Editorial:

Brian Taylor Editor

Welcome to the Cannabis Health annual review of economics in the cannabis industry. An industry where the landscape is rapidly changing and the playing field is not only uneven but full of potholes. Health Canada has announced new open and more inclusive regulations for access to medical marijuana. Sativix, the under the tongue spray, is about to be released into the North American market, cannabis will soon be available in some BC pharmacies and cannabis is on the ballot as both the US and Canada approach elections.
The economic pressures are building in Canada. York Region is raising taxes 6.3 per cent, or $91 on the average home, this year, voting for a plan to put 110 more police officers on the street to protect the community from the scourges and dangers of grow-ops.
The Canadian parliament continues to struggle with passing Bill C-10, once known as the Marijuana Decriminalization Bill, now appropriately known as the “Alternative Criminal Penalty” Bill. Although no one likes it, pundits are divided as to whether C-10 will be passed before or after the Canadian elections.
I worry that, we will be like the trappers who opened up the forests and the plains but in the end, were never included in the wealth as the country grew and prospered. In the end becoming second class citizens in their own land. A bit melodramatic, but in fact the cannabis community is engaged in an emotional dialogue on the future. One sector says go mainstream, play ball from the inside of the game, another group cat calls “sell outs”. Cannabis users come in all political stripes and activists are busy arguing capitalism vs. socialism while the real capitalists are taking over. I invite those that have opened the doors and fought the battles to help shape this new industry to create progressive organizations and prosper along with the growth of this new industry. Less navel gazing, more action.
“Cannabis people are fierce individualists. Normal group dynamics don’t apply,
and when people figure that out, they will figure out the reason for prohibition
in the first place.” (Tim Meehan)
The Canadian government recently announced plans to award one additional marijuana supply contract. This is a mistake! The new progressive medical access regulations will not work unless patients are happy with the government product. Not responding to the supply needs of an increasing number of consumers will result in more patients being forced to grow their own, more patients buying from the underground and more distribution clubs. The direction we are proceeding will create enormous challenges for patients, Health Canada and law enforcement.
To accommodate the volume of requests, we will be extending the short profiles on new businesses over the next two editions.
Be sure to catch the interview with Quentin Hardy. I would like to thank Quentin for his objective reflections, his insights and for the risks he took in doing the original story in Forbes.
And also for his blunt warning, like it or not, the capitalists are coming.

Neds Cartoon

LETTERS

Dear Cannabis Health
I have recently been reading a lot in the news, about the estimated value of the Canadian Marijuana Industry. Forbes Magazine reported the industry is generating US$7bn in the province of British Columbia alone. CBC News said “Although B.C.’s marijuana industry is often touted as the province’s largest cash crop, Ontario’s market is much bigger, estimated at $1 billion a year.”

CBC News Online, ran a story by John Bowman, on Jan. 13, 2004 about the Molson brewery grow operations in Barrie, Ont. The police reportedly said that this was the largest and most sophisticated marijuana grow operation in Canadian history, with an estimated street value of $30 million per crop and/or $100 million annually.
I don’t know who or how these grow operation are valued, but the numbers don’t seem to add up.
I also read the RCMP weighs the total wet plant material found at any grow site, stems, roots, leaves, etc. and then use that poundage when calculating values. However, the DRIED bud is the only saleable part of the marijuana plant. Dried clean weight is 1/4 to 1/6 of the wet weight.

The amount of plants in a grow operation is also not relevant when estimating dollar value, the number of lights however is. You can have 100 plants per light (Sea of Green) or 6 plants per light (Christmas trees), and you will only produce the same amount - the amount of lumens will determine the maximum yield of the crop, usually between 1 to 2 lbs per light.

Even at the highest retail price of $12.8 million annually, this is not even close to the reported $100 million dollar annual operation in Barrie, Ont. Where are they, the RCMP, getting their stats and why are they over-inflating the value? Could it be to justify the amount they spend on marijuana related expenditures?

What we really need is an accurate accounting of the true value of not only a single bust, but of the whole Canadian and US Marijuana industries.

