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Kentucky Gov. Signs Bill To Regulate Delta-8 THC

March 28, 2023 Published by

Up until now, intoxicating hemp-derived products were freely available in Kentucky under the 2018 Farm Bill, but that will soon change. On March 23, Kentucky Governor Andy Beshear signed a bill to regulate hemp-derived delta-8 THC products.

House Bill 544 mandates that only adults 21 and over can buy products containing delta-8 THC—a hemp-derived compound frequently marketed as psychoactive—beginning on August 1.

Per the bill, the state will regulate “any product containing delta-8 tetrahydrocannabinol or any other hemp-derived substance identified by the Cabinet for Health and Family Services as having intoxicating effects on consumers.” This means that the sale, gift, or other transfer of possession of delta-8 THC will be regulated like cannabis.

Beshear signed an executive order last year to regulate delta-8 THC and similar products, but that only affected the packaging and labeling of products.

“We did our best in an executive order, but we couldn’t do many things in that executive order that you can via legislation,” Beshear said in a press conference. “So, this really good bill codifies the executive order into law, but it does a lot else in establishing a regulatory structure.”

Kentucky’s own Senate Minority Leader Mitch McConnell supported the 2018 Farm Bill to assist the state’s large number of hemp farmers. But a legal loophole unexpectedly opened the door for delta-8 THC products.

“We want Kentuckians to have access to the resources they need for relief,” Beshear said. “We want to make sure they can do that safely, and this bill is a good first step.”

The Courier-Journal ran a series of stories about the explosion of the delta-8 THC products following the passage of the 2018 Farm Bill. Some hemp-derived products are not cleared as safe. 

The bill was approved by the Senate 36-0, with one abstention, and the House 97-0, with three abstentions. It directs the Cabinet for Health and Family Services to “immediately begin the process of regulating delta-8 tetrahydrocannabinol and any other hemp-derived substances.”

There are some legitimate reasons to question certain hemp-derived products. Supporters of bills to regulate such items come from inside and outside the hemp market.

Cal NORML Director Dale Gieringer told High Times that consumers should heed the warnings of some of these products. While delta-8 THC that is correctly extracted may not be the biggest worry—other compounds could be notably risky, such as THC-O acetate. THC-O acetate is processed more than typical hemp-derived compounds. Gieringer added that delta-8 THC isn’t his primary concern, given there is slightly more known about the compound, but it’s contaminants and other new cannabinoids he’s most worried about, mostly due to the unknowns: THCP, THCjd. THC-H, THC-B, HHC, and delta-10 THC. 

The Journal of Medical Toxicology published a story on Dec. 12, 2022, as a team of researchers led by Neal L. Benowitz discovered a link between THC-O acetate and significant danger to the lungs. THC-O acetate shares structural similarities with vitamin-E acetate—an additive that becomes dangerous to the lungs when converted by heat.

Some hemp companies are actually applauding the bill.

Daniel Barhorst at CBD Pure Hemp Oil in Prospect, Kentucky told the Courier-Journal that they support the bill.

“I actually think there should be more regulation of the products of delta-8 that are being distributed out there,” Barhorst told the Courier-Journal in February. “I think some of the products … should definitely be FDA approved, so the FDA can actually qualify them.”

The bill directs the Kentucky Cabinet to roll out the regulations by Aug. 1.

The post Kentucky Gov. Signs Bill To Regulate Delta-8 THC appeared first on High Times.

Zurich To Launch Cannabis Legalization Pilot Program

March 27, 2023 Published by

The government of Switzerland has approved a plan to legalize the possession and consumption of cannabis in the city of Zurich as part of a three-year pilot program to assess the social and economic impacts of legalizing cannabis. Through the trial, thousands of Zurich residents will be able to purchase cannabis for personal use beginning this summer.

“The trial will have a broad focus to gain data on the effects of different strengths of cannabis, on what helps individuals make informed decisions and on the pros and cons of different models of sale,” said Barbara Burri, a project manager at Zurich’s municipal health department.

The pilot program will allow a test group of up to 2,100 Zurich residents to purchase regulated doses of cannabis for personal use from pharmacies, social clubs and special dispensaries. Researchers have made arrangements for a total of 21 supply points to be located throughout the city. Sales of cannabis for the study are expected to begin at the supply points beginning in August of this year. 

The study’s participants will have the option of a variety of cannabis products with different potencies of THC and CBD. All cannabis products obtained through the pilot program will be organically produced by licensed Swiss companies and lab tested for purity and potency. Prices of cannabis available at the study supply points will be set to reflect prices of the city’s illicit market.

