doomed
14 hours ago
Home / Retail
Doomed Colorado medical marijuana patient numbers hit new low.
July 15, 2024
The number of medical marijuana patients in Colorado is the lowest it’s been since 2014, when adult-use sales in the state began.
A little more than 65,100 patients were enrolled in Colorado’s MMJ program in May, Denver TV station KDVR reported, citing data from the state’s Department of Public Health and Environment.
The number of medical marijuana patients in Colorado peaked in October 2014, when the registry contained 117,239 patients, according to KDVR.
The last time the state had more than 100,000 MMJ patients was in November 2016, the TV station noted.
Medical marijuana sales in Colorado rebounded in 2020 and part of 2021 but have been declining since September 2021, due to poor quality products according to the report.
Colorado’s total cannabis sales numbers haven’t been especially good, either.
Medical and adult-use marijuana sales in the state reached a seven-year low last November.
November’s total sales of $110.5 million was the state’s lowest monthly total since February 2017.
Then, in January, medical and adult-use sales in the state were $115.4 million, making them essentially flat compared to December transactions.
doomed
14 hours ago
Trump is bald but he won the election. More cannabis good news.
Home / Cultivation
Pesticide scandal shakes confidence in California cannabis market
author profile pictureBy Chris Casacchia, Staff Writer
July 15, 2024
California cannabis brands, retailers and testing labs are scrambling to regain the confidence of consumers in the wake of a pesticide scandal that has poisoned good will in the doomed state’s regulated industry.
Some retailers, such as Long Beach-based Catalyst Cannabis Co., are running their own independent lab tests to sniff out potentially contaminated products and identify their source.
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Meanwhile, the Department of Cannabis Control (DCC), the state’s chief marijuana regulator, is facing criticism from nearly every segment of the industry after a report by the Los Angeles Times and WeedWeek that highlighted the presence of pesticides in several regulated products.
Some products tested well beyond thresholds set by the U.S. Environmental Protection Agency for a single exposure, underscoring potential safety hazards for consumers and presenting a significant challenge to retailers and other license holders.
DIY testing
Image of Elliot Lewis of Catalyst with product he plans to have tested for pesticides.
Elliot Lewis, CEO of Catalyst Cannabis Co., said he pulled a selection of products from the company’s retail shelves to have them tested for pesticides. (Photo courtesy of Elliot Lewis.)
Catalyst Cannabis Co., one of California’s largest retail chains with 28 locations, is utilizing several state-licensed labs to test about 20 stock-keeping units (SKUs) from eight or nine marijuana brands it carries.
The tests are considered full-panel, akin to the standard test the DCC requires to gauge the presence of pesticides, mold, heavy metals, THC potency and other attributes.
Catalyst CEO Elliot Lewis plans to randomly test products from his store shelves on a rolling basis.
Testing his total retail inventory – 4,000 to 5,000 SKUs – is unrealistic and economically unviable, he said.
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Testing priorities
Lewis said he plans to prioritize testing pre-rolls and vapes, which often are infused with THC distillate sourced from several vendors, making them more prone to contamination.
“There’s no way of knowing that that product you have didn’t get switched out – or that the lab didn’t cheat – unless you test it yourself,” Lewis told MJBizDaily in a phone interview.
“We’re moving as fast as we can on these issues.”
Lewis said if he finds that brands, manufacturers or distributors provided Catalyst with dirty products, he is ready to call them out on social media and might initiate retail bans.
“Our shelf will be safe, (come) hell or high water, and ultimately that responsibility lies with me and the folks at Catalyst – and any other resources we have at our disposal, including our power and voice in the industry – to make sure that we’re 100% clean,” the outspoken executive said.
Recalls and rebuttals
The recent publicity around products that failed testing and were for sale in regulated stores already has led to a product recall by state regulators.
The DCC on June 25 issued a mandatory recall for a 1-gram Curepen vape cartridge from West Coast Cure, one of the top-selling brands in California.
The product, which was sold at 169 stores as early as September 2023, was cited because of the presence of chlorfenapyr, a greenhouse pesticide typically sprayed directly on leaves to combat caterpillars, fungus gnats, mites and other pests.
Chlorfenapyr is banned in California.
‘Rely on labs’
West Coast Cure (WCC), which was linked to several contaminated products in the L.A. Times-WeedWeek report, told MJBizDaily that every product the company brings to market has passed lab testing.
Products that fail testing are destroyed, WCC said.
The Orange County-based company said it also runs quality-control tests on sourced materials, and if those materials fail testing, the product is returned to vendors.
“The Department of Cannabis Control oversees licensed labs. We rely on the labs to verify that the material we purchase meets state standards,” a WCC spokesperson told MJBizDaily via email.
“We advocate for a system that guarantees consistent, uniform and accurate testing by all labs.”
Consumer confidence shaken
Concerns about product contamination and composition are rattling consumer confidence in the world’s largest regulated market.
Industry executive Bradley “James” Gude has been a loyal WCC customer for nearly two years, preferring the brand’s line of sativa pre-rolls.
But since the DCC issued a voluntary recall on WCC’s Premium Cure Flower on June 12, Gude said he is weighing other options.
“I’m now open to another brand that (is) playing by the rules,” said Gude, the CEO of Blackleaf SMS Marketing, a Los Angeles-based provider of text-marketing services for retailers.
