Tennessee Lawmakers Consider Cannabis Legalization Bill

A bill to legalize recreational pot-use for adults, and expand medical cannabis treatment to children, is going before a Tennessee legislative committee this week.

The legislation, known as the “Free All Cannabis for Tennesseans Act,” would authorize “the possession and transport of marijuana or marijuana concentrate, in permitted amounts, for adults who are at least 21 years of age (adults).”

The bill would also create a process for “a parent, guardian, or conservator to administer a marijuana product, excluding any combustible product, to a minor, over whom the parent, guardian, or conservator has legal authority.”

Under the terms of the bill, the state’s Department of Health would be required to provide an online form “that, upon execution by a parent, guardian, or conservator, after consultation with a healthcare practitioner, creates a rebuttable presumption that the minor has a medical condition for which the use of marijuana is treatment for any such condition.”

“My constituents are regularly asking why are we dragging our feet on this,” said state House Rep. Bob Freeman, a Democrat from Nashville who is one of the bill’s sponsors, as quoted by local news outlet WSMV.

If it were to become law, the bill would permit adults aged 21 and older to cultivate as many as 12 cannabis plants for personal use. According to local television station WZTV, “adults would be allowed to possess and carry under 60 grams of marijuana or 15 grams of marijuana concentrate,” and would be “allowed to transfer to one another no more than the same amount.”

It would also establish a framework for the state to set up a regulated adult-use cannabis market. According to the bill’s summary, pot sales would be “subject to the state and local sales and use tax, as well as an additional 15% marijuana tax,” while also enabling local governments to “impose a local sales tax on such sales, not to exceed 5% of the price of the products sold, of which proceeds shall be distributed identical to the existing local sales and use tax.”

The proceeds of the 15% sales tax would be allocated as follows: 50% to the state Department of Agriculture, which will implement and administer the adult-use program; 20% to the state Department of Safety, which would go toward “training and education of law enforcement agencies and officers with regard to state cannabis-related laws … the support of law enforcement officers injured in the line of duty … and the support of families of law enforcement officer killed in the line of duty”; 20% would go toward the State Employee Legacy Pension Stabilization Reserve Trust; five percent toward the state Department of Education “for education programs for elementary and secondary students regarding age restrictions for marijuana use and potential health and legal risks for improper or underage use of marijuana”; and another five percent to the state Department of Revenue “for administrative costs incurred pursuant to this Act, including collection and enforcement costs.”

“Let’s talk about the financial benefits this could have for our state. What could we fund differently? What could we fund better? We got the fiscal note back, and it’s hundreds of millions of dollars every year. States that have passed this before its billions of dollars in additional state revenue,” Freeman said, as quoted by WSMV.

It isn’t the only cannabis-related bill to be taken up by the Tennessee legislature this year.

In January, a pair of lawmakers in the state introduced legislation that would direct counties in Tennessee to essentially conduct a public opinion poll on this year’s general election ballot that would gauge voters’ support for both recreational and medical cannabis.

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Will the Lack of License Caps in New York Ensure an Inclusive Cannabis Industry?

When New York legalized adult-use cannabis last year, many lawmakers were adamant that cannabis reform include provisions to address the harms of decades of prohibition. As the state transitioned into a legal cannabis economy, legislators wanted to ensure that the economic opportunities of legal cannabis were in reach for all New Yorkers, particularly members of communities of color and other marginalized groups that historically bore the brunt of the War of Drugs.

The evidence is clear. Despite research that shows that Blacks and whites use cannabis at about the same rates, a 2020 study by the American Civil Liberties Union found that Blacks were nearly four times more likely to be arrested for a pot-related charge. In New York, 93 percent of those arrested for cannabis in New York City in 2020 were Black or Hispanic. Less than 5 percent were white, a group that makes up 45 percent of the city’s population.

Equity in New York Legalization

Because of this disparate enforcement of cannabis prohibition, the Marijuana Regulation and Taxation Act (MRTA) approved in New York last March includes restorative justice measures such as the expungement of past cannabis convictions. The legislation also incorporates social equity provisions to help ensure the economic spoils of legalization are enjoyed by all. Significantly, the legislation reserves half of the state’s cannabis licenses for retailers, cultivators, processors and other businesses owned by women, minorities, distressed farmers, veterans and “individuals who have lived in communities disproportionally impacted” by the failed War on Drugs.

The social equity goals of the MRTA are currently being implemented. In January, Democratic Gov. Kathy Hochul allocated $200 million in the state budget to create a fund to help social equity applicants meet some of the costs of launching a cannabis business. And last week, state regulators announced that the first 100 to 200 licenses for recreational dispensaries in the state will be awarded to applicants with past weed-related convictions.

At a recent public forum held to provide information about the rollout of legalized pot in New York, Cannabis Control Board Chair Tremaine Wright explained that regulators are trying to ensure the new cannabis industry is accessible to all entrepreneurs.

“What we are trying to do is build a supportive ecosystem that allows people to participate no matter their economic background and we want everyone to know they have a real opportunity at a license as well as support so that their businesses will be ongoing enterprises that are successful and have the opportunity for growth,” Wright said last month.

