Connecticut Gov. Signs Legalization Bill Into Law

6/22/2021

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Connecticut Gov. Ned Lamont (D) signed the state’s cannabis legalization bill into law today, closing out a multi-year effort by pro-cannabis advocates and lawmakers.

Under the new law, adults aged 21 or older will be allowed to use and possess cannabis starting July 1. Legal purchases and possession will be capped at one and a half ounces on someone’s person but up to five ounces can be legally stored at home or in a vehicle’s trunk or glove box. Regulated cannabis sales are not expected to roll out until May 2022.

During the signing ceremony, the governor said the bill was public health- and equity-focused.

“People have been working on this for 10 years. It’s been a long time coming. I think we have a good bill that puts public health first.” — Gov. Lamont, during the bill’s signing ceremony

The law was approved last Thursday during a special session after House lawmakers failed to take up the Senate-approved legalization bill in the final days of the legislative session. In a twist of irony, Connecticut’s legalization bill was formally approved by lawmakers on the 50th anniversary of President Richard Nixon’s declaration of the drug war.

With the signing, Connecticut is officially the fifth state to legalize adult-use cannabis in 2021, following in the footsteps of New Jersey, New York, New Mexico, and Virginia. Additionally, New Hampshire and Rhode Island are now the only remaining New England states that have not yet adopted the reforms.

 

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Former Eaze Consultants Sentenced to Prison

6/22/2021

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Two former consultants for cannabis delivery and technology company, Eaze, who were found guilty of defrauding banks into processing more than $150 million in cannabis purchases, will each serve more than a year in prison.

U.S. District Judge Jed Rakoff last week sentenced Hamid Akhavan, who is described as the leader of the scheme, to 2 ½ years in federal prison along with a $100,000 fine. Rakoff also sentenced Ruben Weigard, a co-conspirator, to 15 months in prison and a $50,000 fine. Both men were also ordered to pay more than $17.5 million in restitution.

Former Eaze CEO Jim Patterson last year pleaded guilty to his role in the scheme. Eaze was never charged with any crimes and cooperated with the federal investigation which found the consultants used shell companies and fake websites to hide cannabis sales as shipments of dog food, beauty products, beverages, and diving gear from 2016 to 2019. Akhavan and Weigard argued that the banks knew they were processing credit card transactions for cannabis but looked the other way.

In a press release, Manhattan U.S. Attorney Audrey Strauss described the crime as an “elaborate web of lies to deceive U.S. banks and credit card companies into processing more than $150 million in marijuana transactions, in violation of those institutions’ strict policies against such payments.”

“This massive fraud undermined the fundamental integrity of the U.S. financial system, which relies on banks’ ability to identify the nature of the transactions they process. Now Akhavan and Weigand have rightly been sentenced to prison for their crimes.”—Strauss in a statement

Despite cannabis being legalized either for medical or adult-use throughout most of the U.S., it remains federally outlawed and cannabis companies often do not have access to traditional financial services, including banking and credit card processors.

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Study: Cannabis Use Among U.S. Veterans Climbs 3%

6/22/2021

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The number of U.S. military veterans using cannabis jumped from 9% in 2014 to 12% last year, according to a study published in the journal Addictive Behaviors. The data for the study came from the 2019-2020 National Health and Resilience in Veterans Study, which included 4,069 respondents.

The researchers—from the University of California, San Diego and Yale University’s National Center for PTSD—found that of the veterans who reported using cannabis within the last six months, just 1.5% were enrolled in a state-approved medical cannabis program, and 2.7% screened positive for cannabis use disorder. Combat veterans, Black veterans, and those with physical disabilities were most likely to be enrolled in a medical cannabis program.

The federal agency that runs the healthcare system for veterans, Veteran Affairs (VA), does not recommend cannabis to patients at agency-run hospitals as it remains outlawed federally. In April, a bipartisan group of members of Congress introduced the Veterans Medical Marijuana Safe Harbor Act which would temporarily legalize medical cannabis possession for U.S. combat veterans at the federal level, if recommended by a doctor and allow VA physicians to recommend cannabis in states where it is legalized for medical use.

That bill was referred to the House committees on Energy and Commerce, Judiciary, and Veterans’ Affairs in April but has not yet received a hearing.

Last year, the Veterans’ Affairs Committee approved a different bill that would allow VA doctors to recommend medical cannabis in states where it is legal; however, that bill was not voted on in either chamber of Congress.

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Western Illinois University Graduates First Cannabis & Culture Minor

6/22/2021

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The first of five Western Illinois University students with a minor in Cannabis & Culture was part of the school’s spring 2021 graduating class. The interdisciplinary minor—so far, the only one in the nation—focuses on social justice issues related to cannabis use and the cannabis industry.

There are four other current students minoring in Cannabis & Culture.

Alison Coats said the minor taught her about the medical efficacy of cannabis and about the story of Charlotte Figi, the girl with Dravet Syndrome who became a leading figure in the CBD movement and the namesake of the ‘Charlotte’s Web’ strain. Figi died last year amid the coronavirus pandemic from, what her family described as, COVID-like symptoms.

“She even changed the mind of Dr. Sanjay Gupta (from CNN) about the medical and moral obligations our society has to allow people to use cannabis to treat certain illnesses.”—Coats in a statement

The interdisciplinary minor is comprised of courses from anthropology, botany, history, liberal arts and sciences, philosophy, religious studies, English, and political science, WIU said in a press release. It includes such courses as Cannabis Culture, Religion & Drugs, Contemporary Moral Problems, History of Drugs, Introduction to Public Policy, and Ethno-botany, among others.

WIU Religious Studies and Liberal Arts and Sciences Professor and co-creator of the minor, Sarah Haynes, said the program “provides a solid foundation for understanding the socio-cultural, historical, and politics of cannabis use in the U.S. and around the world.”

An online version of the class will begin in the Fall and students who take the minor along with at least one religious class may be eligible for a $1,000 per semester Mary Olive Woods Scholarship.

