Dentons

In this week’s edition:

  • Federal legalization bill released in Senate
  • FBI relaxes cannabis use rules for job applicants
  • Nevada MMA Commission will no longer punish athletes’ use or possession of cannabis
  • Direct-to-consumer sales and consumption spaces on the rise
  • Apple policy change allows cannabis delivery app
  • And more…

Federal

Federal Legalization Bill Released in Senate - Senators Chuck Schumer (D-NY), Cory Booker (D-NJ), and Ron Wyden (D-OR) released a discussion draft of the Cannabis Administration and Opportunity Act, which would remove cannabis from the federal list of controlled substances and allow states to implement their own cannabis laws. The Senators’ reader-friendly discussion guide is here; the bill text itself is here. The bill provides a comprehensive federal solution for cannabis by creating a framework for regulating and taxing state-legal sales and addressing social equity and justice goals. It also proposes some legislative fixes for hemp and CBD. The draft is intended to spur discussion and inform the final bill. The sponsoring senators request comments from stakeholders and the public on a number of specific topics. Stakeholders are encouraged to submit comments in writing by September 1 to Cannabis_Reform@finance.senate.gov. Contact Eric Berlin if you’d like to arrange a call to discuss the bill further.

FBI Relaxes Policy on Cannabis Use for Job Applicants - The FBI recently revised its website guidance for job applicants regarding past cannabis use, shortening the time frame that would automatically disqualify would-be FBI agents to one year from three. Candidates may not have used cannabis in any form or in “any location (domestic or foreign)” within the year preceding the date of their application. Another revision states that cannabis use before the applicant’s 18th birthday does not disqualify the applicant. However, cannabis use could still disqualify an applicant, depending on the circumstances, as could any dishonest statements on the application.

States

CA - Several cannabis manufacturers have begun direct-to-consumer sales in California, bypassing brick-and-mortar retail shops. Kiva Confections, CannaCraft, Cann Social Tonic, Old Pal and Roach are each reportedly offering online sales, delivered through licensed service providers such as Grass Door. Commenters note that this can provide more choices for consumers seeking products not carried by their local retailer, while also enabling brands to collect and retain consumer data for business and product development. 

CA - The Los Angeles County Sherriff’s Department announced the seizure of 16 tons of cannabis from illegal grows in the Antelope Valley. According to the video announcement, the $1.2 billion seizure, with 131 arrests, was the largest in the department’s history. Officials described a wide-ranging problem with armed cartels running massive illegal grows, resulting in murders, violence and the theft of millions of gallons of water a day, causing harm to farmers and residents in the area.

CO - A 19-year old medical cannabis patient with epilepsy has filed a lawsuit in response to Colorado’s new limits on cannabis concentrates. House Bill 1317, signed by Governor Jared Polis (D) on June 24, limits the amount of concentrate that medical cannabis patients can buy each day, requires doctors to recommend a maximum THC potency and allows the state to track purchases for that purpose. The lawsuit alleges that the law violates the plaintiff’s constitutional right to privacy, could have a chilling effect on physician recommendations, and puts patients at greater risk with federal law enforcement.

GA - The Georgia Access to Medical Cannabis Commission moved closer to issuing medical cultivation licenses, voting on July 7 to finalize applicants’ scores. But the Commission stopped short of awarding any licenses, which it had previously promised to do by June 30. Nearly 70 companies have applied for a total of 6 licenses.

IL - A cannabis consumption space is set to open in Sesser, IL, a small town hoping to grow its tourism industry. The Luna Lounge will be the state’s first cannabis-only consumption area. (A tobacco hookah lounge in DeKalb, IL—Aroma’s Hookah Bar—recently began allowing cannabis consumption). Neither business is a dispensary, so customers must bring their own stash and affirm it was obtained legally. State law allows local governments to authorize cannabis smoking lounges for adults, but does not otherwise regulate consumption spaces directly.

IN - Indiana laws on driving under the influence (DUI) recently changed with regard to cannabis testing. The change is meant to avoid creating DUI charges for drivers who test positive for cannabis use but were not under the influence while driving. After any serious crash, drivers must submit a blood test. The new law sets a guideline on the level of cannabis traces that can be found without leading to a DUI charge, assuming no other evidence indicated the driver was under the influence of cannabis.

NV - The Nevada Athletic Commission, which manages mixed martial arts (MMA) and boxing sports, amended its anti-doping policy so that use or possession of cannabis will no longer be punished, unless athletes show up to their fight visibly intoxicated. A memo from the State Attorney General’s office in response to a Commission inquiry about whether it could amend the policy, noted that cannabis is legal in the state, stating, “There is no longer a basis under Nevada criminal law to prohibit an unarmed combatant for [sic] using or possessing cannabis.”

