Ultra Health, New Mexico’s largest medical cannabis producer, is suing the state of New Mexico’s Taxation and Revenue Department in an attempt to recover $1.5 million in sales taxes, which the company claims were collected illegally, according to the Santa Fe New Mexican.
New Mexico state law exempts prescription drugs from “gross receipts” or sales taxes. Ultra Health is taking the position that medical cannabis, which requires a doctor’s recommendation in New Mexico, is a prescribed drug and thus exempt. However, the company has paid $1,541,088 in taxes between January 1, 2015 and May 31st, 2018.
The company filed a request to have the taxes refunded through the Taxation and Revenue Department, but the request was denied. Ultra Health is now filing suit in order to have the taxes refunded, as well as their lawyer fees and interest on the money.
“Patients already pay 100 percent out of pocket for medical cannabis. If the average cost of medicine for patients is $2300 a quarter, the average [gross receipts tax] burden on medical cannabis is nearly $1,000 per year. This is a huge undue burden on patients with debilitating medical conditions. … It is time that we recognize the tax fairness due medical cannabis patients who are making a healthier and fiscally responsible choice for their well being.” — Duke Rodriguez, CEO of Ultra Health, to the Sante Fe New Mexican
The dispute comes down to the difference between a doctor’s “recommendation” and “prescription.” Ultra Health believes that there is no effective difference — it remains to be seen how the District Court of Sante Fe will rule.
The Washington CannaBusiness Association and others in the Washington state cannabis industry are frustrated with the private selection and confirmation of state cannabis regulators, The Stranger reports.
Washington’s cannabis industry has been troubled by the state cannabis regulation, which is conducted by the Washington State Liquor and Cannabis Control Board.
“Our members in the regulated cannabis industry are concerned about the culture of the LCB, which is under the purview of an unelected board of directors, and whose enforcement behavior is the catalyst for bipartisan support for compliance reform this session.” — Vicki Christophersen, Executive Director of the Washington CannaBusiness Association, via The Stranger
Three board members are up for confirmation in a private hearing: Jane Rushford, Russell Hauge, and Ollie Garrett. According to state Sen. Karen Keiser, who oversees the committee responsible for the confirmations, Russell Hauge’s term is expiring and he is not up for confirmation and will be replaced.
The Liquor and Cannabis Control Board has been criticized for several decisions in the last year, like the organization’s outright ban on all infused candies, which was later reversed. The LCB has also been criticized for lax enforcement of illegal pesticide use, broken seed-to-sale tracking software, and unfair punishment for cannabis businesses for minor infractions.
Sen. Karen Keiser told The Stranger she wouldn’t open the hearing to the public. According to Keiser, the period for public comment was in the last legislative session. “Confirmation hearings are not for people to come and trash people. If people have a problem with Jane Rushford or Ollie Garret they should let me know. If they have a problem with the entire agency they should let me know,” said Keiser.
Keiser admitted the enforcement issues are a concern but pointed to bills currently being considered by Washington state lawmakers that would fix the issues.
On Wednesday, New Jersey Governor Phil Murphy announced that opioid addiction is now a qualifying condition for medical cannabis in the state, according to an NJ.com report.
For years, the death rate from opioid overdoses in New Jersey has been on the rise. In 2018, 3100 residents were estimated to have died from opiate drug overdoses, a fourth straight year in a row to set a new record high. Note that — due to rising population levels — the percentage rise was not quite as high, but opioids remain a serious issue.
The state has developed a multi-tier strategy. Part one is immediately adding opioid addiction as a qualifying medical cannabis condition. State Health Commissioner Shereef Elnahal pointed out two studies from last year that showed convincing evidence for medical cannabis lowering the overdose death rate, as well as the prescription rate.
The additional steps involve clean syringe access programs as well as medication-assisted treatment (MAT) for addiction.
As New Jersey continues to expand its medical cannabis program and move towards legalizing adult-use cannabis, it hopes to lower the rates of death due to overdose and other complications from opiates such as heroin, classic painkillers, and the newer, more potent fentanyl.
Already in 2019, there have been 141 opioid deaths — about seven per day.
Cannabis advocates in Massachusetts said that after a review of contracts between cannabis companies and local governments they have determined that 79 percent of the contracts violate state law, The Boston Globe reports.
The agreements between cannabis producers and municipalities are known as “host community agreements.” Law firm Gersten Saltman, however, recently launched an investigation into the deals working alongside The Massachusetts Cannabis Reform Coalition and the Massachusetts Grower Advisory Council. The group reviewed 77 such deal and found that the vast majority of the agreements violate state laws, which set the limit on payments to municipalities from cannabis companies at three percent of the cannabis company’s annual revenue. The agreements’ payments must also be reasonable charges in light of the actual costs to the town or city of hosting the business; such deals cannot last longer than five years at a time.
