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Maine may revise its current regulations on cannabis advertising, as many feel the current restrictions are too stringent, and arbitrary, to work well for the industry.
Rep. Colleen Madigan, D-Waterville, has proposed “An Act To Amend the Law Regarding the Advertising and Marketing of Adult Use Marijuana.” This act would allow businesses to appeal to use their logos and branding on a case-by-case basis, to try and get around some of the stricter language of the current laws.
As of now, no branding with humans, animals, or fruit can be depicted, by virtue of the fact that those things could appeal to children. While no animals or cartoon branding is a pretty normal ask in other legal states, the restrictions on humans and fruit definitely take things a step further. The rules also specify that anything outside that realm of restrictions that could appeal to those under 21 is off limits.
The Mermaid That Made The First Wave
This issue came before legislators when the Office of Marijuana Policy ruled that Sea Weed Co.’s logo violated advertising rules, as the logo features a mermaid. The Portland-based dispensary received a warning that, in addition to being part human, part animal, it “is generally known that mermaids are featured in a number of stories, movies, toys, costumes and other popular culture items and marketing aimed at young children and teenagers, and so images of mermaids have inherent and particular appeal to individuals under 21 years of age.”
Owner Scott Howard was taken aback, as he had no intention of marketing to those under 21 years of age. Upset by the $10,000 fine he received, in addition to the order to stop using all the branding he had spent time on and already liked, he decided to take action instead of just comply. He found an ally in Madigan, who claims that the wording is too vague, and that almost anything can appeal to children if you look at it a certain way.
With marijuana now legalized for recreational use in Montana, a Fort Benton lawmaker is advancing legislation intended to protect the state’s industrial hemp crop from running afoul of federal law.
Republican Rep. Josh Kassmier told a Senate panel that his bill would automatically align the definition of hemp in Montana with that of the U.S. Department of Agriculture, ensuring the state’s hemp farmers retain access to interstate commerce and banks.
Hemp is a close relative of marijuana, which remains illegal under federal law and is thus excluded from those opportunities.
“This will help continue to further our production of hemp in the state as a high-value commodity,” said Rachel Prevost, a lobbyist for the Montana Farmers Union.
The state’s current definition of hemp is limited to plants containing no more than 0.3% THC, the main high-producing compound found in marijuana. While that is currently in line with federal regulations, the state Agricultural Sciences Division administrator said federal law now allows for more variance when those crops are tested for THC content — up to 1%.
The next stop for the legalization bandwagon might be the Badger State.
Wisconsin Gov. Tony Evers unveiled details of his budget proposal on Monday, which included a proposal to regulate and tax marijuana that he says will produce a windfall of revenue for the state.
“My 2021-23 budget proposes regulating and taxing marijuana much like we do alcohol,” Evers said in a post on Twitter. “States across the country have moved forward with legalization, and there’s no reason Wisconsin should be left behind.”
In a statement reported on by the Milwaukee Journal Sentinel, Evers, a Democrat in his first term, said that regulating and taxing pot like alcohol “ensures a controlled market and safe product are available for both recreational and medicinal users and can open the door for countless opportunities for us to reinvest in our communities and create a more equitable state.”
The newspaper reported that Evers is bullish on the recreational marijuana proposal, which he believes could generate nearly $166 million by the summer of 2022. “About $70 million of that would be used to help rural schools and programs for communities that have been disproportionately affected by past marijuana enforcement and underserved groups of people like communities of color, women and veterans, according to the governor’s office,” the Journal Sentinel said.
Gov. Phil Murphy and lawmakers continue to struggle to strike a deal that will allow New Jersey to begin the process of selling marijuana in New Jersey. But they're also raising hopes that some agreement could be reached soon.
Lawmakers extended a Monday deadline for Murphy to act on legislation that would begin the process of selling marijuana, signaling that all sides may be able to work out issues that have prevented a deal from happening.
Murphy, speaking during a news conference on Monday, said he's had a "good back and forth" and that he's hopeful that any issues can be resolved soon. Read more: WATCH: Gov. Murphy Issues NJ Coronavirus, Vaccines Update
Assembly Speaker Craig Coughlin extended the deadline to Feb. 18, allowing the Senate to "complete its discussions and conclude negotiations with the Assembly and governor on revisions to the cannabis legislation."
