Report: 52% of Cannabis Consumers in Adult-Use States Primarily Use Dispensaries

5/24/2023

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Slightly more than half – 52% – of cannabis consumers in adult-use markets use dispensaries as their primary source of cannabis products, according to a report released last week by New Frontier Data. Thirty-seven percent of cannabis consumers in medical-only states primarily get their cannabis from dispensaries, along with 29% of those in states where cannabis is illegal for any purpose, the report says. 

Just 16% of respondents in adult-use states get their cannabis primarily from a friend, along with 26% of cannabis consumers in medical-only states, and 31% of those who live in a state where cannabis remains outlawed.  

Another 17% of respondents living in adult-use states said they primarily used delivery services, along with 14% of those in medical-only states, and 12% who live in an illicit state.

Only 6% of respondents who live in a legal state rely primarily on a “dealer,” along with 12% of those that live in a medical-only state, and 17% of those who live in a state where cannabis is illegal.

The use of dispensaries among all cannabis consumers in 2023 rose 9% from the previous New Frontier report examining where individuals were making their purchases. The overall percentage (29%) of those getting their cannabis from friends and family remained unchanged, while the use of delivery declined from 18% in 2022 to 15% this year, while the use of dealers also fell 3% from 13% to 10%, according to the report. 

The report notes that 74% of the total U.S. population currently lives in a state with either adult or medical use cannabis access.    

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California Cannabis Taxes Reach $216M During Q1; Down About $32M from 2022 Q4

5/24/2023

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California cannabis taxes topped $216 million during the first quarter of the year, according to California Department of Tax and Fee Administration data outlined by KTLA. The total is down about $32 million from quarter four of last year when the state collected $248.5 million in cannabis taxes. 

The reduction can be attributed, in part, to the state ending the imposition of a cannabis cultivation tax in July 2022. The quarter-one total also does not include outstanding tax returns or returns that are still being processed and only reflect the tax revenue paid to the state; many cities and counties have their own additional fees and taxes that are collected at the local level. 

Falling state tax revenues are not unique to California, however, as a recent Marijuana Policy Project (MPP) report found cannabis tax revenues in the U.S. declined from $3.867 billion in 2021 to $3.775 billion in 2022. The MPP suggests the decrease is due to falling cannabis tax revenues in the six states that first legalized cannabis for adult use.  

In all, California — which was the fifth state in the U.S. to pass adult-use cannabis legalization — has collected nearly $5 billion in total cannabis tax revenues since the reforms took effect there in 2018.

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DEA Seeking to Add Delta-8 THC to Controlled Substances List

5/23/2023

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The U.S. Drug Enforcement Administration (DEA) appears to back considering synthetically-derived cannabinoids that contain THC, such as delta-8 THC, as controlled substances under federal law, according to an agency conference presentation dated May 4.  

Responding to a control status inquiry, the DEA claims that “If the product contains any quantity of synthetic [THC], it is controlled in schedule I of the [Controlled Substances Act] unless it is specifically excepted or listed in another schedule [of] The Agricultural Improvement Act (AIA) of 2018. 

The 2018 AIA is better known as the 2018 Farm Bill which allowed for states to implement their own hemp programs, and their own rules, which led to an increase in hemp-derived cannabis products, including synthetic THC products. 

In the presentation, the DEA suggests that “consumers may have a false sense of safety and legality, as delta-8 THC products may be labeled as ‘hemp,’ which consumers may not associate with psychoactive ingredients and negative outcomes.”   

In the document, the agency said it is planning a proposed rule to set THC limits in hemp products at less than 1%, aligning the products with others exempted in the AIA.  

The DEA notes that 14 states have already banned delta-8 THC products, while two others regulate delta-8 THC sales. 

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Report: Adult-Use Cannabis Tax Revenues Decreased from 2021-22

5/23/2023

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Adult-use cannabis tax revenues in the U.S. declined slightly from 2021 to 2022 from $3.867 billion to $3.775 billion, according to a Marijuana Policy Project (MPP) report. It marks the first time the overall revenues have decreased since the first states legalized cannabis for adult use in 2014. 

The decrease is likely due to falling tax revenues in the six states “with the most mature legalization laws.” States with more recent adult-use legalization programs generated more tax revenue in 2022 than in 2021, the report says. 

