Texas Sues Cities Over Voter-Approved Cannabis Decriminalization Policies

2/01/2024

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Texas Attorney General Ken Paxton (R) announced on Wednesday a new lawsuit by his office against the five Texas cities that have passed cannabis decriminalization policies, The Hill reports.

The lawsuit names city mayors and council members from the five cities, which include Austin, Denton, Elgin, Killeen, and San Marcos, and argues that officials have adopted amnesty and non-prosecution policies “that violate Texas laws concerning marijuana possession and distribution.” The lawsuit further states that the cities’ decriminalization policies — all of which stem from successful voter initiatives — are illegal under the state constitution, which prohibits municipalities from enacting ordinances that are inconsistent with state law.

“I will not stand idly by as cities run by pro-crime extremists deliberately violate Texas law and promote the use of illicit drugs that harm our communities. This unconstitutional action by municipalities demonstrates why Texas must have a law to ‘follow the law.’ It’s quite simple: the legislature passes every law after a full debate on the issues, and we don’t allow cities the ability to create anarchy by picking and choosing the laws they enforce.” — AG Paxton, in a press release

Voters from a sixth Texas city, Harker Heights, approved cannabis decriminalization alongside others named in the suit during the most recent midterm elections, but the city council there ultimately repealed the initiative, the report said.

Notably, city council members in Lubbock recently rejected a cannabis decriminalization proposal, which prompted the issue to be kicked to voters during the election later this year.

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2024 industry predictions for cannabis products, retail, and hemp

2024 Cannabis Industry Forecast: Product Brands, Retail, and Hemp

1/31/2024

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As the cannabis industry continues to evolve, 2024 promises to be a year of significant change, from product development, to retail dynamics, as well as in the hemp/CBD market. Over the past few weeks we put out a call for commentary to our newsletter audience, asking industry professionals and business owners to share their expectations for the coming year. Below, we have rounded up some of the most insightful comments we received, forecasting what could lie ahead for these sectors.

A common theme among the predictions we reviewed was a belief that demand for product personalization and increased consumer awareness will have a significant impact on the market landscape, forcing cannabis brands, dispensaries, and hemp/CBD manufacturers alike to diversify their offerings. The broad consensus is that consumers are likely to care more about craft and high-quality products the more educated they become, meaning that over time it will be less advantageous for brands to focus on volume and market share alone. The potential for new AI technology to affect all aspects of the cannabis supply chain was also a recurring theme, as was the rising popularity of hemp and cannabis-infused beverages.

Cannabis Product Manufacturing & Cultivation

In 2024, craft cannabis is poised to claim a larger slice of the expanding global market, driven by a growing consumer appetite for quality, uniqueness, and sustainable practices. Artisanal producers are set to thrive, leveraging horticultural science methods and distinctive strains to meet the desires of an increasingly sophisticated clientele. Illinois exemplifies this trend, leading the industry with robust regulation that upholds high standards and prices, potentially benefiting small-scale, premium craft cannabis ventures. However, such stringent oversight may also challenge craft entrants financially, underscoring the need for regulatory frameworks that nurture the artisanal segment. Craft cannabis’s success will depend on navigating these regulations while delivering the exceptional products that discerning consumers demand.

Owen Papworth, COO Oregonix

We will continue to see innovation and a shift in products on shelves, particularly in the edibles space. Consumer expectations for “premiumization” and the ongoing momentum in social “mainstreamization” will collide, bringing an eruption of new, innovative products to the market that are effective, friendly, and predictable. Cannabis products that are approachable and easy to use for every (adult) generation and every social and wellness application will become the new normal.

Kim Sanchez Rael, CEO & Cofounder Azuca

Product innovation is going to continue to proliferate as new markets open up, existing ones expand to adult use and more and more consumers, from all walks of life, start buying. These opportunities will be seized by the individuals and cannabis operators that have solid plans and a network of providers that will work with and support their business to not just open their doors but keep them open and successful as they grow.

Kevin Hart, CEO Green Check

Bottom up, AI will revolutionize the cultivation process by facilitating efficient plant cultivation, optimal crop steering, and targeted breeding. Cultivation operations will be able to reliably forecast and plan their production, maximizing the achievable prices and, thus, their profitability. […] Like with any other technological advances, the job landscape will evolve as well and certain jobs will fade out, others will transition, and new jobs will emerge – the most important aspect is that the workforce and the leadership embrace the change to not be left behind.

Elmar Mair, CEO Neatleaf

Brands that solely focus on low-quality, budget pre-roll offerings will continue to decline. Harsh joints kill recurring revenue; nobody comes back to a bad smoke. With their galaxy of opportunities for differentiation and added margins, infused joints will continue to overtake non-infused joints in markets where that hasn’t already happened. Smaller-size joints will continue to grow in popularity, and the convenience and value of multipacks will continue to edge out single-joint offerings. To grow in 2024, brands should strongly consider combining all four: high-quality flower, .5g or smaller, infused-joint multipacks at an approachable price.

Kyle Loucks, CEO RollPros

Retail Business & Consumer Awareness:

Minnesota is well on its way to creating a “heady” cannabis culture with savvy, informed consumers. Before legal cannabis sales start, Minnesota has already allowed adults to purchase cannabis seeds and grow their own cannabis at home. It’s currently one of Royal Queen Seeds’ biggest markets for online sales, so we can see the potential there and the curiosity from consumers. With the ability to grow their own at home, the canna-curious and connoisseurs alike can develop a deeper understanding of the cannabis plant, gain a new appreciation of the natural world and become smarter shoppers overall.

Shai Ramsahai, President Royal Queen Seeds

In the New York market, the settlement of the lawsuit blocking CAURD dispensary licenses from opening, which was incredibly painful for those licensees and the broader market, means that operators can now finally move forward with opening their stores. We are seeing an eightfold increase in the pace of openings from the previous average of two stores per month; however, this is still not nearly enough for a state of roughly 20 million people and over 250 million tourists annually. However, also worth noting is the planned openings of licensed adult-use retail stores by MSOs which previously only held medical licenses. New York’s farmers and producers of any size need more retail stores to sell their products, so I believe these co-located stores will be very important. At this point, New York needs about 200 stores for the legal market to reach its intended revenue projections.

Nicolas Guarino, CEO Naturae

In 2024, dispensaries and brands will realize their target audiences aren’t spending their time networks that are a constant detriment to their growth, like Facebook or Instagram. Alternative networks like Reddit and Discord will give cannabis companies a way to interact and build communities with true connoisseurs.

