Canadian Provincial Government Taps Spire Secure Logistics

CANADA: Vancouver-based Friday Night Inc. announced today that its subsidiary, Spire Secure Logistics, is providing strategic advice and expertise to a Canadian provincial government for the design and implementation of security programs and infrastructure for the legal distribution and sale of cannabis.

Spire is a leading provider of security consultation for the legal cannabis industry and has worked closely with both government and licensed producers to design and build security programs and solutions for the sector.  The Company will be working with the provincial government to implement program system protocols for both retail and online sales of cannabis, focusing on the prevention of organized crime infiltration and black market diversion.

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Spire’s team of industry experts have amassed more than 50 years’ combined experience in regional, national and international policing and security consultation in a variety of fields.  Most recently, Kevin Mead has been appointed Chief Administration Officer and Director International Programs at Spire. A 23-year career veteran of the Canadian Army, Mead served across the country and internationally in numerous command, training and senior staff positions at the tactical, operational and strategic levels. Mr. Mead transitioned as a Commanding Officer of a Canadian Forces Detachment to the BC Ministry of Labour, as an Industrial Relations Officer responsible for legislative compliance and enforcement. Most recently, Mr. Mead served as VP Operations in a private manufacturing firm in the security and defense industry.

Mr. Andrew Richards, CEO of Spire, commented, “We are pleased to be developing secure and compliant strategies and programs as Canadian provinces and cities begin to implement legal cannabis distribution and sales.” He added, “We welcome Kevin to Spire. His expertise in leading inter-agency and multi-disciplinary teams in complex high-risk operations and program delivery is an asset to the team.”

 

 

Friday Night Inc Acquires Spire Secure Logistic

CANADA: Friday Night Inc. has acquired as a wholly owned subsidiary Spire Secure Logistics Inc. (“Spire”), a Canadian private company specializing in security, intelligence, and compliance with international clients and expertise in both the regulated cannabis industry and other sectors.

Friday Night agreed to acquire 100% of Spire by the issuance of 7,142,857 common shares at a deemed price of $0.70 per share.  Closing is scheduled for March 1, 2018.  Friday Night will allocate working capital of CAD $1,000,000 to expand Spire’s client base in Canada and globally.  The shares issued will be subject to an escrow arrangement that will see 12.5% released from escrow on closing and the remaining 87.5% being released to the vendors in 7 equal tranches of 12.5%, each to be issued on the first day of each quarter of Friday Night’s fiscal year, beginning with May 1, 2018.

Spire provides strategic security consulting in Canada, the United States and Latin and South America. They act for or have acted for licensed producers and ancillary businesses in the cannabis sector. Formed almost 3 years ago by Andy Richards and Jeff Meyers, two career law enforcement professionals well acquainted with organized crime and both the illicit and legal cannabis industry, Spire has quickly become a leading firm for companies looking to ensure their operations adhere to government regulations around security and are best equipped to deter the infiltration of organized crime and black market diversion.  Spire is led by experts with international backgrounds in covert and undercover operations to infiltrate and disrupt organized crime, including outlaw motorcycle gangs, cartels, and other violent gangs. Members of the Spire team have been involved with policy, compliance, and law enforcement in the regulated cannabis industry since its earliest days.

By adding this business to the Company’s portfolio, Friday Night is diversifying its income stream and achieving exposure to international markets.

“The Spire team brings decades of experience in the trenches of law enforcement, security, and high-stakes risk management.” said Brayden Sutton, CEO of Fright Night Inc. “Spire is uniquely equipped to keep companies safe, secure, and compliant – which in turn creates more shareholder value and peace of mind.  I am extremely honored to call the Spire team a part of our family and look forward to the increased level of intelligence and awareness it brings us as a company, whether that be in current operations or when evaluating other opportunities in the sector.”

“Spire works with companies who want to make an honest dollar in a secure, compliant, law-abiding cannabis industry,” said Spire’s CEO Andy Richards, a 34-year law enforcement veteran who has led numerous high-profile investigations of organized drug crime. “Whether it’s regulatory applications, security procedures, or working hand-in-hand with government and law enforcement, our team has the right skills, connections, and experience to deliver.”

Coincident with closing, Andy Richards will join the Friday Night Inc. Board of Directors.

Legal Marijuana Makes Law Enforcement Communication Even More Important

By Andrew Richards, CEO, Spire Secure Logistics

The need for different law enforcement agencies to communicate clearly and quickly with each other is obvious to everyone. With a major change in the law, like the legalization of marijuana, the necessity of rapid and clear communication is increased.

What happens when communication doesn’t happen? Back in November 2017, the press reported on an incident in Detroit where officers of the 12th precinct were posing as drug dealers and officers of the 11th precinct tried to arrest them while other members of the latter precinct were carrying out a drug raid. One officer was hospitalized as a result of the ensuing fight, assault and battery charges were considered, and the supervisor wound up being reassigned. Police Chief James Craig called it “one of the most embarrassing things I’ve seen in this department.”

The Detroit Free Press reported, “Poor communication led officers from the 11th and 12th Precincts to be in the same area, at the same time, without proper notification ….  Craig said somebody from the 12th Precinct should have let the 11th Precinct know their officers planned to be in the area, but that didn’t happen.”

It’s funny in a Keystone Kops kind of way, except that lives were in real danger and someone might easily have gone to the morgue rather than the hospital.

The legalization of cannabis adds a large set of complications to the situation that officers will face. Before legalization, the situation was simple. Cultivation, sale, possession of pot were all illegal, and could be dealt with rather directly. Yet the incident in Detroit still happened. After legalization, some cultivation is legal, some sales are legal, most possession is legal – some but not all. The Detroit incident, under these circumstances, could become business as usual rather than an extreme case.

