Cannabis Group Weekly Alert - Week of August 3, 2020

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In this week’s edition:

  • House extends protection for states by blocking DOJ action in states that have approved medical or recreational cannabis
  • Cannabis sales continue to set records in Illinois
  • New Jersey residents overwhelmingly support legalization on the upcoming ballot
  • The Navy extended its ban on hemp-derived products to include lotions, soap and other topical applications

Federal

Protecting states from federal interference: By a vote of 254-163, the House of Representatives approved an amendment to its annual funding laws to block the Department of Justice from interfering with all state, territory and tribal cannabis laws. The amendment builds off a long-standing restriction on the DOJ from interfering with state medical cannabis laws by extending the restriction to all state cannabis laws, medical and recreational. The Senate does not plan to take up the spending bills until later this year.

Federal bill to legalize marijuana: Minnesota Senator Tina Smith (D) introduced S.4386, the Substance Regulation and Safety Act of 2020, to end the federal prohibition on cannabis and establish a federal regulatory system to protect public health and safety. Sen. Smith is running for reelection in November. Her likely opponent is former Representative Jason Lewis (R), a long-time supporter of state authority to legalize cannabis.

States

CA: California State Attorney General Xavier Becerra (D) filed a brief asking a federal court to block a Drug Enforcement Administration subpoena seeking to force state regulators to hand over information about cannabis businesses. Becerra’s brief questions the relevance of the subpoenaed records to the DEA investigation, stating that the information is part of an ongoing state investigation and is confidential and protected as trade secret and California privacy laws.

IL: Cannabis sales in Illinois set another record in July with more than $61 million in sales, up from June’s record-setting $47 million.  In-state buyers accounted for almost $45 million in sales while out-of-state purchasers spent $16 million.

IL: Despite the state having paid accounting and consulting firm KPMG $6.7 million to help it award cannabis licenses, applicants may still be looking at a two-month wait to get a license. The state attributes the delay to difficulties arising from the coronavirus pandemic.

MN: Effective August 1, 2020, chronic pain is a qualifying condition for medical cannabis in the state of Minnesota.

NJ: A recent poll found that 68 percent of New Jersey likely voters support the cannabis legalization referendum that the state’s lawmakers passed for the November 2020 ballot. They also back cannabis delivery services, social consumption lounges and expunging past convictions. The legalization question moved to the ballot after state legislators failed to pass a legalization measure last year.

NY: A study of arrest records in Albany, NY, showed that of 134 arrests and citations given to individuals for cannabis possession, 130 went to blacks and four to whites. The Chief of the Albany Police Department last year vowed to review racial disparities in cannabis enforcement. Albany Mayor Kathy Sheehan now plans an investigation into the matter.

Territories

Northern Mariana Islands: As of August 4, 2020, regulators in the commonwealth began accepting cannabis business license applications.

Hemp/CBD

Navy Secretary Kenneth J. Braithwaite issued a memo banning reservists and active duty members from using hemp soaps, shampoos and lotions as part of a broader prohibition on legal hemp and CBD products. The clarification comes days after an amendment was approved in the House of Representatives allowing members of the military to use and consume hemp products.

Oregon Senators Ron Wyden (D) and Jeff Merkley (D) penned a letter to the US Department of Agriculture (USDA) expressing concern over proposed regulations requiring that hemp be tested in Drug Enforcement Administration approved labs and that law enforcement be involved in the disposal of hemp that contains excess THC. The senators also called on the USDA to expand the testing window prior to harvest to 28 days from 15 days; revise requirements so that farmers only have to test for delta-9-THC rather than total THC; and increase the threshold for what’s considered excess THC from 0.5 percent to over 1 percent.

International

Netherlands regulators received 149 applications to grow legal recreational cannabis to supply coffee shops in 10 cities. Of the qualifying applications, regulators intend to “draw” 10 applicants to begin selling in coffee shops in 2021.

St. Lucia's government has begun the drafting process to develop legislation to legalize cannabis. 

Business

Aphria Inc. reported quarterly net revenue of $152.2 million in the fourth quarter—an increase of 18 percent over the previous year quarter and an increase of 5 percent over the prior quarter—and a net loss of $98.8 million.

The Scotts Miracle-Gro Company reported $303 million in quarterly revenue for its cannabis-focused Hawthorne unit, an increase of 72 percent over last year. 

Medical/Health

In the first randomized clinical trial of cannabidiol for cannabis use disorder, 400 mg and 800 mg of cannabidiol were found to be safe and more efficacious than a placebo at reducing cannabis use.

The International Society for Sexual Medicine reported on a study of female users that found a correlation between increased cannabis use and improved sexual functioning.

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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