State Regulators, Canna Operators and Testing Experts Gather to Evaluate the Cannabis Industry at the Canna West Summit

5/24/2018

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After three successful Cannabis Compliance Summits on the east and west coasts, Infocast is proud to announce the return of the Canna West: Compliance, Testing & Product Safety Summit, taking place June 5-7, 2018 in Redondo Beach, CA. The Summit will bring regulators, policymakers and testing experts together with cannabis operators to share industry best practices.

Estimates suggest that the combined medical and adult-use market may be worth $5 billion by 2019 in California alone, while the forecasts for national and global canna markets are revised, upward, on a daily basis. To take advantage of these new opportunities, industry players must learn how to navigate through the evolving regulatory framework. The Summit will provide attendees with the opportunity to hear from regulators and learn best practices from their peers and industry experts.

Critical topics to be discussed revolve around navigating local, county, state and national regulations for all steps in the cannabis chain – from growing to extraction, infused products to retail, track & trace implementation to contaminant thresholds,  packaging, labelling, and so much more, all just in advance of California’s mandatory July 1 testing launch. State regulators and health officials will be sharing notes and driving operators toward uniform testing, labeling, operational standards, protocols and best practices.

High profile brands and growers participating at the Canna West Compliance Summit include MedMen, OutCo, Meadow, Big Moon Sky, Bud and Bloom, Chemistry, Constance Therapeutics, Berkeley Patients Group, Love’s Oven, LLC, and many more.

Additionally, Alexis Podesta, Secretary, California Business Consumer Services and Housing Agency, Reginald Byron Jones-Sawyer, Sr. of the California State Assembly, Alice Mead of GW Pharmaceuticals and Lindsay Robinson of the California Cannabis Industry Association are the featured keynote speakers.

“A most informative conference with lots of serious, important information for an emerging industry. The panelists were extremely prepared, articulate and transparent.” – Senator Eleanor Sobel, Consultant, ELEANOR SOBEL CONSULTANTS

To register or learn more information regarding the agenda, speakers, and sessions: visit http://infocastinc.com/event/cannabis-compliance-west/ or contact Infocast at 818-888-4444.

About Infocast:

For over 30 years, Infocast has produced the highest quality events, tailored to the needs of the industries we serve. We intensively research the marketplace, pulling from an extensive network of experts to give you the information and connections to succeed.

 

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7-Eleven Denies They Have Any Partnership with CBD Company

5/24/2018

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Convenience store chain 7-Eleven has rebuked the news that they will sell CBD products by the end of the year, calling Tuesday’s announcement false, Huffington Post reports. Denver, Colorado-based CBD company Phoenix Tears made the announcement in a press release earlier this week – and while it notes that the company’s agreement was made with MarketHub Retail Services, which according to the release works with 7-Eleven franchises, 7-Eleven Director of Communications Stephanie Shaw said she had no knowledge of the deal.

“We have made no agreement or partnership with this company and do not know why they said that.” — Shaw to Huffington Post

The Phoenix Tears press release stated that the partnership would see CBD products in 7-Eleven stores in Nevada, Colorado, Massachusetts, Illinois, Maryland, Florida, California and Washington, D.C. by year’s end. 

Suzanna Mattaboni, a spokeswoman for Phoenix Tears from the public relations firm Parallel Communications, Inc., told Huffington Post that the press release may have misstated some of the details and she was trying “to get to the bottom” of the issue. The release includes a statement from the president of MarketHub Retail Services and founder of Phoenix Tears but does not include a statement from any 7-Eleven officials.

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Feds Tell California Brewer to Cease CBD Beer Production

5/24/2018

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The federal Alcohol and Tobacco Tax and Trade Bureau have ordered a California brewery to cease production of their CBD-infused beer because hemp is a non-standard beer ingredient, the San Francisco Chronicle reports. Black Hammer Brewing unveiled Toke Back Mountain on Apr. 20 and released eight more CBD-infused beers, which owner Jim Furman said became the brewer’s most popular line.

The recipe also includes hemp-derived terpenes, and Furman said he will apply for special approval to use both the CBD and terpenes. They have already started the application process with the agency to get approval to use hemp in their beers. The brewery can continue to sell the beers they have already produced at their tap room.

It’s not just the feds. The Massachusetts Alcoholic Beverage Control Commission killed a plan by Down the Road Beer Co. to produce a CBD-infused beer, saying the recipe would violate the Food & Drug Administration’s Food, Drug, and Cosmetic Act.

Other brewers have had success with CBD infusions. Last August Lagunitas Brewing Company, also based in California, produced 120 kegs of its own CBD-infused beer; and Vermont’s Long Trail Brewing Company announced they would create their own beer using CBD-infused honey. Green Empire Brewing, a much smaller Vermont brewer, unveiled their own CBD-infused beer at September’s Hemp Fest.    

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The Toronto Stock Exchange Tower in Toronto, Ontario photographed at night.

Medical Cannabis Company with Colombian Operations Begins Trading on Canada’s TSX Venture Exchange

5/24/2018

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Canada-based medical cannabis company Khiron Life Sciences Corp begins trading on the TSX Venture Exchange today under the “KHRN” symbol. While the company is based in Canada, its core operations are in Colombia, where they were one of the first companies to receive a medical cannabis license in the Latin American nation.

