Cannabis Industry Daily News

Report: California marijuana growers lagging in licensing process

Nearly two months after California launched recreational marijuana sales, less than 1% of the state’s known growers have been licensed, according to a report released by a cannabis industry group.

According to a 38-page report from the California Growers Association, 0.78%, or 534, of an estimated 68,150 marijuana growers were licensed by the state as of Feb. 7.

The association cited such obstacles to licensing as cost and regulatory barriers.

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If more of the state’s smaller, independent growers don’t get licensed, the black market will continue to flourish, according to the association’s report.

“The current system will not achieve its goals without fundamental and structural changes that allow small and independent businesses to enter into compliance,” the report concluded.

About 100 growers expressed their concerns with California’s cannabis regulations during a Jan. 12 meeting with three cannabis regulators.

The growers association said it hopes to work with officials in getting more growers licensed.

“We must develop a regulatory framework that will effectively curb the environmental and public safety impacts of cannabis by providing pathways to compliance for businesses currently operating in the unregulated market,” said Hezekiah Allen, the group’s executive director.

“If they are unable to comply, the unregulated market is likely to persist and there will be an unnecessary strain on law enforcement resources.”

According to Marijuana Business Daily estimates, California’s adult-use industry – which launched Jan. 1 – could generate at least $4 billion in annual retail sales over the next few years.

– Associated Press

Mainstream magazine honors cannabis software company

By Omar Sacirbey , Reporter

LeafLink, an online inventory and ordering platform for the marijuana industry, has been chosen one of the “Top 10 Most Innovative Companies in Enterprise” by a traditional business publication.

Fast Company‘s inclusion of LeafLink on its select list put the software firm in the company of such mainstream businesses as online retail giant Amazon, productivity software developer Atlassian and cloud-based company communications tool Slack.

The print and online magazine said it chose to honor LeafLink for bringing “Salesforce-like tools” to the marijuana sector.

Fast Company’s “Most Innovative Companies” edition profiles businesses in 36 categories that include biotech, design, energy, media and robotics.

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The accolades for LeafLink, which has offices in Los Angeles and New York, add credibility and respectability to the entire cannabis industry

The almost-2-year-old company received another mainstream honor in 2016, when Forbes magazine picked LeafLink CEO Ryan Smith for its “30 Under 30” list.

LeafLink, which has about 450 cannabis brand clients and 2,000 retail clients in six states, raised $10 million last November to increase its sales, client support, marketing and engineering teams.

Ohio may award extra medical marijuana cultivation license

The Ohio Department of Commerce is weighing the addition of a 25th medical marijuana cultivation business permit to the 24 it’s already handed out.

According to WOSU Public Media, the department admitted in a letter to state Auditor Dave Yost that errors in the MMJ grow application scoring system led to the exclusion of one applicant – PharmaCann Ohio – from the process.

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Ohio’s MMJ law limited the department to awarding 24 cultivation licenses, all of which were awarded in November.

Now, however, the agency is “researching how to proceed with 25 licenses, including PharmaCann,” WOSU reported.

Multiple problems with the licensing process have cropped up over the past several months, and Yost has emerged as one of the department’s more prominent critics.

At least two companies that didn’t win MMJ licenses have said they plan to sue the state over licensing flaws, meaning there could be potential delays for Ohio’s MMJ rollout.

Yost has even called on state regulators to redo the entire licensing process, despite some license winners having already broken ground on multimillion-dollar MMJ ventures, WOSU reported.

Michigan unveils symbol that state’s medical cannabis products must carry

Michigan has released an official symbol to label medical marijuana products that are sold in the state and is detailing required label information for such goods.

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The symbol is an upside-down green triangle with an image of a green marijuana leaf in the middle.

The words “CONTAINS THC” sit atop the symbol.

Michigan’s Department of Licensing and Regulatory Affairs also released details on how to label MMJ products under the state’s Medical Marihuana Facilities Licensing Act, including:

  • Date of harvest
  • Other identifying information
  • THC potency levels

Full details are posted on the state’s website.

– Associated Press

Tennessee judge allows CBD sellers shuttered during raids to reopen

Nearly two dozen Tennessee stores padlocked for selling CBD are back open after a local judge ordered that keys and cash registers be returned to the 23 stores shuttered Feb. 12 in Nashville suburbs.

Rutherford County Circuit Judge Royce Taylor ordered the stores to be allowed to reopen Friday, the same day that 16 defendants pleaded not guilty to drug charges, according to Nashville TV station WSMV.