However, the Massachusetts Cannabis Control Commission declined to review the agreements, claiming it has insufficient authority. The commission has applied to the state government to explicitly give regulators the authority.
“It’s a big problem for smaller or medium-sized businesses because it turns into a barrier to entry. … It’s a pay-to-play situation … It’s really a matter of extortion and bribery in plain sight.” — Peter Bernard, president of the Massachusetts Grower Advisory Council, to The Boston Globe.
The law firm requested a response within 30 days. After that time, Gersten Saltman many file suit against the state.
The city of Portland, Oregon has issued two grants to cannabis businesses owned by African Americans, The Oregonian reports.
According to Portland city economic development agency Prosper Portland, the grants were awarded for the benefit of people who were harmed most by the many decades of cannabis prohibition. Prosper Portland said Portland is the first municipal government to invest in “communities disproportionately harmed by cannabis criminalization.”
Two grants of $30,000 each will go to two different companies. One is a cannabis delivery service called Green Box available by subscription. The other is a cannabis retailer that offers an apprenticeship program to young African Americans called Green Hop.
The city hopes the grants will help bridge the “racially divided capital gap.”
Adrian Wayman, CEO of Green Box, told reporters that the $30,000 grant will allow his company to “leap forward.”
“As a 100 percent bootstrapped company, limited funding has inhibited our growth,” said Wayman.
Portland, the largest city in Oregon, has positioned itself at the forefront of city cannabis policy since Oregon voted to legalize in 2014. Last year, Portland Mayor Ted Wheeler (D) was one of many mayors from major cities who wrote to federal lawmakers about the need to reform national cannabis laws.
BudTrader.com is offering free cannabis to furloughed government workers while the government is shut down, according to The Hill.
BudTrader is known in some circles as “the Craigslist of weed.” The company will offer free medical cannabis to government workers whose pay has been stopped due to the shutdown, which has entered its second month this week. Over 800,000 federal workers are currently out of work due to a standoff between President Trump, who has demanded money for building a 2,000-mile wall along the U.S. southern border, and the Democrat-controlled House of Representatives.
“I don’t think federal employees are getting enough love and support, in these tough times, we want to extend the offer of a donation of medical cannabis to any federal worker affected by the shutdown.” — BudTrader CEO Brad McLaughlin, in a press release
BudTrader is currently working with an attorney to ensure that the cannabis donations are legal within California’s cannabis laws. All donations will remain confidential. Donation amounts will be given right up to the state’s legal possession limits for cannabis.
Several other companies including Kraft have settled into their own giving campaigns for out-of-work federal employees. BudTrader, however, is so far the only company to make public its furloughed worker cannabis donation program.
It’s unclear how much longer the government shutdown will last — legislation under consideration today has the potential to reopen the federal government — but at least federal worker patients in California will have access to free medicine while it continues.
The state of Pennsylvania has decided to scrap limitations on its industrial hemp pilot program and will allow farmers open access to the hemp industry, The Morning Call reports.
Pennsylvania submitted its updated hemp plan to the U.S. Department of Agriculture. While the 2018 Farm Bill legalized the cultivation of low-THC industrial hemp, the federal government has yet to establish specific cultivation rules. The previous farm bill Bill contained strict guidelines allowing only for industrial hemp pilot programs, which remain in place in many states.
Pennsylvania is scrapping just such a pilot program, which contained limitations that had capped the industry at 84 conditional participants and just 100 acres of plants. The state agriculture department announced in 2018 that it was too late to change course for 2019 but now has reportedly reversed that decision.
Many challenges still remain even after Pennsylvania’s opening of its hemp program. According to spokesperson Shannon Powers, “there’s 80 years of missing information” regarding hemp cultivation, such as common pests and methods of harvesting. Not to mention, there are not currently any large-scale commercial hemp processors in place.
“It’s one more step, but in this case it’s a big step for Pennsylvania farmers who are certainly seeking alternatives in new rotational crops,” said Geoff Whaling, President of the Pennsylvania Hemp Industrial Council.
Hikurangi Cannabis Company in New Zealand has had its cannabis license adjusted to allow the company to import high-THC cannabis cultivars, according to a Stuff.co.nz report.