“We are pleased to be able to offer investors the opportunity to participate in the realization of our strategic and operational objectives. With the completion of this listing, our team will continue to focus on executing on our goal to expand across Latin America, a region with over 640 million people with unmet medical needs. Our patient-centric business model supported by world-class cultivation and extraction processes, brand loyalty development and a doctor education platform, positions us to become a dominant company in this region.” – Khiron President and CEO Alvaro Torres, in a press release

It’s the latest in a series of firsts for Khiron as they are the first medical cannabis producer with core operations in Colombia to list on any securities exchange globally. The firm struck a partnership with the Colombian Neurological Association to host two medical cannabis conferences and was one of the first companies to receive cultivation quotas for high-THC plants in Colombia. It has raised $17 million of equity capital over three financing rounds.

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A young cannabis plant showing signs of growth under an LED grow light.

Pennsylvania Judge Stalls Health Department Plan to Issue Additional MMJ Licenses for Research

5/24/2018

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A Pennsylvania judge has issued a preliminary junction against the Health Department’s plan to hand out additional licenses to cannabis growers and dispensaries that would partner for research with medical schools, the Associated Press reports. The case against the agency was brought by other licensed dispensaries in the state.

The judge ruled that the research provisions go beyond the scope of the law. In the ruling, Commonwealth Court Judge Patricia McCullough said the “regulations appear to be inconsistent with the legislative intent of Chapter 20, which was to permit distribution of medical marijuana for purposes of and in conjunction with research studies conducted jointly” with medical schools.

The Health Department is considering its options to challenge the ruling.

“Research is a vital component of Pennsylvania’s medical marijuana program to improve treatment options for patients suffering from serious medical conditions, including opioid-use disorder. The research program was rolled out in consultation with the sponsors of the original legislation and our approach was meant to ensure lower costs, more accessibility and ground-breaking treatments.” – Department of Health spokeswoman April Hutcheson, to the AP

The plaintiffs’ attorney, Judith Cassel, says that her clients are not opposed to the research but the “clinical registrants” should be doing research exclusively.

“We are happy that the court saw fit to provide a preliminary injunction so that a careful review could be done on the regulations. And hopefully, in the end, the regulations will better reflect the act.” – Cassel to the AP

McCullough said that the Legislature did intend for clinical registrants “to exist exclusively for research purposes.”

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North Carolina Tire Retailer Transitions Into CBD Sales; Offering Product Trial Bundles

5/23/2018

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Pure Relief is a North Carolina-based CBD dispensary founded by entrepreneur and former tire retailer Mike Melton. The company, having transitioned from Melton’s former tire business into a holistic CBD center, may have a curious history but it has made big waves both online and in its local community via CBD product trial bundles.

The acceptance of CBD oils and products as a health alternative has spiked over the past few years, but, due to its origin in the cannabis plant, it has had a hard time growing in states that are less accepting of cannabis. Mike Melton made it his mission to bridge the gap between CBD and the people in his area through Pure Relief.

In 2001, Melton privately opened up a tire superstore. After over a decade of successful tire sales, he explains why he made the leap into the CBD industry:

“The magnitude of the national opioid epidemic, and its effect on people close to me battling drug addiction, really opened my eyes to CBD. Although the industry is growing, and from a business point of view it only makes sense to jump in now, my true reasoning is personally trying to change as many lives as I can for the positive; for the better.”

In January 2018, Melton officially launched Pure Relief online as an all natural product marketplace and changed the signage of the tire shop to reflect his new business. In order to boost interest and get CBD into people’s hands, he decided to keep prices low because he knew the CBD would ultimately sell itself to people who need it, once they’ve tried it.

When asked about his end goal in the CBD space, Melton said, “We obviously want to offer the highest-quality CBD to people around the world online, and we want to have hundreds of CBD dispensaries across the nation. But these are just steps leading to my ultimate goal, which is to cause a meaningful shift in the opioid crisis and save actual lives, one tincture at a time.”

Visit PureRelief.com to learn more.

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7-Eleven Stores to Carry CBD Products by Year’s End

5/23/2018

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Editor’s update: Since this news broke, 7-Eleven has denied having a partnership with CBD company Phoenix Tears and claims that the press release cited in the below article is false.

7-Eleven stores across the country will begin carrying CBD products by the end of 2018, CBD company Phoenix Tears announced today in a press release.

Founded in 2010, Denver, Colorado-based Phoenix Tears produces and distributes CBD tinctures, oral sprays, and other products that have been derived entirely from hemp.

According to the release, up to 4,500 7-Eleven locations should carry the products by the end of this year — that number could go as high as 7,000 different stores within the next three years. The roll-out will initially focus on Nevada, Colorado, Massachusetts, Illinois, Maryland, Florida, California, and Washington D.C.

“We are excited that 7-Eleven will bring the Phoenix Tears product line to millions of Americans who can benefit from these all-natural, safe, and market-proven health alternative products. In addition, this agreement confirms our belief that CBD’s status as a mainstream wellness option has arrived.” — Janet Rosendahl-Sweeney, Phoenix Tears’s founder, in a statement

The partnership between Phoenix Tears and 7-Eleven was facilitated by MarketHub Retail Services, a distributor who works with the convenience store giant.