Amy Donahue, Owner Hybrid Social

The integration of AI-enabled tools will revolutionize training and ongoing worker engagement processes, making them more accessible, interactive, and tailored to individual needs. This personalized approach to learning will not only enhance workforce readiness but also ensure compliance with evolving regulations. The focus will shift towards micro-certifications and scenario-based learning, enabling employees, especially budtenders, to adapt quickly to market changes and product innovations. Furthermore, enhanced communication tools, including AI-driven interactions, will foster more dynamic and responsive relationships between brands, service providers, and licensed employers. This will lead to a more informed and engaged community, capable of elevating customer experiences.

Mark Oronzio, CEO and Cofounder upLVL, Inc.

We expect to see a contraction of the legal market in California as retailers and suppliers cease operations or leave the state. We have experienced this with several brands who have chosen to stop operating in CA because of the never ending black market, compliance costs and competition from the oversaturation of licensed businesses. Many retailers are struggling to pay taxes and other compliance costs, while customer counts and the average purchase per customer continues to decline due to outside economic factors and too many operators in mature markets like San Francisco and Los Angeles. We also expect to see fewer independent retail operators as larger companies expand by acquiring legacy licenses, and smaller companies struggle to operate profitably.

Lauren Fontein, Co-Founder The Artist Tree

A notable trend is the rise in demand for personalized cannabis products, including a focus on cannabinoid therapeutics​​. THC-infused beverages are also gaining popularity, with consumers often replacing alcohol with these products​​. Retailers that prioritize consumer education, experience, evolving preferences, and specific needs are likely to fare better than those mainly motivated by profits. This approach supports a consumer base seeking a tailored and informed cannabis experience.

Sonia Mangalick, Managing Partner Dank Poet Dispensary

Trends in Hemp & CBD-Infused Products

In 2024, we anticipate substantial growth in the hemp industry, especially in low-dose beverages and edibles. Minnesota’s pioneering hemp-derived market model is setting a trend nationwide, expanding product variety for a wider consumer base and integrating cannabis products more seamlessly into mainstream culture. However, it’s crucial that the hemp-derived market not be seen as a substitute for the legalization and regulation of adult-use cannabis. This year is pivotal for policy decisions that will define the relationship between these two markets. While the hemp market broadens consumer reach and aids in destigmatizing cannabis, true social equity hinges on the legalization of adult-use cannabis. This is vital for addressing the needs of communities disproportionately affected by prohibition and those involved in the legacy market. Policy choices made in 2024 will be instrumental in determining the future direction of both markets, significantly impacting public perception and advancing social justice within the cannabis industry.

Leili Fatehi, Partner/Principal Blunt Strategies

Pressures to regulate will slow the hemp CBD market. Synthetic conversions of hemp CBD to THC will get more attention to regulate vs. stop.

Shawn DeNae Wagenseller, CEO/Owner Washington Bud Company

Cannabis products have been diversifying beyond traditional flower and oils. Expect to see more innovative products, including edibles, beverages, topicals, and concentrates. Cannabis-infused products in the wellness and beauty industries might also see growth. As more research is conducted, there may be an increased acceptance of cannabis as a medical treatment for various conditions, potentially leading to more doctor recommendations and insurance coverage for medical cannabis.

Katie Enright, Founder Lavinia

In 2024, hemp beverages will do more to normalize cannabis in the minds of the consumer than any other form factor.

Kenny Morrison, Founder CQ

We foresee the continued rise in popularity of low-dose infused beverages. And we aim to further accelerate this trend, anticipating increased backing from liquor retailers, beverage distributors and a fresh wave of mainstream consumers. Our collective hope is to usher in a cultural turning point where regulations are thoughtfully crafted to provide a sensible framework for this category, rather than seeking its elimination.

Phil McFarland, General Manager, THC Beverages WHBCo

Consumer empowerment takes center stage as products become more tailored to individual needs. The industry will witness a shift from one-size-fits-all to customizable CBD experiences. Brands offering personalized solutions will resonate with a diverse and discerning consumer base.

Jakub Horák, Founder TOKE

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Senate Democrats Urge Biden to Deschedule Cannabis

1/31/2024

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Twelve Senate Democrats this week called on the Biden Administration to remove cannabis from the Controlled Substances Act (CSA) in a letter to the federal Drug Enforcement Administration (DEA), according to an NBC News report. Cannabis has been considered a Schedule I substance, since 1971

“The case for removing marijuana from Schedule I is overwhelming,” the letter argues. “The DEA should do so by removing cannabis from the CSA altogether, rather than simply placing it in a lower schedule.”

The senators’ call for the complete removal of cannabis from the federal drug schedule comes following a recommendation by the Department of Health & Human Services (HHS) that cannabis be moved from Schedule I to Schedule III under the CSA. The DEA has since argued that it should have the final say regarding the federal status of cannabis.

The letter, led by Sens. Elizabeth Warren (D-MA) and John Fetterman (D-PA), carries the signatures of Senate Majority Leader Chuck Schumer (D-NY) and nine other senators.

“The Biden Administration has a window of opportunity to deschedule marijuana that has not existed in decades and should reach the right conclusion — consistent with the clear scientific and public health rationale for removing marijuana from Schedule I, and with the imperative to relieve the burden of current federal marijuana policy on ordinary people and small businesses.” — Excerpt from the letter by Senate Democrats

Meanwhile, President Joe Biden (D) stands to see his voter approval ratings potentially increase by up to 11% if he were to follow the HHS recommendation to reschedule cannabis, according to a recent survey.

A recent Gallup poll recorded 70% support among Americans for legalizing adult-use cannabis, an all-time high for the pollster since it started posing the question more than 50 years ago.

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Ohio Cannabis Regulators Release Adult-Use Industry Draft Rules

1/31/2024

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Ohio cannabis regulators this week released the draft rules for the state’s adult-use cannabis industry that was approved by voters last year. Officials are also asking for public feedback on the proposed rules, which outline application costs and detail the state’s plan for a lottery-based licensing system.

Under the proposed rules, medical cannabis retailers would be able to apply for a dual-use license — which enables serving both the medical and adult-use cannabis markets — at no additional cost. Meanwhile, vertically integrated companies in the state including Level 2 and Level 1 cultivators would be granted respectively either one or three retail licenses. Applications for new dispensaries in the state will cost $5,000 for either an adult-use or dual-use license. License renewals would be priced at $200,000 for Level 1 cultivators, $50,000 for cannabis processors, and $20,000 for Level 2 cultivators and cannabis testing labs.

