Week in Review: Canada’s tainted MMJ, tribal grow operation & DOJ policies

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By Omar Sacirbey, Bart Schaneman and John Schroyer

The fallout continues over pesticide-contaminated medical marijuana in Canada, a giant MJ greenhouse is planned for tribal land, and Jeff Sessions’ Justice Department will enact “reasonable policies” on cannabis.

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

Contaminated MMJ repercussions

Will the brouhaha surrounding pesticide-contaminated medical marijuana in Canada produce fallout for the nation’s federally licensed MMJ cultivators?

The Canadian media have speculated MMJ patient confidence in the country’s 38 legal producers will decline because of the situation, which unfolded late last year when OrganiGram and Mettrum Health (since purchased by Canopy Growth) recalled marijuana products that were contaminated with myclobutanil, a prohibited pesticide.

After the recall, the companies made changes involving their CEOs.

But Jamie Shaw, a government relations consultant who represents multiple Canadian dispensaries, doesn’t believe patient trust is the main issue for the growers. Rather, the problem is physician trust.

While acknowledging that some patients may have increased concern about the safety of their medical cannabis, Shaw said most either won’t care because they view the problem as isolated or won’t change their buying habits for lack of other options.

The greater fear for the cultivators, Shaw said, is that the contamination issue could dissuade doctors from writing prescriptions.

According to Shaw, Canada’s influential medical colleges located in the country’s provinces have issued guidelines arguing against issuing prescriptions for medical marijuana. That may deter physicians who have considered writing such prescriptions.

What will it take to restore any lost confidence in the growers?

More testing, Shaw said – whether it’s done by government mandate or voluntarily by the cultivators.

“Most of the dispensaries that I know at least test for mold,” Shaw said.

Grand plans

The real deal – or pie in the sky?

Delaware-based Bright Green Group of Companies is joining with Acoma Pueblo to build a $160 million greenhouse on tribal lands in New Mexico. It will have space to grow 40 million medicinal plants, including marijuana.

To succeed, the developers must navigate obstacles that have sunk such proposals.

Lael Echo-Hawk, general counsel for the National Indian Cannabis Coalition, has seen announcements similar to the New Mexico plan.

In 2015, the Flandreau Santee Sioux Tribe in South Dakota planned to open a recreational marijuana resort on tribal land. But the tribe wasn’t sure if it was compliant with federal law and ended up burning its cannabis crop and scuttling the project.

“Every time we have seen one of these big announcements, there hasn’t been follow-through,” Echo-Hawk said.

Numerous issues can emerge. For example, it’s not uncommon for a bank to phone a tribe or send a letter saying “you have to move your money,” she added.

Moreover, the current political climate only fans the uncertainties surrounding big cannabis projects.

Echo-Hawk said tribes nationwide mulling the marijuana industry would be wise to maintain a holding pattern as the Trump administration clarifies its stance on MJ legalization.

The Washington DC-based attorney has been following the statements of U.S. Attorney General Jeff Sessions. Her doomsday scenario: Sessions snuffs out adult-use cannabis by enforcing the Controlled Substances Act on federal lands, including tribal property.

“I think there’s a real risk there,” Echo-Hawk said. “I would hate to see someone lose their investment because of change in federal policy that frankly looks like it’s coming.”

Sessions’ roller coaster

The past five days have been a wild ride for U.S. Attorney General Jeff Sessions, who is experiencing a political firestorm over his encounters with the Russian ambassador on behalf of Donald Trump’s presidential campaign.

Sessions began the week making anti-cannabis statements that gave marijuana businesses reason for concern and later was invited by Colorado’s Republican attorney general to inspect the state’s adult-use industry.

Now it looks as if cannabis may be the least of Session’s concerns.

He said Thursday he will recuse himself from any oversight of Department of Justice investigations into connections between the Trump campaign and Russia. However, critics are still calling for his resignation, and that means cannabis will likely stay on the proverbial back burner for now.

“It seems clear so far that the Justice Department has quite a few large priorities on their plate, and it’s not clear that marijuana is one of them,” said Taylor West, deputy director of the National Cannabis Industry Association.

If the current controversy keeps Sessions’ – and Trump’s – attention elsewhere, it could prove to be a silver lining for the marijuana industry because business will continue as usual.

West said it’ll take increased capital for a Trump administration crackdown on the recreational marijuana industry, plus some Congressional Republicans have argued that regulating cannabis should be left to the states.

There’s also marijuana’s historically high approval rating with American voters.

Jump-starting a widespread crackdown on rec “would require them to really ignore what the vast majority of Americans want,” West said. “That’s a risk regardless of your situation, but it’s even more risky if you are also on thin ice for other reasons.”

West wouldn’t speculate on the likelihood Sessions may resign.

If Sessions were to resign, the cannabis industry would lose its most outspoken opponent in the federal government.

For now, West said, MJ companies “should be watchful.”

Sessions “hasn’t come out and expressly changed a policy or identified a target,” she said, “and until that happens, I think businesses should continue to move forward.”

Omar Sacirbey can be reached at omars@mjbizdaily.com

Bart Schaneman can be reached at barts@mjbizdaily.com

John Schroyer can be reached at johns@mjbizdaily.com