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Federal Enforcement Fears Shelve CA Banking Bill

8/22/2018

Last week, state lawmakers in California ceased consideration of a bill to create state cannabis banks due to an analysis that said the state-chartered banks would be too vulnerable to federal raids, reports the LA Times.

The bill would have created private banks incorporated at the state level in an attempt to circumvent federal money laundering statutes requiring banks to file suspicious-activity reports for every transaction involving a cannabis business.

The bill — which was written in the state Senate but died in the Assembly — would have allowed companies to make deposits and write checks, simple services currently unavailable to the cannabis industry.

Cannabis businesses currently have to deal completely in cash, which is a huge risk: not only are cannabis companies at an increased risk of robbery but the cash-only nature of the industry also complicates compliance for tax payments and other regulations. The banks themselves would also have been at risk as they would be unable to receive protection under the Federal Deposit Insurance Corp. and would’ve needed to secure private insurance, an extremely difficult task.

“This is a serious public safety issue that deserves swift resolution. We’ve got barrels of cash buried all over the state, businesses being ransacked, and it’s clear that the federal government won’t act. It’s a shock to me that the state government may not act this year either.” — State Sen. Bob Hertzberg (D-Los Angeles), via the LA Times

Representatives from the California Cannabis Industry Association said they remain committed to working with the state legislature to solve the cannabis industry’s banking woes.

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WSDA Plans Organic Cannabis Certification Program

8/21/2018

by Graham Abbott

Cannabis consumers in Washington will have access to state-certified organic cannabis products as early as next year, The Stranger reports.

The plan is for the Washington State Department of Agriculture (WSDA) to establish an organic certification program that cannabis cultivators can use to exemplify their plants and growing process as safe, clean, and natural. The actual word “organic,” however, is controlled at the federal level and therefore cannot be used in conjunction with cannabis.

Hector Castro, a spokesperson for the WSDA, said that the word for describing organic cannabis in Washington could be just “certified.” The WSDA will be taking public comment on that term — and accepting suggestions for a different term — when the program’s final draft rules are released at a later date.

“The goal is to be able to begin offering the service next year, in 2019, and we’re on track right now to be able to do that.” — Hector Castro, WSDA spokesperson, in an interview with The Stranger

According to Castro, the certification program will be paid for by fees from farms who pay to be certified.

The WSDA standards for whether or not a cannabis crop is organic will likely mirror the standards of the U.S. Department of Agriculture.

“USDA certified organic foods are grown and processed according to federal guidelines addressing, among many factors, soil quality, animal raising practices, pest and weed control, and use of additives. Organic producers rely on natural substances and physical, mechanical, or biologically based farming methods to the fullest extent possible.” — Excerpt from USDA.gov website

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Ohio Citizens Seek Decriminalization; Police Will Continue Arrests

8/21/2018

by Patrick Beggan

Voters in the city of Norwood, Ohio have collected enough signatures to get a cannabis decriminalization measure on the town’s ballot but police said they will continue to charge offenders under state law even if the measure passes, as reported by The Cincinnati Enquirer.

“This [ballot issue] deals with Norwood’s codified ordinance and doesn’t have anything to do with state law. We really wouldn’t change how we do things. We would simply, from the very beginning, charge them under state code.” –Norwood Police Chief William Kramer via The Cincinnati Enquirer

The ballot measure’s language removes fines and jail time for possession of under 200 grams–almost half a pound–of cannabis. Supporters of the measure collected almost double the amount of signatures required to get the measure on the ballot. A similar measure that the campaign, called “Sensible Norwood,” tried to put on the ballot in 2016 failed to advance past the verification of signatures. The 2016 measure included language preventing police from circumventing the local law change by charging offenders with state-level violations.

In response to Chief Kramer’s comments, the founding President of Sensible Norwood Amy Wolfinbarger said:

“With legalization sweeping the nation the way it is, I just don’t think its appropriate. I feel like you would just be looking your constituents in the face and saying we don’t care how you feel about this issue.” –Amy Wolfinbarger via The Cincinnati Enquirer

Ohio has legalized medical cannabis at the state level. That program is expected to launch September 8th, with sales to patients by the end of the year.

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World Health Organization Recommends Descheduling CBD

8/21/2018

by Graham Abbott

The World Health Organization (WHO) has recommended that “preparations considered to be pure cannabidiol CBD should not be scheduled within the International Drug Control Conventions,” Hempsupporter reports. The statement was issued following the 40th meeting of the organization’s Expert Committee on Drug Dependence on June 7-8 in Geneva.

