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Connecticut Cannabis Sales Continue To Rise in August with $25 Million in Sales

September 13, 2023 Published by

New data on monthly cannabis sales in Connecticut shows that numbers have increased yet again. The Connecticut Department of Consumer Protection (DCP) said in a press release that between Aug. 1-31, the combined total of both adult-use cannabis and medical cannabis sales reached almost $25 million.

“The adult-use market recorded more than $14 million in sales during the month of August, while the medical marijuana market recorded almost $11 million in sales for the same period,” the press release stated.

Medical cannabis patients purchased 278,395 cannabis products (with an average price of $39.36), while recreational consumers purchased 354,700 (with an average price of $39.49).

By product type, most sales (about 53%) included flower, followed by vape cartridges (27%), edibles (10%), extracts (7%), and “other” (4%) which pertains to products such as pills, tinctures, topicals, and more.

Adult-use cannabis was initially signed into law by Gov. Ned Lamont in June 2021, making it the fourth state to legalize recreational cannabis. Sales were initially expected to begin in 2022, and more than 15,000 dispensary applications were received in May that year.

In January, Lamont announced that he would clear approximately 42,964 cannabis convictions, as required by the state legislation that legalized adult-use cannabis. “On Jan. 1, thousands of low-level cannabis convictions in Connecticut will be automatically erased due legislation we’ve enacted,” said Lamont. “Especially as employers seek to fill job openings, an old conviction for low-level possession should not hold someone back from their aspirations.”

Adult-use sales didn’t go live until January 2023, but the state collected $250,000 in sales on the first day with eight operational dispensaries. “Today marks a turning point in the injustices caused by the war on drugs, most notably now that there is a legal alternative to the dangerous, unregulated, underground market for cannabis sales,” Gov. Lamont said of the program’s success. “Together with our partners in the legislature and our team of professionals at the Department of Consumer Protection, we’ve carefully crafted a securely regulated market that prioritizes public health, public safety, social justice, and equity. I look forward to continuing our efforts to ensure that this industry remains inclusive and safe as it develops.”

For adult-use cannabis, sales in January reached a total of $5 million, followed by $7 million in February, $9.5 million in March, $10 million in April, $11.5 million in May, $12.5 million in June, $13 million in July, and finally, $14 million in August.

Medical cannabis was legalized by former Connecticut Gov. Dannel Malloy, but sales tracking was not required and is not available prior to 2023. Now the state uses BioTrack for its seed-to-sale tracking data.

As seen in other states with both medical and adult-use cannabis, medical cannabis sales began to decrease the longer that adult-use sales are established. In January, $8 million in medical cannabis sales were collected, followed by $11.5 million in February, $12.5 million in March, and then a steady decrease in April with $11.5 million, May with $11 million, a slight increase above $11 million in June, followed by $10.6 million in July and finally $10.9 million in August.

In June, residents were finally permitted to start growing their own cannabis plants, up to six per home (three mature and three immature). “Adults who choose to grow their own cannabis should use safe and healthy gardening practices for growing any products they intend to consume,” said DCP Commissioner Bryan T. Cafferelli. “Plants should also be kept indoors, out of reach and out of sight from children and pets.”

According to the CT Insider, one of the state’s two cannabis testing laboratories is officially closed. The report stated that AltaSci Labs closed in March and its license became inactive, however the reason for this is “not due to any disciplinary or other action by the state,” according to DCP spokesperson Kaitlyn Krasselt.

The one remaining lab, Northeast Laboratories, is currently managing all incoming cannabis, which “continues to operate and test cannabis in Connecticut, and there has been no impact to the cannabis program.” However, some advocates believe that soon it will become an issue.

Recently, the California-based cannabis education college Oaksterdam University held a graduation for numerous Connecticut cannabis business owners. Oaksterdam received $1 million in a contract to provide an education specifically for Social Equity Council-approved students in an accelerated program.

CEO of Nautilus Botanicals, Luis Vega, shared insight about his experience in the program. “This was a valuable lesson,” Vega said. “This was awesome. There were growing pains. But I really do appreciate that the state put together a partnership with somebody.” Vega is currently working on opening two dispensaries, as well as two cultivation sites.

A total of 32 participants started the program, and 11 graduated (with eight more expected to graduate soon). As part of the deal for participation, graduates receive a 1.5% reduction off of their APR percentage rate.

Lt. Gov. Susan Bysiewicz attended the graduation and told CT Insider that “the equity component of cannabis legalization is absolutely critical” in relation to the state’s cannabis industry. “Now we’ve got the opportunity to see entrepreneurs and small businesses hopefully develop into big businesses with people of color, women of color,” Bysiewicz added. 

The post Connecticut Cannabis Sales Continue To Rise in August with $25 Million in Sales appeared first on High Times.

