The Spring Edition of the Texas Hemp Reporter profiles Texas Lab Testing that we recommend , a History of the 420 in pop-culture, The East Austin CBD Crawl, CBD & Pets, meet the new faces of the Texas Legislature. Will a “Changing of the Guard” improve cannabis law reform in the Lone Star State?
Also banking and Hemp, Actor Jason Gann of “Wilfred”, Dispensary Etiquette, the top 10 labs you should know about in Texas and more.
Business Conference and Investment Summit
March 24
Join us for the NoCo Hemp Expo Business Conference and Investment Summit — an exclusive one-day event featuring company founders and CEOs, industry leaders and experts, qualified and accredited investors, analysts, and financial professionals. At the Summit, we’ll cover the current hemp business and investment landscape, insights on trends and strategies, the global market, and evaluating opportunities for the future.
Farm Symposium & Ag Tech Forum
March 25
The NoCo Farm Symposium & Ag Tech Forum will present what’s next for hemp farmers and is dedicated to helping educate producers about the agribusiness of hemp and cannabis-related agriculture. Topics will range from regenerative-organic techniques, soil health, genetics, harvesting and processing innovations, new technology and equipment, updated regulations and compliance rules from the USDA, FDA, state departments of agriculture and other issuing authorities, and more.
The WAFBA Awards of Excellence Dinner
and Other Special Networking Events
This year’s NoCO8 will debut a new WAFBA Awards of Excellence Dinner on March 24 to recognize hemp industry founders and innovators of distinction. In addition, NoCo8 will present a Kickoff Conversation and Welcome Reception on March 23. Capping off the event, NoCo8 producer Colorado Hemp Company invites all attendees to its 10th Anniversary Celebration & After Party!
By: Ben Morrical, Brian Higgins, and Andrea Steel
In late January, the U.S. Court of Appeals for the First Circuit issued its opinion in United States v. Bilodeau, 2022 WL 225333 (1st Cir., Jan. 26, 2022), a case involving two marijuana growers from Maine who were indicted by the federal Department of Justice (DOJ) on charges of violating the Controlled Substances Act (CSA). The growers were operating three facilities in Maine where they grew and/or distributed marijuana, purportedly as registered caregivers to qualified patients, which is legal under Maine’s medical marijuana laws. The growers maintained “facially valid documents” demonstrating their compliance with such laws.
However, after an investigation into the growers’ operation, federal agents executed search warrants for two of the growers’ facilities and subsequently indicted the growers for, among other things, “knowing and intentional manufacture and possession of marijuana with intent to distribute in violation of the CSA and conspiracy to do the same.” The growers then petitioned the U.S. District Court for the District of Maine for an injunction preventing the federal government from proceeding with the prosecutions, arguing that the Rohrabacher amendment prohibited the use of federal funds for such an endeavor.
The Rohrabacher amendment, named for former US Representative for California’s 48th district Dana Rohrabacher, is a rider that has been attached to Congress’ annual appropriations bill every year since 2015. The amendment stipulates that none of the funds made available to the DOJ under Congress’ annual appropriations bills may be used to prevent any of the fifty states from “implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” As stated by the First Circuit, the Rohrabacher amendment “places a practical limit on federal prosecutors’ ability to enforce the CSA with respect to certain conduct involving medical marijuana.”
The growers asserted that, pursuant to the Rohrabacher amendment, the DOJ could not use federal funds to prosecute them for violating the CSA. They argued that because their allegedly illegal activities were authorized under Maine’s medical marijuana laws, a prosecution for such activities would therefore amount to the DOJ effectively preventing Maine from implementing its own laws authorizing the cultivation and distribution of medical marijuana. The District Court did not agree with the growers, however, and ruled that the prosecution of all counts against them could proceed. The court premised this decision on its finding that the growers were “patently out of compliance” with Maine’s medical marijuana laws and were instead “part of a ‘large-scale… black-market marijuana operation’” that was clearly not authorized by such laws. The growers then appealed the Court’s decision to the U.S. Court of Appeals for the First Circuit.
In hearing the interlocutory appeal, the First Circuit became only the second of the federal circuit courts to interpret the Rohrabacher amendment, following the Ninth Circuit’s 2016 decision in United States v. McIntosh, 833 F.3d 1163. In its opinion, the First Circuit began by agreeing with the Ninth Circuit’s reading of the amendment and its conclusion that “the DOJ may not spend funds to bring prosecutions if doing so prevents a state from giving practical effect to its medical marijuana laws.” The First Circuit further echoed the Ninth Circuit by acknowledging that “the prosecution of persons whose conduct fully complied with” Maine’s medical marijuana laws would prevent those laws from having much practical effect, which is “precisely what the rider forbids.”
Importantly, however, the First Circuit ultimately disagreed with the Ninth Circuit regarding the circumstances under which a federal prosecution would prevent a state from giving practical effect to its medical marijuana laws. Rather than adopting the Ninth Circuit’s “strict-compliance test to differentiate between prosecutions that prevent a state’s medical marijuana laws from having practical effect and those that do not,” the First Circuit opted for a more nuanced approach. It rejected the strict-compliance test promulgated by the Ninth Circuit in McIntosh on the grounds that “the potential for technical noncompliance is real enough that no person through any reasonable effort could always assure strict compliance.”
While recognizing that the strict-compliance requirement went too far, however, the First Circuit stressed that “Congress surely did not intend for the [Rohrabacher amendment] to provide a safe harbor” to those with facially valid documents “without regard for blatantly illegitimate activity.” The First Circuit stated that in this case, the evidence clearly showed that the growers’ outward appearance of compliance with Maine’s medical marijuana laws was a façade, employed for the purposes of selling marijuana to unauthorized users. Thus, the First Circuit upheld the ruling of the District Court, affirming its denial of the growers’ motion to enjoin their prosecutions.
Though the Maine growers were unsuccessful in challenging their prosecution by the DOJ under the Rohrabacher amendment, the First Circuit’s interpretation of the amendment is an important development in the field of medical marijuana law. The only previous judicial guidance regarding the application and effect of the Rohrabacher amendment, provided by the Ninth Circuit in McIntosh, stipulated that individuals involved in the cultivation and distribution of medical marijuana must strictly comply with all aspects of their state’s medical marijuana laws to avoid being prosecuted by the federal government for violations of the CSA. The First Circuit has now supplied a fresh interpretation in Bilodeau that is much friendlier to those in the medical marijuana business.
