Trump Attorney General Nominee Won’t Go After Legal Marijuana Businesses and Urges Congress to Act: At his confirmation hearing on Tuesday, attorney general nominee William Barr said he would not go after marijuana companies that have operated in compliance with earlier Justice Department Cole Memorandum guidance that was rescinded last year by his predecessor, Jeff Sessions. He also encouraged Congress to address the conflict between federal and state cannabis policies. “My approach to this would be not to upset settled expectations and the reliant interests that have arisen as a result of the Cole memorandum,” Barr said, referring to a memo on federal marijuana enforcement priorities that Sessions revoked in early 2018. “However, I think the current situation is untenable and really has to be addressed. It’s almost like a backdoor nullification of federal law.” Marijuana Moment
Ontario Announces Cannabis Retail Licence Winners: Businesses and investors are rushing to partner with the 25 winners of the Ontario cannabis retail licence lottery, with offers apparently worth millions of dollars, to be involved in the province’s first recreational weed stores set to open this spring. The Alcohol and Gaming Commission of Ontario announced late Friday the 25 entities who can now apply for a cannabis retail licence in Canada’s most populous province, out of the 17,320 expressions of interest the government agency received. There were no big cannabis industry names among the 25 winners, who now have five business days to turn in their applications to the AGCO If their applications are successful, they will have the opportunity to open the first 25 recreational pot stores on April 1 in Ontario, where cannabis consumers now can only legally purchase weed from a government-run website. www.cbc.ca
Illinois Governor Pledges to Legalize Marijuana in Inaugural Address: Newly sworn-in Illinois Gov. J.B. Pritzker (D) confirmed in his inaugural address on Monday that he plans to make good on a campaign promise to legalize marijuana. “In the interests of keeping the public safe from harm, expanding true justice in our criminal justice system, and advancing economic inclusion, I will work with the legislature to legalize, tax and regulate the sale of recreational cannabis in Illinois,” Pritzker said in remarks shortly after taking the oath of office. A recent study found that legalization would create 24,000 jobs in Illinois, as well as generate more than $500 million in tax revenue and infuse about $1 billion into the state economy overall by 2020. www.marijuanamoment.net
Legal Cannabis Could Skim $55 Billion Per Year from Alcohol, Tobacco Firms: Global alcohol and tobacco companies could face losses of $55 billion a year if a fully legal cannabis develops in North America, a new report predicts, a key driver for why they’re looking to move into the blooming marijuana market. David Kideckel, managing director of Altacorp’s life sciences division and author of the report, told Marijuana Business Daily that more CPG heavyweights will enter the sector as they get clarity over when the U.S. will move to legalize medical or recreational cannabis on a federal level. This includes nonalcoholic beverages, nutritional and wellness supplements, personal care and Big Pharma. Other key takeaways from the report:
- Canadian recreational cannabis market could reach CA$9.1 billion in annual sales by 2025, with an additional CA$1 billion in medical sales.
- The uptake of legal demand in Canada is likely to be slower than expected, stemming from bottlenecks with access to legal supply, lack of different product formats and restrictions on branding and marketing.
- The market could be oversupplied by late 2020, once licensed producers build out their projects.
