Cannabis Client Alert - Week of March 15, 2021

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In this week’s edition:

  • Hawai’i, Rhode Island and Wyoming consider legalizing adult-use cannabis
  • Industry experts question legal status of Delta-8 THC
  • Mexico’s lower house approves bill to legalize recreational cannabis
  • Emissions from cannabis production largely attributable to indoor cultivation, study finds
  • And more…

Federal

New Cannabis Coalition to Focus on Federal and State Policy - A new coalition was launched last week “to develop policy and build a national conversation on the federal regulation of cannabis.” Known as the Coalition for Cannabis Policy, Education, and Regulation, the group is comprised of members that represent regulated industries, academics, think tanks, public safety officials, medical and mental health professionals, financial services firms and social equity organizations. The coalition will analyze a number of policy areas, including financing and minority capital access, tax policy, public safety, product format and potency, criminal justice reform and social equity, and will focus on data, research, and regulatory and enforcement structures.

State

AZ - Two days after the early application process for medical cannabis licenses closed, the Arizona Department of Health Services confirmed that every nonprofit medical marijuana license holder in the state applied for and received a marijuana establishment license, allowing these entities to sell cannabis to adults who are at least 21 years of age.

CO - Colorado lawmakers are drafting new legislation targeting high-potency THC concentrates. To address an increase in the popularity of high-THC concentrates, particularly among teenagers, the legislation may include a THC-potency cap, a new database to monitor and crack down on individuals exceeding the daily purchase limits, and a ban on virtual renewal of medical cannabis cards.

HI - Hawai’i’s state Senate approved a bill that would legalize cannabis and cultivation for personal use by adults. The Senate also passed legislation that would increase the possession threshold under the state’s existing decriminalization statute by 10 times (to 30 grams from 3). Both pieces of legislation head to the state’s House of Representatives for consideration, though it is not clear whether the Gov. David Ige (D) would sign a legalization bill.

NE - Nebraska Gov. Pete Ricketts (R) held a news conference opposing the legalization of medical cannabis in the state ahead of a hearing in the state Legislature on the issue. In explaining his opposition to legalization, the Governor cited health concerns, stating that “[i]f you legalize marijuana, you’re gonna kill your kids. That’s what the data shows from around the country.”

NM - Two cannabis legalization bills in the New Mexico Legislature moved out of a Senate committee and into the Senate’s Judiciary Committee for consideration. The bills contain similar provisions, particularly after amendments in committee, and will head to the Senate for floor debate if approved by the Judiciary Committee.  

NY - New data shows that people of color made up 94 percent of cannabis-related arrests in New York City in 2020. Advocates are using this data to call for enactment of the Marijuana Regulation and Taxation Act, which would legalize the harvest, distribution and sale of cannabis for adults over the age of 21.

OK - The Oklahoma House of Representatives passed several bills that would significantly impact the state’s medical cannabis industry. One bill would temporarily cap the number of licenses, block new licenses and give the Oklahoma Medical Marijuana Authority more power over the license lottery system. In an effort to prevent foreign corporations from entering the state’s cannabis industry, a second bill proposes to prohibit the sale of agricultural land to citizens of countries that do not allow American ownership of land.

RI - Just two days after the Rhode Island General Assembly introduced a bill to tax and regulate cannabis sales, Gov. Dan McKee (D) issued a plan as part of his 2022 budget proposal to legalize adult-use cannabis in the state. Though the two plans contain a number of differences, including the effective tax rate, legislators and state officials have indicated that they intend to work together as they move through the process.

TX - A Texas state representative has introduced a bill that would allow counties and municipalities in the state to issue orders or ordinances legalizing recreational cannabis use. Just over half of Texans currently support recreational cannabis use.

WY - Wyoming’s House Judiciary Committee approved a bill that would legalize cannabis in the state. The bill now heads to the full House of Representatives, where it is expected to face significant debate.

Hemp/CBD

USDA - The US Department of Agriculture announced that its regulations governing hemp cultivation will go into effect on March 22, 2021, as set forth in the final rule. This announcement follows the Biden administration’s review of the regulations, which resulted in no changes.

Delta-8 THC - In the past year, sales of Delta-8 THC, a chemical compound extracted from hemp, have exploded. Delta-8 THC is chemically similar to Delta-9 THC, the main psychoactive ingredient in marijuana. In contrast to Delta 9-THC, which remains illegal under federal law, Delta-8 THC is legal under the 2018 Farm Bill as it is written. Some industry experts, however, have called into question the compound’s legal status, noting that Delta-8 THC is intoxicating (like Delta-9 THC), remains in the DEA’s list of controlled substances, and is made synthetically from CBD extracted from hemp.

International

Canada - The Canadian government has distributed for public comment draft guidance on personal production of cannabis for medical purposes. The guidance addresses access to cannabis for medical purposes and “sets out, for the first time, proposed factors that Health Canada may consider in making decisions to refuse or revoke a registration on public health and public safety grounds.” Public comments are due by May 7, 2021.

Mexico - Mexico’s lower house, the Chamber of Deputies, approved a bill to legalize recreational cannabis. The bill is expected to pass in the Senate and be approved by President Andrés Manuel López Obrador. If this occurs, Mexico would become the world’s largest cannabis market.

Morocco - Just weeks after the World Health Organization and the UN Commission on Narcotic Drugs issued new policy positions on cannabis, Morocco’s government ratified a draft law to legalize medical cannabis use. The vote was delayed on two separate occasions due to controversy around the issue and has led to the resignation of high-level government officials. The law still needs to be approved by Parliament.

United Kingdom - The Food Standards Agency (FSA), which is currently accepting novel food applications, has updated the criteria for cannabis food products that can remain on sale after April 1, 2021. The new criteria permits all products on sale on February 13, 2020, and linked to an application submitted to the FSA by March 31, 2021, and subsequently validated. Previous criteria required the application to be validated, rather than just submitted, by March 31.

Business

British American Tobacco enters strategic collaboration with Organigram - A subsidiary of cigarette maker British American Tobacco has entered into a US$175 million strategic collaboration with Organigram, a Canadian-based cannabis producer. The collaboration will focus on research and product development through a new Center of Excellence and steering committee. In a press release, Organigram stated that this capital injection “better position[s]” the company “to expand into the U.S. and further international markets” upon legalization.

Variation in cannabis greenhouse gas emissions - A new study by Colorado State University found that greenhouse gas emissions from cannabis are largely attributable to electricity production and natural gas consumption from indoor environmental controls, high-intensity grow lights, and supplies of carbon dioxide for accelerated plant growth. The study also mapped variation in greenhouse gas emissions, finding that the Upper Midwest region has the highest emissions. Variation in emissions, the researchers surmised, stem from climate and electric grid emissions.

Medical/Health

CBD helps restore two proteins that reduce plaque associated with Alzheimer’s disease - A recent study in mice found that a two-week course of high doses of CBD helps restore the function of two proteins that reduce the accumulation of a plaque associated with Alzheimer’s disease and helps improve cognition. Future research will focus on determining optimal doses, giving CBD earlier in the disease process, and exploring different delivery systems.

Runner’s high” may be linked to endocannabinoids rather than endorphins - Researchers studying the euphoria and decreased anxiety following endurance exercise, often referred to as a “runner’s high,” have discovered that exercise causes the release of two molecules, endocannabinoids (eCBs) and opioids. The eCB system is responsible for producing various effects within the body upon use of THC and CBD. The researchers suggest that the development of a “runner’s high” in humans likely depends on cannabinoid receptors like eCBs, rather than opioid signaling like endorphins.

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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