OG Eddy Lepp Show
Tim Morland, Director of Compliance and Governmental...
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Oct 16 2019 58m
Chapter 1 23 sec
Damon starts the show by welcoming the guests Tim Morland, a compliance officer for Kiva ConfectionsChapter 2 35 sec
Tim is very in tune with the market and the progression of cannabis business and we look forward to getting some insightChapter 3 9 sec
Damon asks Tim to give us a breakdown of who he is and what he doesChapter 4 14 sec
Tim goes on to say he is is honored to be part of this podcast and goes on to say he is the current director of compliance and governmental affairs for Kiva ConfectionsChapter 5 9 sec
He is new to the job he actually started two and a half months ago. prior to that he was the director of compliance and policy for Origin houseChapter 6 29 sec
Tim started his career in the Cannabis industry with River Distribution as their director of compliance and policyChapter 7 14 sec
Tim& primary role at Kiva is to keep the company compliant with all state local and any federal laws that apply to cannabisChapter 8 49 sec
Tim is also very involved with the governmental affairs director, local, and state policy, working with the regulators and lawmakers staff at the capitol to essentially come up with better policies regarding cannabisChapter 9 1 min
Major issues he sees are taxation and access to medicine for patients opportunities for social equity applicants and a lot of issues and one of the issues he sees is retail access because of bans throughout the state. 70% of California has bans in place for cannabisChapter 10 39 sec
Eddy asks how much average cost per edible Kiva produces ballpark.. to the consumer. Eddy asks if it& in the $5 range and Tim response it& more in the $15 rangeChapter 11 1 min
Eddy asks if $15 is the range right now what would it be if we were not the cash cow for the governmentChapter 12 36 sec
Tim goes on to say cities like San Diego and other cities are charging distribution taxes. To even just sell product into the cityChapter 13 16 sec
Tim goes on to say that we have the most amazingly complex wonky over-taxed industry in the nation for cannabis right nowChapter 14 1 min
Eddy uses this opportunity to bring up the new initiative he has created. Tim says he is in favor of simplifying the tax structureChapter 15 54 sec
Damon asks about Tim’s job as a compliance officer and about the red tape he deals with on a daily basisChapter 16 1 min
Tim speaks about the regulators and that they have a tough job. He does not agree with everything they do, but as far as them listening he thinks that they are pretty good at responding to concerns. When he addresses an issue they hear him out, whether they do something about it or not is something elseChapter 17 59 sec
Damon speaks about different California counties, and how he started in Calaveras, how he was robbed for 3 million dollars, and that was based on horrible planning and economic development. Nobody in the powers-that-be from the county listened to a word from any of the major cross section of constituentsChapter 18 39 sec
The name Lori Ajax comes up, and Eddy asks about untold horror stories about the Cannabis commission and that they& well over a year behind on their schedule of what they& supposed to have done, then dealing with him is a nightmare. Eddy asks about what Tim& experience has been with themChapter 19 29 sec
Tim says his experience dealing with the BCC has been very positive. He says it& actually one of the easier regulatory agencies to deal with, but that is his own experience. He doesn& want to discount what other folks have gone throughChapter 20 1 min
Damon adds that he has also had good experiences when coming from Calaveras, he had conflicts that he had run into based on his exit from Calaveras County. The county was sending him tax bills that weren& even validChapter 21 14 sec
Tim says BCC understands the dynamics and they work with youChapter 22 1 min
Tim says when dealing with regulators your key to success is your presentation. Some people send letters to regulators where they& cussing them out and that is not going to work. Take a tactful approach, present what you want to do, if they don& get back to you right away there& no harm in sending a follow-up email but don& go overboard, and don& be rudeChapter 23 1 min
Damon goes on to speak about how education is important and how he& seen many clients who are great cultivators but really need to go to business schoolChapter 24 1 min
Tim goes on to say that he helped cultivators with the simplest things like helping people get a seller& permit with the board of equalization, and how to get tax deductions on the material you buy once you have that seller& permitChapter 25 1 min
Tim speaks about records and the Cannabis industry, and how fascinating it is. He spoke of a grower in Mendocino county who went to jail because the cops raided the farm and found a little bit of paper documenting transactions and that& how they were able to convict him. Back in the days before regulations any kind of paperwork could land you in jail and now that cannabis is regulated and legal now government comes back and says we watch to keep records on everything. Now you have to keep records for up to 7 years even though cannabis is still federally illegalChapter 26 54 sec
Damon speaks about investor vetting for the last 4 years. The Canadians were coming in, Israelis, and all these people requesting to see bank accounts, business statements for the last 3 years before they investChapter 27 1 min