“Reasons for declining tax revenue include the widespread availability of intoxicating synthetic cannabinoids made from hemp, which are largely unregulated and not subjected to cannabis excise taxes; lower prices in several states due to oversupply; sales beginning in additional states — reducing demand from visitors in more mature states; consumers having less disposable income due to inflation; and — in California — the state reducing the tax rate to make legal cannabis more competitive. Cannabis businesses also face significant challenges due to ongoing federal prohibition, which drives up costs of rent, banking, and almost everything else, and results in an enormous federal tax burden. Those burdens do not apply to intoxicating cannabinoids derived from hemp.” — MPP, “Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use”  

Andrew Livingston, Vicente LLP director of economics and research, added that the COVID-19 pandemic also played a role in the decreased revenues as cannabis sales spiked during pandemic-related lockdown orders. 

“People could not spend their money going to concerts, going out to dinner, or vacation travel. So many people increased their consumption of consumer packaged goods,” Livingston said in the report. “Cannabis was a product that could still be purchased and made the difficulty of staying at home for months on end watching TV shows and movies a bit more enjoyable.” 

In all, since 2014, adult-use cannabis tax revenues have topped $15.115 billion. 

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California Eradicates More Cannabis During Q1 2023 Than Previous Quarter Despite Serving Fewer Warrants

5/23/2023

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California’s Unified Cannabis Enforcement Taskforce (UCETF) during the first quarter of this year seized more than $52 million in unlicensed cannabis and cannabis products and eradicated 43% more illegally grown plants (52,529) than the previous quarter (29,687) despite serving 30% fewer search warrants.

During the quarter, which ran from January 1 to March 30, the UCETF seized 31,912 pounds of cannabis. In all, the taskforce seized $52,644,200 worth of cannabis and cannabis products throughout the quarter.

In a press release, Bill Jones, chief of the Law Enforcement Division for the Department of Cannabis Control, said the results speak to the UCETF’s “effectiveness and will help support the legal cannabis market.”

“As the DCC Law Enforcement Division focuses on illegal indoor cultivations, unlicensed dispensaries, and unlicensed manufacturing and distribution operations, the multi-agency, cross-jurisdictional approach of UCETF allows us to leverage the expertise of each participating department to disrupt a broader scope of illegal businesses.” — Jones in a statement

The UCETF also seized 87% more cash in the first quarter ($95,646) compared to the previous quarter (12,602). The operations uncovered fewer firearms – four total – than the previous quarter (9).

Since 2022, UCETF has seized $84,652,875 in unlicensed cannabis through the serving of 51 search warrants, eradicating 82,216 plants and seizing 13 firearms.

The taskforce is co-chaired by the Department of Cannabis Control (DCC) and the California Department of Fish and Wildlife (CDFW) and coordinated by the Homeland Security Division of Cal Office of Emergency Services.

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NECANN to Produce Connecticut’s First Cannabis Industry Convention

5/22/2023

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Cannabis entrepreneurs, executives, and marketers are invited to attend the NECANN Connecticut Cannabis & Hemp Convention to be held from May 20-21, 2023 at the XL Center in Hartford.

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 Connecticut will focus on businesses and products serving the emerging cannabis industry. A great substitute to the generic national canna-convention franchises, NECANN Connecticut 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 with providing attendees an opportunity to learn about the cannabis industry.

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

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

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Minnesota Legislature Passes Cannabis Legalization Bill

5/22/2023

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The Minnesota Senate on Saturday passed a bill to legalize cannabis in the state, moving it to the desk of Gov. Tim Walz (D) who has indicated he would sign it into law, the Associated Press reports. Once signed by Walz, Minnesotans aged 21-and-older will be allowed to possess, consume, and grow cannabis at home beginning August 1. 

The bill passed 34-32 on a party-line vote.   

The bill includes a 10% excise tax on sales on top of the state’s standard sales tax. The legislation will allow adults to possess up to 2 pounds in their homes – the highest personal possession limits allowed by a cannabis legalization law in the U.S. The bill caps public possession of flower at 2 ounces, 800 milligrams of edibles, and 8 grams of concentrates. 

The legislation also includes automatic expungement provisions for misdemeanor or petty misdemeanor cannabis possession. The Bureau of Criminal Apprehension has estimated it will take until August of next year to process eligible charges. 

Minnesota Democrats have been pushing to pass the reforms for years but took full control of the state government following the 2022 elections.

Once the bill is signed by Walz, Minnesota will become the 23rd state to legalize cannabis.

