Triton College Launches Cannabis Cultivation Course

8/17/2022

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Triton College, based in River Grove, Illinois, has launched a cannabis cultivation course as part of its greenhouse grow operations certificate program, the Wednesday Journal of Oak Park and River Forest reports. The program can be completed in five classes and can be spread over two semesters. 

Triton is among about a dozen community colleges in the state licensed by the Illinois Department of Agriculture and the Illinois Community College Board to offer cannabis courses. The college also offers a dispensary technician certificate program.  

Paul Jensen, associate vice president of academic innovation and workforce education at Triton, told the Journal that “large cannabis companies have been extraordinarily helpful to all the colleges that are growing and that are trying to train people.” 

“When there’s an opportunity for us to participate in a program that will give back to the community, we’re going to jump at the opportunity. We’re very excited to be able to get this license, bring this program here and work with the people in the community.” — Jensen to the Journal 

While colleges are not permitted to cultivate cannabis on campus, students enrolled in the program study plants similar to cannabis, and the college partners with cannabis craft growers which offer students tours of their facilities.

Allowing colleges to launch vocational pilot programs related to cannabis was included in the state’s legalization law. Students must be at least 18-years-old to enroll in cannabis coursework in Illinois.

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Adult-Use Cannabis Sales In New Jersey Reach $80M During First 10 Weeks

8/16/2022

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Adult-use cannabis sales in New Jersey reached nearly $80 million during the first 10 weeks, from April 21 – the first day of sales – through June, according to the state Cannabis Regulatory Commission (CRC). Tax revenues derived from sales totaled $4,649,202 including $219,482 in Social Equity Excise Fees, the agency said.

Jeff Brown, CRC executive director, said New Jersey’s adult-use market is performing as regulators expected “with the current number of dispensaries, the spread of locations, and the high prices.”

“As more cannabis businesses come online, consumers won’t have to travel as far to make purchases, and prices will fall with increased competition. The market will do even better.” — Brown in a press release

Dianna Houenou, chair of the CRC, said the agency is working to get more adult-use businesses licensed and “are issuing awards to start new businesses on their path to operation and look forward to the industry growth we see coming in the near future.”

“New Jerseyans are looking forward to supporting new businesses,” she said, “which will increase sales figures and generate more revenue to be reinvested in our communities.”

Medical cannabis sales increased following the launch of adult-use sales after experiencing a small decline in the first quarter of the year, from $55,838,072 to $59,262,014, which the agency said represents totals “more in line with sales figures” in the last quarter of 2021.

Brown said regulators “are committed to ensuring access for patients,” adding that “the demand for medicinal cannabis continues to be strong.”

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The Pitfalls of Cannabis Operations

8/16/2022

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Operations Ownership

After working directly with Oklahoma’s cannabis industry over the past couple of years, our firm thought it a good idea to pen an article articulating the most common and pressing issues we see in the industry.

Our experience comes from working with many cannabis companies in Oklahoma. Our work and experience is with well over one hundred cannabis companies in all segments of the Oklahoma market: Grow, Processing, Dispensary, Transportation, and Wholesale.

Cannabis operations face many hurdles not common to many other industries. One of the first and most problematic is being a mostly cash business.

Accounting / Cash Only (Mostly)

When cannabis began in Oklahoma, being cash only was not a choice. As banks were slow to open operations to cannabis operations, it was the only option. Even as the banks adapted to service the cannabis industry, it comes at quite a cost (especially when compared to any other business sector), often costing upwards of $1,000 per month, per account.

As banking has come more readily available, most of the clients we see have opted to move cash management and storage to banks. This, in our opinion, is a great move. However, even as banking has become a more popular option for cash storage, nearly all transactions are still conducted in cash. As cash is readily available in the businesses, it is easier to pay cash. Therefore, even as banking becomes available, cash management and receipt tracking are still one of the toughest areas for cannabis operations to manage.

Receipts and Proof of Expense

The largest issue of operating with all or mostly cash is keeping track of expenses. Without a bank or credit card statement, it is IMPERATIVE that you keep receipts! Without receipts, there is no expense (in the eyes of the IRS).

If your company is going to operate on cash, use old-school cash systems!! To ensure you can easily track and verify cash, consider the following procedures:

  • Cash Safe Log
    • All Cash that enters or exits the safe should be logged! Log the Date, Time, Amount In or Out, Person Removing Cash, and Reason for the Cash Move (Deposit from Owner, Deposit from Sales, Paid Joe Bob for 2 Pounds of Cannabis Flower, etc).
  • Register Cash Procedures
    • Beginning Cash should be the same at the start of every shift ($150.00)
      • Cash should be counted by the budtender and the manager, at the same time, and a signed receipt (by both) verifying the beginning balance).
    • Only 1 person can be allowed on a register (if more than one, even a manager, it erases the ability to track missing cash to one particular person).
    • The drawer should be pulled by the manager AND the budtender at the end of the shift, counted and a receipt signed by both parties verifying the ending totals.
    • A deposit should be made for each drawer for all cash in excess of the beginning cash ($150.00). A shift report from the Point of Sale (POS) should show the expected cash from the budtender’s shift, and should match the cash removed from the drawer for deposit, and should be dropped in a tamperproof bag. The drawer, with $150.00, should be placed in the safe or counted by the bud-tender coming on shift to verify it starts at the beginning cash ($150.00).
    • This cycle should be repeated for each drawer used.
    • All cash drops should be picked up and dropped in the safe (and entered in the safe log).
  • Purchase Journal
    • It is a great idea to keep a purchase journal for all cash purchases.
    • Track
      • Person Paid
      • Date
      • Amount
      • Purchase Description
      • Total Paid

As you can see, operating in an all or mostly cash operation requires quite a bit of additional work to ensure:

The Benefits of a Bank Account or Credit Card

The ability to use banking or credit cards for business operations is often taken for granted, by most businesses: most other businesses in the United States have cheap, convenient banking readily available to them wherever they are located.

Banking provides many positive benefits to businesses.

