Federal Bill Introduced to Allow Cannabis Research at Universities

6/08/2023

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A House bill introduced Tuesday aims to promote cannabis research at universities and eliminate federal barriers for researchers. The Higher Education Marijuana Research Act was introduced by Rep. Dina Titus (D-NV) and Rep. Joe Neguse (D-CO). 

In a statement, Titus, a member of the Congressional Cannabis Caucus, said cannabis is “a major economic driver in Nevada and across the country and deserves further research.”    

“Most of that research will come from academia, where right now too many universities and researchers do not have robust protections for even possessing what they are researching. As a former professor, I’m introducing this commonsense legislation to support their work and help us all learn more about the effects and potential uses of cannabis.” — Titus in a press release 

Morgan Fox, National Organization for the Reform of Marijuana Laws (NORML) political director, said that “Despite cannabis being one of the most heavily studied substances, there continue to be significant federal barriers to conducting additional research, particularly involving clinical trials and products that are available in regulated state-legal markets.” 

“This bill will facilitate trusted university partners to engage in the kinds of research that will best equip state and federal lawmakers and regulators to develop effective cannabis policies based on public health and safety, will allow consumers to make more informed choices, and will help train the next generation of cannabis researchers,” he said in a statement. 

The measure would provide $150 million in cannabis research funding for universities over five years and allow those institutions to obtain cannabis for research through partnerships with state regulators and law enforcement. 

The measure has been assigned for the House Agriculture, Education and the Workforce, Energy and Commerce, and Judiciary committees. 

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D.C. Judge Rules Cannabis Patient Must Stop Smoking in Apartment Because Odor Causes Nuisance for Neighbor

6/08/2023

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A Washington, D.C. judge on Monday ordered a man who smokes medical cannabis in his apartment to stop following a neighbor’s complaint that the odor caused a nuisance in her apartment, the Washington Post reports. Judge Ebony Scott ruled that Thomas Cackett has a license to purchase cannabis but “does not possess a license to disrupt the full use and enjoyment of one’s land.” 

“Indeed, the public interest is best served by eliminating the smoking nuisance and the toxins that it deposits into the air, toxins that involuntary smokers have no choice but to inhale.” — Scott, in the ruling, via the Post 

In the ruling, Scott determined, however, that the defendant, Josefa Ippolito-Sheperd, could not prove she was entitled to damages. Under the order, Cackett cannot smoke at his address or within 25 feet of Ippolito-Shepard’s address.  

The case is believed to be the first of its kind focused on medical cannabis consumption in multiple-unit dwellings, such as apartments. 

Ippolito-Sheperd, 76, argued that she had developed health problems and trouble sleeping since she noticed the smell of cannabis, the report says. She alleged that Cackett smoked cannabis “all day and all night” but he said he typically smokes “eight to 12 puffs” at night after work and notes that he is a registered patient in D.C. for pain.  

The decision does not set a legal precedent as an appellate decision would. 

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Green Check Verified Acquires Komplyd

6/08/2023

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Cannabis compliance and financial services company Green Check Verified on Tuesday announced the acquisition of Komplyd, the first compliance-as-a-service platform designed for business applications targeting the cannabis industry.  

In a press release, Green Check Verified said the acquisition will enable it “to further integrate with seed-to-sale technologies and more seamlessly connect the supply chain of the plant to the supply chain of commerce,” which the company described as “integral to the future of interstate and international cannabis commerce.” 

In a statement, Mike Kennedy, chief strategy officer and co-founder of Green Check Verified, said the partnership will enable “a much deeper level of data connectivity, resulting in an insights-driven, integrated experience” for the cannabis operators using its platform and provide greater value to its marketplace providers and financial institution clients.  

Rose Elliott, CEO and co-founder of Komplyd, said the deal “will equip cannabis business leaders with the financial services and technology platforms they need to move the industry forward.” 

In April, Green Check Verified closed a $6 million Series A funding round and recently closed on its acquisition of PayQwick. In January, the company launched its cannabis business services marketplace, Green Check Connect.  

The terms of the deal were not disclosed. 

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RAW Rolling Papers Parent Wins $1.5M in Copyright Infringement Lawsuit Against OCB Makers

6/07/2023

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A federal judge on Monday ordered Republic Brands, makers of OCB rolling papers, to pay $1.5 million to HBI International, makers of RAW rolling papers, for infringing on the RAW copyright and trade dress. The ruling concludes a seven-year court battle between the two companies. 

In a statement, Josh Kesselman, RAW founder, said the company was “pleased with the outcome, but that doesn’t make this any less frustrating.”  

“Republic has persistently filed lawsuit after lawsuit against our company, perhaps because of our success. We intend to donate the net proceeds we will receive, now that this case is resolved, to organizations working to help small businesses in the cannabis field, particularly businesses that are startups involving individuals who were previously convicted of nonviolent cannabis related crimes. We’re hopeful that Republic will now cease its relentless effort to destroy our business and focus, like us, on helping the emerging cannabis industry achieve greater equity in the marketplace.” — Kesselman in a press release 

The case in question began in 2016 when HBI contacted Republic to point out the similarity between RAW’s Organic Hemp product packaging, which was launched in 2009, and Republic’s OCB Organic Hemp paper packaging, which debuted in 2011. Republic introduced the OCB Organic Hemp product in the U.S. in 2014 and HBI reached out to Republic about the marketing and packaging similarities soon after. HBI asked for the companies to discuss the matter but Republic sued its rival in federal court in Illinois, seeking a declaratory judgment saying it had not infringed on anything.

HBI counterclaimed for infringement, and then Republic brought a series of allegations that RAW products and marketing materials contained various misstatements. Republic accused HBI of false advertising under the federal Lanham Act, deceptive trade practices, and unfair competition under Illinois state law, and alleged that RAW papers and cones were illegal products because of their association with cannabis and celebrity smokers.

That dispute came to a close in February, when Republic won a permanent injunction in a federal lawsuit against HBI, which required HBI to cease the sale of certain products and stop making certain promotional statements. 

In 2021, however, a jury concluded that Republic had willfully infringed on RAW Organic Hemp trade dress, including its copyrighted “Sold Here” sign and awarded the company over $1 million. The jury also found that none of RAW’s product statements violated the Lanham Act, but found for Republic on the Illinois Deceptive Trade Practices Act and the claim for unfair competition based on the same factual allegations.

In a statement referencing the recent press release by HBI International, a Republic Brands spokesperson called it a “new and misleading spin on an old ruling,” and an “attempt to deflect” from the fact that HBI was found guilty in February of “violating the Illinois uniform deceptive trade practices act and the law of unfair competition by constantly making false and misleading statements for more than a decade.”

