Judge Delays DEA Cannabis Rescheduling Hearing Until Early 2025

The much-anticipated December 2 hearing scheduled by the U.S. Drug Enforcement Administration (DEA) for expert testimony regarding the rescheduling of cannabis under federal law has been delayed until January or February of next year, Marijuana Moment reports.

DEA Chief Administrative Law Judge John Mulrooney ruled Thursday to delay the hearing, saying officials needed more background info about the experts who were set to testify. Earlier this week, DEA Administrator Anne Milgram approved over two dozen witnesses for the hearing. Mulrooney asked for additional details on the speakers, writing in his order that there was “no indication … as to whether the ‘participants’ support or oppose the [proposed rulemaking] or how the ‘participants’ satisfy the ‘interested person’ definition set forth in the regulations.”

“Indeed, the [Participant Letter] contains only a list of persons and organizations accompanied by one or more email addresses, without the benefit of notices of appearance, addresses, or even phone numbers.” — Mulrooney, in the ruling, via Marijuana Moment

Mulrooney also asked in the order for the participants’ potential availability for January or February 2025, the report said, and gave until November 12 to submit the requested information.

The December 2 hearing will still happen but without expert testimony.

DEA first announced the hearing in August and cannabis advocates were already concerned that the extra procedural step — scheduled for after the presidential election — would cause unnecessary delays to the Biden Administration’s rescheduling effort. Now, the hearing has been delayed possibly until after the next president’s inauguration.

Vice President Kamala Harris (D), the Democratic nominee, said recently she would move to federally legalize adult-use cannabis if she is elected president, a significant departure from the Biden Administration stance.

Former President Donald Trump (R), the Republican nominee, said earlier this year that he supports rescheduling cannabis under the Controlled Substances Act but did not specifically call for federal legalization. However, the former president did say he would vote “yes” on the Florida ballot amendment to legalize cannabis.

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Texas Smoke Shop Wins $80k Settlement After Police Raid

The Garza County Sheriff’s Office and the city of Post have agreed to pay $80,000 in settlements to a Texas smoke shop following an “illegal” raid on the location in February, Lonestar Live reports.

Per the settlement, the sheriff’s office and the city agreed to pay $40,000 each to Abdula Alshaif, owner of the Post-based smoke shop Smoke Scene. Additionally, police took more than $20,000 worth of hemp products during the “unreasonable search and seizure” and were required to return all of the seized products.

In making the settlement, the Garza County Sheriff’s Office and the city of Post did not admit responsibility, liability, or fault in the case; rather, they sought the compromise to avoid “the uncertainties of litigation,” the report said.

Attorney David Sergi, who represented Alshaif in the case, said the raid was “another example of overzealous action by local governments and law enforcement agencies.” Sergi is also representing other smoke shop owners with a similar lawsuit against Allen, Texas after police carried out raids against nine hemp shops there in August.

“We will continue to aggressively fight to protect the rights of hemp store owners, many of them minority businesspeople, so they can continue to supply needed hemp products to many of our neighbors here in Texas.” — Sergi, via Lonestar Live

Cannabis remains heavily restricted in Texas but hemp-derived products containing less than 0.3% delta-9 THC are legal under state and federal law.

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ICBC Returns to Berlin in April 2025

The International Cannabis Business Conference (ICBC) is once again bringing its flagship conference, Europe’s largest and longest-running cannabis B2B event, to Berlin on April 29th-30th, 2025. The event will be held at the iconic Estrel Berlin Hotel.

ICBC Berlin 2025 could not be timelier, with Germany’s legal cannabis industry currently undergoing a historic expansion. Starting on April 1st, 2024, cannabis became legal for adults to cultivate, possess, and consume in Germany. Additionally, as of July 1st, 2024, aspiring cultivation association operators can apply with their local regulatory authorities in Germany.

Regional adult-use cannabis commerce pilot projects are another major component of Germany’s legalization model and are expected to launch by the end of 2024. Associations and pilots will likely proliferate in many parts of Germany by the end of next year. Competition is going to increase significantly within Germany’s industry, and a great way to stand out in the crowd and establish your cannabis brand is to exhibit at and/or sponsor ICBC Berlin 2025.

“Europe is by far the most exciting place on the planet for cannabis policy and industry right now. Germany is leading a continental revolution and creating opportunities that we have never witnessed before and may never witness again. Entrepreneurs and investors who get in on the ground floor now could reap the benefits for generations to come,” says Alex Rogers, founder and CEO of the International Cannabis Business Conference.

Germany’s emerging medical cannabis industry was already the largest in Europe before the nation’s new CanG law took effect. However, since April 1st, the nation’s medical cannabis industry has already grown exponentially.

Who You’ll Connect With at ICBC:

  • Top Executives and CEOs
  • Investors and Venture Capitalists
  • Policymakers and Regulators
  • International Business Leaders
  • Industry Innovators
  • Leading Researchers and Scientists
  • Legal and Compliance Experts
  • Entrepreneurs and Startups

A main contributing factor to the recent growth of Germany’s medical cannabis industry was the removal of cannabis from the nation’s Narcotics List, which was a key component of the new CanG law. The removal of cannabis from the list made it easier for doctors to prescribe cannabis in Germany, in addition to improving the medical cannabis supply chain and boosting domestic medical cannabis production.

The emerging global cannabis industry is currently valued at 51.4 billion euros, with projections suggesting it could top 60 billion by 2025, according to Euromonitor International. Germany’s cannabis industry alone is estimated to be worth nearly 1.2 billion euros. The legal German cannabis market is projected to reach an estimated $4.6 billion in value by 2034, according to a separate market analysis by researchers at The Niche Research, which is an impressive sum. However, if Germany’s medical cannabis industry continues to increase at its current rate, this projection could prove to be too conservative as time goes on.

This is your chance to showcase your company to top industry leaders and important decision-makers. As a sponsor or exhibitor, you will gain valuable exposure and position your brand prominently in the cannabis industry. Spaces are limited and filling up fast. Contact ICBC today and reserve your spot at this major event!

