California’s Long Beach City College is set to offer its first class focused solely on the cannabis industry, the Long Beach Business Journal reports. The eight-week class will cover cultivation, retail, the history of cannabis in California, and an overview of the state’s seed-to-sale system.
Joe Rogoway, a cannabis industry attorney and the course’s lead instructor, called the course students’ “portal” to the industry and called it “an important first step” for students “interested in engaging with the cannabis industry on a professional level.”
The curriculum was designed with members of the Long Beach Cannabis Association.
Nate Winokur, an LBCA member and founder and owner of BelCosta Labs who will be teaching a class in the fall, said collaborators “decided to introduce something that, at its heart, would introduce different businesses and license types to each other.”
“I, for one, am hoping for cannabis to be treated a lot more seriously as things go on and I think that proper education surrounding that has a lot to do with it.” – Winkour to the Business Journal
The course is part of the community college’s workforce development program and the first class is expected to admit 30-35 students. Kathy Scott, LBCC executive vice president of academic affairs, said the class mirrors others in the workforce development program, in that it’s “industry-driven, industry-requested, and it’s taught by the industry.”
Throughout the U.S., colleges and universities with both medical and adult-use cannabis programs have started offering industry-centric degree and certificate programs. The LBCC course will cost $395.
Officials in Argentina are moving forward with plans to give medical cannabis to patients for free, allow for personal cultivation to anyone who registers with the government, and authorize production of cannabis topicals, oils, and creams, according to a Bezinga report citing Argentinian news organizations. The new regime prioritizes cannabis research and development by laboratories, universities, and other institutions.
The reforms will also eventually allow nationwide cannabis production.
Personal cultivators will be allowed to grow individually or as part of a group and while cannabis growers will have to register with the government, they will remain anonymous. Plant counts have not yet been defined.
While Argentina legalized medical cannabis in 2017, the program has been criticized for lack of clarity which has left most patients to rely on illegal sellers or be without treatment. The nation’s current qualifying condition list for medical cannabis access only includes refractory epilepsy in children; however, the new rules will likely expand that list.
Facundo Garreton, a former lawmaker in Argentina and director of YVY Life Sciences, a medical cannabis company from the neighboring country of Uruguay, which has legalized recreational cannabis use, said he hopes the reforms are “the start of a path towards regulation of the entire supply chain.”
“Knowing that cannabis can alleviate many people’s suffering and not do anything about it, that’s the true crime. … Good regulation will help to know the needs of every person, what to buy, where to buy it, while at the same time controlling the product’s quality.” – Garreton via Bezinga
Argentinian health officials met with key lawmakers on Wednesday to finalize details on the cannabis reform and medical cannabis expansion bill. The country has a population of 44 million making it one of the region’s most intriguing markets for cannabis.
Software services have been an important facet of the legal cannabis industry since its inception. Over the years, tech companies have worked to solve the myriad problems faced by cannabis entrepreneurs. According to Ivan Suslov, COO of the point-of-sale software firm IndicaOnline, one of the greatest pain points for cannabis retailers has been inventory management. This prompted the company’s latest focus on RFID technology, which tags and categorizes items for easy sorting through the use of radio frequencies.
This Q&A covers the company background, how they identified the need for RFID inventory solutions, developing the appropriate systems, how their platform streamlines the work of cannabis retailers, and more! Scroll down for the full interview.
Ganjapreneur: The cannabis industry has been struggling with problems like inventory management while other retail sectors have access to tools and technology to solve these problems. What industry-specific factors might create this divide?
Ivan Suslov: I think there are a few reasons why the cannabis industry has had limited access to these technological tools that help manage inventory. First and foremost, the inventory itself can be difficult to maintain. Cannabis flower can lose weight when it dries which can quickly cause issues in your inventory. This is why prepackaged cannabis flower has become more prevalent in recent years. Cannabis retailers have also been shut out of traditional financing opportunities to invest in newer and more expensive technology to manage inventory.
How does Indica Online solve problems for cannabis retailers, and what markets are you currently able to serve?
IndicaOnline solves several problems for cannabis retailers, from automated compliance reporting, to loyalty, to marketing, and even product loss prevention. We will be releasing an update soon that will have features to support the ice cream truck model of delivery in addition to the hub-based model. This will allow drivers to fulfill orders on the go rather than return to the dispensary or hub to pick up a new set of orders. The goal is to reduce the delivery time for consumers while in turn cutting expenses for retailers.
We currently serve all states that use Metrc for their seed-to-sale tracking system and any states that have yet to select a seed-to-sale software, such as Oklahoma. We also currently have clients in Canada, Puerto Rico, and Jamaica who have been very successful using our software to streamline their storefront.
Where did Indica Online identify a need for RFID technology in cannabis retail? How can the adoption of this tech optimize logistics in a retail dispensary model?
Inventory management and loss prevention would be the two pieces of retail that would benefit the most from RFID technology. Once RFID technology is implemented, the dispensary operator will know exactly how much inventory they have and where it is located basically without leaving their office. The technology not only improves the accuracy of counting but also will streamline inventory receiving and transferring between the back stock, sorting and the sales floor.
What goes into the process of developing RFID inventory management solutions for the cannabis industry? How long did it take to bring the product to market?
We’ve been in contact with many dispensaries since the very beginning that evolved from being small mom and pop shops to large multi-state enterprises. During our conversations we started to notice that inventory management and loss prevention were becoming the two most problematic areas in dispensary operations. Many times, dispensary operators found themselves spending days and nights counting endless products in their inventory and ended up with missing units or inaccurate counts. This not only wasted a lot of time but also resulted in thousands of dollars of added payroll. By analyzing this and looking at other industries, we came to a conclusion that the implementation of RFID technology will solve most, if not all of these problems. It took us about a year of development and testing to come up with a working RFID solution for our retailers.
How did the company test this new technology before going live with the update? What bugs was the team able to work out in this process?
We are working with several different size retailers that are willing to adopt and test the technology and provide us with valuable feedback. Working with both smaller and larger dispensaries who test the technology prior to release has given us insight into how each can benefit from RFID. We understand that some things that must be implemented in an enterprise size dispensary might not be needed in a smaller store and trying to optimize the technology so that it will fit in perfectly in any size retail operation.
What is the biggest challenge that dispensary owners have in onboarding RFID inventory management systems with retailers?
One of the main goals when we built IndicaOnline is for it to be user friendly and from what we’ve learned so far, the implementation of RFID won’t be very difficult. Like with anything new, it’s a matter of adapting to a new flow but the biggest difference with RFID is that when you are counting your inventory, now you won’t need to count or look for every single piece. Instead, the manager will point the RFID scanner at the shelves and immediately will get a count of all the products there. It’s really revolutionary in the amount of time that will be saved versus manually auditing your inventory.