The company’s license is the first one to be updated in this way. The New Zealand government previously allowed just low-THC cannabis plants to be used in its medical cannabis program, which was changed last month. Hukurangi was the first cannabis company to finish an application for changing its license.
Hikurangi will be cultivating 16 new strains of cannabis. Five varieties will be THC-rich, four will be CBD-rich with low THC, and the other seven will be similar to the formerly approved low-THC strains.
Hikurangi’s Managing Director Manu Caddie said that the importation of these high-THC medical cannabis varietals has nothing to do with the upcoming 2020 referendum to legalize adult-use cannabis. Caddie said the THC-rich strains will be used to help people in need of pain management, whereas the CBD-heavy strains will be used to help people with seizure disorders like epilepsy.
Caddie said his next project is developing relations with burgeoning cannabis industries in Asia — like Thailand, which recently legalized medical cannabis — in hopes of trading for new seeds and medicines.
“Last week we saw the government in Thailand approve medical cannabis, the Philippines, Malaysia, and South Korea are all shifting quickly and others are following,” he said.
Editor’s note: This article was contributed by Cannabis Tax Solutions.
Just when you think you have 280E figured out – BAM! Here comes another curveball. Recent court cases (Alterman and Alpenglow, among them) have empowered the IRS even more, and have seemingly weakened landmark cases like CHAMP.
Attorneys representing clients in audits have told Cannabis Tax Solutions the IRS has now taken the position that if you do not have “enough” non-cannabis revenue from products such as glassware and T-shirts, you will not be able to take related deductions. What is enough? Good question, and one we are still trying to figure out. Another adverse position the IRS is taking: advertising. If you have your brand name or logo on T-shirts, hats, or any non–cannabis item you sell, it can be construed as advertising, which falls directly under 280E. Disallowed deduction.
So, what can you do to protect yourself? In the past, the belief was as long as you accounted for the non–cannabis activities separately — such as different classes in QuickBooks — you would be ok. It doesn’t appear this will fly anymore. The single biggest step you can take now is to set up your non–cannabis activity as a totally separate entity. Completely segregating the businesses will give you a much better path to justifying the revenues and fully legitimate deductible expenses for the non–cannabis activity.
Another crucial factor in determining the success or failure of your cannabis business is choosing which professionals to work with. Cannabis Tax Solutions have had several new clients come to us with tax returns and financials prepared by non-cannabis accountants that bordered on criminal — they were that bad. No 280E recognition, balance sheets not tied out, incorrect codes, no disclosures. If you hire professionals that don’t know 280E (accounting and legal) then you are digging a huge hole for yourself. This industry is filled with very complex accounting, tax, and legal issues; not having the proper people in place will kill your business.
One of the biggest things you can do to help yourself is simply taking time to review your own books and tax returns. Don’t put your complete faith and trust in your accountant/tax preparer — it’s YOUR business, after all. Make sure you know what’s going on inside. Look at the tax return to make sure the proper 280E adjustments are being recorded. Does it pass the common sense test? You would be surprised. You may also want to engage in a 280E analysis by a qualified professional who knows what to look for.
Legal deductions are lost by failing to track and document employees whose work involves production-related activities that qualify as cost of goods sold (COGS) deductions, as well as non-production activities disallowed under 280E. Using technology such as Würk’s cannabis time-tracking and attendance software system to track employee activities can also help produce records that can satisfy the IRS. This is as bulletproof a way as anything to show where employees are working to back up employee-related expenses that may be deductible.
Of course, bookkeeping is always an ongoing issue. And truly, having great bookkeeping practices will help you both in the long and short run. If the books are in order, chances are those deductions in question will have a greater chance of being accepted under audit. If you can’t get banked, don’t worry — creating cash logs and having the proper backup in the way of receipts will go a long way for providing a complete accounting environment.
Speaking of environment, another important consideration is how you are structured as an entity. Should you be taxed as a C corp? S corp? Something else? How do other shareholders and investors fit into this equation? Are there outside states to consider? How will this decision affect exit strategy? There is the potential for tons of moving pieces, so make sure they are all covered.
If you want to keep your doors open, having a perpetual tax planning and projection initiative is imperative. You should always be looking at actual versus budgeted numbers, forecasts, and anything else that will ultimately tilt the (tax) bottom line. Don’t let a million dollar tax bill sneak up on you — be aware! And don’t wait until December to perform this most critical task. Federal and State income, payroll, marijuana-related taxes — including excise and sales tax — all need to be accounted and planned for. Staying current with all tax liabilities is crucial for long term success. If you fall behind, seek immediate help for formulating a plan to catch up. Once you get on the IRS radar, in conjunction with being a federally illegal business, it can be a quick recipe for disaster.