“Phoenix Tears is a trusted brand that has served consumers’ wellness goals for nearly a decade. We’re delighted to introduce Phoenix Tears’ CBD products to hundreds of 7-Elevens across the country, and address the growing consumer demand for effective, safe CBD-based products that can now be easily sourced over-the-counter.” — Blake Patterson, president of MarketHub Retail Services

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Texas Health Officials Backing Off Retail CBD Confiscations, For Now

5/23/2018

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The Texas Department of State Health Services is backing off a plan – for now – to remove CBD products off retail store shelves, the Austin American-Statesman reports. The agency proposed an inspection protocol in April that would have subjected CBD products to confiscation during inspections.

Health regulators are holding off on the action while they consult with other government entities, including law enforcement, on CBD product policy.

“We’re trying to figure out our big picture. We are getting more information to try to decide on a more overarching policy.” – Lara Anton, spokeswomen for the Department of State Health Services, to the Statesman

The agency received about 1,000 comments on the proposed protocol, the bulk of which opposed the action, Anton said, and that people “wanted to be able to continue to buy CBD.” Although she indicated that the comments also made the agency aware just how many products containing CBD were being sold in the state.

“We weren’t aware of how many different products there were and how widely it was being sold. After reviewing the comments, we realized that we needed to gather more information about the use of CBD in other types of products before making any decisions on how to enforce existing laws that apply to foods, drugs and cosmetics.” – Anton to the Statesman

Texas’ medical cannabis law only allows CBD sales and only three dispensaries have been approved to sell the products.

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Class Action Lawsuit Filed Against Xzibit-Owned Vape Cartridge Company in California

5/23/2018

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A class action lawsuit against vape cartridge manufacturer Brass Knuckles has been filed in California which alleges breach of warranty, false advertising, unfair competition, misbranding, and adulteration of the THC concentrate pens, according to the Cannabis Law Report. The lawsuit also names SC Laboratories Inc. and company owner Alvin Nathaniel Jones, better known as Xzibit, as defendants.

The complaint alleges that the products are not as potent as they claim and contain high levels of pesticides.

“Defendants prominently advertise and label the Products as being ‘Lab Tested, Contaminant Free’ … when in fact they are contaminated by harmful pesticides. Defendants also prominently advertise and label the Products as being the ‘Most Potent THC Cartridge Available.’ However, the THC content of the Products is actually substantially lower than that of many competing vape cartridges. Defendants are able to charge substantially more for the Products than they would otherwise if consumers knew that the Products were contaminated with pesticides and not as potent as promised.” – Complaint text, via Cannabis Law Report

The plaintiff retained Steep Hill to test two Brass Knuckles vape pen products. The tests revealed amounts of the pesticides bifenazate, etoxazole, myclobutanil, trifloxystrobin, permethrin, bifenthrin, and carbaryl that exceed the “action level” for pesticides in California. The test also found that the products contained between 59 percent and 77.3 percent THC, while other products contained between 86 percent and 95 percent THC – rebuking the claim that Brass Knuckles is not the “most potent THC cartridge available” as claimed.

The lawsuit seeks compensatory damages, injunctive relief, disgorgement of profits, restitution, attorney’s fees and costs, and punitive damages. According to the Law Report, the case is not the first but is the highest profile class-action suit to be filed against a legal canna-business.

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Aurora Cannabis Invests $1M in Canadian Drug Delivery Company

5/23/2018

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Canadian cannabis producer Aurora Cannabis has invested $1 million in CCT Pharmaceutical Holdings, Inc, the developers of an oral dose-specific dissolving thin film wafer drug delivery technology. The investment, with a 5 percent convertible debenture, gives Aurora a 9.14 percent interest in CTT and the agreement includes issuance of warrants enabling Aurora to increase that ownership to 42.5 percent.

Aurora CEO Terry Booth said the investment reflects the company’s commitment “to science-based diversification into higher-margin drug delivery technologies for both the medical and adult consumer use markets.”

“The clinically-proven rapid onset of action of CTT’s wafers is a key differentiator that, we believe, will resonate strongly with physicians, patients and adult use consumers. This provides us with an important competitive advantage in the rapidly growing market segment for smoke-free form factors.” – Booth in a press release

Dr. Pankaj Modi, CTT CEO, said that Aurora’s investment increases the company’s “commercial and capital markets visibility.”

“We believe Aurora more than any other LP, provides the global distribution channels, regulatory affairs expertise, scale and manufacturing ability to successfully commercialize this unique technology on a global basis.” – Modi in a statement

Aurora has been busy this year as Canada moves toward federal cannabis legalization. Last week, the company announced it had come to terms to acquire cannabis producer MedReleaf in a $3.2 billion stock deal. In January, Aurora announced it had succeeded in its bid to take over CanniMed, and the company’s 800,000-square-foot Aurora Sky manufacturing facility received a cultivation license from Health Canada. In April, its wholly-owned German subsidiary became the first non-government supplier to ship medical cannabis to Italy.