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Study: New Cannabis Users Are Young Women

6/22/2021

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A new study by cannabis research firm Brightfield Group suggests that half of new cannabis users are consuming five or more times a week with 22% consuming more than once a day, according to the U.S. Cannabis Consumer Trends Report outlined by Forbes.

Although the research shows women are younger and heavier users than men, the numbers differ by region. In Michigan, 59% of new cannabis consumers were women, while that figure was 43% in California. Accompanying the increase in women purchasers, 6% of 2020 cannabis consumers were new users and a substantial 22% were Gen Zers, Forbes reports.

Jamie Schau, senior insights manager at Brightfield Group, believes the numbers show adult-use cannabis’s “normalization, increase in popularity and diversity.”

“This is an important departure from the classic cannabis consumer profile and those participating in the space will benefit from adapting to the evolving marketplace.” — Jamie Schau via Forbes

Brightfield predicts the next milestone in the ongoing cannabis movement will be the SAFE Banking Act, which will make it legal for banks to work with cannabis businesses without fear of prosecution. However, the study does throw some shade on the new numbers by highlighting the federal path to legalization—despite the Democrats gaining control of the presidency and Congress—will continue to be “incremental” due to the federal government’s “awkward” walk toward decriminalization.

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Kenneth Mason: Business Analysis & Accounting for Cannabis Startups

6/21/2021

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Expert business analysis and accounting services are vital when launching and scaling a business, especially in the cannabis industry.

We recently asked Kenneth about money management in the cannabis space and how Equibis works to help small businesses navigate potential financial pitfalls and find success even without enormous backing capital. This Q&A also covers the biggest challenges facing cannabis industry startups, Kenneth’s work to facilitate diversity in the cannabis space, the unique financial challenges for social equity entrepreneurs and others from underserved communities, his best advice for cannabis startups, and more.

Scroll down to read the full interview!

Ganjapreneur: After years of experience in finance and accounting, what drew you to working with cannabis entrepreneurs?

Kenneth Mason: I think what you will find with a lot of folks is our personal connections. I’ve had family locked up, family caught in violence surrounding the cannabis. My first time consuming was at about 12/13. I grew up on the south side of Chicago and quite honestly weed has always been a part of everyday living. Going through school and eventually becoming a CPA, I left the world of auditing to start my own business work with small businesses in what I call underserved communities. Most of the companies do not have access to high level CFOs and strategic business advisors. So my heart became set on providing this type of impact on these businesses from communities that I grew up in. As I became more cemented in the community, I began joining social justice initiatives surrounding cannabis. and I quickly saw a need from a business perspective. I immediately began doing my research, learninig, and helping out cannabis companies that I eventually built relationships with.

What is the biggest challenge facing cannabis businesses when it comes to accounting and finance?

By now, I imagine everyone knows that my significant hurdle is 280e. It’s a part of the Internal Revenue Tax Code. To sum it up as simply as possible, a cannabis company cannot take any tax deductions from their gross income. Quick example of how devastating this tax code is. Say a company brings in $100,000 in revenue and has expenses of $99,000 from paying for rent, marketing, employees like an office manager, etc. You only have $1,000 in profit. The IRS says you cannot deduct marketing, certain salaries, etc because cannabis is still a federally illegal drug. The average business gets taxed on the $1,000 profit whereas the cannabis company can easily get taxed on an amount closer to the $100,000 of revenue it brought in. How can a business pay 25% percent on $100,000 which is $25,000 when they only made $1,000 in profit?

For a cannabis startup, how does the experience of working with Equibis differ from working with other accounting services?

Most accounting firms give you the basic bookkeeping and tax work. Some provide audit services. Those are things you are required to have. But, the reality is that getting your taxes done for you at the end of the year won’t make your business successful. It won’t help you reach your financial goals or create a financial plan. What makes Equibis stand out is our focus on guiding your business every step of the way to reaching your revenue goals, profit goals, short term and long term planning goals and much more. I often ask new startups, how much cash do you plan to have by the end of next month? Next year? I have yet to get an actual answer. We don’t simply look at what happened last year or last month. The value we provide comes from our ability to plan for the future, to show you where your business is headed as of right now and what needs to happen in order to be more successful next month. By looking ahead we are also able to avoid the hair on fire crisis mode that most businesses operate with. When my team is able to show you, “Hey two months from now we’re projecting the business to have negative cash flow, let’s push the purchase of the new machine a couple of weeks when we’d have more cash come it”, we help keep the doors open.

Do you serve clients in other markets and regions, or do you primarily stay local to Chicago/Illinois?

Equibis is a 100% virtual firm. We serve nation-wide. We do, however, like to pop in a couple times a year, that’s always fun.

What is the “profit-first model” and how does it play into the services that Equibis offers?

The goal of every business is to be profitable. Every business owner deserves to have their business take care of them financially. So, profit is typically our main priority. It’s simple really. If you aren’t profitable, the business fails. So we help make business decisions with the perspective of how it affects short term and long term profitability.

What are some of the services you offer to underserved communities, and how did this become part of the Equibis mission?

Most of these businesses cannot afford a CFO that can easily run up to $100k to $200k a year. We provide a lot of the services you would typically find with a corporate CFO. We lead the finance department. We look at pricing strategy, cost analysis, employee performance plans, tax planning, employee benefits, all of these things and make sure it’s done correctly and also in a way that the company is still profitable today and tomorrow.

Why is it essential for social equity applicants and other underserved small businesses in the cannabis industry to have financial representation?

Many people start businesses or get into the cannabis industry because of their passions for these things. Unfortunately, passion isn’t enough to run a successful business. Having a company that understand many of the struggles you will face not only from a business perspective but a social and a personal perspective, allows you to work with people you can trust.

Do the financial challenges facing social equity applicants differ from those facing MSOs and other larger operators?