Filing all the Forms

8300 Forms

IRS Form 8300 are forms required for all transactions, in cash, totaling $10,000 or more. A common misconception is that a payment of less than $10,000 followed by an additional payment of less than $10,000 does not have to be reported. This is INCORRECT. (see this article: https://www.irs.gov/businesses/small-businesses-self-employed/irs-form-8300-reference-guide#:~:text=The%20law%20requires%20that%20trades,Escrow%20arrangement%20contributions)

Type of Payments to Report

Trades and businesses must report cash payments received if all of the following criteria are met:

  • The amount of cash is more than $10,000
  • The business receives the cash as:
    • One lump sum of more than $10,000, or
    • Installment payments that cause the total cash received within one year of the initial payment to total more than $10,000, or
    • Previously unreported payments that cause the total cash received within a 12-month period to total more than $10,000
  • The establishment receives the cash in the ordinary course of a trade or business
  • The same agent or buyer provides the cash
  • The business receives the cash in a single transaction or in related transactions

As you can see, any cash installment payment that totals $10,000 within a 12-month period of the first payment must report on form 8300 to the IRS.

Additionally, a new 8300 Form must be filed each time an additional $10,000 cash payment milestone is crossed. In essence, if someone pays you $25,000 in cash in a 12-month period, you would need to file two 8300 forms!

The 8300 form is required to be filed within 15 days of the $10,000 in cumulative payment being received.

Payroll (940 and 941)

All businesses paying employees need to file Federal Payroll Tax Returns. For most businesses, these are 940s (filed annually) and 941s (filed quarterly). Payments for these tax types are on a completely different schedule. Most businesses are required to make payments on a monthly or quarterly basis. The payments are called federal tax deposits, and all businesses are required to make federal tax deposits via the Electronic Federal Tax Payment System (EFTPS).

If a business makes a payment by any means other than EFTPS, even if the payment is made on time, they face a 10% penalty.

Max Freq. of cash payments by tax form (not for tax deposits, only tax due): https://www.irs.gov/payments/frequency-limit-table-by-type-of-tax-payment

How to make cash payments: https://www.irs.gov/payments/pay-your-taxes-with-cash

What to expect when you make a cash payment at in IRS office: https://www.irs.gov/payments/what-to-expect-when-you-pay-cash-at-an-irs-office

Where to make cash payments with retailers (up to $1k per day): https://www.irs.gov/payments/pay-with-cash-at-a-retail-partner

IRS Code – There Isn’t Any!

280E

Ok, prepare yourself. This is 280E!

No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted. (https://www.law.cornell.edu/uscode/text/26/280E)

Yep! That is it! 77 words! The whole of this much talked about “Cannabis Clause” is 77 words. Cannabis isn’t mentioned, but Schedule I and Schedule II drugs are.

Understanding 280E

Section 280E is a provision in the IRS Internal Revenue Code that stipulates any merchant selling goods considered a Schedule I or Schedule II controlled substance is not eligible to file for any tax deductions or tax credits beyond the cost of goods sold (COGS). Cost of goods sold are raw materials and supplies (seeds, clones, and fertilizer), equipment maintenance and repairs, utilities used to grow the cannabis, inspection and testing costs, and labor involved with cleaning, trimming, curing, packaging and supervisory wages. Keeping an accurate record of these expenses will help if you are ever audited and what accountants call Cost Accounting.

Understanding Cost Accounting

Section 471 of IRS Code
IRS Section 471 details how the IRS expects costs to be capitalized (in other words, booked as an asset and charged off as Cost of Goods Sold when sales are made. The good thing about section 471 for cannabis is this moves many costs that are typically booked as Operating Expense to inventory (expenses that are not allowed for Cannabis, thus Cost of Goods Sold; “expenses”/revenue adjustments that are allowed for cannabis).

The issue with section 471 for cannabis companies as this type of account will increase accounting costs.

Most businesses do not conform to GAAP (Generally Accepted Accounting Practices) in the United States. They simply are not required to do so. Cannabis, however, due to having most expenses disallowed, need to account more closely to GAAP than most small businesses, in order to avoid burdensome taxation: taxation that will literally break the bank.

Documentation (Court Case Rulings)

Most of the “rules” we apply to cannabis accounting and taxation today come from court case rulings. There are no “cannabis” rules in the IRS Tax code. Cannabis is never directly mentioned. IRS 280E is as close to mentioning as cannabis gets.

To begin with, this article is a good summary of some of the court cases, minus CHAMPS: (https://www.dopecfo.com/blog/lessons-in-compliance-from-4-notorious-cannabis-court-cases)

In regards to court cases, CHAMPS is a benchmark case for the cannabis industry. In CHAMPS, we learned how the IRS sees cannabis and related companies. CHAMPS most clearly detailed the way in which the IRS will consider a business a non-cannabis entity. CHAMPS involved a medical marijuana dispensary AND a clinic dedicated to helping people with debilitating diseases and conditions. The clinic employed the majority of the staff, had its own revenue stream, and was profitable without the dispensary sales or revenues.

When is my other business NOT a cannabis-taxed business?

In the CHAMPS case, the IRS Tax Court outlined that if a non-cannabis business is not entirely separate (own accounting books, checking accounts, business setup, etc) and cannot turn a profit without direct cannabis income, it IS a cannabis business. (Example, a business owner owns a dispensary and buys the building and puts it in its own company, then leases the building back to their own dispensary, the new “real estate” company is also taxed as cannabis income, as it cannot turn a profit with the income from the dispensary.

If, however, the building is owned by a company that has many rental locations and the real estate business can turn a profit without cannabis-related income, the real estate business is NOT a cannabis-taxed business under those conditions.

The biggest takeaway from Harborside was determining whether it was a single business or multiple separate entities, and how this holds up in the face of 280E. As the court held in CHAMPS, it is allowable to deduce many expenses not allowed under 280E if one is a real “non-trafficking” business. One of the biggest requirements for a “non-trafficking” business is that the activity conducted must be done regularly and consistently, stand on its own, and fully have the intent of making its own profit.

The courts have determined that a single legal entity can definitely operate more than one business based on these requirements. You can also have multiple legal entities that can be viewed as a single trade or business if they are aligned with the same profit motive. To this end, form over structure will hold up in court. The important thing to note is how the operations function as a unified business, rather than just how your entities are legally structured. (https://www.dopecfo.com/blog/lessons-in-compliance-from-4-notorious-cannabis-court-cases)

Documentation in your books: How Important is it?

One of the repeated phrases or criteria in nearly all of the IRS cannabis tax-related cases involved failure to document!

Several of the court cases involving marijuana had similar wording in the lost cases of businesses fighting IRS tax levies: a failure to document. This is a compelling and preventable phrase! The court said, in essence, if your books matched the case you presented in court, you would have a solid case. However, without documentation (proper accounting and tax filings for each reported year of operation), your expenses (Cost of Goods Sold adjustments) simply do not count: You cannot prove them!