Officials also confirmed their intent to hold an application period “for which preference shall be given to applicants certified as cannabis social equity and jobs program participants,” which was a requirement of the legalization initiative passed overwhelmingly by voters last year.

Notably, cannabis dispensaries in the state will be required to maintain a one-mile buffer between themselves and other cannabis retailers.

Members of the public are invited to submit feedback on the draft rules to officials through February 9. Applications will be available by June 7 with provisional licenses to be awarded by September 7.

A report published ahead of November’s election found that legalizing adult-use cannabis in Ohio would likely generate about $260 million in “net benefits for society.”

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Cannabis Retail Bill Advanced By Virginia Lawmakers

1/30/2024

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Lawmakers in a Virginia Senate committee last week advanced a bill that would establish an adult-use cannabis marketplace in the state, the Washington Post reports.

The Senate Committee on Rehabilitation and Social Services passed SB 448 in a 10-5 bipartisan vote but the bill still needs to pass several more committees before reaching the Senate floor. If adopted, the bill would put into motion the regulation of cannabis manufacturing and distribution, with adult-use sales to launch in Virginia by January 1, 2025.

Proponents of the bill say that regulating adult-use cannabis is a commonsense step forward following the state’s legalization of cannabis three years ago and that licensed sales would reduce the risk of exposure to contaminated products.

“We already have a $3 billion adult-use cannabis market. It’s just being run by drug dealers who are selling untested, unlabeled, untaxed products. We are not creating the market. We are regulating the market.” — Greg Habeeb, lobbyist for the Virginia Cannabis Association, via the Washington Post

Lawmakers are still uncertain, however, how the bill would fare before Gov. Glenn Youngking (R), whose administration stated last year that the governor had no plans to facilitate adult-use cannabis sales while he is in office.

“This is an area that I really don’t have any interest in,” Youngkin told reporters earlier this month. “There’s so many things that we can work on that I think we can get to the finish line and … I just don’t have a lot of interest in pressing forward with marijuana legislation.”

Numerous studies, including a recent CDC analysis, have suggested that having a regulated adult-use cannabis market does not lead to an increase in underage cannabis use; rather, it may reduce teenagers’ access to cannabis.

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Arkansas AG Rejects Cannabis Ballot Initiative

1/30/2024

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Arkansas Attorney General Tim Griffin has rejected the initial language for a ballot initiative that would improve medical cannabis access and trigger adult-use legalization in the state if cannabis were ever legalized at the federal level.

First reported by the Arkansas Advocate‘s Hunter Field, Griffin on Monday rejected the Arkansas Medical Cannabis Amendment of 2024 and ruled that the initiative contained improper formatting and ambiguities about how the initiative would affect current laws. Advocates behind the ballot initiative say that they intend to address the issues raised by the attorney general and then resubmit the proposal.

The ballot initiative, which is supported by the state’s medical cannabis industry, proposes several significant reforms to the state’s medical cannabis program, including:

  • Allowing registered patients to grow their own cannabis plants at home.
  • Allowing nurse practitioners and other health providers to recommend patients for the program.
  • Allowing providers to certify anyone they see fit for the program.
  • Allowing for telemedicine medical cannabis referrals.
  • Recognizing out-of-state medical cannabis patient ID cards.
  • Removing program application fees for patients.
  • And increasing the program’s registration period for patients from one to three years.

Additionally, the ballot initiative would trigger the legalization of cannabis possession by adults were the federal prohibition of cannabis ever repealed.

If a reworked version of the ballot initiative is accepted by the attorney general, advocates will have until July 5 to gather 90,704 signatures from registered voters to qualify for the ballot.

Arkansas medical cannabis retailers sold about $283 million worth of cannabis products last year.

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Connecticut ‘Loophole’ Allows THC Beverage Sales In Liquor Stores

1/29/2024

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Some Connecticut liquor stores and other markets have started selling THC-infused seltzers under a “loophole” relating to product serving sizes, according to a CT Insider report.

Under state law in Connecticut — where cannabis was made legal in 2021 and later became available for purchase by adults in January 2023 — cannabis consumables including flower products, concentrates, and infused edibles and beverages are only available for purchase via state-licensed dispensaries. But lately, some THC-infused seltzer products are also being retailed in other markets including convenience stores and state-licensed liquor stores following adjustments to the products’ listed serving sizes in what insiders are calling a “loophole” in state law, the report said.

Per a Connecticut Department of Consumer Protection spokesperson, “a package containing less than 1 milligram of THC per serving and less than 5 milligrams per package is not considered cannabis, and may be produced and sold without a license.”

Some manufacturers, according to the report, are taking advantage by creating products that contain fewer than five milligrams of THC overall and labeling them as being more than five servings, regardless of the product’s volume (typically 7.5 or 12 ounces).

State Rep. Michael D’Agostino (D) said that lawmakers are planning to address the loophole by reducing the THC limit for retail products sold in the state without a cannabis license to .5 milligrams per container.

“This is constantly evolving, and we realized as a committee that we’ve got to get further ahead of this so that’s why this session we’re going to be changing that definition to make it even just a more bright line rule.” — D’Agostino, via CT Insider

Connecticut regulators recently doubled the cannabis purchasing limits from 7 to 14 grams per transaction.

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Delaware House Votes for Medical Cannabis Program Expansions

1/29/2024

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Lawmakers in the Delaware House of Representatives voted this week in favor of a proposal that would expand the state’s medical cannabis program by letting patients aged 65 or older self-certify for the program, Marijuana Moment reports. The self-certification process would not require a doctor’s input.

The bill would also remove the program’s medical condition-based eligibility requirements in favor of allowing doctors to certify for medical cannabis access anyone that they believe would benefit from the program.

The bill’s sponsor, Rep. Ed Osienski (D), said that the bill was crafted according to feedback from the state’s cannabis patients.

“Drawing from their insights, we identified numerous ways to improve our medical marijuana program. HB 285 recognizes the need to remove outdated restrictions and breaks down the barriers that hinder patients who could truly benefit from improved access to medical marijuana.” — Rep. Osienski, via Marijuana Moment

The bill passed the House in a 22-10 vote on Thursday and moves next to the state Senate for consideration, where a companion version of the bill has been sponsored by Sen. Kyra Hoffner (D).

“…It is time to update our medical marijuana law and make it easier for the people who rely on these products to get the therapy that they need,” Hoffner said in the report.

Adult-use cannabis was legalized last year in Delaware but state-licensed stores are not expected until 2025. Lawmakers voted last year to set an initial $4.1 million budget for rolling out the state’s adult-use cannabis industry.