So here is the math:
1 x 1000 watt HPS grow light = 1 to 2 lbs = average 1.5 lbs per light
1000 grow lights x 1.5 lbs per light = 1500 lbs per cycle
Estimated Values:
Retail market value (street value) $200 per oz = $3200 lb
Health Canada’s price $150 per oz = $2400 lb
Wholesale price $125 per oz = $2000 lb
4 Crops per year
1000 lights x $2000 per lb = 2 million x 4 = 8 million (wholesale)
1000 lights x $2400 per lb = 2.4 million x 4 = 9.6 million (Health Canada’s price)
1000 lights x $3200 per lb = 3.2 million x 4 = 12.8 million (top end street value)

Dear Editor
The distribution through pharmacies will mean the loss of a holistic, personal approach, delivered exclusively through our current compassion club system. Alternative therapy and support service delivered through a club system increases wellness. Do we really want to see cannabis distribution be cold and sterile like our current pharmaceutical distribution? What makes a compassion club what it is? The people. The resources. The support.

Through creating a network of fellow medicinal cannabis users, clubs allow consumers to access crucial peer support for coping with their dis-eases and access allies with whom they can feel comfortable, knowing that they share the choice to use cannabis as medicine. What we have created in our existing system of club distribution is what the standard health care system needs to aspire to. Holistic, comprehensive care with choice. We can not afford to lose what has been created.
Teresa Taylor, Social Worker, Cannabis Activist, Past Federal Marijuana Party Candidate

It’s not much but I wish it were more.
Thank you very much for Cannabis Health Journal. I fell asleep while reading Volume 1, Issue 1 and went into a diabetic sweat and I ended up trashing that very first issue I believe. There seems to be so many of them. I hope you have one to send to me please, it tops my collection. Thanks for the fronts of Volume 2, Issue 1 and Volume 2, Issue 2. If you can, could you please send it along with my regular subscription? Good stuff in March/April edition.

I’m sending along a $5.00 donation with my subscription. It’s not much and I wish it were more.
Thanks. B. Miller, BC

Cannbis Health Top 100 in New Zealand
Cannabis Health is an excellent publication. Keep up the style and on-line accessibility. There are many matters of merit with that. In light of the New Zealand Government’s review of cannabis legislation, Cannabis Health should be made available in our parliamentary library to quote as a source. BTW, New Zealand is the only country in the western world where, subsequent to an election of a minority party, “confidence and supply” or the right to draw a cheque on the treasury is governed by an agreement that cannabis is off the agenda.

We need the extra exposure. Cannabis Health website is in the top 100 websites in NZ. Anyway, superb effort and big thumbs up to all your staff and contributors.
B Anderson, NZ

From Iran
With greeting and desire of the best success and prosperity in all of your lifetimes. If possible, please send us copies of your company’s magazines to the mentioned address.
Best wishes Ali, Iran

Recently Seen Picture to the right was sent to us from a subscriber in Vancouver. Thanks Alan.

Cannabis Economics
Quentin Hardy is the Silicon Valley Bureau Chief of Forbes Magazine. He joined Forbes in 1999 from The Wall Street Journal, where he covered wireless technology from the paper’s San Francisco bureau, and wrote about Japanese banks and financial markets during a 6-year stint in Tokyo. He first wrote about cannabis in Canada for a front-page Journal story on the Internet-based seed business, and decided to follow that up with a cover story for Forbes check it out while in Vancouver for a business story. “Talking to a couple of old contacts, I realized that the cannabis business had evolved into something very big and sophisticated,” Hardy says. He never got around to his original story in Vancouver.

Cannabis Health opened the interview with Quentin by explaining that in the past few months, we have been flooded by new products. We have no less than 5 new vaporizers in the store, various designs and prices. Everyone is knocking off everyone else in this lawless and sometimes ruleless environment. “Sounds like what you would expect in a classic early stage industry,” he said confidently, another confirmation of the original hypothesis that drew him back to BC for a second time in the fall of 2003. Flying solo, and with the help of various activists and the RCMP, he toured the emerging BC marijuana industry. His articles appeared in the November edition of Forbes Magazine. In this, the second annual economic report, CHJ contacted Quentin to find out how this coverage in Forbes was received in America, and to see if Quentin could offer us any insights into Canada’s current situation.

Cannabis Health: So tell me what impact did your articles have?

