Shad B. Ewart has been a professor and administrator at Anne Arundel Community College since 2001.
Prior to that, he was a professor of business at Mount Vernon College in Washington, DC. At Anne Arundel Community College, he has served as Department Chair and Director of Business Programs. As chair he designed the curriculum for the Business Support Specialist program and the Transportation Logistics and Cargo Security program. Many of his curricular innovations have been replicated in other parts of the college. Mr. Ewart has also served the college on a variety of committees including being chair of the Academic Forum and other college committees.
Professor Ewart has also been responsible for the design and developments of the first course to explore the entrepreneurial opportunities created by the legalization of cannabis for medical use in the state of Maryland. A number of students who have successfully completed the course have already found employment in the industry, have started their own businesses and in one case, own a dispensary. Professor Ewart is currently developing the first college credit program for those interested in entry level jobs in the cannabis industry.
Our full conversation transcript is below:
Anthony Verna: Okay. I am here with Professor Shad. You are, how are you doing professor?
Shad Ewart: I’m doing fine. Yeah, I it’s nice to see you.
Anthony Verna: It’s a pleasure to see you and talk to you as well. We’re not big on introductions here, but just to be quick you’re a professor and administrator at Anne Arundel community college in Maryland, correct?
Shad Ewart: That is correct. And Arundel was the, a wife of Lord Baltimore. So there is our connection.
Anthony Verna: And you are, a business professor, entrepreneurship professor, correct.
Shad Ewart: A business professor and department chair. I run the business management department here at Anne Arundel.
Anthony Verna: Wonderful. And as a part of this, you’ve created courses for entrepreneurship in cannabis.
Shad Ewart: Yeah. Started about, if you don’t mind, I’ll tell you a little bit of history here.
Anthony Verna: Please, please. Cause, to me, getting, getting into cannabis is just as interesting as the cannabis industry itself.
Shad Ewart: So I had a class here at Anne Arundel. It was called small business management. Uh, I taught that quite often and um, we focused on rain barrels, uh, here in there, Anne Arundel county. We are near the Chesapeake Bay and these people love their water. So saving debate, 55 gallons at a time. It was a, an interesting class that, um, uh, it was real. You can’t just talk about widgets these days in college and, and, and the rain barrel class made it real. And I was getting these questions while I was teaching this class. And this goes back about five years ago. The students were simply interested in, in what was going on in the cannabis world. I think, uh, probably what they were looking at more was a, a Colorado, Colorado coming online, uh, with their medical program 2012 and 2014 with their adult use or recreational program.
Anthony Verna: That’s what I was going to say. I think Colorado tends to be a unicorn for a lot of people.
Shad Ewart: It is. It is. And it’s a unique, it’s unique, uh, islands of legality in a sea of illegality. And we’ll get that, uh, that statement there. But, uh, um, uh, the students were just interested in it. And I had a former student that had come back to the college to just visit and I asked him what he was doing and he, he mentioned that his father, uh, was a farmer out in California, uh, grew artismal lettuce. I have no idea how his dad got sick, though. His Dad got cancer and Tyler had to go out to California and take over the farm and he converted it to a medical cannabis farm, a licensed medical cannabis farm, uh, growing a, a strain of, uh, actually very low in one of the compounds, THC, but very high in CBD short. And it works a particularly good strain for a young children with a, a with seizures. And I said to him, I said, Tyler, boy, you’ve got to come to my class. I’m teaching it. In about five or 10 minutes, he had stopped by my office. I said, the kids are just so in interested and they would love to hear from you. And he was like, you know, I’m not like a professor like you. I can’t make a presentation. I said, listen, you know, the show, I’m inside the actor’s studio. I’ll be Jame’s lift in and you’ll be the simply interview you and Man Anthony. It was, it was tremendous. I mean, we had, we were there for an hour and 15 minutes students completely and totally engaged.
Shad Ewart: And I mean, that was just great. So I, I’ve got to go teach another class and I, and the students still have a couple more questions. And I said to Tyler, I said, do me a favor man, just stay five or 10 minutes here and, and, and you know, answer these questions and then safe travels back to Kelly and I’ll, I’ll talk to you soon so I could teach my other class. I, it’s an hour and another hour and 15 minutes and I happened to get back to my office, got to walk by where I had left him. So instead of 20 students, there are now 40 students. They have come in out of the hallway and Tyler is still there. And I literally, Anthony stood out in the hallway and if you, if it was a cartoon, you would have drawn the light bulb above my head.