Four important excerpts:

“There are no case reports of abuse or dependence relating to the use of pure CBD.”
“No public health problems have been associated with CBD use.”
“CBD has been found to be generally well tolerated with a good safety profile.”
“There is no evidence that CBD is liable to similar abuse and similar ill-effects as substances…such as cannabis or THC.”

The WHO also considered the cannabis plant; its resin, extracts, and tinctures; and the chemical makeup of THC and its isomers.

Despite the obvious evidence above, the DEA has confirmed CBD’s status as Schedule 1 in recent years and threats of a CBD market crackdown have haunted entrepreneurs around the country. Language in the 2018 Farm Bill, however, seeks to federally legalize hemp and all of its derivatives, including CBD extractions, tinctures, and other potential health products.

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Confusion Abounds Over “Dr. Gupta” Hemp CBD Product Endorsement

8/20/2018

by Graham Abbott

CNN’s chief medical correspondent Dr. Sanjay Gupta is often credited for helping spark a major shift of public opinion regarding the cannabis plant. In 2013, Dr. Gupta released CNN’s Weed, in which the acclaimed neurosurgeon denounced the medical and political forces that have stifled medical cannabis to this date and explained how it can be an effective medicine despite its longstanding prohibition.

When the name “Dr. Sanjay Gupta” surfaced in recent news reports covering a partnership between the doctor and the publicly traded hemp CBD manufacturer Tree of Knowledge International Corp., many assumed that CNN’s famed medical correspondent had begun endorsing specific products. As the headlines gained steam, however, it became clear that the Dr. Sanjay Gupta featured in TOKI’s announcements is not the famed CNN correspondent but an entirely different person who happens to share the same name and title.

The other Dr. Sanjay Gupta — a pain specialist — is the president of the American Pain Association and director for Health Time TV.

CNN correspondent Dr. Gupta responded to the developments over the weekend: “I report on medical marijuana,” he wrote to his Facebook and Twitter followers. “I don’t sell it.”

See Dr. Gupta’s full statement to his followers below:

CNN correspondent Dr. Gupta first commented on the situation in a tweet last week in response to Hemp Industry Daily‘s coverage of the story:

Guys, you know this isn’t true. I haven’t partnered with anyone and have never endorsed any products. Perhaps you are doing good work, but you are absolutely misrepresenting my involvement. First I ever heard of this was from this tweet. Please correct.

— Dr. Sanjay Gupta (@drsanjaygupta) August 14, 2018

Some have suggested that TOKI purposefully misrepresented the partnership as a sort of publicity stunt to drive up the company’s stock prices. However, TOKI chairman and CEO Michael Caridi said in a phone interview with Ganjapreneur that any misrepresentations were due to misleading media reports, not the company’s press material.

Caridi said that their partnership with Dr. Gupta was key because of his specialization in pain treatment and because he has a distribution network of 160,000 doctors — Caridi also argued that this qualifies him as the medical cannabis movement’s “real” Dr. Sanjay Gupta.

In the company’s July press release, Caridi wrote that Dr. Gupta’s “leadership, knowledge, and influence will be a tremendous asset” to TOKI.

“Having someone such as Dr. Gupta join our Advisory Board speaks volumes and reinforces our commitment to creating best in class products and being at the forefront in innovation in this rapidly evolving field.” — Michael Caridi, CEO and chairman for Tree of Knowledge International Corp., in a press release

This isn’t the first time confusion has come about due to the shared name. In January 2016, chartered financial analyst Alan Brochstein of New Cannabis Ventures, who specializes in the cannabis industry, posted a warning on LinkedIn about the same issue in relation to an IPO for a different company. According to emails obtained by Brochstein, Dr. Gupta of the TOKI deal did not clarify that he wasn’t the famed Dr. Gupta of CNN. Instead, the doctor appears to have neglected to correct the mistaken identity, and Brochstein suggested that he may have “just wanted to know the details of the pending IPO so that he could get his hands on free shares as part of the deal.”

Neither Dr. Gupta has responded to Ganjapreneur’s request for comment — this article may be updated in the future with their responses.

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We Need to Stop Calling K2 ‘Synthetic Marijuana’ as Body Count Rises

8/20/2018

by Pat Beggan

Following last week’s mass-casualty event in New Haven, Connecticut, it’s clear that the cannabis community needs to do its part to change the language surrounding K2, also known as Spice. Many journalists continue to refer to Spice as “synthetic marijuana” but, in reality, it’s made of only individual synthetic cannabinoids and is often combined with the opioid fentanyl or chemicals found in rat poison.

Much like how cannabis activists have spent the last decade doubling down on changing the public’s lexicon to phase out the prejudiced term “marijuana” for “cannabis,” we now need to encourage a similar change in how we talk about synthetic cannabinoids like K2.

