What’s Happening: Industry Developments

What’s Happening

National & International New Developments

By Kate Lavin

Spending Bill Includes Medical Marijuana Protections

Medical marijuana companies won’t have to worry about being prosecuted by the federal government for at least another six months.

President Donald Trump signed a $1.3 trillion federal spending bill March 23 that extends a statute prohibiting the Department of Justice from interfering in state MMJ programs. The bill lasts only through September, however, at which point Congress will have to approve a new federal budget or an extension of the deal just signed.

U.S. Attorney General Jeff Sessions has been lobbying Congress to kill the law, known as the Rohrabacher-Blumenauer Amendment, which has been approved or renewed by Congress 11 times since it first passed in 2014 because stand-alone bills to protect state-authorized cannabis programs have not gotten any traction.

Canada Releases Rules for Cannabis Packaging, ‘Micro-Cultivation’

When recreational marijuana hits store shelves in Canada later this summer, it will be sold in “plain packaging” that contains only a standardized cannabis symbol and one of 14 health warning messages, according to an updated set of proposals released March 19.

The proposals also shed light on rules for new micro-cultivation and microprocessing licenses. Micro-cultivation permits would authorize a canopy area of no more than 200 square meters (2,153 square feet). A microprocessing permit would allow the processing of no more than 600 kilograms (13,228 pounds) of dried cannabis (or equivalent) per year, or the entire output of a single micro-cultivation license.

Medical Marijuana Harvests Begin in Jamaica

At least two medical marijuana companies in Jamaica have begun the first-ever legal harvest of their crops, signaling that the island nation is well on its way to becoming a full-fledged MMJ market.

Kaya Farms started its harvest Feb. 20, while Timeless Herbal Care said in a news release that it also had completed a harvest.

Both harvests took place under the observance of the island’s Cannabis Licensing Authority. The program has been years in the works, following the 2015 change to Jamaican law that created the licensing authority and allows for private MMJ enterprises.

State News Developments

Alabama

State authorities seized boxes of CBD-infused gummy bears from a company that distributes products to convenience stores after receiving complaints the candies may contain THC. Investigators tested several boxes of gummies taken from American Wholesale Distributors. A representative from the distribution company said the products contain only legal CBD. No criminal charges have been filed, pending lab review of the candies, which weren’t identified by brand name. Authorities said the retailers likely won’t face charges.
Alaska

Supply is catching up with demand in the state’s recreational cannabis market, but wholesale and retail prices remain some of the highest in the nation among adult-use marijuana markets. According to several business owners in the state, prices for a wholesale pound of cannabis flower in the Last Frontier range from $2,800 to $5,000 per pound. An ounce of flower is selling for up to $400 at the retail level. While prices remain on the steep side, more cultivators are coming online, and prices are expected to continue to decline somewhat.

Arkansas

State Attorney General Leslie Rutledge is appealing a judge’s order that forbids the state to license five companies to grow medical marijuana. Rutledge’s office filed a notice that it’s appealing to the state Supreme Court a ruling by Pulaski County Circuit Judge Wendell Griffen that the MMJ licensing process is unconstitutional. Griffen ruled that the state’s process for licensing the companies violated the 2016 voter-approved amendment legalizing marijuana for patients with certain medical conditions and cited potential conflicts of interest by two members of the Medical Marijuana Commission.

California

Arizona-based American Green’s goal of transforming a California ghost town into the “Epcot Center” of marijuana has run into serious turbulence. American Green sold its holdings in the California town of Nipton to Delta International Oil & Gas for some $7.7 million. American Green, a publicly traded penny stock, essentially ran out of money, Business Insider reported. The company agreed last year to buy the town, located about a one-hour drive from the Las Vegas Strip, for $5 million. American Green said it will continue to “manage Nipton and associated projects for five years with a five-year option.”

Colorado

The Colorado Marijuana Enforcement Division released a new “Single Universal Symbol” that must be included on packaging and labeling for all cannabis products by the start of 2019. The symbol is required for both medical and recreational cannabis, and for all types of products. Medical marijuana retailers may sell inventory with the previously established Medical Universal Symbol through July 1, 2019, provided the inventory arrived at the dispensary before Jan. 1.

Florida

A lawsuit filed by the Patients and Producers Alliance aims to turn the state’s medical marijuana program into a more free-market system. If successful, the suit could have industry ramifications far outside Florida. Most MMJ legalization laws enacted in recent years have capped the number of licenses, typically resulting in heated competition. The lawsuit alleges that the state has violated the will of the voters by installing a license cap and requiring all licensed MMJ companies to be vertically integrated.

Hawaii

The state’s medical marijuana patient count jumped 33% in 2017, as the program expanded its list of qualifying conditions and allowed dispensaries to open their doors. Hawaii added amyotrophic lateral sclerosis (ALS, aka Lou Gehrig’s disease) to the list of qualifying conditions in December 2017, bringing the number of conditions to 11. Month-over-month growth averaged 2%, consistent with data from previous years. The strongest growth, 4.2%, occurred in May 2017. The first dispensaries opened in August 2017, but it didn’t appear to move the needle much for new registrations.

Illinois

Voters in the Chicago metro area told lawmakers they want legal cannabis in a nonbinding referendum that asked locals if they want the state to legalize recreational marijuana. In Cook County, which includes more than 130 municipalities, including Chicago, 63% of voters responded “yes.” But the final decision falls to the state legislature in Springfield, since Illinois has no system for citizen campaigns to put statewide questions on the ballot. Meanwhile, Gov. Bruce Rauner has established roadblocks to the expansion of Illinois’ medical marijuana program.