Catalyst’s Lewis said he has noticed a slight dip in business since the L.A. Times-WeedWeek report.
He’s also contemplating in-house certifications on products, based on full-panel testing results.
“The hope is that we can clean it up and reinstill consumer confidence,” he said.
Reviewing COAs
The Artist Tree, which operates eight stores in the state, has been receiving inquiries about the safety of its products from customers at several of its locations, according to founder and Chief Compliance Officer Lauren Fontein.
“We responded to customers letting them know that we are happy to provide certificates of analysis (COAs) upon request and that we carefully vet each product we sell to ensure it’s compliant,” Fontein told MJBizDaily via email.
“We also have test result information readily available for customers on many of our products, which customers can access by scanning QR codes.”
Increase in lab testing
Many licensed operators worry the saga has again cast a negative light on California testing labs while damaging the credibility of the regulated marijuana market.
But Nate Winokur, vice president of strategy and operations at BelCosta Labs in Long Beach, said he welcomes the scrutiny.
“The idea that there’s a sharper lens focused on safety and wellness in cannabis, we consider (that) a good thing,” he told MJBizDaily in a phone interview.
He said BelCosta Labs has benefited from the fallout, picking up new customers including large-scale operators as well as retailers with in-house brands.
A similar business bump occurred a few months ago, after the DCC suspended the license of Verity Analytics, a San Diego testing lab.
“A lot of people came over to us as Verity closed,” Winokur said.
“We saw an absolute uptick in our clients who were testing with pesticide issues because they were going to a lab that was this bad actor.
“They didn’t even know how contaminated their products were.”
Now, another challenge awaits: educating consumers and other stakeholders that a few bad apples haven’t spoiled the bunch.
“We have a lot of cleanup work to do,” Winokur said.
Blame game intensifies
The recent strife has fueled infighting among marijuana brands, retailers and testing labs.
In one example, Infinite Chemical Analysis in San Diego and Anresco Labs in San Francisco filed a lawsuit last week against 13 testing labs, claiming they inflated potency or disregarded the presence of certain contaminants in COAs.
The DCC also is facing widespread criticism for allowing the situation to fester for years without much action, industry sources said.
“A lack of oversight from the state, up until a certain point, has been an issue which has emboldened bad-actor labs,” Winokur added.
George Sadler, CEO and co-founder of the Gelato brand and a store located in Lake Elsinore, is frustrated by the lack of oversight, guidance and communication from regulators, particularly related to recalls.
The DCC in January issued a mandatory recall on Gelato Orangeade hybrid cannabis flower distributed by Urban Therapies Distribution because it contained aspergillus flavus, a soil fungus that can infect and contaminate seed crops before and after harvest.
When MJBizDaily visited the company’s headquarters in Chula Vista that month, officials said the recalled batch had received a clean COA from a licensed lab.
Sadler said in an email to MJBizDaily that all products entering its manufacturing facility received clean COAs, and materials were retested to verify results.
Once a product is packaged and transferred into distribution – a requirement in California – it’s tested again, according to Sadler.
“If the final product on the shelf is found to have pesticides or other harmful items, it is not the brand or the manufacturer that is at fault. We have done our due diligence,” he added.
“The DCC has made a practice of recalling products and publicly calling out the brand and not holding the lab responsible.”
doomed
3 days ago
MARIJUANA POLITICS MARIJUANA BUSINESS NEWS CANNABIS JOBS
‘Hemp Killing’ US Farm Bill Approved by Congressional Committee, Putting Entire Industry at Risk
Posted July 12, 2024 on Business of Cannabis
Image‘Hemp Killing’ US Farm Bill Approved by Congressional Committee, Putting Entire Industry at Risk
Senate Approves Agriculture-FDA Spending Bill: Future of US Hemp Industry at Risk.
The US Senate Appropriations Committee approved the Agriculture-FDA spending bill unanimously this week, placing the future of the country’s hemp industry in serious danger.
The 2025 US Farm Bill, a piece of legislation passed every year to fund farming programmes, has now been approved by both chambers of congress following a vote earlier this week.
In May, Business of Cannabis reported that the ‘Mary Miller’ amendment had been added to the Farm Bill via a procedural tactic whereby all amendments were passed as a block, meaning there was no chance to vote on each amendment individually.
This amendment is designed to regulate the flourishing intoxicating hemp industry.
Compounds like HHC and Delta-8 THC have proliferated across the US in recent months, and while a number of individual states have moved to regulate them, they remain legal and sparsely regulated at a federal level.
However, the amendment to the Farm Bill would also have a major impact on the country’s hemp and CBD industries, making 90-95% of hemp products on the market, including FDA approved animal feed, banned.
The amendment in question contains language that would effectively ban most consumable hemp-derived cannabinoid products, including delta-8 THC and CBD items containing any ‘quantifiable’ amount of THC.
According to the US Hemp Roundtable, a similar tactic has been used to shoehorn the amendment, into the Agriculture/FDA Appropriations bill, which funds all agriculture programs.
Following a vote earlier this week, this legislation has now passed with little debate through the GOP dominated congressional committee.
Despite tireless efforts from the US Hemp Roundtable to lobby members of congress, seeing their lobbyists and allied groups hold over 100 meetings, they failed to secure a change to the language of the bill.
