In the latest episode of the Cannacurio Podcast from Cannabiz Media, my co-host, Amanda Guerrero, and I discuss license numbers and cannabis license verification as well as retail and dispensary license data in 2020. We also speak with Tim Sultan, Executive Director of the Marijuana Industry Trade Association (MITA), an Arizona cannabis industry business association.

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Cannacurio Podcast Episode 6 Transcript

Amanda Guerrero: Hey everyone. Thanks for joining the Cannacurio Podcast by Cannabiz Media. We’re your hosts, Amanda Guerrero and Ed Keating. We’ve got a great show lined up for you today, and we’ll be speaking with Tim Sultan of Marijuana Industry Trade Association. Before we tune in with Tim, let’s check in with Ed and see what he’s learned from the data this week.

Ed Keating: Hey, Amanda. The team is working with a variety of datasets this week – really thanks to a lot of our government relations work. Not all the data we get is easy to obtain, so we’re in the process of adding in license numbers and violations from Washington DC.

We’ve also got some correspondence in the works with New York, Hawaii, and Florida, where we’ve actually had to pay to secure some new information, and we’ll be adding in license numbers for Missouri.

And license numbers are really important because a lot of our clients use the database for validation. Some of them use our validation API actually to make sure that the businesses that they are working with actually have a license. When we can have license numbers from the state, that makes it easier for that handshake to occur. We’re excited to be adding that into the platform.

Amanda Guerrero: Yeah, I’m definitely looking forward to see the license numbers for Missouri as well. And just seeing what other information the data team is able to provide for us this week.

We’re joined by Tim Sultan, executive director of the Marijuana Industry Trade Association. Tim, we’re so happy to have you on the show. Welcome.

Tim Sultan: Thank you, Amanda and Ed. Great to be with you both.

Amanda Guerrero: Great to have you on here, and this is a fun way to get connected during this quarantine. We’re virtually communicating over on the podcast, but for those of us who don’t know, we’d love to learn a little bit more about yourself, Tim. How long have you been in the industry?

Tim Sultan: Well, I got involved about two and a half years ago. A friend of mine from high school, Dmitri, who had founded me actually, called me up and asked if I wanted to meet the Vicente Fox, the former president of Mexico. And so I came up to Phoenix and we hit it off and he invited us down to his hacienda in Mexico to coordinate the first cannabis conference down there at his presidential library.

And so that was my first introduction and it was about a year, two and a half years ago, and we’d launched a great conference and then the following year launched another one. And in the meantime, I started an online media company called the Arizona Cannabis News. Just started learning more and more about the owners and the people in the industry. And then I was hired as the executive director of the Arizona Dispensaries Association.

And that’s a group here in Arizona that represents just the dispensary owners and there are a 131 license holders in Arizona, and they have a small, pretty tight group that formulates a lot of the policy and legal efforts for our industry.

During that time, last year, so that was 2019, we raised some money, got the owners together to launch an adult use initiative, a ballot initiative that’s going to be on the ballot this year in November, November of 2020. And it’s called the Smart and Safe Arizona Initiative.

And we’re pretty darn sure it’s going to pass. We’ve already collected all of the signatures that are required. In fact, 25% more than are required. And that’s a big deal right now with coronavirus, because many of the other in fact, I think all of the other ballot initiatives have stopped collecting signatures and did not have anywhere near the amount that they needed.

We stopped collecting signatures, of course, but we already had way more than we needed. It’ll be on the ballot in 2020, and we’re excited about that. And so after the ADA, I came over here to MITA where I had started, to make it even bigger of an association that represents not just the owners, but the 6,000 people who work in the dispensaries in Arizona and the 220,000 patients that we have here.

The Marijuana Industry Trade Association is more of an industry-wide association rather than just for the license holders. But we work very closely together.

Amanda Guerrero: Wow. Over the last two and a half years, you’ve accomplished quite a lot here within the industry, Tim. That’s fantastic.

Tim Sultan: Just so grateful to be a part of it as I’m sure you are. I haven’t accomplished anything, but I’ve just been along for the ride. Could not be more grateful, especially as a patient. I was diagnosed 17 years ago now with multiple sclerosis and just kind of assumed my body would continue to deteriorate as I got older. But over the last three years, since I’ve been using cannabis as a medicine, my body has gotten stronger. I am losing my symptoms. I’m regaining my ability to walk, and I’m just so grateful for this plant.