North Carolina Tribe Votes To Legalize Recreational Cannabis

September 12, 2023 Published by

For North Carolina, where both recreational and medical cannabis are both illegal under the state’s law, the outcome clears the way for the Tar Heel State’s first dispensary.

The Associated Press reported that unofficial results of the vote on Thursday showed “that 70% of voters said ‘yes’…in a referendum that opens the door to the western North Carolina reservation being the first location in the state where pot for recreational use can be legally purchased.”

“The question put to a vote by the Eastern Band tribal council asked whether members supported legalizing the possession and use of cannabis by people at least 21 years old, and requiring the council to develop legislation to regulate a market,” according to the Associated Press.

Local news station WLOS said that the matter will now go to the Tribal Council “to pass legislation governing the sale of marijuana,” and that if the council approves, “it would make the reservation the first place in North Carolina where marijuana could be legally possessed and used.”

For the Eastern Band of Cherokee Indians, the vote has been two years in the making. In 2021, the tribe passed an ordinance that decriminalized pot on its land. That same year, the tribe also passed an ordinance legalizing medical cannabis.

“The Council’s approval of a medical marijuana ordinance is a testament to the changing attitudes toward legal marijuana and a recognition of the growing body of evidence that supports cannabis as medicine, particularly for those with debilitating conditions like cancer and chronic pain,” Richard Sneed, the principal chief of the Eastern Band of Cherokee Indians, said following the vote in 2021.

The tribe has been planning to convert an old bingo hall into a “cannabis superstore.” But there have been disputes over the cost of the project.

In May, Sneed wrote in a post on Facebook that he had “vetoed the Tribal Council’s recent approval of the final $64 million for the project because the original proposal said the entire project would be completed for $50 million.”

“The fact that this project’s original cost for an outdoor grow, an indoor grow and an indoor dispensary was $50m, and we are now being told it is $95m, demonstrates that there is an immediate need for a full accounting of the money that has been expended to date,” Sneed wrote at the time.

The Charlotte Observer reported then: “Sneed told French he ‘fully supports cannabis, both medical and adult use.’ He also is ‘encouraged and inspired’ by tribal workers at the growing operation at Cooper’s Creek on the tribe’s Qualla Boundary in Cherokee, he added. The operation is run by Qualla Enterprises LLC, the tribe’s for-profit medical cannabis arm. Yet, Sneed told French, ‘I am very troubled by the lack of accountability for the managing of the business side of the operation. The current projected cost is almost 100% over budget as compared to the original RFP projected cost.’ RFP stands for ‘request for proposals.’”

Thursday’s vote marks a significant development in the reform effort. According to WLOS, the referendum passed 2,464 to 1,057.

Some outside the tribe have raised objections to the effort. Earlier this month, Chuck Edwards, a Republican congressman who represents a district in western North Carolina, introduced a bill to “withhold 10 percent of federal highway funds for governments that violate federal law under the Controlled Substances Act, which prohibits recreational marijuana and classifies it as a Schedule I drug.”

The legislation was explicitly aimed at the Eastern Band of Cherokee Indians’ referendum.

“The laws of any government should not infringe on the overall laws of our nation, and federal funds should not be awarded to jurisdictions that willfully ignore federal law,” Edwards said in a statement after introducing the bill. “During a time when our communities are seeing unprecedented crime, drug addiction, and mental illness, the Stop Pot Act will help prevent even greater access to drugs and ease the strain placed on our local law enforcement and mental health professionals who are already stretched thin.”

In a press release, Edwards’ office noted that the “Eastern Band of Cherokee Indians (EBCI) will vote on September 7 whether to legalize the sale and use of recreational marijuana on tribal lands,” and that if the referendum were to pass, “the Qualla Boundary will be the only place in North Carolina to buy marijuana legally for recreational use.”

The congressman’s office noted that the bill “does not apply to jurisdictions that authorize medical use of marijuana when prescribed by a licensed medical professional.”

The post North Carolina Tribe Votes To Legalize Recreational Cannabis appeared first on High Times.

Court-Mandated Cannabis Treatment Plummets After Legalization

September 8, 2023 Published by

Newly released data published in last month’s issue of the Journal of Addiction Medicine concluded that marijuana treatments for young people have declined following legalization.

The data, presented by researchers at Temple University, “were extracted from the Treatment Episode Dataset—Admissions and used to calculate trends in the number and proportion of criminal justice referrals” for cannabis use disorder treatment. They sought to investigate “whether the proportion of referrals to cannabis use disorder (CUD) treatment from the criminal justice system declined among adolescents (aged 12–17 years) and young adults (aged 18–24 years) following state recreational (adult use) cannabis legalization in the United States between 2008 and 2019.” And they said that difference-in-differences analysis [used to measure a cause and effect of a certain policy] “was used to estimate the effect of recreational legalization on the state-level proportion of criminal justice referrals as a share of all admissions.”