- The majority of the margin will accrue to firms that focus on value-added activities, particularly those that focus on developing intellectual property around brands and formulations, unique technologies and building share of the retail channels. com
Cuomo: Let Cities Opt out of Cannabis Shops if NY Legalizes: New York Gov. Andrew Cuomo Speaking on public radio Monday, the Democratic governor says that if legalization moves ahead he believes local governments should have the power to prohibit retail cannabis shops within their boundaries. Cuomo also said he wants to prohibit anyone under 21 from buying legal weed, mirroring the rules for alcohol. While there’s broad support for legalizing marijuana in New York, there’s no consensus yet on the details, such as tax rates, licensing rules or the number of retail shops that would be allowed. www.leafly.com
Medical Marijuana Bill: South Carolina Lawmakers Try Again: South Carolina lawmakers are once again introducing legislation to legalize marijuana for treatment of critically ill patients in the state, making another go at a debate that has gradually made progress in this deeply red state in recent years. Sen. Tom Davis, a Republican from Beaufort, told The Associated Press that he plans on Tuesday to file the Compassionate Care Act in the state Senate. In the House, Republican Rep. Peter McCoy of Charleston is sponsoring similar legislation. If it succeeds, South Carolina’s measure would be among the most restrictive in the country. Making it explicitly illegal to smoke medical marijuana, the proposal also lays out several requirements for prescribing physicians and operators of medical cannabis dispensaries and also specifies a list of illnesses to which it could be applicable, including cancer, multiple sclerosis, epilepsy, post-traumatic stress disorder and multiple sclerosis. www.newsobserver.com
Critics Call Them ‘Kickbacks’: Pot Producers Paying Millions in Fees to Cannabis Clinics for Patient-Customers: Some in the industry call them “referral fees,” others “educational grants.” To at least one bioethicist, they are simply kickbacks. Licensed producers of medical cannabis are paying millions of dollars to cannabis clinics across the US in exchange for patients who register their marijuana prescriptions with the companies, corporate documents and interviews reveal. When someone files their prescription with a producer, that company usually pays the clinic 15 to 20 per cent of the cost of each dose of cannabis the patient buys over time, report insiders. Health-policy and medical-ethics experts argue the payments still make it near-impossible for health professionals to put the patient’s interests first. Specialty clinics assess patients and issue “authorizations” for marijuana, then often help the patient register that prescription with a particular producer, typically one of those contracted with the facility. The then-CEO of Tilray complained in 2015 about clinics and doctors who were starting to demand referral fees, saying it “taints the whole industry.” nationalpost.com
European Union Laying Groundwork for Legalizing Medical Marijuana: Health committee politicians in the European Parliament, the EU’s directly elected legislative, voted in late 2018 to approve a draft resolution on the use of cannabis for medicinal purposes, and now the proposals will head to the bloc’s executive to be turned into a concrete proposal. The file has been added to the work in progress’ calendar, and from January 14 EU officials will begin a formal study of the potential clinical benefits of medicinal cannabis and cannabis-derived medicines, and how they are available to patients across Europe. Europe’s cannabis industry is predicted to be worth €115.7bn (US$132bn) by 2028, making it the world’s largest legal marijuana market. A patchwork of domestic regulations means the EU could not legalize cannabis in one fell swoop, but it can lay down a set of guidelines that each country transposes into domestic law. thefreshtoast.com
Marijuana Legalization Bills Already Filed In Half A Dozen Red States For 2019 Sessions: Marijuana legalization bills have been introduced in at least six traditionally conservative states so far for 2019 sessions. On Wednesday, Kentucky and West Virginia put forward pieces of legalization legislation. Legislatures in Indiana, Missouri, Texas and Virginia could also vote on legalization bills that have already been introduced this year. While marijuana reform is an increasingly bipartisan issue, there are various obstacles lawmakers will have to overcome—such as anti-legalization governors in some states. On the same day that Sen. Richard Ojeda (D) introduced his bill to allow adults 21 and older to consume, possess, and cultivate cannabis for personal use, Gov. Jim Justice (R) emphasized that he is “adamantly, adamantly, etched-in-stone, adamantly against recreational marijuana” during a State of the State address. In Kentucky, Sen. Dan Seum (R) also filed legislation to fully legalize cannabis in the state on Wednesday. Seum said the state could collect tax revenue, address racial disparities in marijuana enforcement and reduce overcrowding in jails under his bill. He also remarked that Kentucky “grows the best” and has a unique agricultural landscape that would allow the state to “double up on this revenue.” Virginia lawmakers put forward legalization legislation—Gov. Ralph Northam (D) reiterated his support for the more modest step of decriminalization on Wednesday, saying the policy would “ease overcrowding in our jails and prisons, and free up our law enforcement and court resources for offenses that are a true threat to public safety.” Missouri Rep. Brandon Ellington (D) wasted no time pushing for full legalization, pre-filing a bill in early December that would legalize possession, use and cultivation of marijuana. In Texas, a proposed constitutional amendment to legalize cannabis was among multiple marijuana-related pieces of legislation that were pre-filed before the formal start of the session. And New Jersey lawmakers are also considering several marijuana legalization bills, including one that was approved by legislative committees late last year. Marijuana Moment