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CDC Suggests Cannabis Legalization Reduced Underage Access

1/26/2024

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Teenage cannabis use in the Seattle, Washington area has dropped significantly since 2008, according to recent data from the U.S. Centers for Disease Control (CDC), and the state’s 2012 cannabis legalization policy likely played a role.

The report, first outlined by the cannabis advocacy group NORML, noted that the observed decreases in cannabis use among eighth-, tenth-, and twelfth-grade students “might be associated with changes in the availability of cannabis among persons aged ≥21 years as well as limited opportunities to engage in use.”

“Researchers studying the association of cannabis laws with cannabis use among high school students have observed similar declines in cannabis use after legalization of nonmedical cannabis. The legalization of nonmedical cannabis for adults aged ≥21 years in Washington with licensed dispensaries requiring proof of age might have affected availability of cannabis to younger persons as well as their opportunities to engage in its use. This, in turn, might have had an impact on use prevalence.” — CDC analysis excerpt

Links between the legalization of adult-use cannabis and reductions in youth cannabis use have been made in multiple previous studies:

  • Canadian researchers found in 2020 that teenage cannabis use dropped 50% following the federal legalization of cannabis in Canada.
  • One year previously, researchers noted in a study published by JAMA Pediatrics an 8% decline in the number of high schoolers who had used cannabis within the last month.

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Oregon Cannabis Businesses Call for Permanent License Caps

1/26/2024

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The Cannabis Industry Alliance of Oregon (CIAO) is calling for lawmakers to make permanent a restriction on the licensing of new cannabis companies that is set to expire in April, according to a KLCC report.

Before the statewide licensing moratorium was enacted in 2018, officials had issued over 3,000 licenses for the production, manufacturing, and retail of adult-use cannabis products, the report said. “There are so many businesses competing for the same amount of market share that it’s just not feasible,” said Mike Getlin, board chair for the CIAO.

Oregon, which was the fourth U.S. state to adopt a cannabis legalization policy, did not initially set a cap on the number of available licenses and the industry has grappled since its launch with issues relating to oversupply, lack of demand, and record-low wholesale and retail cannabis prices.

“What we’re fighting for is not to fix the Oregon system. It is simply to not accidentally have a big old knife stuck in its heart.” — Getlin, via KLCC

Getlin hopes that lawmakers will address the issue during this year’s brief legislative session, which is scheduled from February 5 to March 10, as officials with the Oregon Liquor and Cannabis Commission have stated they may not have the legal authority to extend the licensing moratorium themselves.

The CIAO, which represents more than 500 cannabis operators in the state, was formed last October following the merger of two former cannabis industry organizations: the Oregon Cannabis Association and the Cannabis Industry Alliance of Oregon.

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Maine Proposal Would Legalize Cannabis Social Clubs

1/25/2024

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Maine lawmakers are considering a proposal to legalize cannabis social clubs and other forms of on-site consumption, according to a Spectrum News report.

Sponsored by state Rep. David Boyer (R-Poland), the proposal would establish a cannabis-based hospitality industry in Maine by giving tourists a place to legally consume. If approved, the bill would establish a “cannabis hospitality establishment license” that would need to be acquired before businesses could allow on-site consumption.

LD 1952 appeared recently before the Legislature’s Veterans and Legal Affairs Committee.

“It would provide a controlled and regulated environment for adults similar to a brew pub that allows you try different beers and then take some home. This would help ensure public safety and reduce the likelihood of public cannabis consumption in inappropriate places.” — Boyer, in a statement to the state Veterans and Legal Affairs Committee, via Spectrum News

The proposal is notably opposed by John Hudak, Director of the Maine Office of Cannabis Policy, whose concerns range from poor air quality in cannabis clubs to the potential for increased impaired driving. “This bill simply does not address the serious public health and safety issues raised by permitting the public consumption of a substance that impairs critical thinking, memory, judgment, balance and coordination,” Hudak said in the report.

If passed, Maine would join 14 other states including the nearby Massachusetts, New York, and Maryland in allowing for on-site cannabis consumption.

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Survey: 32% of Cannabis Consumers Would Return to Illicit Market If Schedule III Limits Access

1/25/2024

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About one-third (32%) of cannabis consumers say that if a rescheduling action were to restrict the industry by requiring retail sales to be prescription-based via pharmacies, they would risk criminal penalties by reverting to the illicit market, according to a survey reported on by Marijuana Moment. A slight majority (55%) of respondents said that if their only legal option was through pharmacies, they would do so.

The survey — which was conducted by the cannabis telemedicine firm NuggMD — polled 795 respondents via the company’s opt-in email list about multiple topics including their current ability to access consumer cannabis products and potential effects of the Biden Administration’s proposed Schedule III rescheduling action.

NuggMD’s head of legal and policy research Deb Tharp said the results show that consumers are at risk under the proposed rescheduling plan unless lawmakers pass legislation “to preserve existing state markets.”

“According to government estimates, more than 35 million Americans use cannabis on a monthly basis. Pushing more than 10 million people into the unregulated market for cannabis strikes me as a very bad outcome because black market cannabis is not safe. I don’t think the severity of this situation is entirely clear to policymakers.” — Tharp, via Marijuana Moment

28% of respondents said that they believe a shift to Schedule III would make it more difficult to access cannabis, while 25% said it would improve access and 47% said that they did not expect any change in ease of access. Additionally, 77% of respondents said they would prefer using “traditional botanical products” like cannabis flower over an FDA-approved product, and a strong, 70% majority of respondents said that they believed dispensaries “would pass to consumers any tax savings brought about by new regulations.”

Another recent survey found that President Joe Biden (D) stands to boost his favorability by 11% across the country if he were to follow his were he to follow the Federal Department of Health & Human Services’ rescheduling recommendation.

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How cannabis retailers can alleviate pressure from the illicit market

How Cannabis Retailers Can Alleviate Pressure from the Illicit Marketplace

1/24/2024

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Editor’s note: this article is a guest contribution from Guillermo Rodriguez of Anders CPA.

Cannabis dispensaries play the retail game by a different set of rules. With stringent regulations, sky-high licensing fees and a tax code that doesn’t allow for the deduction of overhead expenses, retailers start with the deck stacked against them. Add to that fierce competition from both licensed and unlicensed operators, it’s no surprise that so few manage to be profitable (only one-third were profitable in 2022, with 31% breaking even, leaving 38% unprofitable, according to a 2023 study).