Shad Ewart: And I said, at that moment, I have to have a cannabis class. So that was probably around 2014 it took me about 12 months to get it operational. I had wanted the title gone. Entrepreneurship and up with that. There were compromises that had to be made, entrepreneurial opportunities in emerging markets, colon cannabis legalization. And given that I only have 34 characters on a, on a script here, the abbreviation of that is absolutely hideous. But when I finally got it operational and that would have been around 2015, and it’s been a tremendous experience for me. I’m not really a pro cannabis person. I just think doctors should have more options. Patients should have more choices. It’s been a great ride. I have students that now own dispensary’s. Uh, I have students that are working in the industry. I have students that are starting, businesses that are kind of ancillary to the business, they took the core business and the core license business. And that’s really the stick in my class. I compare it to the gold rush and in the gold rush, the people that made the money, the green rush, were not the people that found the golden nuggets, but rather the people that sold the picks and shovels here in Maryland, you need, you need at least a million dollars to open up a farm or a dispensary.
Anthony Verna: That’s true here in New York as well.
Shad Ewart: My students don’t have that economic wherewithal. So what I steer them towards are those ancillary businesses, uh, that are supportive of that core industry in it. And you know, and given, right now what we’re seeing in some of the states and, and the price of cannabis crashing, I’m even more convinced now that the picks and shovels, a part of this industry is really where the, where the opportunities are and those services, attorneys, accountants, they’re all going to benefit from this as well. Right. Well, and all of our, our clients are in the cannabis industry aren’t really in the cannabis industry. They’re really just like you said, in the pig picks and axes, a section of, of this particular industry as well. Um, so, so I, and I do want to return to that particular idea in, in a bit, but, but let’s talk a little bit about the state laws versus the, the federal controlled substance act because that has to be a problem in order to get things running.
Shad Ewart: Oh, absolutely. It’s the sword of Damocles that hangs over everybody’s head in this industry. Um, on the other hand, I don’t think we’re going to, uh, push the toothpaste back into the tube at this point. Ah, we’ve got 20, 20,000 full time jobs created just in Colorado. You’ve got a serious tax revenue coming in, but I mean, listen, let’s again, let’s do a little history here. Uh, for 5,000 years, this was medicine. I mean, nobody thought about this in any way. The Chinese used that, the Greeks used it, the, the Romans used it. It was used in India from India, got to to England for medical use. And, uh, uh, Queen Victoria used the, a sublingual tincture underneath their tongue to treat her, her pms. I did not know that. It wasn’t until, um, yeah, I’ve got a great picture of her. I call it the before picture.
Shad Ewart: It’s a little scary. Um, listened to, and again, it would have appeared in any apothecary in the United States and probably in half the households in 1900. It was sitting in somebody’s medic, medic, uh, medical cabinet. And it wouldn’t have been that big of a deal. It wouldn’t have been like morphine or heroin or cocaine, which you could’ve gotten in an apothecary. This would’ve been one of the herbals. Um, but what happened? You got two things that happened around the turn of the century that are absolutely critical to the story of cannabis. And one is a Mexican revolution, uh, around the turn of the century. And you have a Mexican immigrants coming to the United States and they are bringing for the very first time, the recreational use of cannabis. And, uh, as you know, we, we seem to have issues here in the United States with anybody of color crossing our borders. And that was an issue.
Shad Ewart: You converge that with the um, uh, the fact that the Dupont family was introducing a new product, nylon rope. The problem problem with nylon rope was the nylon rope was way more expensive than the current alternative and the current was handled. They’d have a stroke or rich guys sell stuff you call your other rich friends and the dupont family, we’re friends with the William Randolph Hearst. William Randolph Hearst ran 500 newspapers in the United States and started a a 20 years of probably the greatest propaganda campaign ever in the United States. And that was a demonization of this plant. Uh, when you own 500 newspapers, you only have to write one or two articles. And that’s what he did. He wrote one or two articles. They were either about Mexicans or blacks raping white women. That’s always a scary one. And Mexicans and blacks killing white men, usually with a hatchet or an ax and particularly brutal way to kill them.