Quentin: The story was the best selling conventional cover of Forbes last year aside from our annual rich list, despite a Doubletree Inn in Huntsville, Alabama refusing to stock it. For every amount of resistance there was a greater amount of interest. I was recently on a talk show on the government network, C-Span. I talked for 45 minutes, interviewing people from all around the country, and I think there was one anti. I was truly astounded by the level of support. Now you have to take into consideration that activists will call in when others won’t. There was an immense amount of support and the emails, I lost count. Last time I checked they were running 7 to 1 in favor. I tried to strike a neutral position, so in many ways this was a Rorschach. Most average people didn’t see the point of the current system.

CH: I know this is first a financial story, but the observations that you made, that the backbone of the industry is “An army of ordinary people” contradicts Canadian and US positions that this industry is controlled by Bikers and organized crime. Did this observation not bring down some heat on you or the magazine?

Quentin: Yeah, we took a certain amount of heat from anti-drug groups in Florida, we were banned from the prison system in Texas and Indiana, as I recall. They had laws against any information getting to prisoners that would enable them to make drugs. And there I was, pointing out that if you put seeds in dirt they will grow. (Laughing) Clearly, it was an invitation to devious behavior.

I don’t think most people want to engage in debate on that level. I think they like things the way they are and why engage in debate that might cause controversy. You know things like the current drug laws and student loans; they don’t want to shed light on this kind of thing, it’s too preposterous.

Speaking of being come down on, I was recently on a show called The O’Reilly Factor; by the way, he’s no fan of Canadians. He was citing statistics that show for a long time Canadian and American underage consumption rates were running at about the same level. Recently, however, Canadian consumption rates have increased and naturally, he attributes this to the more liberal Canadian attitude. You know, I have my own concerns about underage consumption.

CH: Your co-workers, how did they react?

Quentin: To my astonishment, the people I thought would be pro were anti and vice versa. The editor emeritus of Forbes, who must be 80 years old, he and I were on TV arguing for decriminalization. And the younger Steve (Forbes) of course, is against this, arguing “it’s just a gateway drug, etc”…, but this guy is old enough to remember prohibition and he was making that analogy.

CH: Did anyone question why you would choose to cover this story at all?

Quentin: Basically Forbes is interested in this as a financial story. You know what they say in journalism, “Follow the money”. If you want to understand something, figure out the business part. You know, I didn’t get a lot of push back, in part because I was giving a report on an economic/business situation and my reporting gave me an insight that I thought was very powerful, that is; in an area that has lost its fishing, timber, cattle and mining industries, this is a reasonably or highly lucrative business with very little social disapproval and a reasonably low level of risk, so people have gravitated to it.

As much as we see the Molson bust as the marquee bust, what’s probably going on is an enormous informal network of people growing four and five lights and winning an important secondary income in their house. And because it’s such a loosely structured network, it’s like the internet; it’s going to be very, very hard to stamp it out. You may be able to take down the Hell’s Angels and you may be able to take down the Big Circle Boys, given a high level of infiltration and strong racketeering laws, but it’s very, very hard to take down a dispersed, localized network.

CH: So we are now an industry, where are the visionary entrepreneurs? Where is the capital?

Quentin: They are here, you showed me the entrepreneurs. They are the pipe companies, glass companies, vaporizer companies. They’re crawling out of the woodwork. I saw some very sophisticated operations that entrepreneurs were carrying on. Well, yes, they don’t have access to a lot of capital, and the kind of people they get capital from will swallow their businesses, so they’re wise not to borrow. I knew a guy who was outsourcing seasonal immigrant labor and was planning to bring in a number of Mexican laborers to live on a mountain side for the summer. Talk about entrepreneurial activity, I have met guys who stockpile during the low-price season and put it in lockers and sold it in the summer.

CH: You had a chance to look at things from both sides, you spent time with the growers and the RCMP, what was that like?

Quentin: There are plenty of people in the RCMP that just want to do their job well. They’re enforcing the law, they’re not bad people, and they see things differently. The issue is up in the air in Canada, it’s a social football. At the risk of offending your readers, so much of Canada’s business happens in the context of what goes on in the United States and it’s so lucrative because the laws are so much worse in the US and the demand is so high and the prices are so high because of the US.