An added bonus is that the reader can double as a honing beacon for specific products and help reduce product loss. This is ideal when searching for products that will expire soon, so they can be discounted and sold as opposed to being destroyed after they expire.
Thank you, Ivan, for answering all of our questions! Learn more about IndicaOnline and its RFID inventory management tools at IndicaOnline.com.
Multi-state cannabis industry company iAnthus Capital Holdings, Inc. announced on Monday a recapitalization transaction that will leave current shareholders with 2.75 percent of the company or zero percent.
In one scenario of the transaction, the company will enter “arrangement proceedings” under British Columbia, Canada’s Business Corporations Act. The other option is for recapitalization under the Companies Creditor Arrangement Act (CCAA), which would see the company file for creditor protection.
The company said the transaction “is expected to significantly reduce [its] outstanding indebtedness and annual interest costs, improve its capital structure and liquidity, and result in an enhanced financial foundation.”
“Assuming completion of the Recapitalization Transaction, the Company’s pro forma outstanding indebtedness will be reduced from $168.7 million (excluding fees and accrued and unpaid interest thereon) as at June 30, 2020 to $101.4 million (excluding $20 million of Preferred Equity).” – iAnthus in a July 13 press release
If the recapitalization transaction occurs through the Business Corporation Act, the firm’s secured lenders and unsecured debt holders will be issued an equal amount of common shares of iAnthus and each will own 48.625 percent of the company. This would leave current shareholders owning a total of 2.75 percent of iAnthus upon completion of the transaction.
If performed under CCAA, the secured lenders and unsecured debenture holders will each receive 50 percent of the common shares of the company and shareholders would get nothing.
Additionally, outstanding secured debentures will be cut from $97.5 million to $85 million and the interest rate will be reduced by 5 percent per annum. The original maturity date will be extended over four years, interest will no longer be “cash pay,” and the conversion feature will be removed. Another $60 million in unsecured debentures will be traded for equity.
Preferred equity of $5 million will be issued to the secured lenders, while $15 million will be issued to unsecured debenture holders, with the equity having a five-year maturity and no cash pay dividends.
Some of the company’s secured lenders have also agreed to lend iAnthus another $14 million on the same terms of the restructured debt, funded within three days of the support agreement.
All holders of secured debt owed to the company and 91 percent of iAnthus unsecured debenture holders have agreed to vote in favor of the plan of arrangement that is to be filed by the company. That plan is subject to stakeholder approval.
iAnthus operates in Arizona, California, Colorado, Florida, Maryland, Massachusetts, Nevada, New Mexico, New York, and Vermont.
The Massachusetts Cannabis Control Commission has fined three companies a total of $800,000 for pesticide and regulatory infractions, the Telegram & Gazette reports. The fines were levied against Garden Remedies Inc., 4Front Holdings-owned Healthy Farms, also known as Mission, and The Botanist, which is owned by Acreage Holdings, Inc.
Healthy Farms was fined $350,000 for pesticide use dating back to February 2019 and the CCC said the company failed to immediately report test results showing pesticide use, unintentionally submitted false information, and incorrectly entered information into Metrc, the state’s seed-to-sale tracking software.
Leo Gontmakher, CEO of 4Front Ventures, said that “no one was harmed” by the company’s actions and that “once the company understood the violations,” it “worked quickly to correct them and have implemented procedures to prevent them from happening again.”
Garden Remedies was fined $200,000 for using the banned pesticide Wood’s Rooting Hormone at its Fitchburg facility and covering it by saying on invoices that it had purchased Environmental Protection Agency-approved pesticide Clonex. The falsified invoices were brought to regulators’ attention by an anonymous tipster, the report says. In a statement, Garden Remedies said the falsifying of documents was unknown to the company’s executive team and the employees involved in the scheme had been fired.
Garden Remedies CEO Dr. Karen Munkacy said the “situation was mishandled.”
“The company and I will continue to strive to ensure that ethical and regulatory violations never again occur … We want to be a model of what a well-run cannabis company can be, and I personally will not stop working to continuously improve our company. We are very sorry this happened, but we have come out of this experience a better company.” – Munkacy in a statement via the Telegram & Gazette
The Botanist was fined $250,000 for moving forward with licensing applications while trying to own or having a controlling interest in more than the allowed maximum of three stores.
Last year, Acreage came under scrutiny by regulators for allegedly flouting state rules on cannabis company ownership after reports emerged that the firm bragged to investors about holding more licenses than permitted.
The Botanist’s February 2019 applications for its Worcester and Shrewsbury retail dispensaries showed that Acreage had “consulting services and capital funds” contracts with two other provisional license holders. Acreage denied having any direct or indirect control over those businesses, but regulators raised concerns about those contracts and asked the Botanist whether it wanted to proceed or resubmit the application, the report says.
Evan Mills, Ph.D. of the Lawrence Berkeley National Laboratory, and Scott Zeramby have revealed a new chapter in the upcoming “Routledge Handbook of Interdisciplinary Cannabis Research,” entitled “Energy Use by the Indoor Cannabis Industry: Inconvenient Truths for Producers, Consumers, and Policymakers.” The report takes a critical look at indoor cannabis cultivation in the age of climate change.
According to its authors, the work, “pinpoints blind spots in regulation, outlines research and analysis needs, argues for consumer information and protections against greenwashing and industry capture of regulatory and green-certification processes, and offers recommendations for incorporating energy considerations into the broader tapestry of cannabis policy.”
Cannabis and the Climate
Expanding on a 2012 investigation by Mills, the authors blame the lack of research into indoor cannabis production’s carbon footprint squarely on its status as a controlled substance and the subsequent need to produce, process, and distribute cannabis “in the shadows.” The authors, however, are quick to point out that legalization hasn’t increased transparency into the energy use of indoor cannabis production.
“Although the impacts of outdoor cultivation on ecosystems have received considerable attention …, those associated with far more energy-intensive indoor cultivation have only rarely been evaluated and integrated into policy-making, even in the post-prohibition era. Indeed, cannabis cultivators continue to be passed over by almost every energy policy instrument developed since the first modern energy crisis of nearly half a century ago.” — Excerpt from ‘Energy Use by the Indoor Cannabis Industry: Inconvenient Truths for Producers, Consumers, and Policymakers’
Mill’s 2012 work found that indoor cannabis production was using 20 billion kilowatt-hours (k/h), producing up to 15 million metric tons of CO2, and ran a monetary expenditure of six billion dollars annually. At the time, these rates of consumption penciled out to nine percent of California’s household energy consumption, three percent of state-wide energy use, and one percent of all electricity used in the United States. According to the report, indoor cannabis production’s very nature contributes to its astronomical strain on energy grids, requiring year-round lighting, constant simulation of tropical environments, humidity controls, CO2 injections, and other miscellaneous energy uses.