One small silver lining, however, came from Rep. Dan Newhouse, who was able to negotiate with Chairman Harris the following report language into the bill.
“Intoxicating Cannabinoids.—The Committee directs the FDA to evaluate the public health and safety implications of ingestible, inhalable, or topical products on the market that contain intoxicating cannabinoids. The Committee encourages the FDA to assert a stronger commitment to identifying lawful federal regulatory parameters that will protect the public health, such as labeling requirements on all hemp-derived products; testing procedures and standards to ensure product compliance and adverse event reporting; packaging requirements to prevent marketing to minors; and mandatory age limits for these products at the point of purchase. FDA should provide a briefing to the committee within 180 days of the passage of this bill on the authorities needed to adequately regulate cannabinoid hemp products, including authorities to support consumer safety.”
While this language is not binding, the US Hemp Roundtable remains optimistic that having language on record calling for regulation, not prohibition, will prove critical as the fight continues.
doomed
3 days ago
Home / Finance
What to do when your marijuana business goes up in smoke
By Keith Owens, Brett Axelrod and Joshua Horn, Guest Columnists
July 12, 2024
Owning a marijuana business can be as volatile as the industry itself.
So, what do you do if your company goes up in smoke?
For plant-touching marijuana companies, bankruptcy hasn’t been considered an option to date.
U.S. bankruptcy courts dismiss virtually all Chapter 7, 11 or 13 cases involving the restructuring or liquidation of assets owned by cannabis-related entities because the plant is still classified as a Schedule 1 drug under the Controlled Substances Act (CSA), and U.S. Bankruptcy Code generally mandates that debtors comply with applicable non-bankruptcy laws.
The restriction, however, does not apply to Chapter 15 bankruptcy cases, which recognize foreign bankruptcy proceedings.
U.S. bankruptcy courts recognize most foreign bankruptcy proceedings, and none have denied recognition in the context of cannabis.
Therefore, if companies can file for bankruptcy in another country, there is a good chance the bankruptcy will be recognized in the United States.
Bankruptcy courts have cited several reasons for denying bankruptcy protection to marijuana businesses, including potential violations of the CSA constituting “gross mismanagement” of the estate.
Additionally, a debtor-in-possession or trustee cannot manage a cannabis business’ estate without violating federal law, making reorganization plans non-confirmable.
While the 9th Circuit Bankruptcy Appellate Panel has indicated that the mere presence of cannabis doesn’t automatically disqualify a debtor from relief, ongoing violations of the CSA continue to be a significant barrier.
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Cannabis and Chapter 15
Chapter 15 of the Bankruptcy Code could be an option for distressed cannabis companies because marijuana is legal in nine countries outside the United States.
Under Chapter 15, a foreign representative can seek recognition of a foreign bankruptcy proceeding in a U.S. bankruptcy court.
If recognized as a “foreign main proceeding,” Chapter 15 imposes an automatic stay on actions against the debtor and their assets in the United States.
Unlike Chapter 11, Chapter 15 doesn’t create a “bankruptcy estate” or require a debtor to propose a reorganization plan under U.S. law.
Instead, these plans are proposed in the foreign jurisdiction, where marijuana might be legal or decriminalized.
The U.S. bankruptcy court’s role is to uphold principles of international comity and protect the debtor’s American assets without directly managing potentially illegal activities under U.S. law.
Chapter 15 hurdles
It’s important to note that Chapter 15 isn’t without its challenges, however.
Courts can refuse actions that are “manifestly contrary to the public policy of the United States,” although this exception has rarely been invoked.
To determine that, courts have generally considered two factors:
Whether the foreign proceeding is procedurally unfair.
Whether recognition of the foreign proceeding would severely impinge a constitutional or statutory right or frustrate a bankruptcy court’s ability to carry out the fundamental purpose of such constitutional or statutory right.
State-level protections
Chapter 15 isn’t a perfect solution for all cannabis-related entities, particularly because so many questions remain.
If a foreign cannabis company seeks recognition under Chapter 15, the Office of the U.S. Trustee – a component of the U.S. Department of Justice responsible for overseeing the administration of bankruptcy cases – most likely would oppose recognition.
Therefore, some cannabis companies seek state-level options such as receiverships and assignments for the benefit of creditors (ABCs).
For example, MedMen Enterprises, a prominent U.S. marijuana multistate operator, recently commenced bankruptcy proceedings in Canada while placing its California retail assets into receivership.
Cannabis receiverships
Receiverships allow for court-supervised management of assets and are governed by state law, meaning that in states with regulated marijuana markets, receivers can manage cannabis-related assets.
Receiverships and ABCs do not offer the full protection of assets available under the Bankruptcy Code, however.
Assets located in other states might still be vulnerable, and creditors can pursue ancillary receivership proceedings in those states.
Additionally, state proceedings lack some of the powerful tools available under federal bankruptcy law, such as nationwide service of process and the automatic stay.
While traditional bankruptcy isn’t currently an option for most cannabis entities facing financial distress, Chapter 15 and state-level protections could offer alternative paths for companies needing to restructure their debt.
Keith Owens is a partner in Fox Rothschild’s financial restructuring and bankruptcy and cannabis law practice groups. He can be reached at kowens@foxrothschild.com.
