Week in Review: Flurry of MJ Activity Abroad, Key California Ruling & Rise in Marijuana Demand

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By John Schroyer and Omar Sacirbey

Multiple countries consider cannabis reform, a California court issues a ruling that could ripple across the MJ industry, and a new study bodes well for marijuana businesses.

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

Cannabis Going Global

There’s been a flurry of international movement this month to relax cannabis prohibition laws, and one of the biggest developments on this front happened earlier this week.

On Monday, Canadians elected a new prime minister who has vowed to legalize marijuana. If he’s successful – and the chances are good that he will be – Canada will become the second country in the world to do so after Uruguay.

Mexico’s Supreme Court is slated to weigh in on a personal cannabis use case at the end of October, which could open the door for further reforms. Croatia legalized medical cannabis last week, while Australia is poised to start growing MMJ for clinical trials, beginning with epileptic children.

These developments follow other international moves in Puerto Rico and Jamaica, where cannabis reforms have also been put in place just this year.

And there’s likely more to follow, since a lot of these countries are following the lead of the United States, said Hannah Hetzer of the Drug Policy Alliance.

“Once the United States started talking about legalizing marijuana, that opened up a lot of space for countries that might have previously not considered it because of potential repercussion from the United States,” said Hetzer, a DPA senior policy manager for the Americas. “It’s really fantastic that it’s all converging at once.”

There are several other factors that have played into the cannabis momentum across the globe, she said, including positive news out of Colorado and Washington State, where recreational legalization has moved forward fairly smoothly and uneventfully.

Combine that with a general worldwide frustration on how cannabis laws are applied, Hetzer said, and what you wind up with is a formula for dramatic change.

Medical marijuana legalization bills are already on the table in Brazil, Chile, Colombia, Costa Rica and Mexico, according to Hetzer.

If more states follow in the footsteps of Colorado and Washington next year, that could ramp up even more international momentum for more countries to legalize.

Ruling Beneficial, But Not a Game-Changer

When a California judge ruled Tuesday that the Department of Justice didn’t have a valid reason for closing down the nation’s first licensed dispensary several years ago, cannabis professionals rejoiced.

The move could offer some protection to other marijuana businesses from federal lawsuits.

So are federal lawsuits now a thing of the past, and what does the ruling mean for businesses that are currently wrapped up in litigation with the government?

The case doesn’t mark the end of an era, but rather should be seen as another stone for medical marijuana businesses battling the federal Goliath.

“There is still nothing that stops the government from going after medical marijuana businesses,” said San Francisco attorney Mitch Abdallah. “But what we now have is a defense that is recognized by Congress.”

In other words, the Department of Justice can still arrest or close medical marijuana providers, but those businesses now have an important legal tool to win their case.

The judge based his ruling on a new Congressional law – the Rohrbacher-Farr Amendment- that prohibits the DOJ from spending money to prosecute cases against medical marijuana providers and patients in states where medical marijuana is legal.

That said, the DOJ has significantly scaled back actions against the legal marijuana industry anyway since 2013, when the federal government essentially told federal prosecutors to take a hands-off approach to cannabis businesses in states with oversight and regulations on the industry .

Attorney Henry Wykowski- who represents two dispensaries fighting federal lawsuits – said he would cite the decision if the government sought to lift stays that have temporarily frozen the proceedings against his clients.

“It’s a well-reasoned opinion by a respected jurist that addresses all the major arguments of the Department of Justice, and shoots them down unequivocally,” Wykowski said.

The government has 60 days to appeal the decision, “but my bet is they won’t,” Wykowski said.

Abdallah believes the government will appeal, however.

“This could have a big impact on them,” he said.

Marijuana Market Skyrocketing

Adult marijuana use in the United States has more than doubled since 2001, going from 4% that year to 10% in 2012 and 2013, according to a study by Columbia University in New York.

Unfortunately, there’s been a parallel increase in marijuana-related dependence problems (from 1.5% of consumers to 3% in the same time frame), and anti-marijuana groups will certainly pounce on this to defend their position against legalization.

But the takeaway for the industry is simple: demand is booming.

Aside from an overall increase in use, the report also found a spike among particular demographics, including African Americans, Hispanics, southerners, middle-aged consumers and the elderly.

The increase is likely tied in a big way to the loosening marijuana laws across the country and the spread of the cannabis industry. Cannabis is much easier to obtain in regulated markets, and it’s also more accepted these days in general.

In 2001, MMJ dispensaries weren’t nearly as common as they are today, and most Americans had to obtain cannabis via the black market.

Overall use could even be much higher than the figure in the report, as it was conducted before Colorado, Washington State and Oregon started rec sales.

Expect this trend to continue and accelerate as time goes on. While some see it as a negative, for businesses it’s a tremendous positive. Every industry, after all, wants to see its customer base grow.

John Schroyer can be reached at johns@mjbizmedia.com

Omar Sacirbey can be reached at omars@mjbizmedia.com