Under the First Circuit’s approach, one who is legally engaging in the industry under their state’s medical marijuana laws cannot be prosecuted by the DOJ for it unless their conduct rises to the level of “blatantly illegitimate activity.” If a medical marijuana grower or distributor is making a reasonable effort to comply with their state’s medical marijuana laws, they will be protected from federal prosecution by the Rohrabacher amendment, even if there are aspects of their conduct that are not in strict compliance with such laws.
Of course, it must be noted that the First Circuit’s interpretation of the Rohrabacher amendment in Bilodeau is not binding on other federal judicial circuits, nor does it provide a bright line rule. The First Circuit itself acknowledged that in “charting this middle course,” it did not “fully define [the] precise boundaries” of what types of conduct would qualify as “blatantly illegitimate activity.” The only activity that the First Circuit has clearly classified as “blatantly illegitimate” is that of the growers in Bilodeau – an operation “aimed at supplying [marijuana to] persons whom [none of the prosecuted growers] ever thought were qualifying patients under Maine law.”
In light of Bilodeau, those engaging in the medical marijuana business should continue to make every effort possible to fully comply with all aspects of their state’s medical marijuana laws. Though it is promising that the First Circuit’s decision in Bilodeau interprets the Rohrabacher amendment as providing greater protection from DOJ prosecution for state-licensed medical marijuana growers and distributors, this is still a very new area of law which is rife with the possibility of conflict between the federal government and the state legislatures that have enacted statutes legalizing medical marijuana within their borders.
Those in Maine, New Hampshire, Massachusetts, Rhode Island, and Puerto Rico who are legally growing, selling, buying, or using medical marijuana under their state’s laws can take some degree of comfort in knowing that they are not likely to be federally prosecuted for minor failures to comply, so long as they are not engaging in blatantly illegitimate activity. However, those in other states should continue to err on the side of caution when it comes to strict compliance, as there is no telling whether the First Circuit’s interpretation of the Rohrabacher amendment will be adopted by other federal circuit courts.
This year has been a wild ride for hemp, and cannabis in general in Texas and it’s not going to stop for a single moment.
Our 2021 year started off with a legislature that filed quite a few cannabis related bills in the House. Penalty reduction, medical cannabis, a hemp cleanup bill were the primary topics being pushed in the 87th regular session. Texas saw weak advancement on medical progress for cannabis, no penalty reduction measures signed off because of the desire to include delta-8 language, and the hemp cleanup bill failed for the exact same reason with even more debate on that delta-8 issue.
A committee hearing saw licensed hemp agencies and advocacy groups compared to cartels during hearings. Groups were visiting offices to prevent language designed to block delta-8 from inadvertently destroying the rest of the hemp market. And DSHS testified that they were under the presumption that delta-8 was illegal regardless of what the legislature did with the cleanup bill. Delta-8 was clearly all over the place and on most of the industry’s minds.
The majority of the industry moved forward after the regular session under the presumption that delta-8 avoided a death blow. Others had seen that DSHS was making their claim in the Senate committee hearing because they had held a hearing on the topic and practically nobody knew that it happened. That meeting was to review the controlled substances schedule of Texas to oppose the carved out exemptions. Their results were something that most industry talking heads and experts said, “flipped the definition of hemp on its head.”
There is definitely a problem with delta-8 in the industry and it’s not delta-8 itself that is the problem. Delta-8 is a result of failing to pass proper cannabis regulations while passing a hemp program with no cleanup bills federally or on a state level to address gaps in that program. Itself on its own is not a reason for danger. People creating products that they claim are delta-8, that are really delta-9 are an issue.
Think they aren’t? Wait until you have to be in front of a judge arguing that you were arrested for something that isn’t what is on the label and what was in the bottle is illegal in Texas, all while you can’t get a lawyer because it’s too expensive. People creating products that have byproducts in their extracts that are not conducive to healthy human living are also a problem. A CBD Oracle Lab Study article showed some Delta-8 products are 7700% over the legal delta-9 THC limit. That last sentence, google it and have your mind blown if you didn’t already know this.
Then the icing on the cake of these issues are lab results that have been falsified possibly by the product manufactures or another party down the line after lab tests were done. Products with metals in the original testing being eradicated from the lab result altogether, along with delta-9 thc being relabeled as delta-8 or completely removed from the results as well.Retailers using one lab COA for all of their products they ship and sell over the counter is another issue. A brownie should have its own COA, a gummy should have it’s own, and a tincture should have one as well that isn’t the same COA as the hemp product placed in the item. The item itself needs a COA, not just the substance infused into the product.
This still isn’t a need to remove delta-8 or any other THC isomer from the market. Removing it from the market is a knee jerk reaction, and one that shows no true thought was put into the decision. Elected officials can claim they have put lots of thought into this, but what does it mean if their thoughts are put aside for a few higher up figures, instead of representing their constituents?
What should the state of Texas do to set an example on how to wrangle this issue? Should we have labs that are audited by the state to ensure testing is done properly? Should we ensure that any product that is placed out for retail has a lab result from a Texas lab before it can be placed on shelves or sold to Texans if they have a physical location in state (we cannot do that to a product just passing through the state, as that would likely violate interstate commerce laws)? Should QR codes lead to a website presented database that is operated by the lab instead of the retailer or the wholesaler? How many counterfeit products could be weeded out of online systems and retail shelves that plan to sell to Texas residents?
This next legislative session we can expect to see varied interests coming out on all sides, including medical marijuana that are going to have input about this, and the hemp industry needs to be ready with answers and be ready to fight for their products. We are all in this together and we all need to push the industry forward together in a healthy and responsible fashion if we want this to work.
An Interview with Frank Schultz
by Misty Contreras
TPS Lab, a mainstay of the Rio Grande Valley and the farming industry for over eight decades, wants to help hemp and marijuana growers achieve success and higher yield of crops. TPS Lab President Frank Schultz explains the importance of research and patience as many new farmers and entrepreneurs dip their toes into this emerging field.
Texas Hemp Reporter: How did you begin in the field of soil testing, can you give us a bit of your origin story?
