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New Hampshire, New Mexico and Vermont advance recreational marijuana bills, California’s MJ licensing bottleneck could trigger the supply chain to collapse, U.S. agencies begin to hammer out hemp regulations – plus other important news from around the cannabis industry.
MJBizDaily takeaway: Hurdles remain for full passage. New Hampshire Republican Gov. Chris Sununu has promised to veto adult-use legislation. In New Mexico, the legislation was crafted to gain approval from Democratic Gov. Michelle Lujan Grisham, but it’s unclear whether the bill can pass both chambers. In Vermont, the legalization bill may face tougher sledding in the House.
California licensing logjam creates supply chain dilemma
Lengthy wait times for annual business licenses, coupled with the legal inability of California regulators to further extend temporary permits, have created a situation where many businesses may be forced to shut down temporarily.
That leaves many in the state’s supply chain wondering how this could impact their businesses in coming months.
MJBizDaily takeaway: The ripple effects of the pending supply-chain crisis have already begun making many in the industry nervous. Many of those facing a temporary shutdown are small farmers who may not have the money to abide by the law if it means a month or more of inactivity.
A lengthy shutdown also could put many seriously behind schedule for this year’s growing season. So, the true impact of this crisis may take months to manifest.
U.S. agencies start work on national hemp regulations
This week saw two U.S. agencies – the Department of Agriculture and the Food and Drug Administration – discuss for the first time how they’ll regulate hemp and CBD, now that hemp is no longer a controlled substance. Both agencies warn the process could take months, extending regulatory uncertainty for hemp entrepreneurs.
MJBizDaily takeaway: Marijuana entrepreneurs will watch closely to see how federal regulators say hemp plants should be grown, processed and sold. It’s a likely preview to how those same agencies might regulate marijuana when legalization goes national.
California credit union halts new applications from MJ businesses
A small credit union in California’s Sonoma County that announced it was serving cannabis companies was soon forced to hit pause after being overwhelmed with requests from MJ firms.
MJBizDaily takeaway: It’s another reminder of how desperate many marijuana companies remain for banking services. Plenty of banks and credit unions provide such services. But they typically don’t advertise those services. Most don’t want to risk the wrath of federal regulators who may frown on a federally insured financial institution working with companies that offer goods that remain illegal under U.S. law.
Second Wall Street bank begins coverage of cannabis
Jefferies Group is the second Wall Street investment bank to initiate coverage of the cannabis sector. The firm says fears about cannabis commoditization are overdone and oversupply in Canada won’t be seen until mid-2021 at the earliest.
MJBizDaily takeaway: Jefferies’ coverage of the cannabis industry is another sign that Wall Street prudence is catching up to main street excitement over the burgeoning sector. The firm’s assessment also is correct: The differentiable and branded products sought by sophisticated consumers will not be interchangeable with lower-end cannabis.
Businesses looking to capture more margin ought to heed the bank’s warning: “The market, both for flower and derivatives, will develop a large price ladder like we see with other consumer goods such as wine.”