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Nebraska Advocates Launch Medical Cannabis Legalization Ballot Initiative Campaign

5/22/2023

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Advocates in Nebraska on Thursday filed paperwork to begin a petition drive to get a medical cannabis legalization question in 2024 ballots, the Nebraska Examiner reports. Nebraskans for Medical Marijuana have previously unsuccessfully attempted to get the issue to voters but their most recent bid – for 2022 – failed to garner enough signatures.  

In 2020, a medical cannabis initiative did qualify for the ballot but was thrown out by the state Supreme Court that ruled it violated the state’s “single subject” rule for ballot initiatives. The renewed effort consists of two petitions – one to set up the doctor-patient system and one to regulate the industry. 

Crista Eggers, a spokeswoman for the group, told the Examiner that the effort is starting earlier this year than their previous effort as they hope to gather the more than 100,000 signatures required. 

“We have no choice but to keep petitioning our government. The Legislature refuses to act despite the will of over 80% of Nebraskans, from all parties, regions, ages, etc., supporting this.” — Eggers via the Nebraska Examiner 

In 2021, a medical cannabis legalization bill came within two votes of overcoming a filibuster and being approved by lawmakers. A bill introduced this year in the state Senate has not advanced out of committee.  

Advocates in Nebraska have pushed for the reforms over the last eight years but have not been able to get support from a majority of lawmakers.  

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Pennsylvania Bill Would Protect Cannabis Patients from DUI Just for Testing Positive for Cannabis

5/22/2023

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A bill proposed in the Pennsylvania House last week would protect medical cannabis patients from being charged with driving under the influence charges simply for testing positive for THC, Capitol Wire reports. The measure only covers Pennsylvania-registered medical cannabis patients and does not protect drivers who ate impaired by cannabis whether they are medical cannabis patients or not. 

In a cosponsor memo, state Reps Chris Rabb (D) and Aaron Kaufer (R), said medical cannabis patients “regularly” contact their offices “concerned that state law makes it illegal for them to drive.” 

“In 2016, the PA General Assembly voted to legalize medicinal use of cannabis. Sadly, the legislature failed to provide these patients the same privileges afforded to others who have legal prescriptions for a scheduled medication.” — Rabb and Kaufer, in the memo, via Capitol Wire 

Pennsylvania is one of only a few states with zero tolerance for driving under the influence of controlled substances; 33 states, including those with no legal access to cannabis, require proof of actual impairment, the report says. 

Similar legislation was introduced last year but did not move out of the House Transportation Committee. The Senate Transportation Committee last year approved a bill that aimed to resolve the conflict between state DUI law and medical cannabis law but the legislation did not get put up to a vote by the chamber.  

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Minnesota House Approves Compromise Cannabis Legalization Bill

5/19/2023

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The Minnesota House on Thursday voted 73-57 to legalize cannabis for adult use in the state, the Star Tribune reports. The bill allows Minnesotans 21-and-older to buy up to 2 ounces of flower, 8 grams of concentrate, and 800 milligrams worth of edible products at a time and possess the same amounts in public. Minnesotans could also grow up to eight cannabis plants, with no more than four flowering.

Prior to the vote, State Rep. Zack Stephenson (D) said “The day has finally arrived.”

“Today is the day that we are going to vote here in the House for the last time to legalize cannabis and bring the change that many Minnesotans have wanted for a very long time.” — Stephenson via the Star Tribune

The bill was a compromise between versions already passed by the House and Senate. The bill includes a 10% tax on sales and also sets possession limits in homes at 2 pounds – the highest among states that have approved the reforms. The measure also creates an Office of Cannabis Management which would oversee licensing of medical, adult-use, and hemp-derived products.

The measure also includes automatic expungement of misdemeanor cannabis convictions and establishes a committee to consider expungement of felony-level cannabis crimes.

If approved by the Senate and signed by Gov. Tim Walz (D) – who has promised to give the reforms final approval – cannabis possession and home cultivation would be legal on August 1.

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Report: Post Accident Workforce Drug Test Positives for Cannabis Reached 25-Year High in 2022

5/19/2023

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The percentage of employees in the U.S. workforce testing positing for cannabis following an on-the-job accident increased to its highest level in 25 years in 2022, according to a new analysis by Quest Diagnostics. In 2022, post-accident cannabis positivity of urine drug tests in the U.S. workforce was 7.3%, up from 6.7% in 2021.

The new peak follows a steady increase in post-accident cannabis positivity every year from 2012 to 2022. During that 10-year time frame, post-accident cannabis positivity increased 204.2%; from 2002 to 2009, post-accident cannabis positivity declined, according to Quest’s analysis.