How Legalized Cannabis Changed Colorado in the Past Five Years: The 5-year experiment that is Colorado’s pioneering legalization of recreational marijuana now has enough data for more than conjecture to debate its success. The state’s first dispensaries began legal recreational sales on January 1, 2014. In 2014, combined recreational and medical sales totaled $683.5 million, and are expected to top $1.5 billion in 2018. Over the 5-year period, recreational sales generated 78% of sales revenue. The most recently published sales data shows combined 2018 sales through October of $1.27 billion. Tax revenues jumped 266% during the period, from $67 million in 2014 to $247.4 million in 2017. Colorado’s tax revenues have risen each year since recreational legalization, and currently, represent about 1% of the state’s 2018 – 2019 fiscal year budget. The number of marijuana-related arrests during the 5-year period, shows overall arrests decreased, including for African-Americans, though African-Americans were arrested for such offenses at double the rate of whites. DUI traffic citations with marijuana-impaired drivers increased 3%. In a subset of arrest data from 2016, where blood tests were performed, 73% returned a positive screen for cannabinoids. “The number of fatalities with cannabinoid‐only or cannabinoid‐in‐combination positive drivers increased 153%, from 55 in 2013 to 139 in 2017,” the report states, going on to note that “detection of cannabinoid in blood is not an indicator of impairment but only indicates presence in the system.” Fatal traffic accidents involving a THC-positive driver, on the other hand, decreased 5%. Marijuana-related hospitalizations, including possible marijuana exposures, diagnoses, or billing codes, increased from 575 in 2000 to 3,517 in 2016. The good news from the social impact findings include an increase in Colorado’s high school graduation rates, along with no change in the number of middle school and high school students reporting marijuana use. Court filings related to marijuana declined 55% between from 11,753 in 2012 to 5,288 in 2017, according to the report. While marijuana traffic citations increased, the total number of DUI citations decreased from 5,705 in 2014 to 4,849 in 2017. Adults who reported using marijuana within the past 30 days increased 2%. The number of men who reported use within 30 days — 19.8% — was nearly double that of women — 11%. finance.yahoo.com
Cannabis Companies Struggle to Become More Sustainable: Because cannabis production and consumption have been illegal for nearly a century, there is limited data to support the design of best practices for the industry. Unlike other valuable agricultural crops, there has been virtually no publicly-funded research on how to produce cannabis most effectively and efficiently, nor which of the various cultivation methods has the smallest carbon footprint. Some current building and energy codes force indoor growers to use more energy than necessary with requirements that can be damaging to plants unless they use high-energy consumption mitigators. Indoor cultivation uses the least amount of water, a boon for water-poor states such as California. But it’s also the most energy-intensive growing method. For example, even before legalization, 1% of all electricity used in the entire United States was consumed by cannabis. Today, almost 4% of Denver’s total electricity usage can be attributed to the crop. But that energy use in part is the result of residential and commercial building codes which haven’t considered cannabis’ unique requirements. Codes that maximize insulation requirements and are designed to improve HVAC efficiency increase the need for air filtration and dehumidification for indoor growers, leading to increased energy consumption. Many cannabis companies are doing their best to reduce their carbon footprint while continuing to meet local regulations, here’s what they are doing:
- Some are switching to more efficient and ecologically sound methods, including LED lighting, solar power and water reclamation systems.
- State-of-the art greenhouses, that rely on technology to control everything from the amount and intensity of light to the ambient temperature and moisture level, are also helping with sustainability at the plant level.
- Packaging changes. To date, state regulators have been concerned with a contaminant-free supply chain, appropriate labeling and keeping cannabis products out of the hands of children. That’s led to state laws, such as one in Washington state, that mandates requirements such as every product being individually wrapped. So, multi-serving packages of edibles and concentrates must have each serving be self-contained. Bottles with liquid products must provide serving cups, such as those found with cough syrup, instead of simple hash marks on the bottle. Los Angeles mandates that so-called “exit bags” for edibles be made of unrecyclable Mylar.
- Industry groups and producers are hoping technology in the form of QR codes, a type of matrix barcode which can be read by smartphones and stores URLs and other information, can help.
- Cannabis industry groups are taking the lead on sustainability, recommending the creation of packaging recycling programs, which offer small discounts to customers for returning bags and containers.
