Cannabis Client Alert - Week of November 29, 2021

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In this week’s edition:

  • Bipartisan efforts to include SAFE Banking Act in the 2022 National Defense Authorization Act
  • Three parties likely to form Germany’s next governing coalition agree to legalize the sale of recreational cannabis
  • Illinois court holds that cannabis odor is not valid probable cause for searches
  • South Dakota Supreme Court upholds nullification of voter-approved legalization ballot initiative
  • And more…

FEDERAL

Rosen Leads Bipartisan Effort to Ensure SAFE Banking Act Included in NDAA - US Senator Jacky Rosen (D-NV) spearheaded a bipartisan letter from the Senate Armed Services Committee members urging leaders of the congressional Armed Services Committees to retain the Secure and Fair Enforcement (SAFE) Banking Act in the final conference version of the National Defense Authorization Act (NDAA) for fiscal year 2022. The SAFE Banking Act would allow banking access (including basic services and products, such as depository and checking accounts, credit cards and checks, currently restricted by federal law) to licensed cannabis businesses operating in states that have legalized the sale of cannabis.

Cannabis Bust on Indigenous Land Highlights Legal Divide - A federal raid on a home cannabis garden on tribal land in northern New Mexico is raising questions about US drug enforcement priorities on Native American reservations. After initially legalizing medical cannabis in 2007, New Mexico this past June legalized adult-use cannabis, permitting up to a dozen home-grown plants per household for personal use. In a recent letter to Picuris Pueblo Tribal Gov. Craig Quanchello, a BIA special agent wrote, “The BIA Office of Justice Services is obligated to enforce federal law and does not instruct its officers to disregard violations of federal law in Indian Country.”

Marijuana Legalization Attitudes Vary Significantly Within Partisan Coalitions, Pew Survey Shows - A newly released survey from the Pew Research Center shows significant intraparty divergences in how Democrats and Republicans view the issue of legalizing cannabis for recreational use.

STATES

AZ - A local civil rights branch and consulting company have joined as plaintiffs to a lawsuit against the State of Arizona complaining that the state’s social equity program has failed to meet the standards called for under Proposition 207, the ballot initiative passed by voters to legalize cannabis statewide.

CA - The California Department of Tax and Fee Administration published a special notice overviewing the cannabis cultivation tax and markup rates effective January 1, 2022.

IL - An Illinois judge ruled that the odor of raw cannabis is not sufficient grounds to establish probable cause for police officers to conduct vehicular searches without a warrant during a traffic stop.

IA - The Iowa Department of Public Health published an updated overview of various metrics for its medical cannabidiol program, including the number of healthcare practitioners certifying patients, active patient and caregiver registration cards, designated caregivers and dispensary sales.

MI - In response to a recall for allegedly producing unreliable results, Michigan-based cannabis testing labs Viridis Laboratories and Viridis North have filed a lawsuit against the Michigan Marijuana Regulatory Agency, its director and employees. In the complaint filed in the Michigan Court of Claims, the labs argue that “[t]here is no public or safety risk justifying the recall at all.”

MT - The Montana Department of Revenue plans to strike proposed rules implementing the state’s recreational cannabis program in response to criticism from members of the public, the cannabis industry and legislators. The first rule would have banned cannabis dispensaries from selling CBD products, while the second would have potentially restricted individuals with criminal records from employment opportunities in dispensaries.

NM - A former Colorado lobbyist with ties to the cannabis industry has been selected to head New Mexico’s new Cannabis Control Division as director. The division was created as part of the state Regulation and Licensing Department and tasked with developing the framework for New Mexico’s recreational cannabis industry.

NY - The New York Metropolitan Transit Authority published updates to its advertising policies that now include a ban on cannabis product ads on subways and buses. According to minutes from a November MTA board meeting, the new policy is a response to “recent developments in the decriminalization of cannabis in New York.”