The researchers said that, nationwide, “the number and proportion of adolescent and young adult criminal justice referrals to [cannabis use disorder] treatment declined over the study period.”

“The proportion of young adult criminal justice referrals declined significantly more rapidly after recreational legalization as compared with before (β = −0.045; 95% confidence interval, −0.079 to −0.010; P = 0.01),” the researchers wrote. “Among adolescents, the trajectory of decline in the proportion of criminal justice referrals did not change significantly following recreational legalization (β = −0.033; 95% confidence interval, −0.073 to 0.008; P = 0.11).”

The researchers concluded that their results “indicate that the proportion of referrals to CUD [cannabis use disorder] treatment from the criminal justice system fell following recreational legalization in the United States among young adults, likely due to post-legalization declines in cannabis-related arrests,” as quoted by NORML’s write-up of the data.

“The decline in the proportion of young adult criminal justice referrals to [cannabis use disorder] treatment following recreational legalization is likely due to falling cannabis-related arrests. Although cannabis criminalization may result in court-mandated CUD treatment for some young adults without CUD, the decline in CUD treatment admissions during a period of increasing CUD risk factors associated with recreational legalization represents a key health concern. Promoting screening and other CUD treatment referral sources, such as through primary care, may be warranted,” they concluded.

The findings represent a welcome development for legalization advocates, who have long contended that the end of prohibition would free up resources in the criminal justice system.

NORML’s Deputy Director Paul Armentano said that most people “arrested for violating marijuana possession laws do not require mandatory drug treatment, and historically, these referrals were provided primarily to divert people away from the criminal justice system.”

“In addition to ending tens of thousands of needless low-level marijuana arrests, cannabis legalization is also freeing up space in drug treatment centers for those people who truly need it,” Armentano said in a statement on the findings.

Marijuana legalization is still in its infancy in the United States, and researchers are continuing to learn more about the social and political outcomes of the policy reform. 

A long-term study released earlier this year found that the legalization of marijuana is not associated with drug abuse.

The study looked at various sets of twins (more than 4,000 individuals total) to examine the effect of living in states that permit recreational cannabis.

Although it was not linked to substance abuse disorder, the researchers did find that it often resulted in increased pot use.

“In the co-twin control design accounting for earlier cannabis frequency and alcohol use disorder (AUD) symptoms respectively, the twin living in a recreational state used cannabis on average more often, and had fewer AUD symptoms than their co-twin living in an non-recreational state. Cannabis legalization was associated with no other adverse outcome in the co-twin design, including cannabis use disorder. No risk factor significantly interacted with legalization status to predict any outcome,” they wrote.

“Recreational legalization was associated with increased cannabis use and decreased AUD symptoms but was not associated with other maladaptations,” wrote researchers. “These effects were maintained within twin pairs discordant for residence. Moreover, vulnerabilities to cannabis use were not exacerbated by the legal cannabis environment. Future research may investigate causal links between cannabis consumption and outcomes,” the researchers added.

Another study released last year found that marijuana legalization has led to a reduction in filled prescriptions through that state’s Medicaid program.

“These results have important implications,” said Shayam Raman, one of the researchers involved in the study. “The reductions in drug utilization that we find could lead to significant cost savings for state Medicaid programs. The results also indicate an opportunity to reduce the harm that can come with the dangerous side effects associated with some prescription drugs.”

The post Court-Mandated Cannabis Treatment Plummets After Legalization appeared first on High Times.

South African Police Won’t Arrest You for Growing Weed in Your House (Or Your Car)

September 7, 2023 Published by

The South African Police Service has confirmed that they will no longer be bothering to arrest anybody for personal-use cultivation or possession of cannabis.

“In short, possession, use and cultivation of cannabis by an adult, for personal consumption, in private, is permitted. In contrast, dealing in cannabis is not permitted, therefore commercialization of cannabis is still not legal in South Africa,” Brigadier Athlende Mathe told IOL on Wednesday (a brigadier is an officer in the British army above colonel and below major general).

According to the IOL report, cannabis has been decriminalized in South Africa for several years but a new SAPS police directive has cleared up a bit of confusion that began in 2018 when the South African Constitutional Court declared a law banning cannabis use in private as unconstitutional. 

“I am of the view that the prohibition of the performance of any activity in connection with the cultivation of cannabis by an adult in private for his or her personal consumption in private is inconsistent with the right to privacy entrenched in the Constitution and is constitutionally invalid,” said Deputy Chief Justice Raymond Zondo in his 2018 ruling.