In a press release, Keith Ward, general manager and vice president for employer solutions at Quest, said the “historic rise seems to correspond with sharp increases in positivity for marijuana in both pre-employment and post-accident drug tests, suggesting that changing societal attitudes about marijuana may be impacting workplace behaviors and putting colleagues at risk.”

In 2022, the combined U.S. workforce urine positivity for all drugs was 4.6% – the highest level in two decades, the report says. The 2021 and 2022 positivity rates were the highest since 2001, up more than 30% from an all-time low in 2010-2012. Ward noted that the post-accident drug screenings also found an increase in amphetamines which he called “notable, given the addictive potential and health risks associated with this class of drugs.”

The analysis found that cannabis positivity rates were higher in states that allow adult and medical cannabis use. In the general U.S. workforce, cannabis positivity increased 10.3% year-over-year (3.9% in 2021 versus 4.3% in 2022), while positivity increased 11.8% (5.1% in 2021 versus 5.7% in 2022) in states that permit adult cannabis use and 8.3% (3.6% in 2021 versus 3.9% in 2022) in states that allow medical cannabis use. In states in which neither recreational nor medical marijuana is legal, marijuana positivity increased 3.3% (3.0% in 2021 versus 3.1% in 2022) year-over-year and 14.8% over five years (2.7% in 2018 versus 3.1% in 2022).

In the federally mandated safety-sensitive workforce – positions that are usually not included when states pass laws barring using a positive cannabis test to disqualify a person from employment – cannabis positivity increased nationally 14% year-over-year (0.86% in 2021 versus 0.98% in 2022), including 17% (0.94% in 2021 versus 1.1% in 2022) in states where adult use is legal, and 5.9% (0.85% in 2021 versus 0.90% in 2022) in states in which medical cannabis is legal, according to the analysis.

In states in which neither adult nor medical use is legal, cannabis positivity increased 12.7% (0.79% in 2021 versus 0.89% in 2022) year over year and 1.1% over five years (0.88% in 2018 versus 0.89% in 2022).

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New Hampshire Senate Votes to Study Legal Cannabis Sales Through State-Run Shops

5/19/2023

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The New Hampshire Senate on Thursday voted to create a commission to study cannabis legalization after Gov. Chris Sununu (R) said he would back the reforms if sales occurred in state-run dispensaries, InDepthNH reports. The amendment to create the commission was included in a bill to expand the definition of who can enroll in the state’s medical cannabis program and passed the chamber on a voice vote. 

The New Hampshire House last month passed a broad cannabis legalization bill but the Senate rejected the measure last week. The day after the Senate vote, Sununu appeared on WMUR’s CloseUp and said he would sign a cannabis legalization bill that includes a sales structure through state-run shops, similar to how the state sells liquor. In the interview, he described cannabis legalization in New Hampshire as “probably inevitable in some way or form.” 

The commission would be tasked with studying the feasibility of establishing a state-controlled system to sell cannabis. It would explore how to keep cannabis away from kids and out of schools; how to control marketing and messaging cannabis sales; how to allow local control; and how to reduce multi-drug use. 

The commission would also seek to prevent so-called “marijuana miles,” which Sununu blasted in the interview with CloseUp as “pot shop, after pot shop, after pot shop,” in Maine and Massachusetts. 

The commission would also determine how to allow adult-use sales and not impose additional taxes.    

The first meeting of the commission would be held within 45 days of the bill’s passage and a final report would be due by December 1, 2023. 

The measure still requires House approval before moving to Sununu for final approval. 

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Judge Tosses Humboldt Class Action Lawsuit Against County’s Cannabis Cultivation Fines

5/18/2023

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A U.S. magistrate judge has thrown out the class action lawsuit filed by landowners in Humboldt County, California who claimed the county fined them hundreds of thousands of dollars – without an investigation or opportunity to defend themselves – for allegedly cultivating cannabis without a permit, Courthouse News reports. The five landowners filed the lawsuit in October 2022. U.S. Magistrate Judge Robert M. Illman dismissed the lawsuit in full and did not give the plaintiffs leave to amend.

“Despite the FAC’s length, overlooking its irrelevant content, and its conclusory and implausible assertions – and in light of the materials of which the court is taking judicial notice – it becomes clear that the underlying facts do not, and simply can not, entitle these plaintiffs to any relief against these defendants.” — Illman, in the order, via Courthouse News

The plaintiffs claimed after California legalized cannabis for adult use, the county created an abatement program to fine landowners that have “committed traditional nuisances and permitting violations” to grow cannabis without a permit. However, the plaintiffs argued the county blindly correlates code violations with the assumption of cannabis cultivation which exponentially increases the fines from initial violations. The plaintiffs also claimed that the county based some of its allegations of illegal cannabis farming off “crude arial images” without probable cause.