Kentucky

U.S. Senate Majority Leader Mitch McConnell told constituents in Kentucky that he will introduce legislation to take hemp out of the Controlled Substances Act. The federal government defines hemp as cannabis sativa, with a THC content below 0.3%. Hemp production was authorized in the 2014 Farm Bill, but only in states with hemp pilot projects. McConnell’s proposal would open the door to nationwide production and allow interstate transport of live seeds.

Louisiana

The lobbying group Sensible Marijuana Policy for Louisiana aims to add two medical conditions – post-traumatic stress disorder (PTSD) and chronic pain – to the list of eight ailments that will qualify patients for MMJ. In most states with functioning medical cannabis industries, pain patients make up the bulk of consumers. MMJ sales have not yet started in Louisiana, but one licensed pharmacy has announced it may begin sales in September.

Massachusetts

The Cannabis Control Commission approved final regulations for marijuana companies March 6, improving odds the state will meet the July 1 deadline to launch recreational MJ sales. Some of the new regulations were a lightning rod for industry officials, however, as they cap electricity use at 36 watts per square foot of cultivation space. Massachusetts growers said the regulations all but require them to use the more expensive LED lights. The state has promised to reduce greenhouse gases by 2020 as well as overall energy-usage levels.

Michigan

Regulators said they ordered the closure of 208 medical marijuana businesses over a two-week period, largely because the owners failed to apply for a state license by a mid-February deadline or did not receive authorization from their municipalities. Most of the shops (158) were in Detroit. Shops that did not close immediately could be denied a license down the line if they apply; be referred to local, state or federal law enforcement; or face other penalties or sanctions.

Nevada

Since starting recreational marijuana sales a year ago, retailers sold more than $195 million worth of cannabis through December, or more than $1 million a day. Based on those numbers, the Silver State is on pace to exceed $400 million in sales for its first year. The quick success for Nevada’s recreational cannabis industry was likely boosted by the state’s “early start” for rec sales and the 40 million-plus tourists who visit Las Vegas each year.

New Mexico

Nearly 18,000 new patients enrolled in the state’s medical marijuana program during the 12 months ending December 2017, a 61% jump. The increase in patients is the largest over a single-year period since the program launched in 2007. Such strong growth is rare for a medical cannabis market as mature as New Mexico’s and comes amid a series of failed attempts to expand the state’s MMJ industry.

North Dakota

State lawmakers signed off on rules for North Dakota’s developing medical marijuana program, a necessary move if MMJ sales are to begin later this year. The legislature’s Administrative Rules Committee reviewed dozens of pages covering such areas as testing, security and transportation requirements. The committee didn’t take a formal vote on the regulations but also did not call for any changes or a delay in implementing them, effectively approving them. State voters approved medical marijuana in November 2016, and the health department is aiming to launch medical cannabis sales late this year.

Oregon

State lawmakers have dedicated an extra $1.5 million to local law enforcement agencies to combat illegal cannabis businesses in poorer counties. The move was largely in response to a summit hosted by a U.S. attorney who warned that if states don’t do more to combat the illicit trade, the federal government may “step up enforcement of federal anti-marijuana laws.” Counties that may receive portions of the funding include Josephine, Jackson, Curry, Coos and Douglas, all in southern Oregon.

Pennsylvania

The state Department of Health will issue permits for universities and hospitals interested in researching medical marijuana. Drexel University, Penn Medicine and the University of the Sciences in Philadelphia have expressed interest in adding marijuana research to their programs. In 2016, Thomas Jefferson University in Philadelphia announced a Center for Medical Cannabis Education & Research to study medical cannabis and educate doctors. The same year, the University of Pittsburgh Medical School expressed interest in collaborating with medical marijuana businesses to research MMJ.

Rhode Island

A state commission delayed until 2019 its recommendation on whether to legalize recreational marijuana. The group, which has met four times since October, was expected to release its findings to lawmakers on March 1. A spokesman for the House speaker said that while the commission delayed making a recommendation, legislation on the issue could still be passed this year.

Utah

Roughly 160,000 signatures have been gathered in support of a medical marijuana ballot initiative, an effort being led by Utah Patients Coalition. MMJ advocates needed 113,000 signatures to qualify for the November vote, and around 120,000 signatures have been verified by county clerks. Advocates had until April 16 to collect a minimum threshold of signatures in 26 of Utah’s 29 senate districts, and some of the districts were still a few signatures short as of late March.

Washington state

Marijuana businesses must now pay an annual fee of $895 to produce cannabis-infused edibles. The new charge stems from a special license endorsement that edibles makers were required to get starting April 1, when the state’s Department of Agriculture began regulating infused product makers. The fee will go toward enforcing the state’s sanitary processing requirements. Applications are being accepted through the state’s Department of Revenue Business Licensing Service.

West Virginia

A bill that would have made several changes to the state’s medical marijuana law failed when the legislative session ended in March. West Virginia’s medical marijuana program was set to launch in 2019, but the bill’s failure and an opinion from the state treasurer have put the rollout on shaky ground. State Treasurer John Perdue wrote a letter to the governor and other state leaders, expressing concerns about the federal illegality of cannabis.