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Lawsuit: Federal Seizure of State-Legal Cannabis Products in New Mexico Violates Fifth Amendment

A lawsuit filed on behalf of eight licensed New Mexico cannabis companies alleges that the U.S. Department of Homeland Security (DHS) and the U.S. Customs & Border Protection (CBP) unlawfully seized state legal cannabis products and cash, violating the companies’ Fifth Amendment rights.  

The lawsuit was filed by law firm Greenspoon Marder, which said in a statement that “The federal government is fully aware of the legitimacy and prevalence of state-legal cannabis, and these businesses are paying federal taxes like any other businesses.”   

“Yet, despite this recognition, federal agents are unjustly seizing property without any regard for due process. This isn’t a legal gray area – CBP’s newfound policy is a blatant and arbitrary violation of rights and is completely unacceptable in a system that claims to respect state sovereignty and the rule of law.” — Greenspoon Marder’s cannabis team in a statement 

Earlier this year CPB reportedly seized more than $300,000 worth of cannabis products from state-licensed operators in New Mexico during routine checkpoints in the state’s southern region. CPB contends that the seizures are legal under federal law because cannabis is a Schedule I drug under the Controlled Substances Act. 

Gov. Lujan Grisham (D) has expressed concern over the actions of federal law enforcement regarding cannabis in her state, saying in a leaked call to an unnamed high-level federal official – presumed to be Homeland Security Alejandro Mayorkas – that she was “frustrated” by the seizures.

“Either we have to adjust it, or we have to send you a letter saying you’re persecuting a state,” she said in the call. “You are not using your discretion.” 

Greenspoon Marder said that in one instance, an employee of co-plaintiff Royal Cannabis LLC was detained at a checkpoint for transporting state-legal, cannabis-infused beverages and held in a cell while the company’s products and her personal vehicle were seized. 

The complaint further contends that not only are the seizures of the plaintiffs’ products, cash, and other property unlawful, but also contradict the federal government’s decision to not prosecute legal state cannabis operations, as established as precedent under the Rohrabacher-Farr Amendment for the Department of Justice to not interfere in state-sanctioned cannabis activities. 

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Canadian Police Seize 120,000+ Cannabis and Psilocybin Products Resembling Name-Brand Products

Police in Canada on Tuesday announced they had taken down an organized crime group believed to have produced tens of thousands of counterfeit candy bars, resembling popular name-brand products, that contained cannabis and psilocybin mushrooms, ABC News reports. Police said they seized more than 120,000 cannabis-infused products resembling brand-name products and more than 6.6 pounds of psilocybin mushrooms in the bust. 

Police said the bust included 1,740 psilocybin capsules, more than 400 psilocybin chocolate candies, 2.2 pounds of pressed cannabis resin, over 500 pounds of flower, more than 19 pounds of concentrates, over 5,000 vape cartridges, counterfeit cannabis-laced honey, five vehicles, two ATM machines containing cash, an estimated 164 master cases of contraband tobacco equating to 82,000 packs of cigarettes, over $400,000 in cash, and a shotgun. 

In a statement, Royal Canadian Mounted Police (RCMP) authorities described the products as resembling “professionally manufactured, packaged, and quality-controlled products” that were “produced in the highly unsanitary, and heavily contaminated modular trailers.” 

“A preliminary assessment of the edibles also indicates that they had been treated with unknown amounts of THC, and likely cross-contaminated with other drugs and substances present in the trailers where they were being produced and packaged.” — RCMP in a statement via ABC News 

The search warrants executed by RCMP on October 3 included two dispensaries and five separate residences on Vancouver Island in British Columbia. The warrants were associated with an organized crime group allegedly involved in the production and distribution of illicit drugs and contraband tobacco in Port Alberni and Nanaimo, police said. Six people were arrested in the operation. 

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Trial Over Nebraska Medical Cannabis Petitions Focuses on Petition Signatures

The trial over Nebraska’s two medical cannabis ballot initiatives began Tuesday in Lancaster County District Court, highlighting ballot measures in the state, the different groups involved in the campaign, and notary publics, the Nebraska Examiner reports. Both proposals – which together if approved by voters would legalize medical cannabis in the state – remain on ballots but the trial outcome could invalidate the election results. 

Attorneys for John Kuehn, a former state senator and former State Board of Health member who filed the lawsuit, and Secretary of State Bob Evnen, a defendant in the lawsuit, sought to frame the case around whether the medical cannabis campaign followed state rules. In a legal brief in the case, Evnen, along with Attorney General Mike Hilgers, contend the campaign engaged in “fraud” and the “malfeasance” of notaries involved “strips the presumption of validity” of thousands of submitted signatures. During arguments on Tuesday, Deputy Solicitor General Zach Viglianco claimed that the campaign cheated in obtaining signatures. 

Sydney Hayes, an attorney for the ballot sponsors, argued that plaintiffs don’t have enough evidence of “fraud” and that, at most, one petition contains 706 questionable signatures while the other contains 394 questionable signatures. Advocates need 86,499 valid signatures on both petitions for them to remain valid, and nearly 90,000 signatures were verified on each petition. 

David Wilson Jr., associate general counsel for the Secretary of State’s Office and director of licensing, who oversees the work of notaries in the state, said that notaries give “presumptive evidence” over a matter’s legal validity and must physically witness an “oath” and confirm the identity of whose documents they are notarizing – in this case, the petitions and their signatures.

The Nebraska Attorney General’s Office alleges that thousands of signatures were collected where those requirements weren’t met and Wilson testified that he was unaware of his office having criminal prosecutorial authority over notaries or of circumstances where one invalidated document led to the invalidation of every document approved by a particular notary. At least one notary, Jacy Todd, has been criminally charged and faces 24 counts of alleged malfeasance. Wilson noted that he is unaware of a notary who has ever been criminally charged for malfeasance.

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New York Judge Says NYC Crackdown on Unlicensed Cannabis Shops Is Unconstitutional

A judge in Queens ruled Tuesday that the New York City law enabling local law enforcement to crack down on unlicensed cannabis sales, dubbed Operation Padlock to Protect, is unconstitutional, according to Green Market Report.

In his opinion on the ruling, Queens County Superior Court Justice Kevin J. Kerrigan wrote that when police forcedly closed the Queens-based retailer Cloud Corner, they had violated the shop owner’s right to due process. Specifically, Kerrigan said that New York City Sheriff Anthony Miranda’s decision to ignore an official recommendation against the shop’s permanent closure — stemming from the fact that Cloud Corner had not been open for business when police conducted their raid on the shop — was a “clear violation of due process under the law.”

