What’s Happening

National & International News Developments

By Kate Lavin

Canada’s Ruling Party Nixes Controversial Amendments to Cannabis Bill

Canada’s federal government rejected all the Senate’s amendments to the pending marijuana law that industry sources said would make it harder for legal recreational marijuana to overtake the black market.

The Senate’s version of the Cannabis Act was approved with almost four dozen amendments. While the ruling Liberal government accepted the bulk of the changes, the most controversial ones were unlikely to make the final bill.

Amendments the Liberal government rejected include requiring parliamentary approval of new cannabis products; making public the names of shareholders who hold more than 5% of any class of shares of a cannabis company; giving regulators the authority to cap THC potency for certain products and allowing provinces to ban home cultivation.

The House of Commons was expected to vote on the updated act, with the controversial amendments removed. Then it heads back to the Senate.

Cultivation Applicants in Canada Soar, but Cannabis Shortage Looms

The number of applicants to cultivate cannabis in Canada rose 150% in the first quarter of 2018, as the industry ramps up for legalization late this summer.

Health Canada received 74 cultivation applications in the first four months of 2018, bringing the total number of applications in the pipeline to more than 500; 30 applied for cultivation licenses during the same period in 2017.

The newest applicants aren’t expected to have product on store shelves until 2019 at the earliest because, on average, it takes 341 days after a company is awarded a cultivation license to get a permit to sell. Getting a cultivation license can take from six months to years.

The lack of large-scale, fully licensed capacity in Canada could exacerbate a marijuana shortage, depending on consumer demand from provincially regulated outlets, according to Hamish Sutherland, CEO of White Sheep, a commercial operator and strategic investor in cannabis assets.

Zimbabwe Going ‘Back to the Drawing Board’ on Medical Marijuana Law

Just one month after enacting a medical cannabis program, Zimbabwe hit pause to rectify multiple issues with the original law.

The country’s MMJ program was put on hold over compliance issues with various United Nations treaties as well as domestic accessibility issues.

Zimbabwe’s updated regulations will be unveiled within six months, according to an industry source who requested anonymity because he is not permitted to speak with the media.

Zimbabwe’s announcement in May made it only the second country in Africa to lay the groundwork for an MMJ industry.

The original law defined how companies could become licensed producers and ship medical cannabis to “authorized recipients,” but it did not establish how patients could become authorized within the country. The new law is expected to address that gap.

No details are available on whether imports or exports would be permitted or how local MMJ consumption would be regulated.

State News Developments

Alaska

After the Fairbanks City Council deadlocked 3-3 on whether to allow 15 or 25 stores, Mayor Jim Matherly was called in to break the tie. Matherly voted to set the limit at 25, opting to give all entrepreneurs who have initiated retail license reviews with the state an opportunity to appear before the council. A limit of 15 likely would have barred some cannabis business license applicants from opening.

Arizona

The medical marijuana zoning success of a group of well-connected individuals in Phoenix has raised questions about tactics. The Arizona Republic examined the group’s success in both opposing MMJ facilities and representing dispensaries that needed approvals to open. The cases were brought before the volunteer-led Phoenix Board of Adjustment, which approved cases in which the group represented a dispensary and rejected cases in which the group was opposed, the newspaper reported. Opponents and zoning attorneys allege questionable tactics such as fake signatures of support from residents, but members of the group denied any impropriety.

Arkansas

The Arkansas Supreme Court agreed to accelerate its review of a ruling that halted the issuance of the state’s first medical marijuana growing licenses. Arkansas appealed Pulaski County Circuit Judge Wendell Griffen’s order, which also stopped the Medical Marijuana Commission’s review of more than 220 medical marijuana dispensary applications. Griffen had ruled in favor of the unsuccessful permit applicant, Naturalis Health, finding the Arkansas Medical Marijuana Commission’s process for scoring the 98 cultivation license applications was flawed and unconstitutional.

California

Marijuana regulators made several noteworthy updates in their latest industry regulations. Companies that hold medical licenses can now do business with those that hold only adult-use permits, allowing for a unified supply chain. Also, single facilities that house multiple licensees now may utilize the same common areas, such as break rooms and restrooms. A handful of changes favored by the California Growers Association were added, such as expanded water source protection and transportation of immature plants.

Colorado

Gov. John Hickenlooper vetoed two cannabis bills approved by state lawmakers in early June. One would have pioneered the concept of cannabis tasting rooms, dealing a blow to marijuana businesses that had pushed the measure. Another would have allowed publicly traded companies to invest in the state’s MJ industry starting in January. “We have significant concern about this broader access to capital markets, particularly as it relates to our responsibility to keep criminal enterprises out of the regulated marketplace,” Hickenlooper wrote.

Connecticut

The state’s registered MMJ patient count shot up 46% in 12 months. The number of registered medical cannabis patients went from 17,769 in April 2017 to 25,855 in April 2018, a spike of nearly 8,100 consumers, according to state data. That translates to average monthly growth of about 3% for the patient pool, a positive sign for the state’s nine dispensaries and four cultivators. The boom follows a slight expansion of the qualifying condition list for MMJ patients, including three pain-related ailments.

Florida

The state plans to regulate medical marijuana edibles as it does other food products. The state agriculture department said cannabis producers will be subject to random inspections to ensure edibles are being made in facilities that meet federal sanitation guidelines. Meanwhile, medical cannabis companies in Florida are waiting on the state health department to set the rules for what forms edibles can take and how much THC will be allowed.