After receiving government approval, two producers—Pure Production AG and Swissextract—will begin cultivating cannabis for the study, according to a report from Forbes. The first harvest of cured cannabis flower is expected to be ready in July, with cannabis concentrates coming to the pilot program’s supply points in October.

Participants in the study, which is being conducted by the Zurich city council in association with the University of Zurich, will be required to answer a questionnaire every six months during the three-year study period. The questionnaire will ask participants about their cannabis consumption habits and the health effects of their cannabis use. 

Study Focuses On the Impacts of Legalization in Zurich

The leaders of the study say that the goal of the pilot program is to determine the conditions under which cannabis legalization in Switzerland can be compatible with “promoting individual and public health and safety,” according to a report from CNBC. Data collected from the trial will be released on a rolling basis beginning next year.

“The idea is to get robust real world evidence that serves policymaking for new [national] regulation on cannabis,” Burri said. 

Researchers conducting the study will compare and contrast the advantages and disadvantages of different cannabis products and supply sources. The study will also assess the current illicit cannabis market in Zurich, with the research focusing on maintaining public health, ensuring public safety and protecting young people from the risks of cannabis use.

Zurich residents interested in participating in the cannabis legalization pilot study can register for the program online. Participants must be active cannabis users at least 18 years old. Pregnant women, professional drivers and those with underlying health conditions are not eligible to participate in the research pilot. Study candidates who show signs of drug dependence or poor health due to drug use are also ineligible.

Public health studies have determined that about a third of adults in Switzerland have tried cannabis. Zurich, the alpine nation’s most populous city with about 420,000 residents, has about 13,000 regular cannabis users, according to research. 

In 2020, the Swiss federal parliament passed a so-called experimental article in the Narcotics Act, which allows studies to be carried out on the regulated sale of cannabis. On May 15, 2021, the amendment to the Narcotics Act went into effect, enabling pilot trials with the controlled sale of cannabis for recreational purposes.

The city of Basel was the first municipality in Switzerland to conduct a pilot study, launched last year with 400 participants. Other pilot studies planned for the Swiss cities of Bern, Lausanne, Geneva, Biel, Thun, Olten and Winterthur will be conducted in the upcoming months.

Malta is the only country in the European Union that has legalized recreational cannabis for personal use, although sales of adult-use cannabis have not been legalized on the tiny island nation in the Mediterranean Sea. Germany will likely be the next EU member to legalize recreational marijuana, with legislation expected from lawmakers soon. The Czech Republic has also announced plans to legalize cannabis for adults, although details of the plan have not yet been released.

Cannabis legalization plans that would allow cultivation for personal use have been proposed by officials in Luxembourg and Belgium. And last month, the Netherlands launched a pilot program for cannabis sales in the cities of Tilburg and Breda.

The post Zurich To Launch Cannabis Legalization Pilot Program appeared first on High Times.

New York Governor Unveils Plan To Address Illicit Pot Shops

March 24, 2023 Published by

New York Governor Kathy Hochul on Wednesday unveiled new legislation to combat the state’s persistent illicit cannabis operators. The bill, which already has the support of dozens of lawmakers in the New York Senate and State Assembly, also provides increased authority for regulators including the Office of Cannabis Management and the Department of Taxation and Finance to enforce regulations and close stores engaged in illegal cannabis sales.

“Over the past several weeks I have been working with the legislature on new legislation to improve New York’s regulatory structure for cannabis products,” Hochul said in a statement from the governor’s office. “The continued existence of illegal dispensaries is unacceptable, and we need additional enforcement tools to protect New Yorkers from dangerous products and support our equity initiatives.”

New York Legalized Recreational Weed In 2021

New York legalized adult-use cannabis in 2021 and the first recreational marijuana dispensary opened its doors in Manhattan late last year. But so far, only four Conditional Adult Use Retail Dispensary (CAURD) retailers have opened statewide. Meanwhile, the number of unlicensed pot shops has skyrocketed, prompting operators in the nascent licensed cannabis industry and others to press state officials for action against illicit operators.

Under the proposed legislation announced by Hochul on Wednesday, New York’s tax and cannabis laws would be amended to enable the Office of Cannabis Management (OCM), the Department of Taxation and Finance (DTF) and local law enforcement agencies to enforce restrictions on unlicensed storefront dispensaries. The legislation does not impose new penalties for cannabis possession for personal use by an individual and does not allow local law enforcement officers to perform marijuana enforcement actions against individuals.

“This legislation, for the first time, would allow OCM and DTF to crack down on unlicensed activity, protect New Yorkers, and ensure the success of new cannabis businesses in New York,” the governor’s office wrote. “The legislation would restructure current illicit cannabis penalties to give DTF peace officers enforcement authority, create a manageable, credible, fair enforcement system, and would impose new penalties for retailers that evade State cannabis taxes.”