In short yes, most social equity applicants do not have the capital to fund their ventures on their own. I believe that’s why you see the different states attempting to pass bills that would support these applicants financially and operationally. It’s no question social equity applicants deserve many seats at the table, but they also deserve the support to sustain those positions. Large operators have the funding to not only finance their ventures, but to also survive unforeseen events like a pandemic or waiting for licenses to be given. An example is in Illinois. Social equity applicants who did not have as much capital struggled with paying to hold their place on a lease in hopes of acquiring a license that the state had withheld for a year.

Are cannabis businesses at higher risk of being audited? How does working with Equibis lower this risk and/or help in the case of an audit?

Absolutely. An article came out from the IRS blatantly saying increased focus on auditing the cannabis industry is a better use of time because of the higher rate of these audits uncovering issues. It’s complicated. So we not only make sure cannabis companies are properly filing and paying their taxes, but that they are 100% audit ready. Part of working with us means that we set processes in place to cover our butts during any audit. What this also does is take away the stress from the owners. It ends us being passed audits with less involvement from the owners.

What are some of the additional benefits, beyond preparedness and avoiding costly mistakes, that cannabis startups can get out of a partnership with a financial advisor?

You will have a well-thought-out, structured plan on how to achieve all of your business goals and ultimately your goals for your life.

What are some common financial mistakes you see in the industry and how should cannabis companies address them?

Some common financial mistakes I see often are not having good standard operating procedures for cash or having a plan for how money moves within the company. With the standard operating procedures for cash, it’s critical to have good policies and procedures in place for prevention of theft, fraud and for being able to know where every single dollar is at all times. As far as the cash planning/management, smaller companies are not taking the necessary steps to be able to look at their cash position and say “this money is set aside for bills for the month, this amount is going to taxes, this for payroll, this is going to additional inventory. And at the end of the month, our cash balance should be $XXX”. They are spending without tracking and without having an idea of what type of position they’ll be in, in the future.

What’s your advice for entrepreneurs who are launching their first cannabis start-up?

Get your A team together, and make sure to have people with the skills to cover every important area of the business from compliance to finance to people management. Also, make it a priority to systematize and document everything as much as possible. Improving the system of how you operate and documenting it so that it is easily repeatable is necessary to scale and grow your business.

Thanks again, Kenneth, for answering our questions and sharing your expertise! To learn more about Kenneth Mason or Equibis, visit EquibisAccounting.com.

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Medical Cannabis Advocates and Conservatives Pushing Lawmakers for Gun Rights

6/21/2021

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Medical cannabis advocates and conservatives in Minnesota are lobbying state lawmakers during the special session to allow the state Department of Health to petition the federal government for an exemption to allow medical cannabis patients to own firearms, the Associated Press reports.

Under federal law, medical cannabis patients are barred from purchasing guns as the federal form required with purchases asks whether the applicant uses cannabis, and patients who say ‘no’ on the form are violating federal law.

If the bid is successful, Minnesota would be the first state with a medical cannabis program that would appeal directly to the federal government for gun rights on behalf of its enrollees.

Republican state Rep. Rod Hamilton, who is enrolled in the state’s medical cannabis program to treat symptoms of multiple sclerosis, was told he was unable to renew his gun permit due to his status as a medical cannabis patient—despite that he has never used his recommendation.

“In the eyes of the federal government, we’re all felons, and it’s just tragic.”—Hamilton to the AP

Hamilton is also the sponsor of a bill to make medical cannabis a Schedule 2 drug in the state which would allow patients to buy firearms and renew their permits.

“It needs to change at the federal level and here so people can legally get their gun permits renewed and so they can hunt with family and friends and not be in violation of the law,” he said in an interview with KSTP. “No one in the medical cannabis program wants to be in violation of the law.”

There are more than 43,000 medical cannabis patients in Minnesota and enrollee numbers are expected to climb after the lawmakers in May approved a measure to allow smokable products in the program.

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New Jersey Warns Five Companies Against Cannabis ‘Gifting’

6/21/2021

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New Jersey Attorney General Gurbir S. Grewal last week sent a warning letter to five businesses warning them to stop offering cannabis “gifts” with the purchase of snacks and other products. The cease-and-desist order informed the companies they are under investigation for violating the Consumer Fraud Act (CFA) on the grounds that the cannabis gifts are central to the sales transaction and are, therefore, not gifts at all.

In a statement, Gurbir said that when lawmakers legalized cannabis in February—following approval of the reforms by voters—they “made it clear they were creating a regulated market with restrictions on how that market operates.”

“Instead of waiting for those regulations to be established, some vendors have decided to move forward on their own, in ways that the law does not allow. Today we’re making it clear that we will not permit these entities to undermine the regulated cannabis marketplace the Legislature created or to compete unfairly with properly licensed cannabis businesses.”—Gurbir in a press release

In an interview with Breaking AC, Sky High Munchies Owner Gary Bozzini called Gurbir’s letter “a scare tactic.”

Andrew Nestoras, of Sky High, said that by not implementing an adult-use market immediately, lawmakers “left a void.”

“And entrepreneurs and people who are business savvy and want to do right by the community are filling the void,” he told Breaking AC, “and they don’t like that.”

“Dana P.,” one of the owners of West Wind Wellness who uses a pseudonym to protect her identity, told Breaking AC that the practice of gifting cannabis “isn’t illegal.”

“And that’s the bottom line,” she said in the interview.

First-time violators of the CFA may be subject to a penalty of $10,000. Repeat offenders may have to pay $20,000 for each subsequent violation.

Other companies targeted by the New Jersey Attorney General’s Office include NJ Green Direct, Slumped Kitchen, and Anzalone.

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‘NJ Weedman’ Running for Governor with Write-In Campaign

6/21/2021

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Edward Forchion, the cannabis advocate known as “NJ Weedman,” is running a write-in campaign for New Jersey governor following a successful challenge of his nominating petitions by the Democratic State Committee, NJ.com reports.

