What’s Happening: National and State News Developments

By Roger Filion

National

White House Signals Possible Rec Crackdown

White House Press Secretary Sean Spicer signaled the Trump administration will crack down on recreational marijuana businesses, though to what degree – and when – remains a mystery.

“I do believe you will see greater enforcement of it,” Spicer said in response to a question about whether the Department of Justice will enforce federal marijuana laws.

Separately, U.S. Attorney General Jeff Sessions said the Department of Justice will strive to find “responsible policies” regarding the enforcement of federal cannabis laws.

Congressional Cannabis Caucus Lays Out Agenda

The first Congressional Cannabis Caucus officially launched in Washington DC, with four bipartisan lawmakers asserting that their agenda includes protecting state marijuana laws from federal interference as well as reforming 280E of the tax code and cannabis banking laws.

The group also aims to remove marijuana from the federal list of controlled substances.

The caucus, announced in December, currently is composed of just four House members: Dana Rohrabacher (R-CA), Earl Blumenauer (D-OR), Don Young (R-AK) and Jared Polis (D-CO). But the group said in a statement it has invited all House representatives to join.

Exchange-Traded Marijuana Fund Planned

ETF Managers Group, a New Jersey-based investment company, plans to launch an exchange-traded fund that would track publicly traded cannabis companies.

The company is proposing the Emerging AgroSphere ETF, which could be a first for the cannabis industry. An exchange-traded fund owns and tracks certain assets and, unlike a mutual fund, can be traded like a regular stock.

The Emerging AgroSphere ETF would own stocks in cannabis-related companies that make prescription drugs using marijuana extracts as well as those selling hemp derivatives and other related stocks. The company noted it would buy globally but, for now, wouldn’t invest in recreational cannabis-related equities.

Alaska

Alaska’s Marijuana Control Board revived a proposal in early March to allow cannabis consumption at recreational marijuana shops. A month earlier, board members had voted to abandon the plan, reflecting fears that the White house could crack down on the rec industry. In their decision to reconsider the proposal, board members noted there is already a regulation that would permit public consumption spaces.

Arizona

Arizona has grown into one of the largest medical cannabis markets in the nation, behind only California and Michigan in terms of patient counts. The state’s medical marijuana program added nearly 27,000 patients in 2016 – a 30% increase – that brought the total count to nearly 115,000. Arizona’s patient base has now eclipsed Colorado’s, which has dwindled to approximately 100,000.

Arkansas

The Medical Marijuana Commission has approved a final set of regulations governing how businesses can grow and sell MMJ. The commission agreed to permit 32 medical cannabis dispensaries and five cultivation facilities. The plan is being posted for public comment. State lawmakers have until May 8 to adopt the proposed rules. The commission was expected to hold a public hearing before then, on March 31.

California

Doctors suspect contaminated medical marijuana may have been the cause of a cancer patient’s death in what could serve as a wake-up call for the state’s MMJ industry. The man was using medical cannabis to ward off the side effects of traditional cancer treatments. The cancer treatment compromised the patient’s immune system, and he unexpectedly contracted a rare fungal infection that ultimately killed him. After the patient died, 20 MMJ samples from across California were tested for contamination, and the “vast majority” were tainted with “dangerous bacteria and fungi.”

Colorado

Marijuana dispensaries and recreational stores across the state sold $1.3 billion in products last year, up 30% from 2015 and nearly double the total in 2014 when adult-use sales began. According to state data, last year’s sales total is up from $996.2 million in 2015 and nearly $700 million in 2014. Colorado averaged more than $100 million in sales per month last year.

Connecticut

The state’s consumer protection commissioner gave the green light to add fibromyalgia, muscular dystrophy, shingles and rheumatoid arthritis to the list of conditions that can be treated with medical marijuana. The Legislature’s Regulations Review Committee must still approve the additions before they can be added to the MMJ conditions list, which already includes 22 ailments. It could take up to a year before the move is finalized.

Florida

Florida health regulators have begun processing applications for medical marijuana cards for both patients and caregivers under the state’s new MMJ program. The Office of Compassionate Use is issuing the cards under regulations approved last year by state lawmakers.

Hawaii

Regulators have given a third medical marijuana business the go-ahead to begin cultivating MMJ. The state health department has so far approved Oahu-based Aloha Green Holdings and Manoa Botanicals as well as Maui Wellness Group. Hawaii has eight vertically integrated license holders statewide. Each can operate two dispensaries and two cultivation centers.

Louisiana

Louisiana State University and Southern University, two Baton Rouge-based institutions granted approval to grow medical marijuana under the state’s MMJ law, are seeking help from private cannabis businesses. LSU is set to begin taking applications from cultivation contractors interested in growing MMJ. The university said it expects to choose a cultivator by June and that the first medical marijuana crops could be harvested by the end of 2017. Southern was planning to seek applicants in mid-March to run its MMJ program under a five-year contract. The cannabis would be grown at the university’s agricultural experiment station, five miles from campus. The program could be operational by the end of the year.

Maine

The number of registered caregivers licensed to grow medical marijuana for patients in Maine increased by 42% in 2016, a sign to some that people are hoping to gain experience in the MMJ industry to get a leg up once permits become available for the state’s new adult-use program. The jump also is a sign more patients are turning to cannabis to treat maladies such as chronic pain.