One of the plaintiffs claimed he was fined $90,000 for growing cannabis but he was actually growing vegetables for his restaurant. Illman ruled that the county had actually dropped most of his fines about a week before the class action lawsuit was filed.

In the dismissal order, Illman used the term “implausible” to describe the plaintiff’s claims about 20 times. In an interview with Courthouse News, Jared McClain, the attorney for the plaintiffs, of the Institute of Justice, argued that the lawsuit “didn’t allege anything” that they “weren’t going to be able to prove a trial” and that the county “doesn’t even deny” a lot of what is alleged in the complaint.

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Oregon Cannabis Businesses Must Now Prove Tax Compliance Before Licensing Process

5/18/2023

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Oregon Gov. Tina Kotek (D) on Tuesday announced that anyone seeking to open a cannabis dispensary in the state will be required to prove they’ve paid their state taxes before receiving a license or having an existing license renewed. 

Data from state Department of Revenue shows that cannabis retailers have a higher non-compliance rate in Oregon for payment of taxes (9%) than other tax programs administered by the agency (3%). The Oregon Liquor and Cannabis Commission (OLCC) has indicated that there are approximately 823 licensees that would need to obtain the tax compliance certificate in any given year. 

The change comes following reports that embattled cannabis company La Mota was allowed to expand across the state while owing more than $1.5 million in unpaid state taxes. La Mota is the company that had employed former Secretary of State Shemia Fagan as a business consultant. Fagan ultimately quit the consulting gig and resigned as secretary of state.  

In a statement, Kotek said the new rules “will help ensure that all businesses are operating under the same rules and not getting any competitive advantage if they haven’t paid their taxes.”  

“I’m grateful to the current leadership at the OLCC and the Department of Revenue for working collaboratively to resolve this long-standing need for equivalent tax compliance across cannabis and liquor sectors.” — Kotek in a press release   

Kotek is one of two government officials, along with Fagan, named in a letter sent to U.S. Attorney for Oregon Natalie K. Wight by two state lawmakers who are asking Wight to open a formal investigation into corruption in the state capitol related to campaign donations from cannabis operators in the state. The letter offers no evidence of wrongdoing by the governor or others named in the report but claims the officials accepted “large cash (campaign) donations” in excess of $10,000 from “federally illegal drug operations.”   

In a statement, Craig Prins, OLCC interim executive director, described Oregon’s cannabis industry as “important to the state’s economy.”  

“…The sales tax it generates is vital to the state’s budget,” Prins said. “That’s why it’s critically important for us to get this group of licensees into compliance and paying their fair share.” 

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SEC Fines Hemp Company $50K for Selling Unregistered Securities

5/18/2023

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A hemp company is among 10 microcap companies charged by the U.S. Securities and Exchange Commission (SEC) for offering and selling securities in unregistered offerings that failed to comply with Regulation A, which allows a limited exemption from registration under the Securities Act so that companies can raise money from the public as long as they meet specific requirements. 

Hemp Naturals Inc., a Delaware corporation based in Sunny Isles Beach, Florida, agreed to pay a $50,000 civil penalty and to cease and desist from violations of Section 5 of the Securities Act.  

According to the SEC, between December 2019 and May 2022, each of the 10 companies obtained qualification from the agency for their securities offerings using Regulation A, but they subsequently made one or more significant changes to their offerings without meeting the requirements of the exemption. The SEC found that such changes included improperly increasing the number of shares offered, improperly increasing or decreasing the price of shares offered, failing to file updated financial statements at least annually for ongoing offerings, engaging in prohibited at-market offerings or engaging in prohibited delayed offerings.  

In a press release, Daniel R. Gregus, director of the SEC’s Chicago Regional Office, said that “Companies that choose to benefit from Regulation A as a cost-effective way to raise capital must meet its requirements.”

“These actions stand as a reminder that companies which choose to circumvent Regulation A’s requirements by engaging in prohibited conduct or making fundamental changes to their offerings without qualification will face action by the SEC.” — Gregus in a statement  

According to the SEC complaint against Hemp Naturals, the company’s business plan involves selling branded CBD products and its common stock trades on the OTC Link operated by OTC Markets Group Inc. Hemp Naturals’ stock was registered under the Securities Exchange Act from February 2016 until April 2019.  