CH: I have some problems with the amounts we are supposedly exporting.

Quentin: So how much of what you grow in Canada do you think goes down to the US? Anything that I’ve written on in Canada could easily have been duplicated for the United States, except I might get shot reporting on it. There are enormous parallels to the impoverished portions of the US. You go to Arkansas or Alabama where there are difficult times for farming communities, I have no doubt they’re doing the same thing.

CH: How did you draw some of your conclusions? Canadians like to think we are leaders and that we offer the US moral and ethical enlightenment.

Quentin: Yes, but from a business standpoint, the economics are governed by what happens in the US. Your dope prices would collapse if not for the US demand. I want you to look at what happened to the price of marijuana in Vancouver immediately after 9-11. The wholesale price of cannabis dropped 30% just on the expectation that the border crossing would be tougher. There was massive backlog in Canada and the prices just collapsed. That’s your end market, that’s your price determinant. Look at how much is being grown between Grand Forks and Nelson. If every single person lit up at 10AM and smoked all day, you think you could get through it all? Canadians have a massive surplus.

You need to pay attention to guys like Stephen Easton, Professor of Economics, at Simon Fraser University in BC. He is doing some legitimate work looking at the risk/return ratio, being a grower and discounting for the likelihood of arrest. I understand Stephen will be publishing his analyses of the marijuana economy in the next few months. The guy is great and influenced my own analyses.

CH: How about some advice for Canadians, we cannot decide if we want this industry controlled by big corporate marijuana business or set up more like the wine model of farm gate. The cannabis activist community fears the unfeeling stereotypical corporate domination of this fledgling industry.

Quentin: Face it, Brian; you’re a gentle little man living out in the country. My beat is the Silicon Valley. I know lots of businessmen like you describe. Entrepreneurs are monomaniacal. They have to be, the odds are against you if you’re not. Capitalism, it’s not pretty, but it works. As far as the wine model goes, you might look at the American corn industry model as well. There, individual corn farmers work long brutal hours for generally little profit, while the big aggregators do well and influence policy. Be careful what you wish for, and ask yourself, are you really sure you want this?

CH: Is there any question in your mind who will control this emerging industry?

Quentin: I know there are people in the business now who think things won’t change. With all respect to the activists, they aren’t reading enough history. The fact is, capitalism is going to come in there, and they are better off dealing with it rather than pretending that it is not true. They have a chance now to be in a position at the table, steering policy and the shape of the industry — after all , they have deep knowledge in agriculture and medicine, thousands of potential clients, and a lot of goodwill. If they are there, and welcoming of change, they can do well. If the government and the new entrants have to work around them, they’re going to say, “these guys are all high, and to hell with them.”

CH: You had some exposure to “compassion clubs”. Where do you see this part of the industry going?

Quentin: The Vancouver compassion club and say a band of other compassion clubs, should walk right up to these guys (government) and say, we are the Underwriter Laboratories, The Good House Keeping Seal of Approval on which companies should be supplying medical marijuana. We have 10,000 customers at hand and the greatest depth of experience you have ever seen, “let’s do some deals!” But they probably won’t do that, which I believe is foolish, because they are going to be irrelevant if they don’t.

The compassion clubs are in a position to be players right now, but if they just bitch and whine that a lot of capitalists have showed up, they will be outflanked and that would be a great shame for all concerned.
Think of it as a problem in natural history, you adapt to changes in your environment, or you become a fossil. Nature doesn’t cut you a lot of deals where change is concerned.

CH: Some of us have been pushing to have Health Canada consider small contracts, spread around the country.

Quentin: You know the thing that you can do there that would be smart is what your partner Barb is doing with the regional governments: hook them in as, nobody can get too big, spread your risk, no big drug runner can get involved, this way it’s a local business. It becomes a cottage industry spread throughout Canada. Presumably Health Canada has small regional offices all over the place, why couldn’t they be licensing agents.

Again it all comes down to a matter of power and who makes the decisions. Where I am going with all this is predicated on the idea of engaging. If you are going to sit back and click your tongue and complain that it’s not the Woodstock Nation, don’t even bother, you’re just doomed. Positively, I can see all kinds of ways that the present system could be happily morphed into some kind of capitalist framework that would be more powerful and give the current players in the system some greater life there. In the end, you know, not acting guarantees that someone else will be in charge.