Until Marijuana is removed as a Schedule 1 drug, it will still be the Wild West when it comes to figuring out what you can and can’t do for maximizing your deductions and minimize taxes. Seek out the best representation and you will be on your way to providing your business with the best chance to survive and succeed.
If you would like more information on 280E or other cannabis tax policies please reach out to us at info@cannabistaxsolutions.com or visit our website at CannabisTaxSolutions.com.
Two owners of a cannabis transport company are suing the California Highway Patrol (CHP) following the arrest of two delivery drivers and confiscation of $257,000 in cash in late 2018, according to the Sacramento Bee.
In September, California-licensed cannabis business owners Rick Barry and Brian Clemann — who happen to be former CHP officers themselves — were arrested during a traffic stop. While the men were released within hours, the CHP confiscated the $257,000 in cash the men were carrying after having delivered a shipment of cannabis oil. Neither person were charged with a crime. Barry and Clemann both say they had their state cannabis distribution license on them when they were arrested.
Barry and Clemann are now suing the CHP. They’re hoping a judge will issue a directive to state enforcement agencies to stop interfering in the state-legal cannabis industry, as well as provide financial restitution. Just last week, California regulators made it clear that deliveries are legal statewide, even to areas that have prohibited cannabis sales or have not instituted rules at all.
Seizures by the CHP have not gone down since adult-use cannabis was legalized in California. In fact, the amount of cannabis seized in 2018 was double what was seized in 2017.
The issue will now be decided in the San Francisco Superior Court. According to Barry and Clemann’s attorney, “the fundamental issue here is whether the CHP is going to follow the will of the voters of California and the Legislature and stop cooperating with federal authorities in the ongoing federally instigated war on cannabis.”
The CBS network has rejected a potential Super Bowl ad from Acreage Holdings that would have expounded on the benefits of medical cannabis, Bloomberg reports.
Acreage Holdings — a multi-state cannabis corporation which includes several former lawmakers, including former Speaker of the House John Boehner, on the company’s board of directors — said the company’s proposed Super Bowl ad would have explained the plant’s effectiveness for many conditions and called for legalizing medical cannabis. The ad would have portrayed two individuals who have reached relief through cannabis: a child with epilepsy and a U.S. combat veteran.
According to Acreage Holdings President George Allen, the advertisement aimed to “create an advocacy campaign for constituents who are being lost in the dialogue.”
CBS nixed the ad, however, and did not immediately respond to inquiries about the incident.
The Super Bowl is usually the most-watched network television event of the year. Last year, reports indicated that a 30-second advertising slot cost about $5 million. For this reason, many viewers have started anticipating the ads in between plays, as they are usually of notably higher-production than average network television advertisements.
“It’s hard to compete with the amount of attention something gets when it airs during the Super Bowl,” Allen said in an interview with Bloomberg.
Notably, there is increasing pressure on the NFL to allow its players to access medical cannabis as a potential replacement for opiate painkillers; the organization, however, has yet to budge on the issue.
A federal judge in New Mexico has upheld the free speech rights of Ultra Health, the largest cannabis producer in the state, according to a Globe Newswire report.
Ultra Health filed a complaint against the New Mexico State Fair after the Fair attempted to limit their display of images of cannabis plants and processing equipment during the medical cannabis company’s 2017 application process. U.S. District Court Judge James A. Parker ruled that limitation infringed on Ultra Health’s right to free speech.
“The State Fair’s restrictions … as applied to Ultra Health’s 2017 State Fair application were unreasonable in light of the purpose of the forum and the surrounding circumstances and therefore violated Ultra Health’s First Amendment right to free speech.” — Excerpt from Judge Parker’s ruling
There have been other federal decisions supporting the rights of medical cannabis companies; no previous rulings, however, have yet to so explicitly protect the cannabis company’s right of free speech. Many states with adult-use or even medical cannabis legalization have installed strict marketing requirements that make it difficult for cannabis companies to educate or spread the word about their offerings. With this decision, there is at least some minimum level of communication that is protected.
The judge ordered the State Fair to pay Ultra Health’s attorneys fees and other costs.
Governor Albert Bryan Jr. has signed a bill to legalize medical cannabis in the Virgin Islands, The St. John’s Source reports.
While the Virgin Islands Medicinal Cannabis Patient Care Act doesn’t legalize full adult-use, the legislation does create a regulated system of provisioning centers across the Virgin Islands. The legislation was originally sponsored by Sen. Positive Nelson of St. Croix, who was in the Governor’s office during the signing of the bill.