Unfortunately, Olive did not clearly separate the businesses or account for them individually, leading to the Ninth Circuit holding that the owner of the business was not able to mitigate any tax liability because their business consisted solely of trafficking marijuana. Olive suggested that the Ninth Circuit apply their ruling on a previous U.S. Tax Court case, Californians Helping to Alleviate Medical Problems, Inc. (C.H.A.M.P.) v. Commissioner (a case Cannabis industry had won in which separate entities were found to be compliant), but the Tax Court did not agree with the IRS’s and Olive’s estimates, deciding on its own determined COGS amount and determining that none of Olive’s expenses were tax deductible. (https://www.dopecfo.com/blog/lessons-in-compliance-from-4-notorious-cannabis-court-cases)

Other Articles:

Tax Court decisions upholding 280E and Business deductions:
CANNABIS TAX ALERT: Tax Court Decision Upholds 280E and Business Deductions | MGO (mgocpa.com)

Other Articles by Vertices Co:
https://verticesco.com/accounting-for-medical-cannabis-businesses-explained/

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Canapa Launches High Precision Pre-Roll Check Weigher

8/16/2022

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New ‘Pre-Roll Inspector’ Accurate to 0.01 Gram

August 10, 2022 – Canapa has announced an addition to its industry-leading series of check weighing machines, the WeightCheQ 0-250. Engineered with electromagnetic force restoration (EMFR) technology to achieve incredibly tight 0.01-gram tolerances, this high-precision machine ensures a more accurate, consistent pre-roll is delivered for final retail packaging.

The WeightCheQ can be easily paired with any semiautomated pre-roll machine or manual rolling process to double-check pre-roll weights, eliminating product waste while increasing margins.

This technology is also perfectly suited to precisely weigh gummies, capsules and other cannabis products with seamless integration into existing bagging, container filling, flow wrapping and case filling systems.

In addition to innovative EMFR weigh cell technology, this machine features a robust stainless-steel frame construction, food grade belts, integrated rejection lighting system, 15-inch color touchscreen with display to three decimal points, storage for up to 20 different recipes and does not require compressed air to operate.

To watch video of the WeightCheQ 0-250 and learn more about other pre-roll solutions from Canapa, visit www.canapasolutions.com/check-weigher.

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Report: Medical Cannabis Sector Expected to Reach $24.86B by 2027

8/16/2022

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The worldwide medical cannabis sector is expected to be worth $24.86 billion by 2027, according to a new Research and Markets report. Starting at a 2022 sales estimate of $2.91 billion, the figure represents a compound annual growth rate of 20.9%.

The data was gathered from multiple countries across several continents, including some of the world’s largest medical cannabis markets such as Germany, the U.S., Spain, the United Kingdom, Australia, Israel, Thailand, and Denmark. The report also included lesser-known countries that allow medical cannabis access and those that still prohibit medical cannabis, such as Russia and countries in the Middle East and Africa.

The report says some of the growth is due to an increased demand for cannabis compounds, an increase in population and accompanying diseases, and rising awareness about the benefits of medical cannabis.

The report does warn, however, that the high price of medical cannabis may act as an impediment to growth over the next five years. Other challenges facing industry growth, the report says, are rising energy prices and issues with maintaining product consistency.

Earlier this year, a MarketsandMarkets report predicted that the global cannabis industry — encompassing both medical and adult-use sales — would reach $90.4 billion by the year 2026.

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Missouri Cannabis Campaign Data Suggests Legalization Will Pass in November

8/16/2022

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With Missouri voters set to vote on cannabis legalization in November, independent polling suggests the reforms will pass. Dan Viets, an attorney and executive director of Missouri NORML, told the Columbia Daily Tribune that internal polling data show 62% of Missouri voters back adult-use reforms.

The data is on par with a SurveyUSA poll released in May which found the same level of support for cannabis legalization in the state. That poll found 76% of Democrats supported adult-use legalization, with 14% opposed along with 49% of Republicans (38% opposed) and 66% of independent voters (20% opposed).

“We’re not taking anything for granted, but the data we have certainly indicated we have a good chance of passage. … The national polling shows close to half of Republicans support legalizing marijuana.” — Viets to the Daily Tribune

Viets added that the measure “will likely do better in more educated areas of the state, but support is really broad.”

In Missouri, Viets said, 20,000 people are arrested annually for “usually very small amounts of marijuana” and that, if approved, the measure will “expunge the criminal records of hundreds of thousands of people with marijuana convictions.” The measure includes provisions allowing expungement of low-level, non-violent, cannabis crimes.

In 2020, the American Civil Liberties Union reported that Black people in Missouri are 2.6 times more likely to be arrested for cannabis possession than white people.

The language that will appear on ballots along with the question says state governmental entities estimate initial costs of the adult-use program at $3.1 million with initial revenues of at least $7.9 million, annual costs of $5.5 million, and annual revenues of at least $40.8 million. Local governments are estimated to have annual costs of at least $35,000 and annual revenues of at least $13.8 million.

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Washington Considers Point System for Social Equity Cannabis Licenses

8/16/2022

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The Washington State Liquor and Cannabis Board (LCB) is considering a program to allow individuals convicted of a cannabis-related crime and who served prison time preferential licensing for adult-use cannabis permits, FOX 13 reports. Brian Smith, director of communications for the LCB, noted that the agency is holding 40 licenses for social-equity applicants.

“Our intent is to be able to reach applicants that were disproportionally harmed by the war on drugs.” — Smith to FOX 13

The license consideration by the LCB comes as lawmakers in Seattle are considering their own social equity package. If the LCB adopts the new regime, the city will adopt the same rules and set aside $1 million in grant money for social equity licensees, the report says.

In 2020, state lawmakers created the Washington State Legislative Task Force on Social Equity in Cannabis which makes recommendations to the LCB on the issuance of retail cannabis licenses. The preferential licenses were pitched by the task force.

Smith indicated that there are several criteria an applicant needs to qualify including living in an area that was disproportionally harmed by the war on drugs. He said that the University of Washington is currently developing a map of where those areas in the state are located.

Another criterion of the proposed rule includes social equity applicants or a family member of the applicant having been arrested or convicted of a cannabis offense.

Applicants will be scored on a point system and the way the rule is proposed, individuals that were incarcerated for cannabis crimes will get additional points. If a person was fined for a cannabis offense, it’s 10 points, if they served probation, it’s 20 points, if they were sentenced to home detention, it’s 40 points, and for those who served time in jail or prison, it’s 80 points.

The LCB is set to hold a public hearing on the proposal on September 14.

