Latest Research On Blockchain In The Legal Cannabis Supply Chain Highlighted At SXSW

Blockchain in Legal Cannabis: Weeding Out Supply Chain Inefficiencies is latest addition to research firms’ eBook series

TEXAS: Worldwide spending on legal cannabis is growing rapidly, but the market will not realize its full potential without efficient supply chains to deliver an expanding array of products. Blockchain technology could address this issue by providing greater visibility, traceability and transparency as well as facilitating regulatory compliance.

This is according to a new eBook titled Blockchain in Legal Cannabis: Weeding Out Supply Chain Inefficienciesfrom Chain Business Insights, an independent research firm focused on the application of blockchain and related technologies in supply chain management and trade finance. The eBook’s author, Sherree DeCovny, will present her findings at SXSW in Austin, TX on March 15, 2019.

Uruguay and Canada were the first countries to fully legalize cannabis, and more nations are following suit as its medical and recreational uses gain wider acceptance. Countries such as Colombia, Israel, Lebanon, Mexico and Thailand, where there are optimal growing conditions for cannabis, are looking to establish substantial legal export markets for the product. The potential economic benefits are vast considering the potential to fuel business growth, create jobs and raise tax revenue.

Blockchain in Legal Cannabis: Weeding Out Supply Chain Inefficiencies analyzes the cannabis market and the legal and structural issues that impede operational performance, particularly in the U.S. Cannabis is illegal at the federal level, which means that interstate commerce is prohibited. As a result, there is an imbalance between supply and demand across the country. Other constraints such as a lack of standards, limited access to banking services, and transportation restrictions including limits on when trucks carrying cannabis products can operate, create supply inefficiencies that drive up prices and disrupt supplies.

“For the cannabis industry to succeed, companies will need to build and manage efficient supply chains in a fragmented, highly regulated market,” says DeCovny, co-founder of Chain Business Insights. Blockchain could be a key enabler.”

The cannabis supply chain is inherently complex. Many national and international growers cultivate cannabis, which has to be tested and approved before being manufactured into various products and distributed to end customers. The patchwork of legal jurisdictions adds another layer of complexity.

The industry has started to develop the infrastructure and best practices that will underpin future supply chains, using cutting edge technologies such as Internet of Things sensing and machine learning. Blockchain technology is a key component of this effort.

“Blockchain is an excellent fit for the cannabis business, where numerous trading partners need to exchange information securely and have it updated instantaneously when product changes hands,” explains DeCovny. “Also, blockchain-based solutions can provide levels of supply chain traceability and visibility that the industry and regulators need.”

Smart contracts – computer code hosted on blockchains – can automatically implement business processes and execute contract terms. These capabilities can help companies to manage the transactional traffic created by the cannabis business.

The new eBook details existing and emerging blockchain solutions, and examines blockchain technology’s potential role in the industry. A case study shows how a blockchain platform in combination with other innovations is being used by a leading player in California to develop an efficient, end-to-end supply chain for cannabis products.  

“In addition to providing a guide to blockchain-related applications and developments for any company with an interest in the cannabis business, the eBook offers important market intelligence for supply chain practitioners outside the industry,” says DeCovny.

Supply chain management is one of the most promising application areas for blockchain technology. The way in which the “greenfield” cannabis industry is harnessing the technology in supply chains provides valuable insights for any practitioner.

To download the eBook, please visit https://www.chainbusinessinsights.com/blockchain-in-legal-cannabis-weeding-out-supply-chain-inefficiencies.html.

Attend session at SXSW – Blockchain in Cannabis: Boosting Market Efficiency.

Alternative Health Secures $20 Million In Debt Financing For Expansion Of California Cannabis Operations

TEXAS: Alternate Health Corp., an international leader in technology solutions for the regulated cannabis industry, announced that the Company has signed a binding letter of intent with Agincourt Ventures, LLC to secure funding of $20 million, structured as a debt finance and limited stock purchase agreement, with the option to increase the total financing in the future with an additional note.
“This agreement solidifies our financial position as we aggressively expand into California’s lucrative adult-use cannabis industry,” says Dr. Michael Murphy, Chairman and CEO of Alternate Health. “We are eager to move forward, equipped with the financial power to secure inventory from cultivators, acquire revenue-producing assets and expand our licensed distribution and extraction facilities.”Capturing the California Market

On October 17, 2018, Alternate Health announced that the Company had obtained permits for cannabis manufacturing, distribution, cultivation, and processing, and leased a 14,800 square foot facility in Humboldt County, California. With stricter state regulation coming into effect in January 2019, Alternate Health sees a unique opportunity to acquire assets, inventory and significant market share from “grey market” businesses that do not hold valid California licenses.

