Cannabis Industry Daily News

Four arrested in Nebraska CBD case

A vaping shop in Nebraska has been shut down and the owners and two employees charged with crimes for selling cannabidiol, which Nebraska considers a controlled substance.

The arrests in Herman, about 35 miles north of Omaha, come two months after Nebraska Attorney General Doug Peterson declared CBD products illegal because they haven’t been approved by the U.S. Food and Drug Administration.

The Dec. 5 bust at DJ’s Vapes came after Washington County authorities got community reports that the shop was selling CBD along with tobacco products, according to the Washington County Pilot-Tribune & Enterprise.

The co-owners, a manager and an employee were arrested and face charges including conspiracy and possessing a controlled substance.

Authorities hinted at more arrests if CBD sales continue in Nebraska.

“To those people who continue to possess or purchase these items, they are on notice that we will enforce the laws of the state of Nebraska and prosecute those individuals to the fullest extent of the law,” county prosecutor Scott Vander Schaaf told the newspaper.

Retailers across Nebraska have reported taking CBD off their shelves because of the attorney general’s decision. But the Herman arrests are thought to be the first Nebraska cases of criminal charges for selling CBD.

A North Dakota tobacco-shop owner faces similar charges in that state.

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Denver marijuana tech firm Baker raises $8 million

Baker, a marketing automation software company serving marijuana dispensaries, has secured $8 million in Series A funding, bringing its total capital raises to $11.75 million.

Denver-based Baker will use the money to fuel growth in California and Washington state, according to a company news release.

The company – which some dub the Salesforce of cannabis – plans to open an office next year in Los Angeles.

The latest funding round was led by Poseidon Asset Management, a cannabis-focused venture capital firm, and included two more venture capital firms, the Panther Opportunity Fund and Phyto Partners, as well as investors who previously invested in Baker.

Baker recently acquired Seattle-based Grassworks, a customer-relationship management software platform targeting the marijuana industry.

According to the news release, the company’s software is in more than 700 dispensaries in 16 states, while its staff grew from 18 to more than 50 full-time employees.

California hands out first 20 temporary state cannabis business licenses

California has issued the first of what will likely be many temporary business permits, in advance of the Jan. 1 launch of the state’s regulated cannabis industry.

The 20 licenses granted Thursday include temporary permits for nine different companies, and all but one applied for multiple license types.

For instance, eight of the permits went to Santa Cruz-based KindPeoples and include distribution, retail, microbusiness licenses for both recreational and medical cannabis.

Department chief Lori Ajax said in a news release her agency plans “to issue many more before Jan. 1.”

The licenses can be viewed on the Bureau of Cannabis Control’s website.

Temporary permits will be good for 120 days while applicants undergo permanent licensing.

So far, the agency has received more than 200 applications for temporary permits, while over 1,900 users have registered with the online licensing system.

After Jan. 1, it will be illegal for any company to operate in the cannabis industry without at least a temporary permit, if not a full-fledged permanent state license.

Push continues in Las Vegas for public marijuana consumption

Las Vegas is inching toward public cannabis consumption lounges, which would be a boon to marijuana businesses selling to tourists with no legal space to smoke.

According to the Las Vegas Review-Journal, Councilman Bob Coffin has proposed an ordinance that would allow the city to permit marijuana consumption lounges.

Here’s what you need to know:

  • Bryan Scott, the assistant Las Vegas city attorney, said lounges could be granted approval as soon as March.
  • The lounges could sell paraphernalia but not marijuana.
  • State law bans marijuana deliveries to anywhere other than a home, so consumers would have to take their own cannabis to a lounge.
  • In September, the state’s Legislative Counsel Bureau released an opinion that state law does not prevent local municipalities from allowing such lounges.
  • Nevada officials are holding off on public consumption until they see how a social-use initiative plays out in Denver, where regulators just received their first social-use applicant.