To put it in terms of consumer carbon consumption, the study found that producing one gram of indoor cannabis in California — a state known for its high energy-efficiency standards — is equal to ten pounds of carbon, running ten ten-watt LEDs for 76 hours, or the energy equivalent of 70 gallons of oil. The authors cite more recent studies showing similar results with indoor cannabis production in Colorado using 0.6% of statewide energy and Denver growers hoarding four percent of that city’s power.
Untold externalities like building damage due to mold, power outages, adverse effects on worker health, outdoor carbon emissions due to land-use changes, hazardous waste associated with indoor growing from mercury-laden light bulbs to chemical-ridden mineral wool destined for landfills and finally extra energy costs for technologies such as UV lighting to remove mold and water filtration drive up the environmental impact of indoor production. Other processes the work cites as adding to cannabis’s carbon footprint include excessive transportation, cold storage due to overproduction and water evaporation from reservoirs, producing power for indoor production, energy used in soil production, pesticide synthesis, and building construction.
Current Energy Efficiency Efforts Aren’t Working
Large scale greenhouses have been touted as less carbon-intensive growing facilities, but a recent look into the practice in Canada showed that — due to the need for extra lighting, heating, cooling, and dehumidification wherever natural gas was used for heating — cannabis greenhouses can use up to a third of the energy as similar sized indoor grow sites. Cannabis production also puts a strain on renewable energy availability, siphoning off renewable energy originally designed to serve homes and less intensive commercial applications.
Indoor Hydroponic/greenhouse hybrid in Oregon grows marijuana for recreational use
In the name of security and economic growth, local well-intended regulations have led to extra energy consumption, the authors say. It doesn’t help that some localities such as the state of Illinois and Nevada County, California have completely banned outdoor cultivation. Seeking to attract a larger tax base, some geographies like the Coachella Valley in California — where conditions are optimal for outdoor growing — have put large, counterproductive minimum square footage requirements on indoor facilities. Other cities have put surcharges on electricity to de-incentivize indoor growing, especially for the unregulated market, but this simply drives growers to more energy-intensive practices like using diesel generators. The authors contend that even well-thought-out incentives like tax rebates and credits for energy efficiency have the undesired effect of keeping cultivators indoors rather than moving them to the outdoors.
Compounding the issue are market forces where the perception is indoor cannabis is of a higher quality than outdoor cannabis and consumers are unaware of the environmental impact of indoor cannabis cultivation.
“It is notable,” the authors write, “that the ‘ethical purchasing’ movement (consumers seeking to vote with their dollar, e.g., to promote sustainable products) has barely emerged in the cannabis marketplace and, perhaps fearing stigmatization, environmental organizations have conspicuously sidestepped the issue.”
Difficult Solutions
Mills and Zeramby support legalization but do not believe that action alone is enough to address the environmental impact of indoor cultivation. They say before best solutions can be developed, more “representative and useful” data is needed from producers and utilities. Additionally, they argue that greater transparency in energy use practices must come forward, better consumer information is needed, anti-competitive market distortions like efficiency incentives should be removed, externalities must be considered, improve testing protocols developed, and more public R and D should emerge.
Even if all these goals are met, their primary recommendation is to move the vast majority of cannabis cultivation outdoors, a practice the authors argue sufficed for much of human history.
The chapter concludes with a cautionary warning from the authors:
“Those citing climate pollution as a reason not to legalize cannabis are missing the point: legalization is necessary—but not sufficient—for addressing the problem. Yet, if done poorly, legalization can make the problem worse. Indeed, history may judge today’s cannabis policymakers as betraying the public trust by enabling an industry with such a large carbon footprint. ” — Study excerpt
Mike Tyson’s cannabis startup the Ranch Companies has acquired a global license from Smart Cups to print cannabis products, Forbes reports. Smart Cups prints active and flavor ingredients from natural products on the surface of an underlying layer, eliminating the liquid from a beverage, which is re-added by the consumer.
The process helps reduce transportation costs and the bioplastic cups are environmentally friendly.
Chris Kanik, founder and CEO of Smart Cups, explained that the company uses “water soluble cannabinoids” and is “able to precisely print them on virtually any surface.” They are released when they come in contact with a liquid, he said in the report.
Tyson said the Smart Cups technology will have long-term benefits for consumers, “helping people be confident and understanding proper dosing.”
“For the Ranch Companies, it is very exciting to be working with Smart Cups’ technology, because it gives us the opportunity to make anything that is possible with this innovative tech. Having the ability to produce lines of ingestible cannabis products that will have accurate and consistent doses of cannabis is incredibly important to us.” – Tyson to Forbes
Rob Hickman, CEO of the Ranch Companies, called dosing “one of the systematic issues plaguing” the cannabis industry.
“We have partnered with top research universities to collect critical clinical data supporting CBD for medicinal purposes and pain relief,” he said in the report. “The Smart Cups technology is a new delivery system which we believe will set new standards in this industry.”
Hickman said that once federal rules on CBD were in place, the Ranch “will aim for national distribution” of the Smart Cups product.
Illinois is using $31 million from cannabis-derived taxes for its Restore, Reinvest and Renew Program, a grant program aimed at small businesses and non-profits in disadvantaged communities, the Quad-City Times reports. The state’s recreational cannabis law sets aside 25 percent of net tax revenues for reinvestment into communities most harmed by the drug war.
The program grants focus on civil legal aid funding, economic development, reentry into society by former inmates, violence prevention, and youth development. The grantees are determined by a 32-member board, Lieutenant Gov. Julianna Stratton (D), who oversees the program along with the Illinois Criminal Justice Information Agency, explained to the Times.
“Gov. [J.B.] Pritzker and our entire administration worked hard in conjunction with members of the General Assembly, the Black Caucus and community organizations. It’s great to see this revenue come in and hopefully see those disadvantaged communities do some rebuilding.” – Stratton to the Times
Cannabis sales in Illinois seem to reach new highs almost monthly. Since legal cannabis sales launched in January – reaching $39.2 million – twice the state has set sales records, including $44.3 million in May and $47.6 million in June. Illinois has collected $52 million in tax revenue from cannabis sales during the first six months of 2020, according to state figures outlined by the Chicago Tribune.
