Cannabis Client Alert - Week of September 21, 2020

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In this week’s edition:

  • House postpones vote on legalization bill until after election
  • California legislation ensures no cannabis tax increases for 2021
  • Illinois license applications to be re-graded prior to lottery
  • Pennsylvania high court considers whether license applications are open to the public
  • EU moves to ban foods with CBD derived from flower
  • New studies on colon cancer and sleep
  • And more…

Federal

House Postpones Vote on Legalization Bill Until After Election - A voice vote in the House of Representatives on the MORE Act that was planned for September has been postponed until “later this autumn,” according to Majority Leader Steny Hoyer (D-MD). Concerns about first voting on a pandemic relief measure, as well as potentially waiting for the election, likely contributed to the delay. Although a vote is off the calendar at this time, Hoyer stated that the House is “committed” to passing the bill, which has one Republican co-sponsor and the support pf some additional GOP members, in addition to Democratic support.

States

CA - California Governor Gavin Newsom, a Democrat, signed into law a budget bill, AB 1872, which carries no tax increases for 2021. The Governor’s 2020-21 budget prioritized cannabis “tax reform,” seeking to “simplify the system.” The tax certainty is at least some consolation for cannabis businesses, which are generally not eligible for assistance from the Paycheck Protection Program and other pandemic relief measures. 

IL - Illinois’ monthly cannabis sales reached a record-breaking nearly $64 million in August. Out-of-state visitors accounted for more than $17 million. Of the $52 million in cannabis tax revenue collected during the first six months of sales, 25 percent will go towards a social equity program to reinvest in communities impacted by the War on Drugs.

IL - Applicants for Illinois’ recent cannabis business licenses will have a chance to revise their applications and then have them re-scored, according to an announcement from Governor J.B. Pritzker (D). Some applicants complained, for example, that they received different scores on identical parts of their applications in different regions. Under the new procedure, any applicant who did not get a perfect score will receive a notice of deficiencies, and a score sheet, and may re-submit for re-evaluation. Subsequently, those with perfect scores will proceed to a lottery that will ultimately award the licenses. In order to obtain a perfect score, applicants must include ownership by both a veteran and a social equity applicant.

IA - Iowa awarded two additional medical cannabis dispensary licenses, for a total of five dispensaries. The new licenses were awarded to Iowa Cannabis Company East in Iowa City and Cannabis Patient Network in Council Bluffs.  The state also announced it will be accepting applications for one cultivator/processor license, after the prior operator (Acreage Holdings) dropped out of the Iowa market.

MI - Michigan issued a product recall of certain cannabis flower products that failed compliance testing relating to yeast and mold. The products passed standards for the adult-use market, but not for the medical market. Patients and caregivers are encouraged to report adverse product reactions to MRA-Enforcement@michigan.gov.

MS - Mississippi Agriculture Commissioner Andy Gipson (R), recently spoke out against Initiative 65, a medical cannabis measure that will be on the state’s November ballot. Gipson objects because the constitutional amendment would give complete control over medical cannabis to the state Department of Health and because the measure does not address cannabis cultivation, among other concerns.

MO - Missouri regulators have spent $1.3 million in court fees defending against more than 800 appeals filed by businesses whose applications for licenses were rejected. Some applicants allege that their answers were identical to those of applicants that received higher scores. Meanwhile $19 million was generated in business application and medical card fees as of December 2019. After costs, the funds remaining are supposed to go to the Missouri Veterans Commission. Missouri’s medical cannabis sales are scheduled to begin in September.

NJ - A federal judge in New Jersey dismissed the disability bias lawsuit brought by a nurse who was fired after a positive drug test. The nurse alleged that the hospital had violated New Jersey discrimination law and the state’s Family Medical Leave Act because the drug use (cannabis, and the opiate addiction therapy drug Suboxone) allegedly stemmed from mental health conditions and addiction. However, the judge noted that the nurse reported to work under the influence, before notifying the hospital of any medical issues. 

PA - Dentons attorney Cliff Levine argued before the Pennsylvania Supreme Court, on behalf of medical cannabis license applicants, on whether such applications should be open to the public. In particular, Dentons argued that certain financial records should be confidential, or at least subject to review by the Pennsylvania Office of Open Records prior to release. On a separate matter, the court recently ruled that rejected applicants have the right to see the regulators’ scores of their applications.

TX - The Texas Agriculture Commissioner Sid Miller stated that he supports expanding medical cannabis permitted uses, including for “a toothache,” stating, “If it’ll help somebody, I’m for it. Whatever it is.” Miller is a Republican elected official. Texas limits THC potency to no more than 0.5 percent, among the lowest in the country; high-THC cannabis in other states is typically around 20 percent THC.

WV - West Virginia plans to issue its first ten medical cannabis cultivation permits some time in the week of September 20, according to the state’s Office of Medical Cannabis. Permit recipients must take action within six months or risk losing it, and selling the permit is also forbidden.  The Office plans to have dispensaries open in late Spring of 2021.

Hemp / CBD

U.S. Department of Agriculture - The USDA approved hemp regulatory plans for Utah and the Torres Martinez Desert Cahuilla Indians, an American Indian tribe located in California, bringing to 60 the number of state, territory and tribal hemp proposals that federal officials have signed off on.

International

Barbados - Possession of half an ounce or less of cannabis in Barbados will result in only a ticket and a $200 fine, without arrest, court appearance or a resulting criminal record, according to a speech delivered by Governor General Dame Sandra Mason. The Governor General noted that the pursuing matters of small possession was “a waste of police and court time,” and needlessly harmed individuals’ job opportunities. 

European Union - CBD food products derived from the top of the plant will not comply with the EU’s “novel foods regulation,” according to an initial ruling. The ruling states that CBD, when extracted from the flowering top of a hemp plant, is not a food ingredient, but a narcotic. A final decision is expected in the fall. Some advocates predict that this may push investors in search of more regulatory certainty from the EU to the UK. 

France - A parliamentary committee in France recently acted in support of medical cannabis, requesting a budget to implement some kind of experiment on medical application of the plant. France technical approved such an experiment a year ago, with support from the National Agency for the Safety of Medicines and Health Products (ANSM), but did not take further action. 

Paraguay - Citing its “health and legal implications,” Paraguay President Mario Abdo Benitez vetoed a cannabis decriminalization bill.

Medical / Health

Colon Cancer - A study of mice found that those injected with THC were less likely than those in the control group to develop colon cancer, likely by reducing inflammation. Researchers hope the results may lead to treatments for other diseases of chronic inflammation, such as ulcerative colitis and Chron’s disease, an inflammatory bowel disease. The study was performed by the University of South Carolina and published in the journal iScience.

Sleep - Cannabis use is associated with greater total sleep time in middle-aged and older adults, according to a preliminary, two-week study of 17 participants. Comparing sleep quality on days with and without cannabis use, cannabis use was not related to changes in sleep efficiency or sleep fragmentation.

Sickle Cell Diseases - Patients with sickle cell diseases who obtained medical cannabis for pain were found to have fewer hospitalizations, compared to those who did not (including those who likely were using cannabis without medical certification), according to an NIH-funded study by the National Heart, Lung, and Blood Institute. Over a six-month period, most medical cannabis patients reduced their hospital admissions by at least one visit. The study was published in the journal Blood Advances.

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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