“BBK Tobacco (dba. HBI International) is not a victim or a victor in this matter — a federal jury found BBK Tobacco guilty of violating the Illinois uniform deceptive trade practices act and the law of unfair competition by consistently making false and misleading statements for more than a decade.”

Editor’s note (6/7/23): This article was updated to include additional information and the Republic Brands representative’s statement.

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San Francisco Set to Impose 3-Year Moratorium on New Cannabis Licenses

6/07/2023

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The San Fransisco, California Board of Supervisors on Tuesday voted unanimously to place a three-year moratorium on new cannabis businesses, the San Fransisco Standard reports. The ban does not affect current applicants or operators. 

Supervisor Ahsha Safaí, the bill’s author, said the moratorium was needed due to oversaturation and competition from the illicit market. In San Francisco, there are about 30 licensed medical cannabis dispensaries, 31 adult-use retailers, and more than 100 additional applications in the pipeline.  

“It’s a pause, not a ban, and ultimately, we can revisit where this is in a few years.” — Safaí via the Standard  

Safaí has also acknowledged the anti-cannabis sentiment within the city’s Asian American communities over the potential impact of cannabis on children and other cultural and historical reasons.  

Final approval of the ban is still required, but it is expected to come next week. If given final approval, the law will take effect in 30 days and will sunset in 2027.  

San Francisco has long embraced cannabis culture, including the annual “420” celebration in Golden Gate Park. 

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Pennsylvania Bill Calls on Feds to Deschedule Cannabis

6/07/2023

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The Pennsylvania House Judiciary Committee is considering a resolution that would urge the federal government to deschedule cannabis as a controlled substance. The resolution notes that 38 U.S. states and four territories regulate cannabis for medical use and that 21 states, two territories and Washington, D.C. have legalized cannabis for adult use. 

The resolution also points out that the World Health Organization has called for cannabis to be removed from the most restrictive category of the Single Convention on Narcotic Drugs of 1961 and that the United Nations Commission on Narcotic Drugs has also voted to reclassify cannabis under the convention.  

“Rescheduling cannabis will establish an important step in harmonizing Federal and State policy to improve public health, reduce criminal justice expenditures, raise tax revenue and usher in economic growth; and … removing cannabis as a Schedule I controlled substance will facilitate medical research, ensure patient access and remove Federal prohibitions.” — HB 420 text 

The resolution also takes aim at federal mandatory minimum sentencing laws which result in nonviolent cannabis offenders often “serving long sentences often disproportionate to their crime.”  

The legislation calls for the U.S. Attorney General to “initiate a review process to consider available evidence and change a controlled substance’s schedule classification” and for the Drug Enforcement Administration and Department of Health and Human Services to “carry out a review process to reschedule a controlled substance.”  

The resolution is sponsored by 17 state lawmakers. Pennsylvania does have a medical cannabis program but has not legalized cannabis for adult use. 

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Pre-Rolls: Is It Time to Go Straight?

6/07/2023

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New technology and changing consumer demands are suggesting an industry shift from cone-style pre-rolls to straight-cylinder pre-rolls.

Think back to the first time you ever saw a joint being rolled. The key word there is rolled. While pre-made cones have been available for a long time, no cannabis connoisseur that preferred to consume via joints would be caught stuffing a cone. It wasn’t just the ritual of rolling a joint, although for many, this is a near-sacred ritual. And it wasn’t that cones weren’t readily available. It was about performance. A joint rolled by hand in the traditional way simply smoked better than a cone filled from one end. It burned more evenly than a cone which often burns faster down one side or “canoes.” Consumers had more control to make the joint just how they liked it, compacting to their desired density as they rolled it back and forth across their fingers.

Flower prep

Critical to a good joint is the preparation of the flower. When using a cone stuffed or “tamped” from the top, the flower needs to be dryer than any true aficionado would ever want, often down to 5-6% moisture. That problem doesn’t occur when rolling a joint using the traditional method. A consumer can use much stickier, fresher flower, with preferred moisture content in the 10-12% range. That means that hand-rolled joints can smell and taste better because you don’t need to dry and pulverize the flower to the same degree as you would when filling a cone. (Overdrying doesn’t just damage the aroma and taste of the flower, but it actually reduces its efficacy as well. Dried flower retains fewer cannabinoids and terpenes than flower with higher moisture content.)

Consumers had limited choices in the pre-roll category

Ask yourself this: have you ever seen an experienced, self-respecting cannabis enthusiast filling a cone? No. If they love the flower and want to taste and feel its full effect and characteristics, they roll a joint. But that’s the big conundrum for consumers. Not everyone has the time or skill to roll a good joint by hand. Up until 2020, they only had two options: the convenience of a cone-style joint or the better performance and experience of a hand-rolled joint.

RollPros deploys patented technology

In 2020, the pre-roll automation market witnessed the launch of an entirely new technology seeking to produce straight pre-rolls rather than cones. Kyle Loucks — the inventor behind RollPros and a seasoned joint smoker and master roller for 20+ years — wanted to find a way to fix the problems associated with pre-rolls constructed using cones. Loucks wanted to provide consumers with a choice that gave them both convenience and quality, and this is reflected in RollPros’ mantra: “Quality pre-rolls for all!”

The first units of the Blackbird system made their way into the wild at roughly the same time that the Hauni made its category entry. While there were many differences between the two straight joint manufacturing systems, the Blackbird had a new trick that was truly groundbreaking and not borrowed from the tobacco or food industries: it actually rolled joints. Loucks had invented a now-patented technology that applied radial compaction, which is the same way you compact the flower in a hand-rolled joint. Better yet, the Blackbird provided operators with the ability to adjust the amount of tension placed on the joint as it is rolled. This unique feature gave operators complete control over the draw of their joints, something that no other machine on the market can do. For example, when rolling a lighter, fluffier strain, operators can dial up the tension to get the draw just right. Or with a denser, stickier strain, they can reduce the tension. And, as any joint smoker will tell you, one of the most critical characteristics of a good joint and good smoking experience is having just the right draw, or airflow, through the joint.

With the much more accessible price tag of $225k (the cheapest machine in its class), it’s no surprise that the RollPros Blackbird has more than 80 units in the field. Brands from coast to coast have used it to accelerate their success in the pre-roll category, producing true pre-rolls that taste, smell, and sell better. A number of top-selling brands, like Rebel Spirit in Oregon and Joints in Oklahoma, have built their entire business around the Blackbird.

Why do cones still dominate?