Pritzker predicted the state would see $28 million from cannabis taxes through June 30. Sales since January have topped $239.1 million.
The deadline to apply for the R3 grants is July 20.
New Mexico medical cannabis company Ultra Health is asking a state district court judge to invalidate industry product testing, labeling, and facility safety rules that went into effect earlier this month calling them “arbitrary and capricious” and warning that the rules will increase prices for patients, according to New Mexico Political Report.
The petition filed last week notes that New Mexico medical cannabis producers “already pay well over $100,000 per year” for their licenses “and are precluded by federal law from taking any income tax deductions.” Those businesses, the petition states, “will have to pay for the increased testing burden and will pass along the costs to patients.”
The Department of Health-mandated rules require medical cannabis to be tested for fungus, pesticides, and heavy metals. Ultra Health’s attorneys argue that the health department rules “do not draw the necessary connection between the arbitrarily chosen testing parameters and specific measurements of patient safety,” according to the Political Report’s overview of court documents.
The petition also argues that health officials copied the regulations from other states where both medical and adult-use cannabis is legalized and that standards applied in other states with different climates should not be applied in New Mexico.
“All of the biological and environmental differences between New Mexico and other regions guarantee that cannabis grown in New Mexico will have a very different potential for various kinds of contaminants than cannabis grown in Colorado or Oregon, but DOH never considered these basic environmental factors that make New Mexico unique.” – Ultra Health lawyers in the petition
Moreover, the filing takes aim at a rule allowing the DOH to randomly test products that are packaged and ready for market. The lawyers argue that producers and sellers face financial strain if they are not compensated for those products. They also argue that the rule requiring both product labels and accompanying fact sheets to include the same information is unnecessarily redundant, referring to it as a “belt-and-suspenders rule.”
The petition also calls for the removal of rules requiring product testing at state-approved labs, arguing that New Mexico has only two approved testing labs and “if one of them cannot meet DOH’s requirements, testing would slow to a crawl” and if both cannot meet the requirements the program “would cease to function.”
The attorneys further argue that the health department overstepped its authority with the rule banning medical cannabis and hemp cultivation on the same site. In New Mexico, hemp operations are regulated by the Department of Agriculture and the lawyers note that the Health Department “has never been given any kind of regulatory authority over hemp,” therefore cannot dictate where it can – or cannot – be grown. The attorneys make the same claim about the DOH rule prohibiting hemp products, such as CBD, from being mixed with medical cannabis products.
Additionally, the petition alleges that Health Department rules about facility repairs or upgrades would require cannabusinesses to “submit applications for amended licenses whenever they change a lightbulb.”
Ultra Health has previously filed lawsuits against other state agencies, including a 2019 case against the state Taxation and Revenue Department over tax deductions. A February judgement in that case by an appellate court found that state-licensed medical cannabis producers can claim a tax deduction as prescription medication producers. The state has appealed that case to the New Mexico Supreme Court.
A TVape survey of cannabis consumers suggests that users are not only consuming more cannabis during the coronavirus pandemic but are also shifting more toward vaporizer use and away from combustion.
A slight majority – 53.89 percent – of the 360 people surveyed said they were consuming more cannabis since the call to quarantine, with 41.39 percent saying they are consuming the same amount, and just 4.72 percent of respondents saying they were consuming less.
Prior to the pandemic, 56.11 percent of respondents said vaporizing was their preferred method of consuming cannabis – that figure jumped to 73.06 as citizens throughout the U.S. quarantined either on their own accord or government direction. According to the survey, the number of people using a bong doubled from 5 percent to 10 percent, while the number of people who predominately smoked joints fell from 16.67 percent to 6.11 percent. Pipe use also dropped among the respondents from 5.83 percent to 1.94 percent.
According to the survey, 20.56 percent of those who changed their preferred consumption method attributed the shift to concern over their lung health. COVID-19 – the disease caused by the coronavirus – affects the respiratory system and some patients end up on respirators. Another 12.5 percent said they changed their method to something more convenient, 6.67 percent indicated they switched it up out of boredom, 5.28 percent chose a method with less odor, and 4.72 percent said their new method saves them money by using less product. Just about half of respondents (50.28 percent) said they haven’t changed how they consume.
The survey also found the number of people “likely” to use a vaporizer increased 20 percent – from 68.06 percent to 88.06 percent – and about 9 percent more were more likely to consume indoors (62.5 percent to 71.67 percent).
The survey respondents also indicated that they were consuming more cannabis in the morning and afternoon post-pandemic, with the number of daytime consumers rising from 16.12 percent to 35.56 percent.
Also, users seemed to be split about whether they are willing to share a “piece” with another person during the pandemic as 59.72 percent said they were not likely to share their piece and 48.89 percent said they were not likely to host group sessions with friends.
In most states, cannabis was considered an essential service during pandemic shutdowns.
Nebraskans for Medical Marijuana have submitted more than 182,000 petition signatures to state officials in support of a ballot initiative to legalize medical cannabis in the state. The campaign needed to submit more than 121,000 valid signatures from at least 5 percent of voters in at least 39 counties. The campaign said they have signatures from all of Nebraska’s 93 counties.
The group announced the launch of the signature campaign in March and said that they collected at least 14,000 signatures over the last two weeks.
State Senator Anna Wishart (D), co-chair of the Nebraskans for Medical Marijuana campaign committee who also sponsored legislation last year that was ultimately never voted on, said advocates are “confident” they’ve met the state requirements to put the issue to voters in November.
“This signature drive included a truly impressive feat of grassroots mobilization. We would not have crossed the finish line without the tireless efforts of advocates, patients, families, volunteers, and hardworking Nebraskans who believe in this cause. We’re also proud to say that we registered over five thousand new voters from across the state.” – Wishart in a statement
The signature-gathering effort was spearheaded by Heartland Strategy Group. Heartland’s President Barry Rubin noted that the coronavirus pandemic “severely impacted” signature-gathering efforts for the petition but said “the dedication of … petition circulators, along with the passionate support for this issue from Nebraskans of all backgrounds” pushed the effort forward.
“In the coming months, we will be making the case to voters that establishing a system of safe access for medical cannabis, as 33 other states have done, will be tremendously beneficial for the people of Nebraska,” Rubin said in a press release.
The reforms are opposed by Republican Gov. Pete Ricketts, who has penned at least three columns disapproving of medical cannabis legalization in the state. In a column last May, Ricketts argued that medical cannabis legalization is a gateway to adult-use. In a January column, the governor claimed that cannabis activists “have been trying to circumvent the medical research process that has helped [the] country produce the most safe and effective healthcare in the world” and points out that the Food and Drug Administration has already approved four medications derived from cannabis. He asserted in a 2015 column that “any legalization effort outside [the FDA] process puts Nebraskans at risk.”