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The Weed Gummies Cookbook: Recipes for Cannabis Candies, THC and CBD Edibles, and More

8/15/2022

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Desperately seeking relief for a herniated spinal disk and finding none among the cocktail of opioids prescribed by her doctor, Monica Lo’s world changed after she received a cannabis-infused treat from her roommate.

“For the first time in a long time, I slept like a baby,” she says. “The next day, I found myself spending hours upon hours researching this plant and how to make my own infusions. Since we lived in a strict no-smoking building, I needed to be very discreet with the wafting scent of cannabis; this meant that using a Crock-Pot or cooking on the stovetop was not in the cards.”

Lo was a creative director of a sous vide start-up and thought she’d put the company’s machines to the test, which inspired her to start her educational blog Sous Weed®.

Now, she is sharing her culinary creations in The Weed Gummies Cookbook: Recipes for Cannabis Candies, THC and CBD Edibles, and More [978-1-64604-366-8; $17.95; Ulysses Press; August 2022], a practical collection of recipes for those at various stages of their cannabis journey, offering approachable ways to incorporate a variety of cannabinoids into your routine. With the help of step-by-step instructions and color photos, you’ll also get pro tips for safely handling and labeling your confections.

The Weed Gummies Cookbook will inspire you to create your own special gummies and candies that are even better than your average dispensary-bought treats. You’ll find weed-infused recipes like Sour Green Apple Gummies; Lavender Chamomile Sleep Gummies; Mocha Caramels; Honey Elderberry Lozenges, and much more.

“The main reason for DIY is that it’s far more cost-effective to make your infusions and treats at home, especially as dispensary prices skyrocket,” Lo says. “This user-friendly cookbook is designed to build your culinary cannabis repertoire and help you feel empowered to make your edibles at home.”

With clear instructions, warm anecdotes with each recipe, and an advance warning before the tricky bits, Lo becomes your trusted friend on your exciting cannabis journey.

A portion of the profits from The Weed Gummies Cookbook will be donated semi-annually to the Last Prisoner Project.

The Weed Gummies Cookbook: Recipes for Cannabis Candies, THC and CBD Edibles, and More by Monica Lo
Ulysses Press
Paperback; August 30, 2022
ISBN: 978-1-64604-366-8
$17.95; 6 x 8; 128 pages

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Tilray CEO: U.S. Represents ‘$100B Opportunity in Cannabis’

8/15/2022

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During an appearance on Yahoo Finance Live, Tilray CEO Irwin Simon called the U.S. “a $100 billion opportunity in cannabis.” Simon also suggested that traditional firms, such as “the Nestles and Unilevers” will seek to enter the cannabis space “because they know Gen-Z, millennials, that’s very much what they want.”  

“If you look at cannabis today in the U.S., 93% of Americans want medical cannabis legalized and about 63%, 65% want adult use. Today, it’s legal in about 33 states, plus D.C. So it’s out there that… a majority of people want cannabis legally.” — Simon to Yahoo Finance Live 

Simon noted that in Canada, where Tilray currently operates, the cannabis industry has “contributed about $20 billion in taxes, over 150,000 jobs, [and] about $6 billion in infrastructure.”  

Curaleaf CEO Matt Darin told Yahoo Finance that the firm, one of the largest cannabis companies in the U.S., is “very encouraged by what’s coming out of Washington, D.C. currently.”  

“There’s never been more bipartisan support for sensible reforms,” he said.

In July, U.S. Senate leaders filed a cannabis legalization bill that would decriminalize cannabis federally and allow states to set their own policies, but the measure faces a tough road in the chamber where the filibuster rules require 60 votes for legislation to pass. Democrats hold a one-vote majority as Vice President Kamala Harris serves as the tie-breaking 51st vote but several Democrats, including Sens. Jeanne Shaheen (NH), Joe Manchin (W.VA), and Bob Casey (PA) may not support the reforms. 

The House has twice passed a cannabis legalization bill – the MORE Act – but it has never been voted on in the Senate. 

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Curaleaf Removes Thousands of New York Products With Unapproved Potency Labels

8/15/2022

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New York medical cannabis company Curaleaf has been forced to pull tens of thousands of units of cannabis from dispensary shelves after it switched to a new way of labeling product potency without approval from state regulators, Syracuse.com reports. Curaleaf began using “dry weight” measurements on its products in July but the company had not received Office of Cannabis Management (OCM) approval.  

While all medical cannabis products sold in New York show “wet weight” measurement, the “dry weight” method shows significantly higher THC percentages, the report says. For example, using wet weight measurement, a product could show a 20% THC percentage but that same product could show a THC percentage as high as 37% using dry weight testing.  

Stephanie Cunha, a Curaleaf spokesperson, told Syracuse.com that dry weight “is considered the most accurate metric for THC content on any type of cannabis sample.” She added that Connecticut, New Jersey, and Maryland also use the dry weight method.  

Bob Miller, the COO of ACT Laboratories, told Syracuse.com that from a laboratory perspective, dry weight allows more accurate product-to-product or lab-to-lab comparisons but said the “downside of the approach” is that the method inflates potency which “is misleading to the patients.” 

In late July, the OCM said that dry weight measurements “are for informational purposes only and cannot be applied to approved product labeling until such time an approved method is available.” The agency ordered the removal of the products that used the dry weight method but said they could be redistributed “with the New York mandated wet weight measurement,” Cunha said.     

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31 Rhode Island Municipalities to Vote on Allowing Local Cannabis Sales in November

8/15/2022

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Thirty-one Rhode Island municipalities will vote in November on whether to allow cannabis sales in their jurisdiction, WPRI reports. The cities and towns must decide whether to opt out or they will not be able to prohibit retail cannabis sales in their communities.

The towns that will vote on allowing cannabis sales include:

  • Barrington 
  • Bristol 
  • Burrillville 
  • Charlestown 
  • Coventry 
  • Cumberland 
  • East Greenwich 
  • East Providence 
  • Glocester 
  • Hopkinton 
  • Jamestown 
  • Johnston 
  • Lincoln 
  • Little Compton 
  • Middletown 
  • Narragansett 
  • Newport 
  • New Shoreham 
  • North Kingstown 
  • North Providence 
  • North Smithfield 
  • Richmond 
  • Scituate 
  • Smithfield 
  • South Kingstown 
  • Tiverton 
  • Warren 
  • Westerly 
  • West Greenwich 
  • West Warwick 
  • Woonsocket 

Rhode Island lawmakers approved adult-use cannabis legalization legislation in May and Gov. Dan McKee (D) signed the reforms into law two days later. Under the measure, adults 21 and older can purchase and possess up to an ounce of cannabis and keep 10 ounces at home for personal use. Adults can also cultivate up to six plants at home, including three mature and three immature plants. The state will license 33 retailers across six zones and impose a 10% excise tax, along with the state’s 7% sales tax, and a 3% tax which would go to municipalities. 

