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New Nuggets – July 2019

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Bay Area

Panel Rules that Californian Prisoners Can Legally Possess Cannabis

On June 11, a panel in Sacramento overturned the convictions of five prisoners for allegedly possessing cannabis while incarcerated, citing the language in Proposition 64. Prop. 64 legalized an ounce or less for all adult residents in the state, and no exemptions or exclusions for prisoners can be found in the law. While possession of one ounce or less is technically legal in prisons located in California, smoking or consuming cannabis is against prison rules. “The Attorney General uses arcane rules of statutory construction, twists the meaning of the words of the statute, urges us to disapprove of cases directly on point, and makes a host of policy arguments why we should not apply the plain language of the statute,” the court document reads. “The question of law we review de novo is whether the plain language of the statute leads to an absurd result. We conclude it does not. A result is not absurd because the outcome may be unwise.”

Harborside Goes Public on Canadian Securities Exchange

Trading under the ticker symbol HBOR, Harborside Inc. announced on June 10 that it is listing public shares on the Canadian Securities Exchange. “We reached a milestone by becoming publicly traded on the Canadian Securities Exchange and now, Harborside is officially an international company,” Steve DeAngelo stated. “We were the David that stood up to Goliath and beat overwhelming odds, which established the right of state legal dispensaries to operate without federal interference. This sends a clear message to the world that when we are united and are determined, nothing can stop us. The cannabis renaissance is global and coming to a town near you soon!” Harborside also issued a letter of intent to acquire Airfield Supply Co., a dispensary located in San Jose. Harborside is one of the oldest licensed dispensaries in the United States, and it continues to blaze the way for other cannabis businesses to follow.

Colorado

New Law Expands Cannabis Business Opportunities  

A bill signed by Gov. Jared Polis is opening up new business opportunities for Colorado cannabis companies. House Bill 19-1090 was signed by the governor on May 29, and it will allow for outside investors to join the cannabis industry, as well as private equity firms and venture capitalists. “The bill repeals the provision that prohibits publicly traded corporations from holding a marijuana license,” the bill summary states. Medicine Man Technologies, an existing Colorado cannabis company, wasted no time to take advantage and announced on June 5 that it will be partnering with Los Sueños Farms, the “largest sustainable cannabis farm” in North America. According to the press release from Medicine Man, Los Sueños Farms already has 36 acres of cultivatable farmland and 36,000 square feet of greenhouses fit for cannabis plants. “These acquisitions will increase Medicine Man Technologies’ footprint and expand its operations in cultivation, extraction, production and sales, advancing its plan to become a fully vertically integrated operator in the cannabis industry,” the announcement stated.

Denver Metro Dispensaries Become Target for Robberies

Denver Police Department (DPD) is busy investigating what seems to be an ongoing issue in the “Mile High City.” Police believe that the same group of burglars is hitting several metro area cannabis dispensaries. It’s no secret that the industry is an almost strictly cash-based business, making it appealing to thieves, officials have observed. The DPD released one image to the public of a group of individuals who were caught on camera prying the front door of a cannabis dispensary open with a crow bar. DPD sent out a notice stating, “Suspects are three to four males, and possibly two females, with their faces covered and wearing gloves.” The police notice also revealed that 34 dispensaries have been robbed in the metro Denver area, and most appear to be along the I-25 and I-70 corridor. The DPD is urging dispensary owners to make sure security systems are operating properly and that locks are secure.

Los Angeles

Los Angeles Releases Request for Social Equity Program Assistance

Los Angeles’ Department of Cannabis Regulation (DCR) released a Request for Qualifications (RFQ) on June 14, which seeks to find business development services for the city’s social equity program. The RFQ outlines the need for consultants to construct business development curriculum, training, business, licensing and compliance assistance. “The goal of the Social Equity Program is to promote equitable ownership and employment opportunities in the cannabis industry in order to decrease disparities in life outcomes for marginalized communities, and to address the disproportionate impacts of the ‘War on Drugs’ in those communities,” the Department of Cannabis Regulation Executive Director Cat Packer stated. According to the press release, the program is the “largest municipal cannabis social equity program in the nation.” The DCR started to conduct workshops to assist applicants through the eligibility verification process, and the RFQ will help it to flesh out the application process more fully.

Michigan

Marijuana Regulatory Agency Holds First Meeting

On June 13, the Marijuana Regulatory Agency (MRA) held its first meeting at the Williams Building in Lansing. The MRA falls underneath the Department of Licensing and Regulatory Affairs (LARA) and was created to replace the Michigan Medical Marijuana Licensing Board, after that board was abolished in April by Gov. Gretchen Whitmer. “Executive Director Andrew Brisbo kicked off the meeting by stressing his Agency’s commitment to outreach, education and collaboration,” a LARA news release states. “Brisbo also announced that the next three scheduled public meetings of the MRA will coincide with work groups and will be held at locations around the state.” The new board functions as a licensing board for both the medical and recreational cannabis industries. In order to be more efficient than the previous board, the MRA created an online application licensing to help speed up the process.

Governor Calls for Sensible Cannabis Banking

Gov. Gretchen Whitmer joined 18 other governors to call upon Congress on June 13 to approve the Secure and Fair Enforcement (SAFE) Banking Act. Banking institutions currently cannot cater to cannabis businesses due to the federal status of cannabis under the Controlled Substances Act, but the SAFE Banking Act would end that policy. “There is an inherent danger for businesses operating in an all-cash business, because financial institutions are unable to accept the risks and penalties associated with providing service to this industry under current law,” Gov. Whitmer stated. “This letter sends a clear message to Congress that our states are looking for a real solution to a real problem, and we support them to get this done.” There are now 34 states with medical cannabis programs and 10 with recreational cannabis markets, and the SAFE Banking Act would help legitimize the cannabis industries in those states.