Shad Ewart: But when you have a 500 papers matter, if it’s true or not, you send that story out. And all of a sudden, by 1936, we have reefer madness. Uh, again, I considered that to be the, uh, the, the uh, you know, the greatest propaganda campaign. And by 1937, we have the marijuana tax act and therefore, uh, made it illegal, uh, and made, uh, basically through the use of a tariff. That way we made the, the hemp rope more expensive than nylon works. So you move up a a, you know, a of 40 years. Then we get to the controlled substance act. Even though the American Medical Association had gone to President Nixon and said, please, there’s no reason that this should be scheduled one, three, four, five or don’t even schedule it. I think he basically had a thing against the hippies and it ends up schedule one narcotic.
Shad Ewart: And because of that, you know, we are in the situation that we are in now. Um, it was somewhat resolved in 2009 when the Ogden memo came out of the Department of Justice. And basically what that said was, you know, we’re not going to use any financial or other resources, uh, to prosecute the marijuana based crimes. Uh, the Cole memorandum in 2014 basically set up a, again from the Department of Justice, kind of gave the framework if it really was to help financial institutions. I think what they had seen was, listen, we have a, and we’ll talk about some of the consequences of short islands of legality in a sea of illegality here, but, um, uh, one of those consequences was having an all cash business. And so the Cole memorandum, what it did was set up kind of a, a framework in which how financial institutions could work with the cannabis, uh, companies, uh, Trump gets elected, uh, uh, Jefferson Beauregard sessions the third, and I do always like, well that Mr. Jefferson Beauregard sessions, the third, said, I didn’t, uh, think the KKK was bad until I found out they smoked pot.
Shad Ewart: And, uh, I was going to say, I noticed the, I noticed the dripping sarcasm when you mentioned his name there, but the pot-smoking did well. He rescinded that coal memorandum. Um, it looked like dark days, therefore the cannabis industry. But probably the biggest change occurred back on November six and November 7th of 2018 November six was the election and Pete sessions, no relation to, uh, Jeff, uh, was not reelected. And Pete was, um, a house member that basically controlled any cannabis law. Uh, legislation did not let it get through day after that. Jeff is fired. And, uh, we’re sitting here now in a integrate area, in a gray area. So I talked about some of the consequences, uh, one of them being the banking issues related to his cash handling. Um, I was just out in Las Vegas at a conference talking about about some of the ways in which some of the companies are dealing with it. Bitcoins have gigantic safes in the offices. Well, you know, in my, in my class, you know, that that’s an opportunity, you know, the firms for the safe firms. But you know what, that’s not the way to run your business. It’s not the way.
Anthony Verna: And I understand that some, dispensaries or farms are, because it’s a cash business, are going to the IRS office near them and trying to like pay their federal taxes in cash. And, and I mean this seems ridiculous.
Shad Ewart: They absolutely have to, they don’t have any other choice. Um, and, and think about that. You, you’ve shifted now this burden and it’s a security burden, uh, to your employees. They’re going to have to, or there’s somebody to have to drag that pile of cash down. And if you’re paying your employees in cash, I mean, my God, I’ve got a 26 Gerald Sun, I’m, I’m not sure he knows what cash is. I mean everything he would phone and you know, if he doesn’t have direct deposit, I, I don’t know what he would do. Have the banking issues and, and banking, not only do they not have a place to bank, so they can’t accept that credit cards from their costs, but they don’t have access to loans. So that creates another potential issue. Who gets into this industry? Well, only people that can get into as soon as you see if people, um, yes, and that might be a social equity at you.
Shad Ewart: There is no loans coming out of the bank. That’s a problem. Uh, for uh, your attorney’s also out there that are also CPAs. They know about two 80 e two 80 is the uh, IRS, a ruling about cannabis and the cannabis firms all must pay their taxes based on their gross profits. So the only thing that they can reduce our revenues by is their cost of goods sold. They can’t take wage expenses or advertise fences or any of their expenses out. And finally, I think the last consequence here is the fact that, and this is, this is sad in the, in the, in the, in the medical world here we don’t have any human testing because it is schedule one. We don’t do human testing in our colleges. I mean, are you believe, do we have probably the greatest, you know, higher education system in the world here and in the u s colleges are somewhat hand tied in what they can do with respect to studying the plant here. So most of our, most of our good studies are coming out of Israel in England right now in terms of a plant morphology and things going on with the plant itself and how it interacts with the human body. But those are all consequences of this.