K2, Spice, Black Mamba, Krypton, Kronic and many other brand names have become common names for synthetic cannabinoids. The chemicals are often sprayed onto smokable blends of herbs and other non-psychoactive plant matter. On the street, they’re also often sprayed with opioids like fentanyl or anti-coagulants found in rat poison, among other unpredictable chemicals. Because they look like the well-known and relatively safe cannabis pre-rolls, people often don’t consider what they may be consuming.

Synthetic cannabinoids are a byproduct of cannabis prohibition. Originally, these chemicals were produced to research the effects of THC because federal law made it too difficult to acquire actual cannabis and cannabinoids. Synthetic cannabinoids tagged with radioactive isotopes were responsible for the first discovery of cannabinoid receptors in the 1990s. They’re used recreationally for the same reason — since the compounds are not listed explicitly in the Controlled Substances Act, they’re much easier to legally acquire and distribute. The problem is that they’re often far more powerful and concentrated than cannabis and can affect the human body in unpredictable ways.

It’s their synthetic, lab-produced and refined nature that make synthetic cannabinoids like AKB-48 (named after a Japanese girl band) or XLR-11 (named after the first American liquid rocket fuel) dangerous. We need to stop referencing marijuana and cannabis when we talk about these chemicals as, in reality, they have little to do with whole cannabis plant compounds and much more to do with other lab-produced synthetic compounds like opioids.

Vocabulary changes like this will do much to keep cannabis users and advocates safe from the negativity following the trail of bodies created by synthetic cannabinoids.

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A licensed, indoor cannabis grow operation in Washington state.

Florida Politician’s Accounts Closed for Taking MMJ Advocacy Donations

8/20/2018

by Pat Beggan

This month, Wells Fargo closed the accounts of Florida agriculture commissioner candidate Nikki Fried due to her receiving money from medical cannabis lobbyists, according to a Forbes report by Tom Angell.

This is the first-ever closure of a politician’s campaign accounts due to contributions from the cannabis industry. Nikki Fried, even if elected, would have very limited oversight of medical cannabis issues.

The situation is raising some questions because many candidates across the political spectrum have accepted campaign contributions from the cannabis industry. Non-profits could also be at risk if this enforcement becomes standard policy for larger banks.

“This is yet another clear signal to Congress that they need to address the banking issue for the cannabis industry. It is absurd enough that state-regulated businesses are being denied standard banking services, but it is absolutely ludicrous that political candidates and nonprofit advocacy organizations are also being affected. There is no rational reason for Congress to go another session without fixing this growing problem, which has serious societal implications.” — Mason Tvert, spokesperson for the Marijuana Policy Project, via Forbes

The vast majority of banks, due to federal prohibition and money laundering laws, have refused to deal directly with the cannabis industry in states where it has been legalized. The move by Wells Fargo in Florida, however, is the first of any bank to target a political candidate.

Denial of banking services remains a serious issue for the burgeoning cannabis industry and this spread to broaden those restrictions may finally induce action from the federal government.

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DEA Calls for Fewer Opioids, More Cannabis In 2019

8/17/2018

by Graham Abbott

The Justice Department and Drug Enforcement Agency announced in a news release yesterday the agencies’ new goal for 2019: to reduce production of the nation’s six most frequently abused opioids by an average of ten percent.

Additionally, according to a Tom Angell Forbes report, the DEA will call for the quintupling of research-grade cannabis next year, from about 1,000 pounds in 2018 to more than 5,400 in 2019. Angell first reported this development on Thursday, citing a yet unpublished Federal Register filing set.

The pharmaceuticals specifically identified by the DEA were oxycodone, hydrocodone, oxymorphone, hydromorphone, morphine, and fentanyl. U.S. Attorney General Jeff Sessions and other DOJ officials said these reductions were a part of President Trump’s plan to reduce opioid prescription rates by one-third in three years.

“We’ve lost too many lives to the opioid epidemic and families and communities suffer tragic consequences every day. This significant drop in prescriptions by doctors and DEA’s production quota adjustment will continue to reduce the amount of drugs available for illicit diversion and abuse while ensuring that patients will continue to have access to proper medicine.” — Uttam Dhillon, Acting Administrator for the DEA, in the press release

Meanwhile, medical cannabis advocates argue that the plant could be utilized in the efforts to reduce the average Americans’ opioid intake. Studies show that opioid overdose rates consistently drop in states where medical cannabis is available for chronic and/or severe pain.

