 Sapphire Risk Advisory Group is pleased to announce that Katharine Baxter has joined our team in the position of Lead Technical Writer. Katharine, a recent alumna from the University of North Texas, graduated Cum Laude with bachelor’s degrees in both Journalism and Political Science. In addition to being a published writer, she also brings experience in marketing and social media to the company.
Katharine will be working with the team, writing the security sections of city and state cannabis applications as well as Standards of Operations Procedures, Emergency Procedures and other business training modules. Katharine is a welcome addition to the team as Sapphire Risk continues to help business owners develop their security strategy.
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 The Federal Aviation Administration (FAA) is warning the general public that it is illegal to operate a drone with a dangerous weapon attached. Perhaps you’ve seen online photos and videos of drones with attached guns, bombs, fireworks, flamethrowers, and other dangerous items. Do not consider attaching any items such as these to a drone because operating a drone with such an item may result in significant harm to a person and to your bank account. Operating a drone that has a dangerous weapon attached to it is a violation of Section 363 of the 2018 FAA Reauthorization Act enacted Oct. 5, 2018. Operators are subject to civil penalties up to $25,000 for each violation, unless the operator has received specific authorization from the Administrator of the FAA to conduct the operation. “Dangerous Weapon” means any item that is used for, or is readily capable of, causing death or serious bodily injury. Operators should keep in mind that federal regulations and statutes that generally govern drone operations still apply. Some state and federal criminal laws regarding weapons and hazardous materials may also apply to drone operators or manufacturers involved in certain operations.   WHAT EXACTLY IS HEMP?
While hemp is a plant in the cannabis plant family, hemp is not marijuana. Hemp does not contain the THC that marijuana does, so it has no psychotropic effects. In fact, hemp has been cultivated for thousands of years by people around the world. Ancient civilizations used hemp to create fibers for cloth, fiber-pulp for paper making, oil for fuel, and they ground it into power to use for medicinal purposes. HAS HEMP EVER BEEN GROWN IN THE UNITED STATES? Hemp was brought to colonial America by the Puritans. They planted the hemp seeds in New England, so they could use their hemp harvest to make linen for sails and caulking for ships. Hemp was a mainstay in the maritime industry because of its natural resistance to decay. As the colonies grew so did hemp cultivation. Eventually, hemp was a valuable crop being grown in Maryland and Virginia as well. EVEN THE FOUNDING FATHERS GREW HEMP. Hemp was such an important crop for the colonial economy that farmers were compelled to grown hemp to show their patriotism to the fledgling country. George Washington grew hemp on his farm and Thomas Jefferson cross-bred hemp seeds to create new varieties. He also invented a unique tool that kept the hemp stems from being crushed while being processed. While the founding fathers were hammering out the details of the Declaration of Independence, they wrote their ideas down on hemp paper. WHY WAS GROWING HEMP OUTLAWED? Hemp cultivation got caught up in the "Reefer Madness" hysteria of the early 1900s. This was an idea widely circulated to the public that young people would become "insane" by smoking marijuana. An all-out assault on marijuana reached a crescendo and citizens pressured the politicians of the day to do something. POWER AND GREED GOT INVOLVED. Knowing the societal pressure over marijuana, greedy industrialist William Randolph Hearst and the DuPont Company also pressured them to include hemp in any ban on cannabis. As has been noted hemp was used to make paper and oils for plastics. Hearst had a huge financial stake in timber cultivation and paper mills and DuPont had just created cellophane and other plastic products from petroleum. Together they had a million reasons to want hemp cultivation and the products that could be made from it outlawed in the United States.  Check out this great info graphic about the uses of hemp. Can't wait to see this list expand!
 The biggest news to come out of the Texas House Agriculture and Livestock Committee this year is the passage of "House Bill 1325". That day a Wednesday, Texas State Senator Charles Perry declared, "Wednesday is not hump day but hemp day."