The SEC found the company sold 830 million shares, raising more than $3 million under Regulation A, despite the offerings not falling under Regulation A guidelines. 

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Sound Community Bank Offers Specialty Money Market for Cannabis Industry

5/17/2023

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May 17, 2023, Seattle, WA — Sound Community Bank’s Specialty Money Market account is now exclusively available to cannabis growers, distributors, dispensaries, and other ancillary businesses. Depositors can maximize returns with this competitive, tiered rates money market account. Visit soundcb.com/cannabis for more information.

“In this continuously changing industry, it is critical to work with knowledgeable bankers. Our seasoned bankers believe in getting to know our clients, understanding their business, and supporting entrepreneurship,” said Laurie Stewart, President & CEO of Sound Community Bank.

About Sound Community Bank
Established in 1953, Sound Community Bank is a full-service bank providing personal and business banking services in communities across the greater Puget Sound region. The Seattle-based company operates banking offices in King, Pierce, Snohomish, Jefferson, and Clallam Counties and on the web at www.soundcb.com.

For Media inquiries, please contact:
Deena Rataezyk
Vice President, Director of Marketing & Communications
deena.rataezyk@soundcb.com
(206) 204-8169

# # #

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California Cannabis Companies Form Group to Address Industry’s ‘Culture of Nonpayment’

5/17/2023

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A cohort of cannabis industry operators on Tuesday announced a coalition that seeks to raise awareness and offer solutions to severe credit issues that threaten the industry’s stability. The Financial Stability for California Cannabis (FSCC) includes Kiva Sales & Service, Lowell Farms, Nabis Sunderstorm and other key players in California’s cannabis industry which they say comprise 45% of the state’s industry by sales volume.   

In a statement, Vince Ning, co-founder and co-CEO of Nabis, said “Collections and outstanding debt related to unpaid invoices are key challenges facing cannabis operators of all types across the state, from cultivators to manufacturers, vertical brands to wholesalers, and everyone in between.”  

“Advocacy for solutions is largely an issue siloed to individual operators or specific sectors of the supply chain, which is why we are proud to be an instrumental part of the mission of the FSCC to demonstrate a more holistic, collective representation of the severity of the debt crisis across all levels of the supply chain, and work toward a more financially stable cannabis market.” — Ning in a press release 

The group said it supports AB 776, “The Cannabis Credit Protection Act,” a California bill that aims to establish regulatory oversight around credit terms across the cannabis supply chain. 

In a May 15 letter to state Assemblymember Chris Holden, the chair of the Assembly Committee on Appropriations, the coalition said “California’s cannabis industry does not have the same oversight of sales made on terms that is afforded to other, similar consumer industries.”  

“As a result, terms of sale are not honored by some cannabis businesses, with late payment of invoices being commonplace across the supply chain and limited pathways of legal recourse for operators that owed money,” the letter states. “In some rare instances, licensees refuse to pay invoices altogether. This ‘culture of nonpayment’ that has emerged in California’s cannabis market leaves businesses across the entire industry and supply chain – as well as ancillary businesses that support legal cannabis operators – with outstanding balances and unpaid invoices sometimes totaling hundreds of thousands of dollars.” 

In a statement, Assemblymember Phil Ting (D), author of AB 766, said federal restrictions have left California cannabis operators “with limited options for financing and capital” and “has led to a severe debt bubble across the supply chain from cultivators all the way through to the retailers.” 

Ting added that the bill “aims to bring much needed financial stability to California’s industry, while also ensuring that operators receive payment for goods and services in a timely manner.” 

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New Mexico Adds Insomnia to Medical Cannabis Qualifying Conditions List

5/17/2023

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The New Mexico Department of Health on Tuesday added insomnia to the state’s medical cannabis program. Patients with insomnia will be allowed to enroll in the program beginning June 1. 

In his written decision approving the Medical Cannabis Program (MCP) Advisory Board’s petition, Department of Health Secretary Patrick M. Allen said “From a health equity perspective, medical cannabis can offer a legal alternative to the expensive medications sometimes utilized by those suffering with insomnia.”

“Even though patients may access cannabis without a medical cannabis card through the adult use program, by including insomnia in the list of qualifying conditions, patients would have increased opportunity to discuss with their medical provider how cannabis can be used to impact their insomnia and help them sleep better.” — Allen, in the decision, via a press release

Insomnia is the 30th condition approved for the state’s medical cannabis program. In December 2022, the state added anxiety to its qualifying condition for medical cannabis.