Currently, the federal government allows only one entity to grow cannabis for research purposes, and that’s a farm at the University of Mississippi. Other interested parties have since applied to grow research-grade cannabis, but AG Sessions has so far hindered the application process. This uptick in research-grade cannabis levels for 2019, however, could mean that Sessions’ not-too-subtle efforts to block cannabis research could be ending and new organizations could be federally licensed to grow cannabis in the near future.

Members of the public will have a 30-day comment period when the new cannabis quota is officially released.

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Coworkers Become Enemies As Cannabis Consultants Feud In Cutthroat Market

8/17/2018

by Pat Beggan

The CEO of SIVA Enterprises has filed suit against start-up Cirrata and five executives in that company, previously employed at SIVA, over alleged civil and criminal acts committed in a supposed effort to undermine SIVA’s business, Marijuana Business Daily reports. Avis Bulbulyan of SIVA is pitting himself against Lance Ott, Steve Baghoomian, David Yeager, Colton Lasater and Charles Christopher of Cirrata.

“I’m going absolutely every single step all the way to the very end – every last penny I’ve got, every last nickel I’ve got. This is going all the way to the end. I want my day. To me, my reputation is absolutely everything. I won’t change it for any dollar amount.” — Avis Bulbulyan to Marijuana Business Daily

Neither plaintiff nor defendants seem interested in a settlement, though most suits of this nature tend to be settled out of court.

“I have no interest in settling this whatsoever … If it goes to trial, it goes to trial. The scope of what you’re going to see coming out – this stretches the entire gamut. This is going to look like a bad episode of [CBS’s] ‘American Greed.'” — Steve Baghoomian to Marijuana Business Daily

The five defendants in the case were all hired on at SIVA in October of 2017 and worked there until they began to leave or be terminated in late winter and early spring of 2018. Lance Ott, former CEO of Washington-based Guardian Data Systems, has known Bulbulyan as a friend since 2014. Both Bulbulyan and Ott are members of the LA Cannabis Task Force’s regulatory advisory board.

The suit alleges that, while employed at SIVA, the defendants began conspiring to steal clients and intellectual property. Bulbulyan’s filing alleges that Ott, Baghoomian, and Yaeger decided to form Cirrata as early as January and even searched for new office space during that time frame. Shortly thereafter, the defendants are alleged to have started cutting Bulbulyan out of inter-office communications, as revealed by a few undeleted emails discovered by Bulbulyan.

Between March 23 and April 2, all five had either resigned or been terminated from SIVA Enterprises. Cirrata was incorporated officially on April 12 — Cirrata’s website domain, however, was registered on March 12th, while the defendants were still corporate officers of SIVA. Other details are revealed in the suit, including alleged defamation on several corporate review websites. Most importantly, Bulbulyan claims the defendants violated California criminal laws regarding illegal computer access and data theft; violations that carry a prison sentence if convicted.

Among the defendants, only Steve Baghoomian has commented on the suit so far, telling Marijuana Business Daily the suit is baseless and countering that he and the other defendants would disclose illegal activity at SIVA should the suit go to court. Baghoomian said he was actually terminated from SIVA when he brought these worries about criminal activity to Bulbulyan’s attention.

The battle between SIVA and Cirrata is a clear sign of how competitive the legal cannabis markets have become as they develop. Should the case go to court, it could take 12-18 months before a ruling is made.

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Louisiana Plants First Cannabis Crop After Months of Regulatory Issues

8/17/2018

by Pat Beggan

Louisiana’s first legal cannabis crop will be planted today after the grower, GB Sciences, and state regulators finally reached an agreement on operations, according to a News Star report. The first crop will be grown in a temporary “exterior pod” custom-built by GB Sciences to meet stringent state regulations. GB Sciences must still obtain approval from Agriculture Commissioner Mike Strain to begin full interior production at its facility in Baton Rouge.

“Based upon a very productive meeting with Dr. Strain and the thorough attention to detail from his team we believe we can move forward with production on Friday. … I’m very appreciative of Dr. Strain’s engagement in the process.” — John Davis, President of GB Sciences, in the report

John Davis of GB Sciences, his team and the owners of the state’s nine medical cannabis pharmacies have expressed frustration with the difficulties in achieving regulatory approval of late. Original approval was slated to be given nearly two months ago but there have been a number of bureaucratic and “letter of the law” difficulties.

“It’s become pretty frustrating and illustrates the pace of government and the pace of business operate at two separate speeds. We really need to get moving.” –Greg Morrison, owner of a medical cannabis pharmacy in West Monroe, via The News Star

The first crop is expected to be harvested in November. Cannabis is only allowed to be prescribed in Louisiana as a pill or oil. The “exterior pod” will contain all cannabis from seed to packaged product.