The bill clarifies and expands the OCM’s authority to seize illicit cannabis products, establishes summary procedures for the OCM and other governmental entities to shut down unlicensed businesses, and creates a framework for more effective cooperative efforts among agencies. 

Violations of the law could lead to fines of $200,000 for illicit cannabis plants or products. The legislation also allows the OCM to fine businesses up to $10,000 per day for engaging in cannabis sales without a license from the state.

Elliot Choi, chief knowledge officer at the cannabis and psychedelics law firm Vicente LLP, hailed the use of financial penalties instead of jail time to help reign in New York’s illicit cannabis market. 

“Governor Hochul’s proposed legislation is very much welcomed as prior efforts to combat the illicit dispensaries haven’t appeared to have much of an impact,” Choi wrote in an email to High Times. “We support the use of fines as opposed to incarceration to avoid recriminalization and a return of anything that resembles the prior failed war on drugs.” 

In addition to fines for unlicensed cannabis operators, Choi said that penalizing property owners who rent to unlicensed businesses would also be an appropriate tool for the state’s cannabis regulators and called for an increase in funding for state agencies tasked with controlling underground operators.

“Landlords should not have any incentives to rent to illegal operators and should be financially punished for doing so,” said Choi. “Finally, both the OCM and the Department of Taxation and Finance need additional resources to enforce as the OCM already has enough on their plate getting the regulations finalized and corresponding licenses issued in a timely fashion.”

The post New York Governor Unveils Plan To Address Illicit Pot Shops appeared first on High Times.

UN Warns Adult-Use Cannabis in US States Violates International Treaty

March 23, 2023 Published by

The United Nations agency tasked with monitoring drug enforcement said in a recent report that non-medical (adult-use) cannabis legalization in some US states is a violation of international drug treaties established more than 60 years ago. In its 2022 annual report, the UN’s International Narcotics Control Board (INCB) wrote that America’s federal government isn’t complying with the 1961 Single Convention on Narcotic Drugs by passively allowing states to legalize adult-use marijuana within their borders.

The INCB has regularly criticized countries that have allowed territories within their borders to legalize cannabis because of the obligations of member states under the 1961 Single Convention, according to a report from Marijuana Moment. But in its 2022 annual report released earlier this month, the independent and quasi-judicial monitoring body for the implementation of the United Nations’ international drug control conventions appeared to take aim at cannabis policy reforms at the state level in the US.

“In States with a federal structure, a special issue may arise with respect to whether the Federal Government may be held accountable if a federated entity implements legalization, which violates the conventions, while the Federal Government does not have the power to compel the federated entity to fulfill the treaty obligations,” the INCB wrote.

The INCB added that member states are required under the 1961 treaty to “give effect to and carry out the provisions of this Convention within their own territories,” even in nations with a federal system of government such as the United States. The convention states that “unless a different intention appears from the treaty or is otherwise established, a treaty is binding upon each party in respect of its entire territory.”

“The internal distribution of powers between the different levels of a State cannot be invoked as a justification for the failure to perform a treaty,” the INCB maintains.

INCB Offers Reasons to Maintain Prohibition

The agency offered several reasons for continuing the prohibition of cannabis under the 1961 convention, including the treaty’s view that cannabis is a highly addictive drug that is subject to abuse. The report also notes that legalizing the use of adult-use cannabis lessens the perception of risk and leads to higher rates of consumption.

“The most concerning effect of cannabis legalization is the likelihood of increased use, particularly among young people, according to estimated data,” the UN wrote in a statement about the INCB report. “In the United States, it has been shown that adolescents and young adults consume significantly more cannabis in federal states where cannabis has been legalized compared to other states where recreational use remains illegal. There is also evidence that general availability of legalized cannabis products lowers the perception of risk and of the negative consequences involved in using them.”

The report adds that policy reforms have failed to meet the objectives of states that have legalized adult-use cannabis, including the desire to reduce criminal activity and protect public safety. The agency noted the persistence of illicit markets in jurisdictions that have legalized adult-use cannabis, including Canada, Uruguay and parts of the US.

“Evidence suggests that cannabis legalization has not been successful in dissuading young people from using cannabis, and illicit markets persist,” said INCB president Jagjit Pavadia.

Jason Adelstone, an associate attorney at the cannabis law firm Vicente LLP, wrote in an article about the INCB report that the evidence cited by the agency doesn’t support its conclusions on the success of cannabis legalization, including data that show a significant reduction in the illicit market in jurisdictions that have ended the prohibition of adult-use marijuana. He also notes that the report is calling on member nations with jurisdictions that have legalized cannabis to prioritize INCB policy over their own laws.