Ed Keating: Wow. Well, thanks for sharing that story with us today, Tim. I want to ask a little bit more about MITA. I used to be part of a trade association, and as we looked out on how we served our constituents and our stakeholders, it fell into this area of protecting, promoting, and informing for the industry. That’s what I’d like to dig in to start with.

On the protect side, a lot of associations work to secure the interests of their members and for you. I think it’s helping to change the landscape on the state and the federal side. I was wondering if you could tell us a little bit more about that. Especially one of the areas about meritorious dispensary applications, because if I remember correctly, the last time they gave out licenses in Arizona, it had to do with a ping pong ball machine borrowed from the lottery division of the state. I’d like to hear a little bit more about sort of both those things.

Tim Sultan: Oh boy, I’d forgotten about the ping pong ball machine. Back in 2010, when the voters in Arizona passed our medical marijuana law, it took them about a year and a half, two years to really get things regulated and organized.

Department of Health Services, which is our regulator, they had received way more applications for dispensary licenses than they intended to afford, grant. They took a lottery ping pong ball machine and did a lottery for the people who were going to win it. And really the first 131 balls, or maybe it was 99 balls at the time.

Ed Keating: Yeah, yeah, yeah. Because they did a sub supplemental one, I think in 2015, 16, 17, something like that.

Tim Sultan: Right. Where we added more licenses. They gave away all the 99 or whatever licenses back then via the lottery system. And so we still to this day talk about the owners who own these licenses that are now worth minimum of $10 million each, which back then, cost them maybe $50,000 to do everything. We call them people who won the lottery.

Ed Keating: Yeah, no, it makes sense. Well, and the other piece too, if I remember correctly, is the number of dispensaries are tied in with the number of pharmacies in the state. Is that right?

Tim Sultan: Yes, sir. Exactly. The Department of Health Services decided that the equitable way to decide how many dispensaries we should have is to make it based on the number of pharmacies. For every 10 pharmacies in Arizona, we’re allowed to have one medical marijuana dispensary.

Ed Keating: Wow. Wow. From a trade association standpoint, how do you address that? What are some of the goals of the association in terms of that? If there are any on that side in terms of number of licenses and how they’re going to get doled out in the future?

Tim Sultan: Well, that’s the big, big question. I’ll get into a little inside baseball right now, actually. I mentioned the last organization I worked with last year represents only the license holders. Their only interest is in the value of that license. They want to make sure that we continue to have a small number of licenses that are worth a lot of money and provide medicine to as many people as possible.

That’s also why they funded the smart and safe adult use initiative – because next year after adult use goes into effect, we anticipate that our half a billion dollar industry in Arizona is going to triple, to one and a half billion dollars in retail sales. For those 131 owners who own those dispensaries, that’s fantastic, and they want to make sure that we don’t have another a 100 or 300 licenses that’s going to diminish their income.

There’s some other trade associations, well, there’s our trade association, MITA, that represents everyone. Now, those 6,000 dispensary agents who work at dispensaries, many of them have dreamed of owning something, of owning a dispensary or owning a brand or owning a cultivation site. And so our job at this trade association is to make sure that they have an opportunity to participate in this economy as well – not just as a worker, but as an owner.

And so we’ve in other groups like NORML, have cooperated with the owners and worked very well in Arizona. And I think that’s why we’re going to win because we’re all working together. And what we’ve come to as an agreement, where we’re going to increase the 131 licenses with an additional 26 licenses when adult use passes in November. And those 26 licenses are going to be going to people chosen by DHS as having social equity needs. Those may be who have been hurt by the prohibition on cannabis or in other respects have some social equity issues that they’re dealing with.

Ed Keating: Wow. That’s cool. Definitely different than the Oklahoma approach where we’ve got several thousand dispensaries in a very small state. And I think when Amanda and I last talked, it was one dispensary for every 1,700 citizens. And that includes everybody. Definitely, where a trade association can really add a lot of value and help out their stakeholders. Now, the second piece.

Tim Sultan: Ed, I would just add one last thing to that, that I didn’t mention is right now, Arizona, all of our licenses are vertically integrated. You get the cultivation, onsite cultivation license. You get an offsite cultivation license. You get a kitchen where you can make extracts. You get a retail location. When adult use goes into effect in November, you get another vertical license just like that with all the same benefits.

Everyone who owns a license, who is also awarded an adult use license, is going to get an additional onsite grow license, an additional offsite grow license, an additional extract. What that means is they can, if they don’t want to have another grow, they can sublease that out to somebody else – s ome other entrepreneur who wants to get some land and grow some flower. They can do that by just renting that piece of the license from the owner.

