Cannabis Industry Daily News

Medical marijuana protections extended again as part of budget deal

By John Schroyer , Senior Reporter

Yet again, those in the medical cannabis industry can heave a sigh of relief. For now.

Under the terms of a new federal budget deal approved Monday by Congress, the Rohrabacher-Blumenauer Amendment will be extended at least once more, until Feb. 8, when the agreement expires.

The extension was confirmed by Michael Correia, director of government relations for the National Cannabis Industry Association:

“Medical marijuana protections still remain until that date,” Correia wrote in an email to Marijuana Business Daily.

“We’re working on maintaining those provisions in a longer-term budget.”

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The amendment – previously known as Rohrabacher-Farr – ties the hands of the U.S. Department of Justice and its director, Attorney General Jeff Sessions, by prohibiting the agency from using any federal money to interfere with state MMJ laws or businesses.

The measure does not protect recreational marijuana companies.

This is the seventh time the amendment has been temporarily extended by a continuing resolution from Congress, which hasn’t passed a new federal budget since 2015.

The amendment’s ultimate fate is still arguably in doubt, however, because GOP congressional leaders haven’t allowed it to come up for a vote in the House of Representatives.

The amendment was added to a Senate appropriations bill last year, but the competing spending bills between the two chambers were never reconciled.

The only way the measure will be placed into law permanently is for Congress to approve a stand-alone bill instead of as a budget amendment.

But there’s been no indication yet that such a bill may gain any real traction in the Capitol.

Massachusetts medical cannabis inspections turn up dozens of violations

The Massachusetts Department of Health conducted 327 inspections of medical marijuana dispensaries since the first one opened in 2015 and found numerous violations.

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The Springfield Republican newspaper obtained all the health department’s reports regarding the inspections, and several of the roughly 30 reports of violations contained multiple offenses.

Here’s what you need to know:

  • Violations ranged from minor, where plants were thrown in a dumpster instead of being ground up, to major, where inspectors walked into facilities without being checked in or identified.
  • Other violations included a lack of security cameras, generators that failed to work, faulty alarm systems, filling orders by phone when not required and improperly labeled plants.
  • Inspectors also tested products and found contaminants that led to recalls.
  • Two of the state’s first dispensaries – Alternative Therapies Group and New England Treatment Access – were inspected almost 60 times each.
  • According to The Republican, some of the problems were remedied with new equipment, changes to policies or training.

Vermont governor signs recreational marijuana bill into law

Vermont’s governor privately signed a marijuana bill into law Monday, making the state the first in the nation to authorize through the Legislature the possession and use of recreational cannabis.

The law, which goes into effect July 1, allows adults to possess up to 1 ounce of marijuana, two mature plants and four immature ones.

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The statute signed by Republican Gov. Phil Scott contains no mechanism for the sale or taxation of marijuana, although the Legislature is expected to develop such a system.

Vermont’s move is an incremental reform that will have little impact for most people in the state, said Matt Simon, New England political director for pro-legalization group Marijuana Policy Project.

Vermont will become the ninth state in the country, along with Washington DC, to allow adult use.

The others authorized recreational marijuana through a popular vote, but Vermont law contains no mechanism that allows for a citizen referendum.

The governor had until the end of the day Monday to follow through with a promise to sign the bill into law.

Scott’s office issued a statement Monday afternoon saying he had signed the bill with “mixed emotions.”

“I personally believe that what adults do behind closed doors and on private property is their choice, so long as it does not negatively impact the health and safety of others, especially children,” Scott said in the statement.

– Associated Press

Fate of marijuana business protection uncertain as government shutdown looms

The only current federal law protecting medical marijuana businesses from U.S. Attorney General Jeff Sessions could expire Friday might if Congress doesn’t reach an agreement on the national budget, which is set to expire at midnight ET.

The Rohrabacher-Blumenauer Amendment, which prohibits the Department of Justice from using federal funds to interfere with state MMJ laws, is tied to the life of the federal budget.

It was first passed in 2014 (the measure was originally called Rohrabacher-Farr) and then renewed in 2015, before the Republican-controlled Congress began passing what are known as continuing resolutions instead of a new, updated budget.

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The House approved another temporary spending bill Thursday to keep the federal government open until Feb. 16, but it was unclear Friday afternoon if the Senate would follow suit.

If a spending deal is not reached, that means the amendment could be set aside in coming weeks as Congress fights to reach a new budget agreement.

And if that happens, Sessions will be free of the restrictions the amendment places on the DOJ; he lobbied Congress last year to kill the amendment.

The amendment does not protect recreational marijuana businesses, though a separate amendment called McClintock-Polis to protect all state-licensed MJ companies from the DOJ was shot down in a House committee earlier this week, according to The Cannabist.

Emailed requests for comment to the offices of U.S. Reps. Dana Rohrabacher and Earl Blumenauer, the two main sponsors of the amendment, were not returned Friday.