“Basically, INCB is saying that no matter what the federal government’s constitutional limitations are, signatories with strong federalist systems, such as the US, must violate their constitution in favor of drug treaty requirements to ensure local jurisdiction comply with the drug treaties,” Adelstone wrote in an email to Cannabis Now.

Adelstone says the agency’s narrow interpretation of the 1961 convention requires member states that don’t have the authority to force their territories to comply with the requirements of the treaty to nonetheless take such action.

“This position is unworkable, incompatible with law and practicality and dangerous,” Adelstone continued. “If a signatory’s constitution prohibits the federal government from enforcing requirements on local jurisdictions, or its citizens, then the federal government will not, and should not, enforce such requirements. Pushing any other narrative is dangerous, risking the stability of constitutional governments.”

Despite the International Narcotics Control Board’s continued criticism of member states that have allowed adult-use cannabis legalization measures to take effect, the agency hasn’t assessed any penalties against nations that have allowed policies contrary to the 1961 convention.

The post UN Warns Adult-Use Cannabis in US States Violates International Treaty appeared first on Cannabis Now.

New Lawsuit Against New York Cannabis Agency Filed

March 22, 2023 Published by

The New York-based Coalition for Access to Regulated & Safe Cannabis (CARSC) recently filed a lawsuit against the Office of Cannabis Management (OCM) on March 16. CARSC is an “unincorporated trade association” that includes a handful of organizations, including Acreage Holdings, PharmaCann, Green Thumb Industries, and Curaleaf, all of which sought to apply for a dispensary license in New York.

The lawsuit is requesting a judge to declare Conditional Adult-Use Retail Dispensary (CAURD) as unconstitutional, and state that the OCM and Cannabis Control Board (CCB) have overstepped their authority.

The lawsuit was filed with the Albany County Supreme Court by Feuerstein Kulick, claiming that the 2021 Marijuana Regulation and Taxation Act required both the OCM and CCB “the initial adult-use retail dispensary license application period … for all applicants at the same time.” Both agencies made the CAURD, which created a new license class, and allowed specific groups to apply for it, rather than “all applicants.”

“Rather than perform the tasks required by the MRTA—which would promote a safe and regulated cannabis industry for medical patients and adult-use consumers alike—CCB and OCM have improperly assumed the role of the Legislature to impose their own policies over those of New York’s elected officials and, by extension, their constituents,” the lawsuit states, according to Syracuse.com.

The lawsuit alleges that the CCB and OCM didn’t complete the requirements of the MRTA, and instead abused its power to create the CAURD. CAURD originated from New York Gov. Kathy Hochul’s Seeding Opportunity Initiative that was announced in March 2022, which “position individuals with prior cannabis-related criminal offenses” to earn one of 150 licenses, and an additional 25 to nonprofit organizations. It requires that an applicant must have been convicted of a cannabis crime in the state of New York, and also must have a “significant presence.”

The lawsuit alleges that a 20-month delay in proposed cannabis regulations is a violation of state law, among other evidence, including having cultivators grow thousands of pounds of cannabis without having retail businesses set up to sell it all.

In July 2022, OCM Executive Director Chris Alexander spoke with NY Cannabis Insider about the threat of a lawsuit such as this one. “I don’t have a concern about the challenge towards the retail opportunity, because the board has the power to create additional licenses,” Alexander said. “We think about legal challenges that may come to the program, but that’s why we stay as close to the law and the powers that law has given us as possible.”

One month before the CAURD application window ended in October 2022, a different lawsuit was filed that prevented the OCM from issuing licenses in five out of 14 areas: Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn. The lawsuit alleges that CAURD violates the Dormant Commerce Clause, which “refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce.”

Another lawsuit filed by Variscite NY One, a Michigan-based company, was denied a license because it is 51% owned by an individual who has no “significant presence” in New York, and has a cannabis conviction in Michigan, not New York.

Syracuse.com states that 66 CAURD licenses have been issued so far, with the CCB announcing in March that it plans to increase the pool of licenses to 300. 

Sen. Jeremy Cooney, who co-sponsored the MRTA, addressed the concerns of the lawsuit in a statement to NY Cannabis Insider. “When we passed the MRTA, there was an understanding that the rollout of adult-use recreational cannabis and expansion of New York’s medical cannabis program would be complex, and encounter obstacles,” Cooney said. “While a potential lawsuit is undoubtedly a new challenge, we must not allow it to become a roadblock to progress. We must continue our efforts to deliver for operators, patients, and consumers as the legal process unfolds. We are committed to increasing patient access for the medical program and creating equity in the recreational market.”