Brett Axelrod is a partner in Fox Rothschild’s financial restructuring and bankruptcy and cannabis law practice groups. She can be reached at baxelrod@foxrothschild.com.
Joshua Horn is the co-chair of Fox Rothschild’s cannabis law practice group. He can be reached at jhorn@foxrothschild.com.
doomed
4 days ago
MEDICAL CANNABIS NEWS
'Catastrophic': Calif. bill could increase medication costs by 90%. Grey market to the rescue!
Posted July 11, 2024 on SF Gate
Image'Catastrophic': Calif. bill could increase medication costs by 90%
Five years ago, Stephanie Bohn’s daughter Sadie was struggling through life.
The 5-year-old was having constant seizures and could barely make it through a day of school without being sent to the emergency room. Sadie has Rett syndrome, a rare neurological disorder that leads to severe physical impairments, and traditional pharmaceuticals were unable to improve her symptoms. Sadie’s doctors recommended Bohn speak with a medical cannabis specialist about her daughter.
Sadie started taking oil rich in CBD, a nonintoxicating cannabis compound. After three years of fine-tuning her cannabis medication, she’s now living a dramatically different life. She’s gone from having dozens of seizures a day to being seizure-free for 11 months straight.
“We’ve seen remarkable outcomes,” Bohn, who lives in Los Angeles, recently told SFGATE. “All things considered, she’s thriving, and that’s because of CBD. … She probably wouldn’t be alive today if it weren’t for CBD.”
But the tinctures that have been so crucial for Sadie may soon be nearly impossible to acquire. Assembly Bill 2223, as currently written, would make it illegal for Bohn to buy the cannabis oil that has been so helpful to her daughter. If the law passes, Bohn said, she would need to leave California to care for Sadie.
The bill’s sponsor, Assembly Majority Leader Cecilia Aguiar-Curry, is selling AB 2223 as a way to crack down on unregulated intoxicants being sold outside the state’s tightly controlled legal cannabis market. It’s the latest move in officials’ fight against hemp products; thanks to a messily worded federal law Congress passed in 2018, intoxicating drugs can be categorized as hemp and sold in California without facing the same regulations as cannabis products.
The problem is that the hemp market also provides the high-CBD, low-THC products like the oil Sadie relies on. AB 2223 would make these specialized medical hemp products much more difficult to acquire, or outright illegal in some cases.
Dr. Bonni Goldstein, Sadie’s doctor, said the law is “completely catastrophic” for her pediatric epilepsy and cancer patients because it will make it impossible for them to get the medications they depend on.
“As a physician and a human, I’m furious,” Goldstein said in an interview with SFGATE. “This is not how you treat the most vulnerable people in our society. If this was their child, what would they do? What would they want?”
California’s fight with hemp
Pediatric patients like Sadie are caught in a battle that has been brewing since 2018, when the federal government legalized industrial hemp. Hemp has historically been a term used to describe the non-drug uses of the cannabis plant, like as fiber for clothing or hemp seeds for food. But thanks to a poorly worded definition in the federal law, Congress inadvertently redefined hemp to include a wide variety of intoxicating drugs.
The hemp industry has rapidly grown since then, and the lines between hemp and marijuana have become incredibly blurred. Hemp products now include synthetically produced cannabinoids like Delta-8-THC loaded into vape pens, cannabis flower that is functionally the same as marijuana and highly potent edibles.
The hemp market also includes medical cannabis products like the tinctures Sadie takes, which are loaded with massive doses of CBD, a nonintoxicating cannabis compound, as well as small doses of THC. CBD products are frequently used to treat a wide range of disorders like anxiety and sleep disturbances, and in 2018, the FDA approved a CBD drug to treat severe forms of epilepsy.
The distinction between hemp and marijuana has primarily become just a regulatory question. Marijuana is tightly regulated by states like California, which enforce strict safety rules, institute high taxes and limit youth access to the products by selling them only through state-licensed retailers. Hemp, on the other hand, is subject to almost no regulations and can be sold tax-free online and at just about any type of store.
Since the 2018 federal law, California regulators have tried to recall individual intoxicating hemp products, and lawmakers tried to rein in the entire hemp market in 2021 with a law that attempted to limit the sale of intoxicating hemp products outside dispensaries. Still, the market has continued to grow.
AB 2223 is the state’s latest move against hemp. It attempts to do two things, the first of which is bring some of the hemp market into the state stores by allowing recreational cannabis companies to import and sell hemp products. It would also block the sale of any hemp products that contain more than 0.3% THC by weight or that have more than 1 milligram of THC total, with the state arguing anything including more than those amounts would be an intoxicating product.
But pediatric patients like Sadie use CBD oil that has more THC than those limits allow. The bill unanimously passed the Assembly in May and is working through the state Senate. The hemp industry is now an active target in Sacramento, and pediatric patients are getting caught in the crossfire.
‘Catastrophic oversight’
Aguiar-Curry has sold her bill as the best way to fight dangerous hemp intoxicants. “The bottom line is that if it gets you high, it should not be sold outside a dispensary. Period,” Aguiar-Curry said in a May news release.