Anthony Verna: So, in, in trying to set up a business, whether it’s a cannabis dispensary, whether it’s a farm for, for, for cannabis, or whether you’re in the, the, the pics and access business, uh, how, how can a business understand the market or understand the regulations better in order to maximize their opportunities?
Shad Ewart: Well, I think your, the answer is right there. So there’s a number one, we have to divide the two groups here. So, okay. Or businesses, the licensed businesses and that differs by states in all states that have legalized it for medical use is 30 and the 10 that have recreational or adult use. Uh, that core business that the cultivators, growers, the processors, the ones that are taking the flour and putting it into the concentrated form into the vape pen. Uh, and depending on the state, maybe edibles and the a a dispensary’s, uh, akin to a pharmacy, let’s say those, those what I call the core industry there, that’s the golden nugget or the green nugget shovels being all of those ancillary business. Now in some states like Michigan, uh, they do license also the transport, uh, and some other things. But in most states it’s really just that the growers, the processors and the, um, and the dispensary’s there.
Shad Ewart: So, and then we separate them out from the picks and shovels are those ancillary businesses? There are, for me and for the advice that I give to anyone that comes to me that says, I am interested in getting this into this industry, whether it is the core or whether it is those ancillary businesses. My first piece of advice is get the regulations from your state and read those regulations. Number one, those regulations will tell you how to apply for the licenses and get those. And depending on the state, that can be an incredibly brutal process. Here in Maryland. I think most of the successful licensees put at least 50 to $100,000 in the preparation of their license. And I can,
Anthony Verna: I’ll tell you, New York and New Jersey are both closed right now, but, but it was at least twice that when they were, when New York and New Jersey, we’re accepting applications.
Shad Ewart: I think what you will find is in the states that limit the number of growers, those licenses become incredibly, uh, valuable. That’s an artificial cap. So, yeah, that’s it. You know, that’s one interesting thing we’re studying right now in the class is, um, we’re looking at states, uh, that don’t have any caps and, and what happens to the price of cannabis. Um, but, uh, no, I, I get all of my folks to, to, we start with the regulations, the regulations. We’ll also point to those opportunities. So in Maryland when it says you’ve got to have foot high fencing and you’ve got to have her raise her concertina wire or you’ve got to have video surveillance every 25 feet and it’s got a sweep 180 degrees and got to have facial recognition at night. Well that says to me, if you’re in the fencing business or here in the, uh, you know, the barbwire business or you’re in the video surveillance business, they are telling you exactly what, how you can benefit from that water. Uh, um, you know, water purity issues here in, in Maryland. We have regulations about that. It is telling you where those opportunities are. So for anyone interested in this industry, no here, no the federal laws, but, but start with your state regulations. That’s my best advice that I can get them.
Anthony Verna: You know, you know, I, um, I had, uh, been speaking to a company for awhile that was doing consulting for dispensary’s and basically their idea was that we’re going to make a dispensary look like the, the apple store. And, um, I don’t know that they, that they went anywhere because it seemed a little too, um, a little too much of a simple answer. I mean, what do you expect consumers to get when they’re walking into a dispensary? I’m, I’m thinking not the apple store actually, I’m thinking quite, quite the opposite.
Shad Ewart: Well it’s, it’s, it’s differs between a medical versus adult use and recreation here in Maryland where we have medical only I think you, I think they are akin to an apple store or a spot that has been the, the description, at least the the owners have when they’ve come to my class. That was kind of the look that they wanted from their place here in Maryland, what we’re seeing is, is a lot of customers are north of 70 and 80 degrees. I see a 70 year old or 80 years old and you know, they don’t want to see Bob Marley. They don’t want to go into a place that is burning incense. Uh, I mean the, the, the penetration rate of cannabis is about 12% nationwide here. So that they’re easy. That 12%. What do you need to do? Your marketing is, is a sign that says we are open and they point to find, uh, the, the challenge in this industry is how do you get my dad, my dad to do it? And 80 year old man who has grown up with just saying no, he is convinced that it’s a gateway drug that it, you know, that he’s, he’s absolutely shocked at Queen Victoria wasn’t jamming a needle in her arm next and shooting up heroin.