OH - A spokesperson for the Coalition to Regulate Marijuana Like Alcohol (CTRMLA), an Ohio organization spearheading the state’s cannabis legalization ballot proposal, believes the group will collect enough signatures to force the state legislature to consider legalization.

OH - Ohio senators filed legislation that would significantly overhaul the state’s medical cannabis system. Among other things, the proposed legislation would expand access to medical cannabis where a physician “reasonably” believes medical cannabis would provide relief to symptoms or other otherwise benefit the patient.

OR - Oregon state police claim to have seized half a million pounds of processed cannabis estimated to be worth $500 million. According to a statement by state police, the seizure was the result of a warrant served on five industrial-sized warehouses zoned for commercial use in White City.

PA - The Pennsylvania Department of Health ordered a statewide secondary review of vaporized cannabis products in an effort to ensure that the permitted growers and processors of these products “are not using additives that are not safe for inhalation.”

SD - The South Dakota Supreme Court upheld a lower court's decision to nullify amendments to the state's constitution approved by voters in a 2020 ballot initiative that would have legalized the use of recreational cannabis.

HEMP/CBD

FDA Doubles Down on Rejecting Over-the-Counter CBD Without More Study - Grail Sipes, acting cannabis-product committee chair of the US Food and Drug Administration (FDA), reiterated the agency’s position that it will require further CBD research and safety data before the chemical may be considered for uses beyond prescription drugs, including as a food additive or dietary supplement.

Rhode Island Hemp-Derived Consumable CBD - Rhode Island’s Department of Business Regulation published a “Checklist” targeted toward retailers currently seeking or intending to sell hemp-derived consumable CBD products. The related application for licensure is available online at the Office of Cannabis Regulation's website.

INTERNATIONAL

Germany - The three parties likely to form Germany’s next governing coalition, the Social Democrats, the Greens and the liberal Free Democrats, have agreed to legalize the sale of recreational cannabis. Plans proposed by the three parties also include the expansion of drug-checking models and the tightening of regulations on the marketing and sponsorship of certain drugs, including nicotine and alcohol.

India - The Narendra Modi government is working toward decriminalizing personal use of small quantities of drugs, including cannabis, narcotics and psychotropic substances. Proposals made by the Ministry of Social Justice include replacing terms in the law like “addict” with “person with substance use disorder” and requiring mandatory medical treatment for persons involved with small quantities of substances.

BUSINESS

Legalization of Recreational Cannabis: Facilitators and Barriers to Switching From an Illegal to a Legal Source - A study explored facilitators and barriers relating to the persistence of black markets for cannabis in places where recreational cannabis has been legalized. Among other things, the study investigated as factors affecting the decision of users to transition from illicit to licit cannabis sources considerations of safety, legality, accessibility, product diversity, price, regulation and loyalty to suppliers.

MEDICAL/HEALTH

Are Blood and Oral Fluid Δ9-tetrahydrocannabinol (THC) and Metabolite Concentrations Related to Impairment? A Meta-regression Analysis - A study concluded that (i) while there is some association between THC-related biomarkers and impairment in occasional cannabis users, such relationships were generally weak; and (ii) blood and oral fluid THC concentrations are relatively poor indicators of cannabis/THC-induced impairment.

Discovery of new compounds solves mystery of cannabis’ pungent smell - A new study explored the chemical origins of cannabis’ unique “skunk-like” aroma, revealing links between the pungent smell and a new family of volatile sulfur compounds chemically similar to those found in hops and garlic.

DENTONS SPEAKS

Bloomberg’s Cannabis “Quote of Week” - Dentons’ partner Eric Berlin was featured in Bloomberg’s cannabis “Quote of Week,” commenting on the subject of federal legalization efforts in the legislature. “The dueling bills will be this Republican Mace bill and the Booker-Schumer-Wyden bill,” Berlin said. “Neither has a clean path forward going into the midterm elections. I do believe that Mace’s bill provides a pathway eventually for a unified bipartisan bill where there’s sufficient agreement on everything.”

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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