Towns and cities that opt out of sales are not eligible for any of the revenue from retail cannabis sales. An early fiscal note on the bill estimated first-year sales – from 2023 to 2024 – would lead to $14 million in new revenue for Rhode Island with cities and towns each receiving about $2.5 million. 

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Arkansas Supreme Court Conditionally Allows Cannabis Legalization Question on Ballots

8/12/2022

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The Arkansas Supreme Court is allowing the adult cannabis use question on November ballots conditionally while it decides whether the state Board of Election Commissioners’ decision to reject the proposal was valid, 5News reports. In its order, the court said it would make its final determination by August 25. 

In rejecting the popular name and ballot title – which blocked the question from ballots despite the initiative garnering more than 100,000 signatures than was required – the commissioners said they didn’t think the title fully explained the proposed constitutional amendment, claiming that the measure would repeal the state’s current THC limit on medical cannabis products. 

In their lawsuit challenging the decision, Responsible Growth Arkansas argued the board used an “overly stringent” approach in their decision-making that violated the state constitution. The lawsuit also challenges a 2019 law that gives the board the power to certify ballot initiatives. Prior to the 2019 law, ballot measures had to be reviewed by the state attorney general prior to the circulation of petitions. The campaign also argues that the board’s decision was “incorrect” because it prevents “hundreds of thousands of Arkansans to have the opportunity to vote on the Amendment,” the report says.  

Responsible Growth Arkansas attorney Steve Lancaster previously said that the board’s decision was unfair because it would require the title to go into too much detail, saying “the type of detail that the board expected, or demanded in this case, would make [the] ballot title thousands and thousands of words long.”  

“That just simply is not workable for a ballot,” he said. 

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Maine Offering Towns $20k to Allow Adult-Use Cannabis Businesses

8/12/2022

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Maine’s Office of Cannabis Policy is offering municipalities that allow adult-use cannabis sales up to $20,000 to help regulation costs, Spectrum News reports. Cities and towns can use the funds to cover the costs of attorneys, drafting ordinances, staff time, and other expenses, and officials hope it could incentivize those that do not allow industry operations within their borders to reconsider.

Currently, just 7% of Maine cities and towns have opted in to allow adult-use cannabis sales, the report says.

In a press release, Erik Gundersen, state cannabis office director, said that “the reality is, no matter if a town has opted in or not, there is cannabis being bought, sold and consumed there.” 

“The most important thing we can do is try and ensure that Mainers who choose to use cannabis can do so in a well-regulated environment that safeguards public health and safety in the best way possible.” — Gundersen, in a statement, via Spectrum News 

Kate Dufour, director of Advocacy and Communications for the Maine Municipal Association, said that the $20,000 in reimbursement funds is a “cold comfort” and that municipalities “wanted more” – potentially in the form of enhanced revenue sharing.

“I think communities have made up their minds,” she told Spectrum News. “They are either in or out.” 

In July, adult-use cannabis sales in Maine totaled $16.3 million with 247,401 transactions. So far this year, sales have reached $81 million with more than 1.2 million transactions, according to state data outlined by Spectrum News. 

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Massachusetts Governor Signs Cannabis Industry Reform Bill

8/12/2022

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Massachusetts Gov. Charlie Baker (R) on Thursday signed the bill package of cannabis industry reforms, which includes social-equity provisions, tax reforms for the industry, and a reworking of the state’s host community agreements, Axios reports. The measure also includes a re-tooling of how the state expunges previous cannabis convictions and includes a pilot program for cannabis cafés.  

The new law alters the state tax code so cannabis businesses can write off business expenses like non-cannabis firms. Previously, the state did not allow cannabis businesses to take normal business deductions.

Under the law, communities can still impose a limited-time “impact fee” on cannabis businesses that seek to open shop in their municipality, but that fee is now limited to 3% of the business’s total sales. The so-called community host agreements came under fire following the arrest, and ultimate conviction, of former Fall River Mayor Jasiel Correia who extorted cannabis businesses under the guise of the host agreement.

Baker did veto part of the bill that would have led to a study on pediatric medical cannabis consumption in schools.

“I support many of the provisions this bill adopts to improve regulation of the cannabis industry, and I support the bill’s efforts to expand opportunities for social equity businesses. I have serious concerns, however, about [the study]. The language of the section is highly prescriptive – making it clear that the agencies charged with producing the study must identify ways to make medical marijuana widely available within schools, rather than considering whether such an allowance is advisable.” — Baker, in a signing statement, via the Boston Globe  

Lawmakers had approved the omnibus cannabis bill unanimously in the Senate and 153-2 in the House. Massachusetts lawmakers could decide to try and override Baker’s veto of the section providing for the study, but the state’s formal session has ended. 

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Members of the Crow Tribe Seeking to Open Cannabis Dispensary in Montana

8/11/2022

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Members of the Crow Tribe are seeking to open the first cannabis dispensary on tribal land more than eight months after adult-use sales began in Montana, KTVQ reports. Silverleaf Apsaalooke submitted the plans several months ago but are still awaiting approval from the Crow Tribe. 

Dylan Jefferson, a partner in Silverleaf, noted that the land they are hoping to start the business on is owned by a non-tribal member and that the Bureau of Indian Affairs and tribe “supposedly” don’t have jurisdiction over the site.  

The tribe was the first indigenous nation in Montana to pass an ordinance to allow dispensaries after voters approved the reforms in 2020. The state Legislature passed a law that same month allowing one cannabis business license to each tribal government in the state; however, those licenses are restricted to the lowest cultivation tier structure under the state’s adult-use cannabis law.  

So far, however, the business has not been able to get approval from the tribe, which the state Department of Revenue is requiring because customers would have to pass through tribal lands in order to get to the shop. The agency is also requiring permission from Big Horn County. 

Jefferson said because the business is privately owned it would not affect the tribe’s ability to get their own license. He described the silence from the tribe as frustrating. 

James Vallie, another partner in Silverleaf, told KTVQ that the business owners are ready to “turn on the lights right now.”    

“We just need that letter (from the tribe) or the state just needs to give us the license,” he said. 

