Cannabis Industry Daily News

AG Sessions confirms status quo on cannabis policy

Despite Attorney General Jeff Sessions’ decidedly anti-marijuana statements since he took over the U.S. Department of Justice, it appears cannabis businesses are safe from his agency for the time being.

According to The Cannabist, when asked Tuesday during a congressional committee hearing regarding the DOJ’s policy on the marijuana industry, Sessions replied:

“Our policy is the same really, fundamentally, as the (Obama) policy, which is that the federal law remains in effect and a state can legalize marijuana for its law enforcement purposes, but it still remains illegal with regard to federal purposes.”

In other words, Sessions hasn’t yet decided to tear up the 2013 Cole Memo, which was issued by the Obama administration and laid the groundwork for the current U.S. recreational marijuana industry.

That means the industry status quo will likely continue for the foreseeable future, with states taking the lead on regulating and overseeing cannabis businesses while marijuana remains a Schedule 1 controlled substance at the federal level.

Sessions also walked back some of his previous statements about cannabis and agreed with a congressman who pressed him on whether marijuana is “not as dangerous as heroin.”

“I think that’s correct,” Sessions replied, according to The Cannabist.

However, Sessions has repeatedly refused to close the door on possible future actions against MJ businesses by the DOJ while he’s in charge, and he made similar indications in front of the committee.

“We will be looking at some rigorous analysis of the marijuana usage and how it plays out,” Sessions said.

Varied approaches to rec marijuana in California

As California’s legal marijuana industry awaits statewide regulations for recreational marijuana sales, local governments continue to take it into their own hands to pass regulations.

And the results are a mixed bag.

According to CBS SF Bay Area, the San Jose City Council unanimously passed an ordinance to allow adult-use sales in 2018 in the Northern California city.

Here’s what you need to know:

  • Only existing medical marijuana dispensaries will get first crack at selling rec cannabis.
  • The ordinance doesn’t change the zoning districts or exclusionary zones.
  • Delivery of marijuana to rec customers is allowed.

Farther south, in Orange County, the pendulum is swinging in the other direction.

The county’s Board of Supervisors drafted an ordinance to ban cultivation and sale of marijuana in unincorporated areas, KTLA reported.

Here’s what you need to know:

  • The ordinance would also prohibit lab testing and delivery.
  • Businesses would be fined $1,000 a day for violating the law.
  • The draft ordinance language takes issue with the smell from cannabis, the risk of burglary, electrical fires and environmental impact.

Arizona’s medical cannabis card fees face court test

An Arizona attorney has filed a lawsuit asking the state’s Court of Appeals to decide whether the $150 patient card fee is legal, a move that could affect Arizona’s medical marijuana market.

Lawyer Sean Berberian claims the $150 fee is unnecessarily high, according to Capitol Medial Services, because it generates more than enough revenue to cover the cost of running the program.

After administrative costs, those fees have generated $38 million since 2011 for the Arizona Health Department, Capitol Media Services reported.

Berberian also claims in the suit that the health department has refused to “reexamine” the fees, according to the news outlet.

A superior court judge from Maricopa County, Arizona, rejected similar arguments made in another suit about six months ago, reasoning that courts cannot order agencies to change their administration policies, Capitol Media reported.

MassRoots’ net loss widens, but cash reserves grow

MassRoots saw its red ink double in the third quarter, though the cannabis-focused social media network’s cash reserves were substantially higher than the previous three-month period.

According to the company’s latest quarterly filing with the Securities and Exchange Commission, MassRoots posted a $7.1 million net loss in the third quarter versus $3.5 million a year earlier.

Revenue during the period tumbled to just $11,516 from $209,003 in the third quarter of 2016.

During the first nine months of 2017, the social network company ran up a net loss of $26.2 million – widening from $8.3 million a year earlier – while revenue fell more than 60%.

The filing also showed that MassRoots is still strapped for cash.

At the end of September, it listed $5.8 million in assets; but most of that – $4.97 million – represented the intangible asset known as “goodwill” acquired through the acquisition of two companies earlier in the year.

The company, however, built up its cash reserves during the third quarter, listing $267,322 in cash as of Sept. 30 versus $31,247 at the end of the second quarter.

During the first nine months of the year, the company burned through net cash in operating activities totaling $7.2 million.

