

“The spas are revitalizing, and those spas bought during the tech era by people with technical backgrounds are now being purchased with cannabis in mind, and will be once again much-desired tourist destinations,” Matas said. These new and improved resorts include “bud and breakfast” or “soak and smoke” accommodations. Thanks also to Desert Hot Springs’ great views, Matas said, the city should once again become a place to enjoy the hot water and relax, with a focus on health and wellness.

The spas, new facilities and proposed consumption locations—modeled after wineries with tasting rooms—could lead to an explosion in job growth. The city is home to about 300 cannabis-industry jobs today, but Tyson Ranch alone could bring in 1,000 jobs, and the massive proposed Coachillin’ Canna-Business Park could be home to more than 2,400 new jobs once it’s built out.

What does this mean for the Coachella Valley? It means that for the first time in many years, people may actually want to drive into Desert Hot Springs for both enjoyment and employment. The economic future is bright for Desert Hot Springs and the Coachella Valley as a whole.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

Last month in this space, I illustrated how things are not always as they seem regarding the different types of CBDs on the market.

This month, I want to expand on that same topic—because understanding CBD on a deeper level is important. It can save you time and money, and you can make sure you’re getting the product you need.

As I noted last month: CBD isolate may be pure CBD, but that does not mean it will work for you. When you isolate CBDs, plant elements such as terpenes, fatty acids, oils and lipids are removed—and those things help CBDs work in the body.

The same thing goes for distillate CBDs: These products are often distilled three different times, and each time, critical synergistic ingredients are taken out.

The same thing does not go for CBDs made using whole plant technology. The CBD is extracted using alcohol or ethanol, and the process is done only once, leaving in those needed terpenes, fatty acids, etc. The resulting oil may not be as pretty—it’s usually darker—but your body is not looking for prettiness; it’s more concerned about the synergistic effectiveness.

A new trend in CBD involves using technology to isolate CBD, and then putting whole-plant oil back in. This backward process is unnecessary and a waste of time, because whole plant technology works just fine—and the multiple steps mean there’s more of a possibility of introducing toxins into the mix.

Many CBD manufacturers use less-than-ideal cultivars (strains). Using the right cultivar is key to producing a product that tastes good, smells good and has all the effective properties the body needs. Another problem involves the use of THC-dominant cultivars over hemp. Yes, THC-dominant cannabis has CBD in it, but the THC is dominant and can counteract the CBD. Yeah, you can remove the THC, usually by using heat or burning—during which the CBD molecules can be compromised. On the other hand, CBDs derived from the proper hemp plants (usually female) don’t need this type of processing.

To sum this all up … CBDs produced from female hemp plants using whole-plant technology are the best way to go, in all likelihood.

When researching a CBD product, remember to look on the manufacturer’s website and/or ask for certifications for organic growth, production and extraction. If the manufacturer can provide you with those three things, it should also have no problem providing a Certificate of Analysis (COA). The COA will tell you the percentage of the CBDs, heavy metals, pesticides, products used in the growing process, THC levels, molds, mildews, chemicals and preservatives. Any reputable company will be proud to provide the certifications, because they are proud of their products. If you find a certificate that mentions isolates or another process, beware; the manufacturer may not be properly informed. Those who are using research produced out of Israel and Colorado are best informed. Ask the questions, and make sure you are getting the right answers.

One great way to find out about CBDs, treatments and current research is to visit www.projectcbd.org. Consumers can find a beginner’s guide and research specific conditions; the site will explain in detail the current research on those conditions and the current treatments using CBD.

This is a budding industry (pun intended), and there are many snake-oil salesmen out there peddling their wares, with some of these products winding up in large chains and retail establishments. Taking a moment to ask the right questions will ensure you do not get duped and that you get the best results from the CBD product you purchase.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

CBD has everyone talking these days.

No matter where you are, you will see CBD (an abbreviation of cannabidiol) products advertised, ready for your purchase and consumption. CBD products can be found in stores, pharmacies, massage/beauty parlors, restaurants—and, of course, dispensaries.

But not all CBDs are alike. How do you know you’re getting a quality product? How do you know what sets one product apart from another? The answers come from understanding where CBDs come from and how they are processed.

Isolate CBD is 100 percent pure; however, when the CBD is isolated, the symbiotic qualities of the other parts of the plant are eliminated. In other words, you get CBD, but you lose other critical properties that can have important health benefits.

Full-spectrum CBD contains a wider range of other naturally occurring compounds; whole-plant CBD does as well, but is made from various parts of the plant.