Forchion, 56, previously ran for governor in 2005 but lost after getting just 0.4% of the vote.

According to a Rutgers-Eagleton poll, the race is Democratic Gov. Phil Murphy’s to lose, as 42% of respondents said they would “definitely” vote to reelect the incumbent, with 31% saying they would “definitely” back his challenger, and 21% undecided. The top challenger to Murphy is former Assemblyman Jack Ciattarelli, a Republican.

Forchion had gathered 800 signatures—the required number to make the ballot in New Jersey under the Legalize Marihuana Party, with the slogan “#HOMEGROW $ALL”—electronically, which led to a court challenge against the petition. During a virtual court appearance on his petitions, Forchion said he couldn’t “compete with the power of the Democratic Party” and then proceeded to smoke out of a bong, the New Jersey Globe reports.

He would later tweet, “Have you ever seen a guy taking BONG rips during a court appearance? No, but ummm look now.”

Before leaving the virtual court appearance after announcing his petition withdrawal, Forchion would blow smoke at his screen, prompting Administrative Law Judge Jeffrey Rabin to accept his withdrawal, noting the candidate “left the hearing in a cloud of smoke.”

Murphy has been a strong supporter of adult-use cannabis legalization and ultimately signed the reforms into law. During the signing ceremony, Murphy called cannabis prohibition “unjust and indefensible.”

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South Dakota Launches Medical Cannabis Website

6/21/2021

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South Dakota has launched a website to answer questions about the state’s new medical cannabis program, the Rapid City Journal reports. The new website—an effort between Republican Gov. Kristi Noem, the Department of Health, and the Department of Education—features news releases, FAQs, an event section, helpful terminology, and a link to the law.

In a statement, Noem appears to have dropped her opposition to the program, which was passed by voters last November.

“One of my jobs as governor is to make sure that the will of the people and all constitutional laws are enforced. “I want South Dakota to have the best, most patient-focused medical cannabis program in the country. I’ve heard from people who are hurting and are hopeful for relief. My team is 100% committed to starting this program as quickly and as responsibly as possible for South Dakota.” — Noem in a statement via the Journal

Noem even appears in a public service announcement (PSA) on the site where she says the program is on “schedule” and they are working to create a “responsible” program.

“Other states have made mistakes, we do not want to repeat, so we have been careful in our approach,” the governor said in the PSA.

Medical cannabis officially becomes legal in South Dakota on July 1, but the state has until Oct. 29 to create a patient card application system. Leading up to the deadline, the Department of Health is holding listening sessions around the state to gain public input on what they want to see in the new program.

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Maryland Cannabis Companies Face Exorbitant Fees To Access Banking Services

6/21/2021

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This article was written by Meghan Thompson and originally published by Outlaw Report.

If you’ve ever used a debit card at a Maryland dispensary, it’s more than likely that the company has a bank account opened with one of the three banks in Maryland that services the cannabis industry: Severn Bank, Bulldog Federal Credit Union, or the newest addition—CFG Bank.

Out of more than 80 different banks in Maryland, those three are the only ones that will service the state’s medical cannabis businesses. That’s because cannabis is still federally illegal and as a result, cannabis companies are typically denied traditional banking services. Financial institutions who service the cannabis industry are technically holding what the federal government still considers to be “drug money.”

Severn Bank in Annapolis was the first in Maryland to venture into the cannabis industry when sales began in 2017. It was joined by Gaithersburg-based Bulldog Federal Credit Union in 2018. Then, just last month, Baltimore’s CFG Bank became the third bank to announce they are servicing Maryland cannabis businesses.

Cannabis companies with bank accounts can accept debit cards, purchase products from other businesses via wire transfer and pay their employees directly from a bank account—services accessible to almost every other legal industry in the U.S.

In an interview with the Baltimore Business Journal in 2018, the president of Bulldog Federal Credit Union said “these people are business owners just like anybody else…they’re businesses that are just trying to serve a need in Maryland. So we want to do the same for them.”

Severn, Bulldog and CFG are all willing to open bank accounts for Maryland’s cannabis businesses, but not before charging hefty fees to accommodate risk incurred by the bank and the additional compliance legwork.

Severn Bank charges cannabis businesses $3,000 to open an account and $1,750 monthly, whereas Bulldog Federal Credit Union in Gaithersburg charges $2,500 initially and $1,500 monthly. That’s a $20,500 per year expense, at least, just to open and operate a bank account.

For this reason, 70% of cannabis businesses in the U.S. are still cash-only, and while the number of banks willing to service cannabis companies is increasing, the vast majority of banks won’t budge until cannabis is legal.

But there’s a lot of money to be made by banks who choose to service Maryland’s cannabis industry, especially considering the state’s cannabis sales hit $1 billion within three years of medical cannabis dispensaries being operational.

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Connecticut Passes Adult-Use Cannabis Legalization

6/18/2021

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The Connecticut Senate on Thursday passed a bill to legalize adult-use cannabis in the state, WFSB reports. The legislation was approved on Tuesday by the House and moves next to Democratic Gov. Ned Lamont who is expected to sign the reforms into law.

In a statement, Lamont noted that the bill passed the Legislature on the 50-year anniversary of President Richard Nixon’s declaration of the War on Drugs.

“The war on cannabis, which was at its core a war on people in Black and Brown communities, not only caused injustices and increased disparities in our state, it did little to protect public health and safety. That’s why I introduced a bill and worked hard with our partners in the legislature and other stakeholders to create a comprehensive framework for a securely regulated market that prioritizes public health, public safety, social justice, and equity. It will help eliminate the dangerous unregulated market and support a new, growing sector of our economy which will create jobs. … By allowing adults to possess cannabis, regulating its sale and content, training police officers in the latest techniques of detecting and preventing impaired driving, and expunging the criminal records of people with certain cannabis crimes, we’re not only effectively modernizing our laws and addressing inequities, we’re keeping Connecticut economically competitive with our neighboring states.  … This measure is comprehensive, protects our children and the most vulnerable in our communities, and will be viewed as a national model for regulating the adult-use cannabis marketplace.”—Lamont in a statement

Cannabis use and possession for adults 21-and-older will be legal on July 1 and retail sales are expected to roll out by May 2022. The law allows adults to purchase and possess up to 1.5 ounces of cannabis, including up to five ounces at home or in a vehicle’s glove box or trunk.

