Licensed recreational cannabis sales begin in Illinois, a new Oregon rule could possibly curtail the number of marijuana licenses in the state, Nevada shutters a testing lab – and more of the week’s top MJ business news.
Illinois hits 77,000-plus transactions on first day of legal adult-use MJ sales
The newest U.S. recreational marijuana market kicked off on New Year’s Day in Illinois, where just a few dozen shops began serving huge lines of customers starting at 6 a.m. CT.
The state’s Department of Financial and Professional Regulation reported more than 77,000 legal recreational cannabis transactions occurred on Jan. 1, and sales were close to $3.2 million.
The Illinois market potential is $2.5 billion, according to estimates from Marijuana Business Daily, but will likely take a few more years to realize that as more businesses gain licenses and become operational.
Eventually, around 500 legal marijuana companies could exist in the state, but that rollout will remain slow and likely onerous, since only 37 retailers are approved so far for rec sales and not all of those are currently serving customers.
That number will increase in May, with as many as 75 retail licenses scheduled to be awarded by May 2020.
Beyond that, Illinois has not scheduled additional licensing rounds yet.
But the future looks bright for the state’s market just based on the demand exhibited on New Year’s Day.
Oregon finalizes license approval
As of Jan. 1, Oregon made official the ability for the state’s Liquor Control Commission, which regulates the licensed marijuana market, to deny cannabis production licenses based on supply and demand.
MJBizDaily takeaway: The permanent rule officially puts an end to the state’s previous regulatory structure that essentially allowed anyone with enough money to get a license, with no cap on the amount of permits issued.
The regulatory move was largely made to help curb the state’s overproduction and oversupply of marijuana flower, though that problem appears on the mend as prices are rebounding from rock bottom.
The market intervention also could lead to additional consolidation as business licenses become more rare and valuable.
Nevada testing lab closure
The Nevada Department of Taxation shut down a Las Vegas cannabis testing lab, Cannex Nevada, after tested flower was found to have three times the allowable limit of yeast and mold.
MJBizDaily takeaway: In 2019, Nevada regulators increased scrutiny of marijuana testing labs, even going as far as launching an investigation.
Putting the labs under a microscope, while costly for those who fall on the wrong side of the regulations, should ultimately lead to more consumer confidence in the safety and quality of the regulated industry’s products.
That, in turn, ought to boost licensed cannabis companies’ bottom lines and help them succeed against the unregulated market.
Washington state’s changed packaging rules favor MJ companies
Washington state revised its packaging rules for infused marijuana edibles products to benefit cannabis companies.
The new rules resolve some concerns raised by an announcement nearly a year ago that sparked fears the state could require removal of many types of cannabis-infused candy from store shelves.
The Washington State Liquor and Cannabis Board approved the revised rules, which extend from Jan. 1 until July 1.
MJBizDaily takeaway: The rules do not ban a specific edible product type.
Marijuana-infused edible products, packaging and labeling will be reviewed based on their color, appearance and whether they are similar to products that are commonly marketed to people younger than 21.
Bermuda unveils proposed rules for cannabis businesses/patients
Bermuda released its long-awaited draft framework for a domestic medical cannabis industry.
The proposed law and regulations were released together, but they will not see introduction into the country’s legislature until public feedback can be taken into account and reflected in the new law.
The government cited health and economic reasons for the new law, expecting to attract international investment and support entrepreneurship.
Having the elected government and unelected regulators in the corner of businesses is one of the most important pieces of a healthy new cannabis industry.
MJBizDaily takeaway: Bermuda is broadly supportive of the emerging medical cannabis industry, but the law and related regulations won’t be in place for some time.
An anticipated trend for 2020 is continued rapid progress, legal and regulatory, within Caribbean Community countries – of which Bermuda is an associate member.
Expect business opportunities to continue to develop in these countries this year.