Cannabis Group Weekly Alert - December 2019 #2



In this week’s edition:

  • Members of the Dentons US and Global Cannabis Group will attend MJBizCon in Las Vegas.
  • In the wake of the FDA’s recent warning letters and consumer update on CBD, several class actions have been filed against CBD companies claiming their products were being illegally marketed and sold.
  • The US Departments of Agriculture and Justice are developing an information sharing system meant to expedite hemp shipments across state lines.
  • And more…


The National Center for Complementary and Integrative Health (NCCIH) published a fact sheet on cannabis and cannabinoids.  The fact sheet provides general information about cannabis and cannabinoids and highlights several NCCIH-funded studies that are designed, in part, to strengthen the evidence regarding cannabis components (including minor cannabinoids and terpenes) and whether they have potential roles in pain management.


Arkansas regulators are giving medical cannabis dispensaries until the middle of 2020 to open or risk losing their licenses. The state's first dispensary opened in early May, and eleven are now operating. Since May, they have sold more than $21.35 million of cannabis and cannabis products. However, densely populated portions of the state remain without a dispensary despite the state beginning issuance of licenses in January of this year.

In California, Chanel and other "luxury" retailers are trying to prevent a Have a Heart cannabis dispensary from opening in San Francisco’s Union Square, arguing that it would tarnish the district’s reputation as San Francisco’s epicenter of opulence. The United Food and Commercial Workers labor union, which has unionized workforces at other Have A Heart locations, picketed Chanel on Thursday to support the dispensary and the jobs it could provide.

On December 5, the Maine Office of Marijuana Policy (OMP) announced that applications for cultivation, manufacturing and retail business licenses are now available. Maine’s adult-use cannabis licensure process involves three steps before a facility may operate: conditional licensure, local authorization, and active licensure. Applications are available through the OMP website.

Massachusetts health officials disclosed that six persons with “probable” (but unconfirmed) cases of vaping-related lung injuries reported using cannabis products purchased from state-licensed businesses. The officials “declined to say which licensed producers, products and retailers were implicated.” These patients represent a small fraction of the probable and confirmed cases of vaping-related lung illnesses in Massachusetts, but this marks the first time state authorities have explicitly linked the lung illnesses to product purchased at state-licensed businesses.

Michigan retailers sold roughly $221,000 worth of recreational marijuana products in the first day of legal sales, an incredibly lucrative first day for the four retailers.

The Minnesota Department of Health (MDH) added chronic pain and age-related macular degeneration as new qualifying conditions for the state’s medical cannabis program. The new conditions will take effect August 2020. MDH also approved two new delivery options for patients: water-soluble cannabinoid multi-particulates and orally dissolvable products.

The Missouri Department of Health and Senior Services announced they will issue medical cannabis dispensary licenses on or around January 24, 2020. Each facility application will be approved or denied within 150 days of the date on which the application was considered complete.


In the wake of the FDA’s recent warning letters and consumer update on CBD (as reported here), consumers have filed putative class actions against CBD companies, including Koi CBD, Charlotte’s Web Holdings Inc.  and CV Sciences Inc., claiming, among other things, that the companies intentionally marketed their CBD products as legal (i.e., dietary supplements) under California law, when, the products are illegal under the Federal Food Drug and Cosmetic Act (FDCA). The consumers assert that had they known that the products were illegal, they would not have purchased them. 

The US Departments of Agriculture and Justice are developing an information-sharing system meant to expedite hemp shipments across state lines. The system under development would include the licensing information provided to the USDA by approved hemp producers, as well as reports on the sampling and testing of their crops. The goal, according to USDA attorney Mai Dinh, is to allow law enforcement “to tap into the system in real time … and be able to match up whatever certificate is with the shipment with the information that is in the database.”

In Iowa, a CBD retailer was arrested after allegedly selling CBD while unlicensed in the state. The retailer has been charged with two counts of controlled substance violation and unlawful substance tax requirement. After a tip to law enforcement, the Mid-Iowa Narcotics Task Force investigated several businesses, but so far only this one CBD business owner has been arrested.

