Finding a quiet place to talk is not easy for Brandon Levine.

The whir of construction surrounds the Mercy Wellness CEO and a steady stream of people follow him wherever he goes. “I’m really hands on, so I keep everyone going,” Levine says. He thrives on the energy and activity at his Sonoma County, Calif., dispensary. Located in the heart of Cotati, described as a gateway between the Bay Area and the Emerald Triangle, Mercy Wellness is immersed in an expansion intended to elevate the dispensary experience.

To California cannabis industry veterans, Levine’s backstory may sound familiar. As a teen in his native Sonoma County, he found comfort and opportunity in the local cannabis culture, as well as an alternative to the pills prescribed to treat his attention deficit disorder (ADD). “Unintentionally, [cannabis] was something I found that worked for me,” he explains. His job at one of the area’s oldest head shops yielded him another discovery. “It exposed me to a culture where I felt welcomed,” Levine recalls. “I just kind of felt this is my calling.”

After obtaining his medical marijuana recommendation in 1998, Levine cultivated cannabis in compliance with Proposition 215. He also earned his contractor’s license and enjoyed a successful business until the housing and construction markets crashed in 2008. With a tanking economy and kids to feed, Levine had to act. The time had come to fulfill his destiny. He opened Mercy Wellness in June 2010, and he has been setting increasingly high standards for his dispensary ever since.

Cultivating Community Relations

When Levine sought a home for Mercy Wellness, he had little doubt about where he would look. “I was pretty much born and raised in Sonoma County. Haven’t left and don’t plan on leaving,” he says. In Cotati, he found a city with a healthy attitude toward cannabis business and an ordinance that allowed it. More than eight years after Mercy Wellness first opened, it remains Cotati’s only dispensary. Although, the city is open to adding more as the industry evolves, Levine says.

Levine’s relationship with the city of Cotati is built on transparency and community outreach. He has followed the same blueprint for each of the six licenses he has been approved for to date—three for 10,000-square-foot indoor grows, one for manufacturing, two for distribution and one for the Cotati dispensary—and two for additional Mercy Wellness retail locations planned for nearby Santa Rosa and currently awaiting approval from the municipality.

“We personally go out and meet our neighbors before we even apply for a project,” Levine says. “We do our due diligence, but also do community outreach and make sure it’s in the best interest of the neighborhood and clear up some concerns neighbors might have.” Additionally, Levine provides residents with his personal cellphone and email address, so they can reach him directly with any issues.

The value of Mercy’s strong community and governmental relations became clear at the end of 2017 as adult-use sales in California approached. While neighboring city Rohnert Park shut the door on commercial cannabis sales entirely, Cotati granted Mercy Wellness Sonoma County’s first approval for adult-use sales on Dec. 12, 2017. Though the state’s Jan. 1, 2018, recreational sales start date was only weeks away, Levine and his team were already helping the city prepare for the change.

“Those relationships are very important because you’re part of the community. You want to be a benefit to the community and not a burden to the community. It really does take a bit of education on our part to share with them and show them … that the community is safe with us being here,” Levine explains. “That’s a really big thing that we focus on: security for the community, the customers and our employees.” As proof, Mercy has “rules of conduct” for consumers, which among other behaviors, bans loud music and loitering in the parking lot, and customers can request for an employee to walk them to their cars.

Mercy Wellness also extends an open invitation to local police officers to tour the facility. “We want them to know the ins and outs of the building and for our employees to be familiar faces,” Levine says. “We’re a very open book.”

Expansion Expectations

Cotati’s original cannabis ordinance limited Mercy Wellness to a total of 1,250 square feet, including administrative space. “Bathrooms, office, storage, processing, retail floor, lobby—all of that had to fit,” Levine explains. By the time the dust settled, only a 750-square-foot space was left for retail. Amendments made to the ordinance in 2014 lifted limits on non-retail space, but the ordinance still restricted the size of the dispensary’s retail floor.

When Mercy Wellness requested an increase to 2,000 square feet of retail space for the dispensary’s current expansion, the city’s response surprised Levine. “They ended up allowing for 4,000 square feet of retail space,” he says. “Nobody ever heard of agreeing to give you twice as much as you asked for.”