With the initial $20 million, Alternate Health plans to ramp up operations at the Humboldt County facility and begin developing its signature Humboldt Ave. Cannabis artisan brand. In addition, the Company will produce manufactured products, including cannabis concentrates and infused edibles for wholesale and retail delivery. Distribution will target Greater Los Angeles and rapidly expand across the state. Alternate Health is currently in the process of retaining highly experienced industry professionals to lead distribution and manufacturing operations with state-of-the-art supply chain and inventory management solutions.

Alternate Health already has established relationships with a significant number of top cannabis cultivators in the Humboldt County region and expects to secure exclusive deals for up to 50,000 pounds of cannabis flower with an estimated retail value of approximately $160 million.* The Company will also leverage its relationships with dispensary locations in Los Angeles County to establish strong retail distribution channels in the most dynamic cannabis market in the world.

*Based on estimates from the California Growers Association’s report, Cumulative Tax Analysis, published in March 2018.

“The California adult-use cannabis industry is at a turning point as the state seeks to legitimize the industry and limit black market and grey market sales,” says Dr. Murphy. “With $20 million in initial funding and the opportunity to access additional capital, this agreement strategically positions Alternate Health to capture market share in the cannabis distribution and manufacturing sectors while continuing to develop additional business verticals.”

Terms of the Agreement
Under the agreement, Agincourt Ventures, LLC  will loan Alternate Health $19,600,000USD in two tranches of $9,600,000 on or prior to November 30, 2018 and $10,000,000 on or prior to December 20, 2018. Interest on the loan will accrue at a rate of 5.102% per annum and a maturity date of 12-months from the date of the closing.

Agincourt Ventures, LLC will also purchase one million (1,000,000) shares of Alternate Health Corp common stock at a purchase price of $0.40 per share, for an aggregate purchase price of $400,000USD as part of the agreement.

Alternative Health Inks Multi-State Lab Deal

TEXAS: Alternate Health Corp., an international leader in software solutions for the medical cannabis industry, announced today that the Company signed a binding contract on August 6, 2018, to provide laboratory services for a large multi-state laboratory provider. 
 
Alternate Health expects to begin testing samples in August and is targeting a ramp up to a monthly sample rate of 25,000 – 30,000 by December 2018. August is forecasted to begin with approximately 5,000 to 6,000 samples monthly with an increase of 5,000 to 6,000 additional samples per month. The assumptions on sample volumes, both to start in August and the December projections, were made after carefully reviewing the current needs and future growth projected by the referring entity.
 
Regional fees per sample run between US$50.00 to US$250.00, with averages falling into the US$130 to US$150 range. Costs and expenses associated with performing the tests certainly vary with volume, with Alternate Health’s historical numbers falling between US$35.00 to US$70.00 per sample.
 
“This is a major step forward for the Company and Alternate Health Labs,” says Dr. Michael Murphy, Chairman and CEO of Alternate Health. “This deal represents the culmination of all the hard work and dedication we have put into our laboratory strategy.”
 
In late 2017 through 2018, the Company completed a program of upgrades at Alternate Health Lab’s San Antonio facility. As a result, Alternate Health Labs now has the capacity to run blood, toxicology, allergy, pharmacogenetics, respiratory pathogen panels and women’s health panels. 
 
“With this agreement, Alternate Health will benefit from the investments we have made in our laboratory business,” says Dr. Murphy. “We are excited to build a stable financial foundation to move forward with our mission to be the technology leader in the international cannabis industry.”
 

Alternative Health CEO Updates Shareholders On Spinoff Plans

TEXAS: The CEO of Alternate Health CEO this week provided further details about the company’s spinoff plans and key milestones for the upcoming quarters.

“The Company has been very active this year adjusting our business for revenue generation and growth, including developing our potential spinoff plan for Alternate Health’s non-cannabis assets,” says Dr. Michael Murphy, Chairman and CEO of Alternate Health. “We are excited about this plan, but we want to assure our shareholders that we will only act on this plan when the right conditions are met across the business.”

According to a company press release, management has received board approval to explore a spinoff plan for the company’s non-cannabis assets; it is estimated to take at least three to four months to complete this due diligence process. In the meantime, there are at least four key milestones Alternate Heath plans to meet before acting, including:

  • Laboratory referrals back above 10,000 samples per month and growing.
  • Our payment engine for non-cannabis transactions has at least 2 contracts with testing and implementation underway.
  • Cannabis payment engine fully integrated to the CanaPass/StatePass system and revenue has started.
  • Recreational cannabis sales have started with a good business plan and prospects for future growth.

Should the above criteria be met, and final decision made, the Board expects to seek shareholder approval and that all shareholders would receive their pro rata share of ownership in both companies, on a 1:1 ratio.  Tax implications must also be considered prior to a final decision being taken.

