Cannabis Industry Daily News

Judge orders Illinois to add intractable pain as a medical marijuana condition

An Illinois judge has ruled the state must add intractable pain to the list of medical marijuana qualifying conditions, a move that could greatly expand sales at the program’s 53 dispensaries.

The state health department initially rejected intractable pain as a condition, but Cook County Judge Raymond Mitchell ordered the department to include it, the Chicago Tribune reported.

Here’s what you need to know:

  • The health department is expected to appeal the judge’s order, which would put the change on hold.
  • Intractable pain, often referred to as chronic pain, has dramatically increased dispensary sales in states that have added it.
  • More than 29,900 Illinois patients had signed up for MMJ cards as of Dec. 31, 2017.
  • Total retail sales for Illinois dispensaries in 2017 were over $86 million.

19 attorneys general urge Congress to give cannabis states access to banking

A letter to 10 major Congressional leaders from 19 attorneys general asks Congress to push through legislation that would allow states with medical or recreational marijuana laws to bank as other business do.

The group suggests that Congress give special attention to measures such as the Secure and Fair Enforcement Banking Act (SAFE). Congressman Ed Perlmutter, D-Colorado, introduced the SAFE legislation (S. 1152 and H.R. 2215) last April.

The letter comes only 12 days after U.S. Attorney General Jeff Sessions revoked the Cole Memo, a key marijuana industry safeguard.

Here’s what you need to know:

  • The attorneys general who signed the letter serve Alaska, California, Colorado, Connecticut, Illinois, Iowa, Hawaii, Maine, Maryland, Massachusetts, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Vermont, Washington state, the District of Columbia and U.S. territory Guam.
  • The AGs wrote: “Because the federal government classifies marijuana as an illegal substance, banks providing services to state-licensed cannabis businesses could find themselves subject to criminal and civil liability under the Controlled Substances Act and certain federal banking statutes. This risk has significantly inhibited the willingness of financial institutions to provide services to these businesses.”
  • Such legislation “would bring billions of dollars into the banking sector, and give law enforcement the ability to monitor these transactions.”
  • The AGs characterize the lack of banking services for the regulated market as a public safety threat because cash-heavy businesses are often targets for criminal activity.
  • The group argues that bank tracking would make tax compliance easier and, thus, result in higher tax revenue.

Slew of restrictive medical cannabis bills proposed in Arizona

A proposed law in Arizona would make publishing the incorrect address of a cannabis dispensary a felony.

According to the Phoenix New Times, three “prohibitionist” Arizona lawmakers are trying out new ideas to stymie the state’s medical marijuana program and prevent a recreational program from becoming a reality.

The proposed bills also would:

  • Prohibit dispensaries from acquiring, possessing, manufacturing or selling a cannabis product that’s packaged or labeled in a manner attractive to minors.
  • Charge doctors who give medical marijuana cards to ineligible people with felonies.
  • Allow prosecutors to decide if parolees can obtain MMJ.
  • Authorize the health department to use $40 million from the marijuana-tax coffers to enforce MMJ laws.
  • Require the health department to develop programs warning of the danger of secondhand smoke.

Order could force PA to reveal more about medical marijuana applicants

Pennsylvania’s medical marijuana regulators must disclose more information about business license applicants under a ruling by the state’s Office of Open Records.

The decision by an appeals officer requires the Pennsylvania health department to make public the names of principals, operators and financial backers for MMJ cultivators and dispensary applicants, the Tribune-Review reported.

However, no information would be released until the Commonwealth Court makes a final decision, a cannabis-focused attorney told Marijuana Business Daily.

The health department was given 30 days to comply or pursue an appeal through Commonwealth Court, according to the newspaper.

“That final decision will not be for months or years if either the Department of Health or one of the third-party applicants implicated in this appeals the decision,” said Judith Cassel, a Harrisburg-based attorney.

A health department spokeswoman told the Tribune-Review that the agency is “reviewing the order and weighing our options.”

The issue came to a head in September when a newspaper challenged health department redactions of applicants’ information, including their funding and who was applying for the licenses. Regulators allowed applicants to determine what information was made available to the public.

Pennsylvania’s MMJ program is expected to launch later this year and, once it’s established, could become one of the nation’s more robust markets.

CBD confusion mounts in Iowa as police seize goods but don’t always test for THC

Iowa police who’ve been seizing CBD products off stores shelves have in some cases not been testing them to see if they contain illegal THC, adding to the confusion surrounding cannabidiol’s legal status in the state.

Authorities have seized oils, lotions and candies containing CBD in at least two jurisdictions, the Des Moines Register reported.

Some seizures have been from stores in eastern Iowa, while others have been northwest of Des Moines.