This ruling essentially made private use of cannabis legal in the country but police still technically had the power to arrest people for it because the regulations didn’t contain enough detail surrounding what specifically constituted legal vs illegal activity.

The new police directive would allow South African cannabis consumers to grow and consume their own cannabis provided they do it in a private space. What constitutes a private space is, as with all laws, somewhat up to interpretation.

“No arrests are to be made for personal and private cultivation and/or possession of cannabis, which activities are not criminal,” Brigadier Mathe said. “Furthermore, no arrests of alleged cannabis offenders should be effected merely for the reason to achieve predetermined targets and without assurance that there is indeed a crime that will be enrolled and prosecuted by the National Prosecuting Authority,” Mathe said, referring to police quotas maintaining officers make a certain amount of arrests each month for certain types of crimes.

According to the IOL report, a private space basically just means four walls and a roof, or anything that prevents others from accessing it. This could be a house, a shed, a car, a 4×4 Vivosun grow tent placed haphazardly outside with the roof cut off. It’s a little bit arbitrary and the cultivator does not need to technically own the space to be permitted to cultivate there. As long as you’re not selling the cannabis itself to anybody, SAPS said they will not arrest you.

These changes can be credited to updates in Section 1 of the Drugs and Trafficking Act, No. 140 of 1992, which expanded the definition of the phrase “deal in” to include a more rigid definition which IOL listed as follows:

“Under the newly defined Act, the phrase “deal in” involves any act in connection with the trans-shipment, importation, cultivation other than the cultivation of cannabis by an adult in a private place for his or her personal consumption in private, collection, manufacture, supply, prescription, administration, sale, transmission or exportation of the drug.”

As many Americans living in legal states can attest to, South Africa cannabis consumers still have a long confusing path to walk before they can truly breathe easy but this still marks a sizable step forward for cannabis legalization. South Africa is one of only six countries on the African continent where cannabis isn’t fully illegal. They are also the only African country to have decriminalized cannabis for recreational use. According to the IOL report, cannabis distributed by religions, tradition or cultural healers in small quantities is also regarded as private and personal, topping off a long list of gaping legal loopholes that will make for some very interesting years to come in South Africa. 

Maybe I’ll take a trip one of these days on the off chance I find somebody growing some serious heat in a minivan somewhere, but my buddy once told me they have lions just casually walking around over there so maybe not.

The post South African Police Won’t Arrest You for Growing Weed in Your House (Or Your Car) appeared first on High Times.

Missouri Foster Parents Can Now Legally Possess, Grow Cannabis in Their Homes

August 29, 2023 Published by

Foster parents in Missouri can now legally possess and grow cannabis in their homes. This news results from an emergency rule the state Department of Social Services filed last week.

However, of course, there are guidelines. Foster parents must store their cannabis in a manner “so as to be inaccessible to the children,” the rule says. And don’t think of lighting up around kids; consuming cannabis in a method that releases smoke or vapor is still prohibited inside the house, so duck outside to light your joint. 

These caveats aren’t unheard of. Rather, they follow similar guidelines for how one must store prescribed medication, alcohol, and matches. If a foster parent chooses to grow, the law states they must do so “in an enclosed, locked facility” as defined by law.

Thanks to the passage of this new law, foster parents can now legally participate in cannabis, just like everyone else. Back in November of 2022, Missouri voters passed a ballot initiative, Amendment 3, to legalize and regulate marijuana for adults 21 and older. Amendment 3 allows purchasing and possessing up to three ounces of cannabis. After registering, one can legally grow up to six mature plants for personal use. However, the newly passed legislation barred foster parents of about 14,000 children from participating.  

Missouri adopted the changes to the law, which addresses “physical and environmental standards” for foster care on an emergency basis as the current guidelines clash with the approved constitutional amendment, according to a statement attached to the rule’s text. 

“Rule 13 CSR 35-60.040 presently provides that foster parents shall not use or possess marijuana or marijuana-infused products,” it reads. “A regulation that conflicts with the Missouri Constitution is invalid.”

Following emergency rule guidelines, the change expires on February 23, 2024. 

Based on what Caitlin Whaley, Social Services spokesperson, shared with the St. Louis Post-Dispatch, the changes are meant to protect the foster children.

“This is to protect the foster child from the hazards of second-hand smoke,” Whaley said. “Foster parents may smoke marijuana and tobacco outside the premises but not in a vehicle while transporting a foster child and not in the presence of a foster child.”

Last year, researchers at the University of Mississippi published a study that suggests cannabis legalization leads to at least a 10% drop in foster care admissions. “Our most conservative estimates imply that legalization causes at least a 10 percent decrease in total admissions to foster care, with larger effects in years further after legalization and for admissions into foster care due to specific child-welfare concerns,” the authors of the research concluded.

But if cannabis were legal federally; as a result, there would be hundreds of millions of dollars in estimated cost savings for foster care systems yearly. 