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Ohio Board of Pharmacy Pushes Back MMJ Dispensary Licensing Meeting

5/23/2018

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The rollout of Ohio’s medical cannabis industry has been potentially delayed as the state Board of Pharmacy has canceled its meeting to discuss provisional licensing for dispensaries. The meeting, which was planned for today, has been moved to June 4-6.

But that’s not the only setback: According to a WLWT5 report, there are just 89 physicians in the state certified to recommend medical cannabis to patients; but applications only opened on Mar. 20. The law requires that physicians complete a two-hour continuing medical education course to participate in the program.

The law requires the program to be fully operational by Sept. 8. Earlier this week, two Franklin County courts ruled that state officials can continue moving forward with implementing the program despite lawsuits seeking to put the process on hold, WKSU reports. Six medical cannabis cultivator applicants sued the state in February claiming that regulators didn’t follow their own rules when scoring and awarding the cannabis-growing licenses. The judges ruled that while the state can proceed with the process, hearings for the complaints must be heard quickly.

Cultivation licenses could prove more lucrative if advocates are successful in their recreational cannabis ballot initiative push. Last week, the Ohio Ballot Board certified the Ohio Families for Change petition and now the campaign needs to collect enough valid signatures to put the issue to voters.

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Clear plastic garbage bags that have been stuffed with commercial-grade cannabis nugs.

U.S. Attorney for Oregon Stepping Up Enforcement to Curb Cannabis Trafficking & Diversion

5/22/2018

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U.S. Attorney for Oregon Billy Williams has announced five priority areas of enforcing federal law in the state, including what his office sees as threats to public safety and interstate trafficking, the Argus Observer reports. Williams outlined his concerns about the state’s industry in a January op-ed in the Oregonian and those concerns are reflected in his enforcement directive.

Williams’ priorities include:

  • Minors access to cannabis;
  • Cannabis violations involving firearms, violence, or other public safety threats;
  • Organized crime;
  • Protecting public lands and natural resources from damage from pesticides or extreme water use;
  • Cannabis “overproduction” which, he says, has led to trafficking out-of-state.

“Notably, since broader legalization took effect in 2015, large quantities of marijuana from Oregon have been seized in 30 states, most of which continue to prohibit marijuana.” – Williams, in a memo, via the Observer

The state Liquor Control Commission is also stepping up enforcement efforts. A February audit of the commission’s cannabis regulation and tracking systems by the Secretary of State’s Office found issues with the OLCC’s ability to monitor the program, which has allegedly allowed product diversion to persist.

Gov. Kate Brown is backing Williams’ efforts.

“Today’s announcement from U.S. Attorney Williams confirms our cooperative approach to cannabis regulation and reflects Oregonians’ priorities to keep cannabis in our state and out of the hands of children. A focus upon those breaking state law through illicit market production and trafficking only serves to bolster lawful Oregon grown businesses.” – Brown, in a statement, via the Observer

The enforcement is made possible by the revocation of the Cole Memo by Attorney General Jeff Sessions earlier this year; although local law enforcement has always had jurisdiction to prosecute bad actors.

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Micro photo of a trimmed, homegrown cannabis nug.

New Jersey Legislation Would Expand MMJ Program

5/22/2018

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New Jersey Sen. Joseph Vitale has unveiled an early draft of legislation to expand the state’s medical cannabis program which would see several conditions added to the qualifying conditions list, increase the purchase amount per 30 days, and set up employment protections for the state’s registered patients, the Press of Atlantic City reports.

What else is in the bill:

  • Any healthcare provider that is allowed to prescribe dangerous substances would be allowed to recommend medical cannabis;
  • out-of-state registered patients and caregivers would be able to possess and administer medical cannabis in the state, but they would not be allowed to make purchases at New Jersey dispensaries;
  • patients would be allowed to make purchases from any dispensary, not just the one they are registered with;
  • limits on edibles to minors would be removed;
  • the Health Department would evaluate whether there are enough dispensaries to meet patients demand, if not new permits would be issued and 15 percent of those permits would be issued to a minority, woman, or veteran-owned business;
  • dispensaries would be able to establish a medical advisory board to advise on business operations;
  • patients and caregivers could not be discriminated against when enrolling in schools, colleges, and universities, or when renting property.

The employee protections prohibit employers from taking action against patients enrolled in the program if they fail a drug test for cannabis. The employer would have to prove that the employee’s medical cannabis use impaired their ability to fulfill their duties.

The draft does not outline which conditions would be added to the regime. Last March, the state — at the behest of Gov. Phil Murphy — added anxiety, migraines, Tourette’s syndrome, chronic pain related to musculoskeletal disorders, and chronic visceral pain. The state added 1,000 new patients in the month after the new conditions were added.

Vitale’s bill is not final and has not yet been introduced.

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Mountain Range on Kaua'i island, Hawaii.

Kaua’i, Hawaii Gets First MMJ Dispensary; Brings Statewide Total to Six

5/22/2018

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Kaua’i, Hawaii has its first medical cannabis dispensary now that Green Aloha, which does business under the name Have a Heart, has passed the final state Department of Health inspections. It’s the sixth dispensary to open in Hawaii and the second for Aloha Green, which also operates a dispensary in Honolulu.