Taking Colorado as an example, you were allowed six plants for personal use, but only three could be in flower at a time. This changed on January 1, 2018, when 12 per residence became the rule. Homes with people under 21 living there have to have special enclosed places to grow these plants. Only licensed grow establishments can sell cannabis. Above all, counties and municipalities are allowed to have stricter rules.

It is easy to see how this creates a labyrinth for law enforcement to navigate. If a county decides pot remains banned, what does law enforcement do about a truck passing through the county as part of an otherwise legal operation? The county sheriff probably needs to handle this differently than he would discovering a greenhouse with 100 flowering plants in his jurisdiction. A central clearing house for information is necessary.

In 2018, Canada is going to legalize cannabis if the Trudeau government has its way. According to Jeff Meyers, our COO, Canadian licensed producers will need to cultivate an aggregate of 610,000kg of cannabis to meet conservative projects of domestic and export demand in 2019. Last year total estimated production of 31,000kg represents just 5% of this total. Organized crime is poised to fill the gaps.” Meyers continues, the Royal Canadian Mounted Police, provincial and local law enforcement, and private sector security firms for that matter, are going to need to share information as never before. You don’t want to violate the rights of people to partake of a legal product, but at the same time, you don’t want ‘freelance producers and suppliers’ creating problems because they won’t follow the laws. Law enforcement is going to need to coordinate and communicate as never before.”

The Canadians do have an advantage, as do the states and territories in the US that are just getting around to legalize cannabis now the pioneers like Colorado and Washington State have done much of the trial-and-error learning already. The Brookings Institute reported, Colorado’s strong rollout is attributable to a number of elements. Those include: leadership by state officials; a cooperative, inclusive approach centering on task forces and working groups; substantial efforts to improve administrative communication [italics added]; adaptive regulation that embraces regulatory lookback and process-oriented learning; reorganizing, rebuilding, and re-staffing critical state regulatory institutions; and changes in culture in state and local government, among interest groups, and among the public.”

Those who are now legalizing cannabis can take what the pioneers have learned and adapt it to their own situations. What they cannot do is ignore the need to communicate.


 

Andy Richards is CEO of Spire Secure Logistics, a Canada-based company focused on security in all its aspects in the legal marijuana space, and a seasoned leader in both police services and international private security for high-risk regulated industries. After a diverse thirty-four-year career in three separate police agencies, Andy retired in June 2015 as a Deputy Chief Constable in the Greater Vancouver area.

 

 

Organized Crime Remains Interested In Cannabis Even After Legalization

By Andrew Richards

One of the arguments for legalizing marijuana is that it takes a source of revenue away from organized crime. However, that is not entirely accurate. Legalization and control of cannabis reduces the mob’s take home pay, but it doesn’t eliminate it completely. The economics of black markets simply makes it too attractive.

Tobacco offers us an excellent model for legal marijuana. The product is legal, it is sold in a regulated market, and the government taxes it to raise revenue and discourage over-indulgence. Where organized crime sees the opportunity is in by-passing the regulations and skipping the taxes.

The experience of the Province of Ontario, Canada, is instructive here. A carton of 200 cigarettes is now so heavily taxed that it costs the smoker C$110 (US$85.50). Sold loose without the tax stamp, the same 200 goes for around $20. As many as a third of all cigarettes smoked in Ontario are contraband. A Royal Canadian Mounted Police “estimate suggests at least 175 organized crime groups dabble in the contraband tobacco trade and use proceeds to fund other enterprises such as drugs and human smuggling.”

In the Netherlands, coffee shops legally sell marijuana, but it is illegal to cultivate it. So, the shops wind up buying from criminals, and while the harm reduction is obvious, the criminal element carries on this its business interests. The nation is working on a regulated cultivation program as a test.

In Colorado, home of American legalization, the Marijuana Unit of the Denver Police Department has doubled its headcount of undercover detectives since 2000, when medical cannabis was allowed. The reason is to deal with organized crime.  Sergeant Aaron Rebeterano says illegal growing operations in the state are increasing. “What we’re seeing now is more organized criminal enterprises where they will do anything to protect those grows. Remember there is a lot of money they invest in them and we do see an increasing number of firearms and other crimes associated with them; home invasions, burglaries, robberies, things of that nature.”

The federal government in Canada plans to legalize marijuana and regulate it, passing the appropriate legislation by July 1, 2018. With only about 3-5% of demand in Canada likely to be met by Licensed Producers (LPs), the stage is set for the current black market to adapt to legalization without missing a beat. The RCMP and provincial authorities will still have plenty to do according to analysts.

However, the private sector can help. The four fields that need addressing are compliance with Health Canada’s rules, design of security platforms using cutting edge technology, secure transportation of product, and insurance to manage risks. Get those right, and the effort organized crime must put in to make a profit becomes onerous.

In the US, the private sector is also addressing cannabis risk management and defense against organized crime. General Cannabis, based in Denver, has an entire subsidiary (Iron Protection Group) dedicated to protecting the legal marijuana industry and run by Iraq and Afghanistan combat veterans.

Only a few die-hard prohibitionists believe that marijuana legalization reduces the overall social harm of the drug, but those who believe that organized crime has lost interest in pot are just as wrong.


Andy Richards is CEO of Spire Secure Logistics, a Canada-based company focused on security in all its aspects in the legal marijuana space, and a seasoned leader in both police services and international private security for high-risk regulated industries. After a diverse thirty-four-year career in three separate police agencies, Andy retired in June 2015 as a Deputy Chief Constable in the Greater Vancouver area.