Two Steps Back. How the raid of CBD Guild is a raid on the entire cannabis community and the MMRSA program as a whole.

Upon receiving notice that local and Federal law enforcement officials were raiding the facilities and homes of CBD Guild, manufacturers of Care By Design and Absolute Xtracts products, my first reaction was one of disbelief. Just a couple weeks before I had created a presentation for the organization that was to be used to inform and educate representatives from over a dozen State agencies charged with developing the new cannabis regulatory program for the Bureau of Medical Marijuana Regulation (BMMR). They invited these folks to tour their facilities in hopes of helping them to establish a positive program as required by the Medical Marijuana Regulation and Safety Act (MMRSA) that was passed by the CA Legislature last October.

I was certain that the reports of the raid must have been a mistake, as there was no other organization in the industry that was more compliant and prepared than the folks at CBD Guild. How could it be that in the midst of developing licensing programs for the industry that includes the manufacturing of extractions and finished products could a full blown raid of one the industry’s model providers be happening?

Was this a joke? Did I miss something? Are we really back to doing raids again? Really?

I was stunned and disheartened when I found out that it was true. While I have been incredibly skeptical of the entire MMRSA program, as I understand how difficult it is going to be to put the toothpaste back in the tube after 20 years of being ignored by State lawmakers, I have tried to remain at least hopeful that somehow it could work out in the long run. As I arrived on the scene of the raid to observe law enforcement removing the property of what by all measures was an incredibly compliant organization, my heart sank. I could not believe that after all of the supposed progress that had been made to develop a regulatory program for California that here I was, standing on a street corner asking DEA agents if they had solved the opioid crisis and had the free time to raid responsible and professional providers of cannabis medicines again. For some reason I had allowed myself to believe that we were past this… That the days of military-style raids on cannabis producers was a thing of the past. With one fell swoop this raid had diminished my hope that things would work out. I realized that no matter how hard we tried to be upstanding members of the business community that when it all boiled down we were still just a bunch of outlaws. How depressing.

Make no mistake. This raid has far-reaching implications that will dramatically impact the efforts to regulate the industry in California for a long time. The sad reality is that if CBD Guild is not compliant and is subject to heavy-handed raid tactics and arrests then every single one of us is vulnerable. None of us are safe, and we all should be very worried that this whole deal is a sham. In the words of the great Admiral Ackbar, “IT’S A TRAP!”

Individuals and companies across the State are making heavy investments into upgrading and expanding their operations to comply with the new California laws regulating the industry. CBD Guild had just made a large investment into a state-of-the-art facility to house their operations. This facility is beyond compliant, and exactly what one would expect when considering what a true medical cannabis production and research facility should be. I should know. I am helping to develop the Standard Operating Procedures and compliance protocols for the organization. As I toured the facility for the first time I remember thinking, “Maybe I was wrong. Maybe the new regulations could work out.”

I have been one of the biggest skeptics of the new laws, and in many respects I have been right on that. We saw the ill-fated March 1st deadline result in bans on patient cultivation all around California, with tens of thousands of patients’ rights to grow their own medicine removed due to the rush to push MMRSA through before the end of last year’s legislative session. There continues to be “fix-it” bills being presented to the Legislature to try and make the law somehow workable. It is a terribly written set of laws that will continue to create chaos and confusion for many years to come. It didn’t have to be this way. There is no real need to make the program as strict and overbearing as it is. Attempting to develop a brand new agency to develop and oversee this web of unnecessary rules and regulations that encompasses a dozen different State bureaucracies will prove to be its downfall. To add insult to injury, the geniuses putting forth the Adult Use of Marijuana Act decided to double down on these bad ideas, and in some ways have made them even worse with what is being touted as “the strictest regulatory program in the Nation.” Super. I guess if California is number one at anything it is definitely the enactment of unnecessary regulations to address problems that do not exist. Way to go.

