Navigating the Mid-Atlantic Cannabis Market

First seen in Dutchie X Outlaw Report

Welcome to this webinar brought to you by Dutchie and the Outlaw Report. We’re just gonna wait one second while everybody gets behind stage in the right location. I’m gonna check with my colleague, Ashley, to make sure everything is good to go, and it seems like we are we have a great program slate of you today, and we are absolutely thrilled that you are here. My name is Jay Rosenthal. I’m the lead producer of content at Dutchie, and I will be here to kick things off of the program, keep things moving on stage, make some introductions along the way, and do some back end production stuff on my end through tech.

And we are thankful to have the partners of the LL Report. You’ll hear from LJ Dawson, their editor in chief, coming up. But here’s a little rundown of what we have. First, we’ll hear for an overview from LJ Dawson from the outlaw report of what’s happening in DC and Maryland. Then we’re gonna dive a little bit deeper with, what LJ will pepper two of the best lawyers in the cannabis industry, John McGowan and Meredith Kenner from Kenner McGowan to talk about DC and Maryland status and updates.

Then we’ll get to some DC specific information from Tom Stone, who is Dutchie’s person on the ground in DC and Maryland, and then from Roy Sherwood from Dutchie’s compliance team. And that, of course, is mission critical to what we do at Dutchie, but also how operators operate on the ground in DC and Maryland.

Which which brings me to this. On the right hand side of your screen, there is a comment section. Feel free to chime in there and let us know where you’re joining from. If you have questions, we’ll collect them there and get the guests to respond probably post event as we really wanna keep everyone on task today and get you on your no doubt busy day.

So we’re gonna run about forty or forty five minutes in total then get you out. And if you miss anything today, and this is important, we’re recording this event. And we’ll send a link to the on demand version of the webinar. So don’t worry about keeping good notes or really any notes because you’re gonna get it all probably tomorrow by email.

With that, it is certainly enough for me. Let’s get to the folks you actually want to hear from today. Joining me first is LJ Dawson. She’s the editor in chief of the Outlaw Report.

For For those that don’t know, the Outlaw Report is the essential, reliable, and informative source of cannabis news in the mid Atlantic. They have correspondents based in DC, Maryland, and Virginia. They cover cannabis consumerism, business, law, regulation, government reform, equity, advocacy, science, and, my personal favorite, lifestyle.

And it’s awesome. So I put a link into the comment section so you could link to it there if you don’t already. With that as an intro, LJ, over to you.

Thanks so much, Jay. We’re

really excited to be here today to discuss the Maryland and DC market.

Things have changed significantly for both DC and Maryland in the last twelve months. Maryland launched a legal adult use market, and DC has significantly expanded its medical program.

Virginia just had the legal medical market, unfortunately, due to governor Glenn Youngkin continuing to block Democrats’ efforts to to implement an adult use market. The Virginia government’s own study within the last year found that many of their medical patients actually buy cannabis in other states such as Maryland or DC due to high prices of the legal medicinal cannabis available in Virginia. However, a legal adult use market is stalled as long as Youngkin remains in office which is set to be until twenty twenty six. So today we’re gonna focus on DC and Maryland as those are the markets that are changing the most. The proximity of the DC, Virginia, and Maryland markets mean that cannabis consumers in the two states and the district often cross over into other states or DC to purchase cannabis.

Maryland’s legalization of adult use cannabis for those twenty one and over launched in July twenty twenty three, And a hundred and one established medical dispensaries were able to expand to the adult use market.

Since July twenty twenty three, those dispensaries have benefited from almost five hundred million dollars in just adult use sales, which is a lot of money.

Maryland’s adult use market has consistently broken sales records, and no new businesses have even come online yet. Due to delays in licensing processes, as of just last month, a hundred and seventy four social equity candidates in Maryland were awarded awarded an assortment of licenses via lottery. Those businesses now have eighteen months to fully open.

The businesses licensed include dispensaries, growers, and processors, including some micro dispensary businesses.

Awardees are currently going through a verification process with the Maryland Cannabis Administration, which is who regulates the cannabis industry in Maryland. And two counties have not gone through a lottery yet due to delays from lawsuits.