TEXAS HOUSE BILL 1325 IS A GAME CHANGER. The bill, now signed into law by Governor Greg Abbott, "legalized the cultivation of hemp, processing of hemp, and manufacturing hemp derived products, including cannabidiol (CBD)." This law brings Texas in line with 40 other states and the federal government laws that deemed hemp legal for cultivation and production. Many in Texas are excited to learn how they can now reap the financial benefits from this valuable product. The Texas Agriculture website states that Sid Miller, the Texas Agriculture Commissioner "is a strong supporter of industrial hemp production as a new market opportunity for Texas farmers to expand their operations and grow alternative crops." WHAT EXACTLY IS HEMP? While hemp is a plant in the cannabis plant family, hemp is not marijuana. Hemp does not contain THC that marijuana does, so it has no psychotropic effects. In fact, hemp has been cultivated for thousands of years by people around the world. Ancient civilizations used hemp to create fibers for cloth, fiber-pulp for paper making, oil for fuel, and they ground it into power to use for medicinal purposes. CAN HEMP SAVE THE TEXAS FAMILY FARM? Lisa Pittman, a Texas cannabis attorney stated to the Texas Tribune; "Previously dormant pilot programs are all now activating after the passage of the 2018 Farm Bill. I personally believe Texas will become a leader in [the hemp growing] arena because farmers have been looking to this bill as a lifeline to save their family farms." HOW VALUABLE CAN HEMP BE TO TEXAS FARMERS? Texas farmers need to know that their next most valuable crop may be hemp. Farmers in states where it is now legal to grow hemp have realized substantial profits from their crop. Jeff Lake, President of Elemental Processing, and part of the Kentucky Industrial Hemp Research Pilot Program is quoted in the Dallas News, "Where corn may yield $350 to $400 per acre on a good year, and soybeans $150 to $200, Elemental Processing pays $3,000 to $5,000 an acre for hemp plus a bonus on the yield." WILL HEMP GROW WELL IN TEXAS? Hemp is a very hardy, drought tolerant annual plant that produces high yields. The climate in Texas is ideal for growing hemp. Industrial hemp thrives in warm weather and can grow in a large variety of soils. While hemp can be grown in the same plot for years, rotation with other crops is best. It is also known that depleted soils benefit from hemp rotation. HOW CAN I START A HEMP FARM IN TEXAS? Even though House Bill 1325 was signed into law, the State of Texas must work with the USDA to iron out the details. Applications for hemp growing permits will be available in 2020. Check the Texas Department of Agriculture website for updates. Before starting any new venture, and especially before starting a hemp farm, it is critical to hire a Risk Advisor. Risk Advisors can analyze your entire operation, identify any potential risks before they happen and create a complete hemp security program for your business. There still is a lot of confusion around all the "can and cannot do's" regarding Industrial Hemp Production and Call today to see how our "proactive security strategies can protect your time, money and reputation as your business grows."  The Cannabis Control Commission (CCC) released the draft versions of updated regulations for medical and adult-use cannabis in the great Commonwealth. And assuming no significant changes between the draft and ratification (temporary measures have a habit of becoming permanent), it is worth reviewing the changes made to the regulations. Here we will review the security components including but not limited to 935 CMR 500.110 and 935 CMR 501.110.
Marijuana Social Consumption Establishments - 935 CMR 500.141 When Question 4 passed in 2018, social lounges were a hot topic since, although Amsterdam was well known for its cannabis cafes, no state had broadly encouraged licensing for social consumption areas. Although the CCC was encouraging of lounges, involved parties agreed to wait until 2019 to discuss lounges, i.e. take it slow. Now 2019 is here and we have seen some regulations and structure in California and Colorado. Nonetheless, lounge implementation on the East Coast could prove to be its own animal. On paper, security for a lounge reads similarly to security for a dispensary (in practice, reality is not so kind). Businesses will have to take steps to hide consumers and products from public view and secure doors more carefully since purchasers are not required to leave the premises. Much like a bar, budtenders cannot overserve consumers or sell more than 20 mg of Δ9-THC to a single consumer. Designers have the challenge of not only compliance but providing reasonable expectations of comfort for consumers who want to vape versus those that do not want to smell or breath vape, all the while limiting the potential for consumers to violate rules which apply to them, e.g. disposing of unused marijuana products in a secure receptacle. Delivery of Marijuana and Marijuana Products to Consumers – 935 CMR 500.145 Many entrepreneurs see delivery of anything, not just marijuana, as a premier business model due to lower real estate costs, labor costs, and greater ease of purchasing by consumers. However, just like cash transportation, putting an abundance of valuable assets in something that travels easily creates a lot of security risks not only for the businesses but especially for drivers and employees. Massachusetts and California business owners have asked similar questions to the states, each of which has responded differently. California emphatically has rejected certain geographical limits on delivery vehicles. Meanwhile, Massachusetts prevents delivery vehicles from operating in municipalities which banned marijuana. Discretion is required so you won’t see vans with leaves drawn on them. Although requiring contact with the retail store every 30 minutes, the “ice cream van” business model a la Eaze appears to be permitted since Massachusetts is allowing $10,000 worth of marijuana products in a vehicle and requiring an individual to remain in the vehicle while there is product. But a thorough logbook and a GPS will ensure that businesses adhere to regulations and that drivers are safe. Emphasis on Cash Management and Communication with Law Enforcement Cash is still king in the marijuana industry. It also creates vulnerabilities for employees, customers, and businesses. Normally, the number of security regulations directed at cash is dwarfed by the number directed at cannabis. With that said, the CCC clearly emphasized that marijuana establishments should be practicing secure protocols for handling and storing cash and currencies. The new regulations specifically requiring standard operation procedures (SOPs) for cash handling and cash transportation by armored vehicles. Cameras must be directed at cash safes (which should be TL-rated, not simply fire resistant!). Also ensure you have backup power and alarm monitoring systems. Other notable changes include reworded sections which emphasize that law enforcement needs to be kept in the loop. We recommend this on principle, but now you must make local law enforcement aware of flammable or combustible solvents as well as the floor plan of your location. Essentially, the CCC is emphasizing that security is best practiced by the experts. Although identifying service vendors may cost more in the short term, this practice greatly reduces risks and can save you much more in the long term. Belichick the Regulations Regularly This review is not all-inclusive, but rather we seek to create awareness that the Code of Massachusetts Regulations will be modified and it will effect changes in security plans. In a market that has seen great evolution over the last 3 years, businesses will be required to adapt. Don’t be a Pedro Martinez screwball. Be like Malcolm Butler – know what play is coming and intercept it early. We will update this article should the draft regulations discussed be rejected or modified. Check out this recent article from Marshall & Sterling which discusses the capabilities/limitations of alarm monitoring systems and the tricky situation of false alarms. If you installed an omnipotent alarm system that solves all your problems, congratulations. But most of the time, good security includes intelligently designed systems, quality equipment, and disciplined implementation of SOP's and best practices.