The legislation would address Murphy's concerns that the state Legislature's bill doesn't penalize underage adults and children for using the drug.
The prosperous cannabis industry has long faced significant barriers to obtaining financial services. For example, as of June 2020, only 695 banks and credit unions were servicing marijuana-related businesses, according to the latest report from the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. This despite the fact that the North America legal cannabis market was worth $16 billion in 2020.
A large percentage of cannabis clients pay in cash, and that, combined with a lack of banking options, has frequently left business operators stuck with huge quantities of cash on hand. This, in turn, makes them become bigger and easier targets for theft and fraud, not to mention potentially giving rise to tax evasion issues for the less scrupulous. Greater access to banking institutions directly equates to a more stable financial structure and fewer opportunities for cash management to go wrong.
With adult-use and medical cannabis now legalized in several new states, the number of cannabis businesses in need of a bank will only increase. The good news is that recent changes to the law in California and expanded guidance for credit unions, combined with a Democratic election sweep, are likely to mean more banking choices for the industry.
California Assembly Bill 1525: A little legal and financial relief
California Governor Gavin Newsom recently signed Assembly Bill 1525 into law. The bill accomplishes two major objectives:It provides safe harbor for California banking institutions doing business with cannabis companies by legally affirming that banks and other entities (specifically, licensed armored car services and professional accounting services) are not committing a crime under California law by serving cannabis clients and removing state penalties for banks or other entities that work with cannabis operators. It makes it easier for cannabis businesses to be assessed for loans and other services and financial institutions to comply with federal reporting requirements. The bill achieves this by allowing licensed cannabis businesses to sign a waiver permitting state or local licensing and regulatory authorities to share their "application, license, and other regulatory and financial information" with a designated financial institution "for the purpose of facilitating the provision of financial services for that licensee." The hoped-for outcome is to ease the banks' burden of ensuring that federal requirements are being met by allowing the state to share licensing information with the operators' agreement.
One banking challenge that cannabis businesses regularly face is exorbitant monthly account fees or banks that take a percentage of each deposit. Although AB 1525 does not address fees specifically, the hope is that by removing some of the most significant barriers to doing business with the cannabis industry, a wider range of banking options will become available and lead to a more competitive environment.
Up until now, only synthetic CBD was expressly allowed as a cosmetic ingredient in the European Union’s database.
On February 4, the European Union (EU)’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs added cannabidiol (CBD) “derived from extract or tincture or resin of cannabis” as a legal cosmetic ingredient to its CosIng guidelines.
CosIng is a database of cosmetic regulations that expressly provides for authorized and unlawful ingredients and sets forth their particular purposes and functions.
This recent revision to CosIng follows the recent landmark ruling by the Court of Justice of the European Union (the CJEU) that CBD derived from the entire hemp plant is not a narcotic under the U.N. Single Convention on Narcotic Drugs of 1961; and thus, should be freely traded between EU member states.
Up until this revision to the CosIng guidelines, only synthetic CBD was expressly allowed as a cosmetic ingredient in the EU’s database. Now, the regulation provides that plant-derived CBD can serve the functions of anti-sebum, antioxidant, skin conditioner and skin protectant.
This regulatory change is another promising step toward the development of a uniform regulatory framework for the sale of CBD cosmetics (and other categories of CBD products) in the EU.
It is never easy being green. However, the cannabis industry is no stranger to overcoming stigma if not hurdles. Much less the grotesque ball drops of governments as soon as they get involved—from expanding access to basic regulation.
The Dutch government has just been handed a reminder of that as its widely lauded first cultivation bid for the production of regulated recreational cannabis has embarrassingly hit the skids. It is not even something that can be blamed on COVID-19. Nor does it appear that the Dutch took any lessons from the highly controversial German cannabis tender for medical cultivation in 2017 which has yet to fully come online.
Holland is a sovereign country with 2 million fewer inhabitants than the U.S. state of New York.
What gives? How could the land of the coffeeshop fumble the ball quite so badly?