Oregon

Oregon State University to Open Hemp Research Center

On June 13, Oregon State University (OSU) announced its plan to open one of the nation’s largest hemp research centers. The Global Hemp Innovation Center will fall under the university’s College of Agricultural Sciences and provide an environment for studies on the hemp plant. “At Oregon State University we’re proud to be leaders in technology and innovation,” said Alan Sams, dean of College of Agricultural Sciences. “So in the College of Agricultural Sciences we’re very excited to be launching a Global Hemp Innovation Center. Oregon is the center of hemp production in the U.S., being the leader in terms of acreage of production and its economic value.” The center will also offer certification for seeds and protect intellectual property for hemp farmers who participate in the program. According to KTVZ, OSU will be the only university in the country to certify hemp seeds.

Oregon Liquor Control Commission Report Indicates Improvements to Tracking System

In 2018, the Oregon Liquor Control Commission (OLCC) was audited by the Oregon Secretary of State and was found to have monitoring and security issues. But on May 29, Secretary of State Bev Clarno released a new report that recognized the OLCC’s efforts to improve its tracking system. “The agency continues to take steps to improve the state’s recreational marijuana program and the information systems that support it,” Clarno wrote in the audit report. “Management has implemented processes to improve marijuana system controls, including risk-based and proactive inspections, reconciliation processes, and system access management.” Even with the improvements, however, the new report added that more improvements could be made to the OLCC’s recreational regulation processes and its IT security. The OLCC is currently addressing its Cannabis Tracking System vendor to improve system functionality and update security features.

San Diego

Poway Adds Cannabis to its Social Host Ordinance

Poway City Council voted on June 4 to update the city’s Social Host Ordinance to include the use of cannabis and other controlled substances. Chapter 9.54 of the Poway Municipal Code was updated to impose liability on residence hosts who are aware or should be aware of underage consumption. The updated ordinance applies to cannabis in a similar manner to alcohol, and it outlines the responsibilities of event or party hosts. “The proposed ordinance recognizes the consumption of marijuana and other controlled substances by minors presents many of [the] same adverse effects as the consumption of alcoholic beverages,” explained City Attorney Alan Fenstermacher. Civil liabilities also apply, including responsibility for the recovery of enforcement services. All four councilmembers who were in attendance at the meeting voted unanimously in favor of the amendments.

Washington

HEMPFEST Files Lawsuit against Liquor & Cannabis Board

On June 4, the organizers behind HEMPFEST filed a lawsuit in Thurston County Superior Court against the Washington State Liquor and Cannabis Board (LCB) for overreach based on new advertising restrictions. The LCB recently imposed Bulletin 19-01, which bans any licensee from participating at events like HEMPFEST in any way that involves “any sign” that “references” the business, which bans signs and booths at HEMPFEST that identify sponsors. “We believe that the new interpretation of Washington State’s 502 ad guidelines are so overreaching and restrictive as to be unconstitutional,” said Vivian Peak, director of HEMPFEST. “It is imperative that Washingtonians have access to accurate and up to date information regarding the cannabis products they purchase and consume, and that those citizens and others are able to identify the source of that information.” HEMPFEST lawyers said that the new advertising restrictions impose on the event’s right to free speech.

Study Suggests Legalization Increased Cannabis Use and Diverted Illegal Sales

A team of researchers from University of Puget Sound and University of Washington published a paper on June 18 that suggests legal cannabis sales increased cannabis consumption and diverted sales away from the black market. To determine this data, researchers analyzed wastewater samples and measured for tetrahydrocannabinol (THC) levels. THC metabolite levels increased in the wastewater at an average of nine percent per quarter, from December 2013 to December 2016, which was in line with the rollout of recreational cannabis sales. “A wastewater?based measure of cannabis consumption suggests a significant increase in consumption in Washington, USA following legalization, and that legal sales appear to have displaced a large portion of the illicit market,” researchers concluded. The findings were published in Addiction, a journal created by the Society for the Study of Addiction, and partial funding was provided by the National Institute on Drug Abuse.

National

Researchers Find Evidence of Cannabis Smoking Dating to 500 BCE

In a paper published in Science Advances on June 12, a team of researchers described the “earliest directly dated and scientifically verified evidence for ritual cannabis smoking.” In East Asia, the team found evidence of psychoactive cannabis being burned in crude wooden bowls at a burial site. “This phytochemical analysis indicates that cannabis plants were burned in wooden braziers during mortuary ceremonies at the Jirzankal Cemetery (ca. 500 BCE) in the eastern Pamirs region,” researchers wrote. “This suggests cannabis was smoked as part of ritual and/or religious activities in western China by at least 2,500 years ago and that the cannabis plants produced high levels of psychoactive compounds.” Hemp seeds and fibers are commonly found in archaeological sites, but few have any evidence of cannabis being consumed for its psychoactive properties. The discovery was highlighted in National Geographic, which generated widespread interest.

News Nuggets

News Nuggets – December 2019

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Cannabis Store Becomes Certified Green Business

One of the largest cannabis retailers in Santa Cruz County, KindPeoples, recently announced that it has been named a Certified Green Business for its commitment to helping to save the environment. The achievement fulfills the goals of the company’s founders. “We knew when we opened KindPeoples on Ocean Street in April it had to be a flagship for our values,” said Khalil Moutawakkil, founder and CEO of KindPeoples. “Becoming a Green Certified Business is the first step in implementing green practices that make a lasting impact on our community, our staff and business partners and our planet. This is just the beginning.” KindPeoples worked with theCertified Green Business Program in the City of Santa Cruz to install energy-efficient lighting, use paper products, minimize waste, promote alternative transportation and establish a company-wide Environmental Policy in order to meet the standards required for certification.