MassRoots also reported that it doubts the company “has sufficient capital to become cash-flow positive from operations. We expect to need to raise at least $2,500,000 over the next quarter to continue to fund operations.”

However, the company appears to now be dabbling in cryptocurrency.

Near the end of September, MassRoots entered into an agreement with a pair of accredited investors for the right to purchase up to $420,000 in cryptographic tokens.

Florida MMJ businesses can only watch as 50K try to join lagging program

More than 50,000 patients have attempted to register for medical cannabis ID cards in Florida, but it appears many are being forced to wait months before receiving those cards.

According to WFLA, a total of 50,284 patients have submitted registration forms, but only 29,778 cards have been issued so far.

And a number of patients told the Tampa TV station they had to wait two to three months before receiving their cards, even though a spokesman for the state agency said that processing applications should take only 30 days.

The Florida Office of Medical Marijuana Use has been dealing with the backlog for months, with up to 3,000 patients at any given time queued up for MMJ cards.

The delays are being caused because the state does not accept online payments for MMJ registrations and the fact that, until last month, the state agency had only three full-time staffers to process applications, WFLA reported.

The delays, however, may simply be another indicator of how much demand for medical cannabis there will be in the Sunshine State once it gets fully up and running, a positive sign for MMJ licensees in Florida.

And the rush of patients looking to register is showing no signs of letting up anytime soon.

Michigan capital to start medical cannabis licensing Nov. 16

Michigan’s capital city of Lansing will open a 30-day window to apply for a license to run a medical marijuana dispensary on Nov. 16.

The Lansing clerk’s office said 20 applicants will be conditionally approved to open for business after the Dec. 15 deadline.

However, the winners won’t be given licenses until they receive approval from the state.

Five more applicants will get conditional approval after a second window. Those dates have not been chosen.

Lansing’s medical marijuana ordinance allows for 25 dispensaries or provisioning centers within the city limits.

Applications will be judged on several criteria, including the number of jobs created, location and business operating experience.

Applications will also be accepted for:

  • Safety compliance
  • Processor
  • Secure transporter
  • Grower facility

There is no limit on the number of licenses that can be approved in each category.

The state MMJ licensing process will begin Dec. 15.

To obtain a state permit, medical cannabis companies must first have local authorization, so business licenses from municipalities are quickly becoming a hot commodity.

– Associated Press

San Diego County’s only licensed marijuana grower to double production

With an expected boost in demand on the horizon, San Diego County’s only licensed cannabis grower plans to increase his farm’s output from 1,000 pounds in 2017 to at least 2,000 pounds next year, if not more.

According to The San Diego Union-Tribune, the company, OutCo, said it may produce as much as 5,000 pounds in 2018.

The company also has a pair of licensed grow facilities in Long Beach, which will  churn out another 1,000 pounds a month once they get up and running, an OutCo spokesperson told the newspaper.

The company plans to expand its distribution network outside San Diego, Los Angeles and Orange counties, the newspaper reported, yet another indicator of how competitive the California market will likely become after recreational sales begin New Year’s Day.

Washington state cannabis businesses get help with tracking system transition

The majority of license holders in Washington state have turned to BioTrackTHC’s Universal Cannabis System as a stopgap measure while the industry operates without a state-sanctioned seed-to-sale framework.

Florida-based BioTrackTHC’s seed-to-sale contract expired Oct. 31, and the state’s new provider – Denver-based MJ Freeway’s Leaf Data Systems – isn’t expected to go online until Jan. 2018 at the earliest.

In the meantime, BioTrackTHC developed a workaround that’s essentially a clone of the seed-to-sale system it previously provided to Washington state.

The move is raising the question among Washington state business owners whether the industry must rely on state-contracted seed-to-sale systems or possibly remain compliant by self-reporting in this manner.

According to a news release, BioTrackTHC’s clone system allows licensees who signed up for the program to forgo manually creating spreadsheets to report data to the state.

BioTrackTHC has also agreed to allow third-party software providers to submit data to the system on behalf of their customers.

Producer/processors and retailers can integrate their system with BioTrackTHC’s program if they use the following software:

  • WeedTraQR
  • GrowFlow
  • Mr. Kraken
  • TraceWeed
  • GreenBits
  • S2Solutions
  • DopePlow

In the release, BioTrackTHC said more than 1,600 of the 1,700 cannabis licensees in Washington state are using the stopgap system. The system is free for November but will cost users $50 a month after that.