The post New Lawsuit Against New York Cannabis Agency Filed appeared first on High Times.

New Jersey Cultivation Cap Expired, But Real Estate Issues Remain

March 17, 2023 Published by

New Jersey’s cannabis legalization law initially went into effect in 2021 with a cultivator cap set at 37 licenses. Adult-use sales launched in April 2022, but at the time only seven cultivators were licensed to supply cannabis 13 dispensaries across the state. Last month, the Cannabis Regulatory Commission (CRC) allowed the cap to expire on Feb. 22.

“The market is developing, and we don’t want to hinder that. The New Jersey canopy is currently only 418,000 square feet—far below the average of other states with legal cannabis,” said Commissioner Maria Del Cid-Kosso. “New Jersey currently has only one cultivation license for every 197,000 residents. The national average is one license for every 31,000 residents. We have a lot of room to grow. We expect that lifting the cap will open the space for more cultivators, ultimately resulting in more favorable pricing and better access for patients and other consumers.”

As of March 2, the CRC has granted licenses to 17 operational cultivation facilities. But even with the cultivation license cap change, many New Jersey municipalities have opted out of adult-use cannabis. One year ago, the Ashbury Park Press reported that nearly 400 towns had opted out of being home to any cannabis businesses. The co-founder and president of New Jersey-based Premium Genetics, Darrin Chandler Jr., told MJBizDaily that finding potential real estate opportunities is “almost impossible,” and described prices as “astronomical.”

On the patient side, New Jersey is still the only state with a medical cannabis program that does not allow patients to grow at home. In the past, many bills have been introduced to permit home cultivation to allow medical cannabis patients to grow for personal use. Bill S342, which is sponsored by Sen. Troy Singleton and Sen. Vin Gopal, would allow patients to cultivate at home. However, a report from Politico states that opposition from Senate President Nick Scutari is a significant roadblock for the bill.

New Jersey’s industry is continuing to attract outside cannabis businesses. Brands such as Al Harrington’s Viola products are expanding into the state this month, starting on March 24 at RISE dispensaries. According to Harrington, he wants to expand his brand to support the local community. “I want to make sure that we are educating our community and empowering them with knowledge to understand the cannabis plant and the benefits that come from it,” Harrington told Business Insider.

Similarly, Raekwon of Wu-Tang Clan is preparing to open Hashtoria Cannabis Lounge in Newark, New Jersey as well. “Getting excited yall!!! @hashstoria coming to the brick city !!!!! This is going to be flyest consumption lounge to hit the east coast. This will be monumental ! All hail to the mighty green ! Be strong, be wise and be the best version of you!!! #newjersey #cannabis #hashstoria” Raekwon recently wrote on Instagram.

Recently, the CRC held a public comment period to discuss its draft rules for cannabis consumption rules, which ends on March 18. This includes restrictions for on-site food sales, but permits food to be delivered or brought in from outside, and prohibition of tobacco and alcohol sales on-site.

In late February, the New Jersey Attorney General released an updated drug testing policy for law enforcement. Under the new revision, law enforcement officers will only be drug tested if they appear intoxicated at work. “Agencies must undertake drug testing when there is reasonable suspicion to believe a law enforcement officer is engaged in the illegal use of a controlled dangerous substance, or is under the influence of a controlled dangerous substance, including unregulated marijuana, or cannabis during work hours.”

The post New Jersey Cultivation Cap Expired, But Real Estate Issues Remain appeared first on High Times.

German Minister Expects to Introduce Updated Cannabis Legalization Proposal Soon

March 16, 2023 Published by

German Health Minister Karl Lauterbauch recently attended a meeting in Brussels, Belgium with the Council of Ministers for Employment, Social Policy, Health and Consumers on March 14. While in attendance, he spoke about the progress of his cannabis proposal and an estimated timeline of its release.

According to Europa Press, his proposal “has obtained a very good response from the Commission,” Lauterbach said.

He also spoke with news outlet NTV, explaining that his proposal will be presented in the “next few weeks.”

“We will soon present a proposal that works, that is, that conforms to European law,” Lauterbach said.

According to Europa Press, Lauterbach stated that it’s the responsibility of the German governing coalition to “comply with European legislation while maintaining their own objectives” in order to “[reduce] crime and to make cannabis use as safe as possible.”

He also added that there have been some concerns about cannabis legalization. “We have to address several issues. One of them has been presented by the Netherlands, which […] proposes a centralized care and focuse[s] on the recommendations of the experts,” Lauterbach said.