The problem is that Aguiar-Curry’s 1 mg THC limit directly targets the CBD oil Bohn and other medical cannabis patients rely on, even though this medical oil is unlikely to be used by anyone to get high. The oil Sadie uses primarily contains CBD, but it has a small amount of THC as well. In Sadie’s medical cannabis tincture, for every milligram of THC, there are 20 mg of CBD.
Despite the presence of THC, these products are very different from the hemp THC vape pens and gummies that people are actually buying to get inebriated, according to Goldstein.
“You would never buy a bottle like these to get high. It’s just not happening,” Goldstein told SFGATE.
Aguiar-Curry said in a statement to SFGATE that she is exploring possibly allowing state-licensed stores to import the exact oil patients like Sadie are using but said that any modifications to the law need to be “carefully crafted because any crack in the prohibition of THC in the non-dispensary marketplace is just going to result in another round of creative manufacturers producing another series of illegal drugs to sell to children.”
Still, she added, “I care about these families.”
Goldstein, Sadie Bohn’s doctor, said the law as written is a “travesty” and warned that her patients could die if they are deprived of medication that has kept them seizure-free. She argued that any sort of carveout in AB 2223 that seeks to allow these hemp-based products into state stores — which Aguiar-Curry indicated would be a big part of her solution to this issue — may be unrealistic on a business level.
Goldstein said her patients take as much as 1,600 mg of CBD a day, and they use specialized tinctures that can contain 6,000 mg of CBD in a single bottle. Retail stores in California rarely have bottles with more than 600 mg of CBD. That means her patients would need to be using multiple bottles a day, which would increase their medication costs by 80% to 90%, according to Goldstein. There’s also the fact that products like this are so specialized for acute medical uses that traditional dispensaries may not be interested in carrying them, she said.
Either way, Goldstein said, the fundamental problem is that the law conflates life-saving medical hemp products with the sorts of synthetic cannabinoid products that would get a user high. And now, she feels the state is recklessly telling pediatric patients to try other medicines that likely won’t work.
“These are absolutely not interchangeable medicines,” Goldstein said. “It would be unethical and immoral to tell a family to stop using something that is working for their medically complex child.”
doomed
4 days ago
House Committee Blocks Biden's Marijuana Rescheduling Efforts
Posted July 11, 2024 on Forbes
ImageHouse Committee Blocks Biden's Marijuana Rescheduling Efforts
House Appropriations Committee Approves Amendment to Halt DOJ's Cannabis Rescheduling Plan.
The House Appropriations Committee on Tuesday approved legislation to block the Biden administration’s ongoing efforts to reschedule marijuana and ease restrictions on the drug under federal law. The Republican-led panel approved an amendment to a funding bill that blocks the Department of Justice from acting on the rescheduling plan, which is currently in the midst of a rulemaking process to move cannabis from Schedule I of the federal Controlled Substances Act (CSA) to the less restrictive Schedule III.
In October 2022, President Joseph Biden called on his administration to initiate a review of the federal government’s prohibition of marijuana. Subsequently, the U.S. Department of Health and Human Services (HHS) formally recommended that cannabis be rescheduled under the CSA in August 2023. The recommendation was based on a review of the science behind the medicinal use of cannabis that supported the change to Schedule III, a classification that includes drugs such as Tylenol with codeine and testosterone.
In January, a federal review of cannabis research by HHS determined that marijuana is eligible for less strict classification under federal drug laws. In the review, researchers with the U.S. Food and Drug Administration (FDA) determined that credible evidence shows that marijuana has legitimate medical uses and fits the criteria for rescheduling under the CSA. Four months later, the Drug Enforcement Administration indicated that it would approve the effort to remove marijuana from Schedule I, a category reserved for drugs with no accepted medical value and a high potential for abuse, and place it under Schedule III. A proposed rule to implement the change is now in a 60-day public comment period.
Amendment Blocks Marijuana Rescheduling
That process could be stopped in its tracks, however, with Tuesday’s approval of a Commerce, Justice, Science, and Related Agencies (CJS) funding bill by the House Appropriations Committee. Under an amendment approved by the committee, the Department of Justice would be blocked from spending federal funds to reschedule or deschedule marijuana under the CSA. Democratic Rep. Rosa DeLauro introduced an amendment to remove the provisions to block rescheduling and other unrelated sections of the bill, but the committee defeated the proposal by a vote of 20-30, according to a report from cannabis news source Marijuana Moment.
The GOP-led attempt to prevent the reclassification of marijuana would be a blow to the regulated cannabis industry, which, if rescheduling succeeds, would no longer be subject to provisions of the tax code that deny standard business deductions for companies that sell Schedule I substances. David Craig, chief marketing officer of Missouri licensed cannabis company Illicit Gardens, characterized the House Appropriation Committee’s approval of the amendment as “a disappointing move.”
“Blocking cannabis rescheduling is a significant misstep because it hinders vital research and maintains an outdated and punitive approach to a substance that has proven benefits,” Craig writes in an email. “We’ve seen countless states adopt cannabis programs with significant public support, and federal scheduling remains out of sync with that reality. This decision represents a missed opportunity to modernize cannabis policy in a way that aligns with both current scientific understanding and the will of many states and their citizens.