“I have approved the Virgin Islands Medicinal Cannabis Care Act because it is a step in the right direction toward assisting Virgin Islanders suffering from autoimmune and other debilitating medical conditions.” — Gov. Bryan in a statement
Medical cannabis was originally endorsed by voters in 2014 via a ballot referendum. There was some delay, however, due to the Virgin Islands’ territory status.
“Since the Referendum, it is clear that marijuana-use policy in the United States has been changing rapidly in favor of medicinal and recreational use and will continue, even potentially on the federal level,” said Gov. Bryan.
Bryan said he expects the legislature to work out the finer details of the system now that it’s become law. Regulatory forms, fees, and procedures have all yet to be determined.
Lawmakers in Connecticut have introduced the first cannabis legalization bill of the year, according to a Hartford Courant report.
The bill is co-sponsored by more than 40 state Democratic legislators. Connecticut has failed to pass all previous legalization attempts; with widespread legislative and gubernatorial support, however, this year seems likely to be a banner year for cannabis reforms in the state.
The bill would provide for legal sales to all people over 21. The existing medical cannabis program is regulated by the Department of Consumer Protection; the proposed legal marketplace would also be overseen by that department. Companies already holding medical cannabis licenses would be given priority for the new adult-use cannabis licenses.
The bill also contains provisions for the expungement of prior cannabis convictions. The bill would also allow home delivery and the home-growing of up to six cannabis plants.
Intoxicated driving laws would be amended with a provision making it illegal for anyone with more than 5 nanograms of THC per milliliter of blood to operate a vehicle; public consumption would also be illegal.
While there is strong Democratic control of the Connecticut state Assembly and a governor with a favorable stance, the bill’s passage is not yet guaranteed.
The eighth Massachusetts dispensary to launch sales will be the first in the state to use an app instead of traditional in-person lines, according to The Boston Globe.
The seven other dispensaries in Massachusetts have all opened to huge lines but Northeast Alternatives in Fall River hopes to circumvent this by using a smartphone app called “QLess.”
QLess is a line-creating and schedule management app. Potential customers can text as soon as an hour before opening to get their place in line. The app will then provide them with an approximate time to arrive at the dispensary and will provide additional updates throughout the day as things develop.
Northeast Alternatives will not use a satellite parking lot — which other dispensaries have relied on, so far — because of the app’s efficiency. In fact, no walk-ins at all will be allowed — all customers of the dispensary are expected to schedule via the app.
This is not the first case of entrepreneurs looking to technological innovation to advance the cannabis industry: there is a multitude of apps including delivery and medical cannabis recommendation services already serving the industry.
Massachusetts adult-use cannabis sales launched in November 2018 after voters passed a legalization initiative in 2016.
The Arkansas Department of Finance and Administration issued the state’s first six medical cannabis dispensary licenses on Friday, according to an Associated Press report.
The six recipients were the first among 32 approved applicants to pay the $15,000 licensing fee and post the $100,000 performance bond required for each license. A spokesperson for the department told reporters that officials expect the remaining applicants to pay and post their bonds throughout the next week.
Dispensaries who receive licenses are allowed to construct their retail locations but cannot open for sales until their facilities pass a final inspection.
Arkansas has already licensed multiple medical cannabis cultivators; one cultivator on Friday, however, became the first to receive both cultivation and retail medical cannabis licenses. Medical cannabis products could be ready for store shelves by April, a company representative said.
The Arkansas cannabis licensing process began in early 2018 but was quickly mired in controversy when a judge ruled the state’s first set of cultivator licenses “null and void” after finding that the state Medical Marijuana Commission disregarded licensing rules. Additionally, two members of that commission were found to have had a financial relationship with two people with ownership stakes in approved cultivation centers.
On Wednesday, regulators in California gave approval for statewide cannabis delivery, even in communities where the cannabis industry is banned or products not sold, USA Today reports.
The California Bureau of Cannabis Control sought to clarify misunderstandings about laws and regulations that seemed to be in conflict. Opposition opinions held that the delivery rules undercut local control and regulations, and that local control over cannabis should be left to individual communities. The state law that voters approved in 2016, however, provides for access to cannabis everywhere in the state, at least through some means.
Cannabis companies and private citizens had largely favored establishing the statewide delivery system.
“The public spoke loud and clear in favor of statewide delivery.” — Alex Traverso, a California Bureau of Cannabis Control spokesperson, in a statement
Large patches of California — one of the largest states in the U.S. — have no immediate access to cannabis, whether because of local bans or long distance drives to the nearest dispensary.