PTSD now treatable with medical marijuana in NY

New York Gov. Andrew Cuomo signed legislation to add post-traumatic stress disorder to the list of conditions that can legally be treated with medical marijuana in the state.

The move opens another sales avenue for MMJ businesses operating in a state that has been stymied by restrictive regulations.

The PTSD bill was part of a package of legislation that Cuomo signed to mark Veterans Day.

The Democratic governor said 19,000 New Yorkers with PTSD could be helped by medical marijuana, including veterans, police officers and survivors of domestic violence, crime and accidents.

New York’s medical marijuana law allows patients with illnesses including cancer, AIDS and Parkinson’s disease to consume nonsmokable forms of cannabis. 

New York’s MMJ program is still extremely limited, but the state earlier this year rolled out a plan to double the number of licensed businesses to 10 and saw an 183% increase in patient enrollment.

– Associated Press

Could Maryland medical cannabis sales begin soon?

The four-year wait in Maryland might be coming to a close.

Industry insiders in the state are predicting medical marijuana businesses could start selling product as soon as this month.

Wendy Bronfein, the marketing director for Curio Wellness in Lutherville, Maryland, said she expects to see sales begin this month, then steadily progress into the next year.

Here’s what you need to know:

  • Businesses will sell cannabis in forms such as lotion, pills and transdermal patches.
  • Brian Lopez, chairman of the Maryland Medical Cannabis Commission, said he hopes to see 20-30 MMJ dispensaries open by the end of the year.
  • The commission still needs to iron out issues such as “how to regulate how dispensaries will serve out-of-state patients.”
  • The question of racial diversity in Maryland’s MMJ industry hasn’t yet been resolved. Lawmakers are planning to introduce legislation next session to award cannabis licenses to African-American business owners.

– Associated Press

US hemp production doubled in ’17, report says

The U.S. hemp crop doubled this year, according to new survey data from a prominent hemp-advocacy group.

Vote Hemp counted a total of 23,346 acres growing hemp in 18 states.

That’s more than twice as much as hemp land as 2016, when the group counted 9,649 acres growing in 15 states.

State licenses to cultivate hemp were issued to 1,456 farmers this year, according to Vote Hemp, and a total of 34 states have hemp laws on the books, though not all have started their pilot programs yet.

The report also noted a slight increase in universities conducting hemp research, from 30 in 2016 to 32 this year.

Vote Hemp President Eric Steenstra used the report to urge Congress to make hemp farming legal nationwide.

Steenstra pointed out that hemp farmers face obstacles that include seed access that could be alleviated by federal expansion of hemp.

A hemp bill has been introduced in the U.S. House, but it hasn’t been heard yet, making passage unlikely by the end of 2017.

Steenstra urged Congress to “grant farmers full federally legal rights to commercially cultivate hemp to supply the growing global market for hemp products.”

In neighboring Canada, where hemp production was legalized in 1998, an estimated 120,000 acres were devoted to hemp in 2017.

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Columbia Care delays its MMJ dispensary in Delaware

Delaware’s oft-delayed medical marijuana program is experiencing another holdup.

Columbia Care, a multistate MMJ company headquartered in New York, has postponed by at least six months the opening of its facility in The First State.

Columbia Care’s facility was to be the third operating dispensary in Delaware, The News Journal reported.

Because of zoning, permitting and construction delays, however, Columbia Care now isn’t expected to begin sales in Delaware until spring 2018, a spokeswoman for the state’s health and social services department told the newspaper.

Besides its Delaware business, Columbia Care has operations in California, Arizona, Illinois, Massachusetts, New York, Pennsylvania, Maryland, Washington DC and Puerto Rico.

The MMJ program in Delaware has been beset by delays since its inception, according to The News Journal:

  • The Delaware Medical Marijuana Act was enacted in 2011, but its implementation was hampered for several years by the governor.
  • The state finally awarded its first MMJ license in 2014, to First State Compassion Center, but the launch was delayed a year because of legal and construction hurdles.
  • First State was then granted a second license in 2016, but more delays prevented that dispensary from opening until May 2017.

Besides the licenses belonging to First State Compassion Center’s two operating dispensaries and Columbia Care’s stalled business, a fourth permit was granted in August to New Jersey-based Compassionate Care Research Institute.

The dispensary plans to open next spring, according to The News Journal.