Since its inception, Levine has worked to transform Mercy Wellness into a dispensary experience unlike any he has known. When the current build-out is complete, Mercy’s retail area will more than triple to 2,300 square feet. Large, 20-by-7-foot interior windows will flank the retail and lobby area, offering behind-the-scenes views into new state-of-the-art extraction and cultivation facilities. The entire retail space is wrapped in Mercy’s signature earthy-industrial chic theme, marrying rich woods and stone with cannabis and high tech.

Levine expects the retail floor and lobby to be in full operation by the time this issue goes to press. Completion of the cultivation and extraction lab should occur within the next six to 12 months.

Product Preservation

Sourcing product has always been both the key to Mercy’s success and its greatest hurdle. “In the beginning, it was a gamble purchasing product. There was no real marketplace. … There was no distribution, there was no warehouse you could call when you run out of a product. There were no branded products,” Levine recalls.

“Things have changed since then. There’s distribution now, and the methods of cultivating have evened it out throughout the whole year,” he adds. “Manufacturers have come in and started manufacturing product all year long, and these brands are all really strong. It’s actually been a really cool thing to watch [happen], because you’re watching the industry be built from the ground up.”

Undeterred by past unpredictability, Levine and his team have built what he believes is one of the state’s most extensive dispensary menus. That’s due in large part to Levine’s decision to package flower in nitrogen-sealed cans, and to establish a packaging company to handle that process for Mercy Wellness and other operators.

“We [were one of] the first ones to take N2 packaging to market in the retail [cannabis] market,” Levine says. Though nitrogen-sealed packaging has been used extensively in the food industry, it’s still relatively new to cannabis. Levine says the process can prolong the shelf life of the product for up to two years. “Normally, you’d have about a two-month window to package your product and sell it before it starts to degrade,” he explains.

The decision to use nitrogen-sealed packaging protects Mercy’s menu from supply fluctuations and allows for broader purchasing. At any given time, the dispensary offers about 70 different cultivars, and “all of them stay very fresh because of the method of packaging,” Levine says.

Mercy also offers an extensive selection of extracts, cartridges, edibles and other products, and Levine says AbsoluteXtracts is Mercy’s top-selling brand. “We’re seeing [cartridges] just grow exponentially in terms of the sales,” he says. “Edibles are also becoming more and more acceptable by people wanting to try them, partly because there is testing. The fear before was you didn’t know what you were getting. … Now you’re able to dose the product and feel good about what you’re taking.”

Elevating Education

When he’s not being hands-on on-site, Levine devotes much time and energy to advancing California’s cannabis industry, with a focus on compliance. In 2016, he helped orchestrate the Elevated Cannabis Compliance Conference, which brought speakers from different agencies together with cannabis operators to share what to expect with regulation looming. Mercy continues to host mixers and educational events with similar goals as needed.

“I sit on multiple boards, one of them being the Cannabis Advisory Group for Sonoma County. Sitting on that board, I do have a seat at the table while we are recommending changes to our local ordinance in the county,” Levine explains. “I also sit on the Sonoma County Growers Alliance board and the California Growers Association board. The whole purpose of me being on those boards is for me to help make changes so that other operators have an opportunity to move into the legal market.”

In advance of California’s second phase of 2018 regulations put into effect July 1, Levine and his Mercy team worked to educate operators on what the state would require for testing, labeling and language on cannabis products. “I would say that 90 percent of the operators, at least, had a really hard time with that, and we saw products just fall off our shelf,” Levine says. “We lost at least 90 percent of our product lines that we had on our shelves pre-July 1.”

Though ongoing changes in state regulations affected supply, Mercy Wellness came through fine. “Through that process of just educating [operators], we were able to create really good relationships and we maintained a pretty good stock of inventory moving into that six months and continued to grow our inventory after that,” Levine says.