Massachusetts advances recreational cannabis diversity plan

Massachusetts regulators have approved a draft proposal that would give priority review in the recreational marijuana licensing process to business applicants from economically disadvantaged communities.

The state’s Cannabis Control Commission will vote next week to finalize those and a slew of other regulations the group has been working on in recent weeks.

Adult-use license applicants must meet two of the following requirements to be eligible for priority review, according to the State House News Service:

  • A majority of the entity’s ownership belongs to people who have lived in economically disadvantaged areas for five of the past 10 years.
  • At least 51% of current employees or subcontractors live in economically disadvantaged areas, and that number will increase to 75% by the beginning of business.
  • At least 51% of employees have a prior drug-related conviction.
  • A majority of owners can demonstrate significant, past experience of economic empowerment.

Qualified applicants will enter the review process ahead of others, potentially allowing them to open before competitors.

Regulators haven’t yet defined what the thresholds for economically disadvantaged will be.

Los Angeles’ marijuana regulations include a similar program that requires the city to license applicants that were adversely affected by the war on drugs.

Hawaii taking another look at hemp in 2018

Hawaii may expand its limited hemp program dramatically in 2018, when state lawmakers join policy makers in other states and consider allowing farmers to sell the plant.

Hawaii already allows hemp production thanks to a 2016 law allowing limited research plots and seed development.

But the state’s hemp farmers aren’t permitted to sell what they grow, and a proposal before lawmakers would change that.

If passed, the bill would allow commercial sales of flower, stalks and seeds and, thus, would make Hawaii’s hemp program permanent instead of temporary.

The state’s hemp expansion was proposed in early 2017 but didn’t pass, and the bill is still alive for lawmakers in 2018, according to The Tenth Amendment Center, a California-based advocacy group that promotes states’ rights.

Hawaii – which began medical marijuana sales late last summer – joins several other states that allow hemp but are expected to debate expanding their programs next year.

Legislatures in Colorado, Indiana and Virginia are all poised to debate expanded hemp programs to allow for more commercial production or end uses for hemp.

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Ohio medical marijuana license applicant sues state over ‘racial quota’

A multistate medical marijuana company that lost out in the race for one of a dozen large-scale MMJ cultivation licenses in Ohio is suing the state over what it claims is an unfair “racial quota.”

According to The Plain Dealer, PharmaCann Ohio is asking a state court to order that the 12 available large cultivation licenses be awarded to the top-scoring applicants.

The Illinois-based company also is asking the court to put aside a requirement that minority-owned businesses be included in the program.

PharmaCann argues that the “racial quota” included in Ohio’s MMJ law violates the Constitution’s equal protection clause by giving preference to companies owned by minorities instead of basing winners on the state scoring process.

PharmaCann’s application ranked 12th among the applications scored, while two of the license winners – Parma Wellness Center and Harvest Grows – ranked 14th and 23rd, respectively.

But the latter two companies received licenses at the expense of PharmaCann because they satisfied state requirements, The Plain Dealer reported.

The law stipulates that 15% of licenses must be awarded to companies that are majority owned or operated by “economically disadvantaged” groups such as African-Americans, Native Americans, Hispanics or Asians.

Another losing applicant has also said it plans to sue the state, according to the newspaper.

World Health Organization gives CBD initial boost, plans to look at cannabis overall

Cannabis got a big boost from international health authorities Wednesday when the UN’s World Health Organization said that CBD should not be scheduled as a controlled substance, an initial finding that comes about a month after the agency reviewed cannabidiol therapies.

The WHO also said that it wants to take a closer look at cannabis overall. And it scheduled a May review of “cannabis and cannabis related substances.”

Recommendations from the WHO, an agency of the United Nations, don’t carry the force of law. But they are important guideposts for health authorities worldwide, and the agency’s evaluation of new drug therapies carry big consequences for drug makers and patients.

