Week in Review: California rec initiative, Colorado pesticide lawsuit & renewed hope in Illinois

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By John Schroyer

A marijuana legalization effort in California advances, a major cannabis player in Colorado gets hit with a lawsuit, and efforts to boost the patient base in Illinois ramp up.

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

Ballot competition in California

The first of possibly two or even more marijuana legalization measures was filed last Friday in California with the aim of making the 2016 ballot.

But the proposal – spearheaded by the Coalition for Cannabis Policy Reform, which is campaigning as Reform CA – might not have the broad support needed to go the distance.

That’s evidenced by the pullback of both the Drug Policy Alliance and the Marijuana Policy Project, which are abstaining from taking a position on the measure.

Lynne Lyman, California state director for the Drug Policy Alliance, said that her organization is leaning more towards backing a second initiative that’s still being drafted by Silicon Valley billionaire Sean Parker and a group of his supporters.

“Our first priority and hope is to be able to support the Sean Parker initiative,” Lyman said. “We continue to work with his drafting team and give advice, and I’d say it’s not just our hope but also our expectation that it’s the most likely initiative to move forward.”

That could be enough to torpedo Reform CA’s campaign – in part because the group reportedly doesn’t have any major financial backing, and also because there will be a lot of internal political pressure from the marijuana community to only have one legalization measure before California voters next year.

There’s a widespread perception that having two or more would doom legalization once again, after a similar attempt failed in 2010.

“With two measures on the ballot, we’ll lose. We’ll all lose,” Lyman said.

Lyman expects Parker’s group – which so far doesn’t have a formal name – to file its initiative language with the state by the end of October.

Lawsuit wakeup call

A lawsuit filed this week by marijuana users against Colorado cannabis chain LivWell over pesticide use should serve as a warning to the cannabis industry when it comes to product liability and manufacturing processes.

The suit could herald the beginning of a wave of similar legal action against marijuana companies.

“It should cause the industry to sort of stand up and take notice, and think about their policies and procedures, how they manufacture their product, how they run their cultivations, and in the end, to think about the consumer,” said Colorado attorney Rachel Gillette, who works closely with cannabis companies. “Any business that gets into this industry that doesn’t think they’ll have to follow a very high standard is fooling themselves.”

The lawsuit is targeting LivWell for its admitted past use of Eagle 20, a controversial pesticide that the plaintiffs contend can be toxic.

While Gillette didn’t comment on the merits of the suit against LivWell, she said that it’s only “a matter of time” before such suits become more common. As the cannabis industry grows, its liabilities and problems will grow as well.

Fingers crossed in Illinois 

Dozens of medical marijuana companies in Illinois are holding their collective breath these days, waiting to see if the state’s pilot program will take flight or come crashing to the ground.

Both scenarios are realistic at this point, but two recent developments have created a renewed sense of optimism.

An MMJ cultivator in the state announced it will spend $1 million on a media blitz designed to increase patient registration. And a state panel that saw its suggestions for expanding the MMJ conditions list shot down last month has renewed its efforts, issuing a new set of recommendations this week.

If those two efforts are successful, then the Illinois medical cannabis market could flourish. The state panel has recommended that four types of chronic pain be added to the qualifying condition list, and that alone could bring in thousands, if not tens of thousands, of patients to dispensaries around the state – translating into millions of dollars in revenue.

As things stand now, the state has only around 3,100 registered patients, which simply isn’t enough to sustain dozens of businesses. And the state health commissioner previously nixed the idea of adding 11 new conditions to the current list of 39 ailments, so it’s unclear how successful the new recommendations will be.

John Schroyer can be reached at johns@mjbizmedia.com