Anthony Verna: How do you get my mom in who works for the pharmaceutical industry and, and has since I was five years old?
Shad Ewart: Um, while there’s a couple of things, number one is that, okay, number two, is it Vega? As my father once said, if you get to paying level eight, you’ll consider just about any damn thing on this planet. Um, and, and my answer is of course education. I believe in. So part of what we do in my classes, my students are not allowed to use words like weed, pot, dope, marijuana. Marijuana is a made up word. It is made to marginalize it. It sounded Mexican. It is like the word Haagen daas there. That is a main word. Some Margaret from there, from New Jersey, you know, some Mark Orkin, New Jersey sat around one day. Maybe cannabis was involved, I’m not sure. But in my class we use the word cannabis. We don’t get upset with people when they say it’s a gateway drug. We actually have a a uh, like a a I say we’ve got a little college up there in Baltimore called Johns Hopkins and they did a little research on that.
Shad Ewart: Proved it wasn’t a gateway drug. We don’t, we don’t denigrate people. We hand them information. So how do you get those folks? You create a, a dispensary that is comfortable for them to walk into a, that doesn’t have the Bob Marley poster, doesn’t have music being cranked, doesn’t have incense being burned. Uh, you make sure that the people that I hate the term bud tender, I would much, you know, and I know it’s a euphemism, but patient care advisor. Uh, listen, when my father finally went to a dispensary out in, uh, in Nevada which has both a rack and um, and a medical use, um, he went to a place and he went to a small a room and a woman came in with a white jacket on and a stethoscope and a clipboard and talk to my father for 15 or 20 minutes about what his problems were.
Shad Ewart: Came back with some transdermal patches and my father thought it was the greatest thing since sliced bread as he likes to say, I didn’t see a bic lighter and I didn’t see anything green. Now I’m not a hundred per cent. Instead, the stethoscope wasn’t part of uniform in my 80 year old father feel comfortable and he walked into the recreational dispensaries and was offered the exact same product. I don’t think he’d have taken it. I think it had to come, it had to come from the right person the right way and had to be presented to him in the right way. So yeah, that’s, that’s a huge challenge in the industry right now.
Anthony Verna: I mean, I find that story fascinating because if there’s one thing that, that when, when doctors talk to me about, about marketing, my first thought is, you’re your spy or are you a specialist? Well, have you tried to make your doctor’s office feel a little more spa? Like, and I’m not saying you’re opening a spa, I’m just saying, make your chairs a little more comfy, toned down the colors. Don’t make everything stark white, you know, give your bathrooms a little, a little, um, uh, make-over to feel better and feel a little more pizazz in a bathroom, which I know sounds a little weird, but it’s kind of a part of the overall thought so that your doctor’s office doesn’t feel like a stark white doctor’s office putting people off. But yet your story’s like, well, here, that uniform helped
Shad Ewart: to, to bridge that gap. Absolutely. It was, it critical. And then, and one of the stories I heard from, um, uh, one of my students, uh, owns a dispensary here called Greenpoint wellness. And, um, like I said, they’re, they’re, their clients are running 70, 80 years old. 60 year olds are bringing their 85 year old, the moms and dads in with them too. And, and they have now purchased it. Everything here in Maryland, you’ve got to have cameras on everything, even your parking lot there. So. Sure. And, and so what they were seeing was that the gentleman that’s trying to help his wife get into the store and he gets out of the car, he goes to the trunk, he’s pulling the, the, uh, the wheelchair out. He’s assembling that wheelchair. He’s pulling his wife out of the passenger side. So they invested in two wheelchairs and now they have employees that sip.
Shad Ewart: When they see that happening in the parking lot, they grab their wheelchair, they go out in the parking lot of what that person feels better. So that same person now is, um, she is so happy. She had some rheumatoid arthritis problem, some uh, created some sleep issues, couldn’t get more than an hour and a half at a time, is now sleeping eight hours a night. She is now on a weekly basis bringing a pie in that she has a, a baked herself to the dispensary owner and that dispensary owners now complaining that he weighs 20 pounds more because the woman keep some of the best damn pies on the planet here. So yeah, I mean I think it’s, listen, I’m a business person. I believe everything is sales and I think it all starts with knowing your customer. And if you’re in the medical world only, you know, I would think about not hiring the 21 and 22 year old as your patient care advisor. Maybe look at that 50 or 60 year old as the, as that patient care advisor. Cause when they’re talking to the 70 year old, 70 year old might feel a little more comfortable with them.