TPS Lab: The lab was established in 1938 by Dr. George Schultz (no relation). I am the third-generation president and conservator of an 80-plus year-old institution, starting as a client in the early 2000s.
THR: You have clients all over the globe, but here in Texas, what would you say is the single, biggest challenge a farmer will face in terms of crop health?
TPSL: Education. We often get calls from people who say they are interested in growing hemp but it emerges during the conversation that they have done little to no research into the plant, its unique requirements, possible markets or the industry in general. Unfortunately, we have seen and heard firsthand accounts from people who lost millions of dollars due to lack of experience or faulty research. Some “bet the farm” and lost it.
Even experienced growers, from gardeners to well-established farmers, often do not appreciate the costs, infrastructure required and especially the labor-intensive nature of growing CBD industrial hemp. (We saw a reduction in hemp acres grown with our clients in 2020 from 2019, largely due to the realization of the labor required.) Additionally, experienced growers of other crops are accustomed to few changes in plant varieties and genetics year after year.
However, new hemp genetics are being developed continuously to enhance oil percentages and characteristics, and suitability for specific growing conditions and regions. This means that a grower must constantly be on the lookout for new varieties to better suit his growing conditions and accommodate dynamic market demands for the latest desired CBD isolates.
A BIG mistake some of our clients made was in retaining marijuana consultants to advise them on growing industrial hemp. With the understanding that genetics is where it all starts and is key to the capacity of cannabinoid production and composition (or lack thereof), the growing practices for each are quite opposite in several ways:
● With marijuana, the varietal genesis is typically C. indica L., due to its penchant for producing high levels of THC. Plant stress is purposely induced during the middle and latter stages of development to further stimulate the production of THC. This is done by limiting fertilization, water, light or causing any other factor to induce stress.
● C. sativa L. is the varietal genesis of industrial hemp and typically has a lesser penchant for producing THC. However, THC production is still stimulated by plant stress. Accordingly, it is essential to limit stress in order to limit THC content to 0.3% or less to have expectations of a harvestable crop – even for sativa.
The good news is that we can do much to limit stress and encourage production of CBD by providing balanced nutrition at critical times during plant development and to at an extent, managing water. We can even compensate, to degrees, for other stressful conditions such as weather. With marijuana, stress is encouraged.
But there’s more: Because you get a harvestablecrop does not mean that you get a sellablecrop! Over the past several years, we’ve seen processor’s demands increase for percentage of CBD and even for particular isolates of CBD (CBG, CBN, etc.) – and now, ∆-8 THC (in Texas). The appropriate genetics, stress management, cultivation practice, and correct, timed nutrition and water are the answer.
THR: Can you describe your operation in Edinburg?
TPSL: We are a consulting agronomic laboratory. We’ve been in the same location for decades and have current technology analytical instruments. We are open to the public and encourage growers large and small to bring in their samples or visit with one of our consultants to get answers to their toughest questions.
The main and unique features of the lab are its proprietary methods of soil and compost testing, emulating the way plants take up nutrients in any soil type and calibrated against actual plant uptake (Plant Natural® Soil & Compost Tests); its Ask The Plant® plant sap analyses based on proprietary plant nutrition standards and its What’s In Your Water Becomes Part Of Your Soil® irrigation and spray water analyses for quality management.
Test results alone have little meaning to most growers, so our main product is the experience and ability to interpret lab data and provide our clients with specific interpretations and recommendations for their specific crop and their particular growing circumstances. Accordingly, every test and recommendation is custom and written by a senior consultant – no “shotgun” approach.
THR: Is Plant Natural Innovations your company as well? Did you formulate the CSL+ Organic Fertilizer?
TPSL: Plant Natural® Innovations was established as an independent company to provide formulations of some recently-available and highly-beneficial products which are not generally recognized by growers. The lab’s most senior consultants proposed, developed and designed CSL+ and other organically- based products based upon their decades-long experience in soil health and plant nutrition. Product lines will expand as development continues.
THR: Can you tell us about your “Ask the Plant” program?
TPSL: The lab began testing plant sap (petioles) in 1964, making it an early pioneer in private-lab plant testing. One of my predecessors, Dr. Albin Lengyel of Phoenix, Arizona, started testing plant sap in cotton in the late ’40s and later extended it to many other crops around the country. Another legacy from Dr. Lengyel is the Plant Natural® Soil & Compost Tests.
Originally, Ask The Plant® (ATP) was intended to be a season-long “dynamic” nutrition program for growers to allow them to apply appropriate nutrients in appropriate amounts at critical stages of crop development for best ROI by periodic in-season testing, based upon the physiology of the crop. However, we get many calls sometime during the season from growers who are having serious problems and need help immediately.
Accordingly, much of ATP has evolved into “911” calls concerning physical crop damage (such as by wind, sandstorm or hail) or sudden manifestations of insects, disease or nematodes. We have had remarkable success in guiding our clients past these, and on to doing well by the end of the season.
By the way, HEMPlan® is a comprehensive, specialized and extended version of ATP, exclusively for industrial hemp growers, based, in part, upon a decade of experience with Canadian growers, plus decades-long experience in other exotic and high-value crops around the world.
Again, HEMPlan®, as is ATP, is intended to be a pre-season-to-harvest program, but as with ATP, we get calls from growers sometime into the season about problems they’re having. Unhappily, some call us too late for us to be able to salvage them.
THR: Do you have a success story you’d like to share of a farm you’ve been able to help?
TPSL: Yes. Some years ago, we were working with sugar beet, potato and mustard (plus other) growers in the Pacific Northwest – fairly high-value crops at the time. They had been relying on state extension agents and their local co-ops for advice for years. And it had stopped working – to the extent that several generations-old family farms were facing soon bankruptcy.
Our VP of Research, formerly a tenured professor at the University of Maine, thence a Senior Research Scientist with the USDA – ARS, Weslaco, went on a field trip, together with our COO, to visit with some of our clients up there. He told me that as a [cloistered] academic, it was the first time he ever visited with people who were the end-recipients of and directly impacted by his research.
One day, he was sitting in the kitchen of a farmer, whose farm was in dire straits, when his wife leaned over and whispered, “please help us!”, our VP said that he suddenly realized that what he did seriously impacted real people. Before, it had been simply academic.
This farm, and one other facing bankruptcy, and others did well by the end of the season.