Contra Costa County Bans Vape Product Sales

On Nov. 12, the Contra Costa County Board of Supervisors unanimously voted to ban the sale of cannabis vape products and flavored tobacco products. At the meeting, students and local residents flooded the building to participate and testify against the dangers of vaping. “This is a health crisis; there are potentially fatal consequences,” said  Supervisor Candace Andersen. “We are seeing people die, and I would much prefer to have us err on the side of protecting the public.” The ban comes amid reports of around 40 deaths and hundreds of cases of lung illnesses linked to vaping. The ban on sales of flavored tobacco and cannabis vaping products took effect on Nov. 18 for unincorporated areas of Contra Costa County. Incorporated areas of the county, including about 20 cities that are not under the county’s jurisdiction, will not be affected.

Colorado

Cannabis Edible Sales Increase Following Vape Scare

The recent vaping health scare has shifted cannabis industry trends, causing some areas to plummet in sales and others to rise. According to Headset, a Seattle-based cannabis data intelligence company, edible sales are up 15 percent in Colorado and in four other recreational-friendly states, as a result of the decline of vape sales due the recent health crisis. According to a Headset report from Oct. 2, before the “Vapor Crisis” commenced earlier this year, vape pens totaled 15 to 30 percent of all cannabis sales. Every state where cannabis is legal saw an increase in vapor pen usage from January to June 2019, and vapes have been the fastest growing category of cannabis products. However, since the vape scare began with the first death on Aug. 23, vape sales are rapidly declining and have been banned in some areas. Headset reports that Colorado’s edible sales are up 15 percent from 12.7 percent, from Aug. 23 to Oct. 6 respectively. Nevada, California and Washington edible sales are also up a considerable amount. Dr. Anne Schuchat, head deputy director of the Centers for Disease Control and Prevention, said that the issue is “continuing at a brisk pace.”

Pueblo County Uses Cannabis Taxes to Fund Jail

Pueblo County is setting another example of how cannabis tax dollars can benefit residents in Colorado. In November, voters said yes to 1B, which will raise retail cannabis tax to from 3.5 percent to six percent in order to raise funds to start construction for the new county jail. The proposal came from the Board of Pueblo County Commissioners on Sept. 3 and was made official by voters during the recent election. The new jail construction will cost an estimated $140 million, which includes demolishing the old jail. According to the county commission, while much of the money will go to the capital infrastructure of the new jail, 50 percent of the tax funds will go toward funding college scholarships. This was proposed to voters last year but was rejected. Now that it has passed, the restructured tax will go into effect Jan. 1, 2020. “Other jurisdictions in the state impose a special sales tax on retail marijuana at a higher rate, and this Board believes moving to six percent of the sales price would better align Pueblo County’s tax with other similar taxes in Colorado,” reads the resolution statement from the Board of Pueblo County Commissioners.

Los Angeles

Los Angeles County Sheriff’s Deputy Charged with Lying about Cannabis

Los Angeles County Sheriff’s Department Deputy Bradley Scott Dietze allegedly lied to the Los Angeles Police Department about a cannabis heist that took place last fall. Dietz was accused of posing as a narcotics officer with a search warrant, along with two other men, and carrying out a bogus raid. At the crime scene, 1,200 pounds of cannabis and $645,000 in cash and money orders were stolen. “The case was filed for warrant on Oct. 25,” a press release reads. “Dietze is expected to be arraigned on Dec. 23 in Los Angeles County Superior Court, Alhambra Branch. Deputy District Attorney Deann Rivard of the Justice System Integrity Division is prosecuting the case. On Oct. 29, 2018, Dietze allegedly lied to a Los Angeles Police Department officer who was investigating whether a marijuana distribution warehouse was being robbed in downtown Los Angeles. If convicted as charged, Dietze faces a possible maximum sentence of one year in county jail.”

Michigan

LARA Announces Cannabis License Rule Changes

The Michigan Department of Licensing and Regulatory Affairs (LARA) released an advisory bulletin on Nov. 13, clarifying transfer rules for equivalent license holders who hold medical and recreational licenses of the same type. Growers, processors and provisioning centers may transfer up to 50 percent of their batch or product from their facility to their establishment if they hold equivalent licenses. Specifically, provisioning centers may transfer 50 percent of each product type such as concentrates or flower. “Under Rule 40 of the Adult-Use Marihuana Establishments Emergency rules, the agency may authorize licensees who hold equivalent licenses to transfer marihuana product from the inventory of their marihuana facility to the inventory of their marihuana establishment,” the bulletin states. “This applies if they hold marihuana grower/grower, marihuana processor/processor, or marihuana retailer/provisioning center equivalent licenses.” The bulletin also announced the updated allowed THC amounts in milligrams for cannabis products.

Portage Begins Accepting Medical Cannabis Permit Applications

Portage city leaders began accepting medical cannabis permit applications for provisioning centers, secure transporters, safety compliance facilities, grower facilities and processor facilities on Nov. 18. The window to apply for a permit ends on Dec. 13 and that date will not be extended. “All applicants must have received pre-qualification from the Michigan Medical Marihuana Licensing Board in order to have their application considered,” a news release states. “There are no exceptions. Applications will not be considered on a first-come-first-served basis. All applications will be reviewed once the application period is closed. The city of Portage reserves the right to alter the application deadline.” According to the news release, a $5,000 permit fee applies, in addition to necessary paperwork. Applicants should keep in mind that 1,000-foot buffers apply to neighboring provisioning centers and sensitive areas.