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New Jersey University Files Lawsuit to Stop Cannabis Business from Opening Near Dorms

8/11/2022

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New Jersey’s Saint Peter’s University last week filed a lawsuit against a commercial cannabis applicant and the Jersey City Planning Board over the company’s plans to open a dispensary and lounge near the college’s dormitories, according to the Hudson Reporter. The lawsuit names Medusa NJ and the planning board, arguing that the board’s approval of the business was “arbitrary and capricious” on several counts, and is asking the court to void it.  

Haytham Elgawly, the owner of Medusa, is seeking to convert his clothing store into a retail cannabis store and consumption lounge, which the university has opposed since it was proposed in April. The planning board approved Elgawly’s application despite the college’s opposition. 

During an appearance before the city’s Cannabis Control Board in June, University President Eugene Cornacchia said the college opposed the cannabis businesses over concerns about crowd control and security for students living in residence halls. 

In the lawsuit, attorneys for Saint Peter’s argue that the Planning Board approval violates a city ordinance requiring a dispensary’s main door to be within 200 feet from a school based on the city’s Drug-Free School and Park Zone Map and that Medusa’s door would be just 65 feet from one of the college’s dorms. The lawsuit alleges that the Planning Board used a map called the Cannabis Retail Buffer Map that did not include colleges and universities. 

The lawsuit further claims that the board did not consider the “negative impact” of the businesses on the college’s under-21 student population and the wider community, the report says.      

Medusa has received a conditional license from New Jersey but still needs final approval from the City Council. 

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Arkansas Medical Cannabis Sales Reach $23.3M in July

8/11/2022

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Medical cannabis sales in Arkansas reached $23.3 million last month, according to Health Department data outlined by 5News. The total exceeds the $22 million in sales realized in June. 

Scott Hardin, spokesperson for the Arkansas Department of Finance and Administration, told 5News that Arkansans spent an average of $751,720 per day on medical cannabis in July and since January 1, patients have spent a total of $157.9 million on 27,782 pounds from the state’s 38 dispensaries.  

Natural Relief Dispensary in Sherwood led the state in pounds sold in July with 392.64 pounds, followed by the ReLeaf Center in Bentonville (308.61 pounds), CROP in Jonesboro (281.83), Suite 443 in Hot Springs (281.08 pounds), and Green Springs Medical in Hot Springs (217.77). 

Earlier this month, Responsible Growth Arkansas submitted enough signatures to put an adult-use legalization question on November ballots; however, the state Board of Election Commissioners rejected the initiative’s popular name a ballot title, claiming it didn’t fully explain the constitutional amendment and that the measure would repeal the state’s current THC limit on medical cannabis products. The decision by the board effectively bars the question from ballots.  

Following the board’s decision, the campaign filed a lawsuit in the state Supreme Court challenging that decision, saying the commissioners used an “overly stringent” approach that violates the state constitution. The lawsuit also challenges the 2019 law that gave the board the power to certify ballot initiatives. Prior to the 2019 law, ballot measures had to be reviewed by the state attorney general prior to the circulation of petitions. 

Earlier this week a separate lawsuit was filed that could doom the state’s medical cannabis industry. The lawsuit seeks to use the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO, to target medical cannabis companies plaintiffs accused of deceptive trade practices. The lawsuit claims some medical cannabis was sold in Arkansas with a potency different than what was advertised – a deceptive trade practice – and that cannabis businesses are subject to RICO because cannabis is federally outlawed.    

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Martine Pierre: Education & Networking to Support BIPOC Cannabis Entrepreneurs

8/10/2022

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In June 2020, Martine Pierre — Founder and CEO of Cannalution and the “Lioness of Marketing” — tweeted that she wanted to help more Black and brown entrepreneurs enter the cannabis space. The response from the community was enormous, so Pierre set out to connect people and learn more about how she could advance her goal of supporting and connecting BIPOC cannabis entrepreneurs.

The result was Cannalution: a community platform modeled after historic HBCUs. Cannalution is an online university that teaches students about raising funds, the most successful types of cannabis businesses, plant science, legal and compliance nuances, and more. In this written Q&A, Martine discusses beta-launching Cannalution, what users can expect from the university-style courses, and the serial entrepreneur’s long-term goals as she continues building her footprint in the cannabis space.

Keep scrolling to read the full interview:

Ganjapreneur: When did you realize that you wanted to build Cannalution?

Martine Pierre: In 2016, my heart was set on starting a subscription box service in cannabis, but I also wanted to create a website or space specifically designed for Black and brown entrepreneurs in the cannabis space. It wasn’t until one of my tweets went viral in 2020 that led to the brainstorming of what would become Cannalution. The huge response prompted me to find a better solution to entry for Black and brown entrepreneurs.

How did you convert the support of your viral tweet into the Cannalution community?

I have a deep background in marketing, so my marketing brain immediately kicked in once the tweet went viral. I initially built a landing page and directed people to it to sign up to gain access to the community, sending out periodic updates while continuing Twitter conversations to learn what else budding entrepreneurs were lacking in support and resources, and how I could build a platform to best meet their needs.

When did you know that the community outgrew Slack, and it was time to build the platform?

We never actually made it on Slack for too long. By day 3, I realized that it wasn’t enough and too complicated to manage long-term by myself, so we tried a Facebook Group. Even though that wasn’t a great option either, it did become the initial focus group that helped us build the MVP app, along with our opt-in waitlist.

How do you hope that the platform impacts equity in the cannabis industry?

According to Leafly, less than 2% of businesses in the US cannabis industry are Black-owned, and I’m sure that abroad the numbers are probably worse. My hope is that we create an ecosystem where Black and brown founders can thrive and build generational wealth. In the United States, there has been speculation that by 2053, Black wealth in the US will be at $0. My hope is that we can help aid in changing that narrative.

How long has the app been in Beta? What has been the general feedback during that time?

We’ve only been live for our private beta for about 29 days, so we’re very early in the process of testing the app with real users. So far, we have 72 installs, but we are onboarding users in phases so that we can keep testing.

We just hosted our first beta tester meetup, and so far, the energy from everyone has been contagious. Many users expressed their frustration and hurt that Black and brown entrepreneurs are largely being excluded in the cannabis space, considering the failed War on Drugs. Many also expressed the type of content they want to consume and the instructors that they would love to see teach on the platform one day. Overall so far, it’s been an intimate and rewarding experience.

Has your background in digital marketing helped you solve problems as you build the pillars of Cannalution?

I am a non-technical founder who doesn’t code, nor do I have access to large amounts of capital. If I didn’t have a background in marketing, I highly doubt I would have the traction that we currently do. It’s my marketing background that prompted me to build a waitlist, which in turn, helped us build the MVP app for premium subscription members.