The authors analyzed data from the Adoption and Foster Care Analysis Reporting System from 2000-2017 and other sources. Their findings showed that while there were unremarkable differences between states pre-cannabis legalization, foster care placements gradually decreased in states that enacted the reform. “Legalization may impact foster-care admissions directly by changing the welfare of children or indirectly by changing policies and attitudes towards marijuana use in the home,” they wrote. “Direct effects may arise because marijuana use itself causes behaviors that affect child welfare, or because it changes the likelihood of using other drugs,” Marijuana Moment reports. 

The study, published in the journal Economic Inquiry, additionally examined what those declines would mean regarding economic impact. Additional previous research suggests that a single foster care placement costs an average of $25,000. The latest study found that legalizing cannabis on a national level would “reduce the financial burden of the foster-care system by about $675 million, annually.”

“We also find that placements due to physical abuse, parental neglect, and parental incarceration decrease after legalization, providing evidence that legalization reduces substantive threats to child welfare, although the precise mechanism behind these effects is unclear,” the authors conclude.

State Auditor Republican Scott Fitzpatrick began an investigation into Missouri’s cannabis program to probe into whether regulators are operating “in a manner that is efficient, accountable and transparent,” whining that cannabis provisions “now make up more than one-fifth of the language in our state constitution,” the Missouri Independent reports. This is the latest foray into the inside of a heavily criticized program, which draws scrutiny from both state lawmakers and federal law enforcement, in addition to simply trying to stay on top of the level, speed, and growth of the changing laws. 

Fitzpatrick told the Missouri Independent that the audit is because cannabis is set to be a $1 billion industry in Missouri. He adds that the amendments that legalized it “represent some of the most substantial changes we’ve seen to our state constitution in recent memory.” 

The post Missouri Foster Parents Can Now Legally Possess, Grow Cannabis in Their Homes appeared first on High Times.

5 Big Moments in Cannabis History

August 25, 2023 Published by

First Known Mention in Pharmacopoeia, circa 2800 B.C.

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There’s plenty of evidence to suggest the ancient use of cannabis in multiple civilizations, dating back 10,000 years and beyond. According to the University of Sydney’s Lambert Initiative, Emperor Shennong’s pharmacopeia Classic of the Materia Medica was one of the first to formally list cannabis as a medicine circa 2800 B.C. (It also introduced acupuncture and 365 herbal medicines like ginseng.) Emperor Fu Hsi, whom the Chinese credit with “bringing civilization” to China, mentioned “ma,” which may have referred to cannabis 100 years earlier.

First Arrest Under Marihuana Tax Act, 1937

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We’re far from seeing the last cannabis prisoner, but we know who was the first. Ironically adult-use pioneer state Colorado was where the first cannabis arrest took place. One day after the Marihuana Tax Act of 1937 went into effect, Moses Baca, 23, was arrested in Denver, Colorado. Police allegedly found a quarter-ounce of reefer in his drawer at a rooming house as they were arresting him for a “drunk & disturbance” charge. A few days later, bootlegger Samuel R. Caldwell, was also arrested and charged with selling marijuana. Baca served about 18 months in the U.S. Penitentiary, Leavenworth in Kansas, the same place Caldwell was held.

First U.S. Medical Cannabis Patient, 1976

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One year after getting busted for growing pot, Washington, D.C. Superior Court Judge James A. Washington ruled on Nov. 24, 1976 that Robert Randall had established a defense of medical necessity to use cannabis for his glaucoma. Randall then became the nation’s first medical cannabis patient and received a regular supply of 300 joints per month provided by the federal government from their cultivation site at the University of Mississippi. Randall’s case eventually led to the FDA’s Compassionate Investigational New Drug Program (IND Program) which allows certain people to get experimental cannabis treatments before they have gone through rigorous approvals.

First State Medical Cannabis Law, 1996

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New Mexico was the first state to recognize the medical properties of cannabis, establishing a therapeutic research program for glaucoma and chemotherapy on Feb. 21, 1978. But it was California’s Proposition 215, which created the first major statewide medical cannabis program, and resulted in the biggest change. California voters approved Prop. 215 with over 55% in favor via an initiative on November 5, 1996. This established a blueprint for dozens of other states to follow. Proposition 215 was authored by Dennis Peron, Anna Boyce, John Entwistle, Jr., Valerie Corral, Dale Gieringer, William Panzer, Scott Tracy Imler, Leo Paoli, and Tod H. Mikuriya.

First Country to Legalize Adult-Use Cannabis, 2013

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Uruguay became the first country to legalize the cultivation, sale, and possession of cannabis on Dec. 10, 2013. Uruguay decriminalized possession of the plant in 1974, but it took a lot of time to move forward to the legalization of possession and sale. Nearly one year later in August 2014, Uruguay legalized the cultivation of up to six plants at home, and formed cannabis social clubs and state-controlled cannabis dispensaries. It would take about four years for the country to finalize regulations.