It wasn’t magic – it was simply applying long-established agronomic principles combined with recent discoveries which seem to have been ignored or forgotten by the institutions.
THR: What do you enjoy most about your work?
TPSL: I really enjoy hearing the success stories and how we help improve the clients’ circumstances – sometimes even to the extent of saving their farms.
All considered, it’s not a bad way to live.
For more information on TPS Lab’s custom plant, soil, water and other testing and consulting services, visit TPSLab.com or call 956-383-0739. They can also be visited at 4915 W Monte Cristo Rd, Edinburg, Tx 78541.
For more information on Plant Natural® Innovations plant nutrition products, visit Plant-Natural.com or call 956-380-4050.
With the nature of CBD and hemp being high risk products in the eyes of the financial world, finding stability and even options in merchant services has not always been an easy feat for retailers in the industry. Flex Payment Solutions offers a personal approach in their dedicated CBD merchant accounts as well as adaptability to business’ processing needs.
A family owned company based outside of St. Louis, MO, Flex Payment Solutions offers credit & debit card processing, ACH, e-check, and fund-to-debit-card solutions while allow retailers a range of savings in both fees and time. Each merchant with Flex gets their own monitored account and ID, unlike many of the mainstream batch-model processors, which allows them individuality no susceptibility to any chargebacks and payment issues that commonly arise in aggregate accounts. This often leads to the entire portfolio being bounced by the bank and a resulting inconvenient disruption in business for the retailer. With this tendency, Flex encourages redundancy to merchants in this space. With a backup processor, they ensure a constant focus on their business.
Flex places focus on the attention to intricacies in the industry, staying informed and transparent among the fluctuating state regulations and new laws. Strenuous pre-vetting and underwriting eliminates many potential issues in the groups they bring on. They understand the nature of the space of CBD and hemp historically and take into account the discord present in review structures throughout the processing spectrum. Compliance is key in both industry regulations and typical business operations. In their vetting process, Flex requires proof of valid licensing, lab testing, and COAs which make the underwriting process a lot longer for this industry but ensures proper observance to the legal standards on both sides. With financials, businesses must show a successful operation of a merchant account in the past and that bank accounts reflect activity and ability to pay their debts.
Traditional ISOs are more widespread but come with more stringent guidelines on what products retailers can process through their services; many have policies against smokables, edibles or Delta 8. Flex Payment Solutions is all encompassing in regards to all hemp and CBD products outside of Delta 10 and HHC which require further education in legalities for banking institutions.
The bulk of Flex’s current clientele are online retailers with a secondary pocket of wholesalers. They are open to helping all facets of the industry including farms, co-ops, and equipment companies as the primary or redundant processor which allows for cheaper pricing based on the specific business model as their commercial nature poses less of a risk than a high volume of daily retail or wholesale orders.
Flex Payment Solutions began with the motivation to aid businesses in the more complex niche industries. They built up relationships with Native American tribes in online lending and business as their initial clientele and added in the branch of CBD not long after the Farm Bill passed as a continuation of their existing model of success that they’ve built. Alongside putting in the effort in vetting and compliance, they provide additional value in their intention, not just being a race to the price. Flex is conscientious on choosing industries where they can provide value with their services offered with a personal approach that has proved a big impact among users.
They remain involved and invested in the industry participating in the US Hemp Roundtable and have grown to have a centralized focus in Texas specifically with a Flex representative based in Houston. With founding members and representation in the Texas Hemp Coalition they do their part to keep the industry as safe and profitable as they can.
Flex Payment Solutions is always willing and available to help those looking to build long term, reliable relationships in their processing solutions and remain focused on growing their programs to meet the current landscape. More information and contacts can be found at www.flexpaymentsolutions.com.
J Heart CBD is a woman-owned CBD franchise built out of passion and service from the heart of one Austin entrepreneur.
Connie Hurley opened her first location in Cedar Park in August of 2019 after investing in the cannabis industry and discovering the growing market for CBD in Texas. She has since opened another location in January 2021 on North Lamar Blvd and continues to make natural health and wellness her business. With 30 years experience as an entrepreneur in a variety of fields, including a handful of coffee shops and wholesale distribution on the island of Guam, she made the decision to sell off those businesses to relocate stateside and ultimately invest in this other popular plant pouring her heart into helping fill other people’s cups in life through plant medicine.
Her vision for the business has been to provide products and educate consumers on the benefits of CBD and how it improves quality of life for those who suffer with chronic pain, anxiety and sleep issues. Connie takes great pride in vetting all of her 25+ vendors and offering a line of premium products to her customers. J Heart offers a wide variety of tinctures, edibles, smokables, topicals and even a pet line with choices in full spectrum, broad spectrum, isolate and delta 8.
The storefront and staff of J Heart CBD is something else she takes great pride in. With a clean, welcoming space, the business caters to introducing a wide variety of customers to CBD products and the staff is committed to taking time to explain all of the benefits and make an educated decision on the best choice possible for their needs. Employees undergo consistent training and education on all of the up to date research on hemp products so that they are dedicated to providing the utmost service to their clients and all have a passion to help change lives. Another unique feature to the store blends two of Connie’s passions – coffee and CBD. Their in-house espresso bar provides customers with a choice of CBD, or non, brews to purchase while they browse, serving as another comfort of service.
As the general public continues to gain acceptance for CBD and plant medicine, personal anecdotes of success remain the greatest avenue of change that is pushing the industry forward on a larger scale. Connie and her staff always welcome and share personal stories from their clients in their CBD journey and the story behind the name is a touching commemoration for Connie herself of her daughter, Jessica, whom she lost 8 years ago to drug overdose. The path of natural medicine she took following her loss has been in the spirit of her daughter and Connie is currently seeking out local Austin addiction centers to give back to in community involvement in her name through J Heart.
The 2 locations can be found at 908 W. Whitestone Blvd Unit 300 in Cedar Park and 6719 N. Lamar Blvd. in Austin as well as online at jheartcbd.com
The new edition of the Texas Hemp Reporter is available in Austin and Houston area smoke shops this week for free . . many growers and producers will also receive them by mail as well. This February we honor Jack Herer as his brand of genetics makes its way to Texas via the Texas A & M Hemp Breeding Program with Dr. Russell Jessup. Also profiled is Belushi Farms of Oregon, they grow some of the best cannabis in the Northwest US and Jim and his team share some of their success with us here in Texas. Also when it comes to merchant services we discuss how best to start using our friends at Flex Payment Solutions. Also we look at the Culture of Cannabis nationwide as the country moves into more states with legal programs. Introducing the Texas Agriculture Commissioner Candidates for the March 1, 2022 – Primary Election.