Maintaining Meaning

As the sole owner of Mercy Wellness, Levine has taken what many might consider unconventional approaches: He established a separate management company that includes an in-house tax attorney, a finance department, in-house marketing, human resources, multiple project managers and a compliance department. He’s managed to stay 100-percent self-funded, though growth hasn’t been easy. He’s often restricted by how much capital Mercy has, as funds are not unlimited. He’s also survived a 280E audit of the dispensary’s first three years and came through relatively unscathed.

Looking ahead, he sees industry growth: “I see [the industry] becoming really commercialized, and it’s hard to keep up with because you have a lot of moving parts here. But it’s only going to keep growing. The cannabis industry is at the point where it’s not stoppable.”

He believes appellations will play important roles for California craft cultivators—on an international stage—and alliances with vintners and Sonoma wine tourism will hold significance closer to home. You might expect Mercy’s future plans to involve far-reaching market domination, and they may, but it seems something more heartfelt holds true.

With an apparent nod to his early industry exposure, Levine hopes Mercy remains focused on people, community and culture. “The one thing that I’ve always been really big on is the culture of my business—to try and remain the same and continue that culture that we’ve had and not become this big corporate monster,” Levine says. “We have a community here and we want to maintain that same culture. If anything, that’s the one thing we really want to stand for—making sure that it’s a comfortable place for people to come to, that it’s a comfortable place for people to work. For the longest time my employees knew almost every single person that came through here by first and last name. We want to continue to have that relationship with the people that are coming in here.”

Maria Denzin

Denzin is the owner of MJ HR Strategic Solutions, an HR consulting firm based in Palm Springs, Calif. Denzin specializes in talent strategy and development for the cannabis industry. Her firm helps cannabis business owners create strategic HR plans to select, develop, reward and retain employees who deliver value and loyalty. She can be reached at mariabdenzin@gmail.com.

Debby Goldsberry

Goldsberry is executive director at Magnolia Wellness, an award-winning dispensary in Oakland, Calif., and the managing director of the Berkeley Community Care Center dispensary at Amoeba Music. She co-founded the Berkeley Patients Group (BPG) medical cannabis collective in 1999, directing its growth for more than 11 years. In 2017, Goldsberry published her first book, “Idiot’s Guide: Starting and Running a Marijuana Business.”

Patrick Haggerty

Haggerty is chair of the Frantz Ward Litigation Practice Group. In 2015, he created the firm’s Cannabis Law and Policy Group. Since that time, he has led the Group’s efforts to provide counseling and representation to clients on matters involving an array of issues regarding the cannabis and burgeoning hemp industries.

Crystal Hammon

Hammon manages Leading Reads, an Indianapolis company that helps companies create original online content and build relationships with their customers and friends. An aficionado of vintage fashion, Hammon mines the fullest meaning of the word “vintage” at her blog, Dressed Her Days Vintage.

Jolene Hansen

Hansen is a freelance writer based in Wisconsin’s Driftless Area. A former horticulture professional, she is a frequent contributor to the Horticulture Group publications owned by Cannabis Dispensary’s parent company, GIE Media.

Thomas Haren

Haren, an associate at Frantz Ward, has become one of the go-to attorneys for Ohio’s medical marijuana industry, working with medical marijuana cultivator, processor, and dispensary applicants and license holders. He assists clients with license acquisition, zoning and municipal law, and regulatory compliance.

Jillian Kramer

Kramer is a Cleveland, Ohio-based freelance journalist whose work has appeared in the online or print versions of Glamour, Food & Wine, SELF, The Wall Street Journal, and more. Her work covers everything from career and money to women’s issues, cannabis and beyond.

Gene Markin

Markin is a partner with law firm Stark & Stark. He counsels cannabis industry growers, cultivators, processors, distributors, dispensaries, infused-product manufacturers, suppliers, investors and shareholders on legal matters including intellectual property protection, liability exposure, tax, banking, licensure, regulatory compliance and insurance. Markin is a member of the New Jersey State Bar Association Cannabis Law Committee, the National Cannabis Bar Association and other related organizations. Reach him at gmarkin@stark-stark.com.