So why are cones still so dominant in the pre-roll category? According to RollPros COO Nick Buck, it’s just time. “In the legal cannabis industry, cones have been the norm for years. That’s what people expect; it’s what they are used to. So when you throw something new their way, it takes time for consumers to give in and try it. But once they do smoke a well-crafted rolled joint made with a Blackbird, very few ever go back to cones,” says Buck. “They provide the consumer the experience they’ve always wanted from a pre-roll, but have never been able to get. They had to settle for cones, but they don’t have to anymore!”

Pre-Roll preferences are changing

Slowly but surely, consumer preferences are changing. While Rebel Spirit was growing their brand, they didn’t switch entirely to the Blackbird right away and continued to produce cone offerings. But the balance between the two options continues to shift, and as their brand reaches new heights (currently, they are the best-selling pre-roll brand in Oregon), their sales of Blackbird-manufactured joints continue to grow while the cone-style joints stagnate and decline. “Demand for our rollies, as we call them, quickly outpaced our capacity. So six months after our first Blackbird unit kicked off, we purchased a second one. And we still feel like we haven’t hit our full potential,” says Rebel Spirit COO Chris Belcher. That’s significant in what many see as the U.S.’s most challenging cannabis market.

Straight is the future!

Straight-rolled joints are simply the automated version of what has always provided cannabis enthusiasts with the best smoking experience. When the first consumer cars were invented, eventually everyone switched from horse-drawn carriages — but it happened gradually, and now we can observe the pre-roll category go through the same transition.

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Survey: 70% of Louisianans Support Low-Level Cannabis Decriminalization

6/06/2023

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Seventy percent of Louisianans back allowing adults to possess small amounts of cannabis for personal use, according to the 2023 Louisiana State University (LSU) Louisiana Survey. The support marks a “substantial increase” since the 2013 survey which found just 42% backed such reforms.  

The survey also found 90% of respondents supported cannabis possession for medical use. Louisiana does have a functional medical cannabis program. Last year, medical cannabis patient registrations were up 600% compared to the year prior.  

The 70% mark represents the highest level of support for adult-use reforms in the last decade of the Louisiana Survey. In 2014 and 2015, the survey recorded support at 45% and 55% in 2019.  

In an interview with NOLA.com, Peter Robins-Brown, executive director of Louisiana Progress, an advocacy group that supports legalization, said he believed that cannabis legalization in the state is “inevitable” and probable “within the next few years.” 

“Especially with public opinion being so positive, I think it’s hard for even (Louisiana Attorney General) Jeff Landry or Sen. Sharon Hewitt (R) to veto a legalization bill if it makes it through a conservative legislature.” — Robins-Brown to NOLA 

Both Landry and Hewitt and vying for the governorship.  

In April, the House Criminal Justice Committee voted down a measure to legalize cannabis for adult use in the state. 

Last year, Louisiana lawmakers downgraded possession of up to 14 grams of cannabis for personal use to a misdemeanor punishable by a $100 fine and no jail time. 

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Illinois Hemp Farm Nets $480K Grant to Build Electric Vehicle Chargers

6/06/2023

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A DuPage County hemp farm is among the recipients of $12.6 million in grants to build chargers for electric vehicles. Kerry Farms will receive nearly $480,000 from the Illinois Environmental Protection Agency (IEPA) to build the chargers.  

The funds for the program are part of the 2016 Volkswagen settlement, from which Illinois received about $109 million. In all, the grants will fund 348 new Direct Current Fast Charging (DCFC) ports at 87 locations throughout the state.   

In a statement, Gov. JB Pritzker (D), said the program brings the state “one step closer towards [its] mission of achieving 100% clean energy by 2050.” 

Joe Sheehan, founder and owner of Kerry Farms, told the Chicago Sun-Times that he thinks his company will be able to build six public chargers in high-traffic areas of DuPage, Peoria, and St. Clair counties with the grant. He said he hopes to find a “profitable way to do it” but described the project as a risk “no one else is willing to take.” 

Kerry Farms is the only farm included in the grant program, the other companies include BP Pulse, ChargePoint, Francis Energy, GPM Midwest, Loves Travel Stops, Pilot Travel Centers. Powered Dynamics, Road Ranger, and Universal EV. 

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New York Community College Offering Cannabis Certificate Courses

6/06/2023

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Plattsburgh, New York’s Clinton County Community College (CCC) is now offering three certificate courses focused on the cannabis industry as part of a partnership with cannabis education company Green Flower, the Press-Republican reports. The programs include an advanced manufacturing agent certificate, advanced dispensary associate certificate, and advanced cultivation technician certificate.  

Each of the programs run eight weeks, are entirely online, and cost $900. Students must be at least 18 years old to enroll in the programs.    

Angela Kelley, community and workforce specialist at CCC, told the Press-Republican that officials at Clinton believe backyard growers would likely also take the cultivation course. 

“So that they had the opportunity to not only, you know, have successful plantings, but be safe health wise … in what they were producing so that there wasn’t any kind of cross contamination to where they go to use the product, and then they become ill, because it was not cultivated properly.” — Kelley to the Press-Republican 

Vice President of Higher Education at Green Flower, Daniel Kalef, told the Press-Republican that CCC’s leadership “sees the value in providing students a pathway to become certified to work in cannabis retail, manufacturing and agriculture environments” which will help “to ensure the continued growth of the industry in NY through a well-trained workforce.”  

According to Green Flower’s website, the company now has partnerships with 20 colleges and universities throughout the U.S. 

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Colorado Gov. Signs Bill Allowing Online Cannabis Sales

6/05/2023

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Colorado Gov. Jared Polis (D) last week signed a bill to allow online sale of cannabis products. The law requires customers to provide proof of age and that purchases are picked up in person at the retailer’s physical location.  

The law’s intent is to limit some of the in-person cash transactions at retailers as federal law continues to limit cannabusinesses’ access to traditional financial services, including the use of credit cards, which often makes cannabis dispensaries targets for theft.  

During debate on the proposal last month, state Sen. Kevin Van Winkle (R) said, from his perspective, the bill “mainly aims” to “reduce cash in the marijuana space.” 

“…Which is something that is exceedingly important to do because when there is a tremendous amount of cash in any industry, it can lead to some troubling outcomes – specifically things like robbery. It sets them up for tremendous amount of potential theft, and other things.” — Van Winkle on the House floor  

The U.S. House has passed the SAFE Banking Act, which would normalize banking and financial services for state-approved cannabis companies, six times but the measure has never been approved by the Senate. The measure was reintroduced in April but has not yet received a vote in the House. 

A 2022 poll by Data for Progress found that 72% of U.S. voters, including nearly two-thirds of Republicans, support giving legal cannabis companies access to traditional financial services. 