Why are these distinctions important? Studies show that if you isolate pure CBD, it does not always have the same effect on everyone. In other words, bodies react better and more consistently when all the symbiotic elements of the plant are present. It’s really a shot in the dark whether isolated CBD will work, and determining what dosage will work for each person.

Another term you may see is “distillate,” or distilled CBD, which is often made using carbon dioxide, with the CBD passed through a machine three or more times to remove plant matter—which also removes the plant’s synergistic qualities. If heat is used during this process, the pressure can change the molecular structure of the CBD molecule, making it less bioavailable and effective. In other words: When the plant is stripped, the resulting product may be cleaner, but has been rendered less effective.

To sum this all up, the most-effective CBD products use whole plant technology.

“Do your research, and find organically grown plants, organic extraction and organic processes. All of those should be certified,” said Eric Crowe, CEO of Mystic Valley CBD. (Full disclosure: I am also a part of the Mystic Valley team.)

What can a consumer expect from a CBD product purchased at a dispensary? The answer is that a true 100 percent bioavailable CBD is unlikely to be found at a dispensary, because their CBDs are made from cannabis plants with a THC-dominant cultivar—and that means it needs to be processed to get much of that THC removed.

“When they remove the THC, most likely through heat or a chemical process, it inevitably changes the molecular structure of the CBD molecule,” Crowe said.

True pharmaceutical/supplemental CBDs come from the hemp plant, which is not a financially attractive plant to dispensaries. Quality certified organic hemp is grown outdoors, not indoors. Further, the best CBDs come from the female hemp plant.

“Certain female hemp plants produce up to 20 to 21 percent CBD, while males produce an average of 1 to 2 percent CBD, which is much like the THC cultivar,” Crowe said. “This is why you will see dispensaries selling (products with) … even amounts of CBD to THC. A quality hemp CBD is 20 percent CBD to less than 1 percent THC, which is essentially nothing … with no traceable THC.” This is an excellent option for consumers who want the medical benefits of CBD without the intoxicating effects of THC.

So where do you find a quality hemp-based CBD? Through a reputable distributor. Crowe recommends looking for companies that can display their organic certifications and give information on pesticides, chemicals and ground contamination. Any reputable CBD company can and will supply this information.

The lesson here: Not all CBDs are alike. Read the labels, and make sure organic means organic. Your body will know the difference once you experience a quality CBD.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

Cannabis, while legal, is heavily regulated in the state of California—as is cannabis advertising.

According to the state’s Bureau of Cannabis Control code, any advertising done for cannabis must be to an audience that is at least 71.6 percent 21 or older—and this presents several problems.

First, many advertisers don’t know that this rule exists. Second, advertisers often have no way to confirm the ages of the people who see their ads.

“If a cannabis company advertises in a publication or online and cannot verify that (the audiences) meet the age-safety quota set forth by the BCC, the advertiser is at risk of losing their state license,” said Joan Irvine, co-founder and CEO of ResponsiTech, which helps businesses with youth safety and risk mitigation in cannabis advertising.

Because the industry is in flux and is so new, it’s understandable that these regulations are unfamiliar to many—but it’s important that people understand the seriousness of the matter, since the buck literally stops at the feet of the advertiser, and not the ad agency or publication.

So … how can cannabis companies make sure their advertisements are complying with the law? Irvine recommends taking a close look at applications such as Buoyancy Digital, which allows advertisers to use parental controls and other features that ensure they meet the BCC regulations. For example, Buoyancy Digital requires those coming to a website to verify their birth date.

“There is one easy way of checking, but it is a catch-22, because many people are not aware that there is an age gate they must use that uses data so that parents implementing parental-control settings can ensure their children will be blocked from age-inappropriate sites,” Irvine said. “This requires cooperation between the industry and parents, to ensure everyone is protected.”

She recommends cannabis advertisers do their homework and find a qualified ad agency and/or advertise with publications or sources that practice responsible cannabis-ad practices. She also says advertisers should check publications and other media sources to make sure they meet the audience criteria, and verify as much as possible that the audience is 21 and older.

Annette Said, owner of A|S marketing in La Quinta, works with several cannabis clients, and notes that cannabis advertisers face challenges beyond state regulations. Most social media, for example, prohibit the advertising of cannabis, meaning cannabis retailers must come up with work-arounds—by doing branding and promoting third-party brands or a lifestyle.

“Facebook does not allow promotion of cannabis in their search algorithms, but they are slowly opening up as the industry self corrects and rids itself of illegal cannabis business and advertising,” noted Said.