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Poll: 24% of Young Adults In America Consume Cannabis

8/16/2018

by Graham Abbott

The latest Gallup poll has found that nearly 25 percent of young Americans (aged 18 to 29) are admitted cannabis users — this is about double the rate of the rest of the population, of which 13 percent say they “regularly” or “occasionally” use and/or smoke cannabis.

Cannabis usage rates could be on the rise, because — according to the pollsters — this data “is on par” with the average 22 percent of young adults who said across three surveys from 2015 to 2017 that they smoked cannabis.

The other age brackets are consistently less likely to be cannabis users as their ages increase:

13 percent of adults aged 30-49
11 percent of adults aged 50-64
Just 6 percent of adults who are 65 or older

Cannabis use is not only most prevalent among 18- to 29-year-olds but it is also much more common in the West, where all the coastal states in the continental U.S., including Alaska, have legalized adult-use cannabis.

The poll data was collected during telephone calls placed July 1 to July 11, 2018, to a random sample of 1,033 adults, aged 18 and older.

Cannabis is legal for adult use in nine states plus Washington D.C. and more than 30 states have established some sort of medical cannabis reforms.

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Mormon Campaign Attempts to Block Utah MMJ Ballot Measure

8/16/2018

by Pat Beggan

Members of a campaign funded by Mormon attorney Walter J. Plumb filed a lawsuit in Utah state court on Wednesday in an attempt to remove a measure legalizing medical cannabis from the November ballot, according to a Salt Lake Tribune report. The ballot measure would legalize cannabis use for only specific chronic illnesses like cancer and HIV, among others. Wednesday’s lawsuit is the second attempt by the campaign to remove the measure from the ballot.

The filing indicates the measure would “violate the religious beliefs” of Plumb, whose “religious beliefs include a strict adherence to a code of health which precludes the consumption and possession of mind-altering drugs, substances, and chemicals, which includes cannabis and its various derivatives.”

The deeper issue taken up by the lawsuit seems to be a detail of the ballot measure that prevents landlords from discriminating against medical cannabis cardholders. The Plumb campaign and the Church of Latter-day Saints both believe Mormon landlords should be allowed to discriminate against cardholders if desired.

“In the United States of America, members of all religions, including the Church of Jesus Christ of Latter Day Saints have a constitutional right to exercise their religious beliefs. This includes the right not to consort with, be around, or do business with people engaging in activities which their religion finds repugnant.” — Excerpt from the filing

Proponents of the medical cannabis legalization campaign called the lawsuit a “wacky attempt” to derail the initiative. The movement’s director issued the statement:

“These groups should be ashamed of themselves for calling sick and afflicted patients morally repugnant in their latest lawsuit.” — DJ Schanz, director for the Utah Patients Coalition

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California Cannabis Taxes Generate $74 Million in 2nd Quarter

8/16/2018

by Graham Abbott

California’s cannabis tax numbers are in for the second quarter of 2018 and the numbers suggest the market is trending toward compliance, despite the market’s rocky start.

Tax revenue from the cannabis industry totaled $74,240,257 from April 1, 2018, through June 30, 2018, which includes state cultivation [$4.5 million], excise [$43 .5 million] and sales taxes [$26.3 million]. It does not include tax revenue collected by each jurisdiction. — Excerpt from a California Department of Tax and Fee Administration news release

In contrast, the state’s first quarter cannabis tax total was $60.9 million ($32 million in excise taxes, $1.6 million in cultivation taxes, and $27.3 million in sales taxes). Medical cannabis is not taxed in California.

In the release, the California Dept. of Tax and Fee Administration also announced “a new satellite location” to assist taxpayers in/around Humboldt County, an external tax advisory group for the cannabis industry, a new pilot project for visiting and educating cannabis retailers about compliance with their state tax obligations, and announced new procedures and security measures for financial transactions.

A study released earlier this month by Eaze Solutions, Inc. found that 18 percent of California cannabis consumers are making purchases on the illicit marketplace. A majority of such consumers said they were driven from the legal market by high taxes and a lack of consistency under the new regulations.

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Ontario Delays Launch of Private Cannabis Stores Until 2019

8/16/2018

by Pat Beggan

On Monday, Ontario’s government announced that it would start legal cannabis sales as online-only when it becomes legal on Oct. 17 and would delay brick and mortar sales until April of 2019, Bloomberg reports.

In the meantime, Ontario has partnered with Shopify to provide a government-run, online-only platform for the sale of legal cannabis. Once private brick and mortar cannabis shops open in April, that same platform will handle wholesale distribution as well.

This change is an official rolling back of the previous Liberal government’s plan, which would have seen cannabis distributed via 40 government-run shops by the end of 2018.