“Having a medical cannabis dispensary open on Kauai expands options for registered patients and their caregivers, providing greater access to meet medical needs. As dispensaries continue to open across the state, we remain committed to working collaboratively with the licensees to protect the safety of patients while ensuring an efficient and thorough inspection and certification process.” – Keith Ridley, chief of the Office of Health Care Assurance and medical cannabis dispensary program regulator, in a press release

Two other dispensaries have obtained Health Department licenses but have not passed the final agency inspection. Those dispensaries are expected to open their doors later this year.

Program registrants can purchase up to 4 ounces of medical cannabis during a 15-day period and 8 ounces over 30 days. Patients can also grow up to 10 plants and grow in co-ops. As of Dec. 31, 2023, the co-ops will be limited to five registered patients per site.

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Skyline photo of Salt Lake City, Utah.

Utah Lawsuit Seeks to Block MMJ Ballot Initiative

5/22/2018

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Medical cannabis opponents in Utah have filed an emergency motion to block the ballot initiative from November ballots, the Associated Press reports. The plaintiffs of the lawsuit argue that the proposal, organized by the Utah Patients Coalition, would break federal law. The lawsuit, filed by Drug Safe Utah, names Lt. Gov. Spencer Cox as the defendant; however, the coalition argues that they deserve standing in the suit because both the petitioner and defendant are opposed to the initiative, Deseret News reports.

The signatures for the medical cannabis initiative were approved in March and the plan was immediately opposed by Republican Gov. Gary Herbert, the Utah Medical Association, the Department of Public Safety, the Drug Enforcement Administration Salt Lake City Metro Narcotics Task Force, and the Church of Jesus Christ of Latter-Day Saints. Salt Lake County District Attorney Sim Gill said he would support the reforms.   

The proposal does not allow for smokeable cannabis products, instead allowing tinctures, capsules, and topicals; however, that has not stopped opponents from suggesting that, if approved, the measure would lead to recreational cannabis use.

Polls have found strong support for medical cannabis in Utah. A Utah Policy poll from December found 73 percent support, while another by the organization in September found 74 percent support. An August poll by Dan Jones & Associates commissioned by the Hinckley Institute of Politics and the Salt Lake Tribune found 78 percent support – a supermajority.

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The underside of cannabis leaves in an indoor grow site.

Medicinal Genomics youPCR Platform: Helping Growers Screen Plants for Pathogens Before They Show Visual Signs

5/21/2018

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Medicinal Genomics expanded its youPCR™ Plant Screening Platform to include three new detection assays for common cannabis plant pathogens: botrytis, fusarium, and russet mites.

The youPCR pathogen detection assays can help cannabis cultivators identify plants infected with powdery mildew, botrytis, fusarium, and russet mites before they show visual signs. Cultivators can use the youPCR platform to screen incoming clones before they are added to a grow room or test mother plants before cutting new clones. Cultivators can also use the youPCR pathogen detection assays to diagnose infected plants and determine proper treatment. These preventive strategies reduce cultivators’ risk of suffering costly pathogen outbreaks.

In addition to pathogen screening, cultivators can also use the youPCR platform to identify males and determine plant type. Most cannabis plants can be classified into four groups based on their cannabinoids profiles:

  • Type I (THCA-dominant)
  • Type II (THCA:CBDA hybrid)
  • Type III (CBDA dominant
  • Type IV  (CBG-dominant).

The youPCR CBDA and THCA detection assays can detect whether the THCA synthase gene and/or the CBDA synthase gene is present in a plant. Different combinations of results on the respective tests will indicate the plant type.

How youPCR Works

A 4mm punch of a cannabis leaf is all that is needed to screen for plant pathogens and/or genetic traits. The leaf punch is added to a lysis solution that releases DNA from the plant cells when it is heated. That DNA is then transferred into a well containing a pink solution that contains primers, which look for a specific DNA sequence. If the target sequence is present, the solution will turn yellow, indicating a positive result.

Who uses youPCR?

Cannabis testing labs can use the youPCR platform to offer additional testing services to customers. Cultivators who have basic laboratory experience can also use the youPCR platform to test plants on-site at the grow facility.  

Sign up for the May 23rd youPCR webinar

Learn all about screening plants for pathogens (powdery mildew, russet mites, botrytis) and genetic traits (CBD synthase, THC synthase, Gender) at free webinar “Screening Cannabis Plants for Pathogens and Genetic Traits”, May 23. Medicinal Genomics Chief Science Officer Kevin McKernan will explain how The youPCR™ Plant Screening Platform can be used to protect grows from costly pathogens, accelerate breeding programs, and reduce operational costs.

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New York City Mayor Directs Police to Stop Cannabis-Smoking Arrests

5/21/2018

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New York City Mayor Bill de Blasio has told the city’s top police officials to stop arresting people for smoking cannabis and, instead, issue citations, CNN reports. The directive comes about a week after the New York Times published an investigative report which found that black people were arrested for low-level cannabis charges at eight times the rate of their white counterparts over the last three years; while Hispanic people were arrested at five times the rate of white people.

The investigation also found that police made more arrests in black neighborhoods when people called them for cannabis-smoking complaints than in white neighborhoods. The report has forced the New York City Police Department to convene a working group to evaluate its cannabis enforcement policies and procedures. The working group is expected to present its finding and recommendations to the mayor within 30 days.