While the legalization and participation in the hemp industry is growing in the US, the lack of banking support with funding these businesses remain a national issue. Herring Bank is making strides right here in Texas to change that narrative with their CBD & Hemp Banking Program.
Herring Bank is a FDIC insured institution that must adhere with federal, as well as state regulatory requirements. In banking the Marijuana Related Businesses, Related Entities, Hemp and Hemp Derivative businesses, Herring Bank, if not in compliance with federal and state regulatory requirements, faces the potential of severe penalties.
The bank began serving the Marijuana Related Business, Related Entities, Hemp and Hemp Derivatives industry in April 2019 and has since built a multi-state program that now services over 20 states. Headquartered in Amarillo, Texas, Herring Bank has branch locations in Texas, including Grand Prairie, Vernon, Azle, Clarendon, Seymour, in Colorado (Colorado Springs) and in Oklahoma (Altus). Herring Bank has also grown outside of their branch footprint to other Texas cities such as Dallas, Houston, Austin, San Antonio, and McAllen in which to serve the hemp and hemp derivative industry. Herring Bank’s Marijuana Related Business, Related Entities, Hemp and Hemp derivatives strategy has positioned the Bank to take advantage of opportunities that may be available with the passing of any future cannabis legislation.
Andrew Escamilla is Herring Bank’s Hemp and Hemp Derivative Product Manager. With nearly 15 years banking experience behind him, Mr. Escamilla has the knowledge and excitement to assist businesses in obtaining banking services. Herring Bank has, and continues to, learn about and reach out to the industry. Mr. Escamilla explained that the regulatory/legal environment and the required resources and infrastructure required to support a compliant program. Mr. Escamilla explained that it is important for a bank to understand the industry to know the challenges experienced by industry businesses and individuals, to ascertain the importance of providing a banking service solution as well as identifying the various state compliance requirements the industry must adhere with.
Mr. Escamilla explained that industry clients must provide certain information to the Bank in order to receive access to banking services. The information provided to the Bank is carefully reviewed by the Bank prior to providing any banking service to a potential client. The submission of the information is important to ensure that Herring Bank meets its federal and state compliance requirements as well as it allows the Bank to monitor the respective client’s adherence with its applicable state’s compliance requirements. Mr. Escamilla explained that information prospective clients must submit, includes such things as, information about their respective location(s), the intent of business, type of products being sold, the business structure, business ownership details, supporting documentation such as lab reports on crops, state licensing, etc.
Mr. Escamilla explained that the Banks willingness to Bank the entire spectrum of cannabis related businesses, of all sizes and types. Mr. Escamilla enjoys working with and assisting, potential and existing hemp and hemp derivative clients with their banking needs. Mr. Escamilla believes in staying up to date with what is occurring in the industry and continuing to learn as much as he can about the industry, including the associated federal and state laws that impact the industry. Escamilla has seen many customers come in who have been closed out 2-3 times by banks before they get to him, just trying to operate but encounter limited tolerance of the industry or simplistic pilot programs that cannot fully support their needs.
Herring Bank paves the way in cannabis related product banking to help the industry. Herring Bank’s moto is “Building Relationship for a Lifetime”, which is something the Bank lives every day. Herring Bank would like to establish a relationship with everyone in the hemp and CBD industry. Mr. Escamilla would love to meet you and discuss what Herring Bank can offer you.
The State of Recreational Cannabis (Is Texas Playing It Safe? Or Just Missing Out?)
The fact that the Lonestar state is still vehemently anti-cannabis (at least in legislation at the state level) despite being surrounded by a sea of green is a true testament to the independent Texas spirit. It seems Texas is more likely to secede from the United States than it is to legalize recreational cannabis.
America’s coalition of green – or pro-weed – states is vast, snaking from Washington state down the West Coast, then east to Arizona and New Mexico, up over the Texas panhandle into Oklahoma; and from Arkansas, it goes straight north to Canada and all the way along the Gulf of Mexico to Florida. And that’s not including several other Southwestern states, as well as most of the Mid-Atlantic and Northeastern states.
As of this writing, a grand total of 18 U.S. states have legalized recreational cannabis for personal use, including our immediate neighbors Colorado and New Mexico; and three others, Arkansas, Oklahoma and Louisiana, are part of 18 states that allow only medical cannabis (and, therefore, have the infrastructure to fully legalize in the coming years.)
The 12 states without some kind of cannabis industry, aside from hemp and CBD, are now the minority. We can’t blame it on politics either. Even blood-red states like Montana, Alaska, Alabama and West Virginia have some version of legalization.
But don’t think Ol’ Big Red is bone-dry on the sticky-icky. Far from it. Consider these numbers:
Given the likelihood of steady, easy transport of cannabis into Texas from these red-eyed neighbors (in addition to the cartel-sponsored black market already operating here), the state of about 30 million people likely has, at any time, more illegal cannabis than several other legal states. Just look at population alone: Less than 750,000 people live in both Alaska (legalized in 2014) and Vermont (2018); Montana’s (2020) population is just over 1 million.
If that probability doesn’t convince you that Texas is one of the most weed-heavy states, consider the average age of a Texan is just 34.6 years old, a Millennial; and Millennials love getting down on some ganja. A new Gallup survey says as much as 20 percent of those belonging to my generation say they currently use cannabis. But that number doesn’t include much of the other 80 percent too stoned to complete the poll.
Perhaps Texas is just being strategic in entering the country’s multi-billion-dollar legal cannabis market that is reported to reach $41 billion in annual sales by 2026. That means it could soon be about the size of the craft-beer market. In 2020 alone, legal sales across the U.S. hit a record $17.5 billion, up 46 percent from 2019. Colorado, one of the first to sell recreational cannabis, grew by 26 percent to hit $2.2 billion. California, America’s largest cannabis economy at $3.5 billion, increased sales by more than half a billion dollars. (Yet illicit cannabis sales, via the black market, are estimated at more than $100 billion every single year.)