Ed Keating: Great. Wow. That’s a fascinating and powerful approach. It certainly helps out a lot of the stakeholders that exist and also new ones.

Moving ahead, beyond protect for the industry, the other area is promoting, and MITA is known for its best in class events. I’m sort of curious how you’re handling that during COVID-19? Especially as this new program rolls out toward November, where there’s probably going to be a lot of questions about all those great new programs that you outlined.

People are going to be hungry to find out about it, but in person events are probably not going to happen. How are you guys handling that?

Tim Sultan: Right. We normally hold our events on the third Wednesday of every month at a big hotel, and it’s the place to be every month. We get 350 industry people there, and they all love to chat and socialize and give each other the latest updates. And now we can’t do that.

We’re moving to an online model, and over the last two weeks, we’ve been testing out some different Zoom related online models. And I think we’ve settled on one. There’s a company called Hio, H-I-O, and they have a pretty good system that I think we’re going to use.

The people are thirsting for information. What we’ve been doing so far is just using our email. We have an email database of 42,000 people in Arizona, and we send emails out a couple of times a month with updates on what’s happening in the industry. And we include in there advertisements. The brands like Timeless or Select, or whatever, they want to get the word out about new product launches, about old products, about deals. and so they can purchase banner ads and other things. And we send that out to our 42,000 patients and industry people – p eople interested in cannabis. And so that’s what we’re doing.

We’re just moving everything online. And that seems to be pretty powerful. Also Instagram and Twitter as well.

Ed Keating: No, that sounds like a really smart approach in just making use of the tools that we have at our disposal. All right, lastly, protect, promote, now inform. And as an information industry person, and as the chief data officer, I’m always interested about the inform part.

You talk a lot about sort of the industry information that you make available to your members, and we’re obviously an industry information partner as well. I’d just like to hear about sort of what you do provide to your members and how did they use that?

Tim Sultan: We provide information to patients when we have new programs rolling out, like for example, in Arizona last year, we switched from having a card, a hard card that you use for your patient card, to an electronic card. And that was a big transition. And so we worked with our regulator, DHS, to make sure all the patients transitioned over properly.

But really the main thing we work with are the dispensary operators and owners and the people working in the management there. Right now, you can imagine during COVID-19, they’re all trying to figure out what to do on their own. And so we’re staying in close contact with the owners and with the Department of Health Services to make sure that we’re all working cooperatively, because when this first happened a couple of weeks ago, dispensaries realized, it’s not safe to have people come in. They just on their own started doing curbside take out, and that’s considered scripts side pickup and that’s considered delivery in Arizona, according to health services, which is not permitted.

They also just started doing deliveries in ways that were not officially permitted, according to the regulations.

And so at MITA, representing the industry, we immediately reached out to our regulators and said, “Look, we all want the health and safety of our community paramount. Are you going to be enforcing some of the regulations that just don’t make sense right now?” And they said, “We agree. The health of our community is paramount. We’re not going to be citing for things like curbside delivery and such. We’re not changing the regulations, but we’re just not citing anyone. Do what you can to take care of your own people and the patients. You’re an essential business, and we’re just not going to be citing people right now.”

Ed Keating: Great. Well, it really sounds like you guys have a really strong approach that’s meeting the needs of all the stakeholders, and I’m really impressed to hear how closely you’re working with regulators, because they are part of the process. They are the regulator and a lot of your members are the regulated and having a good relationship among all those parties makes a lot of sense. Also factoring in the patients too.

Great job and thanks for letting me dig into the protect, promote, and inform that MITA is providing for the marketplace in Arizona.

Amanda Guerrero: Yeah. Tim, in the following along the same vein of being a trade association and the benefits that you have for the community, you recently became a Cannabiz Media Trade Association partner. And for those of you that aren’t aware, over the last year, Cannabiz Media has partnered with various trade associations and business associations across the globe to help support their current members in terms of their business development and lead generation opportunities, as well as helping to further connect license holders to each other.

And so Tim, I wanted to ask you, since recently joining, why did you become a Cannabiz Media Trade Association partner?

Tim Sultan: Well, thanks, Amanda. I first learned about Cannabiz Media at MJBizCon, and I got a tour of the things that you have and signed up onto your mailing list. And then didn’t think about it much really until I started receiving your amazing email updates. Wow. The news that you guys get is way before it comes out in the media. I don’t know where you’re getting this information, but it makes me seem so smart.