However, almost two hundred Maryland businesses will be establishing the use of Metrc in the next year and a half to legally track cannabis seed to sale in the state. DC also uses Metrc to track its legal sales. This can be a big transition for some businesses.

DC’s medical expansion was the district’s attempt to get as close to an adult use market as possible. Unlike Maryland, which has statehood, DC does not have state hood. We’re a district and Congress controls our market. Congress has presented DC from implementing an adult use market due to a a part of the federal spending bill called the Harris rider, which is named after a Maryland Republican representative, Andy Harris, its chief proponent. The Harris rider has prevented multiple attempts to fully legalize adult use cannabis in DC, which has popular support from voters and the mayor.

The twenty twenty two medical market expansion in DC launched a major expansion by allowing consumers to self certify for a medical cannabis card without a doctor’s note, and it also opened up the market for a ton of new businesses.

We’re in the midst of almost a year of these, business new businesses being able to apply, and we have just one other application period finishing up right now and one more that will come this summer.

The medical expansion also made a focused effort to provide I seventy one gift shops with a path to the legal market. DC has long been known for its gray market which was established after an amendment legalized the possession of up to two ounces of weed and the gifting of cannabis between two people.

The amendment has been liberally interpreted interpreted by entrepreneurs to to set up a gray market that has long dominated the DC cannabis scene.

The expansion allowed I seventy one shops an opportunity to transition to legal medical dispensaries this past winter. A small number applied and the rest who didn’t are now facing enforcement from the Alcohol Beverage Cannabis Administration that regulates cannabis in DC, which we also call ABCA.

DC awarded both standard and conditional licenses for manufacturers, cultivators, and dispensaries.

Conditional licenses were awarded to businesses who were still in the process of finding locations and investors.

Conditional licenses licensee holders have a year to formally apply to ABCO with necessary information.

I have seventy one gifting shops that chose to convert to the legal market will be among some of the newest dispensaries to open in DC. Prior to the expansion, there were about half a dozen medical dispensaries to serve all of Washington DC.

Just like Maryland, there will be many new businesses adjusting to the legal market requirements of Metrc and Moore, some of them transitioning from a gray market where they didn’t have to abide by any of these regulations.

The current medical market in DC averages around four million in sales a month, but regulators are expecting that to increase significantly as the gray market is shuttered. Both Maryland and DC have a lot of transitioning to do over the next few years, and so we’re happy to be here today to talk with Duchy and also Meredith and John about what that transition’s gonna look like. It’s obvious that the cannabis market and in the DMV is hungry for more options and looking forward to both of these expansions.

Back to you, Jay.

Thank you, LJ. And as LJ moves to a different camera on the back end of this technology, I’ll introduce you to our next guest, Meredith Kinner and John McGowan of Kinner and McGowan, DC’s original cannabis law firm. Meredith and John will get peppered with questions from LJ as soon as she’s all set up, which she appears to be. So LJ, Meredith, and John, over to you.

Meredith and John, thanks guys so much for being here today. So, Meredith, I wanted to ask you first, with your clients and your experience dealing with, the people that are transitioning into the legal market in DC, what are some of the most important aspects that you think, your clients need to focus on compliance wise?

Well, thank you for that question, LJ.

There is going to be a lot. I mean, this is gonna be as you mentioned, these clients were not required to comply with with, really any sort of regulations beyond basic business licensing. And so I think the monthly, and quarterly compliance audits that are done, that are required by APCA, those reports, I think that’s gonna be kind of a new frontier for a lot of people as well as just really maintaining, compliant inventory procedures.

You know, right now, people’s storage rooms at their facilities aren’t the most organized. Things are gonna have to be organized. Things are gonna have to be properly scanned. They’re gonna have to be uploaded to your POS system like Dutchie, which is communicating with Metrc and everything is live and syncing at the same time. So it’s really important to be aware of your, compliance requirements and then to follow them, because that is the kind of thing. If you don’t, that’s the kind of thing where you could be sanctioned by the ABC board, And that that could cost money and set your business back.