Maryland

Maryland’s medical marijuana program rollout has been rife with stumbles, delaying what could become one of the largest markets on the East Coast. Still, industry officials and regulators are working to get the state’s MMJ program on steadier footing and launched. Regulators, in fact, hope dispensary sales will begin later this year. But industry observers are less bullish, predicting the first dispensaries will open in 2018.

Massachusetts

A 17-member committee has been created to examine and possibly revise the recreational marijuana legalization law approved by voters last November. The Regulation and Taxation of Marijuana Act is an initiated state statute, instead of an amendment to Massachusetts’ constitution. That means legislators still have the legal ability to make changes to the law, despite what was approved by voters. The committee will reexamine the law because state lawmakers are seeking significant changes before retail stores open in 2018.

Minnesota

Two former top executives at a multistate medical marijuana company were formally charged with illegally transporting MMJ products across state lines, from Minnesota to New York. Both defendants, previously with Minnesota Medical Solutions, were charged with unlawfully taking cannabis oil from Minnesota to an MMJ facility in upstate New York. Vireo Health, the parent company of Minnesota Medical Solutions, holds MMJ licenses in both states.

Nevada

Marijuana dispensaries in Nevada could have recreational product on the shelves as early as July, a development that would make the state the first new adult-use market created through last November’s election. During an appearance before a panel of state lawmakers, the Nevada Department of Taxation outlined a timeline for the rules governing the new market. If the plan is adopted, the taxation department could begin issuing temporary licenses to dispensaries on July 1, the first day of the new fiscal year.

New Hampshire

Legislation has been introduced for the first time to legalize recreational marijuana in New Hampshire. Supporters, however, may face an uphill battle given potential opposition from state law enforcement and the governor, Republican Chris Sununu. The legalization measure would also establish a legislative committee to focus on a regulatory framework to govern any new adult-use market. The state currently has an operational medical marijuana industry.

New Jersey

New Jersey’s medical marijuana program saw its patient count nearly double last year, breaking the 10,000 mark for the first time, according to an annual report released by the state’s health department. The jump in patients should be welcome news for New Jersey’s five operating medical marijuana dispensaries, which will likely see an increase in demand. New Jersey’s program registered 5,060 new medical marijuana patients in 2016, although 303 of them died and 22 aren’t active, meaning the state added 4,735 new active patients last year. That brought the number of active patients in the state to 10,799, the report showed.

New York

New York’s nearly 13,000 medical cannabis patients apparently aren’t enthusiastic about their purchase options at the state’s dispensaries. The first New York dispensary opened over a year ago, in January 2016, but only 10,250 patients have made a purchase and just 6,403 have been repeat buyers, Politico reported. The figures don’t portend a profitable future for New York’s MMJ businesses unless some dramatic changes are made to the program.

North Dakota

Five of every 1,000 residents are expected to use medical marijuana under North Dakota’s new MMJ program, an official with the state health department told lawmakers. The projected use would be enough to fund regulatory oversight of the program. North Dakota’s deputy state health officer said the government expects the program ultimately will be funded through user fees.

Ohio

Ohio is seeking a company to develop and implement a seed-to-sale tracking system for the state’s new medical marijuana industry. The software platform will track the medical cannabis supply chain, everything from cultivation and transportation to dispensary inventories and sales. Applications for the seed-to-sale contract are due March 10. Work on the new system is scheduled to begin in June.

Oregon

Oregon lawmakers are considering putting the state’s medical and adult-use marijuana programs under the oversight of one regulatory agency. The move would put Oregon in the same company as its neighbor to the north, Washington state, but it could lead to some big changes for existing businesses. The co-chairwomen of the legislature’s Joint Committee on Marijuana Regulation have offered bills that would transfer regulation of MMJ to the Oregon Liquor Control Commission – which currently oversees recreational sales – from the Oregon Health Authority.

Pennsylvania

Cannabis entrepreneurs looking to do business in Pennsylvania’s impending medical marijuana industry finally had a chance to submit applications. The Pennsylvania Department of Health accepted applications for grower/processor and dispensary licenses from Feb. 20 to March 20. The non-refundable fee for growing and processing applications is $10,000; the dispensary application fee, also non-refundable, is $5,000.

Rhode Island

Lawmakers have proposed legislation to legalize recreational marijuana, the third year such a measure has been offered. Supporters are more confident this year after the decision last year by voters in nearby Massachusetts and Maine as well as California and Nevada to approve adult-use cannabis. The proposed measure would stipulate product testing and labeling as well as curbs on advertising. It also includes limits on THC and would give municipalities some authority to regulate local MJ businesses.

Washington state

All edible marijuana products sold in the state must now carry a warning on the label notifying consumers they are “not for kids.” The requirement, covering marijuana-infused foods and soft drinks, consists of a red hand, the written warning and the Washington Poison Center’s telephone number. Marijuana processors are required to incorporate the label on new packaging or to affix a sticker to existing packaging to differentiate cannabis edibles from regular candy bars, sweets and drinks.

Note: Entries sourced from Marijuana Business Daily and other national and local news outlets. These developments occurred before this magazine’s early-March publication deadline, so some situations may have changed.