CBD proponents argue the products were derived from legal hemp. Authorities disagree.

“CBD products seized in the investigation are marijuana under Iowa law. It is illegal to possess or distribute them,” Muscatine County Attorney Alan Ostergren said in a statement.

But he also acknowledged that authorities who seized CBD products from five stores in Muscatine did not request testing for all the items taken.

The shop owners selling CBD have said the products contained legal extracts from hemp.

One store owner said she checked with local police before carrying a CBD product, was told it was fine and then watched authorities seize the product less than a month later.

“I just want it to be clear: What’s legal and what’s not legal?” Carrie Bluml, owner of the Nature Ammil store in Carroll, told the Register.

The newspaper reported that stores throughout Iowa, including health-food outlets and vape shops, are selling unregulated CBD products.

Iowa law limits marijuana-derived CBD to certain medical patients, but the law doesn’t address CBD extracted from hemp.

A manufacturer of some of the products seized criticized police for not knowing about the CBD they seized.

“It’s unfortunate law-enforcement authorities aren’t taking proper steps to determine the legality of these products,” Josh Hendrix, director of business development for Las Vegas-based CV Sciences, told the Register.

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Oregon marijuana retailers busted in underage-sales sting

Nearly 20% of state-licensed marijuana retailers in a recent undercover operation sold cannabis to underage buyers, according to Oregon authorities.

The Oregon Liquor Control Commission told The Oregonian that 16 of 86 shops sold marijuana to people younger than 21 during decoy visits in December.

The agency issued citations to the violating stores, which also could face fines or temporary license suspensions.

Oregon Liquor Control Commission Executive Director Steve Marks says the results of the sting are unacceptable.

“Oregonians who voted for legalizing recreational marijuana implicitly told the cannabis industry to abide by public safety laws,” Marks said in a statement. “Clearly they’re not.”

Anna Schrab’s AmeriCannaRX in Portland was among the shops the state said sold to an underage customer.

The owner called the situation “embarrassing” and said she fired the employee who conducted the transaction.

Schrab said she plans to buy a device that scans the identification of buyers. She also said she’s offering employees a bonus if they catch underage buyers.

Mark Pettinger, a liquor commission spokesman, said more decoy operations are planned and the agency intends to visit every licensed marijuana store in the state annually.

Oregon’s underage sales is the second black eye for the cannabis industry in two months.

In December, Denver police raided one of the largest retail chain operators in Colorado for selling illegally excessive amounts of cannabis to customers.

The “looping” incidents led to the arrests of 13 Sweet Leaf budtenders, and 26 of the chain’s licenses were suspended.

– Associated Press

Los Angeles issues first licenses for cannabis sales

A medical marijuana dispensary and recreational retail store in Los Angeles have received temporary licenses from the city to sell cannabis.

Mother Nature’s Remedy Caregivers in Woodland Hills and WHTC in Studio City received L.A.s’ first MMJ and adult-use permits, LA Weekly reported.

The two facilities now need approval only from state regulators to begin sales.

California began handing out temporary licenses in mid-December in advance of the Jan. 1 launch of the state’s newly regulated cannabis market.

But Los Angeles was among the municipalities statewide that did not allow sales to begin on New Year’s Day.

L.A. regulators, who said the licensing process isn’t “going to happen overnight,” didn’t begin accepting applications until Jan. 3.

Cannabis grow-equipment company GrowGeneration raises $9 million

GrowGeneration, a multistate operator of retail hydroponic and organic gardening stores serving marijuana growers, said it raised $9 million through the offering of convertible notes.

The Denver company said in a news release filed with the Securities and Exchange Commission that it plans to use the proceeds to expands its operations.

CEO Darren Lampert said the company plans to close on several acquisitions during the first half of 2018 and that GrowGeneration’s sales this year are forecast to exceed $30 million following the latest funding deal.

“The company’s acquisition targets include hydroponic and cultivation supply operations in the New England and California markets and proprietary products for commercial growers,” he said in the news release.

GrowGeneration operates stores in Colorado, California, Nevada and Washington state.

Median Capital Partners, based in Albany, New York, led the offering of convertible notes and increased its investment stake in GrowGeneration by $2 million.

Congress members defend CBD, blast DEA’s hemp decision

In a bold show of support for the hemp industry and CBD, 28 members of Congress are asking a federal appeals court to reject the Drug Enforcement Administration’s argument that cannabidiol is a Schedule 1 drug.

The Congress members filed the brief Thursday in conjunction with a pending lawsuit against the DEA.

The 9th Circuit Court of Appeals is set to hear arguments in the case Feb. 15.

The Congress members – 22 Democrats and six Republicans – argue that the DEA is “blatantly contrary” to the 2014 Farm Bill when it argues that CBD is a marijuana extract and therefore illegal.