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ATF to Minnesotans: Cannabis Use Prohibits You From Firearm Ownership

6/05/2023

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Following the legalization of cannabis in Minnesota, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) clarified that cannabis consumers are still “federally defined as an ‘unlawful user’ of a controlled substance” and therefore “prohibited from shipping, transporting, receiving, or possessing firearms or ammunition.” 

In a statement, ATF’s Acting Special Agent in Charge Jeff Reed, of the St. Paul Field Division, said that until cannabis is federally legal, “firearms owners and possessors should be mindful that it remains federally illegal to mix marijuana with firearms and ammunition.” 

“As regulators of the firearms industry and enforcers of firearms laws, we felt it was important to remind Minnesotans of this distinction as the marijuana laws adjust here in the State of Minnesota.” — Reed in a statement 

In February, a federal judge in Oklahoma ruled that the federal law barring people who use cannabis from owning firearms is unconstitutional. That decision is under appeal. In April, a federal judge in Texas made a similar ruling, and referenced the blanket federal cannabis possession possession by President Joe Biden (D), suggesting that, even if the defendant “were convicted of simple marijuana possession, that conviction would be expunged by the blanket presidential pardon of all such marijuana possessions that, like Connelly’s, took place before October 6, 2022.” 

A House bill introduced in April by Rep. Brian Mast (R-FL) aims to end the prohibition of firearm sales to cannabis consumers in states that allow adult- and medical-use cannabis. That measure is currently in the House Committee on the Judiciary.  

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New York Gov. Signs Bill Extending Cannabis Cultivator and Processor Licenses

6/05/2023

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New York Gov. Kathy Hochul (D) last week signed a bill extending the licenses of cannabis cultivators and processors as the state has been slow to get the adult-use market off the ground. The current state permits are still considered provisional as state regulators have not yet issued permanent licenses.  

The law extends the licenses until June 30, 2024.  

The bill also extends the adult-use program’s social equity goals by requiring conditional license holders to participate in a social equity mentorship program.  

In a statement, State Senator Michelle Hinchey (D), the bill’s sponsor who also serves as chair of the Senate Agriculture Committee, said the package of four bills she authored that recently passed the state legislature “will strengthen…Upstate and Hudson Valley Communities.”  

“Across New York State, agriculture is a core industry that has shaped our local landscape, economy, and way of life, and I’m proud that four of my bills supporting different needs within this industry have passed the Senate this week.” — Hinchey in a press release 

According to the state Office of Cannabis Management (OCM), the state has awarded 215 adult-use cannabis retail licenses since the marketplace went into effect; however, dispensaries have been slow to open throughout the state. According to OCM data, there are currently just 12 operational adult-use retailers, three of which are operating as delivery-only services until they are able to open their brick-and-mortar locations.  

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NECANN to Produce 3rd Annual Cannabis Industry Convention in Illinois

6/02/2023

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Cannabis entrepreneurs, executives, and marketers are invited to attend the NECANN Illinois Cannabis Convention to be held June 2-3 at the Renaissance Schaumburg Convention Center in Schaumburg, IL.

NECANN specializes in creating resource hubs for the fast-expanding cannabis industry. Events where entrepreneurs, educators, businesses, advocates, investors, patients, and consumers can learn, connect, and thrive.

NECANN Illinois will focus on businesses and products serving the emerging cannabis industry.

A great substitute to the generic national canna-convention franchises, NECANN Illinois is focused on each local market’s opportunities and needs. The convention will feature industry leaders from across the region presenting and taking part in panel discussions. This multifaceted convention offers a platform for big cannabis business deals to be simplified while providing attendees an opportunity to learn about the cannabis industry.

NECANN is proud to be a part of the Illinois cannabis community and hopes to help evolving cannabis markets succeed and grow.

Tickets: https://necann.com/illinois/2023-illinois-cannabis-convention-tickets/
More info: https://necann.com/illinois/
https://www.necann.com

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California Assembly Passes Cannabis Cafés Bill

6/02/2023

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The California Assembly on Wednesday overwhelmingly approved a bill to allow cannabis cafés in the state, KTVU Fox 2 reports. The measure passed the chamber 64-9.  

The legislation would permit the sale of non-cannabis products for consumption at the cafés, which is prohibited under current state law although limited on-site cannabis consumption is allowed. 

Assemblymember Matt Haney (D) tole KTVU that “There’s absolutely no good reason from an economic, health, or safety standpoint that the state should make that illegal.” 

“Lots of people want to enjoy legal cannabis in the company of others, and many people want to do that while sipping coffee, eating a scone, or listening to music. … If an authorized cannabis retail store wants to also sell a cup of coffee and a sandwich, we should allow cities to make that possible and stop holding back these small businesses.” — Haney via KTVU 

In a statement of purpose sent to lawmakers in support of the bill, the California Nightlife Association said allowing cannabis cafés “the commonsense option to sell food and beverage that isn’t ‘prepackaged’ and giving them flexibility to provide entertainment will give a much-needed lifeline to legal cannabis retailers who are struggling mightily to survive in the industry.” 

“Additionally, this bill will give our communities new, exciting opportunities to offer arts and entertainment in spaces where it was previously impossible to do so economically,” the statement says. 

In a letter opposing the legislation, health-related industry groups, including the American Cancer Society Cancer Action Network, the American Heart Association, and the American Lung Association, warned the bill “could essentially turn a cannabis establishment into a restaurant and potentially force workers to accept exposure to toxic chemicals in order to keep their jobs.” 

“Workers should not have to choose between their health and a good job,” the groups wrote in the letter. “California has fought hard to protect workers and ensure a safe, healthy, smoke-free work environment. AB 374 will undo that by re-creating the harmful work environments of the past.” 

The measure moves next to the Senate.

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Florida Cannabis Legalization Campaign Reaches Signature Threshold to Put Issue to Voters

6/02/2023

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The Florida campaign seeking to put an adult-use cannabis question to voters in 2024 has surpassed the signature threshold to get the issue on ballots, according to Florida Division of Elections data.  

Meeting the quota represents a major benchmark for the campaign but state Attorney General Ashley Moody has already moved to challenge the proposal in the state Supreme Court, and the court has indicated it will review her challenge. Moody plans to argue that the ballot measure violates the state’s single-subject rule on ballot measures for constitutional amendments.    

The constitutional amendment, proposed by Smart & Safe Florida, gathered 967,528 valid signatures – more than 70,000 above the requirement to get on the ballot. The campaign had spent $38.4 million through April to get the new measure on the ballot, according to a Politico report. Multistate cannabis company Trulieve Inc. is the only campaign’s only donor.  

In a statement to Politico, Trulieve CEO Kim Rivers said the company is “thrilled the campaign has made this milestone and look forward to seeing this initiative on the ballot next November.”