Kyra Reed

Reed launched Markyr Cannabis, a digital marketing and social media strategy agency, and Women in Cannabis, a support group for women entrepreneurs, with four chapters in Northern California, in 2016. Reed has also launched Kadin Academy, an online business academy that educates women entrepreneurs in cannabis.

Mark Stockman

A partner at Frantz Ward, Stockman’s practice is devoted to counseling clients through all phases of the real estate development and construction process: from site acquisition through completing effective resolution of disputes throughout the process. Stockman’s clients include a wide range of industries including cannabis, manufacturing, higher education, health care and retail.

New Jersey, my home state, is on the verge of legalizing recreational cannabis. On Nov. 26, New Jersey’s legislators advanced an adult-use cannabis legalization bill through the Senate Budget and Appropriations Committee and Assembly Budget Committee, sending it to the Senate and Assembly for full votes. By the time we publish our January/February issue, I hope New Jersey will be the 11th state to legalize adult-use. (Editor's note: New Jersey lawmakers ultimately did not vote on the bill on the last day of their session.)

While legalization is exciting, it doesn’t mean it isn’t without challenges. Legalization doesn’t always make cannabis legal. For example, state policies often include opt-out clauses for municipalities, or local moratoriums can be put in place to allow further review of legal cannabis sales or refinement of local regulations. In New Jersey, the draft legalization bill allows local governments to enact ordinances to ban marijuana businesses and for municipalities to revisit bans and moratoriums every five years.

From a community perspective, banning cannabis businesses can be beneficial if the citizens don’t support legalization or don’t want cannabis businesses there. The five-year review can be beneficial too, since legalization is still relatively new and its impacts are under watchful eye.

However, municipalities’ ability to opt out or set moratoriums to hold off potential local cannabis businesses can be a tremendous challenge for cannabis business owners.

And many municipalities do opt out. In California: “Fewer than one in three … cities (144 out of 482) allow ... cannabis business[es] to operate in their borders. And just 18 of the state’s 58 counties [also less than a third] permit cannabis businesses in their unincorporated areas,” according to The Orange County Register, reporting in April on a study by its parent company, Southern California News Group, and other Digital First newspapers. “Also, fewer than one in five California cities welcome medical marijuana dispensaries, while fewer than one in seven allow recreational cannabis stores,” the report continued.

In Oregon, 80 cities (out of more than 350, or 23 percent) and 16 counties (out of 36, or 44 percent) have prohibited recreational cannabis businesses, according to a June report by the Oregon Liquor Control Commission (OLCC).

In Washington state, 78 (out of 228, or 34 percent of) cities and seven (out of 39, or 18 percent of) counties have prohibited state-licensed marijuana businesses, according to the nonprofit Municipal Research and Services Center.

If you hold a license and have opened your doors, you deserve an enormous round of applause. It’s a tremendous feat when you look at all the obstacles you have overcome and the ones remaining in front of you.

But for those facing bans or moratoriums, the Guest Column in this issue offers tips on how to fight back.

There are many great tips—81 in fact—in this annual “Tips Issue,” which we compiled to help you with many of those obstacles you face, from navigating daunting HR issues to successfully finding your way through a merger or acquisition to creating an effective brand voice. The easy-to-digest tips format makes for a quick read to help you start the coming year armed with practical information to help you succeed.

Noelle Skodzinski, Editorial Director | nskodzinski@gie.net

American consumers are primed to increase their holiday spending by 5 percent this year, and “high-earning millennials, Hispanic parents and shoppers over [age] 35” will spend the most, according to PwC’s "2018 Holiday Outlook" report. Whether consumers will spend those extra dollars at dispensaries remains to be seen.

If they do, especially in Nevada and Oregon, chances are they will encounter below-average prices. According to Leafbuyer—an online cannabis deals platform—the average price of an ounce of recreational flower in Nevada was $298 from Jan. 1 to Aug. 31, 2018. In October, however, the average price was $289, perhaps signaling the start of declining prices in the state. In Oregon, the average price of a recreational ounce in October was $132, compared to $147 from Jan. 1. to Aug. 31, 2018.