“The Court acknowledges that the unlicensed sale of cannabis within the City of New York represents an enormous public health concern. This decision should not be interpreted to condone such unlicensed activity. However, summarily shuttering a business for one year, despite the fact that it was exonerated from allegations of illegal activity stands against the cornerstone of American democracy and procedural due process.” — Kerrigan, in the opinion

A spokesperson for Mayor Eric Adams’ (D) office said in a statement that the city plans to appeal the ruling, and that “Illegal smoke shops and their dangerous products endanger young New Yorkers and our quality of life, and we continue to padlock illicit storefronts and protect communities from the health and safety dangers posed by illegal operators.” Operation Padlock to Protect was announced by the mayor in May and the resulting raids have shuttered over 1,200 shops, the spokesperson said.

Meanwhile, the plaintiff’s attorney, Lance Lazzaro, said in the report that the ruling could allow any shop affected by the crackdown to immediately reopen and sue the city for damages related to the forced closures.

At the state level, Gov. Kathy Hochul (D) has stepped up enforcement this year against unlicensed cannabis retailers as part of an effort to help grow New York’s legal, adult-use cannabis market.

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Multi-State Cannabis Operator Green Dragon Is Shutting Down

Colorado-based Green Dragon, a multi-state cannabis company with operations in Colorado and Florida, will shut down operations by next year, according to a KDVR report.

DP Holdings Colorado LLC, the holding company behind Green Dragon, filed notices on October 16 with state officials in Florida and Colorado to warn of impending layoffs. Per the report, Green Dragon’s layoffs will affect all company positions including cultivation, processing, and retail roles, and the layoffs will cover 59 positions in Colorado and 113 in Florida.

The company is also shutting down 17 dispensaries in Colorado and 39 dispensaries in Florida, and the company is expected to sell off its 400,000-square-foot medical cannabis cultivation facility in Florida.

The folding of Green Dragon follows the company’s 2021 merger with Eaze Technologies, Inc. — a cannabis tech firm once valued at $700 million — but Eaze’s assets were purchased at auction in August, and the company’s CEO Cory Azzalino announced a few weeks ago that the company will “wind down operations” by the end of the year with layoffs coming for nearly 500 employees.

Additionally, the closure follows a recent downturn in Colorado cannabis sales: the state reported just under $109 million in sales through August this year, the report said, while last year the state recorded $132.45 million through the same period.

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The 2024 Election and Cannabis Legalization: A Critical Turning Point

As the 2024 election approaches, BGM recognizes the pivotal role it could play in shaping the future of cannabis legalization across the United States. Matthew Schweich, the Executive Director of the Marijuana Policy Project and a prominent cannabis reform advocate, offered insightful commentary on the potential impacts of the election on cannabis policy. Schweich’s observations reveal that no matter the outcome of the election on November 5, significant developments for the cannabis industry are likely, but challenges remain. In this blog, we’ll delve into Schweich’s key points and explore the election scenarios that could reshape the future of cannabis legalization in the United States.

In this blog, we explore Schweich’s perspective on the possible election outcomes and what they could mean for cannabis businesses nationwide. We share our perspectives and provide insight into the ever-changing cannabis industry landscape that BGM helps clients navigate every day.

Bipartisan Support for Legalization: A Milestone in 2024

One of the most striking aspects of the 2024 election, according to Schweich, is that both major presidential candidates from the Democratic and Republican parties support cannabis legalization. This bipartisan backing marks a significant shift in U.S. political dynamics. As Schweich remarked, “That’s something that I think would have shocked a lot of people 20 years ago, probably even ten years ago, to have the Democrat and the Republican both supporting this policy.”

This widespread support, he noted, reflects a dramatic change in public opinion and political establishment views over the past decade. Just three elections ago, in 2012, no states had legalized cannabis for adult use. Fast forward to 2024, and 24 states have fully legalized cannabis, a clear indication of the cannabis reform movement’s influence and persistence.

Former President Donald Trump’s residency in Florida also played a pivotal role in eliciting his stance on cannabis legalization, as the issue was placed directly in front of him via a statewide initiative. This direct interaction between local politics and federal influence demonstrates the growing importance of cannabis as a national issue, rather than just a state-by-state battle.

The Impact of Rescheduling: Step Forward, But Not Far Enough

In recent months, the Biden administration initiated the process of rescheduling cannabis to Schedule III. This move is significant, but Schweich is quick to point out that it falls short of what the cannabis industry needs. “I think it should be descheduled entirely,” he commented. “Even as a Schedule III drug, it’s going to be considered more dangerous than Xanax.” Schweich emphasized that this classification remains problematic because, in his view, cannabis poses far less danger and addiction risk compared to certain other Schedule III substances.

However, he acknowledged that rescheduling would offer some relief for cannabis businesses, particularly about the burdensome 280E tax regulation. If cannabis is reclassified under Schedule III, businesses could potentially start deducting standard operating expenses, significantly easing financial strains in the industry. Schweich noted, “That’s a huge potential impact, but the cannabis industry knows that more \work needs to be done at the federal level.”

The Role of Federal Legislation: The Next Major Milestone

While rescheduling cannabis is a positive step, Schweich is adamant that the next significant development for the cannabis movement must come in the form of comprehensive federal legislation. Such a law would address lingering issues related to federal policy, mainly banking restrictions and tax regulations that have hampered the cannabis industry for years. The cannabis sector remains largely cash-based due to the lack of access to traditional financial services, which Schweich described as a significant obstacle to growth and safety.