The WHO’s initial decision on CBD said that the drug “is not likely to be abused or create dependence” and has “some therapeutic value for seizures due to epilepsy and related conditions.”

The WHO postponed a final decision on CBD until the “Special Session on Cannabis” by its Expert Committee on Drug Dependence in May.

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San Diego DA, marijuana businessman agree to settlement in criminal case

James Slatic and his San Diego cannabis distribution company have apparently come out on top in a nearly two-year fight with the district attorney’s office.

The DA has agreed in a settlement to return nearly $300,000 to Slatic that was seized in January 2016 when law enforcement agents raided Med-West Distribution, Slatic’s San Diego cannabis company, the Voice of San Diego reported.

That sum is in addition to the $100,000 that the DA returned to Slatic and his family earlier this year.

The return of the $300,000 comes after Slatic agreed last month to plead guilty to a pair of misdemeanors after having been charged with multiple felonies in May.

Slatic received a year of probation and a fine and, under the recent settlement, also agreed to forfeit $35,000, the Voice reported.

But Slatic’s attorney, Jessica McElfresh, isn’t yet done with the DA, according to the Voice.

McElfresh was also charged with multiple felonies earlier this year by the DA’s office in connection with the Med-West investigation, and that case is pending.

New Mexico medical marijuana businesses see big spike in patient pool

New Mexico saw a 77% increase in registered medical marijuana patients in the past year, giving the state’s dispensaries a significantly larger pool from which to attract customers.

New Mexico’s registered patients totaled 45,347 as of Nov. 30, a net gain of 19,650 over the previous year, according to the Las Cruces Sun-News.

Here’s what you need to know:

  • This is New Mexico’s largest increase in patients over a one-year period since the program launched in 2007.
  • The program is on pace to hit the 50,000-patient mark by the end of the year.
  • MMJ numbers increased even though the health department disenrolled thousands of patients, citing “legacy data” that needed to be removed from the state database.
  • The state’s medical cannabis board voted in April to expand its conditions list beyond the 20 acceptable ailments, but the plan failed to come to fruition.

North Dakota taking feedback on medical cannabis regulations

North Dakota health officials are gathering public input about proposed medical marijuana rules as the state prepares to launch its MMJ program.

Health officials plan to hear from prospective dispensary operators who want to comment at meetings in six cities over the coming week, according to the Williston Herald.

North Dakota Department of Health officials conducted two meetings Monday, and two more are scheduled for Wednesday in Fargo and Thursday in Grand Forks.

Health officials will collect comments through Dec. 26 before submitting recommendations to the legislative council by Feb. 1.

North Dakota voters approved an MMJ program in November 2016, and state lawmakers crafted regulations earlier this year.

The governor approved those rules in April, but medical cannabis sales aren’t  expected to begin for another year.

The program’s guidelines currently allow for two growing sites and eight dispensaries.

– Associated Press

Second Ohio medical cannabis consultant draws scrutiny

The system for awarding the precious few medical cannabis cultivation licenses in Ohio was already under the microscope after the revelation that a judge had a felony drug conviction.

And now it’s come to light that a second consultant involved in scoring MMJ grow applications has ties to one of the permit winners.

Keoki Wing, who was hired by the Ohio Department of Commerce to help score cultivation applicants, worked for Nature Med and AOW Management until 2016.

Both companies are owned by the president and CEO of Arizona-based Harvest Grows, the 12th cultivation license winner in Ohio, The Plain Dealer reported.

The state commerce department hired Meade & Wing, Wing’s consulting business, along with two other consultants to help score business permit applications. The contract was worth $150,000 to Wing, but so far his consulting company has been paid only $43,971.

Meanwhile, the commerce department said it was unaware the other consultant in question, Trevor Bozeman, had a prior felony drug conviction for marijuana possession.

Justin Hunt, COO of the Ohio Medical Marijuana Control Program, told The Plain Dealer that the agency “vetted each consultant to make sure there was no conflict of interest.”