So it sounds like there’s gonna be a lot more boxes for them to check where they didn’t have to check any if they were an I seventy one gifting shop in the gray market before this.

And a lot more boxes to to unload and put in your in your in your vault room after you’ve inventory all of them in your Duchy system that that communicates with metric. Yeah.

Great. So John, turning to Maryland, we know that Maryland has already had an adult use market going.

What are some of the major sticking points that you’ve seen clients dealing with compliance wise in, Maryland specifically?

Yeah. Thanks for having us.

You know, our firm was fortunate enough to have we did submit there was a license lottery for adult use applicants recently, and we were fortunate enough to have a client that won one of the lottery, licenses. And now, what’s going on is there were emergency regulations that were just drafted and published a few weeks ago in Maryland, which are set to become effective after the review period and comment period at the end of June. But what’s significant is these licensed lottery winners, they become conditional licensees, and they have eighteen months, to find property, build it out, get inspected, and get open, get operational.

But one of the sticking points or one of the new regulations that’s affecting these licensees is they have to show adequate capitalization for their project within six months of being awarded the license.

So, you know, as you can imagine, there is significant capital needed to start any of these facilities. And though they have eighteen months to get open, there are new, you know, disclosure regs with financial background you know, financial analysis, investigations, and and showing you have adequate capitalization. And so I think that will be, not not a scramble, so to say, but I think that will be, something that’s gonna affect new applicants that are getting underway, with their with their plans. Because, you know, acquiring identifying or acquiring property for a project can take a minute. And so it’s just going to be, you know, out the gate, a very, you know, strict schedule for compliance, I think, with conditional licensees.

Also, even if you won the lottery, technically, you haven’t been automatically issued a license. You you are there still verifying, things that were disclosed in your application. So we don’t have a set timeline for when the actual conditional licenses will be awarded, if that makes sense.

Great. Yeah. And we know that finding commercial real estate in the cannabis industry, whether you’re in DC, California is difficult because some of these are federally backed, loans, and they cannot cannot, loan to can or they cannot rent to cannabis businesses. So, yeah, in DC and in Maryland, that that looks like that’s gonna be an issue potentially, as people try to find find locations for their businesses.

To piggyback that, sorry, just just to say and also another another hiccup has been, there are counties. It’s count zoning is county regulated in in Maryland as in many states. And so some counties are introducing bills trying to make, you know, where compliance zoning where these facilities can locate a little more restrictive, with more restrictive setbacks.

So that could that could continue to happen from Maryland applicants.

And, John, kind of carrying that over into DC, what are some of the major sticking points that you see, DC clients having to deal with going forward?

It’s kind of a universal issue, but, I mean, property acquisition is a huge, it can be a huge issue for many applicants.

You know, there is only so much, you know, compliant property, and and there are setbacks from schools, from other retailers, and licensees.

And, so so one of the biggest things is finding, compliant property for your project, but then also getting the permitting from the necessary agencies, department of of buildings, and other agencies, within the time period to do so. So those are really big issues for, applicants and licensees at any stage in DC. I don’t know, if that answers your question.

No. It absolutely does. Meredith, going back to you, we talked a little bit about how at the end of your answer, how people are gonna if they aren’t compliant, they’re gonna face fines. So why is it important to be proactive with compliance versus reactive?

Well, because it’s gonna end up costing your business money to be reactive.

Right, you always wanna be sure that you are using all the possible possible compliance tools in your toolbox at the outset so that you don’t have to unlearn bad habits. You don’t wanna start with bad compliance habits. Right? A lot of these companies that are doing going through the transition are gonna have to unlearn some things that they’ve that they’ve been doing.

And they’ve been doing, you know, and they’ve been running a safe facility and haven’t had any, you know, inventory issues. But now all of that is going to be centralized, and the regulators are gonna be looking at it. So it is really important. You don’t wanna you don’t wanna you don’t wanna sell yourself short in being as compliant in it as possible at the outset and doing everything you can at the outset so that you’re not getting fined or having to have, you know, offers in compromise or all these other, mechanisms that they have with, alcohol licensees who are uncompliant.