Who is coding the Cannalution platform? How did you find and hire the right team for the job?

As of right now, we are outsourcing our code. My co-founder and managing partner had previously worked with this team beforehand to build her app for 100K Incubator. However, as we continue to raise proper funding, we will eventually bring it in-house.

How is the curriculum at Cannalution University structured? Are classes held at certain times or watched on the student’s time?

Think Masterclass, but of cannabis content that can be watched on the student’s own time: that’s what Cannalution University (our premium subscription side of our app) will offer. Our curriculum will range from retail and justice reform to cannabis investing and real estate; all educational content that gets straight to the point.

What core lessons will students take away from studying at an HBCU-inspired digital platform?

While we do not have the accreditation to call ourselves a digital HBCU, our branding is paying homage to the Historical Black Colleges and Universities across the country who have paved the way for so many decades.

Our users will learn about the science of cannabis, and they’ll be walking away with the tools to start, maintain, and scale a cannabis business. Moreover, we want our users to define what equity in the cannabis industry means for them, because it doesn’t have to be a plant-touching business that requires a license.

There is an infinite amount of possibility in this budding industry, and we want to show our users vast opportunities that go beyond plant-touching.

Does the Cannalution platform connect entrepreneurs and investors? If so, how are they vetted?

The biggest barrier to entry for cannabis entrepreneurs is access to capital, and there will be two ways Cannalution will be helping users scale this mountain.

Firstly, we’ve incorporated an NFT strategy that will enable us to use a portion of our royalties from secondary sales to create a fund that empowers a select group of our users. Our NFT will only be available to 10,000 users, who we call our “founding members,” and 36 corporate NFTs that will allow corporations to partner with us and advertise through the platform.

Secondly, our CFO, Arielle Loren, is the founder of 100K Incubator, which helps women gain access to capital so that they can scale their business to six figures or more. She will be vetting private and corporate investors interested in investing in our users who meet their criteria.

Do you still dream of starting a subscription box service or have you completely shifted into Cannalution?

I’m a serial entrepreneur by nature with big multipotentialite energy, and I have a knack for brand building. I absolutely still see myself starting a subscription service or physical cannabis product. Cannalution is not the end of the road for me in the cannabis sector.

How can people sign up for the Cannalution platform?

The best way to sign up for access to our platform is cannalution.app.

Thanks, Martine, for answering our questions and sharing your thoughts and expertise!

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Missouri Cannabis Legalization Question Approved for November Ballots

8/10/2022

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The campaign seeking to legalize cannabis for adult use in Missouri gathered enough signatures to put the question to voters in November, Missouri Secretary of State Jay Ashcroft announced on Wednesday. In a statement, Ashcroft urged voters to “study and educate themselves on any ballot initiative” noting that the adult-use initiative “is particularly lengthy and should be given careful consideration.”  

The official ballot title for the initiative will ask voters: 

  • Do you want to amend the Missouri Constitution to: 
  • Remove state prohibitions on purchasing, possessing, consuming, using, delivering, manufacturing, and selling marijuana for personal use for adults over the age of twenty-one; 
  • Require a registration card for personal cultivation with prescribed limits; 
  • Allow persons with certain marijuana-related non-violent offenses to petition for release from incarceration or parole and probation and have records expunged; 
  • Establish a lottery selection process to award licenses and certificates; 
  • Issue equally distributed licenses to each congressional district; and 
  • Impose a six percent tax on the retail price of marijuana to benefit various programs 

State governmental entities estimate initial costs of $3.1 million, initial revenues of at least $7.9 million, annual costs of $5.5 million, and annual revenues of at least $40.8 million. Local governments are estimated to have annual costs of at least $35,000 and annual revenues of at least $13.8 million.  

Alan Zagier of Legal MO 2022, the campaign behind the initiative, told KSDK that the criminal justice provisions in the proposal would “provide a fresh start and wipe the slate clean for really tens of thousands of Missourians who each year find themselves arrested for low-level drug offenses.”

“We’re talking about people who may still be on probation or parole or even had a conviction and did their time and paid their fine but yet it still comes up and is a hindrance in housing or employment,” he said. 

A survey in May found that 62% of Missouri adults supported the reforms. In 2018, 65% of Missouri voters approved the constitutional amendment to legalize medical cannabis.

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Guyana Parliament Legalizes Hemp

8/10/2022

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The Guyana parliament on Monday approved the Industrial Hemp Bill, legalizing industrial hemp cultivation of plants containing 0.3% THC or less, Caribbean National Weekly reports. Agriculture Minister Zulfikar Mustapha, who is described as piloting the legislation, called hemp “a win-win situation for all the players involved.” 

“For the grower, it will be a source of income generation and job creation. For the consumers, it would have significant benefits, and for the broader economy, it would be a valuable source of foreign exchange, especially in the context of economic diversification.” — Mustapha via CNW 

Hemp production in the nation will first begin in two regions, Attorney General and Minister of Legal Affairs Anil Nandlall told the National Assembly, describing the regions as “depressed” and saying that hemp would help them “stimulate employment and economic activities.” Nandlall added that hemp would also help the nation’s environment. 

“It absorbs carbon dioxide and releases oxygen into the atmosphere with one acre of hemp being able to absorb over 22 tons of carbon dioxide,” he said during his remarks. “When harvested, it replaces more polluting materials in the manufacturing industry and provides alternatives for sustaining the environment.”  

The measure establishes a Guyana Industrial Hemp Regulatory Authority and a governing board, which will include representatives from the Ministry of Agriculture, the Ministry of Health, the Ministry of Home Affairs, the Guyana Forensic Science Laboratory, and the Private Sector Commission, News Source Guyana reports. The bill makes it illegal for anyone to cultivate or manufacture industrial hemp, produce hemp-related products, or conduct research on industrial hemp without a license issued by the authority, the report says. Cultivation licenses would be valid for three years while manufacturing licenses would be valid for 15 years. Operating without a license could result in a $500,000 fine and imprisonment of up to one year.

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Seattle Mayor Proposes Cannabis Industry Social Equity Bills

8/10/2022

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The mayor of Seattle, Washington has submitted three cannabis-related bills to the city council intended to address social equity in the industry. The legislation proposed by Mayor Bruce Harrell was developed in partnership with Councilmember Teresa Mosqueda and cannabis industry stakeholders and employees.  