The article also discusses the value of UL certification and backups. Is an alarm system worth it? Absolutely - but take a holistic view to what you're being notified for. Thanks to Scott Sweeney for providing a review of an important security component from an insurance agency's point of view. Original Article: https://www.marshallsterling.com/specialty-risks/your-alarm-system-may-not-be-protecting-your-property  We have already started working with several clients for the next round of the New Jersey ATC cannabis application which are due August 15th. In the last ATC round, we were proud to have scored an average of 91% for our clients with a high score of 94%. We are currently helping with the security build out of a NJ Cultivation and Dispensary from the last round of licenses. Remember, an applicant can only apply three times in the State and needs to be aware of the new rules from the NJ Department of Health. We are ready when you are to help. https://nj.gov/health/news/2019/approved/20190603a.shtml  When it comes to designing the security for a cannabis facility it is very important to strictly follow your state and city security rules and regulations in order to ensure you are in full compliance. Finding a security consulting company within the cannabis arena with proven experience like Sapphire Risk Advisory Group, to say the least can be a challenge. So, when the time comes to choose a cannabis security consultant, it is important to do your research in learning about their experience with previous cannabis facility designs. Get Help From An Expert The cannabis industry is a new market within the United States that has been estimated at $7.06 billion in 2016, medical marijuana emerged as the largest marijuana type segment in 2016 and is estimated to be valued at USD 100.03 billion by 2025. With these type of projections the industry seems very attractive to investors of all kinds, making the licensing competition very fierce. With this high demand it creates a large possibility of hiring a security company that has very little if any experience in the cannabis industry. Ask Before Designing Tony Gallo Managing Partner at Sapphire Risk says, “you cannot design your facility in a vacuum”, meaning that first you need to know your states minimum requirements followed by what the customer wants and furthermore what the city, county, or local sheriff might require. In order to accomplish a understanding of these requirements Gallo recommends to “just ask” before designing i.e. the state may not require the facility to have a security fence along the property line, where as the city or local sheriff may want to see the fence in order to alleviate any concerns of easy access to the public during non-business hours. Next the customer may want a fence line that has barbed wire running along the top, this is not permitted in the city of Las Vegas, as Gallo recommends to “just ask”, you would not be aware of these requirements or even wants from the customer. Another issue that gets overlooked when designing a cannabis facility is something as simple as the city ordinance for outdoor lighting, states Gallo. Outdoor lighting ordinances or codes are a great tool for ensuring that municipalities implement good, safe outdoor lighting. A well-written ordinance, with proper lighting installed, will save the public money and increase safety. Thousands of cities have adopted such codes and they can be a great tool for a community to use to control light pollution, including glare, light trespass and sky glow. If you or the security consultant that is helping you through the design of your cannabis facility is not aware of the local lighting regulations, can cause problems in the final stages of the inspection process to get your license finalized. This could be a costly mistake that could have been prevented by just asking. To sum it up
Gallo says, your best tool to have during the process of obtaining your license is to make sure that you are using a vetted security consulting company in the industry. Are you interested in a Security Audit for Your Cannabis Facility? Contact Us for A Quote: https://www.sapphirerisk.com/connect.html The last few years have been quite the ride for cannabis entrepreneurs in California. As the market has evolved, so have the risks for businesses. We appreciate Andrew Mukthar reaching out with this article about their experiences and advice in California. The post discusses newer topics du jour in the cannabis industry, such as inversion (e.g. sales to other states) and requirements from the Bureau of Cannabis Control and California Department of Public Health. It's a long read but worth it.
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