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Prince and princess of pot are expanding their dispensary empire, whether it’s legal or not


Cannibas Culture

 

Sunny Freeman | February 3, 2017

Jodie Emery struts through the hazy hallway of Cannabis Culture’s flagship Toronto store, through a 15-person deep checkout line, and then past the extracts, pre-rolled joints and display jars of bud into the lounge area where a group of pot enthusiasts is sparking up.

It is just after noon on a Wednesday.

The 32-year-old Cannabis Culture owner makes several attempts to call her husband, Marc, a famous marijuana legalization advocate, to wake him up. The Prince of Pot likes to sleep in, she explains, because he works past midnight, which is closing time at his shop in Toronto’s gay village downtown.

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Marc emerges half an hour later. He joins employees behind the counter to recommend strains and weigh portions for the rapidly growing lunchtime rush. Marc is focused on the Toronto flagship locale he owns, while Jodie oversees the franchising and most other aspects of the business. 

“This is what legalization looks like,” Marc said. “That’s exactly what we want to present to the government: You can go and do your rules and your thing and we’re going to do our thing.”

Many in the scene consider the Emerys weed royalty and the couple’s hard-fought decades-long dream of legalization may be on the cusp of fruition. But even as the government pursues legislation to set up a legal recreational market, the question of whether dispensaries such as theirs will be allowed to operate above ground hangs in the air.

Depending on the specific wording of the legislation, Canada’s prince and princess of pot could very well be excluded from the opportunity to earn a legal living in a recreational marijuana market that is expected to be worth as much as $22.6 billion annually.

In the meantime, a plethora of ganjapreneurs are looking to gain a foothold in the coming pot economy through the only current legal path, by becoming a Health Canada licensed medical marijuana producer. Many more are simply opening dispensaries on the sly, hoping to fly under the radar as they count down to legalization.

The Emerys worry licensed producers will monopolize the commercial system, but even if they are shut out, it will not deter the defiant outsiders from their aggressive expansion plans. 

The couple is relatively new to the dispensary business, jumping in less than two years ago with their first store in Vancouver and deciding to expand last year at the request of interested investors.

“When the opportunity came up to start dispensing cannabis I thought why not? If everybody else is doing it why shouldn’t we after all we’ve done?” Jodie said.

It’s a decision that has paid off so far. The crowd at Cannabis Culture’s flagship dispensary was just an average weekday, and sales spike on weekends. This location, one of 18 franchises, can pull in between $30,000 and $40,000 a day.

One man calls out to Jodie to say he’s one of her 38,000 Twitter followers. Another guy thanks Marc for his years of sacrifice to the cause, which include a five-year sentence in a U.S. federal prison.

For a guy who sometimes gives pot away for free, Marc keeps a keen eye on performance metrics and knows the exact headcount of customers they had last Friday: 1,783.

“You don’t have to be a genius to figure out that’s a good cash-flow business,” he said.

It could be even better if dispensaries like his become legal.

A task force report on legalization has recommended the government allow storefront locations in addition to the current mail-order system and acknowledged a majority of people who participated in the consultation process prefer a distribution system that includes dispensaries.

Related

Yet it remains unclear whether new government legislation will allow a place for the 400 or so dispensaries already operating.

The shops, most of which maintain at least an ostensible medical purpose, argue that they fill a gap for consumers by providing in-person advice, fostering competition and keeping prices low.

Marc has set an ambitious goal of opening 200 locations by the end of 2017, whether they are legal or not.

“Those questions to me are irrelevant, we just do what we do. We’re going to keep doing it. As long as the law is wrong we will disobey,” Marc said. “After prison, I didn’t want to be relegated to irrelevancy so I had to take the lead in provoking the authorities by opening up retail shops.”

And provoke he does.

Marc was most recently arrested just before Christmas, when cops raided six Cannabis Culture locations in Montreal, the day after he made a splashy debut in the city by bestowing free “nugs,” or marijuana buds, on throngs of admirers. Similarly, the flagship Toronto location opened a day after raids shuttered dispensaries across the city last May.

How police handle dispensaries varies widely across in the country, no more so than in the country’s two biggest markets. Vancouver has opted for a licensing system while Toronto police continue to crack down and raid dispensaries, citing public safety concerns.