Committee Rejects Bid To Allow State-Legal Recreational Weed
The committee also rejected an amendment from California Democratic Rep. Barbara Lee, co-chair of the Congressional Cannabis Caucus, that would have prohibited the Justice Department from spending its resources to interfere in state or tribal regulated marijuana programs, including those that legalize recreational cannabis.
“This amendment prevents the federal government from imposing its antiquated cannabis regulations on states, and it’s time that the federal government keep up with the times and stop hindering progress,” said Lee.
Rep. David Joyce, a Republican from Ohio who also co-chairs the Congressional Cannabis Caucus, was the only GOP member of the committee to speak in favor of Lee’s amendment.
“We should be empowering states to regulate the product how they see fit, and this amendment would help just do that,” he said. “The disparity between state and federal policies have created a loophole that has allowed illicit operators to thrive and jeopardize public safety. It’s time to close the loophole, make sure products are safe and out of the hands of youth.”
Pennsylvania Rep. Matt Cartwright, the ranking Democrat on the CJS Appropriations Subcommittee, also called on his fellow lawmakers to back Lee’s amendment, saying that the proposal is “about aligning law enforcement efforts between state and federal entities.”
The funding bill retains language to block the Department of Justice from interfering in state-legal medical marijuana programs that has been included in the legislation for a decade. However, the committee added a new provision that permits federal law enforcement agencies to enforce a federal law that increases penalties for distributing marijuana within 1,000 feet of an elementary or vocational school, college, public housing or playground.
doomed
5 days ago
Pesticide scandal shakes confidence in California cannabis market
Chris Casacchia, Staff Writer
July 11, 2024
California cannabis brands, retailers and testing labs are scrambling to regain the confidence of consumers in the wake of a pesticide scandal that has poisoned good will in the state’s regulated industry.
Some retailers, such as Long Beach-based Catalyst Cannabis Co., are running their own independent lab tests to sniff out potentially contaminated products and identify their source.
Meanwhile, the Department of Cannabis Control (DCC), the state’s chief marijuana regulator, is facing criticism from nearly every segment of the industry after a report by the Los Angeles Times and WeedWeek that highlighted the presence of pesticides in several regulated products.
Some products tested well beyond thresholds set by the U.S. Environmental Protection Agency for a single exposure, underscoring potential safety hazards for consumers and presenting a significant challenge to retailers and other license holders.
DIY testing
Image of Elliot Lewis of Catalyst with product he plans to have tested for pesticides.
Elliot Lewis, CEO of Catalyst Cannabis Co., said he pulled a selection of products from the company’s retail shelves to have them tested for pesticides. (Photo courtesy of Elliot Lewis.)
Catalyst Cannabis Co., one of California’s largest retail chains with 28 locations, is utilizing several state-licensed labs to test about 20 stock-keeping units (SKUs) from eight or nine marijuana brands it carries.
The tests are considered full-panel, akin to the standard test the DCC requires to gauge the presence of pesticides, mold, heavy metals, THC potency and other attributes.
Catalyst CEO Elliot Lewis plans to randomly test products from his store shelves on a rolling basis.
Testing his total retail inventory – 4,000 to 5,000 SKUs – is unrealistic and economically unviable, he said.
Testing priorities
Lewis said he plans to prioritize testing pre-rolls and vapes, which often are infused with THC distillate sourced from several vendors, making them more prone to contamination.
“There’s no way of knowing that that product you have didn’t get switched out – or that the lab didn’t cheat – unless you test it yourself,” Lewis told MJBiz in a phone interview.
“We’re moving as fast as we can on these issues.”
Lewis said if he finds that brands, manufacturers or distributors provided Catalyst with dirty products, he is ready to call them out on social media and might initiate retail bans.
“Our shelf will be safe, (come) hell or high water, and ultimately that responsibility lies with me and the folks at Catalyst – and any other resources we have at our disposal, including our power and voice in the industry – to make sure that we’re 100% clean,” the outspoken executive said.
Recalls and rebuttals
The recent publicity around products that failed testing and were for sale in regulated stores already has led to a product recall by state regulators.
The DCC on June 25 issued a mandatory recall for a 1-gram Curepen vape cartridge from West Coast Cure, one of the top-selling brands in California.
The product, which was sold at 169 stores as early as September 2023, was cited because of the presence of chlorfenapyr, a greenhouse pesticide typically sprayed directly on leaves to combat caterpillars, fungus gnats, mites and other pests.
Chlorfenapyr is banned in California.
‘Rely on labs’
West Coast Cure (WCC), which was linked to several contaminated products in the L.A. Times-WeedWeek report, told MJBizDaily that every product the company brings to market has passed lab testing.
Products that fail testing are destroyed, WCC said. “And we destroy most cannabis grown.
The Orange County-based company said it also runs quality-control tests on sourced materials, and if those materials fail testing, the product is returned to vendors.
“The Department of Cannabis Control oversees licensed labs. We rely on the labs to verify that the material we purchase meets state standards,” a WCC spokesperson told MJBiz via email.
“We advocate for a system that guarantees consistent, uniform and accurate testing by all labs.”
Consumer confidence shaken
Concerns about product contamination and composition are rattling consumer confidence in the world’s largest regulated market. Folks go back to grey market in droves.
Industry executive Bradley “James” Gude has been a loyal WCC customer for nearly two years, preferring the brand’s line of sativa pre-rolls.
