Week in Review: Florida CBD, cannabis legal battles & ominous clouds in AZ, MA

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By John Schroyer and Omar Sacirbey

Florida’s long-awaited CBD industry approaches the launchpad, cannabis lawsuits make headlines, and recent polling numbers cast a dark cloud over recreational marijuana legalization in two states.

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

Florida, finally

First to seed doesn’t necessarily mean first to sell.

Consider Florida, where in February Surterra Therapeutics in the southwestern part of the state became the first approved licensee to receive approval to cultivate CBD-based medicine.

But Trulieve, the cannabis arm of Hackney Nursey in northwestern Florida, received its cultivation authorization soon after and announced this week that it is the first marijuana business in Florida to receive dispensing permission.

Trulieve will open its first store Tuesday in Tallahassee, while Surterra – owned by Alpha Foliage – plans to start dispensing later this summer.

“Trulieve beat them to the punch essentially,” said Jeff Sharkey, executive director of the Medical Marijuana Business Association of Florida.

Besides Trulieve and Surterra, another four nurseries are growing and extracting oil from cannabis, and they should have their dispensaries up and running before the end of the year, Sharkey estimated.

Being first to market is not a game-changing advantage, but it has perks, such as extra public relations capital and of course having the market to itself, if even for just a few months.

But how much of a market will there be for Trulieve at the beginning?

According to Florida’s Compassionate Use website, only about 100 doctors are registered to take medical marijuana recommendation training, while a Department of Health spokeswoman noted that only 15 doctors have created profiles in the state’s registry – not many in a state of almost 20 million. The spokeswoman said no patients are registered at this time in the state’s MMJ program.

“The medical approval structure is still coming together,” Sharkey said.

Still, he doesn’t expect the kind of beginning dispensaries in New York experienced in January, when some didn’t see a single patient on opening day.

“They wouldn’t have announced that they were opening if they weren’t expecting customers,” Sharkey said.

Legally blurred

A pair of legal cases this week again drove home the point that the cannabis industry will likely be closely tied to courtrooms and attorneys as the years go on.

In California, Bhang Chocolate lost an arbitration battle to former business partner Mentor Capital, to which it must now pay over $1.8 million.

And in Oregon, a class action lawsuit was filed against an insecticide maker because the manufacturer allegedly failed to include a specific chemical ingredient on the product’s label.

These, of course, are just two of the latest in a litany of legal disputes in the industry, but they serve as another reminder that legal battles over marijuana are likely going to be complicated, costly and constant.

“The vast majority of projects that I’m seeing in Southern California … will never come to fruition, due to lack of funding, and then there’s lawsuits because of that,” said Aaron Herzberg, corporate counsel for CalCann Holdings. “So many people in cannabis don’t properly paper things up, and it’s just based on a handshake.”

The types of legal disputes are going to run the gamut, he added, from fights between partners to attorneys suing local governments in an attempt to get their clients some type of advantage in a given licensing process.

These types of issues are also happening in states or localities with license caps, where applicants who didn’t win business permits filed suit against the state and claimed that they should have won.

“People file lawsuits to try to stay in business longer, and they’re already doing so very effectively,” Herzberg said.

The moral of the story? Find a lawyer you trust.

Two states too many?

The coming November election may very well end up being a huge victory for the cannabis movement in general, but it’s looking increasingly likely that at least two adult-use campaigns may wind up falling short: Massachusetts and Arizona.

At least if recent polling holds up through November. And that’s still a big “if” this far out.

With a little under four months to go before Election Day, multiple polls in both states have found their respective recreational legalization proposals failing at the ballot box, meaning that both campaigns are currently fighting an uphill battle. Whether they’ll be able to turn the tide is yet to be seen, though it’s obviously still very possible.

In Massachusetts this week, for the first time a polling firm found that a slim majority of voters – 51% – are opposed to Question 4, the Regulation and Taxation of Marijuana Act, while 41% are in support and 9% remain undecided.

In Arizona a week and a half ago, there were similar findings: 52.5% of voters were against the Regulation and Taxation of Marijuana Act, with 39% in support and 8.5% undecided.

Marijuana Policy Project (MPP) is backing both campaigns.

The two states are very different politically, and opposition is multifaceted. In both states, there’s pushback from those within the cannabis community itself due to provisions within the initiatives, and there are also mainstream political factions that are fighting legalization.

Another factor is a general lack of support from the existing medical cannabis industry, especially in Massachusetts.

Put it all together, and it simply may be too much for MPP to overcome.

John Schroyer can be reached at johns@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com