Once signed by the governor, Connecticut will be the 19th state to end cannabis prohibition and the fifth state this year to pass the reforms.

The bill passed 16-11 with four Democrats joining all of the Republicans in voting against the proposal. Nine senators were absent for the vote.

Once the bill is signed into law, New Hampshire and Rhode Island will be the only New England states where cannabis remains prohibited.

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Federal Judge: Detroit’s ‘Legacy’ Licensing Rules are ‘Likely Unconstitutional’

6/18/2021

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A U.S. District Court judge on Thursday blocked the city of Detroit, Michigan from issuing cannabis industry licenses, ruling that the provisions in the city’s industry ordinance giving preference to long-time city residents is “likely unconstitutional,” the Detroit News reports.

U.S. District Judge Bernard Friedman wrote in his opinion that the Motor City’s rules give “an unfair, irrational, and likely unconstitutional advantage to long-term Detroit residents over all other applicants.”

“At a minimum, the ordinance must pass rational basis review to be deemed constitutional under both the United States and Michigan constitutions. However, the challenged provisions of the Detroit ordinance do not appear to be rationally related to the stated purpose of rectifying the harm done to city residents by the war on drugs.”—Friedman, in his ruling, via the News

The Detroit ordinance gives preferential status to “legacy” Detroiters who have lived in the city for 15 of the last 30 years; or for 13 of the last 30 years and are low-income; or for 10 of the last 30 years and have a past cannabis-related conviction.

This is the second time Friedman ruled against the city’s cannabis licensing plan. In April, he issued a temporary restraining order which prevented officials from receiving any more industry applications.

The city’s ordinance includes language that says no licenses will be issued or renewed if any part of the local law is deemed unconstitutional or otherwise struck down. The city had planned to begin issuing licenses on May 1.

The lawsuit against the rules was brought by city resident Crystal Lowe who argued that she was “almost certainly denied” a license because the city’s cannabis ordinance “favors certain Detroit residents over other Michiganders based on the duration of their residency,” according to court documents outlined by the News.

Detroit Councilman James Tate, who sponsored the cannabis ordinance, said the rules were “never to prevent anyone from participating” in the industry but to ensure that those city residents most disproportionately impacted by the War on Drugs “have a fair shot of participating in a potentially lucrative opportunity for Detroit.”

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Florida Supreme Court Rules Cannabis Legalization Ballot Question ‘Misleading’

6/18/2021

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The Florida Supreme Court on Thursday ruled that a proposed ballot initiative to legalize cannabis in the state was misleading due to an unclear use of the word “use,” the Miami Herald reports. The case, brought by state Attorney General Ashley Moody, challenges a 2019 proposed constitutional amendment.

The 75-word summary of the proposal that would have appeared on ballots indicated that the amendment would regulate cannabis “for limited use and growing by persons twenty-one years of age or older.” In the 5-2 ruling, the Justices determined that could mean the initiative’s supporters were claiming to set limits on the amount of cannabis an individual could personally consume; however, the justices ruled that the text of the amendment set no such limits.

“The ballot summary plainly tells voters that the proposed amendment ‘limit[s]’ the personal use —i.e., consumption—of recreational marijuana by age-eligible persons. But the proposed amendment itself does not do so. The relevant provision in the proposed amendment is section (c), titled ‘Personal use of cannabis.’ That section provides in part that it shall not be unlawful for an age-eligible person to engage in certain acts including ‘using . . . cannabis, and cannabis products in quantities reasonably indicative of personal use or for use by household members.’ Even if this language, when viewed in isolation, could somehow be argued to establish a limitation on personal use in an amount equal to a ‘quantit[y] reasonably indicative of personal use or for use by household members,’ any such argument is undermined by the fact that the same section of the proposed amendment further provides that the enumerated quantities ‘are minimum quantities, subject to increase by state, county, or municipal legislation, but not subject to decrease.’”—Florida Supreme Court advisory opinion, June 17, 2021

The initiative backer, attorney Michael Minardi, said his group—Sensible Florida—has alternative adult-use legalization proposals prepared and he called the Supreme Court opinion “really a welcome thing” after a two-year wait. The organization had collected just 29,172 of the necessary 891,589 valid signatures required to put the issue to voters prior to the court challenge.

He indicated plans to put the issue to Florida voters during next year’s midterm elections.

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Fmr. Colorado Govs Back Initiative to Raise Cannabis Taxes

6/18/2021

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A bi-partisan pair of former Colorado governors have endorsed a proposed initiative to raise cannabis taxes to pay for extra tutoring and services to help students make up for academic losses suffered during the coronavirus pandemic, the Associated Press reports. The campaign behind the proposal, Learning Opportunities for Colorado’s Kids, announced the endorsements from former governors Bill Ritter (D) and Bill Owens (R) on Wednesday.

The campaign—I-25—needs 250,000 signatures by Aug. 2 to be put to voters. The proposal would supplement a plan proposed by Democratic Gov. Jared Polis which would serve the state’s low-income students and those who are falling behind by creating the Colorado Learning Authority. The new office in the Department of Education would be tasked with helping kids ages 5 to 17 with English language learning, out-of-school tutoring, special needs instruction, mental health services, and career training.

In order to pay for the program, the initiative would raise the state’s cannabis excise tax from 15% to 20% by 2024. It is expected to raise over $137 million. Under the initiative, other funds may be raised from leases and rents on state land and possibly outside sources. Currently, in addition to the 15% excise tax, adult-use cannabis in Colorado carries a 2.9% state sales tax, but the funds can only be used for school construction and maintenance, the report says.