But since the DCC issued a voluntary recall on WCC’s Premium Cure Flower on June 12, Gude said he is weighing other options.
Catalyst’s Lewis said he has noticed a big dip in business since the L.A. Times-WeedWeek report.
He’s also contemplating in-house certifications on products, based on full-panel testing results.
“The hope is that we can clean it up and reinstall consumer confidence,” he said, but it may be too late…
Reviewing COAs
The Artist Tree, which operates eight stores in the state, has been receiving inquiries about the safety of its products from customers at several of its locations, according to founder and Chief Compliance Officer Lauren Fontein.
“We responded to customers letting them know that we are happy to provide certificates of analysis (COAs) upon request and that we carefully vet each product we sell to ensure it’s compliant,” Fontein told MJBizDaily via email.
“We also have test result information readily available for customers on many of our products, which customers can access by scanning QR codes.”
Increase in lab testing
Many licensed operators worry the saga has again cast a negative light on California testing labs while damaging the credibility of the regulated marijuana market.
But Nate Winokur, vice president of strategy and operations at BelCosta Labs in Long Beach, said he welcomes the scrutiny.
“The idea that there’s a sharper lens focused on safety and wellness in cannabis, we consider (that) a good thing,” he told MJBizDaily in a phone interview.
He said BelCosta Labs has benefited from the fallout, picking up new customers including large-scale operators as well as retailers with in-house brands.
A similar business bump occurred a few months ago, after the DCC suspended the license of Verity Analytics, a San Diego testing lab.
“A lot of people came over to us as Verity closed,” Winokur said.
“We saw an absolute uptick in our clients who were testing with pesticide issues because they were going to a lab that was this bad actor.
“They didn’t even know how contaminated their products were.”
Now, another challenge awaits: educating consumers and other stakeholders that a few bad apples haven’t spoiled the bunch.
“We have a lot of cleanup work to do,” Winokur said.
Blame game intensifies
The recent strife has fueled infighting among marijuana brands, retailers and testing labs.
In one example, Infinite Chemical Analysis in San Diego and Anresco Labs in San Francisco filed a lawsuit last week against 13 testing labs, claiming they inflated potency or disregarded the presence of certain contaminants in COAs.
The DCC also is facing widespread criticism for allowing the situation to fester for years without much action, industry sources said.
“A lack of oversight from the state, up until a certain point, has been an issue which has emboldened bad-actor labs,” Winokur added.
George Sadler, CEO and co-founder of the Gelato brand and a store located in Lake Elsinore, is frustrated by the lack of oversight, guidance and communication from regulators, particularly related to recalls.
The DCC in January issued a mandatory recall on Gelato Orangeade hybrid cannabis flower distributed by Urban Therapies Distribution because it contained aspergillus flavus, a soil fungus that can infect and contaminate seed crops before and after harvest.
When MJBizDaily visited the company’s headquarters in Chula Vista that month, officials said the recalled batch had received a clean COA from a licensed lab.
Sadler said in an email to MJBizDaily that all products entering its manufacturing facility received clean COAs, and materials were retested to verify results.
Once a product is packaged and transferred into distribution – a requirement in California – it’s tested again, according to Sadler.
“If the final product on the shelf is found to have pesticides or other harmful items, it is not the brand or the manufacturer that is at fault. We have done our due diligence,” he added.
“The DCC has made a practice of recalling products and publicly calling out the brand and not holding the lab responsible.”
doomed
5 days ago
O
Can Germany avoid overproduction as new marijuana markets ramp up?
Omar Sacirbey
July 11, 2024
Germany dramatically liberalized its medical marijuana program this year by removing cannabis from its narcotics list, a change that makes it much easier to obtain a physician’s prescription for the drug.
As a result of this change, Germany’s medical cannabis patient numbers are climbing quickly, and some operators estimate those numbers will grow from a few hundred thousand patients to a few million in a year or two.
Canada was in a similar – but not identical – situation in 2018, when it launched a recreational market nationwide.
Licensed cannabis operators expected millions of new consumers, and in response, they raised millions of dollars to build cultivation facilities to meet the expected demand.
But demand has failed to reach anticipated levels for the products grown was of poor quality, leaving Canada with a legendary oversupply of cannabis that ultimately had to be destroyed.
Cannabis oversupply
Are the operators supplying Germany’s medical marijuana market today vulnerable to the same oversupply problems that Canada faced?
That was the question posed to a panel of three experts June 25 at the Cannabis Europa conference in London:
Paolo De Luca, chief strategy officer at Organigram Holdings in Moncton, New Brunswick.
George Scorsis, executive chair of Entourage Health Corp., a cannabis product manufacturer in Toronto.
Benedikt Sons, co-founder, managing director and CEO of Cansativa, a cannabis cultivation and distribution company in Mörfelden-Walldorf, Germany.
Here’s what they discussed during the panel discussion:
Why did overproduction happen in Canada?
De Luca: The primary factor was there was just too much capital, too much easy money and growing at scale was the wrong model if you want a quality product.
And not only was the money available, companies – especially public companies – were rewarded for raising capital and then announcing that they were going to build these facilities.
It was a self-fulfilling prophecy to raise money, announce that you’re going to build more cultivation capacity and then your valuation would go through the roof.