Alternate Health’s focus continues to be on maintaining shareholder value, therefore: Only equity dilution to be based on any capital raise associated with the Newco offering.

Part of any newly raised capital would be used to hire management to oversee and expand each new primary division in the company.

No decision has been made on the final division of company assets between the NewCo and Alternate Health. In particular, Alternate Health is exploring different options for the Company’s laboratory business. The Lab could move to the non-cannabis NewCo or stay in Alternate Health. Another option could see the Lab move to the NewCo and pay a long-term royalty to Alternate Health.

“We believe the proposed spinoff of the Company’s non-cannabis assets is the best plan to maximize the value and revenue potential of the Company’s assets,” says Dr. Murphy. “The Board will be busy performing our due diligence and will update shareholders in time.”

Independent Director Resigns
The Company also announces a change to Alternate Health’s Board of Directors. Kristin Taylor has tendered her resignation as an independent director to focus on her full-time career obligations. The company is actively looking for an independent director to fill Ms. Taylor’s seat on the Board.

Proposed CBD Ban Endangers Patients Warns Texas Cannabis Industry Association

TEXAS: Texas Cannabis Industry Association warns that the Texas Department of State Health Services’ (DSHS) is days away from the unprecedented banning of hemp-CBD products in the state of Texas. This would present a blow to the liberty of thousands of Texans who choose hemp-CBD as a general wellness product and rely on it for the natural treatment of serious medical conditions.

DSHS Commissioner John Hellerstedt has put forth a “Proposed Inspection Protocol” that states all products containing hemp-CBD will be seized from store shelves across the state and either returned to the manufacturer or destroyed.  Commissioner Hellerstedt has given the public until April 16, 2018 to provide comments. DSHS will then decide whether to begin enforcing the ‘Protocol.’

Hemp-CBD is a non-psychoactive compound that even the World Anti-Doping Agency (who oversees the planet’s most-elite athletes) has removed from its banned list. Not only is the DSHS proposal detrimental to thousands of locals whose lives are improved by these products; it is also disastrous for the Texas companies and entrepreneurs who have invested to build out hemp-CBD businesses.

In addition, the legal grounds on which DSHS purports to have the authority to do this are highly-questionable. The TCIA Board of Directors has submitted a one-page executive summary of those legal concerns. TCIA’s General Counsel (Richard Cheng of Dykema Cox Smith – a firm with a national cannabis practice and Texas offices) has submitted a position paper detailing why this state agency cannot lawfully proceed.

HempMeds Exhibits At First-Ever SXSW Wellness Expo in Austin, TX

CALIFORNIA: Medical Marijuana Inc subsidiary  has announced that it will be exhibiting at the first-ever SXSW Wellness Expo in Austin, TX, on March 10-11.

The SXSW Wellness Expo, which will take place at the Palmer Events Center, is the first time the festival has ever hosted an exhibition focused on fueling the mind, body and soul. The two-day exhibition will not only feature numerous companies within the wellness landscape, but also the SXSW Wellness Expo Stage and other areas with programming that includes workshops, demos, fitness classes, speakers, readings, relaxation activities, and more.

“We’re excited to break into this new facet of SXSW and hope that we can use our presence there to help spread education on cannabidiol, also known as CBD, to even more consumers than ever before,” said HempMeds® President Stephen Jones.

HempMeds® was the first company to ever bring hemp-based cannabidiol (CBD) oil products to market in the U.S. in 2012 — and the first to both make CBD products available in bulk for U.S. consumers and also provide high-quality CBD hemp oil to customers around the world. HempMeds® was also the first-ever company to receive historic federal government import approvals for its CBD products in the nations of BrazilMexico and Paraguay.

“We pride ourselves on being a company of firsts and we are excited to participate in SXSW’s first-ever Wellness Expo,” said Medical Marijuana, Inc. CEO Dr. Stuart Titus. “It’s important that we help clear up some of the false information about CBD and spread awareness as to its many health and wellness benefits.”

Texas House Chairman Joe Moody Hosts Public Hearing On Reducing Penalties For Small Amounts Of Marijuana

HB 334 was introduced in the special legislative session and would replace criminal penalties for low-level marijuana possession with a civil citation

TEXAS:  Texas House Criminal Jurisprudence Committee Chairman Joe Moody held a public hearing to discuss reducing state marijuana possession penalties on Wednesday and to support HB 334, which was introduced by Chairman Moody in the special legislative session in July.

HB 334 would make possession of a small amount of marijuana a civil citation punishable by a $250 fine but not a criminal conviction; courts can allow some of the fine to be paid off through the offender taking drug education courses or doing community service. For a third offense, the civil penalty must include a drug education requirement. On a fourth offense, a prosecutor can proceed with a Class C misdemeanor instead of a civil citation.