“Our investment demonstrates our firm belief that Floridians are ready to experience the freedom to use cannabis for personal consumption; a freedom which is currently enjoyed by more than half of America’s adults.” — Rivers to Politico 

Under the proposal, adults 21 and older would be allowed to possess up to three ounces of cannabis for personal use and current medical cannabis dispensaries would be allowed to sell cannabis for adult use. 

A previous legalization initiative in 2019 was ultimately blocked by the state Supreme Court for violating the state’s single-subject rule. 

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Trulieve to “Wind Down” Operations in Massachusetts

6/02/2023

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Multistate cannabis operator Trulieve Cannabis Corp. on Thursday announced plans to “wind down” its operations in Massachusetts. The company said the move is part of its broader plan to “preserve cash and improve financial performance.” 

Since mid-2022, Trulieve has also shut down some of its California assets, exited the Nevada wholesale market, and idled some of its production capacity “to match consumer demand across multiple markets.” 

The company said it would close its dispensaries in Framingham, Northampton, and Worcester by June 30 and would end all its operations in Massachusetts by the end of the year. 

In a press release, Trulieve CEO Kim Rivers described the measures as “difficult but necessary” and part of the company’s “ongoing efforts to bolster business resilience” and its “commitment to cash preservation” as the company continues to focus on its “business strategy of going deep in our core markets and jettisoning non-contributive assets.” 

“We remain fully confident in our strategic position and the long-term prospects for the industry.” — Rivers in a statement 

Trulieve previously closed its retail locations in Palm Springs, Venice, and Grover Beach California. Once it ends its Massachusetts operations, Trulieve will be operational in 10 states.  

The company said it “continues to evaluate the performance of assets and markets within the current macroeconomic environment and will take additional steps as needed to optimize the business” and “is focused on cash preservation and cash generation while continuing to make targeted investments in retail expansion as well as advanced data and technology platforms to set the foundation for a future defined by integrated commerce.” 

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Canadian Cannabis Company Cronos Group to Exit U.S. CBD Market

6/02/2023

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Canadian cannabis company Cronos Group Inc. on Wednesday announced plans to end its hemp-derived CBD operations in the U.S. by the end of this year’s second quarter. The company said the decision will “improve its cash flow in the near term and position itself to directly enter the U.S. THC market when the necessary changes in U.S. regulatory conditions occur.” 

The move is part of a larger plan by Cronos to improve its cash flow and streamline its operations.  

In a press release, Mike Gorenstein, Cronos chairman, president, and CEO said the company believes that “one day, the U.S. will be one of the most important cannabis markets in the world” but that Cronos’ “resources are best spent on staying laser-focused on becoming cash flow positive by driving cost savings and process efficiencies” for its “borderless adult-use products.”  

“We have the best balance sheet in the cannabis industry, with $836 million in cash and short-term investments and zero debt as of March 31, 2023. Achieving our goal to generate positive cash flow in 2024 will advance our industry-leading cash balance and put us in the best position to win in the U.S. once regulatory conditions change.” — Gorenstein in a statement 

Cronos also announced that starting in the second quarter of the year it intends to report its financial results under one consolidated segment and will no longer report the U.S. and rest of world as separate segments. The firm is also increasing its previously announced 2023 operating expense savings target from a range of $10 to $20 million to a new range of $20 to $25 million, partially due to its decision to wind down and exit its existing U.S. operations. 

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Harrison Bard & Fredrik Rading: Custom-Branded Cannabis Pre-Rolls

6/01/2023

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The humble pre-roll is perhaps the most approachable and ubiquitous consumer product in the cannabis industry — when made properly and with high-quality ingredients, pre-rolls can be the perfect treat for seasoned consumers and rookies alike.

In this written Q&A, Harrison Bard and Fredrik Rading, the co-founders of Custom Cones USA, discuss the business advantages of offering pre-rolls, the evolution of pre-roll technology, and misconceptions about the product offering. The interview also covers consumer demographics for preroll purchases, Harrison and Fredrik’s predictions for the future of the pre-rolls industry, and more!

Scroll down to read the full interview.

Ganjapreneur: For cannabis producers, processors, and vertically integrated businesses, what are some of the benefits of offering pre-rolls as a product line?

Harrison Bard (HB): Vertically integrated companies have the ability to earn higher margins, as long as they are able to operate efficiently. Based on our research conducted with Headset, we found that house brands typically earn between 5%-9% higher margins, with Colorado house brands earning up to 12.7% higher margins so far in 2023.

Fredrik Rading (FR): Pre-rolls in general produce higher margins compared to other product categories due to their low production costs. Vertically integrated operators have the ability to earn even higher margins by cutting out the middleman and running more in-store promotions on pre-rolls without hurting their bottom line.

HB: Pre-rolls are one of the most popular add-on items at the point of sale. Headset data tells us that when a customer purchases flower, vape products, edibles, or a beverage, they will add-on a pre-roll 15.5% to 23.3% of the time. In fact, in every one of these product segments, pre-rolls either have the highest attachment rate or are within a single percentage point of the leader. Vertically integrated companies control both the product and the messaging at the point of sale, so they have the ability to really drive sales.

One of the common trends across all state cannabis markets right now is that many producers are struggling financially. Compared to other types of cannabis products, how cost-effective are pre-rolls for manufacturers?

FR: One of the best things about pre-roll production is how inexpensive it is compared to growing flower, making edibles, or extracting concentrates. You don’t need a lot of space or expensive equipment, and you avoid the risks that come with cannabis production. With growing, if one thing goes wrong you can lose an entire harvest. For pre-roll production, you can just buy flower from trusted growers and avoid the stress and added expense. Extraction equipment is very expensive and requires special rooms built to strict codes, and edibles require a commercial kitchen with lots of equipment. A starter kit that includes all the pre-roll machines you need to produce thousands of pre-rolls per shift can be purchased for under $6,000. The only added expense is a table for the equipment to sit on and the pre-rolled cones.

HB: Pre-rolls also have the least amount of price compression in the industry. The Headset data shows average pre-roll prices are down 11% in the US, which is the least of all categories. On the other hand, flower prices are down 24% on average across the country. We know that pre-roll multi-packs further decrease your labor and packaging costs, as you don’t need to individually package each pre-roll. So, from a purely financial standpoint, pre-rolls make the most sense to expand into compared to any other product category.

What are some of the different options that a brand has when venturing into the pre-roll category?

FR: There are so many! Pre-rolls are the most customizable category in the cannabis industry. Brands have the ability to showcase specific cultivars and are presented with a plethora of choices when it comes to the size, shape, paper type, filter type, packaging, and branding of their pre-rolls.