Right? They’re gonna have all those fines and penalties. And if you don’t file your quarterly reports, you know, you your you’re keep having inventory, inventory levels that are off and aren’t, you know, showing what they’re showing a metric. You’re gonna face real, maybe not fines, but certainly scrutiny from the regulator for that and and likely fines as well.

So it it becomes serious now. People have to focus on compliance. And with tools like Duchy, they they have training programs who can work with attorneys like us, to help you not have to get fined and not have to be penalized and to run, a seamless shop. Because, ultimately, that’s gonna save you money in the long run.

Absolutely.

Either of you guys can answer this, but we’ll start with, MCA, which is the Maryland Cannabis Administration that’s responsible for checking compliance.

What do you guys have you seen, like, the tone of of MCA? Like, is it hands off or are they checking with compliance? Have they been, you know, pretty on the ball already, in Maryland?

They’re using third parties. They’re paying third parties to do a lot of their preliminary compliance and verification tax tasks for, the lottery winners? I think, Johnny, you can speak a little bit more to that.

Yeah. So as far as the MCA, I mean, they’re they are assigning, from what we’ve learned, they are assigning, you know, enforcement specialists or investigators to specific applications that you can work with, and they’ve been pretty responsive, so far. However, as Meredith mentioned, you know, there are a lot of third parties that are working to vet the applicants, you know, verify everything in their application. And it seems like, you know, that tends to lead to miscommunication with third party contractors working with a regulator who also has their own employees.

And so I do think, you know, that could be an issue, really in relaying information and having to do double compliance work for things that were produced to one party, but another party does not know about. You know? So, that is something, for instance, you know, there is a a vendor that’s doing interviews of applicants. There’s an interviewer doing social equity investigations.

There’s an, and and there’s a vendor, presumably gonna be doing the background and financial background checks. So, it is a lot of moving parts, to Meredith’s point.

When when these shops do get set up, though, will, MCA be responsible for checking compliance of metric use, or will that be a third party vendor?

Yeah. Those kind of things are like, things compliance wise are always under the purview of the regulator because they are what’s tied to enforcement.

I I mean, we haven’t seen at least in any of the Mid Atlantic where they farmed out enforcement Right. To a third party contract. It’s usually the investigation, particularly in Maryland. They’ve done that quite a bit, farming things out to third party contractors.

Yeah.

Great. And then with, ABCA in DC, have you seen that they’re pretty on the ball, enforcing compliance and kind of tracking the medical market very well and and very specifically, or are they not yet?

I think we actually met with one of their, enforcement investigators today, and I think that the program’s been so small since two thousand, you know, thirteen that I don’t know that they’ve had the opportunity for, like, a, you know, large scale enforcement, and there hasn’t been much enforcement because it’s been such a small program. There haven’t really been bad actors. But I think as all of these, new shops come online, I I I do think that there is going to be there’s gonna have to be enforcement. And I think they’re ready for that and they understand that. I think they’re very cognizant of that.

I agree.

Yeah. I think right now, we have about one or two inspections every month, and, of course, there’s about six functioning, dispensaries and then a few more, grow facilities.

So, yeah, they haven’t DC is a small market, but we know that at least a dozen, new dis dispensaries, medical dispensaries will be coming on in the next three months and then additional cultivation as well. So I guess we’ll have to see how ABCA, does deal with a bigger bigger set of, licensees and businesses to enforce and keep track of.

Yeah. In addition, there’s a new brand new licensing category, the manufacturing category, which, you know, used to be vertical with the cultivation centers forever until last year. So what we’re learning is there is a whole there is a you know, not a lot of knowledge of their agencies about this new license category with their new permitted uses, and that’s going to be interesting how that new category of of producers are gonna be, you know, regulated from a compliance perspective once they get open.

So Is there anything else that you guys wanted to add, that you really want people to know about compliance, new cannabis businesses that are transitioning?

I know you guys deal with a lot of transitioning clients from the gray market to the, legal market. So what else do you think is really important for people to know at this moment?

We can go first.

If you have questions, ask. Don’t try to do it. Don’t try to be like, oh, yeah. I can handle this.