“This week’s hearing on drug enforcement reform is another step in the ongoing effort to right-size our drug penalties and be smarter on the issue,” said Chairman Moody. “It’s something we’ve been working on and will continue to work on through the interim, into the next session, and beyond for as long as it takes. I know we can do better, and I’ll keep fighting for that.”

Chairman Moody’s efforts have continued to be recognized by the Texas District and County Attorneys Association, which gave him their Law and Order Award the past three sessions, and by the Combined Law Enforcement Associations of Texas, which named him ‘Representative of the Year’ last session.

“Most Texans oppose current penalties for marijuana possession,” said Nick Novello, an active duty Dallas police officer with 35 years of experience. “Enforcing unpopular and unreasonable laws creates unnecessary hostility between law enforcement and the people in our communities.”

More than 60,000 Texans are arrested for marijuana possession annually, according to the Texas Department of Public Safety. Advocates assert that this distracts law enforcement and prosecutors from priorities like combating violent crime, which is on the rise in Texas. A marijuana conviction can not only result in jail time, but carries collateral consequences and can make it difficult to find employment, obtain public housing, or qualify for student loans.

Texas Department of Public Safety Releases Confiscated Hemp CBD Oil

TEXAS: On September 7, Texas Hemp Industries Association (TXHIA) received notice that the Texas Department of Public Safety (DPS) arrived at People’s Pharmacy’s four (4) Austin locations to confiscate various industrial hemp Cannabidiol (CBD) products.  On October 11, DPS reported to People’s pharmacy’s attorney the following:

“Attached is the lab report regarding the ‘CBD hemp oil’ from People’s Pharmacy.  The report indicates the presence of cannabidiol (CBD). The report does not indicate any detectable tetrahydocannabinol (THC).  Given certain ambiguities regarding the status of CBD under the Texas Controlled Substances Act (CSA), the department, after consulting with prosecutors, does not intend to pursue enforcement action based on the tested substance.  This discretionary enforcement decision does not constitute a general opinion about the legality of any product,” wrote D. Phillip Adkins, General Counsel, Texas Department of Public Safety.

Sheila Hemphill, Policy Director for TXHIA states, “Since January of 2016, we are aware of seven known conflicts with law enforcement, fortunately none have resulted in a conviction. Ambiguity in the law related to the status of CBD under the TCSA has caused general confusion, unnecessary expenditures by law enforcement, legal expenses and untold stress to innocent consumers and businesses. This event with People’s pharmacy demonstrates the necessity for our upcoming Texas Legislature to define industrial hemp as an agriculture crop separate from the marijuana definition in the CSA.”

Industrial hemp is not new to Texas and prior to prohibition, a 1938 Popular Mechanics article stated, “hemp grows luxuriously inTexas.”  At a recent Cochran County Farm Bureau meeting near Lubbock, attendees interested in growing this historical crop adopted a resolution approving the cultivation of industrial hemp suitable for seed, oil, fiber, and CBD, with a vote of seventy to one.  Coleman Hemphill, TXHIA Executive Director emphasized that, “our farmers are expressing a need for new beneficial crops to remain solvent through drought and profitable in down markets.  Industrial hemp needs half the water required by cotton and historically cotton has been Texas’ largest cash crop.  Lowered market prices for commodities and the loss of subsidies are jeopardizing our Texas farmer’s viability.”

Hundreds Join ‘Marijuana March’ In Dallas

TEXAS: The roar of a crowd echoed through the streets of downtown Dallas Saturday.

Close to 1,000 people joined a march in support of what organizers call sensible marijuana policy in the state of Texas.

“I believe responsible adults should be able to make adult decisions,” said Shaun Mcalister, Executive Director of Dallas-Fort Worth NORML.

How Texas Became A New Front In Marijuana Legalization Fight

TEXAS:  Shortly before 10 p.m. on a Wednesday in April, Tammy Castro was describing the heartbreaking story of her son’s losing battle against drug abuse. The crowded Capitol conference room, packed with marijuana-rights activists, fell silent.

Marijuana started her son on a downward spiral to his death, Castro said, holding back tears. “If you pass this bill, you are sentencing more youth to certain death.”

Castro was testifying against House Bill 2165, which would completely legalize adult use of marijuana in Texas. States like Colorado and Washington that have legalized recreational pot have created detailed structures for regulating the plant. Simpson’s approach was far more radical; he would strike any mention of marijuana from state law—no limits on the amount you could possess, no dispensaries, no state regulation.

The measure got further through the legislative process than many thought possible, progress that proponents say is a harbinger of some kind of legal pot in the not-so-distant future. With some Republicans reconsidering their opposition to marijuana, the Texas Legislature became an unexpected front in the fight to legalize it.