Looking ahead to the potential election outcomes, Schweich mapped out four possible scenarios, ranking them in order of the likelihood for advancing cannabis legislation:

  1. Democrats Control the White House and Congress: According to Schweich, this scenario offers the most promising path forward for federal cannabis reform. Suppose Vice President Kamala Harris wins the election, and the Democrats retain the House and Senate control. In that case, there’s a strong chance of passing a comprehensive federal bill that could legalize cannabis nationwide. Schweich believes this would be the most favorable outcome for the cannabis industry, as it would provide the political alignment needed to push through significant reform.
  2. Republicans Control the White House and Congress: Schweich ranked this as the second most likely scenario for achieving federal reform. He noted that a Republican-controlled Congress and White House under former President Trump could create a more functional system of government, allowing for more streamlined policymaking. However, Trump’s views on cannabis differ significantly from those of many Republican members of Congress, which could complicate the passage of federal cannabis legislation.
  3. Split Government with Trump as President: Schweich expressed cautious optimism in this case. He explained that a Trump presidency with a split Congress could still result in some federal cannabis reform, mainly if Republicans see political advantage in supporting the issue. However, Schweich believes that partisan politics might get in the way, limiting the likelihood of significant progress.
  4. Split Government with Harris as President: Schweich ranked this scenario as the least likely to result in federal cannabis reform. If Harris wins the presidency, but faces a Republican-controlled Congress, Schweich predicts widespread gridlock. “I think if Vice President Harris wins the Presidential election and Republicans control Congress, they’re going to wage a war against her that has nothing to do with cannabis,” he warned. The deeply entrenched partisanship could prevent any meaningful cannabis legislation from passing.

The Filibuster: A Key Obstacle

One of the significant barriers to federal cannabis reform, according to Schweich, is the filibuster in the Senate. With the filibuster requiring 60 votes to pass most legislation, many policy efforts die before they even have a chance to gain momentum. “The filibuster is the enemy of policymaking,” Schweich stated. “It is a mutation of the legislative process in Congress and kills everything.”

Schweich argued that the filibuster prevents thoughtful, well-crafted laws from being passed and hinders progress on issues like cannabis legalization, which enjoys broad public support but faces institutional roadblocks.

State-Level Initiatives: An Optimistic Outlook

Beyond the federal landscape, Schweich is optimistic about the success of state-level cannabis initiatives. In the 2024 election, Florida, North Dakota, and South Dakota are all expected to vote on cannabis legalization. Schweich is cautiously optimistic about all three states, particularly noting that turnout will be crucial. Florida, however, presents a unique challenge due to its 60% threshold for passing ballot initiatives, which Schweich described as “difficult in any state on any issue.”

Nevertheless, Schweich predicted that all three states have a strong chance of passing legalization measures, which would mark yet another milestone in the steady march toward national cannabis legalization.

The Future of the Cannabis Industry Hangs in the Balance

As the 2024 election looms, the future of cannabis policy in the United States remains uncertain but full of potential. Schweich’s insights highlight both the progress made and the obstacles that still remain and stand in the way. While rescheduling cannabis is a step in the right direction, comprehensive federal legislation remains the ultimate goal. Whether that goal is achieved will depend on the outcome of this election and the ability of lawmakers to overcome partisan gridlock.

As Schweich put it, “The cannabis industry knows that work needs to be done at the federal level,” and this election could be a turning point for the entire movement.

If your cannabis business is navigating the evolving regulatory landscape or preparing for the potential changes, BGM is here to help. Our team of experts stays ahead of industry trends to provide guidance on compliance, tax strategies, and long-term planning. Don’t wait for the 2024 election results to take action—reach out to BGM today for tailored advice to keep your business on track. Contact us to schedule a consultation and explore how we can support your cannabis business goals.

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C4 USA Announces Expansion, Strengthening Its Position in Premium Cannabis Market

C4 USA, the trailblazer in high-quality cannabis cultivation, proudly announces an unprecedented leap forward, expanding its operations to over 100,000 square feet of mature canopy. This monumental achievement marks a new chapter in C4 USA’s quest to dominate the cannabis industry, redefining the future of cannabis cultivation on a scale that few can match.

This is not just another expansion. This is a game-changer. By doubling down on innovation and cutting-edge technology, C4 USA has created a facility that sets new benchmarks for quality, consistency, and production capacity. With this expansion, the company can now meet soaring demand while elevating the consumer experience with premium, top-tier cannabis like never before.

“Our expansion to 100,000 square feet is a monumental milestone that underscores our ambition and ability to lead this industry,” said David Bernard, Chief Operating Officer of C4 USA. “We’ve invested in the best talent, the best technology, and a meticulous approach to cultivation that sets us apart. This isn’t just growth—it’s a revolution in how cannabis is produced, and we’re just getting started.”

The expanded cultivation facility, located in Cathedral City, is now one of the largest and most advanced cannabis production centers in California, equipped with cutting-edge technology that ensures precise environmental control and sustainability. From energy-efficient lighting to state-of-the-art irrigation systems, C4 USA is committed to eco-friendly operations while maximizing yield and maintaining exceptional quality standards.

But the excitement doesn’t stop there…

New, exclusive strains are set to be unveiled as a direct result of this expansion, giving C4 USA the ability to introduce unique, highly sought-after products that cater to evolving consumer tastes. These strains will be grown under the most optimal conditions, ensuring superior potency, aroma, and flavor profiles that consistently deliver a premium experience.

The impact of this expansion goes beyond product offerings. C4 USA is poised to create dozens of new jobs in the Cathedral City community, further strengthening its position as a significant economic force in the region. As the company scales up, its commitment to local partnerships and sustainable practices will continue to be a cornerstone of its growth strategy.

C4 USA’s expansion isn’t just about meeting demand—it’s about shaping the future of the cannabis industry. With an unwavering commitment to innovation, sustainability, and excellence, C4 USA is setting a new gold standard for what a cannabis cultivation facility should be.

For cannabis connoisseurs, retailers, and partners, this expansion means greater access to consistent, high-quality cannabis that lives up to C4 USA’s reputation for excellence. For the industry at large, it signals the rise of a true leader—a company that is reshaping the landscape of premium cannabis cultivation.

About C4 USA

C4 USA is a leader in large-scale, premium cannabis cultivation, based in Cathedral City, California. Known for its technological innovation, sustainable practices, and consistent product quality, C4 USA serves both the wholesale and retail markets with an unmatched dedication to excellence. With an ever-expanding portfolio of exclusive strains and cutting-edge cultivation methods, C4 USA continues to set the standard for the cannabis industry.