Oregon

Minors Consume Cannabis at Nation’s Second Highest Rate

A recent study by Las Vegas, Nevada-based US Drug Testing Centers showed that 10.35 percent of Oregonians aged 12 to 17 consumed cannabis during 2017. That makes Oregon the state with the second highest prevalence of youth cannabis consumption in the nation during that time period. Vermont topped the list, where 10.75 percent of children and teens had consumed cannabis during the same time period. Oregon was followed by Maine, New Mexico and Rhode Island for the top youth cannabis consumption rates. The study relied on data gathered in 2017 from the Substance Abuse and Mental Health Services Administration, under the U.S. Department of Health and Human Services. Experts speculated that easy access to cannabis was a factor in the high rates of cannabis consumption, although rates have fallen in Oregon since 2002. The report arrives amid a nationwide teen vaping crisis, usually involving youth of the same age groups.

Oregon Court of Appeals Blocks Flavored Vape Ban

On Nov. 14, the Oregon Court of Appeals placed a hold on Gov. Kate Brown’s six-month vape ban that was recently implemented. Just one month ago, the court placed a hold the ban on flavored nicotine products, but the new hold also applies to THC vape products. The court was  “ . . . unable to tie lung injury cases to the type of flavored vape cartridges at issue,” a news release stated. “The court is not convinced that there is a risk of harm to the public if the enforcement of the rule is stayed.” The court went on to say that the details of vaping illness remain unknown, so that a ban cannot be made based on speculation of what is causing the outbreak of pulmonary lung issues. As of mid-November, 17 Oregonians have fallen ill from vaping, including six who used only nicotine products and five who used only THC products, according to the Oregon Health Authority.

San Diego

Oceanside Planning Commission Approves Recreational Cannabis Cultivation

On Nov. 4, with three members absent, the Oceanside Planning Commission unanimously voted to recommend that the Oceanside City Council add recreational cannabis cultivation to its 2018 ordinance that currently allows only medical cannabis cultivation. It would modify Articles 4, 14 and 36 of the City of Oceanside Comprehensive Zoning Ordinance and Chapter 7, Article XIII of the Oceanside City Code. “By limiting cultivation to medical-only, licensed cultivators were restricted to conduct business with a small percentage of the available market in California,” the city’s staff report reads. “Expanding cultivation to include adult-use gives licensed cultivators the ability to sell product to the entire California cannabis market, increasing the product viability and profits.” Oceanside’s latest effort would only remove the medical-only restriction for cultivation from its city code, and storefronts would remain banned in the city.

California Raises Cannabis Tax Rate

On Nov. 22, the California Department of Tax and Fee Administration (CDTFA) issued a media alert announcing that higher tax rates will apply to cannabis products beginning on Jan. 1, 2020. The markup rate will be raised to 80 percent, or 30 percent higher than its current mark. The markup rate is used to calculate tax on cannabis products. “After analyzing thousands of transactions in the state’s Track and Trace system, CDTFA analysts have determined that the required markup rate for the period beginning Jan. 1, 2020, is 80 percent,” said CDTFA Spokesperson Casey Wells. In the news release, the CDTFA provided an example, indicating that a product with a wholesale cost of $50 would generate a mark-up of $40 and $13.50 in excise tax. California cannabis industry trade groups were seeking the exact opposite, or lower tax rates, and said they were “stunned and outraged” by the tax increase.

Washington

U.S. Customs Agents Seize Packaging from Cannabis Businesses

Several Washington-based cannabis businesses recently complained that U.S. Customs and Border Protection agents seized all types of items including spice jars, vials and packaging materials. The materials were seized at a port of entry located in Tacoma, and were defined as “paraphernalia,” which angered business owners. The confiscated products were worth more than $8,000. “The seized property, including appraised domestic value (ADV) described as follows: 1,080 85x120mm glass jars with wooden lids, ADV: $1,620.00; 5,303 50x70mm glass jars with wooden lids, ADV: $6,628/75,” customs agents indicated in a Sept. 30 letter. “This merchandise from entry BUU-1311428 was seized as an unlawful importation of drug paraphernalia.” Shipment owners may petition to retrieve their property, but only if they post a bond of $5,000 or 10 percent of the shipment’s assessed value.

Study Links Rising Cannabis Consumption Rates with Legalization

A new study published on Nov. 13 in the journal JAMA Psychiatry suggests an association between legalization in states including Washington and rising cannabis consumption rates. The study defined any kind of problematic use of the plant as cannabis use disorder (CUD). “This study’s findings suggest that although marijuana legalization advanced social justice goals, the small post-RML increase in risk for CUD among respondents aged 12 to 17 years and increased frequent use and CUD among adults 26 years or older in this study are a potential public health concern,” researchers reported. “To undertake prevention efforts, further studies are warranted to assess how these increases occur and to identify subpopulations that may be especially vulnerable.” The study’s lead author, Magdalena Cerdá, said that heavy cannabis consumption is linked to psychological and physical health concerns such as lower educational attainment and decline in social class.

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News Nuggets

News Nuggets – November 2019

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Sonoma County Leaders Approve Controversial Farm

The Sonoma County Board of Supervisors approved a five-year cultivation permit for Petaluma Hills Farm on Sept. 25, despite heavy push-back from the local community. Petaluma Hills Farm will cultivate about an acre of cannabis on a former chicken ranch in a quiet community. The other 37 acres of the property will be used for non-cannabis purposes such as cattle grazing. “It’s agriculture in my mind,” said Supervisor James Gore, “No matter how we classify it.” For the past three years, neighbors have been trying to stop the farm from growing cannabis including serving the farm a lawsuit. Community members held rallies to stop the spread of cannabis in the county. The farm is located on Purvine Road, which led protesters to hold up signs that say, “No Pot on Purvine.” But in the end, county supervisors were more interested in the financial opportunities cannabis could bring to the county.