The rule is expected to be challenged in court, however, as many police chiefs and the League of California Cities opposed the proposal; dissidents argued that the delivery rules undercut local control and regulations. The issue could potentially be considered by the California state legislature.
The B.C. Cancer Foundation will be using private donations to conduct a first of its kind study on cannabis’ effects on cancer symptoms in nine cities across Canada, according to The Vancouver Sun.
The trial will span 48 days and involve 150 patients from Vancouver, Abbotsford, Prince George, Victoria, Calgary, Winnipeg, Ottawa, Kingston, and Toronto. The trial seeks to prove whether cannabis helps cancer symptoms such as pain, sleep loss, anxiety and nausea.
The cannabis extracts to be used in the study were donated by Whistler Medical Marijuana Corp, which was recently purchased by Aurora Cannabis, one of the largest licensed producers in Canada. The study will cover extracts with both high CBD and high THC ratios, as well as 1:1 extracts.
Dr. Pippa Hawley, leader of the clinical trial, said, “My goal is to be able to provide a useful guide to patients and health care professionals. I want to be able to give them practical information about what could work.”
Dr. Hawley was previously involved with a clinical survey of 3,000 cancer patients. “That [survey] showed that cannabis use during treatment is widespread, for potential relief of symptoms related to treatment, or to cancer itself. This, in spite of the fact there is little or no scientific evidence into symptom and quality of life improvements.”
Hawley aims to fix that lack of evidence with the new study. Results are expected to be published in a medical journal by June, 2020.
Washington is the only legalized state that does not allow personal cannabis home grows. Activists, however, hope to change that this legislative session with two companion bills recently introduced in the Washington state Senate and House of Representatives — SB 5155 and HB 1131 — both of which have bi-partisan support.
If passed, the bills would allow Washingtonians over 21 years old to grow up to six cannabis plants at home. It would still be illegal to sell the fruits of a homegrown harvest and landlords would have the right to ban home grows on their property.
John Kingsberry, an activist with Homegrow Washington, is optimistic.
“What is different this year is that the majority of legislators I have spoken with, even those who were reluctant to support it before, have told me they may not put their names on the bill, but they will vote for it. After the 2018 election, the landscape changed in Olympia. Many of the opponents in the past were voted out. This year, we have ten sponsors on the house bill and six on the senate bill. Not only are they a bi-partisan group, but come from diverse ideologies — that’s telling me this may be the year home grows pass in Washington.” — John Kingsberry of Homegrow Washington, in an interview
The Washington State Liquor Control Board proposed two possible home grow scenarios in late 2016. Those two paths to home grows both required some variation on a traceability system at home. The WSLCB solutions were widely rejected and a cleaner home grow bill died in committee during the 2017 session.
Currently, nine other U.S. states allow adults 21+ to cultivate cannabis in the privacy of their own homes.
Editor’s note: A previous version of this article incorrectly referred to the House home grow bill as HB 1331.
Two Republican state Senators in South Carolina have introduced the Compassionate Care Act to the state legislature, according to a WIS News report.
The Act would allow doctors to prescribe medical cannabis to patients for an approved list of conditions. Sen. Tom Davis (R-Beaufort) told reporters during a press conference that South Carolina’s proposal would create the most socially-conservative medical cannabis legislation in the nation. “Each step of the process – from the growing to the processing to the dispensing is monitored in real time constantly,” he said.
The shortlist of potential approved conditions includes: cancer, multiple sclerosis, a neurological disease, PTSD, glaucoma, Crohn’s disease, sickle cell anemia, ulcerative colitis, wasting syndrome, severe nausea for a person who is in hospice care, chronic medical conditions causing severe muscle spasms — including multiple sclerosis — or “chronic or debilitating diseases for which an opioid is currently or could be prescribed by a physician based on generally accepted standards of care.”
The bill requires physicians who wish to issue medical cannabis endorsements to complete special training. Under the proposal, cannabis smoking would be banned and the only allowed delivery methods would be vaporized flower or extract, gel caps, suppositories, patches, edibles, or a topical cream.
The South Carolina Medical Association opposes the legislation. They issued the following statement: “Improving the health of South Carolina remains our top priority and legalizing marijuana will not do that.”
New York Gov. Andrew Cuomo on Tuesday outlined his support for adult-use cannabis legalization in the state, estimating it would reap $300 million in tax revenues which would be deposited into the “Marihuana Revenue Fund” after enforcement costs and funds for alcohol and drug abuse programs.
