Week in Review: Vermont’s MMJ expansion, cannabis standards & Sessions’ warning

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By John Schroyer and Bart Schaneman

Vermont adds dispensaries and qualifying conditions to its medical marijuana program, two standards organizations begin work on the cannabis sector, and U.S. Attorney General Jeff Sessions tries to strip MMJ protections.

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

Is more better for Vermont? 

Vermont’s tiny medical cannabis program – four licensed and vertically integrated dispensaries – is set to get a good bit larger now that the governor has signed off on a law to more than double the state’s MMJ storefronts.

The bill allows existing dispensaries to each open a satellite location and creates a fifth license that will likely be issued this year, meaning Vermont could jump to 10 dispensaries. A sixth license will be issued when the state’s MMJ patient registry reaches 7,000 participants. Registry growth likely will stem from Vermont’s addition of Crohn’s disease, Parkinson’s and post-traumatic stress disorder as qualifying conditions.

This news doesn’t necessarily mean the existing licensees are jumping up and down with excitement. At least one dispensary director hedged any enthusiasm because the state’s MMJ market is still quite small with about 4,000 patients.

“If it provides greater access to people, that’s a good thing. But I do have concerns with the market size,” Shayne Lynn, executive director of Burlington’s Champlain Valley Dispensary, said when asked about the fifth dispensary license. “Is there enough of a market to support all of us?

“In the short term, it might be a struggle for the new dispensary to come on. We’ve been doing this for four years, and … it’s not rapid growth. Yes, it increases each year, but it’s not huge numbers.”

Double standards

If establishing standards is a sign an industry is growing up, then the cannabis sector might need to put another height mark on the wall.

Two developments this week – an international standards group is pondering cannabis guidelines and a self-regulatory organization aims to set voluntary marijuana standards – show the industry has strong interest in establishing formal protocols.

“We’re at a great spot in the industry in terms of the growth trajectory,” said Tim Keogh, cannabis consultant and CEO of Denver-based AmeriCann. “(Standards) bring in more legitimacy and more capital and can help us grow and become the industry that we all expect it be.”

To Keogh, there’s one key area in the cannabis sector that lacks standards – testing. And his concern goes beyond testing for pesticides or mildew; he’s focused on dosing.

He believes patients should “know that not only what they’re consuming is clean, but if (the package) says 5 milligrams on it, it’s going to have 5 milligrams in it … not zero, and not 50.”

Keogh would like to see industry standards developed as incentives – rather than punishments – that can help businesses operate more efficiently and responsibly.

“The more that we can show we’re responsible – and we do that through transparency and standardization – the more likely we’re going to be able to expand this industry,” he said. “To get to the billions of dollars of market potential that this industry has in front of it, transparency (and) standardization are keys to realizing the potential.”

The big question is whether the industry is ready to adopt any standards that might be developed. A handful of groups have tried to introduce standards but have had limited success.

Sessions’ wake-up call

News that U.S. Attorney General Jeff Sessions tried to gut the only federal protections for state-licensed MMJ businesses could be cause for concern – or it could be another reassurance that Congress has the industry’s back.

In May, Sessions asked Congressional leadership to set aside previously approved language that bars the Department of Justice from using federal money to interfere with state marijuana laws. But Congress ultimately ignored his request and reauthorized language from the Rohrabacher-Farr Amendment, which was first approved in 2014 and has lived on since in federal statute.

Many in the cannabis sector have been worried the Trump administration could try to undermine the type of protections that Rohrabacher-Farr offers and ultimately try to crack down on marijuana businesses. And though Sessions’ request may seem to validate those fears, it’s also important to remember Congress controls the federal government’s purse strings – including those of the DOJ and the Drug Enforcement Administration.

It behooves cannabis businesses to remember they have allies in Congress who’ve already been convinced marijuana isn’t the stigmatized narcotic that former administrations tried to paint it as.

Republicans and Democrats in the U.S. House of Representatives and the Senate have introduced a raft of pro-MJ business legislation this year. And more are likely on the way, including the reintroduction this week of the bipartisan CARERS Act. Among other things, the bill would permanently prohibit the DOJ from interfering with state MMJ laws.

But that doesn’t mean cannabis companies can relax.

Sessions’ memo to Congressional leaders indicates that, if given an opening, the DEA may resume raids on state-legal MJ businesses. Which means it’s as important as ever that cannabis executives keep a close eye on what’s happening in Washington DC and continue to make their cases to members of Congress.

John Schroyer can be reached at johns@mjbizdaily.com

Bart Schaneman can be reached at barts@mjbizdaily.com