They’re also searching for ways to incentivize producers and processors to switch to sustainable containers, including biodegradable hemp plastic. www.forbes.com
Arizona Supreme Court Agrees to Review Legality of Medical-Marijuana Extracts: The Arizona Supreme Court will review the legality of medical-marijuana concentrates in the state, the court decided on Tuesday. The medical-marijuana community has been on edge over the issue since June, when the state court of appeals ruled 2-1 that THC-bearing resin from marijuana plants, and the products that contain it, were not protected by the 2010 Arizona Medical Marijuana Act. Now, the state’s highest court will decide the issue. Oral arguments will likely come by March, Keenan said. In the meantime, the Supreme Court has instructed the parties to file supplemental briefs in the case on or before January 28. Amicus briefs, which anyone can send, are due by February 11, with responses due 10 days later. It’ll be a few months before the court releases a decision. www.phoenixnewtimes.com
Surgeon General Believes It’s High Time For Marijuana Reclassification: At the close of 2018, the U.S. Surgeon General Jerome Adams made a bold move and called on the federal government to rethink marijuana’s classification as a Schedule I substance. While the Surgeon General did not go so far as to condone legalization for recreational use, he did say that medically, marijuana should be studied like any other pain relief drug and that both health and criminal justice policies need to be re-examined as they pertain to cannabis drug classification. While the Surgeon General is right in his position on medical research, the move would serve other purposes as well. The change he proposed could be significant for justice system reforms and an economic triumph for the U.S. His belief– and that of researchers around the world– is that the current U.S. classification of marijuana inhibits research for medical advancements that include cannabis and cannabinoids, with the U.S. falling behind in both knowledge and financing. Not only are countries such as China and Israel lapping the U.S. in medical innovations and research, but G7 countries like Canada are earning billions of dollars by having legalized cannabis. For example, in the latter six months of 2018, Canada’s market has run wild with IPOs, including American-based cannabis companies flooding the market www.forbes.com
Cities Across Michigan Ban Legal Marijuana Sales: Since the passage of Proposition 1, officially known as the Michigan Regulation and Taxation of Marihuana Act, which legalized the sale, possession, consumption and cultivation of marijuana for adults 21 and up last November, members of Michigan NORML have encountered a new challenge: municipal opt-out. Similar to other states that have legalized adult-use marijuana like Colorado, California and Oregon, it’s up to municipal governments in Michigan to decide if legal marijuana businesses can operate within their communities. To date, more than 80 municipalities in Michigan have imposed moratoriums or outright bans on the sale of adult-use marijuana. In some cases, like with the city of Troy where residents opposed Proposition 1, it’s due to a lack of support for legal marijuana. In other cities, municipal governments are simply waiting until they have a better understanding of how the new law will be implemented by state lawmakers before exploring rules and regulations for local licensing. blog.norml.org
Democratic Donor Among 6 Given Go-Ahead for New Cannabis Dispensaries: A company owned by a major donor to New Jersey Gov. Phil Murphy (D) was awarded one of the state’s new medical cannabis dispensary licenses. Cannabis Executive Elizabeth Stavola contributed more than $35,000 to Gov. Phil Murphy and the New Jersey Democratic State Committee in the months before receiving conditional approval from the Department of Health to open a medical marijuana dispensary in Atlantic City. Stavola, a New Jersey resident and COO of the publicly-traded Canadian cannabis company MPX Bioceutical, contributed $4,300 to Murphy’s campaign committee on Oct. 10, 2017, according to filings with the New Jersey Election Law Enforcement Commission. Two days prior to that, she cut a separate check for $6,000 to the Democratic State Committee, whose chairman is Murphy ally, John Currie. Politico
State Board of Medical Examiners Temporarily Suspends License of Physician Who Allegedly Indiscriminately Authorized Medicinal Marijuana for Thousands of Patients: NJ Attorney General Gurbir S. Grewal and the Division of Consumer Affairs announced today that the State Board of Medical Examiners (“the Board”) has temporarily suspended the license of a physician participating in the State’s Medicinal Marijuana Program (“MMP”) amid allegations he created a multimillion-dollar enterprise by indiscriminately authorizing marijuana use for thousands of patients he met in hotel conference centers across the state. Dr. Anthony Anzalone, 66, who has been a registered participant in the MMP since 2012, must wind down his medical practice within the next 30 days and cease practicing medicine altogether on February 8, under the terms of an Interim Consent Order he entered with the Board on Wednesday. His license will remain temporarily suspended until the allegations against him are resolved. NJ.gov