Gov. Gavin Newsom Signs School Medical Cannabis Bill

On Oct. 16, California Gov. Gavin Newsom signed Senate Bill 223, or Jojo’s Act, which allows for students in grades K-12 to bring approved medical cannabis onto school campuses. The move signals a dramatic shift from the governor’s predecessor. Last year, former Gov. Jerry Brown vetoed a very similar bill. State Sen. Jerry Hill named the bill after Jojo Garcia, a young student with severe epilepsy. “By signing Jojo’s Act, Newsom has lifted barriers for students with severe medical disabilities for whom medicinal cannabis is the only medication that works,” said Hill. “We need to be clear about what SB-223 allows and how important it is for families who have had to remove their children from campus, take them 1,000 feet away, give them their medicinal cannabis and then return them to school again.” The bill excludes smoking or vaping medical cannabis products on cannabis.

Colorado

Colorado Lawmaker Sponsors the SAFE Banking Act

The time has come for cannabis companies to receive the same banking benefits as other businesses. The U.S. House of Representatives passed a bill enacting the Secure and Fair Enforcement Act of 2019, or SAFE Banking Act, on Sept. 25, which passed in a landslide vote. Colorado Rep. Ed Perlmutter sponsored the bill, and if it continues to receive approval, it would allow cannabis-related businesses to have access to banking, which has long been denied by the federal government. Cannabis-related businesses would have access to checking and savings banking accounts. This would also simplify finances for cannabis companies, and it would be beneficial to those who need loans or liens of credit. Perlmutter said in a tweet, “This is a huge milestone in reforming federal cannabis laws and reducing the public safety risk in communities across the country.” The next step for the SAFE Banking Act is to move to the republican-dominated Senate for approval.

State Tourism Board Includes Cannabis Tourism Training

The topic of cannabis tourism has been a back and forth issue for Colorado ever since legalization went into effect in 2014. Legal cannabis draws tourists to Colorado, but the lack of safe places to consume cannabis has become apparent to everyone including state officials. At the end of September, the Colorado Governor’s Tourism Conference was held. There were several panels and presentations to discuss all types of tourism issues and ideas in Colorado, including cannabis, which was endorsed and encouraged by Gov. Jared Polis. Only last year, a bill was passed that would allow businesses to apply for consumption permits. Now, the Colorado Tourism Office is offering cannabis training for businesses with social use permits. Polis assigned cannabis advocate Wanda James to the state tourism board in August. “A key goal of the training is to position frontline workers across the state to inspire the visitors they serve to seek out more experiences, especially in the state’s lesser-known destinations, to generate powerful word-of-mouth and generate even more economic impact from travelers,” stated a press release from the Colorado Tourism Office.

Los Angeles

Attorney Association Creates Cannabis Law Practice Section

The Los Angeles County Bar Association (LACBA) created a new law practice section specifically designed to assist cannabis business operators. The update will help business owners easily locate a lawyer who specializes in the cannabis industry. “The cannabis industry is booming, perhaps like the next gold rush. LACBA must provide its over 15,000 members with a practice group on the cutting edge of the law,” said Ronald F. Brot, president of LACBA. “Los Angeles already has countless business practices directly and indirectly involved with cannabis opportunities. The creation of the Cannabis Section within LACBA meets a current need, and provides an important and necessary space for the many types of lawyers who provide legal services to this industry.” As Los Angeles is one of the largest cannabis markets in the world, some operators have a very tough time? finding a lawyer who understands how the law works and the constant changes within the cannabis space.

Michigan

Michigan Farmers Harvest First Hemp Crop

In mid-October, industrial hemp farmers in Michigan began to harvest the first season of crops as part of Michigan’s pilot program under the 2018 Farm Bill. Michigan authorities licensed 572 registered cultivators and 423 processors, with a plan to grow 32,614 acres of hemp. The Michigan Department of Agriculture & Rural Development stated that it is unaware if the goal of 32,614 acres was achieved. One of the cultivators, Paw Paw Hemp Company, harvested nearly 30 acres of hemp for CBD oil production. “We want to empower our farmers, friends, and their families to live healthier, more eco-friendly lives through the production of hemp,” Paw Paw Hemp Company stated in a press release. The crops were planted in April and have matured and flowered due to the 12-hour light cycle that begins in September in Michigan. According to South Bend Tribune, it’s the first federally legal hemp crop in the Midwest since World War II.

Marijuana Regulatory Agency Expands Social Equity Program

Michigan’s Marijuana Regulatory Agency (MRA) presented its updated Social Equity Program in Kalamazoo on Oct. 7. In order to qualify for the program, applicants must live in one of the 19 designated communities that have been disproportionately impacted by the “War on Drugs.” “Today, the Marijuana Regulatory Agency announced an expansion of its Social Equity Program, which is designed to encourage participation in the marijuana industry by people who live in Michigan communities which have been disproportionately impacted by marijuana prohibition and enforcement,” an MRA release reads. Social Equity Program members will receive up to 60 percent off the application fee, the initial license fee and renewal fee. Disproportionately impacted communities will receive a 25 percent reduction, and an additional 25 percent off if the individual(s) with majority ownership has been a resident in a designated community and holds a cannabis conviction. A further 10 percent reduction will go to individuals who qualify for certain criteria, such as those who were registered caregivers between 2008 and 2017.

Oregon

Oregon Education Association Backs Decriminalization

The Oregon Education Association (OEA), a teacher’s union, announced on Oct. 4 that it supports a decriminalization measure in principle but it still has some concerns over how the money would be spent. The OEA is concerned about lost revenue because of funds that would be taken from schools and redirected to drug treatment programs. The Drug Addiction Treatment and Recovery Act would classify low-level drug possession as a treatment issue and not a criminal justice issue. “Again, the Oregon Education Association supports the policy behind this initiative. But as a practical and legal matter, it is essential that voters understand how the program will be paid for and the impact on education funding. The ballot title fails to do so and must be revised,” an OEA release states. The OEA estimates that schools stand to lose $65.7 million in funding, which amounts to two-thirds of a reduction.