In another bid to help foster an inclusive cannabis industry, the MRTA bucks the trend in many states of limiting the number of licenses awarded to cannabis operators. Freeman Klopott, spokesman for the New York State Office of Cannabis Management, notes that the legislation also bars local governments from putting a cap on business licenses, although communities were given the opportunity to opt out of hosting dispensaries and consumption lounges. 

“We are focused on establishing a stable market that provides multiple access points to expand opportunity for equity applicants and small businesses,” Klopott wrote in an email to High Times. “We’ve seen how caps in other states have driven up costs and raised barriers to equity applicants, and we have no plans to establish them here in New York as a result — our priority remains on stability and opening access to opportunity as wide as possible.”

Most States Cap Cannabis Licenses

In this year’s MCBA National Cannabis Equity Report, the Minority Cannabis Business Association and the Arcview Group note that among the 36 states with legal pot, 26 include license caps to limit the number of cannabis business licenses issued. But the caps, which are designed to help regulators maintain control of the industry and prevent the perceived threat of a proliferation of cannabis dispensaries from becoming a reality, create problems of their own.

“Limiting the number of licenses at the state level artificially inflates the value of the license due to limited competition within the legal market without accounting for competition from the legacy market and without providing access or incentive to transition to the legal market,” the MCBA wrote in its report. “Despite arguments of oversaturation in low-income neighborhoods, state-level license caps do not decrease retail outlet density or overconcentration, especially in low-income neighborhoods.”

Michelle Bodian, the co-chair of the hemp and cannabinoids department at cannabis law firm Vicente Sederberg, agreed that license caps inflate the value of licenses, a situation which tends to favor well-capitalized applicants to the detriment of small, independent entrepreneurs. Caps on the number of businesses can also lead to delaying litigation and limited product selection, all at the expense of consumers.

License caps “frequently result in lawsuits, typically filed by one or more applicants who do not receive licenses, that can slow down the implementation of state programs,” Bodian explained in an email. “Limited markets can potentially reduce the variety of products available to consumers and potentially disincentivize the development of new and potentially improved products.”

Bodian also noted that a lack of license caps does not translate into an immediately unlimited number of permits for cannabis businesses, a point underscored by last week’s announcement that the first 100 dispensary licenses would be set aside for so-called “justice-involved” applicants.

“While the MRTA does not include caps on the number of cannabis businesses, it is unlikely that New York will open the floodgates by making a large number of licenses immediately available at once,” said Bodian. “It is more likely the state will issue a set number of licenses during an initial application phase. Depending on how many licenses are available during the first several licensing rounds, New York may behave like a ‘limited license state,’ even though the law does not mandate a state license cap.”

Will a Lack of License Caps Ensure an Inclusive Industry?

Not everyone, however, is convinced that a lack of license caps will result in the equitable industry regulators hope to create. Khadijah Tribble, senior vice president of corporate social responsibility at Curaleaf, one of the world’s largest cannabis companies, told High Times that there “is certainly room for everyone in the industry, from large businesses to small and social equity owned organizations.” But, she added, a more regulated rollout of the industry may be a better way to achieve the goal of a diverse cannabis economy.

“In New York, we hope to see a situation where social equity licenses are prioritized, even without a license cap on the market,” Tribble wrote in an email. “We believe that with measured regulations that put social equity at the center, licensing caps could provide opportunity for legacy operators to build legal businesses in New York, in a way that would be celebrated by the thriving cannabis community.”

“However, the truth is that there is no magic bullet to what model regulatory scheme will work to ensure an equitable distribution of opportunities, and there are currently no great examples,” she added.

Gia Morón, president of Women Grow, a group working to create an equitable and diverse cannabis business community, believes that we should not “generalize this idea that no caps create fewer barriers because not everyone is financially prepared for every level of this industry.” 

She notes that opening a cultivation facility, even under a license with social equity provisions, requires millions of dollars of investment, a significant barrier for most people. Starting a dispensary also requires substantial start-up capital, a fact that could eliminate a large group of people from participating in the legal cannabis industry. Other types of cannabis businesses such as delivery operations and consumption lounges can offer more affordable and accessible entry points to the industry. But true equity in the marketplace can only come with initiatives that create a source of financing for fledgling businesses as they gain operational stability.

“When it all comes down to a diverse, inclusive, equitable industry in New York, it’s going to come down to capital. If there is no access to capital in place, licenses won’t matter,” Morón told High Times in an email. “One loan, grant, or investment may not sustain a business to keep them afloat. So, we need measures in place for financing. That will help ensure a diverse representation of the cannabis industry in New York.”

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Episode 398 – More of the Same for Legalization

First-time guest Francesca DeMauro joins host Ben Larson to talk about the progress, or lack-thereof, of legalization at the federal level; the latest news out of the states; and a look ahead for what kinds of market movements and contractions we could see in the North American cannabis market in the next two years. Produced by Shea Gunther.