HB: Infused pre-rolls are currently the fastest growing segment in the pre-roll market with an impressive year-over-year growth of 1,426% in Canada and 22% in the US. Multi-packs, mini pre-rolls, hemp blunt wraps, and high-end pre-rolls with glass/wood/ceramic filter tips are also gaining popularity. When you consider that cannabis sales in 2022 were down by -1% in the US and slowed to 7% growth in Canada, it makes the growth in the pre-roll market even more significant.

FR: As pre-rolls become more popular, consumers are looking for new options and producers are trying their best to keep up with demand. The leading pre-roll companies offer multiple lines of pre-rolls in order to reach a larger demographic by offering different price points and smoking experiences.

Do automated pre-roll machines work more efficiently than manual pre-roll loaders? How does a manufacturer know when to make the switch from manual to automated?

HB: We typically recommend thinking about automated pre-roll machines once you are at 50k to 100k pre-rolls sold per month. However, there are a lot of limitations when it comes to using automated pre-roll machines and they are not as easy as just pushing a button and walking away. Compared to making about two to three thousand pre-rolls per 8-hour shift with one tabletop pre-roll machine, you can produce about one to two thousand pre-rolls per hour on an automated machine.

FR: However, automated machines are extremely finnicky and you will need to both grind your cannabis finer than you normally do, as well as dry out your flower to a lower moisture content. If you are not carefully monitoring and controlling the particle size and moisture content of your flower – you are not ready to bring in automation. Also, if you want to use the freshest, stickiest materials, automation is not the way to go.

HB: These machines can make one type of pre-roll exceptionally fast, but it takes time to configure them for a new project. Operators must consider the impact of shutting down for repairs or cleaning, when you have to stop the machine to create a different type of pre-roll, you are losing productivity. The benefit of using smaller, manual filling machines is that they can easily be adjusted, and, if you can have multiple of them, production doesn’t stop when one goes down, needs cleaning, or needs to be adjusted for a different type of pre-roll. There’s now also automation to just infuse the pre-rolls, so you can infuse any type and size of joint, regardless of how it was made.

FR: Also, when you are first setting up your pre-roll brand, you’ll want to experiment with packaging sizes to determine what price points generate the most sales in your market. Automated machines don’t allow you that flexibility, so launching with smaller, table-top pre-roll machines makes sense when starting out, so you can discover and hone in on exactly what your product portfolio will be.

How has the popularity of pre-rolls among consumers changed over the past few years, and what do you foresee for this category over the next 3-5 years?

HB: When the first medical markets started opening, the price of flower was high and producers did not have an easy way to create pre-rolls. Pre-rolls were not as popular amongst consumers, so they unfortunately became a place for producers to put their trim and shake. As markets matured, the price of flower went down and more machines were made that allowed producers to easily create better pre-rolls. This created a situation where the quality of pre-rolls rose, and the price dropped, making pre-roll sales skyrocket.

FR: Pre-rolls used to be the fourth or fifth biggest category, but they are now a strong second to pure flower in Canada and third in the US behind vapes. New pre-roll products are constantly being created, and producers are always looking for new shapes, flavors, papers, and filters to grab the consumers’ attention.

HB: Another interesting point about pre-rolls and consumer preferences is that each state goes through a distinctive product lifecycle for pre-rolls after legalization. During the first 1-2 years, 1-gram 109mm pre-rolls will dominate the market. Since the price of flower in new markets is high, the cost to produce multi-packs results in very high costs for the consumer and producer. As the price of flower and subsequently oil comes down in the next 3-4 years, you’ll begin to see pre-roll multi packs and particularly infused pre-roll multi-packs blossom and take a larger percentage of the market share.

Which consumer demographics tend to purchase pre-rolls the most?

FR: An interesting thing about pre-rolls is that, when it comes to wallet share, they are the most consistent product segment across all age demographics. Whereas other products either show a significant increase or decrease in popularity with each new generation, pre-rolls steadily hover between 12.8% and 14.5% in each.

For example, two of the most popular products for older generations to purchase are flower and edibles, but both of those become noticeably less and less popular with each new generation. Younger generations prefer to spend their money on vape products, so much so that vape products have actually overtaken flower as the biggest category for the Gen Z demographic! You’ll also notice that wellness products like capsules and topicals are more popular with older generations.

HB: These trends in market share make perfect sense. Of course, older generations would be more interested in wellness products, as life tends to get more uncomfortable with age. It also makes sense that vaping would be more popular with the younger crowd, as they highly value convenience and older generations are not as used to the vape format. Pre-rolls break the trend and continue to remain a consistent part of every generation’s purchasing habits, and that is yet another reason why the pre-roll category as a whole continues to grow.

Among diehard connoisseurs, cannabis pre-rolls have occasionally been lampooned for containing mostly shake or low-quality flower. Do you foresee this stereotype being invalidated as more brands invest in higher-quality pre-rolls, or will there always be a division in the market between “cheap” pre-rolls and “high-end” pre-rolls?

FR: As with most things, like coffee, wine, and beer for example, there will always be a cheap $1-$3 option, mid-level options, and higher-end craft options. Right now, there are lots of companies that are completely devoted to making high-quality pre-rolls, but there are also pre-roll companies selling hundreds of thousands of $1-$3 pre-rolls. Like any type of cannabis product, there is always going to be an economically focused selection. In other words, low quality pre-rolls will be a choice instead of the norm.

HB: The division between cheap and high-end pre-rolls will be distinguished by product innovation as more pre-roll producers create infused and non-infused pre-rolls with premium materials like ceramic tips, wood filters, and special paper types that are difficult, if not impossible, for consumers to roll at home. When die-hard consumers, who would otherwise never buy pre-rolls, start to see product innovation and formats they can’t easily roll themselves at an affordable price, pre-rolls will earn even more market share.

What do you think the pre-roll category will look like after federal legalization?

FR: Federal legalization will allow the pre-roll category, and the cannabis industry overall, to function like any other regulated industry. New automated machinery will continue to be invented to make pre-roll production more efficient, and brands will start to consolidate as the market expands across the world. However, craft brands will still thrive, but just like in craft beer, these niche brands will get acquired by and merge with large MSOs and LPs.

HB: I know it’s a nightmare scenario for most cannabis professionals, but federal legalization will probably pave the way for big tobacco to become leaders in the pre-roll industry. They already have billions invested in cannabis, they have all their distribution channels already in place, and they have the resources necessary to impact policy and production. One-way brands can stay ahead of tobacco companies is by continuing to develop customer loyalty through product innovations. Launch creative new products and smoking experiences at a faster rate than a multi-billion dollar operator. It’s not impossible when you have an advantage over knowing the ins and outs of the cannabis industry and are closer to the customer.