A Brief History Of The Regulated Dutch Cannabis Industry
For American Gen Xers at least, Holland became a beacon of cannasanity during the 1980’s and 1990’s. This was a period of time where particularly American Baby Boomers who had inhaled with impunity when they were in their much-heralded youth, decided to further criminalize the plant and those who grew, used, or sold it as they obtained positions of political power.
A Hughes County judge has ruled that a voter-approved amendment to the South Dakota Constitution ending marijuana prohibition in the state shouldn't go forward.
Circuit Court Judge Christina Klinger ruled Monday that Constitutional Amendment A violates the state Constitution on two grounds: It violates the single subject rule, meaning it encompassed more than one topic, and it conflicts with language in the Constitution that provides for its modification.
Attorneys for the plaintiffs in the case, South Dakota Highway Patrol Superintendent Rick Miller and Pennington County Sheriff Kevin Thom argued last month that because Amendment A added an entirely new section to the state Constitution instead of modifying an existing one, it should be considered a revision, not an amendment.
Revisions to the constitution require a convention of state delegates before being placed on the ballot and cannot be done through the petition process, like initiated measures and amendments.
"The failure to submit Amendment A through the proper constitutional process voids the amendment and it has no effect," Klinger said.
Cannabis is not the only industry that can act as a microcosm of the world but it may be the most prominent. Cannabis is still federally illegal so there are many areas in which people can be turned away from participating due to previous arrests for cannabis.
During the Fall Emerge 2020 Virtual Cannabis Conference & Expo, Minorities for Medical Marijuana (M4MM) Founder and CEO Roz McCarthy led a panel discussion with industry-leading advocacy organizations. Together, they addressed the myriad concerns surrounding social equity within the cannabis industry.
Several organizations, including Women Grow and the Last Prisoner Project, were also present to add their insights to the equity-themed conference. Each has a primary directive to achieve social equity and dismantle systemic racism within the cannabis community.
Cannabis and Criminal Justice
The Cannabis and Criminal Justice panel covered many topics, one being what exactly is the issue with handling systemic racism within the cannabis industry.
Mikelina Belaineh, Director of Criminal Justice Law and Policy
Harborside, a California cannabis dispensary, appealed the Tax Court’s decision of tax deficiencies totaling over $29 million dollars for the periods between 2007 through 2012. Harborside’s tax liability stems from the IRS’s denial of deductions under IRC §280E and the disallowances of cost of goods sold reported on Harborside’s tax returns. Internal Revenue Code §280E prohibits tax deductions for businesses whose activities involve a federally controlled substance (within the meaning of schedule I and II of the Controlled Substances Act). Unfortunately, cannabis is still and at the time (of the facts in the case) a Schedule I Controlled Substance.
On appeal Harborside makes two arguments: (1) whether IRC §280E violates the Sixteenth Amendment of the U.S. Constitution; (2) whether IRC §471 regulations excludes certain inventory costs for Harborside (cannabis businesses). This article will not go into the constitutionality of IRC §280E in reference to the Sixteenth Amendment but will focus on the cost of goods sold (COGS) and IRC §471 issue.
The Tax Court erred in determining that “processing costs related to inventory are not includable in Harborside’s cost of goods sold.”
The IRS did not allow Harborside to include purchasing, handling, and storage costs related to the goods it purchased for resale (“indirect costs”) — costs like testing, labeling, curing, storing, trimming, manicuring, maintaining, and packaging the [cannabis], or [cannabis] products — in its cost of goods sold. Harborside would reject [cannabis] if it wasn’t properly cured, if it hadn’t been sufficiently trimmed, if it had an incurable safety issue such as pathogenic mold, or if it didn’t contain the right “cannabinoid profile.”
In response to Harborside, the IRS admits in the Appellee’s brief, “if Harborside could establish that Section 471 permits it to include indirect costs in its cost of goods sold, Section 280E would not prevent that result, as that section only bars Harborside’s claim to deductions.” Section 471 states that “the use of inventories is necessary in order clearly to determine” income, and “on such basis as the Secretary may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting the income.”