In addition to the endorsement from the former governors, the initiative is supported by Democratic and Republican lawmakers and a host of service and education organizations serving Black and Latino kids.

Papa Dia, executive director of the Aurora-based African Leadership Group, said that the “initiative helps level the playing field and lift up those for whom there are too few opportunities.”

“With LEAP, we can narrow the opportunity gaps between the rich and poor, between students from homes where English is not the first or primary language spoken, and between those attending high-performing schools and those who do not.”—Papa Dia in a statement

Notably, the AP points out the Colorado cannabis industry is “wary” of the tax increase and has raised concerns about the increase encouraging the state’s unregulated cannabis market. In April, Colorado collected over $25 million in excise tax revenues from over $166 million in adult-use cannabis sales, according to the AP.

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Connecticut House Passes Legalization Bill, Senate Vote Expected Today

6/17/2021

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The Connecticut House on Wednesday approved a cannabis legalization bill with the Senate expected to vote on the proposal today, the Hartford Courant reports. The vote came during a special session, which Democratic leaders called after the House failed to vote on a Senate-approved legalization bill before the end of the state’s regular session.

The Senate has approved the measure twice in eight days but had recently amended social equity provisions in the bill enough to force Democratic Gov. Ned Lamont—a strong supporter of legalization —to threaten a veto, according to CT New Junkie. The changes included an amendment that would have included wealthy relatives of anyone who had previously been arrested on cannabis charges to be considered a social equity applicant.

House Speaker Matt Ritter (D) told the Courant that most of the caucus members were comfortable removing the language opposed by the governor as it was not part of the original bill drafted in coordination with Lamont’s office.

The House plans to restore the initial definition of equity applicants to only include individuals from areas most disproportionately impacted by the enforcement of cannabis laws—those with the highest rates of drug-related arrests—high unemployment rates, and those with incomes less than 300% of the state median.

Following the House vote, Rep. Steven Stafstrom (D) said the state’s “time has finally come” for broad cannabis legalization.

“We take the next step as this chamber in recognizing the war on drugs has failed us and the criminalization of cannabis was the wrong course of action for our state and for our nation.”— Stafstrom to the Courant

As currently drafted, the measure would allow adults 21-and-older to purchase and possess up to 1.5 ounces of cannabis, including up to five ounces at home or in a vehicle’s glove box or trunk, starting on July 1. Retail sales in Connecticut are not expected to start until May 2022.

The bill passed the House 76-62. During the regular session, the Senate passed the bill by just two votes.

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Florida Supreme Court Upholds Vertically Integrated Medical Cannabis Structure

6/17/2021

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Florida’s Supreme Court has ruled that the state’s current medical cannabis industry rules are constitutional, Florida Political Review reports. The legal challenge against the state’s vertical integration structure was filed by Florigrown, which was denied an operator license in the state in 2018.

Vertical integration requires that the same company grow, process, and distribute cannabis products in order to get a license. The initiative approved by voters in 2016 did not require a vertically integrated system; however, the structure was included in subsequent regulations approved by lawmakers.

In the 6-1 ruling, the Supreme Court found that the vertical integration system has neither made medical cannabis unavailable to patients nor limits the number of dispensaries that can be licensed.

Ben Pollara, who ran the campaign to legalize medical cannabis in Florida, said the decision “should surprise no one” which “comes as a giant relief to the medical marijuana companies.”

“That probably doesn’t mean a whole lot to folks that want to get medical marijuana in Florida, and who aren’t in it, because most of those folks gave up the goat a long time ago.”—Pollara to the Political Review

Pollara also noted that the decision, paired with recent bills to limit the amount of THC in medical cannabis products, makes broad cannabis legalization unlikely “anytime in the future.”

“…This is the ball game,” he said in the report.

Justice Alan Lawson wrote the lone dissent with the majority opinion, concluding that the state’s medical cannabis law grants “privileges to corporations.”

There are only 22 entities licensed as medical cannabis operators in the Sunshine State.

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Weedmaps Begins Trading on the Nasdaq

6/17/2021

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Cannabis technology and software company Weedmaps Holding Company LLC on Wednesday began trading on the Nasdaq following a takeover of Silver Spike Acquisition Corp. In connection to the closing, Silver Spike changed its name to WM Technology and its ticker symbol was changed to “MAPS.”

Chris Beals, Weedmaps CEO, said the merger advances the company’s mission “to power a transparent and inclusive global cannabis economy, further solidify [its] position as a leading technology platform to the cannabis industry, and accelerate … growth.”

“We continue to benefit from strong, sustainable macro tailwinds as cannabis legalization advances throughout the U.S. and internationally. As a public company, we now have an even stronger platform to advocate for legalization, social equity and licensing in many jurisdictions, while providing cannabis businesses with the tools needed to succeed in a highly complex world of regulations. We are well positioned to continue scaling the Weedmaps marketplace in service of our users, while expanding the functionality of our WM Business SaaS offerings in service of our clients.”—Beals in a press release

The company indicated that from fiscal year 2014 through 2020, its revenue grew at a compound annual growth rate of 35% and its gross margin rate expanded from 92% to 95%. By the end of 2020, Weedmaps generated $162 million in revenues, a net income of $39 million, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $43 million, it said.

The deal provides $579 million of gross proceeds primarily comprised of $254 million of cash from Silver Spike’s former trust account and $325 million of cash from a private investment in public equity, not including transaction fees.

Weedmaps announced its intent to take the company public last year, and, at that time, the cannabis tech firm was valued at $1.5 billion.