According to the National Institutes of Health, one in three adults have insomnia symptoms worldwide and about 10% are diagnosed with insomnia.

A 2016 study published by the National Library of Medicine concluded that “The consequences of insomnia are significant, such as depression, impaired work performance, work-related/motor vehicle accidents, and overall poor quality of life.”

“It is an easy-to-diagnose condition with many self-answerable questionnaires for aid,” the study authors wrote, “yet goes unrecognized in a significant number of patients coming to the outpatient department with other comorbid conditions.”

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New Mexico Supreme Court Hears Arguments on Using Alcohol Roadside Sobriety Tests to Test Cannabis Impairment

5/17/2023

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The New Mexico Supreme Court on Tuesday heard arguments about whether roadside impairment testing for alcohol can be used to check for cannabis impairment, the Santa Fe New Mexican reports. The defendant, Nina Luna, was convicted of driving under the influence and speeding in 2018 after a state police officer pulled her over in Albuquerque and determined she was driving while impaired by cannabis. 

Following the traffic stop, the officer described in his report that Luna’s eyes were red and watery and she had slurred speech and that he detected a strong odor of cannabis coming from inside her vehicle. According to the officer’s report, Luna admitted having smoked “a bowl” of cannabis several hours before driving and denied having consumed any alcohol. The officer subjected her to field sobriety tests designed to confirm alcohol impairment and arrested her after she performed poorly on some of them, the report says.

Her attorney argued to the Bernalillo County Metro Court that the officer’s testimony should be suppressed, in part because he was not a certified drug-recognition expert; the motion was denied in Metro Court and the state District Court upheld her conviction, determining “a reasonable fact-finder could conclude … [Luna] was influenced by drugs to such a degree that she could not safely operate a motor vehicle.” In 2021, the state Court of Appeals affirmed the District Court ruling.  

Luna’s attorney, Luz Valverde, argued to the Supreme Court that officers should be allowed to testify about their observations as laypeople, but should not be allowed to make statements indicating a person passed or failed a certain test or link things such as pupil size to cannabis impairment without specific training. In an email to the New Mexican, she described the case as “more about how police should testify in court than … about how they investigate suspected intoxicated drivers.” 

“New Mexico has special Drug Recognition Expert officers who are specially trained in spotting drug-impaired drivers,” she said in the email. “They are the ones who are best suited to testify about drug impairment based on specialized training, not field officers using alcohol impairment tests.” 

The court did not immediately issue a ruling. 

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Florida AG Likely to Contest Upcoming Adult-Use Cannabis Ballot Proposal

5/16/2023

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Florida’s attorney general on Monday submitted the proposed adult-use cannabis legalization measure to the state Supreme Court and seemingly signaled that she would argue the proposal doesn’t meet legal requirements to be put on ballots, WOKV reports. In the filing, Attorney General Ashley Moody wrote that she believes “the proposed amendment fails to meet the requirements” and that she planned to “present an additional argument through a briefing at the appropriate time.” 

The legalization campaign, Smart & Safe Florida, has 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.  

The Supreme Court review determines whether proposed constitutional amendments are limited to single subjects and whether the proposed ballot language is clear. 

The proposal, the “Adult Personal Use of Marijuana,” would allow people 21 or older “to possess, purchase, or use marijuana products and marijuana accessories for non-medical personal consumption by smoking, ingestion, or otherwise.” 

As of Monday, the campaign has submitted 786,747 validated signatures to get the issue on ballots next year, according to the Florida Division of Elections website. The campaign needs at least 891,523 valid signatures to qualify for ballots.   

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Lobbyist Pleads Guilty to Federal Bribery Charges in Michigan Medical Cannabis Scheme

5/16/2023

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A second lobbyist last week pleaded guilty in the bribery scheme involving the former head of the Michigan medical cannabis licensing board, the Detroit Free Press reports. Brian Pearce pleaded guilty to a federal conspiracy to commit bribery charge for his role in funneling $42,000 in bribes to former Michigan Medical Marihuana Licensing Agency Chairman Rick Johnson. Johnson, a Republican, is also a former Michigan House Speaker. 

Johnson pled guilty last month to accepting $110,000 in bribes in exchange for industry licenses. John Dawood Dalaly last month also pled guilty to his role in the scheme, admitting that he had hired Johnson’s wife, Jan Johnson, as a consultant for $4,000 a month and she helped him fill out forms that would end up in front of the board that her husband chaired. Dalaly also admitted to providing at least $68,200 in cash and other benefits to Johnson, including two private flights to Canada. 