“The working group is reviewing possession and public smoking of marijuana to ensure enforcement is consistent with the values of fairness and trust, while also promoting public safety and addressing community concerns.” – NYPD Deputy Commissioner of Public Information Phil Walzak, to CNN

Manhattan District Attorney Cy Vance announced his office will stop prosecuting cannabis possession and smoking cases on Aug, 1.

“The dual mission of the Manhattan DA’s office is a safer New York and a more equal justice system. The ongoing arrest and criminal prosecution of predominantly black and brown New Yorkers for smoking marijuana serves neither of these goals.” – Vance, during a press conference, via CNN

Brooklyn District Attorney Eric Gonzalez has said that his office threw out twice the number of cannabis-smoking cases over the last three months and plans to stop prosecuting even more of them.

Individuals who are given a summons in New York are neither arrested nor fingerprinted unless they fail to show identification.

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Michigan Prohibitionists Would Support Legalization if Passed by Legislature

5/21/2018

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A Michigan anti-cannabis legalization group has indicated that they would be open to cannabis legalization if the reforms were passed by the Legislature, the Detroit Free Press reports. The Committee to Keep Pot out of Neighborhoods and Schools has conceded that legalization “will be a reality” in the state but hopes legislative action will create a more regulated market that the ballot initiative.   

“This committee was initially formed to defeat the recreational ballot proposal, but now we believe that the Legislature should amend and adopt the initiative before it’s too late. Regardless of our feelings on the issue, the question now is how to regulate and control recreational marijuana.” – Mark Fisk, a spokesman for the committee, to the Free Press

Fisk said he would like the recreational industry to mirror the state’s medical program; however, the 2016 changes to the medical cannabis program approved by the Legislature have led to dispensary closures and a delayed rollout of the new licensing regime.

GOP lawmakers have floated the idea of tying legalization to a bill to cut the state’s income tax. Both Michigan Republicans and Democrats have reportedly been cool on this plan. Josh Hovey, spokesman for the Coalition to Regulate Marijuana Like Alcohol – the group behind the ballot initiative – said that they were fine with the Legislature passing the reforms so long as they are “passed one way or another.”

If the Legislature does not pass legalization legislation, the Committee to Keep Pot out of Neighborhoods and Schools will actively oppose the November ballot initiative. A May 15 Michigan State University Institute for Public Policy and Social Research poll found 61 percent support for cannabis legalization in the state, with 34 percent opposed and 5 percent undecided.

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Zimbabwe MMJ Licensing Plans on Hold Due to ‘Crazy’ Estimates

5/21/2018

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Zimbabwe is backing off medical cannabis cultivation licensing plans after receiving wildly varied estimates from the 350 applicants interested in the program, the South African reports. Deputy Finance Minister Terrence Mukupe said that too many of the applications offered far different estimates for how much land would be required to grow cannabis and how much money could be made from the plots.

“We’ve had a Dutch investor who told us he needed just 60 hectares, where he expected to make $100 to $200 million annually. Then we have someone else claiming they would make the same profit but with 10,000 hectares of land. There’s too much of a difference.” – Mukupe to the South African

Last month, Zimbabwe became the second African nation to legalize medical cannabis cultivation for both medical and research purposes. The government announced that they would issue industry licenses to Zimbabwe citizens and residents or companies that were incorporated in the nation.

“What has to be done on our side as government is probably to have a proper feasibility study and have experts telling us what’s actually the truth. When you go over the 350 applications the difference in numbers and what they are talking about; it’s crazy.” – Mukupe to News24

Mukupe did not offer a timeline for when licensing would re-commence.

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Creating Pro-Forma Financial Statements for Your Cannabis Business

5/21/2018

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Part of being an entrepreneur is having to wear many hats. As a business owner, you’re also the head of HR, chief marketing officer, and – for better or worse – the head accountant. Many business owners find accounting and preparing financial statements one of the most difficult and confusing parts of running a company. And, when you’re running a cannabis business, financial accounting can reach a whole new level of complicated.

However, mastering your financial reports is one of the key skills to surviving in California’s competitive cannabis industry. One way to make your venture stand out from the competition? Pro-forma financial statements. This reporting tool is integral to proving your business has what it takes to be successful long-term. Show off the very best side of your cannabis business using pro-forma reporting: here’s how.  

What are pro-forma financial statements?

In the accounting world, financial results are reported in compliance with two broad accounting standards: generally accepted accounting principles (GAAP) and pro-forma. These statements offer investors a better understanding of the operating efficiency and economic health of a company. While the data is the same on both statements, pro-forma differs from GAAP in the way the financial charges are presented. Pro-forma financial statements are designed to “draw focus” to specific figures in a company’s earnings report, usually to indicate a major change in the company’s operations (like an acquisition or a merger). Sometimes, companies use pro-forma statements to make their financial results appear better than they really are. Pro-forma figures can depart dramatically from GAAP statements to paint a rosy picture of a company’s financial health.