Glass Glass Glass
The economics of the glass industry is in a constant state of evolution. Laws constantly change around the world creating many rifts in the culture and re-evaluation of a lifestyle once taboo. The advent of e-trade (business on the internet) is bringing the world closer in terms of business prospects. An example of this growing global industry is seen in the wide range of everyday products, manufacturing, and services available to us from other regions and countries of the world.

The highly criticized and controversial American War on Drugs has led to many changes in our industry. The United States has literally killed off the mainstream glass pipe industry by seizing and charging many American glass artists marketing or selling such paraphernalia. (For more specific information and details research “Operation Headhunter” or “Operation Pipe Dreams”) Because of the influential nature of these backward laws, many American glass artists have shifted to the glass sex toy industry, leaving the demand to be supplied by a foreign producer.

This is detrimental to our national revenue, as outsourcing and purchasing goods from foreign countries takes money from local producers and adds it to other countries GNP (gross national product).
The current outsourcing trend is a search to find a cheaper source for your product, which may come from cheaper labor, cheaper or lower quality materials, resulting in a lower quality product in the end. Two countries known to produce a wide range of cheaply produced knock-off products, goods and services at lower costs are China and India.

Although this may seem great for business, as lower costs generally amount to higher profits, there are also serious drawbacks. Porsche and Civic are both cars made from similar materials, but there is an obvious quality difference. They will both get you from point A to point B and are functional, but both are obviously in different classes of quality. Take the time to carefully examine the glass at a local shop, you may discover that a lot of import glass is made with thinner walls, which translates into less raw glass weight, and therefore lower manufacturing costs. Also, thinner glass may be easier to break, and the shapes are not as perfect, refined (oblong) or aesthetic (comfort, style, AND function).

Enter Wong Bong Glass Werx / Bubble Bros Glass. We are a fresh, new Canadian company out of Ontario, Canada, looking to make our mark on the industry with high quality glass art. We produce production stock in quantity for retailers, and also cater to the custom design needs of the true connoisseur who wants a little more than what is available to other people. We are here to promote safe, high quality Pyrex (borosilicate) glass art, and believe the quality and workmanship of our products will speak for itself.

Our plan is to build a company with a reputation for producing quality products that becomes the North American standard in the glass industry.

Please enter the contest in the hard copy magazine to win a free pipe and visit our website for more information.

The Evolution of Vaporizers
The term vaporizer has been used for any device that can achieve vaporization point prior to combustion. Without temperature control, a vaporizer is just one step away from combustion.

Recently, herbs met technology and true vaporization became a reality. From the early days of vaporizers that just burned everything, to vaporizers of the 1970s that disappeared, and the glass jar vaporizer of the 1990s, the millennium brought us hot air temperature controlled herbal vaporization.

In the early 1900s, smoking mainstream herbs, like tobacco and cannabis, caught on and people started thinking about the concept of inhaling herbs again. It wasn’t until the second half of the 20th century that people truly started to understand the health hazards of smoking. When the first reports of the hazards of smoking came out, the smoking industry denied everything. Rather than spend money on creating a safer way to inhale tobacco; they continued to deny the health problems associated with smoking. Without anyone looking for an alternative to smoking, vaporization wasn’t even a consideration.

In the 1970s, a few herbal vaporizers from small companies hit the market, including the well known Tilt Vaporizer. In the late 1970s and early 1980s, herbal vaporizers got pushed underground by a drug war and passage of anti-paraphernalia laws. Without even considering all the benefits of cannabis and the hundreds of medicinal herbs that could be vaporized with proper temperature control, vaporizers once again disappeared from public view.

In the mid 1990s, affordable glass-domed vaporizers hit the market and people started to think about vaporization again. These primitive devices lacked temperature controls and involved contact with a metal, soldering iron. This form of vaporization became popular, but the units weren’t very efficient. Not only were they capable of reaching combustion temperatures, but they would never be a safe choice for patients who needed to ensure they weren’t inhaling smoke.