The campaign expects state officials to issue a decision on whether they have met the ballot requirements by mid-August.
The government of Canada’s Northwest Territories has reduced the price of all cannabis products by 10 percent hoping the price drop will help legal sellers compete with the unregulated market. The Northwest Territories Liquor and Cannabis Commission said it “has a better understanding of the operating costs associated with the distribution and sale of cannabis” two year after cannabis was legalized federally, and the agency is “confident” it can reduce cannabis prices “while continuing to maintain a safe and secure retail regime.”
Caroline Wawzonek, the Northwest Territories Minister of Finance, said the change “is one of many steps that need to be taken to accomplish” the goal of eliminating illegal sales in the province.
“The Government of the Northwest Territories is committed to eliminating the illegal sale of cannabis by providing residents with legal access to safe and secure products. … We will continue to assess the operations of the Northwest Territories Liquor and Cannabis Commission to find more ways to curb the illegal sale of cannabis in the Northwest Territories in a socially responsible manner.” – Wawzonek in a statement
Currently, legal cannabis is only available at five liquor stores in the NWT and through the cannabis commission’s online sales platform.
A Statistics Canada report from April 2019 found that the NWT had the highest legal and illegal cannabis prices in the nation post-legalization at $14.45 per gram – an increase of 13.7 percent from pre-legalization prices but lower than the national average increase per gram of 17 percent.
The price adjustment in the NWT took effect on July 2.
In a new report, the Canadian Association of Chiefs of Police calls on federal lawmakers to decriminalize low-level possession of all drugs for personal use. CACP President Chief Constable Adam Palmer told the CBC that current drug possession laws have “proven do be ineffective” and do “not save lives.”
“The CACP recognizes substance use and addiction as a public health issue. Being addicted to a controlled substance is not a crime and should not be treated as such. We recommend that Canada’s enforcement-based approach for possession be replaced with a health-care approach that diverts people from the criminal justice system.” – Palmer to the CBC
The research for the paper was conducted by the CACP’s Special Purpose Committee on the Decriminalization of Illicit Drugs. The paper points out that between January 2016 and December 2019, more than 15,000 Canadians died as a result of an opioid-related overdose and between January and December of last year, 3,823 opioid-related deaths occurred, of which 94 percent were accidental.
“Currently, people who experience substance use disorder face repercussions including criminal records, stigma, risk of overdose and the transmission of blood-borne diseases,” the report says. The aim is to decrease these harms by removing mandatory criminal sanctions, often replacing them with responses that promote access to harm reduction and treatment services.”
The report suggests establishing more supervised drug consumption sites throughout Canada, of which there are already 49, up from 29 in March of last year. The report says that more sites would lead to a decrease in fatal overdoses, and increased contact between health and social services and “marginalized clientele.”
The CACP paper also supports providing a “secure, and predictable supply of pharmaceutical-grade opioids for people who use drugs” as most overdoses in the country are tied to illegally obtained fentanyl.
The report points to the model utilized in Portugal, where all drugs are decriminalized. Following the policy shift in 2001, the country has experienced a decline in teen drug use and in rates of injection drug use. The country also experienced a dramatic decrease in drug-related deaths from 80 in 2001 to 16 in 2012. Portugal’s reforms also reduced the number of people arrested and sent to criminal court for drug offenses – from over 14,000 in 2000, to around 5,500 to 6,000 per year. The Portuguese prison population also declined, from 44 percent in 1999, to just under 21 percent in 2012, according to Transform Drug Policy Foundation.
In a statement to the CBC, Canadian Minister of Health Patty Hajdu and Justice Minister David Lametti said the federal government “remains committed to advancing evidence-based responses to help reverse the trend of opioid overdose deaths and other substance-related harms in Canada.”
A bill proposed in Pennsylvania would eliminate the zero-tolerance driving under the influence penalties for individuals legally using medical cannabis, the Times Observer reports. Under current state law, medical cannabis users are effectively breaking the law every time they operate a vehicle within one month of using their medicine because THC stays in most people’s system for about 30 days and a positive THC test while driving could lead to a DUI.
Republican State Sen. Cameron Bartolotta, the bill sponsor, said lawmakers “need to ensure that the legal use of this medicine does not give rise to a criminal conviction.”
“Patients fought tooth and nail for years to see the use of medical cannabis legalized to treat a variety of terrible health conditions. They should have the peace of mind to know that they will not be punished later for using their prescriptions responsibly.” – Bartolotta to the Times Observer
Warren County District Attorney Rob Greene pointed out that there is no requirement in state law that a driver be determined to be impaired in order to be convicted to DUI, rather just the presence of THC. He added that an officer could use a driver’s medical cannabis card as “probable cause” to take them to a hospital and test their blood and that person could be convicted “solely based off of a test result of their blood.”
“The Commonwealth only has to prove that the defendant’s blood contained a controlled substance at the time he or she was in control of the vehicle,” Greene said in the report.
The bill would not protect non-medical cannabis users.
No Canadian cannabis brand has more than 41 percent recognition among current cannabis users, according to a Brightfield Group report outlined by Bloomberg News. Canopy Growth Corp.’s Tweed and Aurora Cannabis Inc.’s Drift are most recognized in the nation, at 41 percent and 34 percent respectively, but most other brands rate between 1 percent and 15 percent for brand recognition.
The report suggests that cannabusinesses in Canada “have primarily focused on raising capital, but this has not inherently translated into strong customer relationships.”
“As the market becomes more consumer-centric, brands must focus on developing a deep understanding of the competitive landscape and consumer behavior to stay relevant and ensure they don’t risk being seen as a commodity.” – Brightfield Group via Bloomberg
Some brands, such as Tilray Inc.’s Canaca, have low recognition ratings but high overall consumer satisfaction. Canaca was recognized by just 9 percent of the survey’s more than 3,000 respondents but 97 percent of those consumers were overall satisfied by the product and 99 percent said they would buy it again. Tweed, by comparison, had an 89 percent overall satisfaction rating with 90 percent saying they would purchase it again.
A Green Horizons report published last month found no U.S. cannabis brand was recognized by more than 23 percent of consumers.
Overall, 23 percent of cannabis consumers had heard of Leafs By Snoop – the brand backed by rapper Snoop Dogg, while 22 percent had heard of Cheeba Chews, and 21 percent had heard of Marley Naturals, which bears the namesake of late reggae legend Bob Marley.
