Week in Review: Tobacco + cannabis, Maryland planning restarts & Native Americans’ MMJ

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Massachusetts cigarette wholesalers eye recreational marijuana distribution, a Maryland court allows MMJ planning to continue, and a Seminole-owned firm partners with a cannabis investment group.

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

Massachusetts morphing

Tobacco wholesalers in Massachusetts are trying to join the state’s upcoming adult-use cannabis industry – and that’s a concern for cannabis businesses.

If the tobacco sector succeeds in getting regulators to require third-party shipping – as the state’s alcohol industry does – the practical result will likely be significant cost increases for growers, retailers and other marijuana businesses, said attorney Mike Cutler, who helped draft the rec legalization measure voters passed last year.

But he noted that it’s far from the Massachusetts rec industry’s only issue.

“Unfortunately, in Massachusetts the legislature owes the initiative process no deference,” Cutler noted. “In other states, either (lawmakers) can’t touch (an initiative) for a period of time, or they can only amend it by a super-majority, or there are other restrictions. There are no such restrictions in Massachusetts.”

Cutler said that means Massachusetts lawmakers will dictate how the rec industry operates.

Meanwhile, many stakeholders looking to get into Massachusetts’ cannabis industry have been eagerly awaiting word on how a special legislative committee formed earlier this year intends to regulate MJ businesses.

So far, Cutler said, the committee has made no decisions, despite the introduction of roughly 100 bills in the state legislature that would affect the adult-use industry.

“Up until about two weeks ago, the committee members hadn’t met to discuss what they’re going to do,” Cutler said. “And when the committee was formed, they were talking about putting a bill on the governor’s desk by June. It’s June. What’s going on? I’m not sure there are a lot of people who know what’s going on.

“It’s an opaque process as opposed to a transparent process,” Cutler concluded.

Maryland moving

Growers are breathing a sigh of relief after a Maryland Court of Appeals ruling.

The court blocked a Baltimore district judge’s decision to halt the medical cannabis program until after a hearing tied to a lawsuit alleging that regulators failed to consider racial diversity during the licensing awards process.

At issue: None of the state’s 15 cultivation licenses went to teams led by African-Americans, who make up about 30% of Maryland’s population.

However, the ruling doesn’t mean growers can rest easy, nor does it mean efforts to include more African-Americans in the program have been exhausted.

That’s because Maryland’s General Assembly – a part-time legislature scheduled to convene in January – could call a special session to consider the MMJ program. Special sessions are not unusual in Maryland: One was used in 2012 to pass legislation relating to the state’s gaming industry.

Ivan Lanier of Greenwill Consulting in Annapolis said top legislators favor a special session, but it’s unlikely to happen until September or October.

If a special session is called, Lanier believes lawmakers – led by the General Assembly’s Black Caucus – will try to draft new legislation creating anywhere from five to 10 new licenses, at least some of which would go to businesses led by African-American teams.

Important details – such as whether regulators should reopen the application process or only consider teams that already applied – would need to be worked out.

“Many legislators are in support of additional licenses, but the question is how many,” Lanier said.

However, growers that won preliminary licenses but still must win their final licenses aren’t in the clear yet. For instance, the original lawsuit stayed by the appeals court is still alive and, thus, could upend the program.

Another try by Native Americans 

The fledgling partnership between cannabis investment firm Electrum Partners and Seminole-owned Billie’s MCW could be a step toward more stable medical marijuana regulations on tribal lands.

Anthony Rivera – a partner in CannaNative, a San Diego-based Native American marijuana advisory group – believes there has to be a better alternative than tribes jumping into the MMJ industry prematurely, without having a clear regulatory system or a relationship with federal officials.

Rivera would like to see the Electrum-Billie’s partnership help the Native American community develop a rigorous regulatory structure before any type of cannabis cultivation occurs on sovereign land.

“We don’t want any more Indian crops destroyed,” he said, referring to a decision by the Flandreau Santee Sioux in South Dakota to burn their cannabis crop after canceling plans for a recreational marijuana resort. “We want to prevent that.”

He believes Native Americans should model any MMJ program after their gaming industry – specifically the strict controls they place on casino operations.

“It took us 30 years to build the Indian gaming industry to where it is now, a $28 billion industry,” Rivera said. “We don’t think it’s going to take that long, but we’re going to take the same steps to build a legal platform.”

However, starting an MMJ operation on tribal land isn’t the same as opening a cannabis business in a legal state, Rivera added.

“To enter into this particular marketplace is extremely unique and built upon trust and a unique understanding of culture and politics within Indian country,” he said. “You can be the best company – with the greatest product and the greatest prices – but if the tribes don’t have trust in you, it doesn’t matter.”

John Schroyer can be reached at johns@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com

Bart Schaneman can be reached at barts@mjbizdaily.com