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A lawyer representing some of the businesses argued that the CBD products, which included vape pens and gummies, are legal.

Tennessee allows the sale of hemp-derived CBD products if they contain less than .3% THC.

A hearing will be held March 19 to determine whether the product is legal, and Tennessee lawmakers are expected to consider new legislation clarifying how CBD can be sold.

While Judge Taylor was hearing the raid case, some protesters held signs outside the courthouse in support of CBD and hemp products.

“The fact that we’re closing down vape shops for something that is 100% legal just doesn’t make sense to me,” a protester told The (Murfreesboro) Daily News Journal.

The Tennessee situation comes as a federal appeals court in California is considering whether the U.S. Drug Enforcement Administration erred when it proclaimed cannabidiol an illegal drug in late 2016.

The Hemp Industries Association has challenged the federal CBD rule, using cases like the Tennessee raids to argue that the DEA’s rule is leading to the arrests of entrepreneurs selling legal, nonintoxicating products.

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Legal medical marijuana sales begin in Pennsylvania

A medical marijuana dispensary in Pennsylvania became the first in the state to sell product to a patient on Thursday under the state’s new MMJ program.

The dispensary, Cresco Yeltrah, is located in western Pennsylvania.

Pennsylvania lawmakers overwhelmingly approved MMJ legalization in 2016.

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According to the Associated Press, the first customer was a woman buying medical marijuana for her son, who suffers from seizures. She spent $178.

The AP reported that Democratic Gov. Tom Wolf said Thursday that about 3,000 patients have received medical marijuana identification cards and more than 17,000 patients have signed up for the program.

Pennsylvania’s MMJ program is expected to grow into one of the country’s largest markets.

Five other dispensaries plan to begin sales this week.

Cresco Yeltrah, in Butler County, is a vertically integrated company that is also the first grower to supply cannabis to the market. Its grow operation is located in Jefferson County.

Maryland medical cannabis businesses settle lawsuit that threatened program

A lawsuit that might have been disastrous for the Maryland medical marijuana industry has ended.

The Baltimore Sun reported the suit, filed by Alternative Medicine Maryland, was settled Thursday after 16 months, removing a case that aimed to scuttle existing MMJ cultivation licenses and begin the application process once again.

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The MMJ company, which was denied a cultivation license, sued the state in 2016, arguing the Maryland Medical Marijuana Commission illegally disregarded racial diversity when selecting growers, even though state law required regulators to “seek” minority inclusion.

Here’s what you need to know:

  • African-Americans do not run any of the 15 cultivators that have received licenses.
  • Alternative Medicine Maryland is 80% black-owned.
  • The lawsuit was intended to force the state to tear up the approvals of all 15 approved cultivators and start the application process over again.
  • The license winners joined the suit as defendants to safeguard their permits.
  • The Sun reported state regulators are working to add five more cultivation licenses to companies owned by African-Americans.
  • Alternative Medicine Maryland’s lawyer told the newspaper the marijuana company will apply for one of those licenses.

Louisiana State University’s cannabis cultivation contractor sells 15% stake

GB Sciences, a Las Vegas company contracted to develop the Louisiana State University AgCenter’s medical marijuana products and manufacturing program, has sold a 15% stake in the venture.

Wellcana Group, which was formed last month in Lafayette, Louisiana, paid $3 million for its share of the project, The Advocate reported.

The capital will be used for construction and general corporate purposes.

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The agreement gives Wellcana the option to purchase an additional 35% of equity in GB Sciences Louisiana for $7 million, according to the Baton Rouge newspaper.

The deal also gives Wellcana the right to appoint members to the GB Sciences Louisiana board, two of whom will be residents of the state.

Wellcana’s registered agent is Lafayette attorney Charles Rush, and the officer is K2 Logic.

K2 Logic is headed by Rush and Charlie Hohorst III, a Lafayette businessman who founded online retailer CajunGrocer.com, according to The Advocate.

Louisiana State University had not say in the transaction, a school spokesman said.

Under regulations established by the legislature in 2016, Louisiana State University and Southern University are the only entities permitted to grow medical cannabis for the state’s legal MMJ patients.

The production facility is expected to be finished in March and medical marijuana could be available by late summer, The Advocate reported.

L.A. police: Hundreds of illegal marijuana dispensaries still operational

Los Angeles has issued licenses to nearly 100 marijuana retailers, but police estimate there are at least double that number operating illegally in the city and undercutting cannabis businesses that are playing by the rules.