I don’t need you know, I’ll wait till the last minute to get my POS system. I’ll I’m not gonna, you know, have to consult with attorneys. We certainly think that’s worth it, but at least take whatever training that you’re provided, either Metrc, any of the required training. Duchy does it through their assist you know, I know you guys have training.

I’m sure other POS systems do as well. It’s important. You should consult with attorneys, but take compliance seriously, or else you’re gonna end up it’s gonna end up biting you in the end.

Yeah. I I I would echo that. I would say everyone that’s applied for this transitional license had to have property. So it specifically applies to them since you already have property.

Start the permitting if you need to do a build out, building permitting, any kind of, inspections needed from other agencies other than APCA, I would recommend working with an expediter or general contractor and starting that immediately because that is what slows you down. Third party approval is necessary that aren’t the regulator. Right? And, you know, you have to get approvals, from these other agencies or else you can’t open as a business to the public.

So that is what that is what typically holds people up the most.

And I’m with Meredith.

There is a lot to do just to get operational as everyone knows, any kind of re any kind of facility in this industry to get open.

So I would work with attorneys. I mean, just like you have, all this stuff to do, it just it just it adds up. The communications and verifying with each agency and make because there is growing pains going on right now because the the market, as, you know, we said earlier, is rapidly expanding from a small market to a to a lot larger market. And there’s just a lot of growing pain. So, yeah, I would I would be on top of everything proactive as we said, but start getting the third party approvals that are necessary for your property, as soon as you can because those those those take several months. You can do other things in the meantime, but those permits, whatever they may be for your operation, take the longest to get.

So And I would say one of those things you should be doing is identifying your seat to sale vendor.

Right? Identifying your your POS, identifying your seat to sale because you can familiarize yourself with those systems, you before you begin to familiarize yourself with metric because that’ll come farther down the line.

Yeah. Great. Thank you, Meredith, and thank you, John. We appreciate your time today.

Thanks so much.

Thank you. Thanks everybody.

Thank you, Meredith. And John and LJ, please stay put. I’m gonna connect you right now with Tom

Stone. Duchy’s on the ground lead in DC and Maryland. LJ and Tom, now you’re up.

Thanks for being here today, Tom. We really appreciate it. So just tell me a little bit about, who Dutchie is as a company and what you guys do.

Yeah. That’s a great question. Thank you for asking, LJ. So Dutchie is a technology platform, that’s built specifically for the cannabis industry with products including point of sale, ecommerce payments, ranging all the way to cannabis specific insurance.

We act as a centralized hub for cannabis businesses where all operators where all operations and technology seamlessly connect. In turn, enabling dispensaries to run efficiently and scale their operations so our customers can ultimately run safer and more compliant canvas business.

Okay. Great. So it sounds like you guys are kind of a one stop shop for, legal cannabis businesses across the country.

That’s the goal. That’s the goal.

What has Dutchie been up to in the Maryland and DC markets? I know both of these are new developing markets. So, yeah, what have you guys been focused on working on in this, this East Coast?

Yeah. So two incredibly exciting markets. There’s a lot of great movement. So Dutchie has been involved in the Maryland cannabis scene for for some years now, probably supporting just around ninety percent of the market as it is today. We do have a good market share in DC. So we’re covering some of the larger MET operators, and we’re working with, some of these new one applicants, as they begin to transition.

As, some of the other folks in the call have alluded to, there’s a lot of hoops that they need to jump through. So being a resource for them throughout that process has been very important.

So our goal now, though, is is really the same as it’s always been, and that’s to help provide safe and easy access to cannabis and enabling our customers with the technology they need to succeed.

And really outside of retail operations as well, we also have employees on Federal Hill fighting for the good fight, really pushing doing our best to push things forward for the, the cannabis industry as a whole.

So Okay. Great. And when these, businesses first approach you in Maryland and DC, if you guys have so many different things that you offer, but what is the thing that most of them are, you know, coming to Duchy to really help, at first?

Yeah. So, I mean, candidly, a lot of these folks just come to us out of you know, people hear about Duchy through word-of-mouth, and they they just really wanna see what we’re all about. So, really, at the end of the day, they’re coming to us to see, like, our core offerings and essentially how we’re able to help them improve their day to day operating operations as an operator.