Eddy speaks about how this country doesn& make any sense. They put him in Florence, Colorado where he spent 3 years in the Federal Bureau Prison for growing cannabis for cancer and AIDS patients. While he was sitting there in prison, the neighbor a civilian next to the prison, was literally growing weed over the fence, and Eddy’s in prison over this, and had to walk by this cannabis garden everyday on his way to workChapter 28 2 mins
Damon asks about the small farmers, and how they& going to do in this industry. Tim speaks about being a bit new to the industry, and how within two years the company he was working for was acquired twice, and he wasn& expecting that. Tim says that the acquisitions are happening all around, and it& making it very tough for the small guys because a lot of these big companies are being acquired and are trying to gobble up the marketChapter 29 44 sec
Tim says the percentage of survival is low. He honestly says it& low for the small players in the industry the market one reason is the consolidation of the market and the environment that we are in right now the regulatory and the environment where they are banning in all cities and counties, they are setting up a system where the big companies surviveChapter 30 54 sec
Tim says without the small farmers, we will not have a good supply chain. With limited licenses, bigger companies will take up all of those licenses. Tim says the whole system is geared right now so only the big companies can succeed. It comes down to capital, as well as smaller farmers and manufacturers don& have the capital to survive right now, while the bigger companies are operating at losses which of the smaller companies do not have the funding to be able to surviveChapter 31 1 min
Eddy speaks about an event he attended where his friend probably lost about $300,000 to $500,000 and and he laughed about it. He said it was his first event, he knew he was going to lose money, and he said if you don& have the money to laugh about losing half a million, now is not a good time to be in the Cannabis industry. If you& trying to be a player in the game, it& practically impossible for the little guy nowChapter 32 54 sec
Eddy says he would like to see something done on the same level as tobacco, where all of the small farmers band together and take all of their product to a centralized location, that way everybody gets the same amount. Centralized processing for the small farmer may be the answer, their way to compete with the big guys because 40, 50, 60 small farmers are as big as one jolly green giantChapter 33 1 min
Tim speaks up about several companies that are adopting a model that is similar to that, and some companies are doing the best they can to acquire flowers from small grows. Tim speaks about his fiance who has a family grow, who has their permits now and is doing this but local governments are causing many problemsChapter 34 34 sec
Damon goes over some of the points Tim has made, basically saying if the local regulatory bodies go with the flow a little more, and try to make things more regular across-the-board, it would make it easier for the small guyChapter 35 1 min
Eddy speaks about licenses: once you buy a liquor license, the first 3 months to 6 months you& open, you might see that liquor regulatory body once, maybe three times. But once that first year is over, you may not see them for 5 years, maybe 10 years. That& the way it should be with cannabis industryChapter 36 44 sec
Tim says we need more retail locations across the state. When he worked at the Board of Equalization under Prop 215, he had two thousand registered dispensaries. When he went to work for River in 2017, when they were gearing up for legalization, there was only about two hundred licensed dispensaries across the state that they could sell toChapter 37 54 sec
Damon says he had a pre-roll company and he had all this product that had to get to the shelves, so they made 80,000 pre-rolls all to go to the market at $6.75 wholesale. As he was getting sales out to the dispensaries, they said that spinosad, an organic spray, could no longer be used. Over 90% of cannabis on the market was using spinosad at the time. Many people& dreams went down the drain in a blinkChapter 38 59 sec
Tim calls these events “Extinction Events.” First deadline for compliance packaging and testing things are going to happen, people thought the BCC wouldn& do it, but coming from a government angle Tim knew this was going to happen. Tim warned clients about packaging, clients didn& believe him that the BCC was going to take action but sure enough those products could not make it on the shelves until the packaging was fixedChapter 39 59 sec
Damon asked Tim about what he thinks about the money that has been going to & these days. He knows that there was $100 million allocated by Gavin Newson, and he heard that the legal industry also donated quite a bit of money. And it sounds like they& still given the right to collect what they deem to be nefarious or ill-gotten funds, and appropriating it into their coffers and he has noticed that they have gained momentumChapter 40 1 min
Tim takes his Kiva hat off for this answer. He says they& going after people who are diverting water or doing damage to the environment, however the perception up there is anytime CAMP is involved in Mendocino, it& obviously not good. There& some PTSD over CAMP, and they are going big, so it is freaking out people. Tim has some mixed reactions about it, as heavy as it is, as dramatic as it is but also Tim is not a big fan of cultivators who have no desire to be regulated, who are damaging the environmentChapter 41 39 sec
