Cannabis Client Alert - Week October 4, 2021

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In this week’s edition:

  • Senate Majority Leader Schumer reveals “agreement” to block cannabis banking legislation until social equity-focused legalization bill advances
  • House Judiciary Committee advances MORE Act
  • Mississippi Governor to call lawmakers into special session to consider medical cannabis legislation
  • The Oklahoma cannabis program (OMMA) Director committed to a “hard reset” to address the cannabis industry’s “explosive growth”
  • Researchers find no overall protective relationship between state medical cannabis laws and reduced risk of fatal opioid overdoses
  • And more…

Federal

Chuck Schumer Says Key Senators Have ‘Agreement’ Not to Advance Marijuana Banking Reform Before Legalization - In a podcast interview, Senate Majority Leader Chuck Schumer (D) stated there is an “agreement” between him and Sens. Ron Wyden (D) and Cory Booker (D) to block cannabis banking legislation until a social equity-focused legalization bill advances. However, Sen. Schumer indicated he is open to exploring an alternative to advancing banking reform if lawmakers incorporate social equity components of legalization into separate defense policy legislation.

Key US House Panel Approves Marijuana Legalization—Again - On September 30, the US House Judiciary Committee voted to advance the Marijuana Opportunity Reinvestment & Expungement (MORE) Act, which would remove cannabis from the federal Controlled Substances Act. The House passed a similar version of the legislation in December 2020, but the Senate did not take up the bill.

IRS Official Offers Tax Advice to Marijuana Businesses and Says Feds Expect Industry to Keep Growing - In a blog post, the commissioner of the Internal Revenue Service’s Small Business/Self Employed Examination division previewed a new “Cannabis/Marijuana Initiative” the IRS is launching to provide training to tax officials to ensure consistency in the IRS’s policy for cannabis. While recognizing that cannabis businesses are precluded from taking key tax deductions, the official noted cannabis firms “can deduct their cost of goods sold, which is basically the cost of their inventory.”

States

CA - The California Department of Cannabis Control adopted new regulations, effective immediately, that include provisions relating to sharing trade samples of cannabis goods within the supply chain.

CA - California Governor Gavin Newsom (D) signed a bill on September 28 requiring hospitals to permit medical cannabis use by certain patients, including terminally ill patients. Patients receiving treatment for emergency care are not included in the legislation, and smoking and vaping cannabis are prohibited.

MS - During a press conference on September 29, Mississippi Governor Tate Reeves (R) indicated he will call lawmakers into special session to consider medical cannabis legislation “sooner rather than later.”

NM - New Mexico’s Cannabis Control Division on September 28 published proposed rules for adult-use cannabis manufacturers, retailers and couriers. In addition to requirements for licensure, the proposed rules establish operational standards for licensees. Public comments are due by the close of the public rule hearing on October 28.

OK - During a press briefing on October 1, Oklahoma Medical Marijuana Authority (OMMA) Director Adria Berry committed to a “hard reset” of the agency, citing the “explosive growth” of the cannabis industry and requirements pursuant State Question 788, which became law in 2018, to create OMMA within 60 days of the ballot measure’s passage. In addition, new OMMA Deputy Director and Legislative Liaison Barrett Brown noted interest among state legislators in imposing a cap on the number of licenses issued for certain types of cannabis businesses. State Question 788 did not place limits on how many cannabis patient or business licenses could be approved, and some cannabis businesses have expressed frustration with the large number of cannabis growers.

HEMP/CBD

Hemp eManagement Platform (HeMP) - The USDA has launched the Hemp eManagement Platform (HeMP), an online system for producers, states, tribes, testing laboratories and sampling agents to manage and submit information and mandatory reporting to the USDA. HeMP replaces the need to download forms and submit them via e-mail, mail or fax.

DC Circuit Hears DEA Should Not Oversee Hemp Manufacturing - In an appellate brief, a hemp trade group and retailer argued the federal 2018 Farm Bill bars the US Drug Enforcement Administration from taking action against hemp manufacturers and processors.

International 

Ireland - CannEpil, an oral cannabis-derived epilepsy drug, is expected to be available to patients with severe refractory epilepsy in mid-October as part of Ireland’s Health Service Executive’s Medical Cannabis Program. MCAP is operating on a pilot basis for five years.

Business

Wrigley and Braun Scrap $1.9B Deal to Merge Parallel and Ceres - William “Beau” Wrigley Jr.’s cannabis company, Parallel, and “Scooter” Braun’s special purpose acquisition company, Ceres Acquisition Corp., mutually called off their $1.9 billion merger. The merger would have allowed the resulting company to go public by taking on Ceres’ listing on a Canadian stock exchange.

Cannabis REI IIP to Fund $56.2M Goodness Growth Development in New York - On September 28, cannabis company Goodness Growth Holdings Inc. closed a sale leaseback transaction with real estate investment trust Innovative Industrial Properties Inc. GGH reported it sold IIP approximately 92.3 acres of land next to its existing cannabis cultivation and processing facility in New York for $1.2 million. IIP plans to provide tenant improvement reimbursement to GGH of $55 million for the construction of a 324,000-square-foot cannabis cultivation, processing and R&D facility.

Medical

Association Between Fatal Opioid Overdose and State Medical Cannabis Laws in US National Survey Data, 2000-2011 - Researchers found no overall protective relationship between state medical cannabis laws and a reduced risk of fatal opioid overdoses between 2000 and 2011, suggesting alternative solutions to the opioid overdose crisis are needed.

A Systematic Review of Fibromyalgia and Recent Advancements in Treatment: Is Medicinal Cannabis a New Hope? - In a review of studies to assess the safety and efficacy of medical cannabis in treating pain in patients with fibromyalgia syndrome, the authors found cannabinoids and cannabis improve common and debilitating symptoms associated with FM with limited side effects, making them an adequate potential treatment option.

Dentons Speaks

Members of the Dentons cannabis group are attending MjBizCon 2021 and would be pleased to meet in person.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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