So something that Duchy does very well is we have a two way integration with Metrc. So, you know, connecting the dots there with these newer operators and, you know, letting them painting the picture for them how we can help streamline their day to day and their operations, is something that I think goes really far, with some of these folks as they come to us in, these initial conversations.

Definitely. Is there any success story that really comes to mind with any of your clients that you guys have, you know, worked with in the last year?

Yeah. So at the top of mind, there’s this I I don’t wanna mention her name just because I don’t have permission to. Absolutely. This woman that, we work with in DC, she she ran a very successful, I seventy one, delivery operation.

And she she came to me. She was like, hey, Tom. I really wanna learn more about Duchy. Like, how can you guys help drive my business forward as the market continues to move forward?

So we were able to work with her, you know, really, you know, get down to business, help her get her website squared away, introduce her to some of our great partners. And right now, I mean, she’s waiting on her final approval from DC and, like, the state to get her her go ahead start operating.

But, like, as it stands today, she’s checked all her boxes. She has all our SOP squared away. She’s a very diligent, individual, but she’s put herself in a position where she’s ready to succeed, and a lot of that started with, you know, us getting out of the conversation and making sure that she was prepared to, take things in strategies to come.

Is there anything else that anyone in the DC market or Maryland market that has not heard about Duchy yet, that’s really important or that you would wanna make sure that they know?

Yeah.

Man, make sure that they know. I think I think something that just really goes a long way is I always recommend to people, especially if if you’re an I seventy one applicant specifically or looking to move over to medical, drive over the the state border. Go in go into Maryland. Check out, you know, a dispensary and see how things run.

See what you like. See what you don’t like. And just kind of get a grasp of, you know, how how you would want your your store to look. My my biggest piece of advice to people is, you know, get out there, see what see what’s offered, and, you know, put things into perspective as as they are your own.

Great. Thanks so much, Tom. I’ll hand it back to you, Jay.

Thank you, Tom and LJ. And finally, it’s my pleasure to welcome up, well, LJ again, but also Roy Sherwood, a senior compliance analyst at Duchy. Meaning, his job is to keep our customer, you, the dispensary owner, raters, and operators compliant. LJ and Roy, you’re up.

Alright, Roy. Now to nerd out on the technology, which I’m excited to do.

So welcome. Thanks for being here.

DC specifically has dozens of dispensaries that were operating as just normal retail stores in the gray market, that now have to transition to metric.

What advice specifically would you give them, these businesses as they transition specifically in terms of technology, that they’ll have to adapt to?

That’s a really great question.

As we’ve seen operators transition from unregulated markets and getting into a regulated market that is now involved with a traceability system like Metrc.

There is a lot of misunderstanding often initially as folks enter in, as to what kind of transparency, this actually provides to regulators and how much scrutiny they have to have internally on their own processes to make sure they’re remaining compliant in their day to day.

The it putting a metric or traceability system of any type on top of a retail market really does mean that you have to be on top of your operations, and you have to make sure not just as an owner operator, but your entire team understands the compliance and the regulations that are the backbone of your market.

If you’re not training your team to understand the regulations that you are trying to meet, you’re probably gonna fall into one of the many pitfalls compliance mistakes that you see businesses that are in the legal market regularly regularly making?

Absolutely.

The most common, I think, by far, issue that that I run into when I talk to operators is purchase limits.

This is one of the best ways that technology can assist operators and keep them within the bounds.

It is by making sure that they are not overselling.

An oversell, when it comes to having a traceability system attached to your retail operation, is one of the most easily flagged violations that regulators are gonna be able to see. Because as each patient has an allotment that can be filled, if you sell over that allotment, the regulators see that immediately. They can have systems set up that it flags that transaction right away. So making sure that you have your technology set up on the point of sale and preventing those over sales is one of the major things that, a technology point of sale platform offers and that Duchy is pretty good at, frankly.