Pricing pressure – especially in well-established markets – is one of the biggest challenges retailers face. Without nationally recognized brands, certain consumer segments – particularly those buying in the flower category – treat cannabis like a commodity and shop around, in search of the best deal. In response, retailers slash prices, offering overly discounted goods in hope of securing customer loyalty and market share, when in reality, all that does is incentivize consumers to continue to make buying decisions based on price.

So how should cannabis retailers position themselves to resist pressure from the illicit market? While many consumers recognize the inherent advantages of dealing with licensed retailers – product safety, consistency, and convenience – the illicit market’s allure of lower prices exerts a considerable influence on legal sales.

Rather than continue to slash prices, we recommend that licensed cannabis retailers focus on customer experience, educating themselves with local data in order to make the most of every sale.

Losing Strategies: Competing Only on Price and THC Content

Offering steep discounts may seem like the surest way to lure customers, but cannabis retailers need to exercise caution: recent industry surveys reveal that only 30% of consumers are motivated purely by price; the other 70% are open to other avenues for loyalty – those consumers should be your focus.

Excessive discounting can have negative repercussions for both individual operators and the industry as a whole. There is a place for discounting, of course, but it should be done with careful attention to your POS data. Limit discounts to slow moving products or products with higher margins, ideally in collaboration with a vendor who may be willing to shoulder part of the cost of the promotion. Blanket discounting may be putting money back in the customer’s pocket – and putting yourself in the red.

Another losing strategy is to try to compete on THC content, another attribute that price-sensitive consumers tend to favor, as they falsely believe higher THC leads to a better experience. The more educated consumer, however, will be buying based on factors like terpenes, aroma and consistency. That’s where the growth potential lies, and that’s the consumer segment a retailer would be best served to focus on.

So if you aren’t pulling customers into your store for the bargain basement prices or high THC content, how do you get them to come in, spend more, and keep coming back?

Customer Experience is Key 

Licensed cannabis retailers must prioritize delivering exceptional customer experience for anyone who comes through their doors.

This goes beyond having a well-designed, welcoming space. We think about customer experience holistically. It starts with educating yourself about your market, which requires a nuanced consideration of various factors, including the local market dynamics, competition, and regional preferences. Tailoring strategies to cater to the unique characteristics of your customer segments can be a game-changer in a highly competitive industry.

Demographics, geographical location, and cultural factors all play a role in shaping your customer profile. For instance, cannabis sales data by Headset from across the United States reveals that Generation Z has a strong preference for selecting pre-rolls as their form factor. If your retail shop is near a college or university, it would be prudent to stock your assortment accordingly.

However, if your dispensary is near a popular tourism hotspot or close to a state border, your customer demographics and shopping behaviors may differ significantly. In Las Vegas, for instance, individuals from out-of-state often visit to purchase cannabis, but their buying patterns may result in higher basket sizes compared to local customers.

Recognizing these unique aspects of your consumer base enables you to adapt your marketing, product selection, and pricing strategies.

Don’t Sleep on Your In-House Sales Data

Looking at industry-wide data trends can give a big-picture understanding of how you fit into the market, but when it comes to increasing profitability, your own sales data is your most valuable asset.

No matter which point-of-sale system you use, your sales data can typically be exported to a separate data visualization program to help you quickly identify your best and highest-impact opportunities for improvement.

  1. Reinforcing Dynamic Sales Forecasting: Leveraging sales data enables retailers to better understand customer behavior and trends, facilitating more confident and precise sales forecasts which provides visibility into future cash flow.
  2. Optimizing Pricing Strategies: Analyzing sales data empowers retailers to make informed pricing decisions, striking a balance between competitiveness and profitability.
  3. Optimizing Basket Size: Sales data can also help retailers increase average basket size at checkout by predicting where a consumer is likely to add additional items into their basket. This empowers budtenders to make personalized recommendations that increase basket size.

If conducting in-depth data analysis seems like a daunting endeavor and you don’t have an in-house CFO, you can always hire an outside financial consultant or Virtual CFO to help you interpret your data and develop strategies to carry forward. A VCFO can also help you manage your dynamic forecasting process and model out future growth based on the strategies you implement.

Optimize Each Sale by Zooming into the Individual

Data analysis gives you the big-picture, but you’ll see the financial impact when you put the numbers to work with each customer who steps up to the register.

Once you have this granular level of detail about a customer, upselling becomes a way to continuously improve client experience, rather than a money grab.

The benefits of upselling are significant: Consider a retailer who successfully upsells one $5 preroll on just 10% of transactions. This seemingly modest effort can lead to an increase in the average transaction size, adding 50 cents per transaction. While this may appear minimal at first glance, its cumulative long-term impact can be substantial: if this retailer is averaging 500 transactions per day, this seemingly insignificant amount adds up to over $90,000 in revenue annually. For a retail chain with five locations, this simple approach could yield over $450,000 in annual revenue.

The key is consistency and discipline in training sales staff continuously, especially given the high turnover in the industry.  If a budtender learns to use POS data, they’ll be able to offer the right product to the right client, for example, elderly clients may be more likely to go for edibles rather than pre-rolls, and female customers have a higher affinity for edibles than their male counterparts.

Overcome Upselling Challenges

Upselling for cannabis retailers includes unique hurdles. The current state of cannabis payment processing typically does not allow for payment with popular branded credit cards issued on the two largest payment networks Mastercard and Visa. When customers visit ATMs before their dispensary visits and limit their cash to the intended purchase amount, buying additional items may not be an option for the consumer.

Nevertheless, there are several technologies and tools that help overcome these obstacles to upselling:

  1. Non-Credit Payment Gateways: ACH payment platforms like Aeropay offer electronic payment options that can help circumvent the barrier to seamless upselling. Encouraging loyal customers to embrace such platforms can simplify the process by providing them with a more convenient and flexible payment method.
  2. Loyalty Programs: There are numerous cannabis-specific B2C loyalty software platforms that integrate with your point of sale (or are included as part of it). These platforms can help you upsell to your recurring customers through points programs and discounts.
  3. Remarketing: To get the most value out of your customer data and loyalty program, you should be remarketing to them on a consistent basis. Different from customer acquisition, remarketing is simply the process of reaching out to your existing customers to offer them deals, provide useful information, and (for best results) personalized recommendations. Happy Cabbage is an example of a platform designed to help retailers do precisely this. Additionally, an active social media presence and email newsletter can keep your customers engaged so you have a receptive audience to promote upselling offers to.

While banking reform and access to standard financial services for cannabis retailers is hopefully not too far off in the future with the proposed federal rescheduling of cannabis, in the meantime it’s essential to make upselling as frictionless as possible.