Both Green Horizons and Brightfield Group said that the low brand recognition numbers proved that there are still breakout opportunities for legal cannabis brands.
Dan Bilzerian, CEO of cannabis company Ignite International Brands Ltd, and so-called Instagram playboy who posts images with stacks of cash and models on yachts, is being sued by a whistleblower amid reports that the company lost $50 million last year.
Curtis Heffernan, former Ignite executive vice president, claims he was fired after flagging unordinary purchases to the company board, including $75,000 on paintball field, $40,000 on a rock climbing wall, $60,000 on a “Star Wars” gun set, $31,000 on pool renovations, $50,000 on a bed frame, $15,000 on a ping pong table, and $88,000 on a vault, TMZ reports citing court documents.
Heffernan claims he also found evidence that some “business expenses” charged to Ignite were for household items, groceries, luxury yacht rentals, and transportation for models. He claims that when he brought the discrepancies to the board, Bilzerian accused him of doing drugs and fired him. Heffernan is seeking compensation for damages.
Ignite is publicly traded on the Canadian Securities Exchange, and per its annual filing the firm only made money by selling company stock – to the tune of $25 million – and through debt, according to a Forbes report. The filings show the company raised $19.9 million from “convertible debt” and $23.7 million from a “short-term promissory note.”
The filing also indicates that Ignite used cash to pay for salaries, licensing fees, and business and travel expenses for companies “owned by the CEO.”
The report runs contrary to former Ignite President Jim McCormick’s comments last year that he expected the firm to be “cash flow positive” in 2020, adding that Ignite was run “very lean and mean.”
In the filing, the board warned that, partly due to the coronavirus pandemic and partly due to “an unfavorable perception” of the Ignite brand, “there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms that are acceptable to the company.”
“The uncertainty of the Company’s ability to achieve profitable operations and its success in raising additional capital funding may cast significant doubt on the Company’s ability to continue as a going concern.” – Ignite’s Board of Directors in an CSE filing
The company also received $1.2 million from the federal Paycheck Protection Program which was designed to help businesses struggling from the coronavirus pandemic. The company indicated it intends to apply for forgiveness on that loan.
Bilzerian told TMZ that Heffernan’s claim is “frivolous” and “ridiculous,” and that he was “fired for incompetence and negligence” and said Ignite would respond with its own lawsuit.
As an editor of West of Wild, an online publication dedicated to helping high-performing women optimize their day, I’ve tried a lot of CBD products. From novel packing, to novel dosing suggestions, to the coveted celebrity endorsement, for better or for worse, CBD brands have been making a tremendous effort to define themselves in a saturated market. However, with the surge of market entrants, and general inability of the average consumer to differentiate one CBD product from another, their efforts have not always been successful. In the case of expensive media buys, such efforts are often unsustainable.
Thus, the current mood in the industry is innovate, or die. To avoid the latter, some savvy cannabis entrepreneurs have coupled the cannabinoid with a category of plants that have been around for centuries, yet have only recently sprung to the fore-front of the wellness world.
Thanks to the educational efforts of their earliest purveyors, this class of holistic herbs are now familiar enough to the average consumer, that their coupling with CBD, might just make the cannabinoid more approachable. If you’ve frequented the ever-popular Moon Juice in West Hollywood, listened to a Goop podcast, or fancy yourself a cup of mushroom coffee, you’ve most likely heard of these plants. Yep, I’m talking about adaptogens.
Adaptogens and CBD
Adaptogens have been making a slow and steady resurgence in the wellness world, but their coupling with CBD is a relatively new concept. At the forefront of this pairing, is wellness entrepreneur Ken Lawson, founder of the FOCL brand of products.
Struggling with the common issues of focus and sleep, Lawson “became obsessed with finding, researching, and vetting the best natural ingredients to help”. While on his own personal wellness journey, Lawson stumbled on adaptogens such as Lion’s Mane and Ashwagandha, which he found to be beneficial in their own right. Once friends and family started asking what he was taking, “the lightbulb went off”, and the FOCL founder decided to combine adaptogens with CBD.
FOCL now offers a line of Wellness Stacks, which couple broad spectrum CBD with a slew of adaptogenic herbs and mushrooms -all in neat and tidy pill form. Each ‘stack’ is optimized for the time of day you are taking it: with “FOCL Day” pairing CBD with adaptogens that increase focus, learning, and memory; and “FOCL Night” pairing cannabidiol with adaptogens that help you achieve high-quality sleep.
When asked about the requirements a given adaptogen must meet before being included in the formula, Lawson stated that safety and effectiveness are the two most important criteria when selecting ingredients. Aside from having a world class scientist on their board of directors, clinical studies, consumer data, and top eastern and western doctors are all consulted in the selection and formulation of FOCL’s wellness stacks. Thus, while you’ll see some well known adaptogens such as Lions Mane and Ashwagandha in FOCL’s formulas, you’ll also see some lesser known herbs such as Purple Passion Flower and Bacopa Monnieri.
While it’s clear that Lawson made the decision to combine CBD and adaptogens in order to amplify their respective wellness benefits, I can’t help but wonder if the combination may also serve to bridge the gap between cannabis and the broader world of wellness. Put differently, could an established association with adaptogens, (and eventual inclusion of CBD in the categorization itself), help de-stigmatize hemp derived products in the minds of consumers?
After all, adaptogens are grouped by their ability to help the body produce a healthy stress response, and doesn’t CBD accomplish this as well?
It seems that only time will tell. In the meantime, Lawson is aware that “some [adaptogens] are more well known to the public than others” and admits that even as the popularity and awareness of these plants continues to grow, FOCL’s job is to “help educate and expose people to these amazing gifts from Mother Nature”.
Workers at Mayflower Medicinals in Holliston, Massachusetts have voted to join United Food and Commercial Workers Union Local 1445, the Boston Business Journal reports. The union said employees chose to join to the union due to slow responses to the coronavirus pandemic, lack of consistent treatment from management, and a dearth of adequate healthcare coverage.
The union will next negotiate a contract for the employees.
“More Massachusetts cannabis workers will have an opportunity to ensure the beginnings of this industry, and the working conditions in all these facilities are equitable and standardized,” Local 1445 Secretary Treasurer and Organizing Director, Fabricio DaSilva, in a statement via the Business Journal
In 2019, employees at Sira Naturals became the first cannabis employees in the state to unionize, according to the report. Since then, Local 328 won an election at Curaleaf’s Hanover dispensary, Local 1445 filed petitions with the state to represent workers at Cultivate in Leicester, and on July 1, 60 employees at New England Treatment Access’s Franklin cultivation facility voted to join Local 1445.