Every new location to legalize cannabis either recreationally or medically, comes up with its own set of rules for exactly what is legal. After the last US election, there were a few new additions to the legalization family, one of them being New Jersey, which legalized for recreational use. However, the State didn’t get everything it wanted. New Jersey wants home cultivation of cannabis to be legalized for its citizens, and right now, it is still not.
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Tuesday, November 3rd, 2020 was the date of the last US presidential election between Joe Biden and Donald Trump. It was also the day that several states held referendums to allow their voters to decide certain issues, one of the biggest of which was the legalization of cannabis. Many states held votes for the legalization of medical cannabis, recreational cannabis, or both (in the case of South Dakota). When the results of the election came in, four new states had gone legal recreationally: South Dakota, Montana, Arizona, and New Jersey.
The New Jersey referendum
On November 3rd, the people of New Jersey were given the right to vote for or against a recreational cannabis policy through Public Question 1 on their ballot. Approximately 67% of the voting population answered ‘yes’ on this ballot measure, legalizing recreational cannabis use for adults 21 years of age, or older. The bill legalized the cultivation, processing, and selling of cannabis commercially.
Public Question 1 acted as a constitutional amendment. The ability for this was passed as a resolution by the New Jersey State Legislature in December 2019, which was supported by 72 out of 79 democrats, and disapproved by 36 of 41 republicans. New Jersey, and the use of Public Question 1 on the ballot, marks the first time that a state legislature has referred a legalization measure onto its voters.
New Mexicans who are following the push by many lawmakers to legalize recreational-use cannabis now have plenty of reading material.
Legislators have filed four legalization bills, two of which have identical language. All of the bills have the same general goal, but with different paths to get there and varying standards of what would and wouldn’t be allowed in a post-legalization New Mexico. Passage of any of the bills is still not a guarantee and given the history of previous cannabis legalization proposals and the legislative process in general, it is likely some pieces of the differing bills will be absorbed into one final bill.
What was once an issue with more of a binary argument, is now an issue with nuances and proponents with a variety of priorities as it gets closer to becoming reality. Just six years ago, a cannabis legalization bill sponsored by a Democrat was assigned to five committees and was never considered by its first panel. This year, lawmakers will likely shift their concerns to the best tax rate, whether the state should allow home grows and how to ensure the state’s medical cannabis program stays intact.
Likely to be one of the more contentious issues, and possibly the first one to be tossed out, the ability to legally grow cannabis at home is one of a list of things that sets HB 12 apart from the other proposals. Sponsored by Rep. Javier Martínez, D-Albuquerque, and Rep. Andrea Romero, D-Santa Fe, HB 12 would allow people to grow up to six mature plants at home. The home grow allowance is also just one of the many provisions included in HB 12 that also aligns with the Drug Policy Alliance of New Mexico’s priorities for legalization. Martínez and Romero’s bill also seeks to automatically expunge previous drug convictions under previous laws. So far, HB 12 is the only bill filed that includes automatic expungements and a community investment program for communities “disproportionately affected by past federal and state drug policies.”
Emily Kaltenbach, the state director of the Drug Policy Alliance, said Martínez and Romero’s bill comes closest to what her group would like to see in a legalization effort and that the two Senate proposals miss the mark when it comes to social and restorative justice.
Last year, Ukraine circulated a poll, supported by the country’s president, that showed most people in the nation currently support medical cannabis in some form or another. Now, most politicians are backing legal, medical cannabis for the country, hopefully leading to a new industry that could provide a major boost for the Ukrainian economy. However, the first step before that can happen is for the country to work out what it wants this industry to look like.
This will be a pretty big step for Ukraine, as currently, THC is a Schedule I substance, just like in the U.S., and hemp and CBD are not classified, but can only contain up to 0.08 percent of THC, a very small amount that is restrictive to market potential Both recreational and medical use are strictly prohibited.
Due to the lack of cannabis knowledge or acceptance currently in Ukraine, there are a few different proposals in Ukrainian Parliament right now that would outline a map for medical legalization if it passes this year. In total, four draft laws have been submitted, each a little different from the next, but all focused on setting out a blueprint for medical cannabis legalization.
Plans For Cannabis In Ukraine
The first of these would allow local growing of cannabis for medical use, as well as open the market to cannabis imports. This focus on growing leans into Ukraine’s existing talents, as the country is known for its agriculture. It would also give autonomy to patients and local businesses to develop the industry literally from the ground up.