Emery wears his 289 arrests, eight raids and five years in prison as a badge of honour. After all, the raids attract media attention and that attracts even more customers.

“Raids are just part of doing business. They’re annoying and they certainly set you back, but ultimately the police are wrong and we’re right,” he said.

Raid-related expenses, including covering the costs of lawyers for any employees who get arrested, have been built into the cost of doing business.

Those questions to me are irrelevant, we just do what we do. We’re going to keep doing it. As long as the law is wrong we will disobey

Stan Behal/Toronto Sun/Postmedia Network

Stan Behal/Toronto Sun/Postmedia NetworkMarc and Jodie Emery’s Cannabis Culture store on Church Street in Toronto. The couple, considered pot royalty, can’t keep up with the requests they have for franchise licences for their business model.

But the Emerys also have to think about the more mundane aspects of growing a franchise business, such as how much of a cut they should take. Jodie has been studying the Subway sandwich model and working with a franchise lawyer to help figure it out.

Cannabis Culture’s model asks for a $10,000 investment up front, plus a royalty of six per cent for the first six months, rising to seven per cent afterward. But she thinks they might be lowballing it. Subway, by contrast, asks for $15,000 upfront and a 12.5-per-cent royalty each month.

Cannabis Culture franchises can take in anywhere from $2,000 to $40,000 a day depending on their location, but about 60 per cent of that goes back into the stores, mostly toward buying new product, Jodie said.

Like all dispensaries, Cannabis Culture currently operates outside the law, so the Emerys have established their own guidelines: they don’t record customer information, do not require a doctor’s note and ask customers to show ID to prove they are over 19.

HST is tacked on to all prices and payroll taxes are collected, Marc said. He estimates they have turned over about half a million in taxes to the government.

The details of their supply chain are, somewhat understandably, sketchy. Jodie said much of the product comes from brokers who get it from those with medical growing licences. Many of the connections have stood for decades.

She equates the growers to farmers at a local market. They are proud of their product and would like to come forward, but prohibition forces them to stay in the dark.

Product quality is mostly assessed by a sight and smell test by store employees. But bigger locations such as the flagship store owned by Marc work with a lab to test strains for pesticides, mold and tetrahydrocannabinol (THC), the psychoactive ingredient in pot, and cannabidiol (CBD), the ingredient said to have therapeutic effects. The tests can cost about $150 each, prohibitively expensive for most small-time operators.

My feeling is if I am not allowed to sell marijuana after all the work I’ve done this far, then who does have that right?

Tyler Anderson/National Post

Tyler Anderson/National PostMarc Emery, owner of Cannabis Culture, speaks with customers at his store on Church Street in Toronto. Like all dispensaries, Cannabis Culture currently operates outside the law.

Despite some unusual costs factored into the underground business, interest in Cannabis Culture and the Emerys runs high among investors — a diverse group that includes fellow activists as well as deep-pocketed business-types — who don’t seem to be deterred by dispensaries’ questionable legal status.

“‘I’ve got hundreds of franchise request emails coming in from all across Canada and even the U.S.,” Jodie said. “People are begging and I can’t even get back to them.”

Cannabis Culture’s brash business style irks some other dispensary owners worried that the Emerys’ in-your-face promotion style could turn off Canadians who are on the fence about legalization and the role of dispensaries within the system.

But Jodie is dismissive of their critics: “They’re looking at Cannabis Culture with a bit of green in their eyes saying you guy are big corporate cannabis now.”

Meanwhile, the Emerys are also feeling squeezed from the publicly traded licensed producers that they believe are trying to monopolize marijuana and shut them out of a free market. The Emerys say the market is big enough for all types of players — especially theirs.

“We’ve paid our dues. My feeling is if I am not allowed to sell marijuana after all the work I’ve done this far, then who does have that right?” Marc said. “And I don’t believe anybody else has that right over me.”

Financial Post

sfreeman@postmedia.com
Twitter.com/sunnyfreeman

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The price of a life-saving overdose treatment has increased 680% to $4,500 in the last 3 years


An emergency medication often referred to as an “antidote” for opioid overdoses has been skyrocketing in price over the last few years.

The device, the only auto-injector version of naloxone, is called Evzio, and it’s made by Kaleo. 

Naloxone instantly reverses opioid overdoses by blocking the drug from interacting with the brain’s receptors. It has been on the market since 1971.