Sales and Media Contact:

Marcela Valentino

C4 USA  |   WWW.C4USA.COM

831-521-3938

Marcela@c4industry.com

sales@c4industry.com

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Washington State Auditor Says Cannabis Industry’s Tracking Software Has ‘Failed’

In a report released last week, the Office of the Washington State Auditor found that the state’s “stopgap” cannabis industry product tracking technology, Cannabis Central Reporting System (CCRS), has “failed.” The report notes that the state Liquor and Cannabis Board (LCB) has no plans to implement a better system until 2031 – nearly 20 years after cannabis was legalized by voters in the state.    

“A robust, ‘seed-to-sale’ tracking system has been under development for 12 years but has yet to be fully realized. The recreational cannabis market has changed throughout those years. At this time, I believe this report can serve as an important framework through which state leaders can engage with LCB to establish clear goals for ensuring accountability in our modern recreational cannabis system.” — “Evaluating Washington State Oversight of the Cannabis Industry: Follow-up issues,” Office of the Washington State Auditor, 10/22/24 

In its 2018 report, the Auditor’s Office recommended the LCB implement a cannabis tracking system for a data-driven, automated approach to enforcement; however, the recent report found the state “lacks a data tracking system that easily and reliably tracks cannabis products.”  

The report notes that CCRS lacks real-time tracking information and has limited data input protections which means the LCB relies on licensees to report accurate and complete information.  

“Additionally,” the report says, “licensees cannot easily access or correct their data after they upload it, and the lack of a single identification number makes it difficult to track products for quick product recalls.” 

The report suggests a system that tracks cannabis products from seed-to-sale, has consistently reliable and current data, and automated alerts.      

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National Hemp Association Nets $19.6M USDA Grant to Study Impact of Hemp Cultivation

The National Hemp Association (NHA) last week was awarded a $19.6 million grant from the U.S. Department of Agriculture (USDA) to monitor the impact of hemp cultivation in the Chesapeake Bay region. The grant, part of the USDA’s Regional Conservation Partnership Program (RCCP), is designed to address critical conservation challenges such as water quality, soil health, and wildlife habitat protection. 

The initiative will see hemp cultivated on 5,000 acres in the region annually and the NHA said they expect to see reduced nutrient runoff, pesticide contamination, and soil erosion along with the improved overall health of aquatic and terrestrial ecosystems. The Chesapeake Bay Watershed spans more than 64,000 square miles across six states and the District of Columbia and is one of the nation’s most vital ecosystems, supporting wildlife, local communities, and agriculture. However, the NHA notes that it faces significant challenges from pollution and agricultural runoff and by incorporating industrial hemp into regional farming, the organization aims to combat those issues while supporting healthier ecosystems.  

In a statement, Erica Stark, executive director of the National Hemp Association, called the project “an incredible opportunity to demonstrate hemp’s ability to contribute to climate-smart agriculture, help farmers adopt sustainable practices, and expand the industrial hemp industry.”  

The RCCP funding includes $1.5 billion from the USDA and $968 million from private partners, and is part of a broader effort supported by the U.S. Farm Bill and the Inflation Reduction Act of 2022. 

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New York Office of Cannabis Management Issues ‘Quarantine’ for Caffeine-Infused Cannabis Products

Over the summer, the New York Office of Cannabis Management (OCM) issued a stop order for the production of caffeine-infused cannabis pills manufactured by Hudson Cannabis for cannabis brand 1906, the New York Post reports. In a July 24 OCM “quarantine” reviewed by the Post, two OCM inspectors said that “Evidence supports that ingredients used in product are not allowed to be used in cannabis products.” 

The quarantined products include “Go” – a tincture which contains 80 milligrams of caffeine, 2 milligrams of THC and 5 milligrams of CBD – and “Genius,” a pill that includes 20 milligrams of caffeine, 2.5 milligrams of THC, and 5 milligrams of CBD and CBG. Both products have been on the market since February 2023, the report says. The order states that the products “may jeopardize public health or safety.”    

In a statement to the Post, Melany Dobson, co-founder of Hudson Cannabis, said the company is “surprised by this decision from the State to quarantine products that have been on the market for over 18 months, are sold legally in States across the nation, and as far as we know have had zero reported adverse effects.”  

“This type of arbitrary and capricious behavior, preventing the sale of safe and tested products readily available across the country, only serves to benefit the illicit market Governor (Kathy) Hochul claims to care about shutting down.” — Dobson to the Post 

According to state regulations, infusing pure caffeine into cannabis products is not permitted but “naturally occurring caffeine” is allowed.  

“A processor is prohibited from processing any products which… contain any non-phytocannabinoid ingredient that would increase potency, toxicity, or addictive potential, or that would create an unsafe combination, known or unknown, with other psychoactive substances,” the rule states. “This prohibition shall not apply to products containing naturally occurring caffeine, such as coffee, tea, or chocolate.” 

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Kentucky Holding First Medical Cannabis License Lottery

Kentucky officials are holding the first licensing lottery for the state’s medical cannabis industry on Monday, October 28, WLWT5 reports.

The state’s first lottery for medical cannabis licenses will cover cannabis cultivation and processing licenses, with a separate lottery for cannabis dispensary licenses expected sometime later this year. The chances to win a license are quite low — for the 584 cultivator applications received by the state, just 16 licenses will be awarded. Additionally, 344 processor applications were submitted but just 10 licenses will be issued. Overall, the state received nearly 5,000 business applications for the medical cannabis industry but the vast majority (4,076) are for dispensary licenses, of which only 48 will be available.

Today’s license drawing will be live-streamed at 2:00 pm.

Under the medical cannabis program approved by lawmakers in 2023, cultivators will be “responsible for planting, raising, harvesting, trimming, and curing raw plant material” for the state’s medical cannabis industry, while processors will be “responsible for processing and packaging raw plant material into usable product formats,” the report said.

Meanwhile, the state’s first cannabis business license was awarded last month to the testing lab KCA Labs, a Nicholasville-based facility that was previously testing consumer hemp products.

Kentucky Gov. Andy Beshear (D) announced the medical cannabis licensing lotteries in April.

The licensing process is ramping up as officials move to launch Kentucky’s medical cannabis program by January 1, 2025, as directed by state law.

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South Dakota Cannabis Legalization Bid Polling at 45%

Voter support is trailing for the South Dakota ballot initiative to legalize adult-use cannabis, according to a recent survey conducted by Emerson College, KELOLAND Media, and The Hill.