“The Farm Bill’s definition of industrial hemp includes any part of the plant, including the flower,” the Congress members argue in the brief.

The members conclude that the federal agency’s rule about CBD was an “abuse of DEA’s administrative procedure and rulemaking authority.”

The lawyer who wrote the brief for the Congress members, Steven Cash, told Marijuana Business Daily that Congress members took the extraordinary step of weighing in on the lawsuit in hopes of seeing the courts resolve the conflict between the Farm Bill and the DEA’s interpretation on the Controlled Substances Act.

“Apart from arguing about the relative benefits, flaws and dangers of medical marijuana and hemp, it appears we’re going to solve this (conflict) through traditional avenues, the courts,” Cash said.

The DEA said in late 2016 that because CBD cannot be easily extracted from non-flower parts of the cannabis plant, CBD should be considered a controlled substance. The decision brought a hasty lawsuit from the Hemp Industries Association and a CBD business.

A lawyer for the hemp companies says the brief will show judges that Congress understood what it was doing when it authorized hemp production, meaning not just the stalks and seeds but the whole plant.

“Congress has spoken, yet again,” Bob Hoban said in a statement. “The industrial hemp industry has seen exponential growth … and this case represents the most significant challenge the U.S. hemp industry has seen to date.”

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Report: Marijuana banking protections intact – for now

Financial institutions that serve marijuana businesses still have federal protections – at least for now – outlined in a February 2014 memo from the Financial Crimes Enforcement Network (FinCEN), Reuters reported.

The report comes after Attorney General Jeff Sessions last week revoked certain Obama-era protections for the legal marijuana industry.

FinCEN is a U.S. Treasury Department agency. The Obama-era FinCEN memo effectively gives banks permission to serve marijuana clients, provided they can prove those marijuana clients are in compliance with state laws.

The FinCEN memo was drafted in parallel to the Cole Memo, which gave marijuana businesses some protection from federal interference. Sessions rescinded the Cole Memo on Jan. 4.

Sessions’ decision fanned fears in the cannabis industry that even fewer banks would be willing to serve MJ businesses.

But a FinCEN spokesman, Stephen Hudak, told Reuters the agency’s policy “remains in place.”

About 400 banks out of more than 13,000 currently serve marijuana businesses, according to a recent FinCEN report. That’s up from 301 banks and credit unions two years ago.

Cannabis compliance firm Simplifya secures first stage of $3 million raise

At a time when adhering to regulations is key for marijuana businesses, Denver-based compliance software company Simplifya has secured $1 million in the first stage of a Series B funding round.

Simplifya said it has additional investors lined up to close a total funding round of $3 million.

According to a news release, the raise was led by private equity fund Merida Capital Partners, a Maryland-based cannabis infrastructure fund.

Compliance has moved to the forefront for many cannabis entrepreneurs since U.S. Attorney General Jeff Sessions last week revoked key protections for states with recreational marijuana programs.

Here’s what you need to know about Simplifya’s raise:

  • The company’s software allows businesses to delegate, review and manage compliance tasks across industrywide facilities and license types, including tools for audit management, scheduling and tracking.
  • Simplifya is increasing its offerings based on the Jan. 1 launch of California’s recreational cannabis market.
  • The company is backed by cannabis law firm Vicente Sederberg and venture capital firm Hypur Ventures, among others.
  • “Now more than ever, businesses are going to want to be in clear compliance with state and local laws, and they are going to need assistance,” said Brian Vicente, a co-founder of Simplifya and founding partner of Vicente Sederberg, a cannabis-focused law firm.

North Dakota specifies where state’s medical marijuana dispensaries can open

North Dakota has established eight regions for medical cannabis dispensaries in an effort to ensure qualifying patients have easy access to MMJ.

The regions center on the state’s largest cities – Fargo, Bismarck, Grand Forks, Minot, Devils Lake, Jamestown, Williston and Dickinson.

However, the dispensaries that eventually are licensed can be located anywhere within a 50-mile radius of those cities.

It will be a few months before the state begins accepting formal applications from groups and businesses that want to open dispensaries.

The program likely won’t be up and running until late 2018 or early 2019.

Administrative rules covering such things as lab testing, security requirements and transportation regulations must first be approved by the state attorney general’s office and the Legislature’s Administrative Rules Committee.

The State Health Council, which advises North Dakota’s health department, voted Thursday to approve the rules, which could be fine-tuned as the MMJ program evolves.

After final approval of the rules, the health department will accept applications from manufacturing facilities, likely in late spring or early summer, before moving on to application periods for dispensaries and a testing lab.

The application period closed Monday for proposals for a tracking system to monitor the MMJ program.

– Associated Press