It is important for cannabis advertisers in the Coachella Valley and throughout the state to be aware of all of these rules and regulations—and to never assume anything. Retailers must fully understand where they are advertising, and who their audiences are, to ensure they don’t risk losing their state license.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

With the rise of the cannabis industry in the Coachella Valley, many would-be investors are wondering whether to jump into the industry—and how/when to do so, if the answer is yes.

If you are entertaining the idea of investing in cannabis—specifically, the growth and cultivation of marijuana—there are a several important things to keep in mind.

How much do you want to invest … and how do you want to invest? The cannabis industry is growing and expanding at a rapid pace, and there are numerous levels and types of investments to consider, but the main question for investors is: Are you going to “touch the plant,” or get in as an “ancillary” business?

“Traditional investors do not want to touch the plant and are looking for ways to get into the industry without actually being in the industry,” said Michael Dickerson of EcoMaster Corporation, which is currently building the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park in Desert Hot Springs.

Dickerson said these types of investors are generally developers, landlords and builders—basically, investors in any business that helps address the challenges of the grower. He said investing in service industries that are risk-adverse makes for a good rule of thumb—because he predicts that 90 percent of growers will go belly up, while ancillary businesses will be less affected by shifts in the industry.

Why does he think growers are going to have such a tough time? State environmental approvals are difficult to get, and long-term sustainability will be challenged by water resources, water rights and environmental compliance.

Kenny Dickerson, also of EcoMaster, notes that many in the industry are unprepared for regulation; after all, they’re garage-growers who aren’t necessarily experts on business models … making ancillary businesses a wiser place to start for investors.

Greg Rutten, COO of Mochi Holdings Group in Desert Hot Springs, also said that cannabis is risky because it is an emerging industry.

“Most private lenders will only lend 50 percent of a construction (amount), so operators need to raise 50 percent as equity and will (often) give a piece of the company or stock in the company or a preferred investment rate,” Rutten said.

Rutten said potential investors should make sure any grow operator has the necessary licenses from the state and municipality where it’s located, and has landlord approval for cannabis use. As with any business, investors should also fully read the grower’s business plan and make sure the business model clearly addresses all aspects of the business. In other words: Potential investors need to do their homework to make sure they’re making a sound investment.

One final thing to keep in mind when considering investing in the industry is the instability of local and state authorities, who are scrambling to keep up with the new and growing industry. Katherine Dickerson, also of EcoMaster, echoed and emphasized Rutten’s point about making sure any marijuana business has all the necessary permits—because they’re incredibly difficult to get.

“The state is saying they are relying on (permits being issued at) the local level, but there are people at the local level making laws who are not in the industry and do not understand it,” she said. “(Investors need to) do their homework to ensure that what they are investing in is prepared to deal with the red tape as the industry morphs and becomes standardized and becomes more consistent. It is going to be a bumpy ride for the next five years.”

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

The California cannabis industry is now in its second year of legalization—and excitement within the industry is building. Experts in the Coachella Valley have been diligently preparing their forecasts for 2019—so we decided to ask them what they’re expecting to happen.

One leader in the industry is predicting great things for 2019. Adrian Sedlin, CEO of Canndescent, which has a large grow facility in Desert Hot Springs, is expecting the industry to boom as legalization spreads globally.

Sedlin notes that in 2018, the adult-use cannabis market tripled in population size, and says that as the industry grows with adult use, so will production. He also thinks the political arena is looking better for legalization, as more political candidates are promoting federal legalization.

“Many critics argue that California made a mess of things in its first year regulating adult-use cannabis,” Sedlin said. “(The year) 2019 will prove far more prosperous for license-holders as operating a cannabis business without a license will finally become a felony.” 

The economic potential in the Coachella Valley is huge, considering the amount of open land and the potential for cannabis-industry growth here. Brent Buhrman, CEO of Nationwide Cannabis Funding and president of the Coachella Valley Cannabis Alliance Network, is predicting the industry in the valley “will see an explosion of growth as new cannabis development becomes vertical and operational.” Buhrman also expects real estate in the valley to hold its value, especially with many cannabis investors who were waiting for two things to happen that, well, just happened: the passage of the Farm Bill and the departure of Attorney General Jeff Sessions. These investors are “ready to play ball,” says Buhrman, “and the watchers are now ready to jump into the game.” Buhrman predicts the Coachella Valley will see a new wave of people and companies come forward as a result.

With the industry starting to mature, Sedlin does expect some—no pun intended—weeding out to occur. He foresees stocks changing drastically, and as a result, the “high-profile sackings” of two or three high-profile CEOs at publicly owned cannabis companies.