Rhode Island governor seeks to expand medical marijuana program

Rhode Island’s governor is making another push to expand the state’s medical marijuana program.

Gov. Gina Raimondo’s $9.4 billion state budget plan for the 2019 fiscal year includes:

  • Establishing 12 more medical marijuana dispensaries.
  • Adding acute pain to the list of MMJ qualifying conditions.
  • Allowing Massachusetts and Connecticut cardholders to buy medical cannabis in Rhode Island.

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The governor wants to increase the number of dispensaries from three in order to provide more patient access to MMJ and because she projects a $5.1 million increase in revenue from such a move.

However, the three dispensaries currently operating under state law have resisted the creation of additional MMJ businesses. They argue there’s no demonstrated need for more dispensaries.

The legislature will review the governor’s proposals and present its plan before the 2019 fiscal year begins in July.

The governor has expressed reservations about recreational marijuana, but she has previously floated the idea of expanding Rhode Island’s MMJ program.

– Associated Press

Nebraska proposal would put medical marijuana up for vote in 2018

A Nebraska state senator is proposing a ballot measure that would give Nebraska voters the opportunity to legalize medical marijuana in November, a move that’s been tried before to no avail.

Sen. Anna Wishart of Lincoln introduced a proposed constitutional amendment Thursday after several previous legalization bills stalled in the legislature.

For example, in 2015, independent state Sen. Tommy Garrett sponsored a constitutional amendment that gained little traction.

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Wishart says she believes voters should have the opportunity to establish protections for people with chronic conditions who use marijuana to ease pain.

She says Nebraska state officials have failed to act.

The proposal would refer the issue to voters in the November general election.

MMJ advocates have tried to get the issue on the ballot but so far have not succeeded.

Nebraska’s law enforcement community has been highly critical of legal marijuana, particularly in neighboring Colorado.

In 2014, the state’s attorney general, Jon Bruning, joined with the Oklahoma AG in lawsuit to overturn Colorado’s recreational marijuana law.

Nebraska’s governor, Pete Ricketts, is also staunchly anti-cannabis and has said he plans to run for re-election in 2018.

– Associated Press and Marijuana Business Daily

Colorado company develops first US-bred hemp seed variety

By Kristen Nichols , Hemp Editor

A Colorado cannabis company has developed the first hemp seed bred entirely in the United States in the modern era, according to the state’s agriculture department.

The Colorado Department of Agriculture said the seed variety, called NWG-Elite, was developed by New West Genetics, a cannabis biotechnology company in Fort Collins.

“This is the first U.S.-bred variety in over 70 years in this country,” said Duane Sinning, who oversees the hemp program for the Colorado Department of Agriculture. “It’s an exciting time.”

Colorado and other states already have certified hemp seeds, which means the seeds have been tested to meet THC limits of 0.3% and to germinate and perform well in a particular state.

“But all those varieties belong to a foreign company. They were developed somewhere else and adapted for use here,” Sinning said.

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New West CEO Wendy Mosher told Marijuana Business Daily that the new variety was developed for seed production, with an average CBD content of 3% for the whole plant.

The new variety is especially prized because it resists “shattering,” when a plant drops seeds on an uncertain schedule, making it difficult to harvest the seeds.

The company is also working on hemp varieties better suited for CBD production and for fiber production, though she said fiber is the least marketable part of the plant right now in the United States.

“You can get a ton of hemp fiber from China for very cheap,” she said. “We’re not convinced yet that the (U.S.) fiber market is going to explode.”

The seed is available only from New West Genetics directly.

Many states do not allow the importation of viable seed, though Colorado hemp rules are silent on cross-state seed transfer, so hemp growers anywhere can buy NMG-Elite.

Mosher said that New West is also working on hemp variety trails in Indiana, Kentucky and Nevada.

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Oregon credit union, tech firm to offer marijuana banking services

Oregon-based Wauna Credit Union has forged a partnership with Arizona tech firm Hypur that will allow the financial institution to service marijuana-related companies.

According to the Coast River Business Journal, the credit union believes the partnership will allow the institution to “become part of the solution and not part of the problem.”

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Hypur is providing technology that will supplement Wauna’s existing processes with “real-time, red-flag alerts, automated onboarding and document management, electronic business-to-business and consumer-to-business payments, and Level 3 data for complete transaction transparency,” the Journal reported.

Marijuana companies “have difficulty forming banking relationships due to the limited number of credit unions and banks serving this industry,” Wauna CEO Robert Blumberg told the Journal. “Providing banking services to this industry legitimizes these businesses.”

The credit union has more than 25,000 members in Oregon and Washington state.

Study urges greater role for minorities in Maryland medical marijuana program

Maryland’s medical marijuana program put minority applicants for business permits at a disadvantage, according to a new study that recommended race be factored into any future MMJ licensing.