In 2014, when Evzio was approved in the US, the list price was $575 for a two-pack. Now, it has a list price of $4,500 — an increase of 680%.

Kaleo, a private company based in Richmond, Virginia, also owns Auvi-Q, the emergency epinephrine device that made headlines in October 2016 when the company announced it would come back to the US as competition to the EpiPen after getting recalled a year earlier. The Auvi-Q and Evzio use the same auto-injector technology to deliver their respective emergency medications. 

The list price for a two-pack of the Auvi-Q comes in at $4,500 as well, though the company maintains that the cash price for people without insurance is $360 and that more than 200 million people will be able to get the device with a $0 copay. That list price is roughly 640% higher than the list price of the EpiPen, which was singled out in August 2016 for increasing the price of a two-pack by 500% over the course of seven years.

Now, the list prices of the two drugs is catching the eye of Democratic Senator Amy Klobuchar of Minnesota, who sent a letter Friday to Kaleo asking for more information about the company’s pricing strategy.

List prices don’t often tell the whole story when it comes to a drug’s price. There are other players in the system that each take a piece, which means that what a drugmaker actually receives could be lower even as the list price rises. Kaleo declined to comment on its average net price for Evzio. 

“When setting the ‘list’ price for products, kaléo always starts with the needs of the patient first and then engages with multiple stakeholders in the healthcare system,” Kaleo’s vice president of corporate affairs Mark Herzog said in a statement emailed to Business Insider. “Following these discussions, in order to help ensure our product is available as an option to most patients for $0 out-of-pocket, we set the list price at $4500.”

The rationale of the company’s pricing strategy didn’t seem to satisfy Klobuchar. 

auvi q 

“I understand that Kaleo is trying to mitigate the impact on consumers by providing Evzio for free to cities, first responders, and drug treatment programs, and offering various programs to help ensure that no consumer pays the $4,500 price for Auvi-Q,” Klobuchar wrote. “While these subsidies and programs are noteworthy, I am concerned that they do not address the underlying problem of rising prescription drug costs.”

This isn’t the first time rising naloxone prices have been called out. Until recently, Evzio’s price had been $3,750 per two-pack. And across the board, naloxone prices have been skyrocketing, as Business Insider’s Harrison Jacobs has reported.

However, most other naloxone options — syringes, and a nasal spray — have list prices in the hundreds for sets of 10 vials or two nose sprays. As a proportion of total naloxone market, Evzio made up roughly a third of prescriptions in 2016, according to data from IMS Health.

It remains to be seen how many prescriptions transfer from the EpiPen to the Auvi-Q. Before it was recalled, Auvi-Q only had a small share of the market at a list price of around $500.

But its high list price is already turning off health insurers and pharmacy benefits managers. FiercePharma reports that Cigna, Humana, and the pharmacy benefits manager Express Scripts have come out against the pricing strategy for Auvi-Q, while Aetna is putting it on restricted coverage. The device officially launches in the US on February 14. 

CONTINUE READING…

Burgeoning Marijuana Market Prompts Concerns about Crop’s Environmental Impact


By Melati Kaye on February 2, 2017

A visit to a marijuana farm in Willow Creek, the heart of northern California’s so-called Emerald Triangle feels like strolling through an orchard. At 16 feet high and eight feet around, its 99 plants are too overloaded with cannabis buds to stand on their own. Instead each plant has an aluminum cage for support.

Welcome to America’s “pot basket.” The U.S. Drug Enforcement Administration estimates 60 percent of cannabis consumed nationwide is grown in California. According to the Department of Justice, the bulk of that comes from the three upstate counties of the Emerald Triangle: Mendocino, Humboldt and Trinity. Conditions here are said to be perfect for outdoor marijuana cultivation. But that has proved to be a very mixed blessing for the region, bringing with it a litany of environmental disturbances to local waterways and wildlife. Creek diversions threaten fish habitat and spur toxic algal blooms. Road building and clear-cuts erode soil and cloud streams. Deep within, illegal “guerilla grows” pepper forestlands with banned rodent poisons that are intended to eradicate crop pests but are also fatal to other mammals.