New Congressional Bill Would Enshrine Rescinded Marijuana Memo Into Federal Law: Rep. Lou Correa (D-CA) and a bipartisan group of cosponsors filed the fourth marijuana bill of the new Congress. The proposal would essentially enshrine into federal law the Cole Memo on cannabis enforcement that then-U.S. Attorney General Jeff Sessions rescinded last year. Marijuana Moment
Fla. Governor Will Make Decision on Medical Marijuana Appeal: Soon Florida Governor Ron DeSantis has signaled he may drop appeal after a Tallahassee circuit judge agreed with a lawsuit filed by Orlando lawyer John Morgan. The lawsuit claims a 2017 law is unconstitutional because it doesn’t allow medical marijuana to be smoked. The state’s stance is that the constitutional amendment approved by voters in 2016 does not explicitly allow smoking and there are other methods of consumption. The governor said he will make moves on the state’s pending appeals to medical cannabis regulation lawsuits “probably within a week or two.” Wfsu.org
Federal Officials Recognize How Marijuana’s Legal Status Blocks Research, Documents Show: Federal officials with the National Institute on Drug Abuse and other agencies openly acknowledged the barriers that cannabis’s restrictive Schedule I status places on scientific research at an event last month, presentation materials obtained by Marijuana Moment show. NIDA’s director of the division of extramural research, Dr. Susan Weiss, included a slide in her presentation that laid out administrative and scientific “cannabis research barriers.” On the administrative level, that includes the “complex and lengthy registration process” required for researchers interested in studying the plant, the lack of alternative sources for research-grade marijuana and the ongoing Schedule I status of “non-intoxicating components of cannabis” such as CBD. Dr. Emmeline Edwards, the director of the division of extramural research for NCCIH, echoed some of those points in her presentation. “Despite marijuana being ‘legal’ in some states, the federal government has not legalized cannabis and continues to enforce restrictive policies and regulations,” one slide states. Edwards also discussed marijuana’s Schedule I status and the limited supply of research-grade cannabis from NIDA, which does “not sufficiently reflect the variety of products used by consumers.” Marijuana Moment
Multistate Cannabis Operators Rapidly Expanding into New Markets: The fragmented, state-by-state nature of the marijuana industry historically has been dominated by small, local players, but larger, publicly traded companies with operations in multiple states are becoming an increasingly prevalent force. Rapid consolidation and expansion among cannabis companies dominated 2018 with more than 300 mergers and acquisitions and a rash of reverse takeovers that allowed U.S. companies to go public in Canada, where marijuana is federally legal.
These Multistate Operators (MSOs) Tend to Consider:
- Tightly controlled markets with limited license availability. States such as Arizona, Florida, Connecticut, Maryland and North Dakota are prime for MSO expansion because of high barriers to entry and limited competition.
- States that have – or are expected to have – both medical marijuana and adult use. Markets such as Massachusetts and Nevada gave existing MMJ businesses first crack at recreational licenses, a model that will soon be implemented in Michigan (expected to exceed $1 billion in sales) and could very well be carried out in other states in the near future.
- States that are on the speculative end of the spectrum, such as Iowa (whose financial viability is under question), CBD-only Virginia and highly competitive Oklahoma (which has some of the lowest barriers to entry in the U.S.)
Here’s What Else You Need to Know About These Multistate Operators:
- Curaleaf (CSE: CURA) (OTCPK: CURLF) operates in 11 states including 42 dispensaries, 12 cultivation facilities and 10 processing facilities. Curaleaf’s Jan. 9 market capitalization was $2.6 billion.
- Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) operates in 11 states with 12 manufacturing licenses and 85 dispensaries. As of Jan. 9, GTI had a market cap of $1.8 billion.
- MedMen (CSE: MMEN) (OTCQX: MMNFF) is preparing to close its acquisition of PharmaCann this month, at which point the company will have a footprint of 12 states through 16 cultivation and processing facilities and 76 retail stores. MedMen had a market cap of $1.5 billion as of Jan. 9.
- Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) has the largest footprint of MSOs in the U.S., operating 15 cultivation facilities and 78 dispensaries in 19 states. Acreage had a market cap of $1.3 billion.
- With the smallest state footprint of companies on this list, Trulieve (CSE: TRUL) (OTCPK: TCNNF) is in only three states but operates 23 dispensaries in Florida alone. The company recently acquired operations in California and Massachusetts. As of Jan. 9, Trulieve had a market cap of $994 million. com
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