Who are some brands that you think are doing an exceptional job in the pre-roll category right now, and why do they stand out?

FR: Jeeter does an excellent job with branding and marketing, quickly becoming the number one pre-roll in California and many other new states. If there is a niche in the pre-roll market, you can bet that Jeeter has a product in that category, like flavored, infused, glass tipped, and mini pre-rolls.

HB: Juicy Joints is a Washington brand that exclusively produces pre-rolls. They focus on keeping prices low and potency levels high. They offer a wide range of flavored and infused pre-rolls, which consumers love. Mixing low prices, high cannabinoid percentages, and flavored products has been a winning formula in the cannabis industry, and they’re doing it really well.

FR: If you are looking for a craft cannabis brand that focuses on producing the best pre-rolls, you can’t go wrong with Fire Bros. As one of the premiere growers in the state of Washington, Fire Bros. has a reputation for making high quality pre-rolls. Their most recent offering is a multi-pack of five pre-rolls that allows you to get either a single cultivar or a variety.

Thank you, Harrison and Fredrik, for answering our questions! Our readers can visit CustomConesUSA.com to get in touch or learn more.

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Florida Supreme Court to Review AG’s Challenge to Cannabis Legalization Ballot Proposal

6/01/2023

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The Florida Supreme Court will review the legal challenge against the state’s upcoming adult-use cannabis ballot proposal brought by state Attorney General Ashley Moody, The Capitolist reports. In a legal filing to the court earlier this month, Moody argued that the “the proposed amendment fails to meet the requirements” of constitutional amendments but did not lay out her arguments.  

According to the Florida Courts’ information system, opponents must file their briefs on or before June 12, and after the deadline, the court will determine whether to conduct oral arguments on the matter. 

The “Adult Personal Use of Marijuana” amendment proposal is backed by Smart & Safe Florida. The group is seeking to put the issue to voters in 2024. The campaign has already collected more than the required number of petition signatures to trigger the state Supreme Court review and is nearing the threshold required to put the issue on 2024 ballots.    

Moody is maintaining a previously-established position from 2019 – the last effort to legalize cannabis in the state which was blocked by the state Supreme Court – and insists that the amendment should not reach the ballot, saying that it violates the state’s single-subject rule on ballot initiatives. 

The proposal would remove criminal liability or civil sanctions for the non-medical use of cannabis and authorize all licensed Medical Marijuana Treatment Centers in the state to produce and sell adult-use cannabis products. 

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Arizona Appeals Court Rules that Some Convictions for Cannabis Sales are Eligible for Expungement

6/01/2023

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The Arizona Court of Appeals on Tuesday ruled that some convictions for cannabis sales are eligible for expungement under the state’s adult-use cannabis legalization law, AZ Mirror reports. In the unanimous opinion, Judge Brian Furuya reversed a previous ruling from a Maricopa County Superior Court judge that denied expungement of a man’s 2014 cannabis sales conviction. The appellate court order forces the trial court to grant the expungement petition.  

The appellate judges concluded that, because transportation of cannabis is now eligible for expungement, and because transportation of cannabis for personal use has not been a crime in Arizona since 1987, voters must have meant to include transportation of cannabis for sales to be eligible for expungement.    

In a statement, Martin Hutchins, lead attorney and program manager for the Reclaim Your Future campaign, said the decision will allow people who have been convicted of cannabis sales “to mitigate the generational impact of their involvement with the criminal legal system, which affects Black and Brown people and people of lower socioeconomic status at disproportionate rates.” 

“Today’s decision is a great embodiment of the will of the Arizona voters who elected to undo the harms caused by the overpolicing of marijuana laws. There are many people who were charged with for-sale offenses before the passage of Prop. 207 even when they had minimal amounts of marijuana because other factors led officers to assume the person was some sort of dealer. The state and the cannabis industry is now making millions on marijuana sales, so it’s fortunate that people who were believed to have committed a sales-related offense can now benefit from expungement.” — Hutchins, in a statement, via AZ Mirror 

The case was brought on behalf of Ethan Sorensen who was arrested in 2014 for possession of about two-thirds of an ounce of cannabis and was charged with felony possession of cannabis for sale and felony possession of drug paraphernalia. As part of a plea agreement, Sorensen pleaded guilty to solicitation to commit possession of cannabis for sale, a felony, which was later reduced to a misdemeanor after he completed his probation.

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New Hampshire Lawmakers Give Up on Effort to Legalize Cannabis Sales Through State-Run System

6/01/2023

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New Hampshire lawmakers on Tuesday gave up on an effort to come to a deal on allowing adult-use cannabis sales under a state-control model that was backed by Gov. Chris Sununu (R), WMUR reports. Sununu had pitched the plan after the state Senate voted 14-10 earlier this month to reject a House-approved legalization bill.

The House Commerce Committee couldn’t agree on how to proceed with a plan to implement the state-control system for cannabis, with a major issue being how the state would treat the medical cannabis operators. 

Cannabis advocates in the state and medical cannabis companies said they wanted more clarity written into the legislation rather than through a bureaucratic rulemaking process. Timothy Egan, of the New Hampshire Cannabis Association, said stakeholders “want to know the rules” before they begin investing in businesses. 

“I don’t think you can create the hopes and dreams of a businessperson on ‘Oh, we’ll get to the rules later.'” — Egan via WMUR 

Earlier this month, after years of opposition to cannabis legalization in the state, Sununu said during an interview with WMUR’s CloseUp that allowing cannabis sales through state-run shops could help “harm reduction” efforts in the state. During the interview, Sununu described cannabis legalization in the state as “probably inevitable in some way or form.” He added that the system would prevent so-called “Marijuana Miles,” which he described as the strings of “pot shop, after pot shop, after pot shop” that have popped up in Massachusetts and Maine.   

Republican House Majority Leader Jason Osborne told WMUR that “Until people are ready to get together and compromise and not demand that their preferred state of the world is the only thing they will accept, we’re not going to get anywhere.” 

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European Cannabis Social Clubs Explained

6/01/2023

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Editor’s note: This contribution was submitted by Michael Sassano, CEO and Chairman of the Board for Somai Pharmaceuticals LTD, a European biotech firm that distributes cannabinoid-based pharmaceuticals throughout the European Union and globally.

As recreational cannabis talks increase all around Europe, the term “social clubs” keeps getting bandied about. The formal understanding is that social clubs are not-for-profit associations that cultivate their own cannabis for their members. Like any private club’s concept, the idea is to bring the illicit market indoors. This mom-and-pop style approach has a mixed bag of interpretations and results associated with it across the European cannabis social club scene.

