In this week’s Cannabis Industry News Recap, you will find the top stories from around the industry for the week of May 27th – June 2nd, 2019.
The FDA had their hearing regarding the regulations around CBD, and their approach as they consider the use of CBD in alternative foods or as a dietary supplement. This meeting marked a historical moment in time, as advocates, industry representatives, regulators, health professionals, and marijuana legalization opponents stood up before the FDA to sway consideration and public appeal. Matters ranged from health concerns to national research programs that would help speed up the research and understanding of the substance.
Among all the topics in cannabis, one of the most popular is the progression of the rules and regulations around CBD. The pot is coming to a boil, as this Friday the FDA will finally hold their hearing to decide what limitations CBD food and beverages will have moving forward. CBD has taken the world by storm, however with the loosely defined regulations, and lack of medical evidence, the FDA has been bottlenecking the industry. Companies are concerned that all of their product, which contains certain amounts of CBD, may become useless after regulation, while others have been trudging ahead manufacturing with force, ignoring the FDA’s warnings.
Cannabis and professional sports have been making quite a few headlines lately. Last week, the merging of the worlds continued.
On Tuesday, May 21, 2019, a major partnership was announced between the mixed-martial-arts (MMA) league Ultimate Fighting Championship (UFC) and Edmonton-based Aurora Cannabis Inc. (TSX: ACB) (NYSE: ACB). The multi-year, multi-million dollar partnership is primarily a research-based collaboration that will explore the role that hemp-derived cannabidiol (CBD) products could potentially play in the areas of mental health, pain management, and athlete recovery.
In the spring of 2014, RCMP officers in Kelowna, B.C. prepared a press release about a big drug bust at the local airport. It described how investigators had intercepted two shipments of marijuana of “unfathomable quantity” that were bound for a couple of licensed cannabis producers in Ontario. The press release, however, was never sent.
Days went by with a virtual information blackout over what the Mounties had seized and why, even after one of the companies — Tweed Marijuana Inc., now Canopy Growth Corp. (TSX: WEED) (NYSE: CGC) — decided to release its own public statement, containing what some RCMP members perceived to be “brutally misleading” information about the seizure.
The Illinois Senate voted to approve a bill to legalize marijuana on Wednesday, with just two days left to get the legislation to the governor’s desk before the current session ends. The bill would allow adults 21 and older to consume, possess and purchase certain amounts of cannabis for personal use, and seeks to create a legally regulated system of marijuana production and sales.
It also contains several provisions aimed at promoting social equity in the legal industry, including expunging the records of individuals with convictions for marijuana possession of 30 grams or less and allowing the state’s attorney or individuals to petition the courts for possession cases involving 30 to 500 grams of cannabis.
Colorado Gov. Jared Polis signed a bill Wednesday that for the first time opens the state’s cannabis industry to outside investors. The law is expected to bring new cash flow into Colorado as well as marijuana products from companies that previously were unable to do business in the state.
“By permitting access to capital through private and public investments with appropriate guardrails, this bill ensures that Colorado businesses keep their headquarters in the state, remain competitive, invest in research and development and other innovation and continue to contribute significant tax dollars to the state,” Chuck Smith, CEO of Dixie Brands, a Denver-based manufacturer of THC- and CBD-infused products, said in a prepared statement.
Alberta Gaming Liquor Cannabis has lifted the moratorium on new retail cannabis licences, the governing body announced on Thursday. “Due to a steady increase in AGLC’s cannabis supply, the moratorium on accepting new retail licence applications and issuing new retail licences has been lifted,” the AGLC said on its website.
New licences were halted in November 2018, after the AGLC said it had only received 20 percent of the cannabis that had been ordered for producers.
A federal appeals court gave medical cannabis patients and reform advocates a small but significant procedural victory on Thursday, ruling that it would hold open a case challenging the scheduling status of marijuana under federal law.
In essence, the court is putting the federal government on notice that it must “promptly” make a decision on marijuana rescheduling so that those who rely on its medical benefits don’t unduly suffer.
The Food and Drug Administration will hear from CBD manufacturers, researchers, farmers, retailers and more on Friday as the agency holds its first public hearing looking at the sale of what’s being touted as a magical elixir that can treat everything from inflammation to epilepsy.
Congress in December legalized CBD, or cannabidiol, derived from hemp. The nonintoxicating cannabis compound is being added to just about everything, including makeup, tea, pet treats, and soft drinks — even though the FDA has expressly prohibited companies from adding it to food, beverages and dietary supplements.
After ten hours of testimony about cannabidiol (CBD) from more than 100 stakeholders, two things are clear: The American public has a high desire for CBD products, and too many CBD manufacturers are delivering shoddy goods.
On Friday, FDA Acting Commissioner Ned Sharpless kicked off the agency’s historic first-ever public hearing on CBD by noting that “we’ve seen an explosion of interest in products including CBD, [but] there is much we don’t know.”