OLCC Approves Punishments for Six Businesses

At the monthly meeting of the Oregon Liquor Control Commission (OLCC) on Oct. 17, the commission approved six violation stipulated settlement agreements. Most businesses were given steep fines and temporary suspensions, and one business, Gras Cannabis, will be forced to surrender its license for three violations. Another business, Artisan Agriculture, will not receive a renewed license after its old license expired. “The administrative hearings process is methodical and certain,” said Steve Marks, OLCC executive director. “Even though this case started last summer (2018), the end result is we’ve removed a bad actor from Oregon’s regulated marijuana system. We don’t have tolerance for this kind of behavior and licensees should know the clock eventually runs out on those who have no place in our system.” The license surrender was due to the business exceeding daily purchase limits, and other bad behaviors were reported.

San Diego

UC San Diego Center for Medicinal Cannabis Research Awards Grants to Five Studies

The Center for Medicinal Cannabis Research (CMCR) at the University of California, San Diego’s School of Medicine announced on Oct. 10 that it will award a total of $3 million in research grants to five research teams. “Within the medical community, there is a lot of interest in the role of medical cannabis and CBD,” said Professor of Psychiatry Igor Grant, who also serves as the CMCR director. “There is a hope that it could be yet another useful agent in some of these conditions, which are difficult to treat or disabling.” The five grants are funded by Proposition 64, which includes revenue set aside for the purpose of advancing scientific research regarding medical cannabis. It’s the CMCR’s first year of grant funding. Research studies will explore topics including cannabis’ potential to treat early psychosis, rheumatoid arthritis, insomnia, alcohol dependence and anorexia nervosa.

Washington

Washington Extends Leaf Data Systems Contract

The Washington State Liquor and Cannabis Board (LCB) issued a bulletin on Oct. 3, announcing that it has extended its contract for an additional two months with the traceability system software, Leaf Data Systems. “As you may know, the Liquor and Cannabis Board and our traceability software vendor, Leaf Data Systems, have been operating under a two-month contract extension through Sept. 30, 2019,” Deputy Director and Executive Sponsor Megan Duffy stated. “We have now agreed to an additional two-month extension, the terms of which will continue to focus solely on providing a stable system to our users. Leaf Data will operate the system and work on addressing post-release issues to ensure a stable system.” The LCB and Leaf Data Systems will now focus on maintaining the current LEAF system that licensees utilize for seed-to-sale tracking. A recent update in the system last July caused the software to crash for several days, which cost businesses thousands of dollars in lost revenue.

Governor Bans Flavored Vape Products

On Sept. 27, Gov. Jay Inslee issued Executive Order 19-03, which bans flavored vape products in the state containing nicotine or THC. The ban went into effect on Oct. 10 and affects both cannabis licensees and vapor product licensees. “I am pleased the State Board of Health agrees we cannot wait to act on this very important public health issue,” stated Gov. Inslee. “It comes down to protecting the health of Washingtonians, especially young people. These emergency rules will help protect public health and save lives.” Vape product vendors are required to post a specific warning sign at retail locations, add packaging requirements, disclose all compounds to the Liquor and Cannabis Board and cooperate with the ongoing vape investigation with state and federal authorities. The emergency rules follow a growing number of reports of mysterious vape-related cases of pulmonary illness.

National

Australia to Fund Medical Cannabis and Cancer Research

Australian officials will allocate A$3 million ($2.03 million USD) to study the benefits of medical cannabis on cancer patients. On Oct. 5, Health Minister Greg Hunt said that so far, 11,000 patients have been granted access to medical cannabis. “Our Government is committed to ensuring a safe, quality supply of medicinal cannabis to Australian patients, but only when it is prescribed by a medical professional,” said Hunt. “There have only been a limited number of well-designed clinical studies on medicinal cannabis, and we need to increase the evidence base to support medical professionals.” Hunt spoke at a fundraiser walk led by former CULTURE cover celebrity Olivia Newton-John, who is currently touting the beneficial effects of medical cannabis. Newton-John herself has utilized medical cannabis to battle a recurrence of stage 4 cancer.

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News Nuggets – October 2019

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Bay Area

Oakland Cannabis Breathalyzer Company Raises $30M in Funding

Oakland-based Hound Labs announced on Aug. 27 that it has raised $30 million in Series D financing, shortly after a University of California, San Francisco study revealed that THC can be reliably detected within a three-hour window after smoking cannabis. Hound Labs developed one of the first breathalyzers that are capable of detecting both cannabis and alcohol. “With the publication of clinical study results validating breath as the new frontier for testing recent use of THC, investors can see the tremendous value that Hound Labs will bring to the market with its first-of-its-kind technology,” CEO and Co-founder of Hound Labs, Mike Lynn, stated. “We are excited to usher in a new era of more meaningful and fair drug testing now that marijuana is both medically and recreationally available to so many people.” The study results helped to lure investors to participate in the latest funding round.

California Launches Vaping Danger Awareness Campaign

On Sept. 16, Gov. Gavin Newsom announced the launch of a public awareness campaign to alert Californians about the dangers of vaping e-cigarettes with nicotine and vaping products containing cannabis. In addition, he announced that state officials will be developing a plan to ban the sale of illicit vaping products that contain harmful additives. “As a parent, I understand the anxiety caused by the deceptive marketing tactics and flavored options designed to target our kids,” said Gov. Newsom. “With mysterious lung illnesses and deaths on the rise, we have to educate our kids and do everything we can to tackle this crisis.” Newsom stated that he doesn’t have the executive authority to outright ban all flavored vape products, as in certain other states, but he requested that state lawmakers send him legislation to carry out a ban.