The Historic Dutch Cannabis Coffee Shop Model

The oldest versions of the European cannabis social club — which is not a social club but an important pre-cursor — are Amsterdam’s cannabis coffee shops. The basic premises are a place to relax with friends and like-minded individuals who enjoy the social aspect of cannabis consumption: A place to consume cannabis where there are drinks, food and/or games — a social experience. Still, even the Netherlands has yet to lead the growing and commercial buying of cannabis down a fully legal pathway, and cannabis products are still frequently bought secretly from home grow-style grey market sellers.

Despite ten legal pilot programs winning licenses almost three years ago, there has not been any success in curbing grey-market sales. One issue is governmental delays; another is that coffee shops worry it will take years to get the quality of genetics smaller growers have worked to perfect for decades; another is that pricing cannot compete with products like Moroccan hash. Whatever the reason, the coffee shop model has contracted over time, going from 730 coffee shops in 2005 to fewer than 500 today.

Unsanctioned Spanish Cannabis Social Club Membership

Barcelona and the Catalonia area have tolerated the largest grey-market social clubs and are similar models to those currently proposed by countries pursuing adult-use cannabis sales. There are roughly 1600 social clubs in Barcelona and Catalonia designed to serve their members. Some are small, and others multistory well-decorated hangout zones. Regardless of the vibe, all products sold are from the grey market with no check on quality standards. To make matters worse, these clubs struggle to pay employees because membership programs have little to no commercial viability. Profit is not even conceivable, and many operators express that the rules must change to survive.

The harsh reality is a similar contraction to that in the Dutch cannabis coffee shops will eventually occur as people struggle to upkeep rent and minimal employee bases to service clients.

Many EU cannabis social club memberships help cover the products’ cultivation and other manufacturing costs.

Malta’s Not-For-Profit Private Cannabis Social Clubs

Proper legal social clubs started in Europe with Malta. The program has been in the works for a few years, and the recent regulations set to accept up to 500 cannabis clubs with many limitations, including that the cannabis club must cultivate cannabis in-house for its members and that consumers can only belong to one club at a time. Legal registration began at the end of February 2023, and applicants can apply to Malta’s Authority for the Responsible Use of Cannabis (ARUC). These “not-for-profit” clubs are, exactly as they sound, private membership clubs that do not inspire significant investments or a viable economic model. In function, it is much like a bar that brews or distills beer or liquor on-premise — albeit one that is not-for-profit — as it allows members to purchase and consume cannabis on the property.

Does Malta’s Cannabis Club Model Make Economic Sense?

Many European cannabis operators question the logic of reducing Maltese quality standards essentially to home-grow status. Others question Malta’s ability to combat the legacy grey market, particularly given the costly alternative of cultivating in-house, the undesirability of operating a nonprofit business, and that it is easier for most consumers to continue buying from the streets.

As seen in the United States and Canadian markets, there is no doubt that the grey market proliferates as decriminalization takes effect. Advancing innovative products like vaporizers and faster-acting formulas from established regulated companies are ways to compete with grey markets directly. For these markets, flower will remain a challenging competitive category because small home growers can provide both low pricing and high-quality care. Additionally, clubs may only appeal to a specific demographic — like older people or professionals who may prefer a corporate product — and leave out others.

Germany Still Debating Social Clubs and Dispensaries

Germany has proposed the broad strokes of something similar to the Maltese cannabis social club model. Although a legislative step forward, there is little enthusiasm for investing in a not-for-profit business. Additionally, it’s dubious how Germany expects to conform to higher standards through small home-grown cultivation.

Questions remain about what will happen to the booming German medical cannabis market. It must conform to the highest European Union Good Manufacturing Practice (EU-GMP) pharmaceutical standards that require pharmacies to sell magistral preparations only. There is already a massive need for more institutional grower quality assurance. The general belief is that smaller growers with little regulation can cater to craft growers better than standardized, larger-scale, regulated growers. Market observers project that flower may be sold in social clubs while extracts remain medicinally distributed. As a second program pillar, Germany has proposed U.S. and Canadian-style dispensaries. Again, it is still being determined if Germany will be part of a medical program that allows access to the higher-standard global products, if this, too, becomes a local home-grown market, or other possibilities.

Swiss Social Cannabis Clubs in Early Stages

Switzerland has already chosen and started its ten Zurich-based social clubs with the same not-for-profit membership model as other European countries. The program is attached to the University of Zurich to monitor the progress as a medical experiment. This medical experiment road allows Switzerland to explore recreational-style acceptance through the social club model without infringing on the United Nations medical-approved cannabis standard voted on in December 2020. The Zurich program is already expanding to other regions.

The same questions that plague other European markets remain about the Swiss model’s economic viability and whether it will combat or feed grey markets. Additionally, police and politicians do not have the will and capabilities to enforce punitive measures since the basic premise of decriminalization is that nobody should be arrested for using cannabis.

EU Social Cannabis Clubs: Prioritize Quality Standards

As more countries such as the Czech Republic, Luxembourg and Portugal follow the social club model and movement, there is little doubt that progress is happening. However, tremendous doubts remain about this unproven model’s future success for consumer quality standards, innovation capabilities, or creating a pathway that reduces the legacy grey market.

It is hard to imagine social clubs will be anything more than a slight step forward without the potential to generate the capital required to achieve the goals European governments envisioned. Still, this is one step in a series of steps, and while politicians aren’t necessarily all-in on cannabis reform currently, time has a way of enabling progress.

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Illinois Budget Bill Would Decouple State Tax Laws from IRS Code 280E

5/31/2023

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Illinois’ budget bill includes provisions that eliminate the state’s conformity with Internal Revenue Service (IRS) Code 280E which will allow state-licensed cannabis businesses to take some normal business deductions, according to a report from Tenth Amendment Center. Section 280E prohibits businesses from deducting otherwise ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the federal Controlled Substances Act, and applies to cannabusinesses in states that have legalized cannabis. 

The bill also includes language to direct funding to a cannabis development fund and extend the deadline for conditional cannabis business licensees to find a storefront. 

The budget bill was approved this week by both chambers of the Illinois legislature and Gov. J.B. Pritzker (D) is expected to sign it into law. 

Earlier this month, New Jersey Gov. Phil Murphy (D) signed a standalone bill to allow the state’s cannabis companies to deduct normal, management-related business expenses from their taxes.  

Minnesota’s newly-signed adult-use cannabis law also decouples the state’s tax regime from IRS Code 280E. 

In a National Cannabis Industry Association policy paper, Henry Wykowski, a California attorney who works with cannabis clients on tax issues, said that “Section 280E de-incentivizes people from filing tax returns” and “penalizes people who are trying to be transparent and operate within the law.” 

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