Cannabis Group Weekly Alert - February 2020 #2

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In this week’s edition:

  • Unverified US government document discusses pros and cons of UN reforms
  • Connecticut lawmakers file the Governor’s Bill for adult use
  • USDA claims it is legally unable to raise hemp THC limits
  • USDA announces more insurance programs for qualifying hemp farmers
  • Shakeups and layoffs continue at prominent cannabis companies
  • And more…

Federal

Joe Biden’s New Marijuana Comment ‘A Big Nothing,’ Says Advocate Who Spoke To Him - Walking back earlier comments about cannabis being a “gateway drug,” former Vice President Joe Biden (D), a candidate for the 2020 Democratic presidential nomination, said that cannabis is “at the point where it has to be basically legalized,” but added that he’s “not prepared to do it as long as there’s serious medical people saying we should determine what other side effects would occur.”

The Feds Are Worried International Marijuana Rescheduling Could Boost Legalization Efforts - In a an unverified US government document obtained and published by wire service Marijuana Moment, the government expresses concern that an upcoming United Nations vote to reschedule cannabis internationally, which could come as early as next month, could boost legalization efforts.  The document, titled “Handout for External Use: Possible Responses to WHO/ECDD Cannabis Scheduling Recommendations,” suggests that, alternatively, the UN could clarify that the inclusion of cannabis on Schedule IV (the most restrictive category in the international treaty) should not be an impediment to country’s allowing research efforts into the plant.  Industry activists have noted the hypocrisy of this position, given that the DOJ has cited its treaty obligations when rejecting requests to reschedule cannabis or expand the number of authorized cannabis manufacturers for research purposes in the past.  Additionally, the document criticizes a motion to footnote Schedule I to state that CBD preparations with less than 0.2 percent THC are not controlled substances, claiming that “there are not ‘pure’ preparations that can guarantee the absences of psychoactive components.”  Despite this, the same document also states that “[t]he default assumption is and should be that non-psychoactive substances are not under international control.”  Note, however, that Marijuana Moment was unable to independently verify the document, and calls to the State Department for comment were not returned. Read the entire document here.

States

CO - Gov. Jared Polis (D) and the Colorado Department of Regulatory Agencies announced a new plan to help financial service providers that work, or want to work, with cannabis-related businesses. Read the plan here.

CT - Connecticut’s Senate president and House speaker filed Gov. Ned Lamont’s (D) new cannabis legalization bill, which would allow adults 21 and older to possess and purchase up to one and a half ounces of cannabis from a licensed retailer, and has provisions for social equity measures.  Leading lawmakers in Connecticut said last month that they’re prioritizing legalization as part of the legislature’s 2020 agenda.

FL - The Florida Supreme Court scheduled oral arguments for April 22, 2020, in Florida Department of Health v. Florigrown LLC, a case challenging the state’s requirement that medical cannabis businesses be vertically integrated.

VT - On Wednesday, the House Ways and Means Committee voted 7-3 to advance a retail cannabis bill with a 20 percent tax on all sales.  Based on those figures, the state could expect annual revenues of anywhere from $9.1 million to $17.7 million once it is five years into the market, according to the Vermont Joint Fiscal Office.  However, the change also removed any right of localities to impose their own taxes, a move that is already being criticized by the Vermont League of Cities and Towns.

Hemp/CBD

Federal - The US Department of Agriculture stated that it cannot change the THC threshold for defining a legal hemp crop or the testing method used to reach that threshold.  However, the administrator of the USDA’s Agricultural Marketing Service signaled that the department may be open to changing the rules around (1) which parts of the hemp plant can be used for sampling, (2) the time frame within which testing needs to occur and (3) what happens to crops testing above the 0.3 percent limit.  Officials also announced that before issuing final regulations they will be opening a second public comment period following the 2020 harvest season to solicit more input on the current interim final rule.

Federal - The US Department of Agriculture announced that hemp farmers are eligible for two more crop insurance programs.  The first pilot program, multi-peril crop insurance (MCPI), will be available for farmers in select counties in 21 states for the 2020 crop season. It provides coverage for crop losses attributed to weather, fire, disease and other natural events.  If no permanent federal insurance option is available, hemp farmers have a second option: They can apply to the USDA’s Farm Service Agency’s Noninsured Crop Disaster Assistance Program (NAP), which will also cover losses for hemp grown for fiber, grain, seed or CBD for the 2020 season.  For more about who qualifies for these programs, read the press release here.

CA - Mendocino County extended by 12 months a temporary moratorium on the cultivation of industrial hemp in unincorporated areas, as it continues its consideration of new hemp regulations.

International

Australia - The Australian government held public consultations on a proposal to implement a single medical cannabis license for producers that experts say would address lengthy delays and disproportionate levels of paperwork facing businesses.  Under the current process, three different licenses can be granted. The proposed new system would cut that to a single license flexible enough to apply to multiple sites.

Panama - Lawmakers pushed forward medical cannabis legislation under which the Ministry of Health (MINSA) would be responsible for the licensing of entities seeking to import, acquire or commercialize cannabis.  Cannabis cultivation would not be allowed in the country.  The bill (in Spanish) can be found here.

Business

Aurora Cannabis Inc. - Company founder Terry Booth announced last week that he is stepping down from his position as CEO. Executive Chairman Michael Singer has been appointed to serve as interim CEO.  Additionally, the Edmonton, CA-based company is laying off close to 500 full-time equivalent staff, including approximately 25 percent of corporate positions.

Caliva - The San Jose-based, Jay-Z-backed cannabis brand announced that it is laying off 200 employees and ending its partnership with cannabis technology company Eaze when its current contract expires in March.  Caliva is not the only prominent cannabis company to shed employees in recent weeks.  Leafly, a cannabis media and information site, cut 54 employees, or 18 percent of its workforce, last week; and retailer MedMen—contending with a slumping stock price and layoffs of its own—announced the departure of its co-founder and CEO, Adam Bierman, in January.

GenCanna Global USA, Inc. – Kentucky-based GenCanna, a large, vertically integrated agriculture-technology company specializing in the production of hemp rich in CBD, filed for voluntary Chapter 11 reorganization with the US Bankruptcy Court.

Medical/ Health

Worker’s Compensation - Legalizing access to medical cannabis may lead to fewer, and modestly lower, workers’ compensation claims, a study published in Health Economics suggests.

Psychedelics

Research - The psychedelic experience is associated with persisting reductions in cannabis, opioid and stimulant use, according to new research published in Frontiers in Psychiatry.  However, these results are based on self-reported behaviors.  While these cross-sectional and self-report methods cannot determine whether psychedelics caused changes in drug use, results suggest the potential that psychedelics cause reductions in problematic substance use, and support additional clinical research on psychedelic-assisted treatment for substance use disorder.  Read the study here.

Dentons

Article: Eric Berlin was quoted in a Benzinga article entitled “A Snapshot Of America’s Medical Marijuana Markets: Illinois. Eric provided commentary on the state of the state’s medical cannabis market.

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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