At the turn of the millennium, a few companies released hot air temperature controlled herbal vaporizers and the industry changed forever. Temperature control opened the door to use with hundreds of readily available legal herbs, allowing vaporizers mainstream acceptance. Not only could recreational users vaporize herbs instead of smoking, but vaporizers now had an undisputed legitimate medical use.

Smoking will never disappear, but those of us in the vaporization industry realize how obsolete it really is. Vaporizers have come a long way and they will just keep getting better. It’s just a matter of time before people embrace vaporization as the only real way to inhale herbs. The future of herbs is here and things are just going to get better from here.
Damon, Vaporizers.ca

Cannaguide
When I decided to make the move into entrepreneurship over a year ago, my mission was and has remained simple: to serve both private and public interests in the cannabis culture by creating a unique, useful and profitable product or service that in itself helps bring an end to prohibition. One aspect of this that I feel we can all have an immediate impact upon is the everyday normalization of what we do and who we are as cannabis consumers. CannaGuide is the essence of this form of individual activism. We support those businesses and services that support our lifestyle. CannaGuide BC is North America’s first free, annually published, comprehensive directory of both cannabis-focused businesses, services, events (non-profit or otherwise) and those organizations which may not have a direct cannabis connection, but want to reach out and support the cannabis consumer nonetheless.

One of the most basic institutions that draws people together, as banal as it may seem, is a directory. Whether it’s the Yellow Pages that define your area by its businesses and services, a Gay Guide that targets the homosexual community or a Jewish or Chinese phone book, a directory is a physical representation of the breadth and diversity of one’s culture. Not only will both the canna-resident and canna-tourist alike have a
professional, portable and easy-to-read resource of every category of listing required to fully utilize this amazing plant in daily life, but they and society as a whole, will have a visual cue as to how strong and secure Canada’s cannabis culture truly is, for us to have a directory of our own.

It is my belief that, if we are to be accepted by the “straight” business community, cannabusinesspeople need to run their organization like any other business and need to truly believe that what they are doing is no less deserving of success than every other legitimate enterprise. This is a concept that many struggle with, especially those who are used to being forced to circumvent regulation and authority. I’ve completed and have been implementing my business plan with the help of a loan from Community Futures Development Corporation (a non-profit business development organization) and with a weekly grant from Human Resources Development Canada (the Federal Gov.) as part of the Youth Entrepreneurship program. I was accepted based on the merits of my business plan. Yes, they know exactly what my business is, too!

Cannabusiness should strive to reach their target market without having to compromise integrity. Right now, although seed dealers, nutrient companies, paraphernalia makers, etc. all have the means to advertise their particular product or service, prohibition prevents mainstream advertising from allowing them to fully express what their product or service really is or does. Most phone books don’t even have a Hemp Store section, so they spend hundreds of dollars to list under Clothing or Books. CannaGuide frees the advertiser to explain to the consumer honestly the who, what, when, where, why and how of their product, service or event. Conversely, the non-cannabis focused organization that wants to target the cannabis consuming market has never before had an effective medium to do it until CannaGuide. Restaurants, electricians, real estate agents, any business or service that the rest of the society requires, canna-people require as well. The astute entrepreneur who markets their organization in CannaGuide knows that their ad is a statement and their newfound market-base is extremely loyal to those who make such a statement. Look for CannaGuide BC 2004-2005 on shelves Cannabis Day (July 1st) 2004!

Beyond Prohibition- Legal Cannabis in Canada
The British Columbia Civil Liberties Association Presents A Multi-Disciplinary Approach to Law Reform: BEYOND PROHIBITION Legal Cannabis in Canada
It is far past time that cannabis be removed from the Criminal Code and that a workable system of regulation replace Canada's current social policy of prohibition. Numerous studies and government commissions have concluded that prohibition is a failed social policy that does more harm than good. This conference, however, will not focus on the harms of prohibition. Instead, participants from a wide variety of fields will demonstrate the ramifications of a legal cannabis environment.