Poll results for Initiated Measure 29, which seeks to legalize the personal possession and cultivation of cannabis for adults aged 21 and older, found 50% of voters planning to oppose the measure, with 45% in favor and 5% undecided.

According to Emerson College Polling’s executive director Spencer Kimball, support for the initiative was highest among younger voters, with 68% of people under 30 in favor. Voters older than 70 were the most opposed, with 64% against.

IM 29 will be the third cannabis legalization initiative posed to South Dakota voters in as many elections but, unlike the previous measures, IM 29 focuses only on legalizing for personal use and would not legalize cannabis sales. Supporters of the measure said they hope lawmakers will legislate rules for a regulated cannabis market if the initiative passes.

In 2022, South Dakota rejected a cannabis legalization initiative with 53% of voters opposing the measure. Two years earlier, however, voters approved two cannabis initiatives in the state — one to legalize medical cannabis, which passed with 70% support, and one to legalize both medical and recreational cannabis, which was approved by 54% of voters. However, the adult-use measure faced legal challenges and was eventually overruled by the Supreme Court for violating the state’s single subject clause for ballot initiatives.

 

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Poll: 66% of Florida Voters Support Cannabis Legalization Amendment

Two-thirds of Florida voters said they will support Amendment 3, the state’s constitutional amendment to legalize adult-use cannabis, when it appears on the ballot in just under two weeks, according to a recent poll. Conducted by the University of North Florida’s Public Opinion Research Lab (PORL), the poll found 66% voter support for legalization, 30% of voters in opposition, and 4% who said they were undecided.

If passed, Amendment 3 would legalize the possession of up to 3 ounces of cannabis flower for adults aged 21 or older. As a constitutional amendment, the issue requires at least 60% voter support to pass.

“After years of polling on marijuana in Florida, both medical and recreational, it is clear that the majority is in favor of legalization. Closing in on election day, despite some heavy campaigning, we’re seeing support for this amendment and is on track to exceed the 60% supermajority required to pass.” — Dr. Michael Binder, PORL faculty director and UNF professor of political science, in a statement

“This poll is another welcome reminder that Amendment 3 is expansively supported and widely seen as the best path forward for Florida,” Smart & Safe Florida spokesperson Morgan Hill said in a press release. “Legalizing recreational adult use marijuana is good for the health, safety and individual freedom of Floridians, and we are energized to continue showing that to voters between now and Election Day.”

The poll also found bipartisan support for the amendment, with 78% of Democrats, 73% of Independents, and 53% of Republicans saying they would vote yes on the issue. Notably, the campaign has pitted the state’s most high-profile Republicans against one another, with Gov. Ron DeSantis (R) and former President Donald Trump (R) — who is a Florida resident — taking opposing sides.

DeSantis launched an opposition campaign earlier this year. The governor also vetoed a proposal in July to restrict intoxicating hemp products in the state, after which many of the state’s hemp operators pledged to donate $5 million to the Republican Party of Florida to help defeat the upcoming legalization vote. This week, DeSantis argued that cannabis supporters should also oppose Amendment 3 because the campaign was largely funded by Trulieve, the state’s largest medical cannabis company which stands to gain significantly more customers if the amendment passes, the Florida Phoenix reports.

Meanwhile, Trump said last month that he would vote yes on Amendment 3, and called on lawmakers “to responsibly create laws that prohibit the use of it in public spaces, so we do not smell marijuana everywhere we go, like we do in many of the Democrat run Cities.” The former president also said that he supports moving cannabis from Schedule 1 to Schedule III under federal law.

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Unlicensed New York Cannabis Retailer Ordered to Pay $9.5M

The owner of an unlicensed cannabis retailer in upstate New York is facing a $9.5 million judgment after investigators found the Rochester-based store had been selling unlicensed cannabis products since at least September 2022, the New York Law Journal reports.

Issued by New York State Supreme Court Justice Frederick Reed, the judgment against George West, who owns Jaydega 7.0 in Canandaigua, was issued after West allegedly ignored a June 2023 notice from the Office of Cannabis Management (OCM) to stop selling cannabis without a license.

As penalty, West is ordered to disgorge more than $1 million in profits from selling unlicensed cannabis products and pay $8.4 million for continuing to sell after being ordered to stop.

New York Attorney General Letitia James thanked OCM for collaborating with the investigation.

“The owner of Jaydega 7.0 refused to follow the law and ignored repeated warnings to stop selling cannabis without a license. Today, George West must pay $9.5 million for violating our laws and hurting local communities. Stores that sell cannabis must abide by rules and regulations just like any other business in New York.” — AG James, in a press release

Meanwhile, after two years of licensed adult-use sales, cannabis tax dollars are finally available to be reinvested into the state, and OCM recently announced it is accepting applications for $100,000 grants — funded by cannabis taxes, with $5 million available in total — for programs seeking to benefit the state’s youth.

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Maine Recalls Cannabis Products Over Bacterial and Mold Contamination

The Maine Office of Cannabis Policy (OCP) has expanded a recent recall of cannabis products sold at retail stores statewide due to the presence of harmful bacteria, yeast, and mold. The recall initially began on October 11, 2024, focusing on the strain “Frosted Cookies,” produced by Massachusetts-based Nova Farms. The contaminated products were sold at 14 adult-use stores between September and early October. As of October 24, 2024, the recall has grown to include more stores and products, including a second strain, “Frozay.”

The recalled products include pre-ground flower, pre-rolls, and blunts, which failed microbial testing for bacteria and mold. Nine additional stores across cities such as Auburn, Bethel, and Portland are reportedly affected, increasing the total number of impacted retailers to 23. The recall covers products sold between August 30 and October 14, 2024.

Consumers are advised to check their packaging for the affected batch numbers and either dispose of the products or return them to the store. Anyone experiencing adverse reactions after using these products, such as sinus issues, dizziness, or fatigue, should seek medical advice immediately.

OCP’s investigation continues as they work to isolate and remove the contaminated cannabis from the market. For a full list of affected retailers and additional information about the failed tests, visit the OCP website.

