News Nuggets – May 2019

Bay Area

25 Local Governments File Lawsuit Against Delivery Policy

Represented by the legal team at Churchwell White LLP, 25 California jurisdictions filed a lawsuit against the Bureau of Cannabis Control (BCC) according to an April 5 announcement. The purpose of the lawsuit is to invalidate the BCC’s recent policy change that allows cannabis deliveries in any jurisdiction, even if the jurisdiction has banned cannabis sales. “The BCC is fundamentally changing Proposition 64, eroding local control and harming our local cannabis businesses by allowing commercial cannabis deliveries in every jurisdiction in California,” Santa Cruz County Board of Supervisors Chair Ryan Coonerty stated. “This betrays the promise made to the voters in Proposition 64.” The 25 plaintiffs are the county of Santa Cruz, and cities of Agoura Hills, Angels Camp, Arcadia, Atwater, Beverly Hills, Ceres, Clovis, Covina, Dixon, Downey, McFarland, Newman, Oakdale, Palmdale, Patterson, Riverbank, Riverside, San Pablo, Sonora, Tehachapi, Temecula, Tracy, Turlock and Vacaville.

Concord City Council Approves Deliveries and Rejects Storefronts
During an extended study session on April 2, the Concord City Council unanimously expressed support for allowing deliveries in city limits, while rejecting a proposal to allow recreational storefront dispensaries. The ordinance won’t be drafted until a town hall meeting and several community workshops have taken place. The city council also signaled support for medical dispensaries, but felt drastically different about opening recreational dispensaries. “I’m not convinced that retail sales for adult use is appropriate for our community,” Councilmember Laura Hoffmeister said at the study session. Mayor Carlyn Obringer agreed, expressing similar reservations about allowing recreational storefront sales. Currently two delivery services, Fume Highroad in Lake County and Ohana Gardens in Sacramento, deliver to the market in Concord, but the city can’t collect any taxes until the ordinance is passed and delivery companies are granted local permits.

Colorado

Department of Revenue Names New Director

Gov. Jared Polis announced the Colorado Department of Revenue’s (DOR) new executive director on April 4. Lu Córdova will replace Mike Hartman in the position. The DOR is a large, governmental department that has about 1,500 employees. It controls and regulates the cannabis industry as well as alcohol, tobacco, gaming, racing and lottery. From 2017 to 2018, the DOR helped improve packaging and labeling in the cannabis industry to enhance public health and safety. Córdova has a background in ecommerce, cybersecurity and international finance, and is the chair and CEO of CTEK, a nonprofit that that helps worldwide entrepreneurship efforts. She has held various president and CEO titles including working at Euronet Worldwide, an international payments company. She also sat on the Board of Directors for the 10th Federal Reserve Bank. The governor said in the official announcement, “We are thrilled to have Lu join our team. Her vision, expertise and record of experience make her a natural fit at the Department of Revenue. We can’t wait for her to get started.”

CBD Burger in Denver Makes Fast Food History

Carl’s Jr.® made fast food history on April 20 by selling burgers infused with cannabidiol (CBD) at a Denver location. “The Rocky Mountain High: CheeseBurger Delight” came with Santa Fe Sauce infused with hemp-based CBD oil. Each serving of Santa Fe Sauce was infused with 5mg of CBD, which was sourced from Colorado-based Bluebird Botanicals. To satisfy the inevitable munchies on 420, the burgers also included pickled jalapeños, pepper jack cheese and Crisscut® fries directly on the burgers. “The new Rocky Mountain High: CheeseBurger Delight ties back to our core strategy of being the first to bring bold and unexpected flavors that are at the forefront of hot restaurant trends to a quick service menu,” said Patty Trevino, senior vice president, brand marketing at Carl’s Jr.® “From our early introduction into plant-based options to bringing the rare indulgence of truffles to our menu with the new Bacon Truffle Angus Burger, our customers have come to expect innovative and unique menu offerings, and we’re thrilled to be the first quick service restaurant to be testing CBD infused options.”