But here’s some relief: At least local governments are getting on board. Several of Texas’s most populated regions have decriminalized possession of cannabis, including the cities of Austin, Dallas, Cedar Park and El Paso, as well as major counties (Bexar, Harris, Travis and Williamson).
Then there’s hemp, at least. Thanks to the 2018 Farm Bill, Texas politicians are embracing the hemp-derived CBD market, expected to reach $23.7 billion in 2023.
And at least Gov. Abbot is starting to come around to this magical plant. When he’s not crusading to ban books from children, he’s doing what he can (but not all he can) to help Texans suffering from cancer and PTSD. In 2021 he very compassionately signed a bill into law that allows the increase of the current 0.5 percent THC cap on “medical cannabis” to a whopping 1 percent! Tax dollars well spent.
If this legislation is any indication of cannabis progress in the Lonestar state, start saving your beer money for a trip to New Mexico or Colorado. Because it’s going to be a long while before legal weed comes to Texas.
Editors Note: At Posting of this article the State of Illinois just released tax revenue statement on their states Cannabis Tax revenue surpassing the states alcohol tax. Illinois Collects Nearly $100 Million More From Marijuana Tax Revenue Than Alcohol In 2021, State Data Shows
Grassroots and Hemp Seeds: How Traditional Political Action Has Failed TX Cannabis
With the 87th Texas legislature having come and gone without any particularly exciting progress on cannabis, it is clear that efforts on selling the conservative voting bloc on legalizing it have not been as fruitful as we might have hoped. Sessions come and go, and while other states are generating billions of dollars in tax revenue through recreational cannabis markets, funding education and social programs, and generally not being the worst to their voting constituencies, Texas continues to push the bar on careless legislating.
It might be fulfilling, even entertaining, to blame the legislature and the politicians, but keep in mind we vote them in, and remember this when considering whose name to tick off next time. Willie Nelson for governor anyone? He does claim to have begun the “Teapot Party”, but let’s hope he doesn’t take to tossing bales of cannabis into a harbor should Texas ever decide to legalize and tax the agricultural commodity.
Cannabis is Not from California, Nor Will It Turn Texas Into California
Texas does not have to become California to make progressive steps towards generating billions of dollars in tax revenue. Instead of hippie weed, why not country wildflower? It’s all about framing and packaging, and given that some of the worst political presents in history were wrapped in the most wonderful cutest little boxes that the nation just could not wait to tear open, why not repackage the cannabis market for the Texan psyche?
The drastic leaps backwards concerning women’s reproductive rights notwithstanding, the 87th Legislature of Texas denied cancer patients and veterans the ability to purchase cannabis with sufficient levels of THC to do what the entire purpose of medical marijuana is to do: provide adequate levels of THC to impactfully support treatment.
If the government were to limit the amount of alcohol allowed in beer to ineffective levels, or deny sufficient amounts of cheese to populate the space between patties and buns on a Big Mac, the nation would explode like a powder keg into a second civil war, complete with patriotic psychedelic fireworks (more on psychedelics in a future article).
So how do we get the conservatives on board and actually make some godforsaken progress this next legislative session? Pitch them not on the lifestyle benefits of pot, but on the economic value of the complete cannabis plant. Hemp is cannabis. Hemp is legal, employing thousands of citizens and generating millions in taxable revenue for good ‘ol Tejas at this very moment.
The mainstream asks, “so how is hemp legal and weed is illegal if it comes from the same plant?” Great question, mainstream, let’s draw a parallel they’ll all understand.
The Alcohol and Tobacco Analogy Pushes the Dials and Doesn’t Just Run the Wheels
Alcohol is to wheat what marijuana is to hemp and nicotine is to tobacco: an agricultural byproduct. All three are intoxicants, all three can alter one’s consciousness, although only two kill hundreds of thousands of Americans annually, the two that are legal. Why again is marijuana illegal?
It’s Already Here, Why Not Tax It and Save on Useless Law Enforcement Efforts?
The character played by actress Michelle Rodriguez in the film “Machete” by director Robert Rodriguez says something like “We didn’t hop the border, the border hopped us.” The historical and political poignancy of this quote from an otherwise grindhouse feature of ultraviolence and Danny Trejo-driven awesomeness aside, cannabis in a similar manner has already transcended the borders of Texas. We have legal hemp, and if you might be looking for a product of the cannabis plant containing more than the legally allowed .3% THC, you likely know a person, or know a person who knows a person. You dig? It’s around, man, don’t be a square and it just might find you.
Marijuana Enforcement Measures are Exceptionally Discriminatory
As reported by the New York Times, Willie Nelson was caught by canine officers in the West Texas Town of Sierra Blanca with a quarter ounce of “high-grade, domestically grown marijuana”. Way to keep it ‘Merican Willie. The Hudspeth County Attorney on the case, Kit Bramblett, stated to local publication The Big Bend Sentinel, “I’m gonna let him plead, pay a small fine, and he’s gotta sing ‘Blue Eyes Crying in the Rain’ with his guitar in the courtroom. I ain’t gonna be mean to Willie Nelson.”
Now, substitute out “Willie Nelson” for “a Black teenager in a hooded sweatshirt”, and take a moment to envision what might have happened to our theoretical teenager if caught in West Texas with a quarter ounce of “high-grade, domestically grown marijuana”. I think it is safe to assume the canines and officers would have taken a different approach during the arrest, and the prosecutor would not be asking them to sing ‘Blue Eyes Crying in the Rain’ in the courtroom then let them go with a small fine.
Making the Effort? Reaching Out to Your Representatives
While you might think that the hemp companies generating hundreds of millions annually and their lobbyists will sway the minds of the Texas Legislature to legalize marijuana, don’t. It hasn’t happened yet, while recreational cannabis has been proving it value across the nation for nearly a decade at this point. While niche progress is made here and there to support commerce and the interests of the companies paying the lobbyists, as with the smokable hemp ban, broad political change takes broad effort on behalf of the body politic. Us.
Reaching out to your local representatives and communicating your position in support of legalizing recreational cannabis might be helpful. Before voting, determine who supports cannabis, and ask them what they plan to do in support of it if they make it into office. Vote with your voice, and inform your choices with hard data not glossy propaganda. Instagram is not news, but do slide into people’s DMs whom you find attractive, that’s what it’s for they tell me.