Pro-forma vs. GAAP statements

There’s a very big difference between pro-forma statements and GAAP statements. Pro-forma earnings’ statements include “estimates,” hypothetical amounts built into the earnings’ results that depict what a bottom line might look like if certain non-recurring items were excluded from the balance sheet. For example, if your company purchased a major piece of equipment for a one-time cost of $100,000, you might leave that expense out of your pro-forma statement to give a more “accurate” picture of your long-term financial health. Many companies leave out these one-time expenses because they do not have extended (negative) impact on a company’s overall valuation.

The difficulty in comparing pro-forma statements with GAAP statements is that it is up to the company’s discretion which expenses get included or left out of the pro-forma statement. GAAP is considered the “official” profitability statement, as every liability and income stream is accounted for on a GAAP financial statement. There are no universal guidelines that a business must adhere to when producing a pro-forma statement.

How to build pro-forma financial statements

Cannabis businesses typically have higher startup costs. Therefore, a pro-forma statement may be more attractive if you’re trying to demonstrate the long-term viability of your venture to an investor. How do you make a pro-forma statement?

Start with your current income statement and try to project into the future. What are the biggest line items that you’ve spent money on recently? Are these recurring expenses, or one-time costs? Typical one-time expenses a cannabis company might be able to take off a pro-forma statement include real estate, permits and licensing fees, and, if you’re a cultivator or manufacturer, equipment. Separate your recurring expenses from these one-time expenditures to give a clear picture of what your long-term operating costs will look like.

Ideally, pro-forma statements are prepared at the end of the year. This gives you a clear picture of what your final sales will be. Much like projecting reductions in your expenses, you can project increases in your revenue. What will your business do differently to increase sales? Will you have new promotions, a change in pricing, or will you reach new customers? These factors can all help inform your pro-forma sales projections.

Other specific items considered in building your pro-forma financial statements include:

  • Goodwill or intangibles such as trade names, customer and/or vendor relationships, and technology
  • In-process research and development assets
  • Effects of additional financing
  • Planned or probable disposals, such as an underperforming segment
  • Effects of major new distribution, cost-sharing, or management agreements
  • New recurring transactions
  • Unusual or non-recurring events or transactions
  • Effects of changes in tax rates

What to include in pro-forma financial statements

Many cannabis businesses are new businesses, and entrepreneurs within this industry operate many different types of ventures. Cultivators, retailers, manufacturers, and distributors all have very different expenditures and income sources. So what should you include on your pro-forma statement?

The short answer is that this depends on the type of pro-forma financial statement you are issuing. Here are the types of pro-forma financial statements you might use.

  • Full-year pro-forma projection. If you are an existing cannabis company that has been in operation for a year or more, then consider using a full-year pro-forma projection. This statement offers a projection of a company’s year-to-date results, as well as expected end-of-year results.
  • Investment pro forma projection. If you are a new cannabis company trying to attract investment, this is a good way to show your viability. Use this type of pro-forma projection to show investors how their cash infusion can help grow your business.
  • Historical with acquisition. If you’re an existing cannabis company merging with another existing cannabis business under one license, use this statement. This is a backward-looking projection of a business’s results in one or more prior years. It will include the results of the other business you are purchasing. Many companies use this statement to show how a prospective merger would have “altered” the financial results of the purchasing business. These can also be used for roll-up mergers, such as when a private equity firm buys up companies in the same market and merges them together into a larger entity that is better positioned to enjoy economies of scale.
  • Disposition. If you are an existing cannabis company disposing of a significant portion of your business, such as an unprofitable part of the business, consider showing your financials as if that part of the business was already excluded.  Many companies use this statement when it is probable that a portion of the business will be disposed by sale, abandonment, or distribution to shareholders.
  • Risk analysis. Any cannabis business can use a pro-forma risk analysis for both internal and external planning. These statements reflect best-case and worst-case scenarios for a business. In conjunction with your business plan, try to predict how different decisions will have long-term financial impact on your cannabis company.

Other circumstances where you might want pro-forma financial statements include:

  • New or modified contracts, such that historical financials are no longer indicative of future performance
  • Changes in debt or capitalization
  • Changes in tax status, such as converting a subchapter S corporation or partnership into a C-corporation
  • Change in control of business
  • Application of push-down accounting with revalued assets and liabilities

Pro-forma financial statements are particularly useful to cannabis companies looking to show their potential for success to outside investors, as well as benchmark their own growth. Pro-forma financial statements decrease the impact of major one-time expenditures, essentially smoothing over liabilities that can seem prohibitively expensive on traditional GAAP statements.

Whether just starting out in the cannabis industry or taking your company to the next level, pro-forma financial statements can help clarify your business’s financial health.

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A tall, CBD-rich cannabis plant stands up in an outdoor field.

California Bureau of Cannabis Control Proposes Extension of Emergency Cannabis Regulations

5/18/2018

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The California Bureau of Cannabis Control has proposed the state readopt and extend the current, emergency cannabis industry regulations. Previous regulations called for the merging of the medical cannabis industry (MCRSA) and adult-use industry (AUMA) into what’s now known as MAUCRSA, governed by the Bureau of Cannabis Control.

As part of the current regulations, applicants have had to apply for both adult and medical use licenses, Type A and Type M, respectively.