RI - Cannabis legalization in Rhode Island is “inevitable” and bound to happen “soon,” according to a comment by state Speaker of the House Joseph Shekarchi (D). “If we can reach a consensus with the Senate and the governor’s office on marijuana, we’d certainly come back in the fall to address that issue,” he said in a local news interview. As part of any legalization, the state will have to decide whether to regulate cannabis under the existing Department of Business Regulation or an independent commission, among other things.

SD - Four separate ballot initiatives for cannabis legalization have been filed by activists in South Dakota. Last November, the state’s voters passed Amendment A, a legalization measure, but it was nullified by a court in February, and is now pending before the state Supreme Court. In a coordinated response, South Dakotans for Better Marijuana Laws have filed paperwork for various similar initiatives, including a fifth that would address the “single-subject rule” that was the basis for striking the November initiative.

International

UK Agency Fails to Meet Novel Food List Deadline for CBD - For the third time this year, the UK’s Food Standards Agency (FSA) has failed to provide the Novel Food Public List of Validated CBD applications without any further updates. The FSA appears to be delayed by the volume of incomplete applications, while some industry leaders have explained there is also an issue with certain applicants providing false documentation. Until the list is produced, the CBD industry in the UK is somewhat in limbo.

Cannabis-Growing Gains Momentum in Zimbabwe - Africa’s largest tobacco producer is promoting cannabis as a new cash crop, partly due to a decline in tobacco demand, which is likely the result of anti-smoking campaigns. The recent elimination of a sole-state-ownership rule for cannabis farming has encouraged a number of domestic and international investors, as well as farmers in Zimbabwe, to work with both cannabis and hemp.

Business

BioHarvest Sciences Shortens Cannabis Production Cycle - BioHarvest Sciences Inc. announced a milestone achievement in the production of cannabinoids. New technology has allowed the company to harvest from 13 to 17 cycles per year, as opposed to the average 4 cycles a year for conventional cultivation. The technology also allows the cannabis flower to remain in the flowering stage continuously for two years, in contrast to a typical cannabis flower that will terminate after 9 to 10 weeks. BioHarvest plans to commercialize the product in the first half of 2022.

Apple's First Full Scale Cannabis Delivery App Launches with Eaze - Due to a recent Apple policy change, cannabis delivery company Eaze has announced that consumers can now shop and pay for cannabis products with a streamlined iPhone application, as an alternative to using the mobile browser. While Apple’s App Store now permits the use of cannabis applications, Google’s Android App Hub still explicitly prohibits programs affiliated with cannabis, regardless of legal jurisdiction.

Medical/Health

Athletic Performance - A New York Times article that examined the research on cannabis and athletic performance found that the evidence that cannabis enhances performance is “inconclusive at best.” The inquiry follows news of Sha’Carri Richardson’s Olympic dismissal due to cannabis use. The Times also found that the World Anti-Doping Agency (WADA), upon which the US Olympic Committee relies for its policy, “overstated anecdotal and speculative evidence.” WADA’s 2011 paper justifying the policy, for example, misstates the conclusions of two cited studies that found cannabis to worsen performance, rather than improve it. WADA, on the other hand, has stated that it is the US that has consistently advocated to keep cannabis on the prohibited list.

Teen Use and Neurocognitive Ability - A longitudinal study of 804 adolescents from ages 14 to 19 suggests that decision-making skills, measured over the long term, are not impaired when (i) cannabis is used in moderation and (ii) the onset of use occurs after the age of 15. The study, published in the journal Cognitive Development, found no evidence that light cannabis consumption in older teens leads to decline in neurocognitive ability.

Dentons Speaks

Cannabis in the Midwest - Earlier this week, industry experts Benzinga, MGO, BDSA and Dentons discussed the Midwest cannabis landscape and considerations for successful growth. Topics included: “How Chicago became a cannabis capital,” “Data-driven insights and consumer behavior” and “Optimizing operational strategies in anticipation of future interstate commerce.” A link to the recording is here.

Legalization and Regulation of Cannabis in the US - Also this week, in a Citi Innovation Insights webinar, Dentons Partner Eric Berlin and Adam Spielman of Citi Global Insight examined the future of legalization. Eric and Adam discussed how and when the industry may be legalized at the federal level, how regulation might work, and what the consequences are likely to be. A recording will be available next week.

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