Under some cannabis laws, businesses are required to have labor-peace deals which sometimes involves unions, but not always. Stoney Brothers employees in Portland, Oregon last year became the first in the state to unionize, voting unanimously to join UFCW Local 555. The UFCW is also recruiting cannabis employees in Washington state.
In February, budtenders at Clarity Cannabis in British Columbia became the first workers at a private dispensary in Canada to vote to join a union.
Kansas City, Missouri lawmakers voted on Thursday to remove cannabis possession from the city code, effectively decriminalizing low-level cannabis-related offenses, the Kansas City Star reports. The crimes can still be prosecuted by county prosecutors who wish to pursue the case.
In 2017, Kansas City voters approved a decriminalization measure which replaced criminal penalties for cannabis possession up to 35 grams with a civil fine of $25. Thursday’s City Council vote removed that penalty.
Jackson County Prosecutor Jean Peters Baker has already said she would no longer prosecute low-level possession; however, portions of Kansas City are in Clay, Platte, and Cass counties, and prosecutors in those counties could choose to bring a criminal case.
Due to this geographical issue, some city councilors and advocates said removing cannabis possession from the city code might actually make it more likely prosecutors outside of Jackson County would levy criminal charges because it removed the citywide protections afforded by the 2017 reforms.
Councilwoman Katheryn Shields said people in her district could receive harsher penalties than those in districts in the neighboring counties.
“By taking this option from the police of being able to file something that’s a city charge and instead taking it to the state prosecutor, we’re putting any of those African Americans and Hispanics who are stopped while … in Clay and Platte county in a possession of perhaps facing much more serious state charges.” – Shields via the Star
Mayor Quinton Lucas told the council that 90 percent of possession cases in Kansas City happened in Jackson County and wondered whether they would backtrack on something that would benefit 90 percent of those affected “because of the 10 percent.”
The U.S. Securities and Exchange Commission has reportedly told Hightimes Holding Corp. to halt its initial public offering after the company missed a June 12 deadline for filing its audited annual report.
Attorneys Stephen Weiss and Megan Penick of Michelman Robinson LLP — who both work as securities lawyers for High Times — confirmed to Cannabis Law Report‘s Teri Buhl that the company cannot accept additional sales until the annual report is filed and publicly available for investors. The most recent High Times annual report was filed in June 2019 and showed that the company had raised just $15 million of its $50 million goal.
High Times has been technically barred from accepting any new sales and, when Buhl asked about the company’s marketing materials in early June, Penick said she was unaware the company was still pitching to investors.
In an SEC filing by High Times on June 30, meanwhile, the company announced yet another extension of its IPO but failed to mention that it was not allowed to accept new sales due to having missed the audit deadline earlier that month.
“The SEC may have softened up in the Covid crisis but previously, both sales and offers were supposed to stop during such time as the issuer was delinquent in its filings, because there is no exemption under Reg A for ‘offers’ … while a company is delinquent.” — Securities attorney Sara Hanks, via Cannabis Law Report
Ultimately, the company’s Regulation A offering has drawn a mixed bag of criticism and hesitant excitement from the cannabis space.
The High Times brand was sold in 2017 to Los Angeles-based Oreva Capital, headed by Adam Levin, for $70 million. The High Times IPO was first announced in July 2018 under the federal Reg A exemption. Since then, the company has gone through three different CEOs, announced a major pivot from media and events to the business of cannabis retail, carried out a flurry of acquisitions, and has been the target of multiple lawsuits over unpaid debts.
Beverages are a rapidly-growing segment of the CBD industry, and are predicted to generate $1.4B in annual sales by 2023. In this interview, Breck Speed and Cameron Meshell of Farmington Research describe their process of infusing beverages with CBD, the history and driving ideology behind their business, what makes CBD-infused beverages such an exciting consumer goods opportunity, and much more!
Ganjapreneur: What would you say are the biggest problems facing cannabis and CBD brands who want to develop infused beverage products?
Breck Speed: I come from a background of over 30 years in the healthy beverage business both as a bottler and a brand owner. For beverage brands, delivering a great tasting product to consumers also having a discernible benefit is the whole ball game. Fail that test and consumers will go elsewhere. So when I became intrigued with the developing cannabis/CBD market I was concerned to discover serious issues with taste, smell, and solubility in the available extracts in the marketplace. At Farmington, we believe we have solved those issues.
How has Farmington Research addressed common cannabis beverage issues like solubility, taste, and smell? Have you seen issues like this in other beverage markets?
Cameron Meshell: Solubility, taste, and smell are major issues for most cannabis extracts in beverage applications. Other beverage additives may have an issue with one of those factors like Stevia (taste) or CO2 (poor solubility at warm temperatures). Cannabis has issues with all three and presents a real challenge to flavor companies and brand owners. Farmington Research has developed a proprietary process over the last several years which addresses these factors and allows brand developers much more freedom to create wonderful tasting products. We can’t tell you how but we can prove it! Sample us, test us, taste us and you’ll be convinced.
Why are beverages an ideal form of consumption for cannabis and CBD?
Breck Speed: Beverages are familiar to consumers. It is the way they enjoy alcohol, how they hydrate and refresh, what they turn to for energy, and more recently what they consume for a wellness benefit. The only thing missing for them to fully enjoy CBD or Cannabis in beverages is a reliable, familiar way to understand the dosing. The brands delivering on reliable dosing will be big winners.
What role does Farmington Research play in the development of new products for clients?
Cameron Meshell: Like Breck, I used to run a bottling operation. We don’t just understand the science behind cannabis and CBD. We also understand working with flavor houses, the mechanics of batching, bottling, testing, compliance, and the sourcing of supplies. The nuts and bolts of what it takes to bottle a brand and get it in distribution. That experience really streamlines the relationship with brand owners whether they are new to the business or “beverage war” veterans. Working with Farmington is a “value added” experience.
As consultants how does the Farmington Research team stay informed on the regulatory uncertainty and changes that happen in the developing market?
Breck Speed: I was an attorney with a practice representing businesses in regulated industries before I was in the beverage market. I also was closely involved as the Chairman of the International Bottled Water Association in the many legal and political challenges that particular industry has faced over the last 30 years. To stay informed on the legal hurdles in the developing cannabis market we consume industry news closely from multiple sources, follow the statements of the FDA and state authorities closely, share information with other leaders in the cannabis market, and attend conferences and seminars. It’s a “firehose” of information to consume right now. We do all of this so we can share what we learn with our extract customers so they can develop the best practices to stay out of the crosshairs of regulators.