Another plan looks more at foreign investment, as there are currently no barriers to a foreign investors wanting to come in and get involved in the industry before it even starts. While this may not be the best for promoting local businesses, it could have big implications in terms of the medicine that could be imported, and could gain a lot of international attention for the industry.
Outside medical cannabis use, more than a half dozen marijuana-related bills, including a measure to legalize its recreational use, have been introduced this legislative session.
Not one had secured a hearing before an assigned committee as of press-time Thursday. Feb. 19 is the deadline for all bills referred to more than one committee to move to their final committee. Bills referred to three committees must reach their second committee by Feb. 11.
House Bill 7 would legalize the personal use, possession, and sale of marijuana in a specified quantity for those 21 and older, establish a means for licensing marijuana establishments, and subject marijuana sales to excise and income taxes.
Among its introducers were by Big Island Reps. Jeanne Kapela (D-South Kona, Ka‘u), Nicole Lowen (D-North Kona), Mark Nakashima (D-Hamakua, Hilo) and Richard Onishi (D-Hilo). It has been referred to three committees, but had yet to secure a hearing as of press-time Thursday.
New Zealand is facing a collapse of legal medicinal cannabis supply after March 31, when a deadline to meet stiff new government rules is expected to keep the products of three of the country’s five main importers out of the market, reports NZ Herald’s Kate MacNamara in this Herald Premium article.
Last April, the government unveiled a new regulatory system to create more safe, widespread and affordable access to medicinal cannabis. It has not yet approved a single product.
New Zealand-based importers Medleaf Therapeutics, Nubu Pharmaceuticals, and Eqalis Pharmaceuticals confirmed their products are not likely to be approved under the new standards before the March deadline. Domestic production, still in its very early stages, is not likely to reach the market until late this year.
On March 31, special provisions, which have allowed companies to import under an old, stop-gap system will expire. Shane Le Brun, regulatory and business development consultant at Medleaf, currently estimated to be the country’s largest importer of medicinal cannabis, said his firm is preparing for a hiatus from the market of at least several months. A situation he described as a “looming crisis” for patients.
Even after receiving ministry verification, products will face a lag in reaching New Zealand, Le Brun warned. Companies require licences to both import to New Zealand and export from abroad, these cannot be obtained until after verification, and shipping times are uncertain.
The Idaho Senate approved a measure on Wednesday that would amend the state’s constitution to prevent the legalization of marijuana and other drugs not approved by the federal government. The proposed constitutional amendment was approved in the GOP-led Senate with a vote of 24 to 11, just one vote more than the two-thirds majority required to advance the measure.
If the constitutional amendment succeeds, it would prohibit the legalization of marijuana or any other psychoactive drug not approved by the U.S. Food and Drug Administration. The measure (Senate Joint Resolution 101) was proposed in response to the wave of cannabis legalization measures that continues to spread across the United States.
“Senators, we have a duty to protect our children, our families, our communities from the scourge of drugs and the drug culture which we have seen go clear across this nation,” said Republican Sen. Scott Grow, the sponsor of the legislation, at the beginning of Wednesday’s debate in the Senate. He characterized Idaho as the “last foxhole” surrounded by neighbors with some form of legalized marijuana.
“Let Idahoans choose whether they want to live in a drug-free state – free from drug culture – or not,” Grow added.
Debate on the proposed amendment became emotional at times. Republican Sen. Van Burtenshaw reportedly choked up for half a minute as he beseeched his fellow lawmakers to approve the proposal.
California just overturned a state ruling that allowed for cannabis billboard advertising along state and interstate highways. While cannabis billboards are still allowed, they are prohibited on any highway that crosses state borders, a new restriction for the industry.
The new regulation, which comes from the California Bureau of Cannabis Control, overturns the previous ruling, which claimed that billboards were allowed unless they were within a 15-mile radius of the border. Obviously, not being allowed on any highways that leave or enter the state is a lot more restrictive than just keeping them away from the border, so this is a blow for cannabis advertising in California.