Recreational cannabis is not far away from Texas, in fact there’s a market just above us in Colorado, and quite a bit of products diverted from other markets already here. Whether or not Texas decides to do what is best for the citizens of the state depends upon us. Or not. In all likelihood the Fed will legalize cannabis before Texas ever does, so advocate and vote, or don’t, it ultimately might not make any difference in the end. Just do you, live long and prosper, and maybe at some point you can legally buy a joint at a recreational dispensary in Texas to get over the futility of it all while allowing a moment in time to go up in smoke.
Cheers,
Michael John Westerman, Esq.
Central Texas’ Landlord-Tenant Attorney
South Austin is known for its food trucks and funky vibe, tight-knit retail communities and lack of parking, and yeah, we’re the meat eaters. But a new wave has hit South Austin, and Austin as a whole: CBD dispensaries. Texas is still anxiously awaiting legalization. As of Sept 1, the availability of medical cannabis was widened and the dam was broke on the legal THC levels for medicinal purposes, a win for those suffering from PTSD and cancer. A step in the right direction.
For the time being, we must take our victories where we can. Hemp and CBD were made legal to grow and consume in the state of Texas in 2019. Industrious entrepreneurs eagerly seized the opportunity to fill a niche and pioneer the CBD startup.
Locally, we have seen the rise of a new market, and pandemic be damned! The owners of these boutiques have survived the long quarantine and are severely knowledgeable and, in many cases, you will find them on-site.
My first stop was American Shaman, where owner, Julien Lamb, greeted me in the well-lit, cozy showroom.
“Shamanism has roots in many cultures, in terms of healing and bringing knowledge back to help people. American Shaman is kind of a play on that. I think that’s the inception of the name.”
“We used to grow this stuff back in the 1800s, and make clothes out of it. And during WWII all the rope was made out of hemp for the Navy. In Australia they’re doing 3D printing of houses with hemp paste. It could replace a lot of industries but there’s a lot of investment in that pre-established stuff. We must have progress, progress by going back to what we used to do. I grew up with D.A.R.E and that kind of fear-based rhetoric is the opposite of progress. The lumber industry was huge against growing and cultivation of hemp because it’s a threat. Hemp has a 90-day growing cycle, you don’t have to chop down forests anymore. There’s been a hundred years of ‘reefer madness’ thanks to Harry Anslinger and the DEA. My favorite thing is, D.A.R.E. has actually sent out a message of, ‘hey, we’re sorry about all the things we said about marijuana’. That was actually posted on social media.”
“I grew up with D.A.R.E and that kind of fear-based rhetoric is the opposite of progress. The lumber industry was huge against growing and cultivation of hemp because it’s a threat. Hemp has a 90-day growing cycle, you don’t have to chop down forests anymore. ”
“I grew up with D.A.R.E and that kind of fear-based rhetoric is the opposite of progress. The lumber industry was huge against growing and cultivation of hemp because it’s a threat. Hemp has a 90-day growing cycle, you don’t have to chop down forests anymore.”
Hit Julien up to get some quality CBD products for you and your pet, cbdamericanshaman.com, 1901 W. Wm Cannon, Ste 109.
My next stop was Joy Organics, at 902 N. Lamar. Owner, Danielle Smith, was on hand in the chic boho boutique and excited to show me the array of products they have available, from tinctures, gummies and dog treats, to energy drinks and bath bombs.
A particular source of pride for Danielle is the launch of her own line of personal care products, Wild Bloom. “I grew up conservative, and I want people to be able to feel comfortable about expressing their needs to achieve sexual wellness.” Wild bloom is about inclusivity, and “facilitating a space of healing mind, body and spirit and empowering others to be their most authentic selves”. Danielle actually had a hand in formulating the Wild Bloom CBD Pleasure Gel, a water-based gel that is safe for use with condoms and toys.
Visit Joy Organics or joyorganics.com to put together a holiday gift set for your loved one.
Next was MaryJae, at 2110 S. Lamar Ste E. Jae Graham, owner and founder of Mary Jae, knows firsthand the positive effects cannabis can offer to those suffering from cancer. In 2000, Jae and her brother shared cannabis with their father, Larry, who was diagnosed with cancer and cirrhosis. When doctors questioned why Larry’s quality of life had increased so dramatically, Jae was reluctant to share the truth with them, fearing prosecution. After all, Hispanics are more than twice as likely to be arrested for marijuana than whites. But Larry lived another 10 years.
This experience inspired Jae to “create a safe space where the elderly could come in, women, people of color, the queer community, everything that we are”. Jae says that people have read Larry’s story, and they actually come in to her store seeking help for themselves or a family member. Often, especially with older people, it is a moral issue. They think CBD will get them high. But as attitudes change and trends emerge, those in need will open their minds to the benefits of cannabis.
Stop in to Mary Jae, or check out their website, shopmaryjae.com.
This is the first in my series, “CBD Crawl” (think: “Pub Crawl”). Hopefully I can entice you to visit one of these shops soon!
As a child Josh Kesselman would watch his father’s trick- lighting a rolling paper on fire throwing it in the air and POOF! It would vanish. Josh became obsessed with rolling papers and amassed a large collection as a hobby. In college during the 90’s he researched a class project of the aspects of opening a small smoke store in Gainesville Florida. “I got an A then decided hey what about really opening an actual store.” Josh tells. But nobody would fund or rent to a hippie, Harley-riding wannabe entrepreneur who would attract a stoner clientele. Finally someone agreed to lease an old record shop for 400 dollars a month. Being poor Josh moved into a friend’s shed. He was quite blank on how to move forward. He employed his “Tom Sawyer” theory of questioning customers what they wanted to see displayed, and would promise to have the product within two weeks. He always did and satisfied his clientele. People wanted oddities and Josh found that selling rarities increased his margins.
Then Josh sold a bong to the daughter of a US Customs Official. The police closed the store, confiscating bongs, pipes, but not the rolling papers.
Josh relocated to Phoenix, Arizona, a mecca for counter-cultural smokers. Josh found a pro-marijuana movement in the city as Arizona has become an adult-use state now. He did well with a shop selling hi-end European rolling papers. A Spanish craftsman came on and they developed an all natural product, no bleach, no chalk, vegan, plant-based. Some detractors called them brown bags but Josh was unmoved. Persistence paid off and RAW was born. In a year the papers had flooded the local market.