This article was originally published in the June 2023 issue of High Times Magazine.

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Michigan Cannabis Sales Hit Record High, Profits Another Story

August 21, 2023 Published by

According to the most recent monthly report from the Michigan Cannabis Regulatory Agency, Michigan cannabis sales reached a record in July, recording $276 million in sales, with the lion’s share of sales coming from adult-use cannabis. Local cannabis businesses say they aren’t making much in profits, however.

The state will likely surpass the $3 billion mark in revenue for the first time in 2023. It reinforces the importance of the state’s cannabis market. If the trend continues, Michigan will become the second largest market in the nation after California. 

But insiders say making a profit in this industry is an entirely different scenario, nearly impossible for businesses following the rules. In addition, the constant flow of new licenses is increasing competition to unworkable levels.

“It’s kind of a race to the bottom, as they call it,” Beau Whitney, senior economist for the National Cannabis Industry Association, told Bridge Michigan. “Prices are going down, down and down because there’s so much competition, but at some point, prices won’t be able to go down any further.” 

Some locals say the current system won’t work for long under the current circumstances.

“I think that big corporate stores thought they could throw money at this and just keep throwing money at it, and it would work and it’s not working. That’s why most of your major dispensaries … are for sale,” said Jerry Millen, owner of The Greenhouse, a dispensary located in Walled Lake.

The incoming flow of new licenses doesn’t seem to be helping existing businesses much. During the past month, Michigan received 97 applications for adult-use use licenses, and issued 87 new licenses. Seventeen of the licenses were designated for class C growers, with a limit of up to 1,500 plants, per state regulations. 

A 10% excise tax was imposed on retailers in addition to a 6% sales tax after adult-use was legalized in Michigan in 2018. Thanks to high production costs and oversaturation of the market, consumers are happy but businesses are not. 

That average price of $99 for one ounce of adult-use cannabis is much cheaper than it was this time last year. The price for an ounce of medical cannabis is only slightly higher. 

A Boon for the Michigan Economy

While small businesses aren’t likely making much profit, local governments, however, are loving it. Tens of millions of dollars in revenue are being allocated to local governments across Michigan as a result of the state’s adult-use cannabis industry. 

According to FOX 2 Detroit, “Only 30% of total adult-use sales go to local governments, with the other 70% going to schools and roads. When contributions from last year are paired next to figures from 2021 and 2020, they show an industry that shows no signs of slowing down.”

Michigan voters legalized adult-use cannabis in 2018, when they approved Proposal 1, which made it legal for adults 21 and older to consume cannabis, and paved the way for a regulated cannabis market that launched in 2019. 

But despite strong sales numbers, Michigan, like other regulated cannabis markets, has become oversupplied with pot.

Illegal cannabis sales continue to thrive in the state, and Michigan regulators are taking action. Last October, The Detroit News reported that Brian Hanna, the acting director of the Michigan Cannabis Regulatory Agency, told assembled media that “the agency is planning actions that will expose bad actors and serve as a warning to other regulated businesses.”

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New Report Shows Colorado Cannabis Tax Revenue Exceeds Tobacco, Alcohol

August 21, 2023 Published by

The Colorado Legislative Council Staff (LCS), described as the “nonpartisan research arm of the Colorado General Assembly,” released a report on Aug. 16 detailing how cannabis taxes are benefitting the state.

According to the analysis, Colorado annual cannabis tax revenue may have decreased in FY 2021-2022 and FY 2022-2023, but cannabis sales remain a consistent stream of funds for Colorado budget—more than any other regulated substance.

In FY 2022-2023, data shows that Colorado collected $282.3 million in cannabis tax revenue, compared to $233.9 million from cigarettes, $60.5 million from tobacco products, $56.4 million from nicotine products, and $56.1 million from alcohol.

Cannabis tax revenue comes from a 15% excise tax, 15% special sales tax, and 2.9% general sales tax. Recreational cannabis purchases are applied with the excise tax and special sales tax, but only state sales tax applies to medical cannabis sales.

In a breakdown of where cannabis tax revenue is distributed, medical cannabis 2.9% sales tax goes directly into the Marijuana Tax Cash Fund while the adult-use cannabis sales 15% special sales tax is divided into the Marijuana Tax Cash Fund, State Public School Fund, and local governments. The adult-use excise tax goes directly into the BEST (Building Excellent Schools Today) Fund.