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Jetty Extracts

Nate Ferguson: Driving Innovation and Sustainability at Jetty Extracts

Nate Ferguson, co-founder and Chief Product Officer at Jetty Extracts, has spent over two decades in the cannabis industry. With Jetty’s 11-year anniversary just passed, the brand is recognized for its commitment to product innovation, sustainability, and overcoming regulatory challenges. In this Q&A, Nate joins us to discuss:

  • His role overseeing product innovation and supply chain management.
  • The early legal risks and lack of regulation faced by cannabis operators.
  • The complex regulations in expanding to new markets like New York and Colorado.
  • Pre-roll production advancements, including the rise of multi-packs and infused pre-rolls.
  • Jetty’s commitment to sustainability through innovative packaging.

For the full interview, continue reading below!


Can you describe your role as co-founder and Chief Product Officer at Jetty Extracts?

Sure. Yeah, my name is Nate Ferguson. I’m co-founder of Jetty, and my title currently is Chief Product Officer. I head up all products at the company, from new product innovation to current products, QC standards, and things like that. I focus heavily on the supply chain, really upstream in the manufacturing process on the cannabis side of things.

Jetty just celebrated our 11th anniversary on October 1st, so we’ve been around a long time. Before that, I owned retail dispensaries in 2009 through 2011, which got shut down by the federal government back in the day. I had cultivation and delivery services as well. So, I’m 20 years into the cannabis industry. I’ve basically seen a lot and know a lot about the plant and cultivation.

What sets Jetty apart is that a lot of us have that old pedigree, that legacy tenure in the industry. We’re close with a lot of growers and breeders, which really helps us put out a product that I feel is better than most of the products on the market because we have a strong focus and good relationships with the cultivators. We focus heavily on what strains we curate, especially for pre-rolls—what are the best crosses when it comes to infused pre-rolls.

So, day-to-day, as a co-founder, I’m doing a little bit of everything. I’ve got my hand in marketing, I’ve got my hand in sales and operations, but my main focus is on product and supply chain.

What challenges did Jetty face in the early years, and how do they compare to the challenges you face today?

Early on, there was a lot less red tape and just a different degree of risk, namely law enforcement. In the first couple of years of Jetty, we had to deal with raids, despite being medical and following Prop 215. There were no ordinances, no regulations in place, and how we operated depended on the mood of local sheriffs or cannabis task forces.

Back then, there were also a lot of small companies that could start easily, sometimes doing dangerous extractions at home. We had to compete with them, and innovation moved fast. Now, it’s the opposite, with more focus on margins and running a healthy business. There’s a lot more red tape, which slows everything down. We’re also expanding into new markets like Colorado, New York, and New Jersey, each with its own set of regulations, which complicates things further.

After becoming so well established in California, how has Jetty managed its expansion into new markets like Colorado, New York, and New Jersey?

Each market comes with its own set of challenges. We’ve been in California for 11 years, one of the most complex markets, so we’re battle-tested. Many of the problems we face in new markets, like an immature supply chain, we’ve already dealt with in California.

Colorado, for example, legalized before California, and because of the climate there, there’s a lot of indoor cultivation. The inputs are great, so we’re excited to work in Colorado, where the supply chain is very mature, and the strains are well known for what works with hash and so on.

In New York, it’s a different story. The state is only a couple of years removed from legalization, and people are trying to cultivate in upstate New York, and it’s snowing on the crops in late September and early October. We’re getting frost, and strains that would normally finish fine in California just aren’t ripening or getting to maturity in New York. So there are still a lot of learnings from the cultivation and supply chain standpoint.

We’re also seeing everyone trying to do so much in New York, which is similar to what we saw in California. Everybody wants to be this big vertical operator, with retail, their own brands, white-labeling, cultivation—you name it.

There are a lot of shiny objects in cannabis. Where Jetty has found success is by focusing solely on being a manufacturer and a brand, doing extraction only, and not branching off into too many things or getting distracted.

That’s something I see happening in New York, and it makes it tough to pick the right partners and work with groups that are hyper-focused and can help Jetty build a sustainable company for the long term.

How does Jetty manage its packaging across different markets, and what role does sustainability play?

We handle all our packaging design and sourcing from our HQ in California. Depending on the market, we either ship it to California first or directly to the other states. The regulations vary by state. For example, New York requires 10% post-consumer recycled packaging, and Colorado has opaque packaging requirements for pre-rolls. It’s challenging to manage, but we prioritize sustainability and innovation in our packaging, which has always been core to Jetty’s identity.

Jetty Extracts Pre-Rolls

How has Jetty approached pre-roll manufacturing, and how would you say the pre-roll market evolved?

Pre-rolls have evolved a lot. Early on, it was manual labor with knock boxes, and many companies bought expensive machines that didn’t work as expected.

Infused pre-rolls, which we specialize in, add extra challenges because of the sticky texture. We’ve finally found a machine that works well for us, producing up to 10,000 pre-rolls a day. We’re seeing a shift towards multi-packs and smaller joints, especially post-COVID, where consumers want personal, single-use joints instead of sharing larger ones.

Jetty is known for its sustainability initiatives. Can you elaborate on these efforts?

The cannabis industry can be extremely wasteful, especially with packaging regulations. We’ve always prioritized sustainability by using recyclable components like post-consumer plastics and craft paper.

We try to balance compliance with eco-friendly solutions, but it’s a work in progress. Disposable vapes, for example, are hard to ignore because they dominate the market, but we’re looking at biodegradable plastics and ways to recycle parts like the lithium battery. It’s tough, but sustainability remains a focus in everything we design.


Thanks for joining us, Nate! To learn more about Jetty Extracts, visit their website.

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California Has Seized More Than $191M in Illegal Cannabis Since January

Since January, California’s Unified Cannabis Enforcement Task Force (UCETF) has seized more than $191 million worth of illegal cannabis across 13 of the state’s counties, with $70.7 million of that total occurring since July. 

In a statement, Gov. Gavin Newsom (D) said that the task force has seized more than 42,000 pounds of cannabis since the start of the year. 

“Through the UCETF, California continues the charge in cracking down on the illicit cannabis market for the safety of consumers and the support of the legal cannabis industry.” — Newsom in a press release 

Bill Jones, chief of the California Department of Cannabis Control’s Law Enforcement Division, noted that during the most recent quarter, UCETF “targeted unlicensed cannabis operators misusing the California cannabis universal symbol on their packaging.” 