Bottom Line: It’s All About Consistency

When a customer enters a dispensary, they might simply be curious to know what all the hype is. But they also might be seeking a specific outcome: pain relief, more energy, better sleep.

Meet that need by staffing your store with knowledgeable budtenders, ready to offer highly consistent products specifically geared to each individual consumer, and you’ll earn customer loyalty and higher profit margins.

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German Minister Expects Cannabis Legalization This Spring

1/24/2024

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German Health Minister Karl Lauterbach says he hopes to submit the nation’s adult-use cannabis legalization proposal for a parliamentary vote this February and see the proposal come into effect by April, according to a DW report.

The proposal was initially agreed upon by Germany‘s three-part government coalition last year, and Lauterbach said that lawmakers’ discussion regarding the Cannabis Act has remained positive.

“I am continuing to assume that the Cannabis Act will be passed by the Bundestag in the week between February 19 and 23 and will go into force from April 1.” — Lauterbach, via the Die Welt newspaper

While legalization critics have pushed back against the proposal, Lauterbach argues that the unregulated market carries risks such as contaminated products and extremely potent products — “Controlled distribution of cannabis is the right way to do this, combined with special protection for children and adolescents,” he said in the report.

Germany is one of five European Union member states that have enacted, introduced, or announced plans to enact adult-use cannabis reforms; the other nations include the Czech Republic, Luxembourg, Malta, and the Netherlands.

Switzerland, which is not a member of the EU but has also enacted cannabis reform policies, licensed Europe‘s first legal — albeit experimental — cannabis dispensary last October as part of a study on adult-use cannabis reforms.

Industry insiders have predicted that once Germany’s policy is active, its neighbors will likely be inspired to move quickly with policies of their own. In a recent statement to Ganjapreneur, Alex Rogers, Founder/CEO of the International Cannabis Business Conference set to be hosted in Berlin this April, said that “leaders in several other European nations have indicated that once Germany legalizes it, they will proceed with similar policy modernization efforts in their respective countries.”

CEO of Bloomwell Group, Niklas Kouparanis, echoed these sentiments, stating that Germany’s roll-out of its legalization proposal would serve as a “major catalyst” for reform across the entire continent. “The year 2024 will likely be deemed a major milestone for cannabis policy in Europe,” he said.

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New York Regulators to Consider Allowing Cannabis Home Grows

1/24/2024

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New York cannabis regulators are set to consider new regulations this week that would allow for the home cultivation of cannabis plants by adults aged 21 or older, the Times Union reports. The rule change would also authorize licensed retailers to sell starter cannabis plants, although they would need to acquire a nursery dealer registration certificate from the New York State Department of Agriculture and Markets.

The right to cannabis home grows was actually established under the legalization law passed by New York lawmakers in 2021, but only following the approval of “regulations governing home cultivation of cannabis, which will occur within 18 months of the first adult-use retail sale” — and New York’s first legal sale took place in December 2022, the report said.

Under the proposed rules, each private residence in the state will be allowed to host up to 12 cannabis plants, including six mature and six immature plants, regardless of the number of adults living there. Additionally, personal possession rates would be increased to up to five pounds of “cannabis flower that has been trimmed from plants, which have been cultivated in or on the grounds of said person’s private residence.”

While New York formally legalized cannabis about three years ago, state officials opted to delay the home grow rules to give licensed retailers a headstart in the industry. Most of the state’s early cannabis retailers, however, have faced enormous difficulties including competition from unlicensed and illegal retailers and lengthy delays in the licensing process, which was temporarily halted by lawsuits against the state’s cannabis social equity provisions.

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Cannabis may enhance empathy, according to study

Study: Cannabis Use May Enhance Empathy

1/23/2024

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A new study involving brain scans of cannabis users has revealed that regular users may have a heightened ability to understand and empathize with others’ emotions. The research, published in the Journal of Neuroscience Research by Victor E. Olalde-Mathieu and Daniel Atilano-Barbosa, offers a fresh perspective on the cognitive effects of cannabis, challenging mainstream assumptions about the plant’s impact on mental health.

The study compared 85 regular cannabis users with 51 non-users, assessing their empathy levels through psychometric tests. Remarkably, cannabis users displayed a greater ability in Emotional Comprehension, a cognitive empathy trait crucial for understanding others’ emotional states.

“[…] this study found that regular cannabis users have a greater understanding of the emotions of others. Furthermore, the anterior cingulate, a region generally affected by cannabis use and related to empathy, had stronger functional connectivity with brain regions related to sensing the emotional states of others within one’s own body. These findings highlight positive effects of cannabis on interpersonal relationships and potential therapeutic applications.”

– Olalde-Mathieu, Atilano-Barbosa, et al

Intriguingly, the study utilized resting state functional MRI scans for a subset of participants (46 users and 34 controls) to examine brain activity. The scans revealed that cannabis users had increased functional connectivity in the anterior cingulate cortex (ACC), a brain region central to empathy. This area showed stronger connections with the left somatomotor cortex, a region involved in processing and replicating emotional states.

This enhanced connectivity was not limited to these areas alone. Within the broader empathy network of the brain, cannabis users exhibited greater overall connectivity. These findings could suggest that regular cannabis use might actually bolster the brain’s capacity for empathy, particularly in understanding and sharing the emotional states of others.

The study’s results are groundbreaking, and it opens new avenues for understanding how cannabis influences interpersonal relationships and offers potential therapeutic applications, especially in enhancing emotional comprehension. However, the researchers caution that these findings are not conclusive. They note the need for further research to fully understand the relationship between cannabis use and empathy, acknowledging that other factors might also influence the observed effects.

Despite these caveats, this research provides insight into the complex effects of cannabis on the human mind and social interactions, and could help shed light on the prevalence of cannabis use among musicians, artists, and other creatives who need to tap into their understanding of human emotions for their work.

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Florida Gov. Predicts Voters Will Decide Cannabis Legalization Issue This Year

1/23/2024

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Florida Gov. Ron DeSantis (R) said last week that he thinks the Florida Supreme Court will allow an adult-use cannabis legalization proposal to appear on this year’s ballot despite legal challenges brought by the attorney general, Marijuana Moment reports.

DeSantis, who recently ended his longshot campaign in the Republican presidential primaries, was asked during his final campaign event about the ballot initiative. “I think the court is going to approve that,” the governor said, “so it’ll be on the ballot.” It is unclear whether DeSantis knew more than what’s publicly available about the issue or if he was simply making a prediction based on recent observations, the report said.