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The study’s author – Jon Wainwright, managing director of NERA Economic Consulting – said the findings support “the use of race- and gender-based measures to remediate discrimination affecting minority- and women-owned businesses in the types of industries relevant to the medical cannabis business.”

Diversity in Maryland’s MMJ industry has been a hot-button issue because minorities won only a small number of the retail and processing MMJ business licenses and none of the cultivation licenses.

The cultivation licensing process was even delayed because of a lawsuit stemming from the diversity issue.

Commissioned by Gov. Larry Hogan in April, the report will likely make it easier for regulators and lawmakers to consider race when awarding future medical marijuana business licenses, The Baltimore Sun reported.

The state’s General Assembly is considering a bill that would create five new licenses and require race to be factored into how they would be awarded, according to the newspaper.

MA picks Franwell’s Metrc for cannabis seed-to-sale traceability system

Massachusetts marijuana regulators have selected Florida-based Franwell’s Metrc program to serve as the state’s seed-to-sale traceability system.

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According to The Boston Globe, the Massachusetts Cannabis Control Commission budgeted about $750,000 for the system, which is intended to help states prevent diversion of cannabis to the black market.

Here’s what you need to know:

  • Using Metrc’s system adds a cost to the license holder because each plant requires an RFID tag that costs about 80 cents per plant.
  • Metrc has several state traceability contracts, including in California, Nevada, Colorado, Alaska, Ohio and Michigan.
  • The commission also decided to move forward with a contract with Salem, Massachusetts-based JD Software, which offers a program to process applications for adult-use cannabis licenses.
  • The health department already uses JD Software’s system to manage medical marijuana licenses.
  • The commission’s executive director told the Globe the companies were chosen for their ability to set up the systems quickly and flexibility in adjusting the software as the state’s recreational regulations are finalized.

New York is considering recreational cannabis legalization

New York’s governor is urging state lawmakers to provide funding to establish a commission that would study the feasibility of legalizing adult-use marijuana in the state.

The study would explore recreational legalization’s health effects, economic impact, criminal justice impact and how recreational legalization by some of New York’s neighbors would affect the state, according to Buffalo TV station WKBW.

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The announcement – which Gov. Andrew Cuomo made during his annual budget address to lawmakers – comes as three of New York’s neighbors move closer to having full-fledged recreational marijuana markets:

  • Massachusetts voters passed a recreational marijuana law in 2016, and the market is supposed to launch later this year.
  • New Jersey Gov. Phil Murphy wants his state to pass adult-use cannabis, and lawmakers are poised to pass a bill soon.
  • Vermont Gov. Phil Scott is expected to sign a rec MJ bill that the legislature passed earlier this month.

Those states’ momentum toward recreational marijuana helped fuel New York’s desire to conduct a study on adult use, budget director Robert Mujica told the Rochester Democrat & Chronicle.

The study would be undertaken by the New York health department and other state agencies, according to news reports.

New York already has a medical cannabis program, but it’s considered one of the most restrictive in the nation.

The Democrat & Chronicle noted that Cuomo insisted on “many of the restrictions” on the MMJ program and that the governor has been hesitant to ease the state’s adult-use laws.

Canadian-listed marijuana company buys Florida MMJ license holder for $48M

By Matt Lamers , International Editor

A New York-based marijuana investment company used cash and its Canadian-listed shares to fund a $48 million acquisition of a licensed medical marijuana business in Florida.

iAnthus Capital Holdings, an investor in U.S. marijuana businesses, bought Florida’s GrowHealthy Holdings for $30.5 million in stock and $17.5 million in cash.

GrowHealthy and its affiliate, McCrory’s Sunny Hill Nursery, hold one of the state’s 13 medical marijuana business licenses.

The deal gives iAnthus a toehold in what is expected to become one of the nation’s largest MMJ markets. The company trades on the Canadian Securities Exchange as IAN.

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Randy Maslow, president and co-founder of iAnthus, said the $48 million transaction is the largest M&A deal in Florida’s cannabis sector to date.

“Florida is the big prize,” he told Marijuana Business Daily. “The reason we love Florida is you can open up to 25 dispensaries immediately, dwarfing any other medical state, and the demographics are phenomenal.

“It’s a state with a lot of opportunity and a limited number of licenses.”

GrowHealthy spent close to $20 million to complete its 200,000-square-foot facility in Lake Wales, according to Maslow.

And, within that structure, Maslow plans to establish cultivation space as demand increases.

The facility currently houses 4,000 square feet of canopy that produces 500 kilograms of medical marijuana per year.

Construction of GrowHealthy’s flagship Palm Beach County dispensary is expected to be in operation by July.

The company also is working on leasing arrangements for dispensaries in Tampa and Orlando. They are planned to open in the third and fourth quarter, respectively.

Matt Lamers can be reached at mattl@mjbizdaily.com

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