Week in Review: Cannabis investors eye NJ, program delays in Illinois and Maine, US House votes to protect adult-use markets & more

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Some of New Jersey’s medical marijuana operators already are investing heavily to expand cultivation facilities and other infrastructure to prepare for the expected rollout of an adult-use market.

Voters will have their say in November. The recreational initiative is expected to pass.

MJBizDaily takeaway: If voters do say yes, New Jersey could well develop into a multibillion-dollar market over time and become the focal point on the East Coast if New York doesn’t approve adult use soon.

Still, recreational sales might not start until 2022 because regulations would need to be developed.

Some of the big investors now are multistate operators that already have a foothold in New Jersey’s medical cannabis market. They hope to join the first wave of adult-use sales – assuming they occur.

Program, licensing delays

The coronavirus pandemic continues to delay a number of marijuana programs and licensing timelines.

The latest two developments: Maine likely won’t launch recreational sales until late this year, and Illinois has slipped several months behind in awarding second-round licenses for its new adult-use program.

MJBizDaily takeaway: Program delays especially affect businesses that are on the hook for real estate and other fixed expenses.

Delays also can test the patience of investors amid a virus-fueled recession and tight capital markets, perhaps more so in Maine than Illinois.

In Illinois, existing MMJ operators already have had a seven-month (and growing) head start to establish customer loyalty and brand recognition in the state’s new recreational program. Depending on the market dynamics of a location, that could make it difficult for second-round licensees to break in.

Protecting adult-use MJ markets 

The U.S. House again passed a provision that would prevent the Justice Department from cracking down on state-legal recreational marijuana programs.

MJBizDaily takeaway: The measure enjoyed some bipartisan support, an important indication of pro-marijuana sentiment in the House.

However, the language, tucked into a spending bill, isn’t expected to pass the full Congress. And even if it did, it’s only a stop-gap measure.

Industry officials hope the next year brings permanent federal reform. If wide-ranging marijuana legalization is out of reach, banking services for the cannabis industry continues to head the wish list.

CBD scheduling

Two cannabis scheduling recommendations by the World Health Organization received some stiff resistance, including from the United States, at a United Nations meeting.

Separately, the European Union appears to be leaning toward considering hemp-derived CBD as a narcotic.

Those two developments don’t bode well in advance of an expected vote of the WHO recommendations in December by the U.N. Commission on Narcotics Drugs. But industry officials still hold out hope.

MJBizDaily takeaway: The recommendations would ease international controls on certain CBD preparations.

That, in turn, should stimulate international trade in those preparations as well as boost markets and sales.

Bribery nets two years

A former Maryland lawmaker who helped develop the state’s medical marijuana industry was sentenced to two years in prison for taking $33,000 worth of bribes. Federal prosecutors had recommended a three-year sentence.

A Baltimore businessman earlier had pleaded guilty to bribing the former lawmaker, Cheryl Glenn.

MJBizDaily takeaway: The feds have been taking public corruption in the marijuana industry seriously in the past year.

So this case is just one of many offering cautionary tales for marijuana businesses looking for shortcuts to lucrative licenses.

Jeff Smith can be reached at jeffs@mjbizdaily.com