And so, in my conversations, I’m always talking to people at the companies that you cover. We have a lot of multi-state operators here. We have Cresco Labs; we have Harvest is headquartered here. In fact, you just had something last week about how the Harvest and Verano Holdings deal fell through. The $850 million deal.

Amanda Guerrero: Yeah, that’s correct.

Tim Sultan: That was the first place I had heard about it. I immediately emailed Steve White. He used to be my boss at the ADA last year, and he’s the CEO of Harvest, to find out what we can do just to find out what’s happening.

It’s always good to know what’s happening. And you keep us in the know.

Also with JARS Cannabis, they’re growing in Arizona, acquired a couple of locations that I hadn’t heard about and I heard about it from you. And so I contacted both the owners and they were so happy to hear from us. And we were able to help them with another license they were looking at. You have helped get us more involved in the industry and make us look like we’re the go-to place for information.

Amanda Guerrero: I love that, Tim. That’s fantastic. And I really, I also, when I worked previously before I joined the Cannabiz Media team, I also utilized this platform. And one of the ways that I was able to stay ahead of the curve was exactly through the daily newsletters that our president Larry Schwarz sends out every single day, just giving us the data highlights.

And again, within the platform, you can create curated lists and set email alerts for yourself. When anything is changed, whether it’s a change in hand of a license holder, or if it’s breaking news on a state that you’re watching, we really, I can say now this, I can confidently say this now because I’m on the back end of things, but we really do our best to provide our subscribers, our trade association partners, with the best available data possible, not just within the platform, but also within the community.

I’m so happy to hear that, Tim. But so in terms of this new quarantine, remote lifestyle that we find ourself in, in kind of wrapping up the conversation you had with Ed, is there any COVID-19 business tips or tricks that you would like to share as a trade association partner with Cannabiz Media, or as just a trade association, trying to share some knowledge with the community?

Tim Sultan: I would just say that during this COVID-19 time, it’s a wonderful opportunity for us to learn more about the industry and build your network. Especially since people can’t go out. There they’re much more available to be reached right now. I think frankly, if you can find them.

I’ve been enjoying a lot of webcasts on cannabis. A lot of the organizations like Arcview and BDS Analytics are holding some very interesting webinars where you can learn stuff. Max Simon, who’s the CEO at Green, forgot what the name of his company is.

Amanda Guerrero: Green Flower Media.

Tim Sultan: Right? Green Flower Media. He offered, wonderful guy, he offered free training, free marijuana, cannabis industry, budtender training for people, which is something I actually, I intend to take a look at.

And so anyway, I would just say, learn as much as you can and get ready for when this goes away. And also, there’s never been a better time to start a business too. If you have contacts and you see a need, like building a delivery business or making things more secure or whatever, think of something that’s going to be needed and create it. This is the time that big companies can get started.

Amanda Guerrero: Yeah. I think that’s fantastic advice. We have nothing but time now, so might as well spend it being productive, being positive. And if you can create a solution for a problem or identify a problem here, then you can hopefully work together with building the community.

I appreciate that, that Tim. And yeah, we really appreciate having you on the show. It’s been great having you as our trade association partner, as well as just a friendly face at conferences and hanging out. Definitely miss seeing you guys in person, but thank you so much for joining us on today’s show.

Tim Sultan: We look forward to continuing to work with you. Thanks both. Have a great day.

Amanda Guerrero: Ed, what do we have to look forward to in the upcoming weeks from the data vault?

Ed Keating: Right now, the team is working with some new information that’s coming from Oklahoma and Colorado as we’ve gotten new license issuance and updates from them. And then we’re also going to continue our look back on the first quarter. Where were licenses created? Where were the hotspots? We’re going to do some Cannacurio posts on cultivation and manufacturing.

And the one that everybody will read next is dispensary and retail. Where did all those licenses get created? What was interesting to me and a surprise was that while Oklahoma was certainly at the top of the list, I think they generated about 156 licenses this quarter. The second place state was not California, but Michigan. I think there were somewhere around 60 licenses. Also, for the companies that generated multiple licenses, a lot, two of them, the top two spaces included Michigan licenses.

I think we’re finally starting to see Michigan perhaps come of age and really step in as one of the larger markets for people to keep an eye on.

Amanda Guerrero: As a Midwesterner, I am so pleased to hear that Michigan is coming of age. I like how you phrased that, Ed. But I’m looking forward to seeing those updates and learning more about the licenses. Everyone thank you so much for joining us on today’s podcast. We’re your hosts, Amanda Guerrero and Ed Keating. Stay tuned for more updates from the data vault.