Los Angeles

Los Angeles City Attorney Sues Dispensary for Banned Pesticide

City Attorney Mike Feuer announced on April 17 that his office filed an injunction against Kush Club 20, a South Los Angeles dispensary that is accused of selling cannabis that was contaminated with a banned pesticide. “Illegal cannabis businesses can pose serious threats to the public’s health and safety,” Feuer stated. “Customers patronize illegal shops at their peril, and undermine businesses who play by the rules—and whose product is tested to protect buyers’ health.” The civil lawsuit claims that the dispensary operated without a license and sold cannabis that was contaminated with paclobutrazol, a plant growth regulator pesticide commonly used on golf turf. Paclobutrazol is toxic and used to add color to grass. The city of Los Angeles is seeking penalties of up to $20,000 per day that the store remained open before closing, plus attorney fees. The move makes an example out of Kush Club 20, sending a warning to all other illegal dispensaries in the city.

Michigan

Hard Deadline for Licenses Approved by House Panel

On April 10, the Michigan House Government Operations Committee approved House Bill 4440, which would authorize unlicensed cannabis businesses to be shut down on June 1. Furthermore, any business that operates without a license as of June 1 would be barred from operation for at least one year. “Under the bill, an applicant would be ineligible to receive a license if the Department of Licensing and Regulatory Affairs determined that the applicant, at any time after the bill took effect, held itself out as operating a marijuana facility and did not have a license to operate the facility or had a license that was suspended, revoked, lapsed, void, fraudulently obtained or transferred to the applicant without the prior approval of the Medical Marihuana Licensing Board,” the bill states. The bill now heads to the House, where it is expected to be approved. If it receives House approval, then it will move to the Senate.

Bay Mills Native American Reservation Legalizes Recreational Cannabis

Last January, elders of the Bay Mills Indian Community (BMIC) voted to legalize recreational cannabis, and on April 8, the Bay Mills Executive Council approved an ordinance, legalizing recreational cannabis for adults 21 and over. It’s the first Native American community in Michigan to do so. “Our tribal government does not necessarily promote the use of marijuana, but we believe that criminalizing it is bad policy,” BMIC Tribal Chairman Bryan Newland stated. “Our new tribal law ensures that people on our lands are no longer at risk of prosecution for actions that are lawful everywhere else in Michigan.” The ordinance would also provide a way to clean the slate for tribal members who have been convicted of cannabis-related crimes in the past. The community is taking a slow, calculated approach to cannabis regulation in order to stay in sync with state law.

Oregon

Oregon Authorities Issue Reminder of Online Inventory System Requirements

The Oregon Medical Marijuana Program (OMMP) issued a reminder bulletin to all cultivation businesses on April 3 that they are required to use the Oregon Medical Marijuana Online System (OMMOS) every month and that they must report all on-site inventory and transfers. Even during months with no inventory and no transfers, businesses are still required to login to the program by the 10th of every month. “Failure to report monthly into OMMOS as required will result in OMMP proposing to issue at least a $200 civil penalty to the grower,” the bulletin read. This month, the OMMP began sending out warning letters to cultivators that aren’t logging into the system. Even patients who are growing at-home are required to use the system if they transfer any cannabis to a medical processor or dispensary. Tutorials are available for those who are unfamiliar with the system.

OLCC Unanimously Rejects Producer License

On March 21, the Oregon Liquor Control Commission (OLCC) voted unanimously to deny the application for a producer license by Earth People’s Garden, LLC. The decision was made based upon a recommendation from a State of Oregon Administrative Law Judge. According to the OLCC, Earth People’s Garden Manager Steven Shirley was supposed to take a Metrc proficiency test, plus a Marijuana Worker Permit test, but instead allegedly falsified his name and had someone else take the tests for him. “The Commission’s action reflects how serious it is about public safety in the legal recreational marijuana industry,” OLCC Executive Director Steven Marks stated. “This is another example of the compliance work our agency undertakes every day to make sure that those people who don’t belong in this system aren’t a part of it.” In the same news release, the OLCC listed several other temporary license suspensions for various compliance violations.