“Implementing this new approach will take time. We have to get this right and we will not be rushed.” — Vic Fedeli, Finance Minister for Ontario, via Bloomberg

Canaccord Genuity analyst Matt Bottomley said the move may cause a drag in sales growth if cannabis is only available online. He said there likely remain some unknown bumps in the road ahead and that a delay of just six months is optimistic.

“I’m a little suspect on these stores being open April, but maybe the first batch will be open then.” — Matt Bottomley, analyst for Canaccord Genuity, via Bloomberg

Following the announcement, all publicly-traded cannabis stocks took a hit, some nearly 10 percent.

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Researchers Pioneer New Cannabis Extraction Method Using An Espresso Machine

8/15/2018

by Pat Beggan

In a study to be published in The International Journal of Pure and Applied Analytical Chemistry, researchers have revealed that it is possible to use a hard-cap espresso machine to create cannabis extracts. The team of researchers made the extracts, meant to be used for analysis, with a common laboratory solvent and a $300 espresso machine.

The study was conducted by researchers from the University of Valencia in Spain using cannabis that had been seized by law enforcement.

“It has been evidenced that the developed method for the major cannabinoids extraction is a really encouraging example of the wide range of possibilities that a conventional and low cost hard cap espresso assisted extraction could offer in analytical laboratories.” — Excerpt from the study “Fast extraction of cannabinoids in marijuana samples by using hard-cap espresso machines”

Researchers compared extractions of THC, CBD and CBN made with the espresso machine and the solvent 2-propanol to a more traditional ultrasound-assisted extraction using both gas chromatography and ion mobility spectrometry. The method was comparable in accuracy and more importantly, vastly cheaper and faster.

This method of extraction could be used in a laboratory setting but deserves more experimentation to see how else it may be employed. Researchers in a variety of chemical fields have lately been using hard-cap espresso extraction (HCEE) to obtain samples for analysis.

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Alcohol Distributor Constellation Brands Makes $4 Billion Cannabis Investment

8/15/2018

by Graham Abbott

Constellation Brands, the brewer of Corona beer and a major distributor for Svedka vodka, just invested nearly $4 billion (CAD $5 billion) into Canada’s Canopy Growth, Marketwatch reports. It is the largest investment ever in the cannabis industry.

After news of the announcement broke, Canopy Growth — which is publicly listed on both the New York and Toronto stock exchanges — saw its share values skyrocket up almost 30 percent across both stock exchanges.

Constellation Brands first partnered with Canopy Growth in October 2017, when the alcohol giant agreed to buy a 9.9 percent stake in the company for about $191 million (CAD $245 million). But with this investment, Constellation’s stake in Canopy Growth has increased to 38 percent; there are also options on the table for Canadian cannabis producers to access an additional $3.4 billion in investments down the line, which would give Constellation more than a 50 percent stake in the company.

Wells Fargo analyst Bonnie Herzog told Marketwatch this is a smart move for Constellation Brands, as it “further solidifies Constellation Brands’ first-mover advantage” among other major brewers and alcohol companies.

“While there could be some cannibalization risk for Constellation Brands beer/alcohol portfolio, we believe the strategic partnership will ultimately be incremental to Constellation Brands’ core business, especially as the deal opens the door to tremendous white space opportunities globally – beyond Constellation Brands’ current U.S. limits with its core brands.” — Bonnie Herzog, analyst for Wells Fargo, via Marketwatch

Cannabis entrepreneurs have long predicted that Big Alcohol will dip into the cannabis space. After the bold investment by Constellation Brands, cannabis stocks seemed to enjoy a slight increase across the board on Wednesday, as the move signals a willingness among major alcohol companies and other players to make big investments — and take big risks — on the burgeoning cannabis industry.

“These alcohol and tobacco companies are starting to better understand the cannabis industry and the opportunity for large scale growth. Mood modifying beverages for socialization is a natural segway for their businesses. As people continue to move toward a more healthy lifestyle and recognize some of the negative effects that alcohol may have on the body, I think we are only going to see this trend continue and get stronger.” — Beth Stavola, president and founder of MPX Bioceutical Corp., in a statement

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UN to Review Cannabis’ Status Under International Law

8/14/2018

by Pat Beggan

In November, the United Nations will perform a deep review of cannabis’ scheduling status under the 1962 Single Convention treaty, which coordinates international drug laws, reports Marijuana Moment‘s Tom Angell.

The UN World Health Organization’s Expert Committee on Drug Dependence found in a pre-review in June that there was sufficient scientific evidence to support a full critical review of cannabis’ status, the first part of a multi-step review process. The review will consider cannabis from multiple scientific viewpoints with epidemiological and pharmacological analyses.