While Lauterbach’s formal proposal has yet to be released, a separate cannabis proposal was also held in a meeting with the German Bundestag Health Committee on March 15. “MEPs [Member of European Parliament] propose allowing adults to purchase and possess up to 30 grams of cannabis or cannabis resin,” the meeting description states. “The cultivation of up to three female cannabis plants for personal or community use should also be permitted. Keeping a year’s harvest of up to three plants should also be allowed. The draft law provides for administrative offenses and fines if the maximum permissible amounts are exceeded.”

Originally, a rough draft of Lauterbach’s proposal was leaked in October 2022 by RedaktionsNetzwerk Deutschland. One week after the leak, Lauterbach gave his proposal to German Chancellor Olaf Sholz.

Under that proposal text, cannabis possession between 20 to 30 grams for adults 18 and older would not result in a punishment. Product THC limits would be capped at 15%, with a 10% limit in place for young adults between 18 and 21 years of age. Sales and distribution would only be permitted for licensed businesses (and importing would be prohibited). Finally, residents would be allowed to cultivate three cannabis plants for personal use.

At the time, Lauterbach described his plan as “the most liberal legalization of cannabis in Europe, which will result in the most regulated market in the EU.” He also shared that an updated version of the plan would be presented as early as the beginning of 2023. “A formal introduction of the legalization measure will occur in the first quarter of this year,” he estimated. 

Germany legalized medical cannabis in March 2017, but officials formally announced an interest in exploring recreational legalization in late 2021. Official interest began in June 2022 when it was announced that it would be holding five hearings to discuss the importance of public safety, youth prevention, supply chains, and more. “The hearings are intended to discuss which measures can be used to ensure the best protection for young people, health and consumers in the event of implementation,” said Federal Government Commissioner for Addiction and Drugs Burkhard Blienert. “Because one thing is clear: we want to protect children and young people in particular from possible risks.”

Officials from the delegation of the Health Committee of the Bundestag traveled to California in September 2022. They met with Oaksterdam University Chancellor Dale Sky Jones, CA NORML representatives, and many other advocates, and also toured cannabis dispensaries to assess the opportunities and risks of legalization. Finally, they explored Lowell Farms cultivation facility and discussed seed to sale, including energy and water conservation, as well as the inner workings of SC Labs in regards to lab testing and compliance.

The post German Minister Expects to Introduce Updated Cannabis Legalization Proposal Soon appeared first on High Times.

Slow Pace of Dispensary Openings Leaves Fresno, CA. with Budget Shortfall

March 16, 2023 Published by

The slow pace of retail cannabis dispensary openings in Fresno, California has led to a budget shortfall of more than $3 million for 2023, prompting city leaders to consider changes to expedite the process to get the businesses up and running. 

California voters legalized cannabis for adults in 2016 with the passage of Proposition 64, a ballot measure that passed with more than 57% of the vote. Two years later, Fresno voters approved an ordinance to tax retail sales of recreational marijuana, setting the stage for adult-use cannabis dispensaries to open in the city. 

In 2019, the Fresno City Council amended civic ordinances to regulate recreational cannabis, and in 2021 the city began awarding the first of 19 preliminary retail cannabis dispensary licenses issued to date. But more than a year later, only two recreational marijuana retailers have opened in Fresno, a pace that is wreaking havoc with the city’s budget projections.

The city budget approved for 2023 projected that cannabis taxes and fees would generate $5.37 million in revenue for the city’s coffers. But with only two dispensaries open for business so far, the city is now projecting the cannabis tax revenue to be $2,113,100, a deficit of more than $3 million. Councilmember Nelson Esparza said that the situation is “insanity.”

“We keep over-projecting cannabis every fiscal year,” Esparza said.

Only Two Dispensaries Open So Far in Fresno

The dispensaries that have opened in Fresno, Embarc and The Artist Tree, began serving recreational marijuana customers on the same day in July 2022. The remaining 17 businesses awarded preliminary licenses have submitted their applications for conditional use permits (CUPs), which must be approved before building permits are issued and construction or renovations of the site can begin. So far, 13 of the 17 pending CPU applications have been approved, and new dispensaries could open as soon as May of this year. 

Sontaya Rose, Fresno’s director of communications, noted that the timeline for construction and opening the dispensaries is controlled by the business owners, not the city.

“So, we can’t say for sure,” Rose said in an email to The Fresno Bee.

“Overall, it is taking longer for the sites to open than was originally anticipated.”

City leaders and business owners in the cannabis industry cite several reasons for the slow pace of dispensary openings. Several of the coming dispensaries will be located in old buildings that require extensive renovations before they can open and begin serving customers, according to the city. Others have had to make accommodations for their landlords, including waiting for current tenants to vacate the building so renovations on the site can begin.