San Diego

Study Suggests Cancer Patients are More Likely to Turn to Medical Cannabis

According to a new study published online on April 22, cancer patients are more likely to manage pain with medical cannabis in comparison to other population groups. The study was published online first, and it was published in print shortly after in the American Cancer Society’s peer-reviewed journal, Cancer. To gather data, researchers looked at existing responses about medical cannabis from the U.S. National Health and Nutrition Examination Survey with date collected between 2005 and 2014. The team compared 826 people with cancer to over 1,600 people without the disease and found that 40.3 percent of cancer patients consumed cannabis within the last 12 months to manage pain, compared with 38 percent of non-cancer patients. “Prospective clinical trials are needed to quantify the efficacy of marijuana in cancer-specific pain as well as the risk of opioid misuse in this patient population,” said study author Kathryn Ries Tringale MD. In addition, cancer patients were 13.9 percent more likely to turn to prescription opioids than non-cancer patients.

Washington

WSU Researchers are Conducting Tobacco, Cannabis and Youth Study

Washington State University (WSU) is currently conducting a study about the effects that cannabis and tobacco consumption can have on youth. Crystal Lederhos Smith, who is currently pursuing a Ph.D. in Prevention Science at WSU, is the primary researcher for the study. The study’s findings are still to-be-determined, but Smith gave CULTURE a statement on why WSU chose the subject to study. “We chose to study the intersection of cannabis and tobacco use in youth, because research has indicated that there may be a greater potential for negative outcomes when youth begin their use earlier in life,” Smith said. “Cannabis and tobacco co-users have increased odds of several negative outcomes, such as respiratory distress, increased nicotine dependence, reduced lung functioning, psychosocial problems and some cancers.” Previous research has found that factors such as personality and family life can influence a youth’s choice to consume cannabis and/or tobacco. This study aims to further pinpoint why youth consume cannabis and tobacco so that they can deter consumption until adulthood.

Representative Supports Cannabis Tax Bill to Combat Opioid Abuse

The Puget Sound region has been inundated with reactions to a film short by KOMO News Reporter Eric Johnson. Johnson is best known for his uplifting ongoing segment for KOMO News entitled Eric’s Heroes. The piece, Seattle is Dying, correlates Seattle’s rampant and obvious homeless problem with another epidemic in the region—opioid abuse. One person who was moved by this video was Rep. Andrew Barkis, who bravely chose to be open about his 24-year-old son’s heroin addiction. This experience along with the KOMO piece influenced Barkis, along with several other state representatives, to sponsor House Bill 1959, which aims to amend the state budget to redistribute a portion of cannabis tax funds to go to law enforcement. “Mr. Speaker, I watched a documentary or a news report the other day. If we don’t take these steps, all we are going to hear in the future, is more bills named in memory of somebody, and I pray to God that it’s not named in memory of my son. Mr. Speaker, help me today in support of this amendment,” Barkis pleaded in testimony to the house. The bill is currently in committee.

National

Guam Legalizes Recreational Cannabis

On April 5, Gov. Lou Leon Guerrero signed Bill No. 32?35, or the Cannabis Industry Act, legalizing recreational cannabis in Guam. The U.S. territory will allow adults who are 21 and over to cultivate, purchase and consume cannabis. Cannabis will be subject to a 15 percent excise tax, and revenue will go toward efforts like drug rehabilitation and law enforcement. The governor will fill a nine-member Control Cannabis Board, which will set up rules and regulations. “I have to answer this one question: Given all the info, studies done, experiences shared, advice [and] anecdotes about marijuana, what would a responsible community government leader do to protect the interests and welfare of the community?” Guerrero asked at a press conference. Guam joins The Commonwealth of the Northern Mariana Islands, another U.S. territory that legalized recreational cannabis in 2018. In 2014, Guam legalized medical cannabis, but a viable industry took several years to materialize.