Other seasoned cannabis entrepreneurs see different transitions on the horizon. Eric Crowe, of Cathedral City-based Mystic Valley CBD, who has been on the forefront of the Colorado cannabis industry for the last 15 years, predicts Coachella Valley happenings will mirror much of what was seen in Colorado. Crowe is predicting a clearing in the industry, which will lead to legitimacy and credibility as well as a surge in canna-tourism. This surge, Crowe states, “will created unprecedented economic growth in the valley, which will include all ancillary business, such as construction, hospitality and all business trades.”

Crowe cautions that lessons learned from Colorado should be heeded as the Coachella Valley cannabis industry expands.

“All industry in the valley, in some way, will come to depend on the cannabis industry, and as it morphs and grows, oversaturation will happen,” he said.

As happened in Colorado, Crowe anticipates the quality and quantity of the goods in the market will reach capacity, which will result in price reductions and many companies closing as a result. Like Buhrman, he predicts this will allow a new group of players to come to the table. Crowe thinks some of the new business emphasis will be on medicinal uses for hemp, specifically 100 percent certified organic growth and production. He expects that the success of some within the industry will depend on new technology; for example, his company uses reverse-engineered sound-wave technology, which focuses on the DNA of the hemp plant in order to produce the highest level of CBD full-spectrum concentrations.

The economic outlook for the cannabis industry in 2019 and beyond looks very promising—but those in the industry will need to change along with the demands of the industry.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

As we approach the one-year anniversary of legal cannabis in California, the Coachella Valley has gone through many changes—specifically on the employment front.

As this new industry has evolved, so have the career prospects in the region, with many cannabis employers in the Coachella Valley ramping up to hire in large numbers in 2019. Understandably, many potential employees have questions about careers in the cannabis industry—and there are a few things any prospective employee should know before jumping in.

The job opportunities are numerous and continuing to grow along with the industry, ranging from entry-level jobs, such as budtenders and trimmers, to high-level growers and professional roles, such as human-resource work and executive leadership. While the high-end jobs can pay up to six figures, it is taking some time for the industry to catch up in terms of pay and benefits, although things are beginning to level out.

Remember that the majority of the cannabis companies in the Coachella Valley are ever-evolving, meaning companies are not as stable as many potential employees would like. Some these companies have experienced a level of “sticker shock” at the market rate for qualified employees. Brian Harmsen, CEO of Designworks Talent in Palm Springs, which specializes in cannabis job placement, cautions that although the cannabis industry is catching up, it is still behind the curve because of its infancy. He said it’s critical that any new employee understand the scope of the work—and understand the challenges currently facing the industry. Anyone interested in entering the industry must keep in mind it is an industry in flux, and therefore may not be good for those who are not flexible, he said. As with all startup industries, there are many kinks that will take time to work out. Harmsen said startup cannabis companies are risky, often disorganized, sometimes messy, fast-changing, and lacking in infrastructure. If you don’t have the ability to tolerate the dynamics of the industry in its current state, you may want to consider waiting until the California cannabis industry is more established, he said.

The instability and newness do not mean employees aren’t entitled to the protections afforded to them by U.S. and California labor laws—and many cannabis companies are hiring people without fully understanding the legalities of being an employer, breaking labor laws and thus putting their companies at risk. Jerry Cooksey, director of marketing and employment brand at Designworks Talent, said employees need to know their rights to ensure they are protected, especially as more and more cannabis companies are coming online and ramping up their hiring.

The fact that the industry is new affects both sides on the hiring equation; there are not a lot of people experienced in the cannabis industry for companies to hire. Because of these challenges, cannabis companies must carefully consider how they do their workforce planning in order to recruit the best talent. Cooksey said cannabis companies need to fully understand their brands and who they are, identify their workforce values, determine employee support (such as benefits and compensation packages), clearly define employment needs (including job analyses), and ensure they have legitimized their ability as an employer by understanding labor law and making sure they have all of the required insurance in place.

If you have determined you can tolerate the current state of the industry and are looking to be hired, Harmsen suggested that potential employees consider the size of the company and its culture, ask questions, and look at how the company is branding and marketing itself. Also: Take queues from the interview.

There is no doubt the “green rush” is bringing new employment opportunities to the Coachella Valley. The potential for economic development in cities like Desert Hot Springs, Coachella, Indio and Cathedral City is unprecedented, and each large facility opening can mean between 150 to 300 new jobs. As things level out in the coming years, we can expect to see a solvent and strong workforce in cannabis throughout the Coachella Valley.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.