Interest in Colombia’s medical marijuana market is booming, but a Marijuana Business Daily analysis shows that – out of over 100 licensed cannabis companies operating in the country – few have finished registering their first cultivars, a prerequisite to growing crops for commercial purposes.
So far, no company is selling or exporting medical cannabis commercially. That highlights the challenges – and future milestones – still facing businesses operating in Colombia’s medical marijuana industry.
Everyone who smokes cannabis seems to have an opinion on the difference between an indoor vs. outdoor weed high. Some people swear up and down that their best high came from an outdoor grow while others stand by their decision to smoke indoor-grown weed and only indoor-grown weed. But what’s the reality behind this age-old cannabis debate? Well, indoor vs. outdoor weed highs depend on way more factors than just where they grew, which is probably where all this confusion comes from. After all, a master farmer’s cannabis crop will (almost certainly) always come out better than any novice’s weed, no matter where they grew it. The reason for this is skill, not LED lighting vs. the sun! And that’s just one example of how indoor vs. outdoor weed highs depend on so much more than where they grow.
The number of cannabis companies in Canada that have yet to transition their federal license applications to the new system has been cut in half since the start of the year, but about a quarter of all applications still have not taken the required step.
The number of companies that have not transferred to the Cannabis Tracking and Licensing System (CTLS) fell to 230 at the end of March from 430 earlier this year, according to Health Canada. Applications not in the system are effectively in regulatory limbo and not being scrutinized by the country’s cannabis regulator.
While farmers in Florida were hoping to plant hemp in 2019, the state’s hemp program – approved by lawmakers earlier this month – is still awaiting Gov. Ron DeSantis’ signature. But the Florida Department of Agriculture and Consumer Services is confident it will be ready to issue growing permits “by late fall, at the earliest,” according to Holly Bell, the state’s director of cannabis.
“2020 is going to be our first, I believe, great grow year for industrial hemp,” Bell told a group of entrepreneurs and business advocates on earlier this week, according to WJCT, Jacksonville’s public media station.
Canadian stockpiles of cannabis in dried and oil form continued to climb to record levels in March, but retailers nationwide struggled to maintain consistent inventory of in-demand products.
Finished inventory of dried marijuana held by federal license holders, provincial distributors and retailers hit a record 30,800 kilograms (67,902 pounds) in March, up significantly from the 23,200 kilograms stocked the previous month, according to Health Canada data.
The U.S. Department of Agriculture (USDA) said on Tuesday that hemp can be transported across state lines—even through states that haven’t enacted laws allowing the crop’s production—and that the descheduling of the plant and its derivatives under the 2018 Farm Bill are already in effect because they are self-executing and do not require further action by federal agencies.
In a four-point legal opinion issued by the agency, USDA specified that hemp has been removed from the Controlled Substances Act (CSA), states and Indian tribes may not prohibit the interstate transportation of lawfully marketed hemp products—including those that fall under the more limited research-focused provisions of the previous 2014 Farm Bill—and that restrictions on participation in the hemp industry apply for individuals with felony drug convictions.
Retail sales of medical and recreational cannabis in the United States are on pace to eclipse $12 billion by the end of 2019 – an increase of roughly 35% over 2018 – and could rise as high as $30 billion by 2023.
That’s according to exclusive projections from the 2019 edition of the Marijuana Business Factbook. Continued sales gains in recreational markets as well as the rapid development of medical marijuana programs in newly legalized states will spur much of that growth over the coming year.
In a period of just five scant years, cannabis has gone from the frequently maligned status of stoner counterculture to a Kardashian-level social phenomenon. Popularity of the plant has eclipsed even the most avid marijuana supporters’ expectations. That success has had a lot to do with many decades of activists fighting for legalization state by state, combined with powerful political interests in America taking a can’t-beat-em-join-em approach to the popular substance. There are enormous profits to be made in weed and corporations are ready to do what they do best — acquire it, scale it, and mass distribute it into every CVS, Starbucks and Walmart on the planet.
The quarter end of 2019 brought the state of California revenue of $116.6 million through the taxation on the cannabis industry. The excisable amount figured $61.4 million, and tax on the cultivation of cannabis generated revenue of $16.8 million. The sales tax alone generated an income of $38.4 million, meaning that the sales of marijuana amounted to $409.3 million alone in Q1.
However, since the sale of medicinal marijuana is tax exempt, around 40% (as per analysts’ consensus) of the total sales do not contribute to this income. This means that the actual sale of cannabis in the first quarter amounted to over $680 million in California itself.
Thousands of marijuana businesses have left California since the Golden State industry’s 2018 pivot from a 20-year gray market into one of the most highly regulated MJ business landscapes in the United States.
Reasons for the exodus vary, ranging from a company’s inability to obtain local or state licenses to not having enough money to comply with costly state regulations. In a nutshell, the biggest marijuana space in the world hasn’t been a business-friendly environment. (In fact, California lawmakers are trying to legislate ways to correct the situation.)