On November 8 voters in four states—Massachusetts, Maine, California and Nevada—legalized recreational marijuana. These states join Colorado, Washington, Oregon and Alaska, along with the District of Columbia, where one can already legally buy the drug for recreational use. Will this expanded market mean more environmental damage? Or will legalization pave the way for sounder regulation?

In 1996 California legalized marijuana for medical use, providing the first legal space for pot cultivation since the federal government’s blanket ban on the crop some 60 years before. As grow operations in the state flourished, California Department of Fish and Wildlife biologist Scott Bauer analyzed satellite imagery to examine the impact of cultivation on water levels in four Emerald Triangle watersheds. His study, published in PLoS ONE in 2015, found that in three of the four watersheds, “water demand for marijuana cultivation exceeds stream flow during the low-flow [summer] periods.”

The real problem is not marijuana’s overall water consumption, which still falls far short of California staples like walnuts or almonds, explains environmental scientist Van Butsic of the University of California, Berkeley. Rather it is an issue of where and when pot is grown. Analyzing aerial imagery of 4,428 grow sites in 60 Humboldt county watersheds, Butsic found that one in 20 grow sites sat within 100 meters of fish habitat and one in five were located on steep land with a slope of 17 degrees or more. “The problem is that cannabis is being grown in the headwaters, and much of the watering is happening in the summer,” Butsic says.

If that arrangement goes on unchecked, U.C. Berkeley ecologist Mary Powers warns, summer plantations could transform local rivers from cool and “salmon-sustaining” to systems full of toxic cyanobacteria. Over eons of evolution native salmon species have adapted to “deluge or drought” conditions, she says. But the double whammy of climate change and water extraction could prove to be a game-changer.

Powers spelled out the unprecedented stresses in a 2015 conference paper focused on the Eel River that flows through Mendocino and southern Humboldt. She and her team found riverbed-scouring floods in winter, followed by dry, low-flow conditions in summer, led to warm, stagnant, barely connected pools of water. That is bad news for salmon, but ideal for early summer algal blooms. The algae then rot, creating an oxygen-deficient paradise for toxic cyanobacteria, which have been implicated in the poisoning deaths of 11 dogs along the Eel River since 2002.

Dogs are not the only terrestrial creatures endangered by the grow operations. Between 2008 and 2013 Mourad Gabriel, then a doctoral candidate at the University of California, Davis, Veterinary Genetics Lab, carried out a study of the American fisher, a small carnivorous mammal that is a candidate for the endangered species list. He wanted to suss out the threats to fisher populations in northern California. So he radio-tagged fishers from Trinity County’s Hoopa Valley Reservation and public lands near Yosemite National Park to track their movements. Between 2006 and 2011, 58 of the fishers Gabriel and his team tracked turned up dead. Gabriel studied the necropsies and found that 46 of the animals had been exposed to anticoagulant rodenticides—rat poisons that block liver enzymes, which enable blood clotting. Without the enzyme the exposed mammals bled to death from flesh wounds.

The finding puzzled Gabriel at first, because rat poison is more common in agricultural and urban settings than in remote forests. But then he started visiting the remnants of guerilla grows that had been busted under the guidance of lawmen such as Omar Brown, head of the Narcotics Division at the Trinity County Sheriff’s Office. “We have found [anticoagulant rodenticides] carbofuron on grows in the national forest,” Brown reports. “These are neurotoxin-laced pesticides that have been banned in the U.S. since 2011. And even for allowed pesticides, we’ve found instances where trespass grows are using them in illegally large quantities.” The poisons hit female fishers particularly hard, because the early, pest-prone phase of marijuana cultivation coincides with the fishers’ nesting season, when pregnant females are actively foraging.

Gabriel, now director of the Integral Ecology Research Center based in Humboldt County, says other states may be dealing with rodenticides, water diversions and other problems from guerilla grows, too. “The climate in Colorado, Oregon and Washington is conducive for marijuana cultivation,” he observes. But “there just isn’t the scientific data to prove whether other states have these problems because there has not been research funding put towards answering these questions.”

In California headwater ecosystems could get a reprieve if a greatly expanded legalized pot industry moves to the Central Valley, where production could take place indoors and costs would be less. In pot-growing pioneer states like Colorado or Washington much of the production has moved indoors, where temperatures can be more closely managed. But other factors may hinder that move. “Bud and pest problems are always worse indoors, which biases farmers toward a chemically intensive regime,” says Marie Peterson of Downriver Consulting, a Weaverville, Calif.–based firm that helps growers fill out the paperwork for state and county permits as well as assesses water management plans for their plantations. And besides, the Central Valley already suffers from prolonged drought.