Some of the state’s cannabis tax revenue funds went toward a variety of programs such as substance use disorder services ($16.6 million), affordable housing construction grants and loans ($15.3 million), school health and professionals grant program ($15 million), mental health services ($6.1 million), black market cannabis interdiction/state toxicology lab ($4.4 million), pesticide control and regulation ($1.2 million), marijuana impaired driving campaign ($1.1 million), and school bullying prevention and education ($1 million).

“Taking into account the statutory distributions and the MCTF [Marijuana Tax Revenue and Education] appropriations, K-12 education received about 37 percent of total spending from marijuana revenue for school funding and school construction,” the analysis states. “The Department of Human Services received about 20% for a variety of programs, including those focused on behavioral health and addiction.”

The distribution of cannabis tax revenue was divided among the Department of Human Services ($57.5  million), school construction ($55.9 million), school funding ($52.4 million), general fund ($30.7 million), Department of Public Health and Environment ($23.6 million), local governments ($21.9 million), Department of Local Affairs ($17.5 million), Department of Higher Education ($11 million), Department of Public Safety ($7.6 million), and “other” ($14.1 million) which includes a variety of smaller departments.

While FY 2020-2021 yielded a record high of $425 million, FY 2021-2022 decreased slightly to $366 million, followed by FY 2022-2023 at $282 million.

A report released by the Tax Policy Center in September 2022 noted both Colorado and Washington cannabis sales generated more tax revenue than alcohol or cigarettes in FY 2022. 

Similar reports, such as one published by the Arizona Dispensaries Association in March 2022, showed that cannabis tax revenue reached $6.3 million, which is more than the combination of tobacco ($1.7 million) and alcohol ($2.7 million) for that month.

The California Governor’s Office of Business and Economic Development (GO-Biz) awards cannabis tax funds to a variety of approved organizations. The most recent annual awards contained more than $50 million from FY 2022-2023 split between 31 organizations, from government agencies to youth organizations. In FY 2020-2021, GO-Biz split $29.1 million between 16 awardees, and in FY 2021-2022, GO-Biz awarded $30 million to 58 chosen recipients. The state recently opened up a new grant application window between Aug. 14-Sept. 18, with chosen organizations to be announced sometime in spring 2024.

A report from Whitney Economics in May showed that the legal cannabis industry paid more than $1.8 billion in taxes in 2022. However, the chief economist at Whitney Economics stated that these taxes, which are driving many cannabis business owners into strife, are on the “brink of systemic collapse.”

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Ohio Rec MJ Market Could Generate $275-403M in Taxes in First Five Years

August 21, 2023 Published by

Ohio just approved a statewide vote on adult-use cannabis on November’s upcoming ballot, and it’s looking like business would be booming should it be approved.

A study published earlier this month by researchers at Ohio State University suggests that Ohio could generate between $275 million and $403 million by the fifth year of operations in adult-use tax revenue, should voters move to legalize.

Establishing a Baseline

The study, titled “What Tax Revenues Should Ohioans Expect If Ohio Legalizes Adult-Use Cannabis,” used cannabis tax data from Michigan fiscal year 2021 as the main point of reference to estimate Ohio’s potential cannabis tax revenue gains, as the two states share “demographic and tax structure similarities.” 

Because Ohio does not have an established adult-use industry or tax structure, all tax revenue projections are speculative and based on variables and assumptions that could shift, researchers prefaced, calling them “best-guess” projections.

It also used data from Illinois, given its proximity to Ohio and similar population size, along with Nevada, Oregon, Washington and Colorado, “selected to provide tax revenue trends from more mature cannabis markets.”

The researchers issued their first report estimating possible tax revenues for the state in Spring 2022 and said they wanted to revisit the report given the recent ballot news. 

Researchers used Michigan as a base for cannabis pricing as well. In 2021, Ohio medical dispensaries charged an average of 40% or more than Michigan dispensaries, increasing to over 120% price differential in 2022 largely because of falling Michigan prices.

Projections for Ohio’s Budding Recreational Market

“Consequently, we have thus prepared a set of tax revenue estimates assuming price parity, as well as assuming 10% and 20% higher prices relative to Michigan to account for different possible Ohio pricing scenarios following legalization,” the report notes.

Given the baselines, researchers used Michigan data and applied a conservative rate of diminishing retail sales under three models to establish their $275 million and $403 million range. 

They also noted that the estimates don’t include collections if additional local sales don’t include any collection of additional local sales taxes or any other taxes that cannabis businesses and employees may pay, like state Commercial Activity Tax, local property taxes or state and local income taxes. It also doesn’t include fees collected from cannabis business license applicants or license holders, which can be structured in a way to provide additional significant benefits to Ohio’s expected cannabis revenue.

Authors also note that, regardless of the final tax structure, cannabis tax revenue only makes up a small proportion of the overall state revenue collection in legalization states. They cite that more mature cannabis markets have seen a tax revenue proportion from cannabis markets hovering between 1-2% of the total state revenue.