Colorado

Denver’s Nathaniel Rateliff Collaborates for Cannabis Line

WILLIE’S RESERVETM, the signature cannabis brand of singer-songwriter Willie Nelson, announced its collaboration with the popular Americana-style folk band, Nathaniel Rateliff & The Night Sweats. The company is set to release 500mg Cherry AK distillate cartridges from the new Nightstache Collection, which will be sold exclusively in Denver’s LivWell dispensaries. The Cherry AK will be cultivated at AJ’s Craft Cannabis farm in Pueblo County, one of 11 Colorado outdoor cannabis farms that grow flower for Nelson’s brand. Based in Denver himself, Rateliff announced the collaboration in a recent press release. “We are grateful to WILLIE’S RESERVETM and their vetted network of cannabis farmers in each state, and we respect the brand’s commitment to these growers—including the team at AJ’s Craft Cannabis in Boone, Colorado, where all of the flower for our initial vape cartridges is sourced,” Rateliff stated. “Our hope is that these cannabis products will provide enjoyment for many, as well as relief to those patients who need it most.”

New Social Equity Cannabis Legislation Moves Forward  

In order to add more diversity to the industry, new social equity cannabis business licenses for low-income groups were worked into the new Senate Bill 224. According to the bill’s outline, those who are applying must come from designated low-income areas, deemed so by the Colorado Office of Economic Development & International Trade, and applicants must have been in that bracket for at least five of the last 10 years. The point is to offer entrepreneurial opportunities to those who many not have the financial backing once required. The state of Colorado is now trying to figure out how to distribute these new social equity cannabis business licenses for the 2020 launch. Under SB-224, in order to research and manufacture their cannabis products, new license holders will need to utilize existing cannabis companies’ facilities. Although there are restrictions on operating dispensaries, those with the social equity licenses may cultivate, extract and manufacture infused products in the designated existing facility. During meetings on Sept. 13 and Sept. 20, industry stakeholders and state lawmakers began creating the framework for the agreements between the new license holders and the existing businesses, as well as how the state should weed through the companies that will host for the new licensees.

Los Angeles

Pasadena Officials Weigh Impact of Legalizing Unlicensed Dispensaries

On Sept. 16, Pasadena City Council unanimously agreed to direct City Staff to deliver a report on the potential impact of a citizen-led initiative to legalize all unlicensed dispensaries in the city. “This [initiative] would allow such business to operate without a permit required of other commercial cannabis [businesses], until Dec. 31, 2024,” the bill reads. “The Measure would require cannabis [businesses] that operated in violation of the Municipal Code in 2018 to obtain that permit as of January 2025, although it is unclear what the criteria for issuance of such permit would be.” The staff report will be ready to present to city council on Oct. 7. The bill, called People’s Initiative to Preserve the Existing Operation of Non-Offending Commercial Cannabis Businesses, would amend Section 5.78.010 of the Pasadena Municipal Code to allow those businesses.

Palm Springs to Tackle Cannabis Odors

Palm Springs Mayor Pro Tem Geoff Kors and Councilmember J.R. Roberts announced on Sept. 4 that they will be making revisions to the city’s existing cannabis ordinance. The announcement was made to a forum full of people at the Palm Springs Convention Center, where citizens could voice any concerns that they had with the local cannabis industry. “Our number one focus is odor and we’ve found that there’s a lot more we can do now than we could do in the past,” said Councilmember Roberts. The plan is to implement punishments in the form of a $10,000 fine for businesses that fail to control odor. In addition, those businesses could risk losing their permit if they don’t take action to abate offensive odors. According to Kors, the draft will be completed soon before being presented again for community feedback, followed by the full city council.

Michigan

Four Cannabis Products Are Recalled

On Aug. 30, the Michigan Marijuana Regulatory Agency issued a health bulletin to recall four medical cannabis health products found in Michigan provisioning centers. The four products are RSO Syringe Monster X, Glue-Buds, Platinum Vapes – Diamond OG Cartridge and Savage Signature OG Budder – Concentrate. One product tested positive for a banned pesticide and three others tested positive for dangerous heavy metals, which prompted the recalls. “All affected medical marijuana is required to have a label affixed to the container that indicates the METRC number assigned to the marijuana product,” the bulletin reads. “Patients and caregivers should look for the production batch number associated with the product name or the individual package number which can be found under the name of the provisioning center at which the product was sold.” No adverse reactions linked to the recalled products have been reported as of mid-September.

Gov. Whitmer Orders Emergency Rules to Ban Flavored E-cigarettes

Amid a growing vaping epidemic, Gov. Gretchen Whitmer ordered the Michigan Department of Health and Human Services to issue emergency rules on Sept. 4 to ban flavored e-cigarettes for six months. Once issued, it would make Michigan one of the first states to ban flavored e-cigarettes, although several more states are currently in the process of taking similar actions. This ban would last for six months and currently only targets flavored e-cigarettes, but does not ban tobacco-flavored products. “As governor, my number one priority is keeping our kids safe,” stated Gov. Whitmer. “And right now, companies selling vaping products are using candy flavors to hook children on nicotine and misleading claims to promote the belief that these products are safe. That ends today. Our kids deserve leaders who are going to fight to protect them. These bold steps will finally put an end to these irresponsible and deceptive practices and protect Michiganders’ public health.” Retailers would have 30 days to comply with the new emergency rules once they’re issued, which could happen within weeks.