So if I was in one of these dispensaries selling weed to a medical patient, and we were using Duchy, basically, it would be able to flag it immediately that this patient had already been sold their limit. And then rather than me going back to a ledger or a Excel spreadsheet or some other less efficient, mode to to figure that out, which would probably be too late at that point.

Absolutely. So, as Tom mentioned, we have a a integration with the Metrc API. So, because all of, DC operates on this self certification or has the ability for self certification, we’ve worked with, ABCA to understand the way that that integration is working.

And, essentially, once someone self certifies and they receive a patient ID number, they automatically have a number associated with their patient profile in Metrc.

So when you put that patient profile into Duchy, we are able to ping off of that API and immediately return how much of a patient’s allotment is remaining to make sure that you’re not overselling not just in a given transaction, but over the entire course of, that patient’s, allotment, which extends, up to thirty days.

Okay. Great. And then what about Maryland that does have an adult use, market that is launched? What are some of the biggest compliance issues that you see other than this oversale?

So, aside from, limits, which we also definitely, have had to create solutions for in Maryland, one of the main things that we help folks with is just reporting to Metrc. If you were to go into a spreadsheet and write down every looking at hundreds, if not thousands, of man hours a year to just make sure that you’ve got everything into metric. The seamless integration that we provide simply allows you to report which products were sold in what quantities to Metrc to make sure your inventory levels in the traceability system are always going to be reconciled with what you actually have physically in your on your sales floor, in your backroom, and what’s represented in your point of sale system.

Okay. Great. We kinda talked about this already, but in avoiding these mistakes, I know that we talked a lot about actually training. You know, having the technology is one thing, but being able to have the the dispensaries and their employees use that, well is another thing. So just talk to me a little bit about what, trainings Dutchie offers and how you guys help, businesses actually implement this technology.

Yeah. So I think you said it, the word already. We have a an awesome implementation team. So when you are first onboarding with Dutchie, we have some amazing experts who are going to be able to help you get in and understand all of the finicky little configurations that you have to have just right to make sure that everything stays above board as you go forward and start operating.

In addition to that, we also have an awesome support team who is always ready to hop in and help. As soon as you notice something doesn’t look right, they’re gonna help you get back on course, and make sure that you’ve got everything lined up so you’re not getting too far off track. One of the main issue pain points that we often see is that folks won’t notice that something is wrong, for a long amount of time, and by then, it just becomes a major headache. So, making sure that you are reaching out and using the resources available to you as soon as possible is so key to operator success. And, I think Duchy’s positioned ourselves really well to make sure that we are able to help people really quickly and and get them back on track if something is going wrong.

Okay. Great. It sounds like you guys are also very, adapting adaptable and adapting to these markets. We all know that the cannabis industry is one of the, you know, biggest shifting, quickest shifting industries, that exists right now. So is there a certain adaptation in the DC, Maryland or just East Coast market, that you guys have developed or, you know, implemented in the last few years that you’re really proud of?

Well, we’ve worked really hard to make sure, our system is ready and able to meet the external patient reporting, which is a a really boring way of saying, the DC market also allows medical patients from other states to come and be served in DC.

However, they aren’t using a DC limit. They’re, basically basing those purchases off of their native limit from their home state wherever they’re coming from, in reciprocity states. So our integration does allow, the check against those limits as well, which just make sure that everyone is remaining compliant, both operators and purchasers as they’re going in so they’re not, gonna get in trouble when they get back home.

Additionally, in Maryland, we have, worked really hard to make sure we’re able to meet their rather unique interpretation of adult use limits.

Maryland has a a very, interesting interpretation of their limits in that you can buy one hundred percent of one category, and then you’re prevented from buying any more, in any other category. However, you can purchase ninety nine percent of every category, and that’s perfectly fine.

And so we worked really hard, when we got news of that interpretation, at the last moment last year, to make sure that we had a solution in place so operators could really maximize their cart size and not artificially restrict, adult use customers, from making the purchases that they really wanna make.

Okay. Great. Yeah. Thank you, Roy. So what are the main benefits of using these technologies? It sounds like freeing up time is one of them. So expand on that and then any other major benefits of, you know, using these technologies in your businesses.