The bill package would: 

  • Create a city-level social equity license;
  • Lay the groundwork for future cannabis-related businesses, in collaboration with the Washington State Liquor and Cannabis Board, to also issue licenses through a social equity framework;
  • Require a 90-day retention of store workforce when ownership changes, similar to protections created for hotel workers in the city in 2019;
  • Create a short-term cannabis advisory committee, selected in collaboration with City Council to collect input on cannabis equity and needs from workers, community members, and industry leaders;
  • Implement a needs assessment to understand additional steps to make the industry more robust and sustainable for diverse communities;
  • Collaborate with county and community efforts to further the work of expunging convictions for cannabis-related crimes prior to 2014, and;
  • Develop a state and federal legislative agenda promoting cannabis equity, along with safety improvements, capital investments, and access to banking services.

In a press release, Harrell said that for Seattle’s economy to thrive, “every worker and business deserve safety and the opportunity to learn, grow, and prosper.” 

“As the cannabis industry continues to develop, we must course correct and support the communities who too often have been left behind. Equity in this industry means safe working conditions and fair treatment for workers, store ownership that includes the communities most impacted by the war on drugs, and a commitment to fairness, innovation, and opportunity.” — Harrell in a statement    

Mosqueda added that the “legislation represents an initial step in the right direction towards creating local equity applications, improving workforce standards, and focusing on safety for workers in the cannabis industry.”   

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Florida Cannabis Advocates Launch Adult-Use Legalization Campaign

8/09/2022

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A new campaign launched on Monday seeks to legalize cannabis for adult use in Florida. The effort is backed by the state’s largest medical cannabis company, WJCT News reports. The first ad published by Smart and Safe Florida featured country music stars the Bellamy Brothers. 

The proposed constitutional amendment petition language reads: 

“Allows adults 21 years or older to possess, purchase, or use marijuana products and marijuana accessories for non-medical personal consumption by smoking, ingestion, or otherwise; allows Medical Marijuana Treatment Centers, and other state licensed entities, to acquire, cultivate, process, manufacture, sell, and distribute such products and accessories. Applies to Florida law; does not change, or immunize violations of, federal law. Establishes possession limits for personal use. Allows consistent legislation. Defines terms. Provides effective date.”   

Medical cannabis company Trulieve is contributing $5 million toward the effort to put the measure on 2024 ballots. Trulieve CEO Kim Rivers told the News Service of Florida that the amendment is “all about improving access.”  

“We came into this with a mission to provide access to high-quality products that are safe and have an appropriate value proposition to give folks control over their – in the original days – medical journey. I don’t think that changes here. I mean, in effect we are at our core about expanding the opportunity for access to safe legal product, which is what this would allow us to continue to do.” — Rivers to the News Service of Florida via WJCT  

Florida voters approved a constitutional amendment to legalize cannabis for medical use in 2016 with 71% of the vote. Past attempts to legalize cannabis for adult use in Florida have failed legal challenges with the state Supreme Court but Rivers said the proposal was crafted with the state’s single-subject rule for initiatives in mind. 

“Any amendment in the state of Florida has to be very careful in terms of single subjects with this court,” she told WJCT, “and so I do know, speaking with the lawyers, that there was a very high focus on keeping this really focused around authorizing adult use and then allowing the Legislature to develop policy.” 

The petition would need 900,000 valid signatures in order to make the ballot. 

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New Mexico District Attorneys Reviewing Cannabis Charges for Expungement

8/09/2022

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District attorneys in New Mexico are reviewing prior cannabis charges in the state for expungement, KRQE reports. The reviews are required under a bill approved by lawmakers that accompanied the state’s adult-use legalization legislation.   

Lauren Rodriguez, the spokesperson for the 2nd Judicial District Attorney’s Office, said officials have reviewed over 11,527 cases that are potentially eligible for automatic expungement in the district while challenging 53 because the charges are related to transporting more than 100 pounds or distributing cannabis to a minor. 

In the 11th Judicial District, officials have filed 1,608 cases for expungement, the 5th Judicial District have filed 265, and Doña Ana County has filed 312, the report says.

Adrianne Turner, the general counsel for the New Mexico Law Offices of the Public Defender, said the “big question” that remains is how the process will work in court and how the individuals will be notified.

“Right now, their last known attorney is supposed to be notified. That is problematic because some of those attorneys are now prosecutors, deceased, retired, or have moved out of state. We are receiving notice of some of the objections, but there is no clear process we are supposed to follow, including how or if we tell our former clients. So that leaves a lot of questions and confusion.” — Turner to KRQE

The Department of Public Safety says they initially pegged 151,640 cases across the state for review but the courts have the final say in whether a case is expunged.

Turner indicated that some legal professionals have noticed that there are “differences in how prosecutors across the state are objecting to expungements” and that the right to the relief should not be based on who the local prosecutor is.

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Federal Lawsuit Filed Against Medical Cannabis Companies in Arkansas

8/09/2022

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A federal lawsuit filed in Arkansas is seeking to use the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO, to target medical cannabis companies plaintiffs accused of deceptive trade practices, WREG reports. The lawsuit names California-based cannabis testing laboratory Steep Hill, Inc., its Arkansas subsidiary, Steep Hill Arkansas and its co-owners Dr. Brandon Thorton and Brent Whittington, cannabis cultivators Osage Creek Cultivation, Bold Team LLC, Natural State Medicinal, and “John Does 1-10,” which are law firms, accountants, and financial firms that assisted medical cannabis companies. 

The lawsuit claims some medical cannabis was sold in Arkansas with a potency different than what was advertised – a deceptive trade practice – and that cannabis businesses are subject to RICO because cannabis is federally outlawed.  

“Enjoining the RICO Defendants from continuing to engage in racketeering activities to enforce strong federal policy that seeks to reduce the cultivation and distribution of medical marijuana through a complete prohibition on those activities.” — the lawsuit’s Prayer for Relief section 

If successful, the lawsuit could end medical cannabis operations in Arkansas.

The plaintiffs claim that some of the cannabis they bought seemed less potent than others and sent it off to be tested. The test results showed that some of the products had 25% less THC than what was advertised and, in one case, up to 52% lower.

“Marijuana businesses who market their products as medicine should be held to reasonable production standards to ensure this ‘medicine’ is effective,” the plaintiffs contend. “But Defendants have intentionally refused to implement reasonable production standards, instead preferring to do business with Steep Hill that regularly intentionally inflates the amount of THC in its customer’s flower. The net effect is to defraud the Plaintiff and putative clause by over-representing the amount of THC in flower to the detriment of the Plaintiff and Class so that Steep Hill, the cultivators, and the dispensaries can make more money.” 

The lawsuit is filed in the U.S. District Court for the Eastern District of Arkansas. 

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