Discussion Topics Include
* Models for a Regulatory Environment - Recreational and Medical
* Law Enforcement and Judicial Resource Allocation
* Economic Impacts of Legalized Marijuana
* Internal Treaty Ramifications
* Public Health Perspectives
* The State of Cannabis Research
* Safe, Legal Cannabis Cultivation

Date of Conference: Saturday, May 8, 2004 Location: The Wosk Centre for Dialogue, Vancouver BC. Keynote Speaker: The Honourable Senator Pierre Claude Nolin
Tickets are available for $20 each. Ticket price includes admission to the conference, a copy of all written materials presented at the conference and two coffee services. Lunch is not currently included, but will be provided budget permitting. Seating is limited and a maximum of two tickets per person may be purchased.
For tickets or more information contact: Kirk Tousaw, BCCLA Policy Director 604.687.2919 kirk@bccla.org (email is the preferred method of contact)

Cannabis Research Institute Inc. and Cannabis Health Foundation
Choosing your organizational structure.
In the early 80s some of us came to the realization that a traditional top-heavy management style was strangling many of the non-profit organizations in which we had spent so much time working. We wanted to form an organization whose structure would enhance its objectives, not undermine and stand in the way of its success. Co-op seemed to be a possible step in the move towards efficiency while retaining the spirit of co-operation and involvement of employees.

Early experiments with co-ops had shown us that although the government wants to encourage co-ops and has a number of incentives in place to encourage this form of progressive organization, very few funding branches of government will do business with a co-op. It often comes down to a subjective decision by a government employee, who is seeking to decrease his own risk by having a clear point of responsibility in the organization he is considering for support. Non profits and Co-ops have a place in providing various human and community services, but when it comes to politically volatile and high risk issues like marijuana or cannabis, these volunteer-based organizations offer the (often amateur) board members at the helm a scary burden of responsibility.
Faced with this seeming dilemma, we decided to approach this from a different angle. It was important to our success to harness the energy of our employees and the commitment they have to the cannabis cause and, at the same time, to offer them meaningful involvement in the day-to-day decisions of the company. It was essential that we have a flat authority structure; make decisions by consensus, and have a low level of “them and us” mentality.

In effect, we wanted to be a co-op but were forced by the realities of the market to be a for-profit corporation. Cannabis Research Institute was registered in 1999. The initial private placement, bylaws and constitution are traditional, with the exception of the addition of certain ethical commitments stated directly in CRI’s constitution. Nothing was stopping us from operating internally any way we wished, and we continued to behave internally as a co-op.

We began to see that some doors were closed to CRI, the corporation, in the areas of support and services to medicinal marijuana users. In 2001, with this in mind, the principals of CRI formed the Cannabis Health Foundation. The Foundation made the support of patients and the use of volunteers easier to manage within this organizational marriage. We took the time to ensure that we were beyond reproach when it came to the finances and the relationship of the corporation CRI to the Foundation CHF. Internally the “accountant” role and rules are well defined. We seek legal advice on any contentious issue and conduct an annual external audit.

In 2002 the Foundation began to publish the Cannabis Health Journal. The journal filled a need for a hard copy magazine that stayed away from sex and other drugs. We wanted a magazine that reached doctors and teachers and students and would be acceptable in a medical clinic or school library. We wanted general appeal but were targeting the 50 to 60 year old early retirees, the boomers. The journal, now well into the second year of operation, has successfully developed an advertising base and distribution network that reaches into 15 countries. The majority of commerce takes place in Canada and the US West coast.

CRI, in co-operation with a local company in Grand Forks, BC, is in the final development stage of a new user-friendly grow box. Within the next year, this state-of-the-art option for growing your own medicinal cannabis will be available on lease.

This summer both CRI and CHF will be moving to new accommodations. The new site will be a renovated heritage barn that we will be making over to resemble a turn of the century mining town. The location is close to the highway and we will encourage visitors to drop in to be educated and entertained.

To what do we owe our modest success? We have a deeply committed group of employees and volunteers. Everyone in our organization is in the loop, and we all share a 10-year future vision. You could say we are successfully operating a co-op within a corporation that is married to a nonprofit foundation.
CHJ

Seattle Hemp Fest
Vote Freedom! Seattle Hempfest 2004 Saturday and Sunday August 21 & 22 - 10AM to 8PM Myrtle Edwards Park, Pier 70 Free!

Construction in Myrtle Edwards Park has been