Tim says he has worked on a few clean ups with the marijuana enforcement team, where he would go find cartel grows, and he is seeing some of the damage that has been done by those folks. It was horrificChapter 42 24 sec
Eddy asks Tim a question: if the government wasn& fucking with us with us every time we goddamn turn around, and a man could plant a garden like a farmer can go out can put strawberries or lettuce, do you think you would have seen that kind of bullshit? Tim answers noChapter 43 49 sec
Eddy says 80 to 90% of the problems in this industry are not only created by, but are fueled by government interference. Tim says there is some validity to that, maybe no 90%Chapter 44 39 sec
Damon says the last thing he or Eddy wants to see is Mother earth treated with anything other than respect. That is definitely a core value with both of them. Damon likes to bring to light the frustrations that we all deal with, with the overstepping that happens in regulationChapter 45 2 mins
Tim says they& fighting in Sacramento for compassion and care, trying to bring everybody to the table. He& not a huge fan of CAMP, obviously he wishes it would have been done differently, but here we areChapter 46 1 min
Damon speaks about CAMP, why did they choose to use the same guys that caused all the controversy? CAMP had the famous interlude with Oaksterdam and got egg on their face, and now we are empowering them. Just seems like maybe we should make a new task force, something that& not polarizedChapter 47 27 sec
Eddy says we are coming to the end of the show, asks Tim if there& anything he would like to ask him or DamonChapter 48 1 min
Tim asks what is their view on the current state of affairs in the Cannabis industry. What do they think are the top fixes? Eddy says if things stay the same that you are fucked. He honestly believes there will be no cannabis industry, only R.J. Reynolds and a couple other huge companies doing pre-rolls and that will be the marijuana trade in the United States. Then Eddy brings up that there is a new initiative that he has introduced so we can take back what is ours and even out the playing field so that a cannabis farmer is treated exactly the same as a lettuce farmer, or strawberry farmer. A person that owns a cannabis retail store is givev the same consideration as one who owns a restaurant, or a 7-Eleven. A man that owns a dispensary is given the same consideration as one who owns a pharmacyChapter 49 34 sec
Damon makes an analogy and says that if he goes and he grabs a wooden table leg off his table, and he beats someone to death with it, he used that table leg irresponsibly. It& up to him as an adult in a free country to choose not to beat someone with the table leg, just as he doesn& need to abuse marijuana, or heroin, or anything else, but he should have the right to choose what he does with himself within his own little bubbleChapter 50 54 sec
Ed brings up alcohol and how they regulate the shit out of that alcohol.. you can& buy it at certain times. You can& buy it unless you& a certain age, then if that& the case why in the hell are there so many many drunks. Why are there so many alcoholics?Chapter 51 24 sec
Tim says he believes in regulations, but there is a point where there is too much regulation and too much taxationChapter 52 49 sec
Tim brings up that it is preposterous, all of the things that people have to do just to get a license. He says frankly, no wonder the small guys are going out of business, they can& afford itChapter 53 1 min
Eddy brings up a great point. He used to know everybody who was in this business 10 years ago. He knows who built it, he built it with them. There was not one of them in there that you would call a big farmer, until he came along. Then he changed things a little bit. The point he was making was that a small farmer, the mom-and-pop farmer, is what created this industry. It& what created this community, it& what made it great. It& what got the knowledge, the education, the word out there, so people can understand and realize the benefits of this powerful plant. It just seems to Eddy that there should be a whole lot more done to help and support this plant and what we& trying to do. It seems to be occurring, trying to over-regulate it. Trying to outlaw it. To him it is absolutely ridiculous. It& like trying to ban a rose bushChapter 54 34 sec
Tim sees a lot of support in communities for development of cottage style grows, but it has to get to retail somehow. To Tim, that’s a big problem: how do we get that product to market?Chapter 55 34 sec
Eddy says we need to build co-ops. We have to organize the farmers. Everyone in the tobacco industry gets along well. There’s no reason why we can’t conglomerate and be as powerful as the giantsChapter 56 14 sec
Tim reminds Eddy we need a market for those co-opsChapter 57 44 sec
Tim talks about the wild success of hosting a booth at Grasslands. He says we need more events. If smaller farmers could have more events, it will definitely helpChapter 58 24 sec
Eddy thanks Tim for his time, and for being on the show. Eddy says he has learned a lot and hopes the audience has learned something tooChapter 59 29 sec
Eddy says there is one word across the board while recording the episodes for the show, that will fix everything: EDUCATIONChapter 60 19 sec
Eddy says at the end of the day, what he hopes he and Damon can give to people is KNOWLEDGE, and showing them there is a way that people can do thingsChapter 61 19 sec
Tim thanks Eddy and Damon for their timeChapter 62 3 mins
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