In either case, the initiative does seem likely to appear before voters after Florida Supreme Court Justice Charles T. Canady said in November that he was “baffled” by the legal challenge brought by Attorney General Ashley Moody’s legal team. The challenge claims the initiative would somehow trick voters into believing they would be protected from federal law, and should be disqualified, even though the initiative explicitly states that it would only apply to Florida law and “does not change, or immunize violations of, federal law.”

Brought by the Smart & Safe Florida campaign, the initiative qualified for the 2024 ballot after advocates submitted about a million voter signatures in support of the legalization bid. The proposal is a constitutional amendment — meaning it will require at least 60% voter approval to pass — and seeks to legalize the possession of up to three ounces of cannabis for personal use and authorize current medical cannabis dispensaries to retail cannabis for adult use.

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Survey: Rescheduling Cannabis Could Give Biden 11% Approval Boost

1/22/2024

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President Biden stands to boost his favorability by 11% if he were to follow the Federal Department of Health & Human Services’ (HHS) recommendation to reschedule cannabis, according to a Lake Research Partners survey first outlined by Politico.

The survey, which engaged 900 likely voters through a mix of phone (cell and landline) and text-to-online outreach, also found that a 58% majority of American voters support the rescheduling proposal, with the strongest support (65%) coming from young voters aged 18-25. Only senior voters largely opposed the move, but there was still a plurality of support for rescheduling among such voters.

A 74% majority of Democrat voters said they support the federal rescheduling of cannabis with just 7% opposed; 55% of independents, meanwhile, would support the move with 15% opposed. For Republicans, 41% said they support rescheduling while 31% said they opposed the move — the idea is disproportionately popular, however, among young Republican voters and Republican women.

Notably, the pollsters said that “no punches were pulled” in the survey’s articulating of the arguments against rescheduling, including claims that the move from Schedule I to Schedule III is “a half measure” that would bring massive profits to pharmaceutical companies, that it reneges on Biden‘s campaign promises to decriminalize cannabis, and that it could leave “hundreds of thousands of Americans behind bars for marijuana-related offenses.”

Nevertheless, “By the end of the poll, impressions of Biden improve by a net double-digits—an 11-point swing overall, including a double-digit (+11-point) swing among younger voters,” the pollsters said.

The survey coincides with a recent Gallup poll which found a record 70% support among Americans for cannabis legalization.

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Potency taxes in NY

New York Gov.’s Budget Proposal Would End Cannabis Potency Tax

1/22/2024

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Under New York Gov. Kathy Hochul’s (D) budget proposal for fiscal year 2025, cannabis operators would no longer be required to pay taxes based on product potency; rather, the industry’s potency tax would be replaced with a weight-based excise tax.

New York’s original legalization law taxes cannabis distributors based on product potency as follows:

  • $0.03 per mg of total THC in edibles
  • $0.008 per mg of total THC in cannabis concentrates
  • And $0.005 per mg total THC in cannabis flower products, including pre-rolls.

“To promote and support the expansion of the legal adult-use cannabis market, the Executive Budget simplifies, streamlines, and reduces the tax collection obligations and burden for cultivators, processors, and distributors by repealing the wholesale THC potency tax, and replacing it with a wholesale excise tax of 9 percent, while maintaining the State retail excise tax rate of 9 percent and the local retail excise tax rate of 4 percent.” — FY2025 budget proposal excerpt

For cannabis companies that are vertically integrated, the budget proposal specifies that “the new wholesale excise tax will accrue on the final retail sale to consumers and be imposed on 75 percent of the final retail sales price.”

In addition to the cannabis industry tax changes, the budget proposal would allot $68.1 million to the New York Office of Cannabis Management (OCM), the regulatory agency responsible for overseeing the industry. The proposed budget would also strengthen cannabis regulators’ ability — and that of other local government agencies — to bring enforcement actions against unlicensed cannabis operators, including additional staff resources for the state Department of Taxation and Finance.

According to recent data from the state, the New York legal cannabis market generated more than $150 million in revenue during its first year of operation.

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Oregon Lawmakers Consider Reversing Drug Decriminalization

1/19/2024

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Oregon Republican lawmakers in the House last week unveiled a proposal that would re-criminalize drug possession in the state by reassigning misdemeanor penalties for drug possession and mandating addiction treatment to avoid jail, the Oregon Capital Chronicle reports. The bill seeks to override the state’s 2020 voter-approved drug decriminalization initiative, Measure 110, by making persona possession of fentanyl, heroin, and meth a class A misdemeanor with jail time penalties of up to one year, a fine of up to $6,250, or both, according to the report. Similar penalties would be imposed for public drug use.

Top Democrats in the state, meanwhile, are also considering a proposal to re-criminalize drug possession, but with the option of multiple off-ramps for people to avoid criminal penalties, according to an OPB report. Democrats hope that when faced with legal repercussions, addicts will be more willing to seek and/or accept help as an alternative. Such a program could look similar to the law enforcement-assisted diversion (LEAD) program in Seattle, which allows people who are caught with drugs to be brought to a service provider instead of jail, the report said.

The idea of recriminalizing drugs in Oregon was lambasted by advocacy organizations including the American Civil Liberties Union of Oregon, the Drug Policy Alliance, and others, which together released the following statement:

“Any action by the Oregon legislature that criminalizes addiction would be cruel, harmful, and a failure of leadership. We cannot regress back to the failed war on drug tactics that harm Black, brown, and poor people and make drug addiction, overdose deaths, and homelessness more difficult and expensive to solve.” — Excerpt

Measure 110 was passed by 58% of Oregonians in 2020 but recent polling suggests that voters are not pleased with the state’s ongoing addiction crisis and may have soured on the decriminalization policy.

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New Jersey Regulators Approve Framework for Onsite Cannabis Consumption

1/19/2024

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In a significant move for the New Jersey cannabis market, the state has now opened the doors for the operation of cannabis consumption lounges at dispensaries, according to a report from news outlet NJBiz. During a meeting on January 17, the New Jersey Cannabis Regulatory Commission (CRC) unanimously passed a regulatory framework that permits both medical dispensaries and recreational-use retailers to establish on-site consumption spaces.

This development, initially proposed in December 2022, introduces a set of rules that detail the qualifications, application process, and operational guidelines necessary for businesses interested in offering these consumption areas. The regulations specify that a cannabis business can operate only one consumption area, irrespective of the number of Class 5 Retailer licenses or Alternative Treatment Center (ATC) dispensary permits it holds. Furthermore, these lounges are prohibited from selling food, but customers have the liberty to bring their own or have it delivered.