Yet even through my skepticism the group at CBD Guild made me want to believe. These were not members of the billionaire boys club coming in to corporatize cannabis or turn the whole industry over to Monsanto. This is a group of people who have worked hard to evolve this industry from one of outlaws and ongoing fears of enforcement into a legitimate business model and an industry of good paying jobs and tax revenues for the community. These were the folks not just talking about doing it… they were actually doing it and doing it right. They have created great product lines of strain specific vape pens, sublingual sprays, capsules, and extracts through the Absolute Xtracts brand; and an entire line of CBD rich products called “Care By Design” that has become one of the most reliable CBD options on the market. They have built the organization from the ground up and currently employ over 50 people in good paying jobs. Their operations are meticulous and their attention to detail of every batch they produce to assure quality and effectiveness makes them a desirable option for thousands of patients who have come to trust their brands for their medical needs. They really are at the forefront of the industry and are a positive model for all medical cannabis businesses to follow.

Which is why the raid on the CBD Guild facilities is so devastating. The harsh reality that we all must now face is that if those guys are not compliant and are subject to raid and arrest, you can be assured we all are. No one is safe; and that is a scary proposition when you consider that State and local authorities are asking us to all come forward and volunteer admissions to felonies that carry severe mandatory minimum sentences with zero legal protections when it is all said and done. Yay! After we are done incriminating ourselves we can then agree to pay billions in fees and taxes all for the privilege of getting their fancy licenses to hang on our wall. This all seemed pretty groovy about a week ago, but now I am not so sure. If this is their idea of “regulate and control” I will pass. Thanks.

Being an outlaw worried about getting discovered and busted every day sucks. It is how nearly everyone on the production side of the industry has operated for years. Our clandestine operations result from going to great lengths to avoid being detected in fear of having the doors kicked in and being arrested have created a volatile and overpriced market for cannabis. This lack of legal clarity or any real assurances for those who grow and produce cannabis products makes it difficult to operate effective businesses. Which is why what CBD Guild was building was so revolutionary. It seemed like we were turning the corner from fear and loathing to growth and prosperity… and then this happens.

I am positive that I am not alone in feeling confused and betrayed by the raid of Care By design and Absolute Xtracts properties and leaders. I am both angered and saddened by the situation, and frankly, I am not sure what to think. Why does it always feel like any attempted step forward is answered by two definitive and devastating steps back? Here was a good business operated by people who I respect and who have made every effort to do things the right way being aggressively raided by misinformed law enforcement, plastered all over the media as some sort of criminal masterminds, having one of their directors locked up for days like some sort of crook, and being slandered by officials as illegitimate and illegal. If this is how a forward thinking and transparent organization like CBD Guild is being treated then are we all screwed or what? If these guys are being treated this unfairly do any of us really stand a chance? It is depressing to say the least. My cautious optimism has turned into flat out paranoia and frustration. I am really questioning if it is ever going to be alright if this is how things are going to go.

This entire episode was allegedly caused by a disgruntled ex-employee who left on bad terms and threatened the organization on his way out. He is apparently now making products that directly compete with them. Stay classy, player! This should serve as a stark reminder to us all. Your cannabis business is not like other businesses. Had an employee left a company like say Graton Resort and Casino and phoned in some anonymous tips to law enforcement to exact their revenge on the casino you can be sure that there would not be some weak five-day investigation followed by a multi-agency raid on their facilities and the home of the owner. No. If anything at all they would probably receive a letter of inquiry of the matter, or maybe a phone call to follow up. But no other business is treated like this. They just do not use big raids and front page news stories for code violations and licensing matters. But alas, here we are.

You can be certain that this raid is two steps back for the entire regulatory process and everyone working on compliance with the new laws. They have succeeded in scaring the bajeezus out of us all, and making everyone fear the worst… That the licensing and regulatory program we are facing will be the end of the industry as we know it. Only time will tell I suppose. Welcome to the show. Selah.

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