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Inkbrite: Compliant Cannabis Packaging Solutions in California

6/17/2021

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Compliance errors in cannabis packaging can create costly errors. They can trigger a recall if products have made it to dispensary shelves, or result in fines — in January, for example, Maine-based SeaWeed Co. was slapped with a $10,000 fine over product packaging that featured the company’s logo, a cartoon mermaid that regulators said could be construed as appealing to children. Additionally, because there are still only state-level cannabis legalization laws, each state may have different cannabis packaging requirements and compliance rules, meaning that cannabis packaging rules in Arizona, for example, may be wildly different from the rules in California.

Cannabis companies and brands don’t have to handle these issues alone, however, because there are cannabis packaging companies like Inkbrite who understand the need for embedding regulatory intelligence into the actual creation of cannabis packaging. Inkbrite is a California-based cannabis packaging company that helps both emerging and legacy brands get a foothold in the cannabis market through impactful packaging. Their platform offers an easy way to create stylish compliant packaging so that cannabis companies can focus on what they do best.

We recently chatted with Inkbrite co-founder Laurie Peterson about the company’s launch and how important it is for cannabis business owners to be on top of compliance issues related to their packaging.

“What if we shine a light on the good you can do when you are free to follow your own vision?” Peterson said.

Founding story

Inkbrite is a woman-founded and owned company led by serial entrepreneur Laurie Peterson and business partner Marya Gomez. Peterson came from a background in toy construction and Gomez has a varied background in compliance and software development. Together, they launched Inkbrite in 2019, backed by a group of investors and advisors.

“A small percentage of funded startups are led by women. I think this is in part because of how we talk about entrepreneurship,” said co-founder Laurie Peterson. “We glorify the risk-taking and the wild ride, rather than the impact you can make. We imagine the young guy in the hoodie who has nothing to lose, leaping off a cliff. What if instead, we imagine the woman with a lifetime of experiences to give, taking one step at a time?”

Who does Inkbrite serve?

Inkbrite was created “to make impactful cannabis packaging accessible to the independent businesses that have built the cannabis industry,” said Peterson.

The startup’s primary role as a company is to offer the easiest way of creating custom cannabis packaging — even for people who have little design skills, little knowledge of industry compliance, and/or a small budget. The company empowers cannabis brands to make powerful impressions that are on-trend and meet the ever-evolving regulatory market requirements in California.

“Go on, give those big-money brands something to sweat about.” — Excerpt from Inkbrite.com

Inkbrite vows that their cannabis packaging options are:

  • Stylish: Co-create custom packaging to unlock the unique potential of your cannabis brand.
  • Compliant: Proceed with confidence knowing that Inkbrite’s design platform is rooted in regulations.
  • Affordable: Design making is free! Once you’re ready to order, enjoy all-inclusive per-unit pricing.

“My long-game view has been an advantage for me as a female founder,” Peterson said of Inkbrite, which is her sixth entrepreneurial venture. “I’ve learned not to get too caught up as my entrepreneurial peers skyrocket and then fizzle as I just keep putting one foot in front of the other, keeping faith that even when I can’t see around the corner, we must be headed somewhere meaningful.”

Inkbrite’s services also include compliance reviews for cannabis product labels, as well as a checklist review of current cannabis product packaging against the company’s compliance checklists. Ultimately, their goal is to ensure that any and all California-based clients are using only 100% compliant packaging.

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Louisiana Gov. Signs Bill Reducing Penalties for Low-Level Possession

6/17/2021

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Louisiana Gov. John Bel Edwards (D) on Wednesday signed a bill making possession of small amounts of cannabis a misdemeanor, according to the Associated Press. Sponsored by Shreveport Rep. Cedric Glover (D), the measure makes up to 14 grams of cannabis flower a misdemeanor punishable by a $100 fine with no possibility of jail time.

The bill narrowly passed the state Senate in early June and takes effect August 1.

In a statement announcing the signing, Edwards said the bill was part of Louisiana’s “criminal justice reform efforts” and it was not a decision he made lightly.

“In addition to carefully reviewing the bill, I also believe deeply that the state of Louisiana should no longer incarcerate people for minor legal infractions, especially those that are legal in many states, that can ruin lives and destroy families, as well as cost taxpayers greatly.” — Edwards via the AP

Glover worked with conservative Republican Rep. Alan Seabaugh on the legislation. Seabaugh’s amendments set the penalty parameters outlined in the legislation, the Lafayette Daily Advertiser reports.

“One thing I think we can find common ground on is the belief that the possession of small amounts of marijuana should not lead you to jail or to become a felon,” Glover told the Daily Advertiser.

Although the bill falls short of Louisiana’s attempts to pass broad cannabis legalization, it represents progress in the Deep South state. This session, lawmakers also passed a bill allowing smokable products in the state’s medical cannabis program.

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Federal Bill to Decriminalize All Drugs Introduced in House

6/16/2021

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Congressional Democrats on Tuesday introduced a bill to decriminalize all drugs at the federal level and shift authority for the substances from the Attorney General to the Secretary of Health and Human Services.

The measure, introduced by Reps. Bonnie Watson Coleman (NJ) and Cori Bush (MO) also includes social justice provisions including records expungement and sealing, and relief for people currently incarcerated or on supervision for certain drug-related convictions. The proposal would also eliminate the consequences associated with drug convictions, including denial of employment, public benefits, immigration status, drivers’ licenses, and voting rights.

The measure was introduced ahead of the 50-year anniversary of the declaration of the War on Drugs— on June 17—by then-Republican President Richard Nixon.

In a statement, Coleman described the War on Drugs “as a stain on our national conscience since its very inception.”

“Begun in 1972 as a cynical political tactic of the Nixon Administration, the War on Drugs has destroyed the lives of countless Americans and their families. As we work to solve this issue, it is essential that we change tactics in how we address drug use away from the failed punitive approach and towards a health-based and evidence-based approach.”—Coleman in a press release

In a story for Harper’s in 2016, reporter Dan Baum interviewed Nixon’s former Chief Domestic Policy Advisor John Ehrlichman who said that the War on Drugs was a weapon against two of the disgraced former president’s “enemies”: the antiwar left and Black people.