Despite a recent chorus of skepticism, New York legislators are mounting a final bid for an adult-use cannabis bill before the current legislative session ends on June 19. Last Friday, a group of State Senators unveiled Bill 1527A, which aims to merge the progressive Marijuana Regulation and Taxation Act (MRTA)—which has been introduced several times since 2013—with the legislation that failed to pass as part of this fiscal year’s budget.
Although Governor Cuomo has recently stated that he won’t use his political clout to persuade on-the-fence lawmakers to support the bill, the bill’s compromises may be enough to convince him to “twist arms.” 1527A presents a sort of final shot at legalization for the moment; if it fails to pass, it’s unlikely that legislators will have another stab at cannabis for at least two years.
Customers making the trek from nearby New York are responsible for as much as 50% of recreational marijuana sales so far in Massachusetts, according to reporting by Crain’s New York Business. In Great Barrington, a town on Massachusetts’ western edge that’s only a one-hour drive from Albany and less than three hours from New York City, Theory Wellness has hit $11 million in sales in five months. About half of those sales are credited to New Yorkers.
“You see folks from New York City doing aggressive carpooling, with four or five people packed into a (vehicle),” Theory CEO Brandon Pollock told Crain’s.
Some Republican senators say there is a chance that Sen. Mike Crapo (R-ID), who chairs the Senate Banking Committee, will schedule legislation aimed at increasing marijuana businesses’ access to financial services for a hearing in his panel if it passes the House of Representatives.
Sens. Kevin Cramer (R-ND) and Rand Paul (R-KY) both told Marijuana Moment they discussed the cannabis banking legislation with Crapo and are hopeful he will bring the bill forward.
“I’ve talked with Senator Crapo about it,” said Sen. Paul. “I think there’s a good chance they’re going to bring it up.”
Sales of medical marijuana in Arkansas are off to a strong start, with patients purchasing more than 50 pounds of cannabis in nearly 5,000 transactions in the first week dispensaries were open. The initial sales eclipsed those in Ohio, which has nearly four times the population.
With sales underway, the Arkansas market could grow at a rapid clip, with several new dispensaries expected to open next month, more patients likely to register for MMJ identification cards, and new license types designed to create more business opportunities.
The Arizona medical marijuana community and business industry can finally exhale: The state Supreme Court decided a crucial appeal on Tuesday by siding 7-0 with patients and state voters on marijuana resin extracts.
Parties in the case of State of Arizona v. Rodney Christopher Jones received word just after 10 a.m. on Tuesday that Jones had won his appeal.
“We hold that [Arizona Medical Marijuana Act’s] definition of marijuana includes both its dried-leaf/flower form and extracted resin, including hashish,” the court stated in its unanimous ruling.
The Transportation Security Administration (TSA) updated its policy on cannabis over the Memorial Day weekend, changing the medical marijuana section of its “What Can I Bring?” webpage from reading “no” to “yes” (with “special instructions”).
Specifically, the agency is clarifying that hemp-derived CBD products may now be carried on planes under certain circumstances.
California legislators advanced a bill that would increase the number of marijuana retail licenses in the state by requiring some cities and counties that have banned commercial cannabis to open their doors to the industry.
Assembly Bill 1356, which was amended in committee last week, would require local jurisdictions where more than 50% of voters supported the state’s 2016 adult-use marijuana law to:
The CBD market in Europe faces a challenge that would look familiar to many U.S. producers: Its popularity is on the rise, despite lack of clear rules and industrywide standards.
For consumers, this means legitimate products can often be found right next to others with significantly less CBD than advertised or with potentially harmful contaminants.
Bulgaria has issued its first authorization for a company to sell hemp-derived cannabidiol or CBD, products freely, in open markets.
According to official documents procured exclusively, Bulgaria’s Ministry of Agriculture, Food and Forestry, and the Bulgarian Food Safety Agency, have issued a Free Certificate of Sale for a series of products containing CBD. The products, produced by Kannaway, a subsidiary of publicly traded cannabis company Medical Marijuana Inc. (OTC: MJNA), are now certified to “comply fully with relevant requirements of the Law on Foodstuffs of Republic of Bulgaria and of Regulation (EC) No 852/2004 of European Parliament and the Council on the hygiene of foodstuffs.”
Breath of Life International Ltd. (BOL), Israel’s largest medical cannabis producer, has filed a preliminary prospectus for a proposed initial public offering of shares on the Toronto Stock Exchange (TSX).
The move will make the company, also known as BOL Pharma, the first Israeli medical cannabis firm to list its shares on the TSX. Kalytera Therapeutics Inc., also an Israeli medical cannabis firm, has shares listed on the TSX Venture Exchange, Canada’s public venture capital exchange for emerging companies.
On Thursday (23 May), the Department of Health published an update on regulations surrounding cannabis in South Africa, effectively deregulating certain components of the plant.
The cannabis plant comprises two main compounds – Tetrahydrocannabinol (THC) and Cannabidiol (CBD). THC is considered to be the psychoactive component of cannabis, whereas CBD is not associated with psychoactive outcomes.
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