Businessman Vincent Brown has also pled guilty in the scheme. 

Pierce faces up to five years in prison and a potential fine of $250,000. Federal prosecutors have agreed to consider motioning for a sentencing guideline reduction for Pierce in exchange for his cooperation.  

None of the four men have been sentenced and all four are cooperating with the government. 

U.S. Attorney for the Western District of Michigan Mark Totten has said the investigation into the corruption scheme remains ongoing. 

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Workers at Connecticut Grow Become State’s First Cannabis Industry Employees to Form Union

5/16/2023

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A cannabis grow operation in West Haven, Connecticut on Monday became the first cannabis industry workers in the state to unionize. The 48 Advanced Grow Labs employees formed their union with the United Food and Commercial Workers Union (UFCW) Local 919.  

In a statement, UFCW Local 919 Director of Organizing Emily Sabo said the employees “came together to form their union because they believe in the cannabis industry and they know that forming their union will make their job and the industry better.” 

“We are incredibly proud of the work the Advanced Grow Labs team has done to form their union. They know that unionization is the way for workers to uplift the Connecticut cannabis industry as a whole, and create living wage jobs.” — Sabo in a press release 

Connecticut’s adult-use cannabis law requires all licensees to enter into a Labor Peace Agreement as part of the final license approval.  

UFCW Local 919 President Mark A. Espinosa said the union is “excited to bargain a contract and set the standard for all cannabis workers” in Connecticut. 

“We know there is strength in numbers, and now many workers to come will benefit from the hard work done by these workers at Advanced Grow Labs,” he said in a statement. “We encourage other cannabis workers in this state to join this important movement.” 

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Arizona to Invest $5M Into Psilocybin Research

5/15/2023

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Arizona Gov. Katie Hobbs (D) last week signed the state’s $17 billion budget bill into law; the budget includes about $5 million dedicated to whole-mushroom psilocybin research, the Arizona Mirror reports.

Renowned medical cannabis and psychedelics researcher and principal investigator at the Scottsdale Research Institute Dr. Sue Sisley — who had pushed for the funding — said the $5 million was a good starting point for medical psilocybin trials. Additionally, the funding’s emphasis on whole mushroom research makes it unique from most other studies into the medical efficacy of psilocybin because they typically isolate the chemical from its natural source.

“We’re thrilled that the research on natural mushrooms will finally be able to move forward, so this is a big achievement that finally we’re going to get objective data. This will give us reliable insight into how these mushrooms might help or harm people. We need to learn more about how this works.” — Dr. Sisley, via the Arizona Mirror

The approved budget stipulates that nonprofit and/or university researchers who ultimately receive the grants must prioritize the use of veterans, first responders, frontline healthcare workers, and people from underserved communities as trial participants, the report said.

The funding for psychedelics research was supported by bipartisan state lawmakers including Reps. Kevin Payne (R), Jennifer Longdon (D), and Stacey Travers (D), and Sen. T.J. Shope (R).

“Arizonans, especially veterans, deserve alternatives to dangerous and addictive prescriptions,” Payne said in a statement. “This bill will help.”

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Connecticut Medical Cannabis Sales Decrease for First Time Since Adult-Use Launch

5/15/2023

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Medical cannabis sales in Connecticut in April decreased for the first time since adult-use sales commenced in the state, according to state data outlined by CT Insider. Medical cannabis sales in April totaled $11.4 million, down from $12.6 million in March, but were still higher than adult-use sales in April, which reached $10.2 million.  

Adult-use cannabis sales in Connecticut commenced in January and totaled $5.1 million, while medical cannabis sales reached just over $8 million. In February, adult-use sales were just over $7 million, while medical cannabis sales totaled $11.4 million. In March, adult-use sales climbed to about $9.6 million, with medical sales totaling about $12.6 million. 

The price of medical cannabis since the launch of adult-use sales has remained stable, with an average product price of $35.68 in January, $36.11 in February, $37.06 in March, and $36.51 in April, according to state data. Adult-use prices have declined since the $44.61 average seen during the January market launch. In February, the average price was $41.82; $40.69 in March; and $39.58 in April.    

Despite the strong medical cannabis sales, patient counts are on the decline in the state. In January, there were 48,896 registered medical cannabis patients, compared to 46,048 in April. 

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