Illinois

Bank of Springfield, the main financial institution serving Illinois’ medical marijuana businesses, announced it would stop working with the state’s MMJ industry, forcing local cannabis companies to deal in cash or find an alternative. The bank informed its clients this spring that their accounts would be closed May 21. The bank began its review into working with cannabis businesses in mid-January, shortly after U.S. Attorney General Jeff Sessions rescinded the Cole Memo.

Maine

After fits and starts owing to political squabbles, Maine is moving forward to launch its adult-use marijuana market, likely by 2019 or 2020. State lawmakers voted overwhelmingly to override Gov. Paul LePage’s veto of a recreational MJ implementation bill. The legislation develops the regulatory framework for the sale and taxation of recreational marijuana, which voters approved in 2016. The compromise legislation permits municipalities to opt in and allow rec MJ sales. It also provides tax dollars for law enforcement and public awareness campaigns.

Massachusetts

While the state opened the permitting process for adult-use cannabis cultivation, a sizable business population that wants in has already been locked out: local farmers in towns or counties that haven’t allowed cannabis growing. A provision in state law that gives local authorities the power to opt out of the industry is blocking plenty of farmers from jumping in. As of late May, 65 counties or towns in Massachusetts had banned marijuana companies entirely, while 161 had business moratoriums that typically last until the end of 2018.

Michigan

Organizers of a ballot drive to legalize adult-use marijuana have collected enough signatures to qualify for the November ballot, the state elections board said. The group seeking to get the issue on Michigan’s November ballot collected more than 365,000 signatures from registered voters. Only 250,000 signatures were necessary. The Board of State Canvassers’ ruling means the measure will go to lawmakers, who could enact the measure or let it proceed to a statewide vote. A 10% tax on marijuana would be assessed on top of the 6% state sales tax.

Montana

Medical marijuana patient numbers nearly doubled to 25,725 between March 2017 and March 2018, according to state data. Not bad for a state with barely 1 million residents and a medical marijuana program that was nearly killed by a state Supreme Court ruling in 2016. An estimated 120-150 dispensaries were operating as of February.

Nevada

The state Gaming Commission ruled unanimously that a gaming license holder can lease a building from a property owner who also rents to someone in the marijuana industry. It’s the first time Nevada gaming regulators have had to decide whether someone with a gambling license was too closely associated with a marijuana business.

New Hampshire

The state is on the verge of expanding its medical marijuana program from four to six dispensaries – a move that will add two businesses to an industry that’s been struggling financially but may be turning a corner. Lawmakers passed legislation that calls for the two additional dispensaries in sparsely populated regions of the state. Gov. Chris Sununu signed the bill. New Hampshire’s MMJ program began in April 2016.

New Jersey

New Jersey expects to at least double its medical cannabis patient registration from about 20,000 to 40,000 or even 50,000, the state’s health commissioner said. Such numbers would almost certainly be a boon to the six existing dispensaries in New Jersey, as well as those that may win business licenses under an expansion that could allow for almost 100 MMJ dispensaries. The commissioner is so bullish on the planned expansion that he believes the patient count will increase dramatically — even if the Legislature legalizes adult-use marijuana, as many observers expect will happen.

New York

Regulators approved an MMJ business to start selling a liquid-soluble cannabis powder, a first for the state. Chestertown-based Etain currently is the only MMJ company in the state selling the liquid-soluble THC product, the company said in a news release. According to the release, the powder has no taste, dissolves in any liquid and is formulated from pure beet sugar and cannabis oil. While Etain is the first MMJ company in New York to offer a liquid-soluble THC powder, similar products are being sold or developed in other states.

Ohio

Two Ohio judges have refused to stop the state’s medical marijuana program, enabling regulators to continue to strive to meet a Sept. 8 statutory deadline for the MMJ launch. Franklin County Common Pleas Judge Richard Frye ruled that Ohio Releaf, one of 97 unsuccessful applicants in the large-grow category, should receive an administrative hearing with the State Commerce Department within 15 days, but he denied a request for a preliminary injunction. A similar, separate lawsuit by five other cultivator hopefuls was dismissed because those companies hadn’t yet gone through the state administrative appeal process.

Oregon

Persistent low prices have led to small operations downsizing staff and cultivation facilities closing in the state. Oregon regulators reported that 1.1 million pounds of marijuana were entered into the state’s traceability system in February. By contrast, Oregonians consumed only about 340,000 pounds of regulated cannabis in 2017. The state is planning to double the number of licensed cultivators this summer. At the beginning of April, Oregon had 963 licensed cannabis cultivators and another 910 on the Oregon Liquor Control Commission’s desk awaiting approval.

Pennsylvania

A first-of-its-kind medical cannabis research program was halted at least temporarily when a Pennsylvania court issued an injunction preventing eight universities from solidifying deals with companies that want to grow and dispense MMJ. A group of licensed MMJ companies in Pennsylvania filed suit to stop the program, arguing that it would “flood the market with medical marijuana” because each company that won a university contract would be allowed to cultivate MMJ and open six dispensaries.

West Virginia

In advance of the launch of West Virginia’s medical cannabis industry, the state treasurer has proposed potential solutions for MMJ companies in need of payment and banking solutions to avoid operating on an all-cash basis. Treasurer John Perdue has floated two different possibilities to Gov. Jim Justice: Create a third-party loop system for payments that could be used by customers and businesses, or establish a state-run banking system for MMJ companies. Both would require action by the state Legislature and support from the governor’s office.

Note: Entries sourced from Marijuana Business Daily and other international, national and local news outlets. These developments occurred before this magazine’s publication deadline, so some situations may have changed.

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