Of the eight states that legalized the cultivation of recreational marijuana, only Oregon and California allow outdoor grows. But regulating open-air pot plantations in these states remains challenging, even though legal operations for medical marijuana have been around since 1998 and 1996, respectively. In 2015 California passed the Medical Marijuana Regulation and Safety Act, which calls on the state’s departments of Food and Agriculture, Pesticide Regulation, and Fish and Wildlife, along with the state’s Water Board—to oversee environmental impacts of the industry. The board came up with a list of requirements for a marijuana plantation water permit, which in turn became a necessary condition for a license to grow medical pot in any of the three Emerald Triangle counties. Counties have until January 2018 to decide whether to create similar stipulations for recreational marijuana growing permits.

Butsic is optimistic about a more regulated future for the marijuana industry in California. “I think five years from now things will be more sustainable. Permitting shows growers that the state is interested in water use and their crop.”

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Finicum family, Bureau of Land Management still tangling a year after fatal standoff


 

Widow fights for grazing rights

A year after her husband Robert "LaVoy" Finicum was fatally shot by police after a standoff near Burns, Oregon, his widow Jeanette is continuing her fight against the Bureau of Land Management over grazing rights for the family's cattle herds. (Associated Press)

A year after her husband Robert “LaVoy” Finicum was fatally shot by police after a standoff near Burns, Oregon, his widow Jeanette is continuing her fight against the Bureau of Land Management over grazing rights for the family’s cattle herds. … more >

 

By Valerie Richardson – The Washington Times – Thursday, January 26, 2017

Ten months after her husband was killed in a standoff with the federal government, Jeanette Finicum was driving her cattle to their winter range in Northern Arizona when she received a message from the Bureau of Land Management: Keep off.

She was told she could not pasture her cows on the grazing allotment she inherited upon the death of her husband, Robert “LaVoy” Finicum, even though she had turned in her application and written a check for fees and fines before making the 50-mile trek.

“We were in the middle of the cattle drive [in October] when we got word that they were not accepting my check,” said Ms. Finicum. “I had to stop because my attorneys didn’t want me to be out of compliance, and I had to find somewhere else to put my cows.”

She was stunned. “Here I am, in the middle of the desert with 150 cows, going, ‘Where am I going to go?’” she said.

Ms. Finicum, 56, was able to move her cattle to her sister-in-law’s pasture, but she still has a problem on her hands. She fears the directive may be more than a bureaucratic snafu, that federal officials want to wrest her grazing rights in order to discourage other ranchers from challenging land-management policies, as her husband did.

“I believe it’s because of his stand and because of what happened in Oregon,” Ms. Finicum said, referring to the armed takeover of a federal wildlife reserve. “They want to make an example out of him. They want to make sure people don’t do this again by taking my ranch away from me. It’s like, ‘Here’s what will happen to you if you don’t behave.’”

LaVoy Finicum was killed Jan. 26, 2016, at an FBI roadblock as he and other protesters drove to John Day, Oregon, to meet with a local sheriff.

A readily recognizable figure in his white cowboy hat and glasses, he had served as a spokesman for the several dozen armed occupiers who took over a vacant federal building at the Malheur National Wildlife Refuge in a protest against federal lands policy.

A county sheriff’s investigation ruled the shooting justified, noting that Finicum, 54, had a pistol in his jacket when he jumped out of his vehicle after veering off the road. A video taken from a plane shows he may have been reaching for his weapon, but his supporters say he was trying to surrender.

Ms. Finicum has since immersed herself in running the ranch from their home in tiny Cane Beds, Arizona, about five miles from the Utah border. Even so, she may be the most recognizable figure in the public lands movement not named Bundy, thanks to the international coverage of her husband’s death.

She made a rare public speech at a rally in March at the Utah state Capitol, where she told a crowd of several hundred that her husband of 23 years had been “assassinated.” Her next appearance comes Saturday in John Day, where she plans to host an event called “the meeting that never happened” to mark the one-year anniversary of her husband’s death.