During his combined state of the state and budget address, Cuomo indicated New York’s law would seek to “stop the disproportionate impact on communities of color and … create an industry that empowers the poor communities that paid the price and not the rich corporations who come in to make a profit.”
According to the governor’s Executive Budget, more than 800,000 people have been arrested in the state for low-level possession “with the majority…people of color.”
A memoranda in support supplement to the budget released shortly after the Democrat’s remarks included the “Cannabis Regulation and Taxation Act,” sponsored by fellow Democrat Sen. Liz Krueger. The measure, currently in the upper chamber’s Finance Committee, would implement a taxed and regulated market for adults along with a host of other reforms; however, in order to ensure the law is signed once it reaches Cuomo’s desk, the home-growing provisions included in the current proposal would likely be struck from the legislation. In November’s election, the Democrats gained control of the Senate, giving the party control over the legislature.
The memorandum calls the enactment of the legalization bill “necessary to implement the [fiscal year] 2020 Executive Budget because it would increase All Funds revenue by $83 million in FY 2021, $85 million in FY 2022, $141 million in FY 2023 and $184 million in FY 2024.”
“I am glad that the Governor has embraced the necessity of ending the prohibition on adult-use marijuana. In recent months I have worked with his office, sharing what I have learned over several years working on this issue,” Krueger said in an email. “As always, the devil is in the details, and I look forward to a close examination of his proposal when the language of the Executive Budget is released.”
Photo credit: Sarah Climaco
The current language of the bill
The current measure, which moved into the finance committee in November, would allow a six-plant home grow and outlines penalties for unlicensed growing ($125-$500 fines), sales, and selling to minors (a class E felony). It would allow massive personal possession limits – up to two pounds of flower and four-and-a-half grams of concentrates; these limits, however, could also be affected in order to for the measure to receive the governor’s approval.
The measure also provides for municipal control and seed-to-sale product tracking, both included in the governor’s memorandum.
“Existing laws have been ineffective in reducing or curbing [cannabis] use and have instead resulted in devastating collateral consequences that inhibit an otherwise law-abiding citizen’s ability to access housing, employment opportunities, and other vital services,” according to the bill text. “Existing laws have also created an illicit market which represents a threat to public health and reduces the ability of the legislature to deter the accessing of [cannabis] by minors. Existing marihuana laws have also disproportionately impacted African-American and Latino communities.”
During his address, Cuomo promised the state’s cannabis industry would help the poor communities adversely affected by prohibition rather than the corporations.
As proposed, the measure includes social-equity provisions for both minorities and women, implementing a social-equity incubator for women and minorities. The plan defines social equity applicants as: “a member of the community group that has been disproportionately impacted by prohibition; has an income lower than 80 percent of the median income of the county in which the applicant resides; and was convicted of a cannabis-related offense prior to the effective date of the bill.”
The incubator program would provide “support to social equity applicants after they have been granted licensed…in the form of counseling services, education, small business coaching and compliance assistance.”
Additionally, it would block cannabis odor or possession of two pounds or less from constituting “reasonable suspicion of a crime or be used as evidence in any criminal proceeding.”
The bill would create nine licenses — nursery, producer, processor, distributor, retailer, microbusiness, on-site consumption, delivery, and testing — while implementing three taxes.
The first tax would be imposed on cannabis cultivation at a “rate of $1 per dry weight gram of cannabis flower and $0.25 per dry weight gram of cannabis trim,” according to budget documents. The second tax would be imposed “on the sale by a wholesaler to a retail dispensary at the rate of 20 percent of the invoice price.” The third tax would be “imposed on the same sale by a wholesaler to a retail dispensary at the rate of 2 percent of the invoice price but collected in trust for and on account of the county in which the retail dispensary is located.” Business registration fees and bi-annual renewal fees would be set at $600.
The proposal would move supervision of the state medical cannabis program to the newly created Office of Cannabis Management – the same agency that would supervise the recreational program – and would allow registered medical patients to grow up to four plants, according to a member of the governor’s office in an email. There are no home-growing provisions under the current medical cannabis law and flower products are unavailable to registered patients.
In an email, Vireo Health CEO Ari Hoffnung said, “until the official legislation is released it is hard to be sure how the bill will impact existing medical cannabis producers.”
Vireo operates four dispensaries throughout the state in Albany, Johnson City, White Plains, and Queens.
“Gov. Andrew Cuomo’s proposal represents an historic step toward ending the decades-long war on drugs that has unjustly targeted communities of color, bringing substantial tax revenue to the state, and creating an environment in which New Yorkers have safe and legal access to marijuana,” he said. “With that said we need to study the impact this legislation will have on our vertically integrated medical marijuana program, in which companies cultivate, process and dispense these life-changing products.”