Yeah. Freeing up time is obviously one of the biggest elements. Making sure you’re able to kind of, operationalize the day to day, whether that’s inventory intake or auditing your inventory.

Those are really important things that you have to do that take a lot of time. And so having a tool like Dutchie can really streamline that operation, make that much quicker, and less painful.

I think one of the other things that we do really well is put guardrails in place.

Dispensaries are really fast paced environments when it comes to retail, especially in a launching market where there’s a lot of excitement from consumers coming into dispensaries for maybe the first time.

It can be really hard to make sure that everyone is paying attention to every detail all the time.

So making sure that you have a backstop of a point of sale that is going to stop your budtender from making that oversale, or making sure that you’re going to, report that patient transaction correctly and not gonna have to go back and reconcile that hours or days later, that’s all going to be a huge benefit when it comes to just getting off the ground and making sure that you’ve got a workflow that’s gonna work for your shop.

Shop. Got it. So last question.

These businesses, even though everyone thinks the cannabis industry is flushing money, a lot of these, especially the social equity businesses that are coming online, they’re small businesses. They’re already putting a ton of money just to get the build out in, their application through, and even just get the product and the shop up and running. So I’m sure for some of them, looking at a service like Duchy can feel, like extra. It can feel like a really big investment that they just don’t have at that point. So to that person, maybe that smaller business, Roy, why would you say that it is worth the investment, to to purchase something and use something like Dutchie, that technology?

That is an awesome question. And, I think the real question here is, have you looked at the fines and fees schedule of your market?

If you have to, kind of weigh the cost of paying for a point of sale system that helps you maintain compliance against the potential weight of a hundred thousand, three hundred dollar thousand, a million dollars in fines because you’ve been operating noncompliantly, the math works itself out very easily.

The key really is that a an effectively established point of sale system will really help operators stay within compliance and not incur the extra cost that comes with citations, fines, and costly court battles that might result from those.

Okay. Great. Is there anything else, Roy, that, people should really know about the technology that Duchy is offering?

Yeah. I think one of the big takeaways I always wanna make sure that I give to new operators is that the technology is there to help you. It is a wonderful tool.

It is so important that first and foremost, you do understand the rules of your market, that you know what the technology is supposed to help you do so you can make sure the technology is doing that.

We, like I said, have an amazing implementation team, and they will help you get a good head start on all of this. But making sure that operators are taking personal responsibility for their operations is so key. And if you’re able to understand the regulations and train your team on that, that will create that much more security. And if you’re not able to understand those regulations, because let’s admit it, legalese is not everyone’s first language, make sure that you are contacting an attorney or someone with the legal expertise to help you through the weeds so you can get your operation running compliantly and just stay on course.

Absolutely. I really appreciate that, highlighting a personal responsibility because you can give everyone all the tools, an attorney, someone like Duchy, and if they don’t use it, then they will not be in compliance. So, thank you guys all for being here today. We really appreciate it, and, I’m sure we’ll have a lot of follow-up questions as well. But, thank you. Make sure to subscribe to the Outlaw, check out Duchy, and follow-up with anything else.

Thank you,

Roy and LJ. LJ, thank you especially for carrying the weight today. Nobody knows more about what’s happening in DC and Maryland than you and the outlaw report team. And I put links in the chat about how to keep in touch with that team and with you. Thank you Roy and Tom from team Dutchie for your expertise. And Meredith and John from Kenner and McGowan. Thank you for being here today and sharing all things Maryland and DC.

Things are heating up faster than a muggy DC summer in DC and Maryland. So thank you for keeping us abreast of what’s happening. And from team Dutchie, always you can keep in touch with what we’re doing at business dot dutchie dot com slash blog, which I put a link on the right hand side. And one last thing, I love if you could head over to our LinkedIn page and give us a follow on LinkedIn, for Dutchy.

I’ll put a link there as well. Every Friday at noon Easter, nine Pacific, we have our weekly program titled This Week in Cannabis News, where we review the key stories, regulatory changes, and updates to the sector that you need to know. And finally, thank you all for being here today. Have a great week because Saturday is four twenty.

So have a safe, great, celebratory four twenty weekend.