Cannabis business takeaways for week ending Feb. 1 (SLIDESHOW)

 

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Washington state regulators contemplate allowing small marijuana farmers to sell to consumers directly, co-owners of Sweet Leaf make plea deals, and California lawmakers take another swing at lowering state MJ taxes for businesses - plus other important news from around the cannabis industry.
Washington state considers giving small MJ farmers ability to sell directly to consumers

Washington state regulators are mulling the idea of permitting small, licensed marijuana farmers to sell directly to consumers - similar to what is allowed for alcohol distilleries, breweries and wineries.

Rick Garza, marijuana czar for the Washington State Liquor and Cannabis Board, said that because Washington doesn’t allow for vertical integration, smaller cannabis farmers are struggling.

MJBizDaily takeaway: Allowing the “wine model” for cannabis companies could lead to business opportunities and give smaller growers a shot in the arm. Washington growers cultivate cannabis in beautiful rural areas that could become tourist destinations for cannabis aficionados, including those from outside the state. (Photo by Lindsey Bartlett)
Saga of Colorado marijuana chain Sweet Leaf ends

The three co-owners of Sweet Leaf pleaded guilty to violating the Colorado Organized Crime Act and made one-year prison plea deals.

Sweet Leaf, which lost all its Colorado licenses, was accused of “looping,” an illegal multimillion-dollar sales scheme that allowed customers to buy maximum amounts of cannabis multiple times a day.

MJBizDaily takeaway: “The Sweet Leaf case illustrates the importance of strict compliance with regulations, and where a rule may be ambiguous or less than clear, business owners need to have some understanding of the purpose and intent behind those regulations,” Denver cannabis attorney Rachel Gillette said. (Photo by Matthew Staver)
California lawmakers introduce another tax reduction measure

A bill in the California Assembly would lower state marijuana tax rates for three years on businesses. It would temporarily suspend a $148-per-pound cultivation tax and lower the MJ excise tax from 15% to 11%, before the higher rates would return in 2022.

MJBizDaily takeaway: Tax relief for MJ companies will likely be a tough sell, not just for lawmakers but for the public. A key question is whether the state’s new pro-cannabis governor, Gavin Newsom, throws his political clout behind the measure.

A nearly identical measure died quietly last year.
Massachusetts recreational cannabis stores ring up $24 million in sales

Recreational marijuana shops in Massachusetts have racked up nearly $24 million in sales since the initial ones opened two months ago. To date, only eight rec MJ retailers have begun full sales, with a ninth upcoming.

MJBizDaily takeaway: All the open stores are in more thinly populated areas of the state, a bullish sign for the eventual start of recreational sales in Boston some months down the road.

“The volume being done where these stores are speaks well to what can happen when Boston gets stores,” said Kris Krane, president of 4Front Ventures, a multistate cannabis firm.
Consultant forecasts huge Golden State cannabis market contraction

Sacramento-based consultant Jackie McGowan predicted the number of licensed California MJ companies would contract by 90% in 2019. As of January, there were roughly 5,000 state-licensed retailers, growers, manufacturers, distributors, testing labs, microbusinesses and event organizers.

MJBizDaily takeaway: If McGowan’s prediction holds true, there could be as few as 500 such businesses left in 12 months.

That could raise two questions. Would state officials loosen regulations to attract more companies into the legal market to combat the illicit market? Or would California evolve into a place where well-capitalized operators are shielded by high barriers to entry?
Maine seeks new consultant to help develop recreational program rules

Maine is on the hunt for a consultant to help develop recreational program rules a few days after regulators terminated a contract with BOTEC, a Los Angeles firm originally hired for the job. Before that, some entrepreneurs hoped rec sales would begin in the state this summer, but that’s uncertain now.

MJBizDaily takeaway: “It’s plausible this could get us to summer sales faster,” said David Boyer, political director for the Maine chapter of the Marijuana Policy Project. A new consulting contract could set more aggressive deadlines for rules to be submitted, he noted, leaving fewer issues to address such as packaging and testing.
Pennsylvania governor softens adult-use marijuana opposition

Pennsylvania Gov. Tom Wolf changed his tune regarding his opposition to adult-use marijuana, deciding that it’s a good idea to explore potential legalization.

MJBizDaily takeaway: Pennsylvania is the fifth-most-populous state with nearly 13 million people, so a legal market could represent massive business opportunities - especially for existing medical marijuana operators.

Cannabis attorney Judith Cassel suggested that it would make sense for Pennsylvania, like other states have done, to implement an adult-use program initially through the existing MMJ permit holders “who have already proven they can successfully grow, process and sell medical marijuana.”
Many of Canada’s marijuana grower applicants currently live in limbo

More than half the 839 cannabis cultivation applications in Canada had not transitioned to the country's new licensing system as of the end of 2018, meaning their applications are effectively in regulatory limbo and not being processed.

MJBizDaily takeaway: The 409 applicants that already have transitioned to the new licensing system will have a first-mover advantage, because applicants are generally reviewed by federal regulators in the order in which they were received.
2 comments on “Cannabis business takeaways for week ending Feb. 1 (SLIDESHOW)
  1. Robert Hempaz, PhD Trichometry on

    This is the “Mom and Pop” model that Marc and Jodie Emery championed at great risk for so many years before the current Pot explosion. Ironically, their own province of British Columbia across the northern State border of Washington is clamping down on this very practice at the behest of a rapacious central Liberal ruling class thirsting ever for maximum social control (and, maximum tax revenue). Unleashing the entrepreneurial spirit of our excellent and proven American Cannabis breeders will only continue to expand the market into areas of patient care untouched by the current dollar bill model of cannabis commerce. I say yes … grant our Cannabis breeders access to every stitch of the patient market, recreational or medicinal with gusto! Enshrine this tidbit into your respective State Constitution and all is right in the Cannabis Nations of North America …”The right of the people to grow, harvest and process Cannabis in any way, shape, or form shall not be abridged.” C=> https://www.linkedin.com/pulse/case-home-grown-dweeb-robert-hempaz/

    Reply
  2. Kenneth Robertson on

    Legislators in Kansas have introduced medical marijuana bills in the house and senate. They’ve been doing it every session for several years. This year we elected a new Governor and she said during her campaign that she will sign a bill that reaches her desk. Kansas has a very good chance of going Legal this year!

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