“Thankfully the World Health Organization has accepted the challenge of evaluating the placement of cannabis in the 1962 Single Convention treaty. Cannabis placement in the treaty was done in the absence of scientific evaluation and has provided the basis for a moral campaign against drugs by the USA for many decades. Since our work on medical access to cannabis has been based upon scientific inquiry we know that any rational assessment of the evidence leads the observer to understand cannabis indeed has proven medicinal value and, compared to other medicines, has profoundly fewer negative side effects.” — Michael Krawitz of Veterans for Medical Cannabis Access, via Marijuana Moment

If the UN decides to reschedule cannabis, this would trigger a U.S. review of the plant’s scheduling. After the full review in November, UN Secretary-General Antonio Guterres will receive the committee’s report and bring the issue to the UN floor.

Guterres was prime minister of Portugal in 2001 when the country decriminalized the possession of small amounts of all drugs.

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Health Canada Expands Industrial Hemp Rules to Allow Full-Plant Harvests

8/14/2018

by Graham Abbott

Canadian hemp growers can now harvest the entire hemp plant — including its flowers, buds, and leaves — after Health Canada established new rules on August 10, Producer.com reports.

Previously, hemp farmers could only farm the plant for its seeds and fiber.

The move is expected to open access to another potentially massive source of cannabidiol (CBD), a cannabinoid found in cannabis and hemp plants that has medicinal properties but not an intoxicating effect. This will also give hemp farmers access to a medicinal products marketplace in addition to just food and textiles.

“These new parts (of hemp) are economically valuable and will provide a new source of CBD and potentially other cannabinoid products.” — The Canadian Hemp Trade Alliance, in a statement

The new rules are attached to The Cannabis Act, which will fully legalize cannabis and hemp in Canada starting October 17. The hemp harvesting rules were changed earlier to give farmers, manufacturers, and other entrepreneurs time to develop the technologies and procedures for processing hemp into CBD products.

“We need to experiment with harvest, preservation and storage technologies, and this exemption means we won’t waste a year, which would have been the case if we were unable to collect plant material until Oct. 17.” — Jeff Kostuik of Hemp Genetics International, via Producer.com

While farmers can now harvest and store all parts of the hemp plant, they cannot sell any products made from hemp flowers, buds, and leaves until after The Cannabis Act takes effect.

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New Jersey Judge Rules Employer Can Discriminate Against MMJ Use

8/14/2018

by Pat Beggan

A U.S. District Judge in New Jersey has ruled that an employer can indefinitely suspend an employee for his doctor-prescribed medical cannabis, The Daily Journal reports.

Ardagh Glass in Bridgeton, New Jersey did not allow medical cannabis patient Daniel Cotto Jr. to return to work after he refused a drug test. Cotto claims his employer knew about his use of medical cannabis, which was prescribed for chronic pain due to a severe neck and back injury in 2007. Cotto has provided a doctor’s note saying he is capable of operating machinery while medicated.

Cotto filed a lawsuit against Ardagh Glass which argued that, by not allowing him to return to work, the company had violated New Jersey‘s anti-discrimination laws and the Compassionate Use of Medical Marijuana Act (CUMMA), which allows Cotto to be prescribed medical cannabis.

U.S. District Judge Robert Kugler’s decision found that the point of law allowing Ardagh Glass to deny Cotto his work hinged on mandatory drug testing. Under the language of CUMMA, Kugler wrote, an employer cannot be compelled to waive a drug testing requirement.

Other judges across the nation have delivered mixed rulings regarding medical cannabis for employees, including other decisions in New Jersey. In July, a Workers’ Compensation Judge ruled that Freehold Township, New Jersey had to pay for an injured worker’s medical cannabis treatment. That ruling ran counter to the decision in Cotto v. Ardagh Glass, and more contradictory rulings can be expected until federal legalization cleans the slate.

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Marijuana Policy Project Appoints New Executive Director

8/14/2018

by Graham Abbott

The Marijuana Policy Project (MPP), after months of considering qualified candidates, has hired activist Steve Hawkins to the position of executive director, the organization announced today via press release.

Hawkins has spent three decades as an advocate, policy strategist, nonprofit leader, and foundation executive in the movement for criminal justice reform. His experience in public education, stakeholder mobilization, and the engagement of government officials — as well as a knack for “developing strategic alliances with business leaders, law enforcement officials, scholars, faith leaders, victims’ advocates, and other key voices” — qualified him for the position.

“Steve has a strong track record in the field of criminal justice reform, and he knows how to build a movement toward meaningful social change. We were not only impressed by his expertise and experience, but also his strong convictions regarding the injustice of marijuana prohibition.” — Troy Dayton, chair of the MPP board of directors, in the press release

Some of Hawkins’ previous positions include the executive vice president of the NAACP and the executive director for Amnesty International.