Anthony Verna: Understood, understood. Completely. So one last topic before we get rolling here. And that would be the beginning of this particular industry. A lot of states have origination issues and, and you, you know, yet mainly because a state wants the, the cannabis to be, uh, grown in state, but it’s gotta come from somewhere, doesn’t it?
Shad Ewart: It does. And it, listen, there are, um, there’s a little bit of, don’t ask, don’t tell.
Anthony Verna: I can tell you here in New York, that’s not quite true. There, there were, there was, there were a couple, uh, um, dispensaries that were um, that were fined because their cannabis came from outside New York when they started growing.
Shad Ewart: Well, okay. So the options are when they start our, it is going to have to come from outside of the state or they are going from an illegal grow in this. Yes. And now is now the seeds. Uh, you can get the seeds. There are some, uh, a seed, um, uh, propagators out in California and Oregon that are, are quite good that are now having seed banks. Uh, you can order the seeds online. Um, and it, you know, very pragmatic, a, a standpoint, it’s very difficult to discern whether seats are being shipped, uh, or if you picked up seats. And brought them back. Um, I I know here, there were a couple of dispensaries that said w we put 20,000 cash in our pocket. We drove out west and we loaded up with seats. And remember that’s hard. That’s not easy. You got to get a hundred seats to get one mother plant.
Shad Ewart: Uh, so the plant morphology comes at that. You don’t, once you get the plan to establish, you don’t want to go from seeds because there was only the female plant that produces the flower, which is a, you know, your revenue source there. So you, it takes a hundred seats, 50 of them will be mailed, you’re going to dump those 40 of the females are probably going to be kind of weak and, and you know, they got the flavor profile you’re looking for, but it’s just a weak plant and that doesn’t help as well. So out of a hundred seeds you might get two, you might get two plants out of that and then you’ve got that mother plant. So now what we’re starting to see is they are freezing a cellular at, at the cellular level. And propagating at the cellular level. So no longer just cuttings, but I think you’re going to see a, that’s going to be a huge opportunity.
Shad Ewart: Once again, if it’s a problem, it becomes an opportunity in this industry and there’s, there’s a bunch of them coming down the road here that, that need to be dealt with here. Listen, we’ve got, we’ve got the patenting of stern rains. Uh, there’s one patent and so far there are tremendous licensing licensing opportunities there. We’ve got food additive issues. We’ve got a ruling coming down and CBD probably pretty soon cause right now CBD is a wild world out there. Yes it is. You got this or your dog, you can get it in your hamburger a, you even, even the fertility clinic, my wife and I go to sells their own branded CBD oil right now. That is completely unregulated. You don’t know what you are getting. You don’t know if it is coming from industrial hemp. Is it coming from a cannabis plant? Uh, I think you’re going to see new products coming online.
Shad Ewart: Part of the issue here of, of uh, and I think in the states I mentioned before that don’t have these limits. It’s a race to the bottom. I mean, right now in Oregon we are seeing $300 pounds that is under $20 an ounce. What it’s gonna do with that, you’re going to have to, and you can’t save it. I mean come on. It’s a perishable product here so you got to do something with it. So I think you’re going to see some really neat and interesting things going on in terms of the concentrate world and those things are gonna have to be dealt with. And I think we’re going to see new to districts. It’s, we are not far away from a situation in this world where you’re going to be able to walk into a restaurant and order a Brownie and that Brownie is going to be infused. And then what are the issues for the restaurant? Listen, if I see someone come up to the bar and they do three shots of Whiskey, I’m saying, you know what? You’re taking a cab home. But if somebody’s, I mean, what, where is the, the culpability with the restaurant there and something that may not take effect for six minutes or nine. So I think there’s a whole wide range of issues that are coming up here in the very near future in the cannabis world.
Anthony Verna: Shad, I want to thank you so much. We are out of time. Thank you so much for coming on the podcast and this is a reminder. If you liked what you’ve heard, don’t forget to rate, don’t forget to subscribe to the lawn business podcast and we’ll be back soon with another episode. Professor Shad Ewart thank you so much.
Shad Ewart: You’re most welcome. Thanks Anthony.