NASCAR recently announced that it will continue to prohibit sponsorships by CBD companies. The sanctioning body decided against allowing sponsorships to be sold to CBD companies.


Argentina's Ministry of Science and Technology signed an agreement with a local government and a university to research medical cannabis. The Secretary of Science and Technology said, “[i]t is an important project not only from a scientific point of view, but also because of its social impact in terms of job creation and in particular in regional economies.”

Barbados's Senate approved bills allowing medical and sacramental uses of cannabis. The new law covers activities related to cultivation, processing, dispensing and export, and also allows practitioners to prescribe medical cannabis to Barbadians or visitors to the island. The Barbados Medicinal Cannabis Licensing Authority, a newly created agency, is responsible for developing regulations to govern the industry and will regulate the medical cannabis industry, including licensure.

Brazil’s pharmaceutical regulator, Anvisa, approved rules for cannabis-based products, but in a separate vote rejected a proposal to allow domestic cultivation or medical cannabis. Anvisa’s approval of the rules to regulate the medical cannabis market marks a major shift in the country’s view on cannabis. The new rules will soon be published in Brazil’s official gazette and will take effect 90 days after publication.

Ireland regulators approved Aurora Cannabis to sell CBD oil drops under the nation’s Medical Cannabis Access Program for the treatment of spasticity related to multiple sclerosis, chemotherapy-induced nausea and vomiting and treatment-resistant epilepsy. Aurora’s product is only the second product to obtain such authorization under the program.

Jamaica made its first cannabis export to Canada. Global Canna Labs, one of the leading medical cannabis companies operating in the island nation, was responsible for the shipment and expressed to attendees at the recent CanEx Summit that the company is gearing up for further exports to Australia and other countries. Global Canna Labs reported that the export was a “very rigorous and challenging process,” but with the coordination of many individuals in both the private and public sector they got it accomplished.

US Virgin Islands Gov. Albert Bryan Jr. (D) is calling the legislature into special session this month to consider a cannabis legalization bill. If the proposed measure is passed, the Virgin Islands would become the third US territory to legalize cannabis, following Guam and the Commonwealth of the Northern Mariana Islands. Per Gov. Bryan, “This amendment creates a regulated system, enables tourists and increases tax revenue to the government of the Virgin Islands."

New Zealand’s government released a draft cannabis legalization bill ahead of a planned 2020 voter referendum on the issue. The draft bill outlines the basic elements of establishing a regulated adult-use cannabis market. If the legislation is approved by more than 50 percent of the voters, the incoming government would have to enact a law permitting adult-use cannabis.


Cresco Labs Inc., one of the largest vertically integrated multistate operators in the US, entered into an equity distribution agreement with Canaccord Genuity Corp., through which it may sell up to C$55 million worth of subordinate voting shares. Cresco intends to use the net proceeds for a variety of purposes, including to repay outstanding debt, discretionary capital programs and potential future acquisitions. 


The American Journal of Gastroenterology recently published the results of a nationwide study conducted to better understand the relationship between recreational cannabis use and bowel function. The study found that constipation prevalence was lower among those with recent cannabis use compared with those with past/never use.

A study published in Current Pharmaceutical Biotechnology found that "there was a statistically significant reduction in intense pain, sharp pain, cold and itchy sensations in the CBD group when compared to the placebo group." The study consisted of 29 patients with symptomatic peripheral neuropathy; 15 patients were randomized to the CBD group with the treatment product containing 250 mg CBD/3 fl. oz and 14 patients were randomized to the placebo group. The study concluded that  "transdermal application of CBD oil can achieve significant improvement in pain and other disturbing sensations in patients with peripheral neuropathy."

Two recent studies suggest that the use of cannabis is linked to higher risk of stroke and hospitalization for cardiac arrhythmia in young people. The lead of one such study stated “as this was an observational, cross-sectional study with many limitations, our findings should be regarded as hypothesis-generating and need confirmation, preferably from longitudinal studies. However, I don't think we should ignore these findings and marijuana use should be considered a risk factor for stroke.” Both studies were presented at the American Heart Association’s Scientific Sessions held November 14-16.

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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