“To comply with the law and regulations, licensees may not place new advertising or marketing on any interstate highway or state highway that crosses the California border,” the official notice explains. “Licensees should also begin the process of removing current advertising and marketing that meets this criteria.” This can also be found in Business and Professions Code section 26152(d).
Back when Proposition 64 first passed in California, the California Bureau of Cannabis Control was given the power to regulate the new industry, and the matter of cannabis billboards has pretty much been in debate since the state legalized. Some contend that the billboards are necessary for advertising what is a perfectly legal industry inside state borders, while others feel it’s just asking for tourists to stop at dispensaries and drive back across the border.
Back in 2019, the regulations were set in place that allowed advertising on interstate and state highways, except for those that were too close to the border. However, this new rule was challenged by a resident from San Luis Obispo County, who claims that the billboards expose his children to cannabis advertising.
Once again, out-of-state business entities and owners took the majority of dispensary and processor permits for West Virginia’s long-awaited medical cannabis program.
Last week, the Department of Health and Human Resources’ Office of Medical Cannabis announced that 100 dispensaries between 32 companies with locations in 23 counties had been selected. The Office of Medical Cannabis announced the selection of 10 growers in October 2020 and 10 processors in November 2020.
According to a review of the selected dispensaries and processors selected by the Office of Medical Cannabis and a search of business records through the West Virginia Secretary of State’s Office, 22 of the 32 companies selected as dispensaries involved out-of-state entities, controlling 79 of the 100 dispensary locations.
Looking at last year’s selection of medical cannabis processors, seven of the 10 processors came from out-of-state. As previously reported, eight of the selected 10 growers had out-of-state connections.
All of the selected dispensaries, processors, and growers were required to base their operations in West Virginia due to the legal issues surrounding marijuana – a schedule I drug under the federal Controlled Substances Act. According to the 2017 Medical Cannabis Act, applicants were either required to be West Virginia residents or majority ownership of the business entity must be held by state residents.
After years of hesitancy among lawmakers to seriously consider allowing people to grow their own marijuana at home, two lawmakers have introduced bills in the past week that would overhaul the ban.
Sen. Troy Singleton, D-Burlington, introduced a home grow bill Thursday that would allow medical marijuana patients or their caregivers to register as home cultivators. They could then grow up to four mature marijuana plants and four immature plants.
The Democratic senator’s bill is more restrictive than a measure by a more conservative lawmaker, Sen. Gerald Cardinale, R-Bergen. He introduced a bill last week that would legalize growing up to six marijuana plants for medical or personal use, pending the passage of a bill to legalize marijuana for those 21 and older.
Current law makes growing five plants or less punishable by three to five years in prison and a $25,000 fine. Nothing in the legalization bill or a second bill that would allow people to possess up to six ounces of marijuana would change the harsh penalties for keeping plants.
Many states with medical marijuana programs allow patients to grow their own cannabis at home.
Amid uproar over the state’s troubled efforts to issue new cannabis licenses, state Rep. La Shawn Ford on Wednesday said he introduced a “shell bill” that will ultimately be used to create as many as 110 additional dispensary permits.
The Chicago Democrat filed the legislation last Wednesday and now plans to add language that would create the new licenses. The proposal is similar to a bill that cleared the Senate but ultimately went up in smoke during last month’s lame duck session.
“This is the language that’s coming from social equity applicants,” Ford said, referring to a designation created to diversify the state’s weed industry. “I really don’t have any interest in doing anything but what’s going to be good for the cannabis industry.”
The issuance of 75 outstanding dispensary licenses has been delayed by an ongoing controversy sparked by outcry from social equity applicants, who banded together after state officials announced last September that just 21 of the more than 900 dispensary applicant groups qualified for a lottery to determine the winners. Amid a series of lawsuits, Gov. J.B. Pritzker later announced that he was giving the losing applicants a second chance to earn the perfect score needed to qualify.
According to a draft of Ford’s bill, the lottery related to those licenses would take place once that supplementary grading process is completed. A second lottery comprised of some of the losing applicant groups would then be held no more than two days later to dole out 75 more licenses. And another 35 licenses would later be awarded after state officials complete a study analyzing the state’s demand for cannabis later this year.