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News Nuggets

News Nuggets – October 2019




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.


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.


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 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.


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.


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.