“This deceptive practice confuses consumers and puts them at risk,” he said in a statement. “We are stepping up enforcement across the supply chain and shutting these operations down.” 

UCETF was launched in 2022 to combat the California illicit cannabis industry. Since its inception, UCETF has seized and destroyed over 162 tons worth of illegal cannabis worth an estimated $536 million through over 350 operations. The taskforce has also eradicated 526,037 plants, seized 167 firearms, and arrested 59 individuals, according to officials. 

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Arkansas Supreme Court Rules Medical Cannabis Measure ‘Misleading,’ Votes Will Not be Counted

Votes to expand medical cannabis in Arkansas will not be counted after the State Supreme Court ruled that the measure didn’t fully explain what it would do, the Associated Press reports. The decision comes just two weeks before the election but too late to remove the proposal from ballots. 

Justice Shawn Womack, writing for the majority, said the measure did not fully inform voters that it would have stripped the ability of lawmakers to change the 2016 constitutional amendment to legalize medical cannabis in the state. 

“This decision doomed the proposed ballot title, and it is plainly misleading.” — Womack in the decision 

The 4-3 decision by the court also said the measure did not inform voters that, if approved, the amendment would legalize up to an ounce of cannabis possession for any purpose if cannabis were legalized federally. 

In a dissent, Justice Cody Hiland said the court was ignoring precedent by ruling the measure’s wording was misleading. 

“Long ago, this court established definitive standards for evaluating the sufficiency of popular names and ballot titles,” Hiland wrote. “This court has not deviated from those standards until today.” 

In a statement, Arkansans for Patient Access, the group behind the measure, said they are “deeply disappointed” by the decision, adding that “It seems politics has triumphed over legal precedent.”  

 

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American Institute of CPAs Asks Feds for Guidance on Cannabis Rescheduling

The American Institute of CPAs (AICPA) on Tuesday sent a letter to the Department of Treasury and Internal Revenue Service (IRS) requesting guidance for cannabis businesses as the federal government moves to reschedule cannabis from a Schedule I drug under the Controlled Substances Act to a Schedule III. Under the reforms, state-approved cannabis businesses would no longer be subject to section 280E of the tax code. 

In a statement, Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, said that “Since the beginning of the decriminalization and legalization of marijuana across a growing number of states, cannabis businesses and their CPAs have struggled to walk the tightrope of an industry that is locally legal, but federally illegal.” 

“It’s imperative that the federal government’s tax administration bodies provide guidance to these profitable businesses and their advisors in advance of the rescheduling of marijuana to help ensure a clear understanding of their federal tax obligations and mitigate non-compliance.” — Lauridsen in a press release 

In the letter, the organization makes several recommendations to officials, including retroactive treatment for expenses previously subject to section 280E, clarifying issues stemming from prior section 280E disallowance, uniform tax treatment among cannabis businesses, and that the Treasury Department and IRS offer a voluntary disclosure program for cannabis businesses that would no longer be subject to section 280E as a result of the rescheduling of cannabis.

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Utah Poll Finds 50% Voter Support for Adult-Use Cannabis Legalization

A public opinion poll conducted earlier this month in Utah found that half of state voters support fully legalizing adult-use cannabis, FOX 13 reports.

The poll, conducted by Noble Predictive Insights on behalf of the Utah Patients Coalition, found that about 50% of Utah voters support the legalization of adult-use cannabis. In comparison, 38% of voters believe that only medical cannabis should be available, 9% believe that cannabis should be prohibited entirely, and just 3% were “not sure.” Support for adult-use cannabis was highest (60%) among younger voters and lowest (29%) among those aged 65+, while middle-aged respondents were split almost evenly on the issue (49% in favor).

Desiree Hennessy, the executive director for the Utah Patients Coalition, said the poll was designed to gauge public opinion on the state’s medical cannabis program — and on cannabis reforms in general.

“We’re not even just talking patients. We’re talking Utahns who are up for a recreational or adult-use market in Utah. That is surprising, but it’s not surprising after you’ve watched what’s happened with the program.” — Hennessy, via FOX 13

Utah voters opted to legalize medical cannabis in 2018 but state lawmakers promptly passed legislation to replace the voter-approved program, and it took two years for the state’s first dispensaries to open.

Meanwhile, a study published in April found that about 60% of Utah medical cannabis patients obtain their cannabis from outside the state’s legal market, primarily via illicit or out-of-state sources.

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Alabama Judge Appoints Mediator to Resolve Medical Cannabis Licensing Dispute

Montgomery Circuit Judge James Anderson on Tuesday appointed a mediator in the legal dispute over Alabama’s attempts to award medical cannabis operator licenses, ABC News reports.

Anderson appointed retired Circuit Judge Eugene Reese to the case, writing that mediation “is appropriate in this case and could result in the speedy and just resolution of the dispute.” The argument stems from a series of lawsuits against the Alabama Medical Cannabis Commission’s (AMCC) licensing efforts for the state’s medical cannabis program, which lawmakers approved in 2021.

The AMCC first attempted to issue medical cannabis licenses in June 2023 and since then, regulators have licensed medical cannabis cultivators, processors, transportation services, and a testing lab. However, even though some cultivators have already started growing, the licenses for integrated operators — which cover the combined cultivation, manufacturing, and retail of medical cannabis — have been repeatedly blocked by lawsuits.

The lawsuits cover a variety of complaints including that there were “inconsistencies in the tabulation of [applicants’] scoring data;” that the AMCC had violated the state’s open meetings law; that officials had no right to revoke licenses that were awarded then retracted following the discovery of the aforementioned data error; that regulators had wrongfully implied the owner of a company had been previously convicted of a crime; and that regulators unfairly excluded a company’s application from the second licensing round. Most recently, one of the companies suing the Alabama Medical Cannabis Commission last month asked a judge to toss the agency’s attempts to award cannabis licenses and declare the regulators’ appeal process void.

Previously, state cannabis regulators and licensees asked for a court order to allow the state’s medical cannabis program to proceed.

Meanwhile, thousands of medical cannabis patients in Alabama have been left without legal access for more than a year since regulators first attempted to issue the licenses.

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