Aaron Herzberg ’95 is a partner at CalCann Holdings, LLC, a California medical marijuana real estate company with a portfolio of licensed medical marijuana businesses and properties in California. Herzberg is also a strategist, corporate lawyer, cannabis policy expert, and entrepreneur specializing in California’s nascent legal cannabis industry.
Aaron’s expertise has allowed him to successfully raise over $28 million in investment capital for his projects at CalCann, including two newly licensed dispensaries in Santa Ana, CA known as “OC3” and “Bud and Bloom.”
2L Jeremy Schwartz, President of UC Hastings Law Students for Sensible Drug Policy, had the opportunity to discuss Aaron’s business and experience in this growing industry.
Jeremy: What catalyzed your interest in attending law school?
Aaron: I was always fascinated by legal things. I actually have Asperger’s syndrome and at times find it very difficult in social settings. I wanted to confront my fears. It was tough when I first practiced as a divorce attorney. Judges would scream at me for mumbling or not looking at them. It was a challenge, but I enjoy the gamesmanship and strategy of being a lawyer. I tried cannabis at age 40 and found it really helped to decrease my anxiety and was basically harmless.
Jeremy: After practicing family law for over 20 years, what sparked your interest in cannabis?
Aaron: I had a good reputation of being a hard ass, which means being talented and prepared, so I scared other attorneys who wanted to be lazy. I was making a great living, but wasn’t feeling socially anything redeeming or changing the world. I finally left the family law practice after someone defamed me really viciously on the internet. They said horrible stuff like I have AIDS and steal clients’ money. I basically had a nervous breakdown and decided to change direction.
After reflection and re-evaluating what I wanted to do for the rest of my life and career, I thought that cannabis was an exciting social cause that I believe in. It affords the opportunity to give back and do something meaningful to help people have access to medicine. I can also allow myself to really enjoy the friendships and social cause of servicing people in the community.
Jeremy: Are there activities you undertook in law school that helped develop your entrepreneurial spirit?
Aaron: I found two books in the law library that seemed like no one had ever checked them out. One book that I remember quite distinctly was called “How to Go Directly into Solo Law Practice without Missing a Meal” by a lawyer named Gerald Singer. I studied that book like the bible. The second book was by this guy, Jay Foonberg, who writes a lot of books on practice management for the American Bar Association. He still has this book published, “How to Start and Build a Law Practice.” These books tell you step-by-step how to do that. Using these tools I picked up, I managed to pay off my student loans after my first year of practice and I was making several hundred thousand dollars a year by the second year.
Jeremy: It seems like you wear many different hats at CalCann Holdings. What’s a typical day like for Aaron Herzberg?
Aaron: Before I start my work day, I try to cook my kids some breakfast and get them to school. I’ve got a 15-year-old and 10-year-old. Then I try to work out if I’m not too tired. Owning a dispensary can be very demanding. I not only founded Bud and Bloom, but also have some other ownership interests in several other entities. We have a management team that handles most of the day-to-day operations and I serve as a chairperson. So, once I get to the office I have about 15 scheduled calls or meetings and spend most of my time talking to people. I try not to be on the computer too much and just work on relationships, which I enjoy.
Jeremy: I am clerking for Vicente Sederberg LLC and I got to review different licensing requirements. One in particular that I thought was interesting is how liquor and cannabis must be separate business operations and can’t be sold under the same roof. I wonder with the introduction of hemp wines and canna wines; is it sort of a strange environment to be able to sell those products?
Aaron: I’m looking for some cannabis wine for a Passover Seder I’m conducting, but other than that I don’t know much about the ties between liquor laws and cannabis. There are a lot of state policies and I recently applied to serve on a board for the State of California to advise the Bureau of Medical Cannabis Regulation. However, I’m mostly focused on local policies. Helping our company obtain local licensure for various cannabis businesses under the Medical Marijuana Regulation and Safety Act or “MMRSA”. We’re focused on the few cities that are allowing cannabis licenses, knowing what the law is on MMRSA, and trying to get local licenses.
We’re more of a cannabis real estate developer. We locate property, get an option on the property, and get a license. We also work with the cities to pass laws. It takes working with the city attorney, the city manager, and regularly filing policy briefs and legal briefs with the offices to try and get laws passed. Once we get our building’s permit, then the plan is to lease or sell these entities and create cannabis real estate investments and cannabis licenses.
Jeremy: A big conversation for Law Students for Sensible Drug Policy is not only the War on Drugs, but its effect on minority populations. Do you have any thoughts on the social equity programs that are being introduced in Oakland and Los Angeles to support minority and woman-owned businesses?
Aaron: For what it’s worth, half of the money I give each year to charity is to SSDP. I support these equitable programs. I don’t know that Oakland does it right and the problem with their equity program is that it’s subject to abuse. In other words, someone could list their wife as the president of a company and all of a sudden you’ve got a woman-owned business. The bottom line is we want to make sure that the opportunities for minorities are actually provided to a minority business owner not some millionaire that uses a minority as a figurehead. I hope that’s not offensive to say.
I’m not sure LA has any policy in place yet. I’ll have to look into it because I’m actually intending to refocus some of my efforts toward LA now that they have passed Measure “M” which allows the city to regulate marijuana businesses. LA is where it’s at. It’s the largest medical marijuana market in the world.
Jeremy: How do you address stigma as a business owner and attorney in the cannabis industry?
Aaron: I don’t see a stigma and people should be proud of their industry like anything. I’m Jewish and proud to be Jewish. If I was gay, I’d be proud to be gay. I don’t even think marijuana supporters are a minority anymore. Several public opinion polls have established that a majority of American’s are now in favor of legalizing marijuana. I think that marijuana is similar to or less harmful than alcohol and it’s just no big deal for most people, including most law enforcement officers. If you’re someone that thinks there is a stigma, then you shouldn’t be in marijuana.
The other stigma is the one in the business world. Some people think that when you deal with marijuana people, you’ll deal with only losers and thugs. We battle that stereotype by being credible, professional, espousing good public policy and by providing benefit to the greater community. For example, by requiring marijuana businesses to hire locally and to be involved charitably in community charities.
Jeremy: How does the uncertain drug policy climate under the new administration, including Attorney General Jeff Sessions, affect your operations?
Aaron: We’re a little concerned about Sessions and Trump, but they’re fighting a lot of other battles right now and I’m not sure that they’re going to make cannabis a high priority item at the DEA. The thing is, he’s not going to touch medical and I don’t think they have enough resources to fully mess with recreational. Medical’s going to remain and California has the most liberal medical system in the country where you can stub your toe and get a doctor’s recommendation. Bottom line is we’re going to roll out regulations and legitimize the industry. If they attack, they may use one of their many federal powers like tax law or banking law to make our lives difficult, but it won’t stop us.