Photo credit: Pat Beggan
New York Republicans have their own plans for cannabis revenues
In a “pre-buttal” prior to the governor’s remarks, Republicans – now the minority party in both legislative chambers – said they would like cannabis revenues to be used for tax relief, “not to fuel more spending.”
In an interview with Spectrum News, Deputy Minority Leader Joe Griffo said the tax windfall could reduce both property and income tax rates in the state. Griffo compared the legalization proposal to another ‘sin’ industry newly legalized in the state – casino gambling.
“When they told us that legalizing gaming would be an economic cure for upstate New York, we now know these casinos are looking for bailouts and help,” Griffo said in the interview.
Once approved, New York would be the eleventh state to legalize cannabis for adult use, along with Washington, D.C. Two of New York’s border states – Vermont and Massachusetts – have legalized cannabis use for adults along with Canada, which borders the state to the north. New Jersey is also expected to legalize sometime in 2019.
There is no timeline for when the bill will move out of the finance committee, what amendments could be made, or when sales would begin; however, with Cuomo including revenues from the market in his 2021 budget, sales could commence in 2020 if lawmakers pass the legislation this session.
The first cannabis sales in Ohio occurred Wednesday morning, according to an Ohio 10 TV report.
While licenses have been issued to more than 56 dispensaries, only four were open for the first day of sales: two in Wintersville, one in Canton, and one in Sandusky. A fifth is expected to open sometime this week just outside of Cleveland, as well.
Currently, just flower and similar plant materials are available to Ohio patients. Only cannabis growers — not processors or manufacturers — have been given certificates of operation by the state. An ounce is currently retailing in Ohio medical dispensaries for about $500.
Ohio’s medical cannabis program has been plagued by delays. Originally sales were to begin on September 8 of last year. The complicated license approval process and the low number and quality of applications are to blame, according to regulators.
Ohio Senate Minority Leader Kenny Yuko, a cannabis legalization advocate, criticized the state for its delays on the first day of sales. However, he urged the new governor to prioritize the program’s completion. Filling out the number of dispensaries in the state and getting processor licenses issued might be “An opportunity for the new governor to do right by people who are suffering,” said Sen. Yuko.
On the last day of the Lift & Co. Cannabis Business Conference in Vancouver, someone distributed sample packages of cannabis candy on windshields and other public places, causing a government official to call for a crackdown, the Vancouver Sun reports.
Jas Johal, a member of the B.C. legislative assembly, said, “It’s time to start enforcing.”
“Clearly some of these companies feel emboldened and have gone as far as marketing these products by putting them on windshields. They need to be reminded that this is not acceptable, that this is a public hazard. It’s an issue of public safety at the end of the day and it concerns me deeply.” — Jas Johal, BC MLA, via the Vancouver Sun
The distributed candy was branded by Earth’s Edibles and directed attention to earthsedibles.ca. The owner of Earth’s Edibles, Adam Osborne, told reporters that his business had nothing to do with the incident. “There is definitely some espionage going on,” Osborne said.
Whoever distributed the cannabis has broken Canadian federal laws. Edibles themselves are not even legal to produce in Canada, yet. The person responsible could be charged with trafficking as well as laws regarding distribution to minors.
It’s unclear which policing group would be responsible for the investigation. Some say the Vancouver police are responsible, though representatives of the B.C. government said the issue is federal. Jas Johal said he welcomed an investigation by the Vancouver law enforcement and would retain evidence he found.
A newly-formed organization in Minnesota is talking to legislators about introducing legalization legislation as early as the end of the month, The Star Tribune reports.
The organization, Minnesotans for Responsible Marijuana Regulation, is comprised of members with backgrounds in other Minnesota nonprofits. Members on the group’s steering committee have served with the Jewish Community Action and the Second Chance Coalition; the Mayor of Minneapolis is also on the committee.
The group aims to build support across the state by expanding their coalition and hosting educational events. “A lot of the early work that we’re going to have to do is fact-based,” said founder Leili Fatehi.
Fatehi hopes to address the many misconceptions prohibition has caused regarding cannabis’ risks and benefits. The group will organize its efforts via its website, mnisready.org.
While Minnesotans for Responsible Marijuana Regulation is currently talking to legislators about launching a bill, cannabis legalization was not on the short list of priorities listed by Minnesota House Democrats.
There are currently 10 U.S. states that have opted into ending cannabis prohibition and several more are expected to legalize later this year.