Lauren Carpenter, the CEO of Embarq, which has received preliminary approval for two cannabis dispensaries in Fresno, says that her company has experienced delays at both of the locations. The company is “working expeditiously to open our second location later this year,” Carpenter said.

“A variety of factors influenced the timing” of the first and second location, she added, “including site conditions, driving duration of build out and the speed in which tenants were able to vacate the premises.”

“Fortunately, our first location affords us the ability to serve Fresnans while training our team to become leaders in our second,” said Carpenter.

Lauren Fontein, founder of The Artist Tree, said that the state of California’s regulated cannabis industry is also influencing the opening of new businesses. Wholesale prices for cannabis have plummeted in the state, squeezing profit margins throughout the supply chain. High taxes and licensing fees for cannabis businesses also take a hefty bite out of the bottom. Many companies are struggling, and some have had to lay off workers to stay afloat.

“There’s much less an appetite for investing in the cannabis industry,” Fontein said. “It’s not this kind of cash cow business that people thought it was.”

Civic leaders in Fresno have looked to several jurisdictions for possible solutions and are considering several options to expedite the opening of additional adult-use cannabis retailers in the city. In West Hollywood, the city council amended its cannabis ordinance so more licenses could be issued, while Riverside conducted an additional round of licensing to add to the city’s roster of cannabis dispensaries. Fontein said that Fresno is considering adding deadlines to its ordinance to encourage a quicker opening of new dispensaries.

“The city just kind of needs to get practical at this point,” she said.

But the city has few options. While businesses are given a one-year deadline to submit CUP applications, the city ordinance does not have provisions that set a timeline for dispensaries to open for business.

Rose wrote in an email to the Fresno Bee that the city manager’s office is working with the staff at the city attorney’s office “to determine options for establishing additional deadlines for applicants to make progress towards opening.” But she was unable to offer a timeline to get the businesses up and running.

Until that happens, Fresno will continue to see a shortfall in projected cannabis tax revenues that could impact the city’s ability to provide services. 

The post Slow Pace of Dispensary Openings Leaves Fresno, CA. with Budget Shortfall appeared first on High Times.

Legal Weed Sales Projected To Grow 14% in 2023

March 15, 2023 Published by

Sales of legal cannabis in the United States are projected to grow by 14% in 2023, according to a recent report from Colorado-based cannabis industry market analysis firm BDSA. In an updated five-year global legal cannabis market forecast, the company reports that global spending on legal cannabis increased by 4.8% to $32 billion in 2022. BDSA projects that the global cannabis market will see a compound annual growth rate (CAGR) of 13.2% from 2022 to 2027, resulting in a total worldwide regulated cannabis market size of $59.6 billion by 2027.

The U.S. legal cannabis market has shown significant growth across the industry as more and more states legalize adult-use cannabis and medical marijuana. And while the industry’s growth slowed in 2022 in response to market conditions including rising inflation and economic uncertainty, BDSA expects the U.S. legal weed market to again show significant growth this year, projecting a 14% increase in the market in 2023.

“Legal cannabis spending slowed significantly in 2022 due to rapid price declines across all markets,” Roy Bingham, co-founder and CEO of BDSA, said in a statement from the company. “Despite this, our updated forecast predicts strong growth in the U.S. driven by developing markets, particularly the adult-use markets of Missouri, New Jersey and New York.”

Currently, 21 states have legalized cannabis for adults, while 37 states, the District of Columbia and three U.S. territories have passed laws to legalize the medicinal use of marijuana. Additionally, 11 states permit the use of low-THC cannabis formulations for medicinal purposes. Only Idaho and Nebraska continue to prohibit all forms of cannabis. 

Some Mature Cannabis Markets Contracted In 2022

The U.S. cannabis market posted rapid growth during the height of the COVID-19 pandemic as lockdowns kept consumers home and dispensaries were designated as essential businesses in many states. But last year marked the first decline in overall cannabis spending in some mature cannabis markets in the United States. In the West, early cannabis policy reform adopters California, Colorado, Nevada and Oregon saw a combined drop in spending on legal adult-use cannabis of 16.5% in 2022, according to the updated report. BDSA expects most mature cannabis markets in the U.S. to return to positive growth in 2024, although more slowly through 2027 than in the years leading up to the pandemic. 

Newer legal cannabis markets showed strong growth in 2022, despite the decline seen in more mature markets. BDSA also projects new legal adult-use cannabis markets to launch by 2027, predicting a start of legal sales in Maryland in 2024 and in Florida and Ohio in 2025. The launch of new recreational marijuana cannabis markets is also possible in Minnesota and Hawaii by 2027, BDSA notes, but the company does not expect to see federal cannabis legalization during the five-year forecast period.