Another critical aspect of these regulations is the allowance for medicinal cannabis patients to bring cannabis items from other retailers for personal use in these consumption areas, according to the report. The sale of tobacco products and alcohol within these areas is strictly prohibited, and the rules stipulate that patrons must be at least 21 years old and must present photo identification for entry.

The licensing fee structure for these consumption areas is also delineated, with microbusiness retailers being charged $1,000 and standard retailers $5,000, as stated by the CRC. These endorsements, necessary for the operation of consumption areas, are valid for one year and require annual renewal.

Jeff Brown, the Executive Director of the CRC, has assured that details on license applications will be available shortly, the report stated. This announcement follows a 60-day public comment period initiated by the CRC post the preliminary framework approval last winter. The finalized rules are expected to be published in the New Jersey Register next month, marking their official enactment.

As New Jersey joins a select group of U.S. states that have embraced on-site cannabis consumption at dispensaries, the move reflects a broader shift towards more progressive cannabis policies and sets a precedent for other states considering similar regulations.

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California Taskforce Seized Nearly 190,000 Pounds of Cannabis Last Year

1/18/2024

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California’s Unified Cannabis Enforcement Taskforce (UCETF) seized nearly 190,000 pounds of illicit cannabis during the taskforce’s first calendar year of operation, and the haul was valued at nearly $312 million, according to a press release. Law enforcement also seized 119 illegally possessed firearms and oversaw the eradication of almost 318,000 cannabis plants.

“California is effectively decreasing the illegal cannabis market by leveraging the strengths and knowledge of over 20 state agencies and departments alongside our local and federal partners. The UCETF’s progress in 2023 reflects California’s ongoing commitment to disrupting and dismantling illegal cannabis activity. I look forward to working with all our partners in 2024 to build on this progress.” — Nicole Elliott, Director of the Department of Cannabis Control (DCC)

The UCETF was launched in mid-2022 and is co-chaired by the Department of Cannabis Control and the California Department of Fish and Wildlife, while the Homeland Security Division of Cal Office of Emergency Services coordinates the taskforce’s efforts.

Officials also noted the five California counties that experienced the most enforcement actions and a dollar estimate for the amount of cannabis seized:

  • Alameda County, about $77,828,338.50 worth of cannabis seized
  • Siskiyou, about $70,747,875.00 worth of cannabis seized
  • Mendocino, about $48,073,113.00 worth of cannabis seized
  • Los Angeles, about $28,317,139.69 worth of cannabis seized
  • Kern, about $21,578,438.25 worth of cannabis seized

California Department of Fish and Wildlife Director Charlton H. Bonham said the taskforce “hit the ground running” in 2023 with year-round enforcement actions that spanned the entire state.

“We’ve sent a strong message that illegal operations that harm our natural resources, threaten the safety of workers, and put consumer health at risk have no place in California,” Bonham said. “While there is more work to be done, we made progress last year and I look forward to going further alongside our county, state, and federal partners.”

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Minnesota Regulators Say State Needs At Least 381 Dispensaries

1/18/2024

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Minnesota cannabis regulators said in a report this week that officials will need to license at least 381 cannabis dispensaries to properly service the state.

Under the state’s legalization law, there must be at least one cannabis retailer per 12,500 residents, calling for at least 381 locations, the report said.

The Minnesota Office of Cannabis Management commissioned the report to better understand cannabis consumers and cannabis demand in the state. In their investigation, officials surveyed a large number of Minnesota-based cannabis consumers (i.e. people who had consumed within the past year) and found the following:

  • The percentage of surveyed cannabis consumers in each county matched the percentage of actual Minnesotans in each county, showing the study and its findings hold about 99% accuracy.
  • Survey participants obtained about 24.8 grams of cannabis on average within the past month, slightly higher than the national average, which suggests a “robust market” for the cannabis industry, the report said.
  • 83% of survey participants had consumed cannabis at least once a month, with 40% consuming daily or almost daily.
  • Cannabis consumption patterns for past-year cannabis consumers matched national trends.
  • One-quarter of respondents said they were growing cannabis plants at home, with an average of two plants growing at a time.
  • More than half of respondents said they had consumed at least one alternative cannabinoid (i.e. CBD, delta-8, or delta-10 THC) within the past month, and 68% said they had tried such products at least once previously.
  • 17.6% of participants said they got their cannabis from a dealer, 16.6% from friends and family, and 16.1% said they purchased the products from one of the state’s dispensaries selling low-potency hemp products.

Minnesota became the 23rd state to legalize adult-use cannabis last August. Under the law, Minnesotans aged 21 and older can possess up to two ounces of cannabis in public and up to two pounds at home. Legal consumers can also cultivate up to eight plants at home, with a maximum of four flowering plants at once.

Unlike other states, Minnesota had already established legal access to low-dose cannabis products but that program was limited to consumable products with a maximum of 5mg of THC, including both delta-8 and delta-9 THC.

Earlier this month, lawmakers and state officials convened to investigate a loophole in the state’s current system that facilitates the sale of hemp flower products that may contain high levels of THC.

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Maryland Police Chief Says Rule Against Cannabis Use Is Bad for Recruiting

1/17/2024

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Montgomery County Police Chief Marcus Jones said that a state rule requiring law enforcement recruits to have abstained from cannabis use for at least three years before they can be hired hurts the state’s police recruitment opportunities, according to a News4 report.

Chief Jones, who is also the head of the Fraternal Order of Police and a Montgomery County Council Member, asked the Maryland Police Training and Standards Commission in a letter last year to revise the regulations.

“I think in today’s environment, where we are with the legalization of cannabis, that has now restricted law enforcement agencies, particularly larger agencies, across the state.” — Chief Jones, via News4

Montgomery County Assistant Chief Administrative Officer Earl Stoddard said in the report that making off-duty use of a legal drug into a “barrier” for growing law enforcement agencies around the state seems like “a bad policy.”

The commission has said it would investigate the issue.

Many states with legalization laws have enacted policies to prevent employers from refusing to hire someone based on their past cannabis use but those policies are frequently not extended to safety-sensitive positions including law enforcement, other first responders, and any position requiring federal security clearance.

In nearby New Jersey, the state attorney general ruled last year that police officers were allowed to consume cannabis while off-duty. That policy sparked a federal lawsuit in October from the public safety director for Jersey City which argued that because federal law prohibits anyone who uses a federally controlled substance from possessing firearms, the city cannot employ any officers who consume cannabis.

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