Topics on the agenda include the wrongful-death lawsuit expected to be filed by the Finicum family, as well as the Portland jury’s not-guilty verdict in October against seven occupiers, including leaders Ammon and Ryan Bundy, on federal conspiracy charges stemming from the 41-day occupation.

‘They never said a word’

J. Morgan Philpot, one of the Bundy attorneys, is aiding Ms. Finicum in her fight to keep her winter range, known as the Tuckup Allotment, a pasture used by ranchers for more than 100 years that her husband purchased the rights to from the previous owner in 2009.

Mr. Philpot said she should inherit the allotment rights under Arizona and federal law, “but for some reason the BLM has made a choice to obfuscate and avoid rather than working with Jeanette to ensure that her permit remains in effect.”

A BLM official declined to offer specifics on the case. Last month Arizona spokeswoman Amber Cargile told the Tri-State Livestock News that the agency “recognizes that Ms. Finicum is a personal representative of her late husband’s estate.”

“The BLM has been working with Mrs. Finicum and her legal counsel on issues related to both the fees associated with her husband’s estate as well as the future of the permit,” said Ms. Cargile. “Due to the ongoing nature of these discussions, we’re not at liberty to provide additional details at this time.”

She also said the agency had been in contact with Finicum attorneys “in an attempt to resolve fines associated with a nearly yearlong grazing trespass on the Tuckup Allotment.”

Ms. Finicum said she paid an “outrageous” trespass fine last year of more than $20,000, incurred after her husband moved cows onto the range four weeks early in August to take advantage of the grass before it died. Such transgressions are not unusual, she said, but the BLM’s reaction was.

“There were other years he went on early, and they never said a word,” Ms. Finicum said. “It was OK to go a couple weeks early. They’re making a stink to get me off, period, and to make an example to the rest of the ranchers here in the West that, ‘If you put up a fight, you’ll be out of business.’”

A few months before heading to Oregon, Finicum had announced that he would start sending his grazing fees to the county instead of the federal government, the same tactic used by Nevada rancher Cliven Bundy in his longstanding legal battle with the BLM.

Despite that, Ms. Finicum said her husband died before he could follow through, meaning his account with the BLM was still paid in full.

She said local rangers have been helpful, but decisions on the matter are apparently being made above their pay grade.

“It would have been settled within a short period of time had it been under the control of our range cons (conservationists) here,” she said.

Alone on the range

Under federal rules, Mr. Philpot said a spouse has two years to complete the transfer of grazing rights, and that the rights can be extended for another two years if probate drags on. During that time Ms. Finicum should be able to graze cattle on the Tuckup Allotment.

He worries that Ms. Finicum may be up against not only lingering ill will against her husband but also the political winds. Environmental groups such as the Western Watersheds Project have led the fight against grazing on public lands, a stance that enjoyed support during the Obama administration.

The BLM manages 245 million acres of public lands, with 155 million for livestock grazing. Ranching on public lands has declined from 18.2 million animal-unit months [AUM] in 1954 to 8.6 million in 2015, a 53 percent drop, according to the agency.

“If you have a policy that is opposed to grazing, and you have rights that go back 100 years, and you want to disrupt those, how do you do it? How do you get somebody off a piece of land when they have a right to be there?” said Mr. Philpot, a former Utah state legislator.

“In this case, I think what they’re doing is they’re making it so difficult for Jeanette that her permit cannot be renewed,” he said. “And then they’re going to say, ‘You don’t have rights anymore here.’ And she’ll say, ‘Why not?’ And they’ll say, ‘Because you didn’t renew your permit,’ and she’ll say, ‘But you wouldn’t let me.’”

Months after she was forced to reroute her cattle, Ms. Finicum feels as frustrated as she did that day in the desert, surrounded by her cows with no place to go.

“What is a person like me supposed to do? This is what I had to wrestle with in the desert when I was halfway to my allotment with my cows,” she said. “Am I to go there to use the grass that I paid for that’s rightfully mine and use that water that’s rightfully mine, or do I try to fight them in court? Do I try to negotiate with them? Do I try to continue to reason with them?”

One thing she refuses to do is give up her life as a rancher.

“This is my property. This is my family’s property,” said Ms. Finicum. “We are not criminals, and we should be allowed to operate our business as we have done so in the past.”

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