Week in Review: California cannabis home delivery, the ‘real’ Sanjay Gupta & ND to vote on adult-use MJ

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California cities push back on proposed regulation changes around home marijuana deliveries, a Canadian CBD company signs a branding agreement with “Dr. Sanjay Gupta” – but not the one you may think – and a North Dakota recreational cannabis measure gets approved for the November ballot.

Here’s a closer look at some notable developments in the cannabis industry over the past week.

Delivery fisticuffs

When California released its first draft of permanent industry regulations last month, perhaps the most significant shift was a clarification to allow licensed marijuana delivery businesses to sell to residents in any city or county in the state, regardless of whether that jurisdiction had banned MJ commerce.

That policy led to a letter to regulators from the League of California Cities this week in which the municipalities contended the state was undercutting their power to regulate local cannabis activity.

It’s another indicator of just how contentious and uncertain many of California’s regulations are for operators, said political consultant Dustin Moore.

Though he is “optimistic” the new delivery rule will remain in place, he said it’s “too early to tell” for sure.

Moore noted the proposed rule is actually a clarification that was included in Proposition 64, the 2016 voter-approved ballot measure that legalized marijuana for adult use. Prop 64 specifically allows licensed MJ businesses to use public roads, said Moore, who was the deputy campaign manager for the measure.

“So the question becomes, if that person is leaving one jurisdiction and going into another one, they’re permitted to use public roads, and if the transaction is taking place online, that transaction is taking place where it’s legal, and they’re just using public roads (to deliver goods to a customer),” Moore observed.

“The counterargument is no, the transaction actually occurs at the door. But even from a tax-collection standpoint, that’s a hotly contested point as well. So this is really uncharted territory.”

Either way, the league won’t give up easily, and it also has other big political organizations on its side that also opposed Prop 64 two years ago. Which means its letter could just be foreshadowing a very contentious political battle in coming months.

Dr. Gupta in the house?

Dr. Sanjay Gupta might be more responsible than anyone for opening American eyes to the medical promise of cannabidiol through his reporting on CNN.

So the cannabis industry took note when Canadian CBD company Tree of Knowledge International announced a branding deal to roll out a “Dr. Gupta’s” line of hemp-derived tinctures and salves with predicted nine-figure sales.

However, the company’s agreement is not with the famed CNN medical correspondent, but with lesser-known Dr. Sanjay Gupta, head of the American Pain Association and star of “Health Time TV.”

The company insisted it was not trying to sow confusion, but others aren’t so sure.

As news of the deal spread on social media, CNN’s Gupta tweeted to Hemp Industry Daily: “Perhaps you are doing good work, but you are absolutely misrepresenting my involvement.”

Messages to CNN to see if the network or the medical correspondent wanted to respond further were not immediately returned.

Mary Shapiro, a trademark attorney who specializes in cannabis law, said that even having the same name as a celebrity may not give one the right to brand a product likely to be confused with a celebrity endorsement.

Shapiro pointed to the famous 1980s trademark battle among the Gallo brothers, when two winemaker brothers successfully blocked a third sibling from using the family name on his cheese brand.

“This will depend on Canadian law,” Shapiro said of the CNN star’s legal options. “But under U.S. law, even the Gallo siblings are not allowed to use the Gallo trademark.”

Tree of Knowledge plans to start selling “Dr. Gupta’s” CBD line in the U.S. next month.

Free market

A proponent of a voter initiative to legalize adult-use marijuana in North Dakota said the group’s intent is an open market with unrestricted business opportunities but acknowledges state lawmakers could rein it in.

The initiative, which would legalize the possession, use and sale of marijuana by adults 21 years and older, was approved this week by the North Dakota Secretary of State’s Office for the Nov. 6 ballot.

Legalize ND, the backer of the initiative, doesn’t spell out regulatory parameters in the measure.

But that was by design, said David Owen, chair of the citizens group that put forth the initiative.

“We personally believe in free markets,” he said. “We believe they create better products” for the consumer.

The initiative’s intent, he said, is to not place limits on the number of businesses that could participate in a recreational cannabis market in North Dakota.

However, Owen acknowledged, lawmakers could add restrictions to the program.

It’s unclear what the initiative’s chances of success are  in November.

Legalize ND conducted a poll in late February that showed 46% in favor of legalizing adult use, 39% opposed and the rest undecided.

However, there’s no independent polls to cite, and the measure faces stiff opposition from law enforcement agencies and others in what has been a decidedly red state.

The rec MJ initiative comes at a time that North Dakota’s medical marijuana industry is closer to getting off the starting blocks.

State health officials are employing a phased-in approach to licensing MMJ dispensaries in eight regions throughout the state, with sales expected to start in late 2018 or early 2019.

North Dakota’s medical marijuana ballot initiative passed by a 64% to 36% vote in 2016.

John Schroyer can be reached at johns@mjbizdaily.com

Kristen Nichols can be reached at kristenn@hempindustrydaily.com

Jeff Smith can be reached at jeffs@mjbizdaily.com