A licensee can hold both an M- and A- license of the same type at one location as long as the following criteria are met:

(1) The licensee holds both an A-license and an M-license for the identical type of commercial cannabis activity;
(2) The licensee who holds both licenses is identical in name, business formation, and ownership;
(3) The licensee only conducts one type of commercial cannabis activity on the premises;
(4) All cannabis and cannabis products are clearly marked with an “A” or “M”; and
(5)Records are kept separately for each license and clearly indicate that the records are related to the A-license or the M-license.

Section 5029 of the emergency regulations states:

(b) Notwithstanding any other law, or regulation in this division, beginning January 1, 2018 and before July 1, 2018 licensees may do all of the following:
(1) Licensees may conduct business with other licensees irrespective of the M or A designation on their licenses.

What’s changed?

The BCC has issued an extension of the expiring emergency regulations it issued before for another 180 days, with the following changes affecting adult-use and medicinal licenses:

  • Applicants may complete one license application and request an A-designation, an M-designation, or both for the license.
  • Regardless of designation requested, applicants will pay one license fee.
  • Licensees may engage in commercial cannabis activities with any licensee regardless of designation.

Summary

  • The first draft of emergency regs released in late 2017 is still in effect for the next 180 days.
  • During these 180 days all licensees can keep on conducting business like they are (ie. temporary medical licensees and temporary recreational licensees) which was supposed to cease July 1.
  • They are proposing amendments now to the first draft of regs for clarification purposes. There is a 5-day comment period. Per bulletin: “The public comment period will begin when the California Office of Administrative Law (OAL) posts the proposed emergency regulations on its website and will last 5 calendar days. The posting may not occur before May 25, 2018, to allow for the 5 working day notice to the public that the licensing authorities provided today. “

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Ohio State Capitol Building in Columbus, Ohio.

Ohio Ballot Board Certifies Rec. Cannabis Ballot Initiative

5/18/2018

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The Ohio Ballot Board has certified the ballot initiative to legalize cannabis for recreational use in the state, the Dayton Daily News reports. The group behind the initiative, Ohio Families for Change, now must collect 305,591 valid signatures from 44 of the state’s 88 counties – and, within each county, the group must collect enough signatures equal to 5 percent of the total votes cast for governor.

This is the eighth cannabis legalization proposal approved by the Ballot Board in five years and just the 2015 effort by ResponsibleOhio made it to the ballot. That measure was rejected by voters, partly because of pro-cannabis activist opposition to language that would have given campaign investors a monopoly on sales.

The Ohio Families for Change constitutional amendment proposal:

  • Allows adults 21-and-older to possess, grow, use, sell, and share cannabis;
  • Has residency requirements for businesses;
  • Allows landlords and employers to prohibit cannabis-related activities;
  • Does not change the state’s already approved – but not yet implemented – medical cannabis program;
  • Allows the General Assembly to write laws governing impairment, public use, and restrictions for minors.

Medical cannabis sales are expected to begin in Ohio on Sept. 8. Officials are still writing rules, reviewing applications, and inspecting operations for the industry, which was approved by Gov. John Kasich in 2015.

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The U.S. Capitol Building in Washington D.C., photographed at dusk.

House Committee Approves Amendment Protecting MMJ Programs

5/18/2018

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The House Appropriations Committee has passed the so-called Joyce Amendment, which restricts Department of Justice funding for prosecuting state-approved medical cannabis programs. The passage marks the first time the committee has addressed the issue, and the first time such an amendment has passed through regular order in the committee.

“Today marks a victory for medical marijuana programs and a loss for Attorney General Jeff Sessions. Passage of this amendment through regular order in the appropriations committee represents another big step in the normalization of state level marijuana reform in the Congress of the United States.” – NORML Political Director Justin Strekal in a press release

The amendment was blocked last year by Rules Committee Chairman Pete Sessions, a Republican and cannabis prohibitionist. The amendment was offered by David Joyce, a Republican from Ohio.

State-approved medical cannabis programs have been protected from federal interference via an amendment in annual spending bills. That amendment, known as the Rohrabacher-Blumenauer amendment, does not allow federal funds to be used to prevent states from “implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana.”

NORML estimates that there are more than 2 million medical cannabis patients in the United States.

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A collection of medical cannabis clones inside of a commercial grow facility.

Pennsylvania Health Department Restricts Access to MMJ Application Scorer Info

5/18/2018

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The Pennsylvania Department of Health has restricted public access to information about who scored applications for the state’s medical cannabis industry as part of a batch of temporary regulations, according to a PennLive report. The law already bars applicants from obtaining the names of the scorers, but not the general public or journalists.

The Office of Open Records has ruled that the Health Department must disclose the names of the application scorers but the department appealed that decision and the matter is still pending. Yesterday, the Commonwealth Court ordered the department and PennLive to file briefs addressing what effect the new regulations could have. PennLive made its initial records request in May 2017.

“The Department of Health does not have authority to enact regulations that nullify the Right-to-Know Law. Only the General Assembly has authority to declare what is and what is not a public record. This case would establish a dangerous precedent that would allow agencies to make any information non-public simply by enacting a regulation.” – Joshua Bonn, an attorney for PennLive, in the report

The Health Department argues that keeping the names secret safeguards scorers from outside pressure and threats to their safety. The department also argued that reporters could, eventually, become medical canna-business applicants and then be privy to the names of the reviewers.

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