“Whatever tax structure is adopted, our analysis suggests it is reasonable to predict that Ohio would collect hundreds of millions in annual cannabis tax revenues from a mature adult-use cannabis market,” the study concludes. “But the amount of tax revenue collected would likely still represent a small percentage of Ohio’s $60+ billion annual budget.”

Voters, Advocates Prepare for 2023 Vote

Last week, advocacy group Coalition to Regulation Marijuana Like Alcohol (CRMA) approved their adult-use cannabis initiative, which would legalize cultivation, manufacturing, testing and sales for people over 21. Prospects are promising, as a recent poll conducted by Suffolk University found that 59% of voters support legalizing cannabis possession and sales.

Ohio voters recently rejected Issue 1, which was a constitutional change proposal that would have made it more difficult to enact constitutional amendments. Experts predict Issue 1’s failure will result in increased voter turnout, especially surrounding a proposed ballot measure around abortion rights heading to the polls.

CRMA spokesperson Tom Haren suggested the potential for a higher turnout could work to the cannabis initiative’s favor.

“I think people who go out to vote in November are likely to support us no matter what they vote on the abortion amendment,” said Haren. “I think we will be popular among those who vote yes (on the abortion rights amendment) and we’re going to be popular among those who vote no (on the abortion rights amendment) as well.”

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Ohio Cannabis Legalize Initiative Pending For November Ballot

August 17, 2023 Published by

The Ohio-based advocacy group known as Coalition to Regulate Marijuana Like Alcohol (CRMA) is working on a citizen-initiative to legalize cannabis cultivation, manufacturing, testing, and sales for residents over 21.

In July, advocates submitted 123,367 signatures to qualify for the ballot this November, but they actually needed 124,046. “It looks like we came up a little short in this first phase, but now we have 10 days to find just 679 voters to sign a supplemental petition—this is going to be easy, because a majority of Ohioans support our proposal to regulate and tax adult use marijuana,” said CRMA spokesperson Tom Haren.

Advocates worked to collect the remaining 679 signatures, but instead submitted 6,545 signatures for the initiative to qualify for the ballot in early August.

Recently Ohio voters rejected Issue 1, which was a constitutional change proposal that would have made it more difficult to enact constitutional amendments. In the case of a proposed ballot measure heading to the polls for abortion rights, the failure of Issue 1 would instead allow the measure to pass with a majority vote, rather than a minimum of 60% in favor.

While the cannabis citizen-initiative would not amend the Ohio constitution, and therefore is not affected by Issue 1, it could be indirectly affected in terms of increased voter turnout. “The failure of Issue 1 really, really is going to create a massive turnout in November and the people that I think would be likely to vote on that abortion issue would also be more likely to vote positively on the recreational marijuana issue,” Attorney David Waxman told the Ohio Capital Journal.

Another attorney, James Sandy, added that the hot topic of abortion rights will distract voters from opposing the cannabis initiative. “Being on the ballot with such a hot issue like abortion, some of the groups that might be willing to fundraise against legalizing adult-use in Ohio are going to be using those resources on the abortion initiative,” Sandy said.

Haren maintained confidence for the success of cannabis legalization. “We have always believed that our issue is popular and will pass no matter the date of the election or who we share the ballot with,” Haren said.

A recent poll conducted by Suffolk University found that 59% of voters support legalizing cannabis possession and sales.

“I think people who go out to vote in November are likely to support us no matter what they vote on the abortion amendment,” said Haren. “I think we will be popular among those who vote yes (on the abortion rights amendment) and we’re going to be popular among those who vote no (on the abortion rights amendment) as well.”

The Ohio cannabis ballot initiative has not yet been officially approved to appear on the November ballot.

A paper published by researchers at Ohio State University, entitled “What Tax Revenues Should Ohioans Expect If Ohio Legalizes Adult-Use Cannabis?” found that Ohio could collect up to $403.6 million in annual tax revenue if cannabis is legalized. This is the second time researchers have published a report on the potential impact of legalization in Ohio, which previously estimated that the state could earn anywhere between $276.2 million (last year’s estimate) to $403.6 million after five years of legalization have passed.

“Though these projections are subject to various assumptions, the tax revenue experiences of other states support claims that Ohio is likely to generate hundreds of millions in tax revenues from a mature adult-use market,” researchers wrote. “For comparison, in FY 2021, Ohio casinos have generated gross tax revenues of over $300 million, so it is possible that cannabis sales in Ohio will generate tax returns comparable to those now collected through the gross casino revenue tax.”

Researchers concluded that these estimates for annual cannabis tax revenue would be impressive, but still only “represent a small percentage of Ohio’s $60+ billion annual budget.”

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