He approached a mill and promised to purchase one million tons. Once again he put all his money in his mouth. In 2008 hip hoppers began singing about RAW papers, Currency, Wiz Khalif, then 2Chainz, Chance, Rae Sremmund, Action, Chief Keef, and of course the Raw Song itself. Next Dom Kennedy, Ozworld and RAW became the shit.
Then there’s Josh the celebrity himself. YouTube, social media, gatherings, conventions, podcasts. Giving to charity: forming the RAW Foundation for philanthropy. Water is Life Intentional and Wine to Water, Trees for the Future, CarbonFund.org, Home “Fur” Good (for homeless animals), and KIVA, a crowdfunding source for the underprivileged.
Josh fought the FDA in their Tobacco Bill which banned flavored blunts, and there was a huge consumer backlash. “I believe in humanity strongly” Josh says of how inspiring it was to see regular people standing up for thier rights. Today Josh Kesselman employs over 2000 people and has a net worth of 42million. RAW is the most popular rolling paper brand in the world.
In 2020 a Spanish company HBI International sold rolling papers four times to hired investigators that were of an inferior quality under the RAW label. Mark Giangiuli and his partner Dawn were defendants as alleged operators. A lawsuit claimed the couple sold papers likely manufactured in China and India, whereas the bulk of rolling papers are made in Alcoy Spain. Pay Pay was the first rolling company in the world, in the 1700’s cigarettes used to be rolled in leaves and even newspaper. Mark Giangiuli responded to press inquires blaming HBI calling them “thugs” and referred to a prosecuting attorney as an “asshole”. Dawn his wife also left seriously viscous voicemails for inquiring journalists. Cited in court documents Giangiuli repeatedly denied selling counterfeit products and counter-sued. HBI also counter-sued asking for profit-loss of 2 million in damages. Neither side responded to journalist inquiries. In late 1990’s HBI had invited CEO RAW Josh Kesselman to Spain for a business meeting. In an article called “The Unfiltered History of Rolling Papers and Tommy Chong’s Big Jamaican Vacation” Kesselman admitted that he contacted a Niles from HBI.
Although the pandemic hurt sales RAW came out on top as the most health-conscious innovation in the smoker’s world. It’s hemp-based, burns slow, even, smooth and Josh reminds us “Blunts are not to be inhaled, just as cigars are not to be inhaled.”
NYC 2021
While writing Hemp for Victory, I was presented with stories about hemp growing 30′ tall. However, there is scant, if any, record of this. Not that it isn’t true, or entirely lacking witness thereof. One account of super tall hemp that I found was in a German language pamphlet on hemp cultivation in Nepal from 1914. From personal observation, I found that most grew 6-10′ tall. The Chameleon variety that I saw in England, and all the rest that grew there, and in Europe at the time of my writing, were at best 8′ tall.
Lyster Dewey of the US Department of Agriculture in 1913 wrote that it grew 1-5 meters. I noted all of this and gave 25′ as a possible height.
Last month I got a call from Mina Hegaard telling me that in California, Wade Atteberry stated that the team at the Riverdale Hemp Factory had surpassed such figures.
Talking to Atteberry, I was able to confirm that. They had measured some at 24′ 1 5/8”. He also had measurements for the stems, some of which were up to 2 ½” across. Similar records of thick stems exist from Berti’s 1657 La Coltivazzione delle Canape and an 1839 record from Rev. Daniel Smith. Berti gives a thickness of 3 7/8” while Smith writes that it was over 3”.
With a credible record to work with, I picked his brain to find out how he they made a skyscraper out of Cannabis sativa. First, there was the variety:Yu Ma, a Chinese land race strain, that Larry Serbin of Hemp Traders had procured from his Asian trading partners.
Mike McGuire, Tom Pires, Patrick Flaherty and Tony de Veyra who were involved in this project, decided to use this as a learning experience; they sowed seed 4” apart in one plot, and 6” apart in another, then watched them shoot up in the San Joaquin heat. The thermometer there registered up to 108 degrees F, some days a constant of 106-108 degrees F. Irrigation did not exceed 17 inches of water per acre (note that cotton uses about 24-30” of water per acre).
The taller specimens were not however harvested at the end of the season, but left to continue their growth well after the season.
For some application, such as seed and CBD, this is counterproductive. The plant uses more energy, water and time to grow.
But for those selling the cellulose, this greatly multiplies the yield. The cellulose in the bast can be used for paper, cordage or textiles. I have been writing lately about paper, as this is a good start, giving the farmer a product that is not too demanding to grow, but for which there is constant demand. And not just bast, but hurds as well, in contrast to cordage and textiles, can be used for paper. Wade explained that the softer hurds are more absorbent, and while they might not make the best writing paper, they have applications in paper towels and art paper; and next time you squeeze the Charmin you just might be pressing on hurds. Dewey wrote about making hemp paper from hurds ca. 1917.
But Wade and the team at the Riverdale Hemp Factory were not selling this for pulp. They had higher ideals: textile production and building materials.
The bast that they got from these stalks received top grades. It will be shipped to China for processing, and we await more results.
This is a personal victory, or at least partial victory for me, as I have always been pushing for hemp to be grown and processed in the US. Minawear Hemp Clothing, which I founded with my sister in 1999, had to buy Chinese hemp, and I once complained about this to Serbin. Had the laws been different in the US at the time, he could have made these moves a long time ago. Now that the federal government gives each state the right to decide on the legality of hemp, we have made some headway.
With 25′ tall plants, we have much larger cellulose yields. For which I hope that we will have paper mills going full steam in the United States, and that the paper industry, which was in the last century much a part of the economy, employing over a million Americans, will be back in business.
Since Atteberry, Serbin, McGuire, Pires, Flaherty and de Veyra have focused on bast production for textiles, the hemp industry in the US has taken a step further than paper, which has been my focus in this and the two previous articles.
And while improving hemp’s market as a textile, they have at the same time improved hemp’s market as paper pulp, in that the hurds not made into shirts and trousers are in greater supply and more readily available to the paper mills.
Expect more jobs to be created as the Riverdale Hemp Factory and partners continue their research on industrial hemp. And no shortage of Charmin in the supermarket aisles