Police have shut down eight illegal marijuana shops since Jan. 1, a pace that is unlikely to intensify as the department is focused on curbing violent crimes.

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At least 35 people were arrested during the eight raids, including four who were taken into custody last week.

Most of the illegal shops were operating in plain sight from storefronts in busy neighborhoods.

So far, only 99 businesses have been issued licenses to sell recreational marijuana in L.A.

But police estimate 200 to 300 illegal cannabis shops are operating within the city.

A report from the city’s controller last June estimated there were more than 1,700 legal and illegal dispensaries.

Police will continue to identify illegal shops, according to an LAPD spokesman.

Because investigations can be lengthy, police are prioritizing cannabis shops that are causing crime and generating complaints from the community.

– Associated Press

Weights, measures group seeks to set standards for cannabis industry

The National Conference of Weights and Measures (NCWM) has formed a marijuana task group to develop universal standards for the cannabis industry.

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Several groups have tried to create a body of standards, but developing industrywide guidelines has been a challenge.

The NCWM is a nonprofit association of state and local weights and measures officials, federal agencies, manufacturers, retailers and consumers, according to a news release.

The Nebraska-based group’s focus is on customer protection and maintaining a level playing field for businesses, according to the release.

The NCWM hopes to answer several questions involving the cannabis sector, including:

  • What are the precision requirements for scales used in direct sales?
  • What is the prescribed method of sale (weight, volume or count) for the various forms of cannabis?
  • Are there any special labeling requirements?

US senator gives ground in fight over Sessions Memo, marijuana policy

Correction: An earlier version of this story reported that U.S. Sen. Cory Gardner was “ending” his holds on government nominees over the Sessions Memo, and that those nominees were judicial. The senator has lifted most – but not all – of the holds as part of negotiations with the Department of Justice, and the relevant nominees are DOJ appointees, not judicial.

Colorado’s junior senator, Republican Cory Gardner, blinked first in a standoff with U.S. Attorney General Jeff Sessions.

According to the Denver Post, Gardner said he will stop blocking appointees from the Department of Justice in retaliation for Sessions’ revocation last month of several nonbinding cannabis-related policy memos.

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But according to a press release from Gardner’s office, the senator will continue to block other DOJ nominees “as discussions continue.”

After the Sessions Memo roiled the MJ industry, Gardner delayed confirmation votes on more than two dozen appointees for posts as U.S. marshals and U.S. attorneys. Gardner’s press secretary, Casey Contres, said there are currently three nominees still being blocked, and that number will likely increase as more appointments are made by Sessions.

Gardner’s political pushback stemmed from his belief that states should be left to their own devices on marijuana legalization and regulation.

“The DOJ should respect the will of the states who have spoken overwhelmingly on this issue,” Gardner said in the release. “While I have decided to lift my holds on these specific nominations, I will continue to lead a bipartisan group of colleagues to find a legislative solution. I remain optimistic that we will come to an agreement with the DOJ soon.”

What remains unclear, however, is what will happen to the Rohrabacher-Blumenauer Amendment, which is the only legal roadblock in Sessions’ way if he hopes to begin prosecuting state-licensed medical cannabis companies.

The amendment is set to expire March 23 unless Congress acts to extend it again.

Gardner is one of 18 U.S. senators who recently signed a letter urging the Senate Appropriations Committee to work to formally protect states’ rights when it comes to cannabis regulations.

BioTrackTHC gets North Dakota’s medical marijuana tracking contract

By Bart Schaneman , Editor

BioTrackTHC has been awarded the contract to provide North Dakota with a seed-to-sale medical marijuana traceability program.

Jeff Gonring, BioTrackTHC’s communications director, told Marijuana Business Daily the company will be paid $589,000 over five years on a tag-based model.

He said the Florida-based company doesn’t yet know how much the tags will sell for.

According to BioTrackTHC, the traceability system will allow regulators to enforce compliance throughout the supply chain.

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The company will also provide a registration system to enroll qualifying patients, caregivers, manufacturing facility workers, dispensary employees and laboratory staffers.

North Dakota law allows two producer/processor facilities and eight dispensaries in an MMJ program that likely won’t be up and running until late 2018 or early 2019.

BioTrackTHC now holds tracking contracts with seven states, U.S. territory Puerto Rico and the city of Arcata, California.