Cannabis Client Alert - Week of November 30, 2020

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This week:

  • US House to vote on Marijuana Opportunity, Reinvestment and Expungement (MORE) Act
  • California federal judge rules that Prop 64 prohibits billboard advertising for cannabis on interstate highways
  • Oklahoma now biggest medical cannabis market in US on per capita basis
  • European Court of Justice ruling allows CBD products to be transported across the EU

Federal

The US House of Representatives will vote on the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act. If passed, the bill would federally de-schedule cannabis, expunge the records of those with prior convictions, and impose a federal 5 percent tax on sales.

States

CA - A California federal judge ruled that Prop 64 prohibits billboard advertising for cannabis on highways that cross state borders. The order invalidates a 2019 regulation from the state Bureau of Cannabis Control that permitted billboard advertising on interstate highways.

CT - Democratic lawmakers have proposed a ballot referendum on cannabis legalization if the state legislature rejects a cannabis reform bill in the coming session. Efforts in the General Assembly to legalize adult-use cannabis have repeatedly failed over the past five years.

KY - The Kentucky legislature hopes to pass medical cannabis legalization, despite 27 new members entering the House.  A medical cannabis bill passed in the legislature last year, but requires a new vote from incoming members.

NJ - Overturning a 2018 decision by the state Department of Health to deny licenses to six medical cannabis companies, a New Jersey appeals court ruled that the rating system used to award licenses was arbitrary, capricious and unreasonable. The state’s licensing system has issued only 12 licenses to serve some 97,000 registered patients.

NY - The push for cannabis legalization and regulation in New York has gained traction with New Jersey voters’ approval of cannabis reform.  Although NY Governor Andrew Cuomo (D) included cannabis reform in his last two annual budget proposals, negotiations have consistently stalled. Recent polls showed that 61 percent of New Yorkers are in favor of enacting the reform.

OK - Oklahoma is now the biggest medical cannabis market in the country on a per capita basis. The booming industry is a result of the state’s free-market approach to cannabis regulation, which does not limit the number of licenses that can be issued, or permit cities to ban cannabis operations within their borders. 

VA - Governor Ralph Northman (D) plans to introduce a bill to legalize recreational cannabis next session. A study by the Joint Legislative Audit & Review Commission found that cannabis legalization could create up to 18,000 jobs and generate $300 million in tax revenue in the first five years.

CBD/Hemp

Iowa Hemp Fields Destroyed for THC Content - Approximately 13 percent of Iowa hemp fields have been destroyed because the THC levels in the plants exceeded 0.3 percent, the maximum allowed under state and federal laws.  According to the Iowa Department of Agriculture, farmers in the state planted hemp on about 680 acres this year.

Japan Issues Regulations for Hemp Imports - Japan’s Ministry of Health, Labor and Welfare (MHLW) issued regulations for the import of industrial hemp products. Only MHLW-authorized researchers may import and export cannabis products to and from Japan.

International

Legal Recreational Market Share in Canada Rises from 8 to 24 percent - The penetration of legal sales tripled in the first 12 months of cannabis legalization in Canada. Despite a slow start due to shortages of both dry cannabis products and licensed stores (but not cannabis oils), availability, accessibility and low prices led to higher market share for legal recreational products.

EU Court Exempts CBD From Narcotic Restrictions - The European Court of Justice has ruled that CBD is not a “narcotic.” The ruling allows legal CBD products to be transported across the European Union and member states may not ban the sale of CBD products produced in another EU member state. The ruling also clarified that CBD marketed in the EU may be derived from any part of the cannabis plant as long as it is sourced from legal, THC-low cultivations.

Catholic Church Opposes Cannabis Legislation in Mexico - Mexico’s Roman Catholic Church issued a statement criticizing the Senate’s vote to legalize the cultivation, sale and possession of cannabis, citing the current legislation’s failure to address public health implications. Supporters of the legislation say that cannabis regulation will help take the cannabis trade out of the hands of drug cartels.

Malawi Builds Hemp Industry - Malawi, a country in southeastern Africa, will begin the commercial production and processing of hemp for medicinal and industrial use. License fees for cultivation, selling, storage, and distribution will range from $100 to $10,000 a year. 

Jay-Z Named CVO of cannabis SPAC Subversive Capital - Rapper and entrepreneur Jay Z has been named the chief visionary officer for Subversive Capital Acquisition Corp., a special purpose acquisition company, or SPAC, specializing in cannabis industry acquisitions. Subversive Capital acquired Caliva and Left Coast Ventures, combining the brands under a new vertically-integrated cannabis company to be named TPCO Holding Corp. Jay-Z previously served as the chief brand strategist at Caliva since July 2019. TPCO Holding has pledged to commit at least 2 percent of its annual net income to fund TPCO Social Equity Ventures, a new corporate venture fund that will invest in minority-owned cannabis businesses and contribute to progressive criminal justice initiatives.

Cannabis Use Increased during the Pandemic, Especially Among Parents - According to a survey conducted by New Frontier Data, 42 percent of cannabis consumers have increased their overall cannabis use during the pandemic. More than half (56 percent) of parents with children under age 18 reported increased use, compared to 39 percent of those without children and 25 percent of those with adult children. 

Medical/Health

A Study Explores Pharmacology of 8 Different Phytocannabinoids - A study evaluated the pharmacology of THC, THCa, THCV, CBD, CBDa, CBDV, CBG and CBC to better understand the therapeutic potential and utility of these phytocannabinoids. The resulting data, together with previous studies, indicate, among other findings, that THCa may mediate neuroprotective and anti-inflammatory actions when administered in sufficiently high concentrations and in the absence of other cannabinoids.

Vaping-Related Lung Illnesses Remain a Risk But No Cases Traced to Legal Products - Vaping-related lung illnesses continue to emerge but cases were substantially lower in states where cannabis was legally available and no case has been traced to a legal product.

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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