“Throughout my career, I have witnessed the counterproductive effects of the war on marijuana and its especially devastating impact on communities of color. MPP has been at the vanguard of changing public perceptions and public policies surrounding marijuana, and I am proud to join this incredible team of advocates at such a critical moment in the movement to end marijuana prohibition.” — Steve Hawkins, Executive Director for the Marijuana Policy Project, in a statement

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Trump Tariffs Expected to Increase Cannabis Industry Prices

8/13/2018

by Pat Beggan

The prices of cannabis retail items like vapes, batteries, filters, cartridges, and packaging may soon increase thanks to President Trump’s proposed tariffs, Forbes reports.

The tariffs will force vape manufacturers to locate new American suppliers or be quickly out-competed by the companies that do. American-made equipment in this category is far more expensive.

The increase in prices is expected to decrease sales and tax revenues, hurting not only the private companies’ bottom lines but also the budgets of states with legal sales. Colorado logged more than $247 million in tax revenue from cannabis sales in 2017; 25 percent of those sales were in the category of cannabis vaporizers.

Other components beyond vapes — such as construction and grow equipment and even cell phones — will also increase in price.

Companies in the cannabis space are especially vulnerable to product cost increases as they are unable to deduct the usual business expenses before paying taxes due to the federal status of cannabis; those business deductions are fundamental to how the vast majority of business works in the United States.

Growers are expected to suffer the most with the tariffs because, of all operators in the cannabis space, their margins are typically the slimmest and many already struggle to make ends meet.

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Shopify Locking Up Canadian Cannabis Market

8/13/2018

by Pat Beggan

Online retail giant Shopify has been cutting huge deals with Canadian provinces and cannabis producers to set itself up as the largest cannabis point-of-sale and inventory management platform, reports The Motley Fool.

Shopify has signed contracts with the provinces of Ontario and British Columbia, as well as with Aurora Cannabis, Canopy Growth Corp., Hydropothecary Corp., and others. Shopify’s deal with Ontario was made direct with the government, placing Shopify squarely in the middle of the entire cannabis industry in that province, while Shopify will function as an inventory-management go-between in British Columbia, where cannabis retail will be privatized. Aurora Cannabis and Hydropothecary Corp. are expected to be the two largest producers of cannabis in Canada once the legal market is in full swing.

Shopify’s dealings in Canada may position the company for developing a first-mover advantage when cannabis becomes federally legalized in the U.S.

Shopify’s sales are expected to top $1 billion this year alone. The company’s software-as-a-service platform dominates in a wide range of markets, but its move into the cannabis space is not expected to significantly increase total revenue just yet — though analysts predict that, by 2019 or 2020, these cannabis deals may begin to contribute significant revenue to the company’s annual total.

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Denver Mayor Says Legalization Has Benefited City

8/13/2018

by Graham Abbott

Despite campaigning against Colorado’s successful 2012 bid to legalize cannabis, Denver Mayor Michael B. Hancock admitted last week that the city of Denver is effectively regulating cannabis and called the industry a “success,” according to a press release.

The statement was sparked by a city report that outlines the Denver industry’s journey from medical-only to a fully operational adult-use marketplace.

Some key findings of the report:

Denver’s retail cannabis sales jumped 29% from 2016 to 2017
Tax/licensing revenue from cannabis expected to increase by 8% this year
Cannabis sales tax revenues constituted about 3.4% of Denver’s general fund revenue in 2017
From 2014-2018, more than $11 million in cannabis revenues will go to youth-serving organizations by Denver’s Offices of Children’s Affairs and Behavioral health; further funding will go to Denver’s “High Costs” youth prevention campaign
Cannabis-related crimes in 2017 made up just .30% of overall crime in Denver in 2017
Cannabis industry-related crime made up “less than ½ of 1 percent” (or .21%) in 2017

“This new report demonstrates Denver’s coordinated approach between multiple agencies to manage marijuana is working. We took on the daunting challenge of becoming the first major city in America to manage legalized recreational marijuana and we are having success. That’s because of coordination between Denver’s Excise and Licenses, Denver’s Fire Department, Police Department, Department of Public Health and Environment, Community Planning and Development, as well as our partners in other city agencies, the community from the marijuana industry and public health advocates.” — Denver Mayor Michael B. Hancock, in the press release

In 2012, Mayor Hancock came out against Colorado’s legalization amendment. At the time, he called cannabis a “gateway drug” and suggested that its legalization would detract from Colorado’s image and make the state less attractive to tourism and business interests.

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