“We knew we couldn’t make it illegal to be either against the war or Black, but by getting the public to associate the hippies with marijuana and Blacks with heroin, and then criminalizing both heavily, we could disrupt those communities,” Ehrlichman told Baum. “We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.”

Bush described the crack-cocaine epidemic robbing her community “of so many lives” and called the war on cannabis “malicious.” She added the Black people are arrested for cannabis possession at three times the rates of their white counterparts despite similar usage rates.

“As a nurse, I’ve watched Black families criminalized for heroin use while white families are treated for opioid use. And now, as a Congresswoman, I am seeing the pattern repeat itself with fentanyl, as the DEA presses for an expanded classification that would criminalize possession and use,” she said in a statement. “This punitive approach creates more pain, increases substance use, and leaves millions of people to live in shame and isolation with limited support and healing.”

The bill was drafted by the Drug Policy Alliance whose Manager for the Office of National Affairs Queen Adesuyi added in a press release that someone’s “life is ruined” for drug possession every 23 seconds.

“We will not be subjugated any longer by an offensive that was created solely with the purpose of ‘disrupting’ our communities,” she said in a statement. “This bill gives us a way out—a chance to reimagine what the next 50 years can be. It allows us to offer people support instead of punishment. And it gives people who have been harmed by these draconian laws a chance to move forward and embrace some semblance of the life they have long been denied.”

Democrats hold slim majorities in both chambers of Congress and, were the measure approved by the House, it would face very long odds in the Senate.

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Columbia Care to Acquire Medicine Man in $42M Deal

6/16/2021

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New York-based multi-state cannabis operator Columbia Care Inc announced on Tuesday a deal to acquire Colorado’s Medicine Man Denver for $42 million in cash and stock. Medicine Man last year outperformed the broader Colorado market with sales growth of 42% compared to 24% for the state and 64% year-to-year through May versus 24% for the state, Columbia said in a press release.

The acquisition will add three adult-use dispensaries, one facility that serves both medical and adult-use clients, and a 35,000-square-foot cultivation facility that produces three million grams of flower annually.

Nicholas Vita, CEO of Columbia Care, said the deal “will further cement” the company’s “position as the leading vertically integrated operator in Colorado.”

In 2019, Columbia announced it would acquire The Green Solution for $140 million. Vita said that the Medicine Man acquisition “in tandem with [the] ongoing integration of The Green Solution … will have a positive impact on [Columbia’s] financial performance for years to come.”

Medicine Man President and Co-founder Andy Williams said that the cannabis industry “is changing and growing now faster than ever” and that the company recognizes “the need to partner with others in order to continue to compete within, and help to responsibly transform, the industry as it grows.”

$8.4 million of the deal’s considerations will be paid in cash with $33.6 million in stock. A potential milestone payment is included next year if certain performance targets are met. The transaction is expected to close in the fourth quarter of this year.

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California Legislature Approves $100M Aid for Cannabis Businesses

6/16/2021

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The California legislature has approved Democratic Governor Gavin Newsom’s $100 million plan to help legal cannabis businesses transition from temporary to permanent licenses, the Los Angeles Times reports. Under the plan, which is part of the State budget, cities and towns can apply for grants to help provisional licensees obtain the California Environmental Quality Act (CEQA) mandated environmental review needed for final license approval.

According to the report, as of April, 82% of California cannabis businesses hold temporary licenses.

Assemblyman Phil Ting (D), chairman of the Assembly Budget Committee, said that despite the legalization of cannabis in the state five years ago, California has “yet to reach the goal” of a “well-regulated cannabis market.”

In addition to the grants, the governor is seeking a six-month extension to the January 1, 2022 deadline for temporary license holders to obtain the environmental review needed to upgrade to an annual license. The extension, which did not pass in the state budget with the grant proposal but remains in negotiations, is opposed by a coalition of seven environmental groups, including Sierra Club California, Defenders of Wildlife, and the Nature Conservancy. In a letter to Newsom, they called the proposal “wholly inadequate to protect local communities and the environment.”

On the other hand, industry leaders say the funds, although needed, are inadequate and may not help licensees, some of whom may still face years of red tape to obtain annual licenses.

President of the United Cannabis Business Association, Jerred Kiloh, told the Times that “it is a significant amount of money,” but, that he wasn’t sure “that it actually answers the problem of provisional licenses making it through CEQA analysis in a timely manner to get an annual license.”

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Joe Exotic Launching Cannabis Brand from Prison

6/16/2021

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Joe Exotic, whose life was chronicled in the Netflix documentary “Tiger King: Murder, Mayhem and Madness,” is planning to launch his own cannabis brand, Joe Exotic Cannabis, in partnership with Tango Hotel Charlie Group LLC and Cannaxxs LTD, according to a TMZ report.

Exotic has been working on the deal from prison, where he is serving a 22-year federal sentence for plotting to murder his rival, Carole Baskin.

According to the report, the line will include CBD edibles and will be rolled out in California, Colorado, and Exotic’s former home state of Oklahoma. His attorney, Brad Small, told TMZ that he expects the launch to happen within weeks.

A share of the proceeds from the line will be donated for captive tiger care, the report says.

Exotic, 58, whose real name is Joseph Maldonado-Passage, is reportedly also suffering from prostate cancer.

In May, Exotic launched a clothing brand with Odaingerous which, according to TMZ, sold out in minutes and made more than $20,000 in online sales.

Exotic had sought a pardon from former President Donald Trump but was not included on the outgoing president’s final list. In April 2019, he was also sentenced for killing five tigers, selling tiger cubs, and falsifying wildlife records, according to an Associated Press report.

Exotic has maintained his innocence in the murder-for-hire conspiracy and his attorneys argued in his pardon application that he was “railroaded and betrayed” by others which led to his conviction, according to the AP. He is scheduled for release in 2037.

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