Brian Vicente, founding partner of the cannabis law firm Vicente LLP, agreed that emerging markets will help fuel the growth of the legal cannabis industry in the upcoming years.

 “The future remains bright for the cannabis industry in the United States. Despite a recent setback at the polls, with Oklahoma voters shooting down legalization this month, we are still seeing other domestic markets expand and commence sales,” Vicente wrote in an email. “This includes significant revenue growth in newly-legal cannabis markets like Missouri and New Jersey, and also emerging medical markets like Mississippi. With additional states like Florida and Ohio looking likely to legalize in the next several years, we can expect continued expansion in cannabis sales.”

By 2027, U.S. sales of adult-use cannabis are forecasted to contribute 78% of the total spending on legal cannabis worldwide, up from 64% in 2022. U.S. legal cannabis spending is expected to grow at a CAGR of 11.3%, from $26.1 billion in 2022 to $44.5 billion in 2027, with the industry’s growth driven primarily by the New York, Florida, New Jersey and California recreational marijuana markets. 

Globally, cannabis markets outside the U.S. and Canada are forecast to grow at a CAGR of 40% to $9.5 billion in 2027, up from $1.8 billion in 2022. BDSA forecasts the Canadian market will see overall growth of 12% this year, increasing to a $5.7 billion market by 2027 at a CAGR of 6.3%. New adult-use markets in Germany and Mexico are expected to be the primary drivers of global growth, while existing limited medical cannabis programs are expected to expand, particularly in the European Union and Latin America.

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Connecticut Cannabis Sales Top $18 Million in February

March 14, 2023 Published by

Licensed cannabis sales topped $18 million in Connecticut during February, the first full month of regulated recreational marijuana sales in the state. Sales of adult-use cannabis began on January 10, only seven months after lawmakers passed legislation to legalize and regulate recreational marijuana.

Connecticut Governor Ned Lamont signed legislation to end the prohibition of recreational marijuana in June 2021, legalizing the possession of cannabis by adults 21 and older and creating a framework for regulated adult-use sales. The measure also included restorative justice and social equity measures, including provisions that led to the expungement of nearly 43,000 marijuana-related convictions at the beginning of the year.

The Connecticut legislature passed a bill to legalize the medicinal use of cannabis in 2012, leading to the launch of legal medical marijuana sales to patients with qualifying debilitating medical conditions in September 2014. Regulated sales of adult-use cannabis began in Connecticut at seven of the state’s existing medical marijuana dispensaries on January 10.

“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,” Lamont said in a statement last month. “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.”

Cannabis Sales Data Released On Friday

Last week, the Connecticut Department of Consumer Protection (DCP) released cannabis sales figures for February of this year, the first full calendar month of regulated adult-use cannabis. According to data provided by the department on Friday, total regulated sales of marijuana for the month came to more than $18.4 million. Total adult-use cannabis purchases in the state totaled about $7.02 million from February 1 through February 28, while medical marijuana sales contributed approximately $11.4 million to the monthly total.

Registered medical marijuana patients purchased 316,644 cannabis products in Connecticut last month, while adults 21 and older bought 168,565 adult-use cannabis items. Since the launch of recreational marijuana sales last month, the DCP’s Drug Control Division has approved more than 600 new brand names for products that may be sold in both the medical marijuana market and the adult-use market.

The DCP collected the cannabis sales data with its BioTrack seed-to-sale tracking system, which monitors the production, distribution and sale of all medical marijuana and adult-use cannabis merchandise in the state. In a press release, the department noted that it does not regulate prices, set sales expectations, or make revenue projections for Connecticut’s licensed cannabis market. 

The department noted that cannabis sales information will be made public on or about the tenth day of each month. All data is subject to further review by the DCP. Because Connecticut’s seed-to-sale tracking system was not operational until last month, sales figures for the medical marijuana market prior to January 10 are not available.

Purchase Limits On Recreational Weed in Connecticut

To ensure that there is a sufficient supply of cannabis for the state’s medical marijuana patients, purchases of recreational marijuana are currently limited to a quarter ounce of cannabis flower per transaction. Medical marijuana patients are permitted to buy up to five ounces of cannabis per month, with no quantity limits on individual transactions. 

In its notice last week, the DCP reminded consumers and patients that information about responsible cannabis use and the potential health risks of using marijuana is available online.

“Adults who choose to consume cannabis are reminded to do so responsibly, including storing cannabis products in their original packaging, locked up and out of reach of children and pets,” the department noted in its press release. “Resources regarding responsible cannabis use, as well as information about addiction and health risks is available at ct.gov/cannabis.”

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