Oregon

Oregon Company Raises Awareness for Veterans

Curaleaf launched the Veterans Cannabis Project (VCP) initiative in Oregon, according to an Aug. 29 report, to help promote awareness about veteran access to cannabis. Customers can buy a custom-designed Veterans Cannabis Project box of pre-rolls, with a portion of proceeds going to the VCP. Each box contains five pre-rolls, which are filled with a total of 2.5 grams of UKU flower, one of Oregon’s top-selling cannabis brands. “Raising awareness of veterans’ access to cannabis is an important issue for Curaleaf,” said Curaleaf Oregon President Tim Fitzpatrick. Curaleaf can play an important role by educating veterans and consumers on how cannabis may be of great benefit for veterans. We are proud to be able to support our veterans as they look to improve their quality of life.” The products are also available in Maryland, Maine and Arizona.

Judge Rules Cannabis Farm Damage to Grape Vineyard is Plausible

U.S. Senior District Judge Anna Brown ruled on Aug. 27 that Momtazi Vineyard, a grape vineyard, may proceed in its racketeering lawsuit against a neighboring cannabis farm. Momtazi claims that under the Racketeer Influenced and Corrupt Organization Act (RICO), its grapes were contaminated with cannabis odor. “The customer’s concerns, whether valid or invalid, arose directly from the proximity of defendants’ marijuana-grow operation,” Judge Brown stated in her opinion. Momtazi must now prove that it suffered “concrete financial loss” due to the smell of cannabis on its grapes. The defendants, Mary and Steven Wagner, as well as their son Richard, say there are no concrete losses. Momtazi also said that the Wagners are running a “criminal enterprise” because cannabis is illegal under federal law, and the company is seeking three times the amount of damages that were valued. Those found guilty of RICO charges face up to 20 years in prison—per racketeering count.

San Diego

Voters will Decide on Imperial Beach Cannabis Regulations

Despite a passionate effort by Imperial Beach officials to invalidate a citizen initiative that would allow for an unlimited number of cannabis businesses, the proposal will be on the November 2020 ballot for voters to decide. The bill is sponsored by the Association of Cannabis Professionals and would allow for dispensaries, manufacturing businesses and lounges with no limit on the number of permits. Imperial Beach City Council voted on Sept. 18 to place the proposal on the ballot. Imperial Beach Mayor Serge Dedina called the proposal “crazy,” while Councilmember Ed Spriggs suggested also putting the city’s current cannabis ordinance on the ballot as well as a competing measure. “Councilmember Spriggs stated that one of his big concerns about the amendment is that the city loses the requirement for data gathering analysis, the ability to examine impacts on schools,” the Imperial Beach City Council agenda reads.

National City to Draft Ordinance Allowing Cannabis Businesses

On Sept. 16, the National City Council approved staff recommendations to draft an ordinance that would allow for three cannabis businesses in industrial zones. The cap on the number of businesses could be raised in the future. Standalone retail businesses are not allowed in industrial zones of National City, so businesses may have to be defined as microbusinesses and operate under dual functions with operations such as manufacturing or distribution. However, city leadership has not yet settled on what types of businesses will be allowed, from delivery to retail. “If we’re going to open it up, I think everybody should be affected by the locations,” said Councilmember Jerry Cano. “And I think if we’re going to be considering to have dispensaries, I think we should go to the highest limit that we can do.” The final draft of the ordinance could be ready as early as the end of 2019.

Washington

West Seattle Cannabis Store Launches Recycling Program

Canna West Seattle’s new incentivized recycling program was announced on Aug. 29. Canna West Seattle employees will take any cannabis-related waste from other cannabis stores and ensure that it is recycled, and customers can earn points as an incentive. It’s common to find plastic canisters scattered around in cities like Seattle with a high saturation of cannabis businesses. “Some experts estimate that by 2020 the cannabis industry will be generating over one billion units of single-use plastic packaging waste per year,” said Maryam Mirnateghi, owner of Canna West Seattle and Canna Culture. “As an entrepreneur in this industry, that statistic bothers me and it bothers my staff, so we are taking action.” While some cannabis packaging is too small to recycle at conventional recycling centers, Mirnateghi aims to help develop new technology to make it easier to recycle small plastic containers like the ones used for most cannabis products.

Cannabis Trade Group Unveils Proposal to Launch Equity Fund

The Washington CannaBusiness Association (WACA) announced the Cannabis Capital Equity Act, a bill that would fund a social equity program to help remove obstacles for minority business owners and would eliminate a residency requirement. In addition, the fund would be generated by a one percent fee on cannabis investments for a total of over $500,000. “Our state is proud to have led the way in legalizing cannabis, but that was only one step in addressing historic injustices created by the War on Drugs,” said Rep. Kristine Reeves. “That’s why I am looking forward to working with my colleagues to create a new statewide loan fund to increase access to capital and more opportunity for women and minority license-holders in the cannabis industry.” The fee would not be integrated until Dec. 31, 2025. WACA’s bill awaits state lawmakers to reconvene in January, at which point the legislation can move forward.

National

Officials Suspect Vitamin E Acetate as Culprit in Vaping Epidemic

A joint investigation published on Sept. 12 by the Centers for Disease Control and Prevention and the U.S. Food & Drug Administration points the finger at vitamin E oil, or tocopheryl acetate, as one of the compounds that may be linked to six deaths and the hospitalization of hundreds of people who vaped e-cigarettes or vape pens. “Most patients have reported a history of using e-cigarette products containing THC,” the CDC report reads. “Many patients have reported using THC and nicotine. Some have reported the use of e-cigarette products containing only nicotine.” Vitamin E acetate is used as a thickening agent by rogue vape manufacturers. Other common ingredients include propylene glycol, vegetable glycerin, polyethylene glycol and medium-chain triglycerides (MCT oil). Even the terpene D-limonene is reported to be a dangerous solvent despite being organic, when it is added in unnatural quantities. Serious pulmonary illness can arise if unregulated or random ingredients are added haphazardly.

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