What is the biggest misconception about CBD-infused products within the industry right now?
Breck Speed: The biggest misconception has been exposed! Early on people believed the market would take off like a rocket and were surprised when it was more like a late model sedan. I do believe the market will be quite large in the not-too-distant future and I see a lot of consumer products companies taking steps to participate. But regulatory uncertainty has delayed participation by major brands, retailers, and distributors. That hesitation has created an opportunity for early movers who under normal market conditions would be left looking for small niches.
Where does Farmington Research source the hemp for your CBD formulations? Are there multiple genetics available for product formulation?
Cameron Meshell: We process hemp currently from farmers licensed by states having a clear and clean testing record. But we are not hemp or cannabis producers ourselves so will gladly work with a brand owner to process the hemp they specify. If a brand owner wants certified organic hemp, if they want cannabis from a certain state for marketing purposes, if they want something with more CBG or terpenes, we have the experience and contacts to make it happen. We are not a one size fits all kind of supplier.
How do you guarantee consistent quality and potency of your products?
Cameron Meshell: Testing, Testing, Testing. We have a sophisticated production laboratory and a process we believe through experience delivers a consistent extract for use in beverages – but we prove it daily. We require testing of the hemp or cannabis in the field. We test it upon receipt at our facility. We test it after extraction. And we work with our brand partners to test it after their production runs. All of our testing results are available to our brand partners and their consumers. Not many other beverage suppliers are so transparent but we believe it is absolutely essential in this new market where consumers are deciding if this is something they want to try, trust, and keep using.
What role do you think infused beverages will play in society five years from now?
Breck Speed: To be honest, CBD and cannabis have been part of society for many, many decades. Now legal and largely socially acceptable, infused beverages will follow a macro trend of consumers seeking out healthy, ‘better-for-you’ drinks. Brands will participate in the fast growing wellness beverage market. They will be part of the premium beverage market. And they will take significant market share in the alcohol market for people who want to relax or recreate but don’t want the significant negative effects of alcohol. It will be a completely normal thing in five years and used for lots of different occasions in our society.
Thanks, Breck and Cameron, for answering all of our questions! You can follow up to learn more about Farmington Research at FarmingtonResearch.com.
The California Department of Tax and Fee Administration is using tax warrants in cannabis enforcement, announcing on Wednesday that it initiated actions against 12 illegal retailers in Los Angeles and San Bernardino counties.
The warrants are more commonly known as liens.
The agency said it had seized nearly $1 million in illicit cannabis products along with $100,000 in cash during a crackdown in conjunction with the California Highway Patrol. The cash will be applied to tax liabilities, the CDTFA said.
CDTFA Director Nick Maduros called the inter-agency collaboration “an important deterrent to tax evasion.”
“Tax evasion unfairly shifts the burden onto all other taxpayers and makes it tough for those businesses that are playing by the rules to survive.” – Maduros in a statement
The agency did not name the targets of the enforcement action but said violators are subject to fines and possibly jail time.
California levies a 15 percent excise tax on recreational sales cannabis in addition to the state’s 7.25 percent sales tax and local taxes of up to 1 percent. Cannabis businesses taxes are decided by municipalities and can run from 0 percent up to 15 percent. The state also imposes a cultivation tax of $9.65 per ounce.
As of March 10, California raised $1.03 billion in cannabis taxes since the industry’s launch in January 2018, according to the OC Register. After regulatory costs, cannabis taxes are utilized for childcare for low-income families, cannabis research, public safety grants, and environmental remediation for lands harmed by illegal cannabis grown.
The campaign behind Oregon’s Initiative Petition 34, which would legalize medical psilocybin when prescribed and supervised by a medical professional, has qualified for the ballot, Oregon Public Broadcast reports.
164,782 Oregonians signed the petition, far surpassing the required 112,020 signatures. The campaign was backed by the Dr. Bronners soap company, which in May injected $1 million into the campaign’s coffers.
Psychedelics such as psilocybin and MDMA have been hailed by many, including the FDA, as a breakthrough therapy in the treatment of severe depression and anxiety.
“This careful, regulated approach can make a real difference in peoples’ lives and we’re looking forward to bringing this program to the state.” — Sheri Eckert, chief petitioner for IP 34, via OPB
IP 34 initiative, if successful, would establish regulations overseen by the Oregon Health Authority for therapists to get licensed to treat patients with psilocybin. Unlike the state’s medical cannabis program, Oregon‘s medical psilocybin program would not include retail options and patients would not be allowed to take the medication at home — rather, the patient’s psilocybin sessions would take place in “licensed settings under the supervision of trained facilitators.”
The U.S. Defense Advanced Research Projects Agency recently announced it was providing $26.9 million in funding for a medical health study investigating the therapeutic use of psychedelics.
Last September, researchers at Johns Hopkins University announced the forming of the Center for Psychedelic and Consciousness Research, thought to be the world’s largest psilocybin research center.
A lawsuit filed against the city of Los Angeles, California by the Social Equity Owners and Workers Assn. and one of its members has been dropped after officials agreed to process more of the applications for new cannabis industry licenses, the Los Angeles Times reports.
Advocates had filed the lawsuit in April arguing that the application process for new dispensaries – a first-come, first-served system – was flawed. The city had opened up licensing last September for 100 total licenses.
The plaintiffs had claimed in the lawsuit that more than 200 applicants had accessed the online application portal before the official start time for applications which gave them an unfair advantage over others who had waited until the 10 a.m. start time. City attorneys argued that just because they accessed the platform, didn’t mean they started their application and that those who started early were pushed back in line to where they would have been if they started on time. The city also claimed an audit found officials took reasonable and appropriate steps to prevent unfairness in the system.
Last week, the City Council unanimously approved new regulations that will tighten up the city’s social equity program and create rules for licensing new dispensaries in city neighborhoods that have already reached their cap. The reforms were part of a settlement for ending the litigation, according to the report.
Kika Keith, Social Equity Owners and Workers Assn. co-founder, called the new social equity program rules “a great victory” for affected entrepreneurs.
“Social equity applicants banded together and raised the money for legal fees to fight the injustice of the application process.” – Keith to the Times
The city will also scrap the first-come, first-served system in favor of a lottery system. The new rules also narrow the ZIP codes eligible for social equity licensing relief in the city after it was discovered that some wealthier, affluent, white neighborhoods were included among the list of ZIP codes eligible for the program. Licensing officials will now use police reporting districts which Department of Cannabis Regulation Executive Director and General Manager Cat Packer said would better target the communities most affected by the drug war for the licenses.