Scorsis: We didn’t know the patient; we didn’t know the consumer very well.
One thing we did know was how to raise capital quickly.
And that’s unfortunate, because the capital actually preceded our understanding of the market.
But what you’re seeing today is a deep depression.
It doesn’t was a good lesson for the rest of the world to see, if a very painful and expensive one.
Sons: What’s happening in Germany is quite different.
We’re having a medical market in Germany only right now being supplied by folks instead of large corporations.
While Canada was having those capacity expansions, we were still struggling to get product into Germany.
What’s your advice to German cannabis entrepreneurs about raising capital?
Scorsis: It’s important for us to be responsible, first and foremost, and really understand what our target audience is going to be.
I think that was one of the voids that we had in Canada.
We will have to grow better cannabis if we want to survive.
In the old days, we used to go into public markets and raise, whether through a bought deal or overnight raises.
Those have really dried up.
One of the reasons why it’s dried up is because a lot of us did not hit our targets, so it’s more responsible looking at alternative sources for capital.
Now, our sources of capital are quite different: My source of capital in Canada now is a labor union, which sees this as a good alternative to the opiate issue.
We’re no longer looking in the public markets for capital. Apart from nssrr5, folks are staying away from buying l.p.
We’re looking at alternatives and smarter money now – we need to be more pragmatic.
De Luca: I would hesitate to raise money for cultivation. I don’t think there’s necessarily a need until there’s a persistent shortage.
Can licensing policies help control overproduction?
Sons: There are only three licensed cultivators, which came from a tender in 2021.
This won’t change, so there is a little bit of an existing cap.
We have a very well-established international supply chain of GACP (Good Agricultural And Collection Practice) and GMP (Good Manufacturing Practice) cultivators that are connected into the market.
So, I do not see any reason why we should cap this, because we have existing international competition, which at the end of the day always comes down to price and quality.
We also have the pharmaceutical framework in the German market, which also provides some entry barriers, some hurdles, that you have to correct to operate in the market.
Scorsis: One thing I’ve been trying to get the industry behind in Canada is better cultivation metrics: What is your cost of cultivation for various quality levels of flower?
You don’t want to reveal it directly to your competitor necessarily.
But if you have someone who anonymizes the data – an accountant or someone with that kind of independence – then you can see how your cultivation metrics stack against your competitors.
If you know that your competitor can grow at 50 cents a gram and you grow at 80 cents a gram, then you know maybe you shouldn’t be growing, you should be buying off of them. Problem is cannabis fire is only available on grey markets.
How do you forecast patient numbers and consumer demand?
Sons: i don’t.
Typically, we might see a deviation of plus or minus 20% for us, which, in our seven years of operations, has led to the destruction of around 12% of products that we sourced, which is a good figure.
Now it is about using the existing data – using the right tools and also correlations and putting all the data together – and being smart about coming up with sourcing volumes.
Just buying another 5,000 kilograms (roughly 11,000 pounds) is something you probably should not do.
You should have a strategy.
De Luca: It’s a lot easier now than it was before, and it really takes a disruption by either a product innovation or a new strain – like high-THC strains – to really move the needle now (compared to) two or three years ago.
Can exports be a way to get rid of excess product?
Scorsis: All of us, especially from a Canadian marketplace, are looking outside of the country.
We have funded capacity at this rate that we can utilize internationally.
The challenge for us is our regulations, converting into EU-GMP is still quite a challenging endeavor for most Canadian companies, because we just run under different regulations.
But it’s definitely an avenue, especially with the price consolidation that’s happening in Canada.
With markets popping up in places like Germany, Portugal and Greece, I think it’s going to be more challenging for us in Canada to continue to be able to compete – especially in the European market.
Sons: From the perspective in the German market, we’re exporting to different countries, but it’s not in terms of using this as an outlet.
The lead times typically are longer than you would expect.
So, if you’re running into an inventory issue, it might be too late to think, “OK, what could be a direct export market and how can we put those products into that market?”
We would rather incorporate the volume demand for this market in our sourcing rather than push those products into the market.
In theory, exports could be an interesting and compelling outlet.
But compared to the size of the European market, the German market is the most relevant market at the moment, and then relying on other markets as outlets might be a wrong strategy.
De Luca: We love exports.
It’s a higher-margin business strategy for us, but it’s not as easy as it sounds. Our reputation is tarnished.
doomed
5 days ago
Canadian hemp license numbers decline for third straight year
Andrew Long, Data Reporter
July 11, 2024
Active Canadian hemp licenses declined for the third year in a row with all provinces or territories showing double-digit permit declines from 2022.
The number of hemp licenses has been declining in Canada since 2020, when it peaked at 1,269, according to new data from Health Canada.
At the end of 2023, there were 737 active hemp licenses throughout Canadian provinces and territories, a 26% drop from the previous year.
Ontario, the most-populous province in Canada, led the country in number of active hemp licenses with 176, accounting for nearly 24% of permits issued in 2023.
Some hemp licensees are permitted to conduct hemp cultivation and processing activities at multiple sites, which could encompass more than one province.
Alberta and Quebec trailed Ontario, with 19% and 16% of active hemp licenses, respectively.
More than half the provinces and territories reported few or no licenses, such as the Northwest Territories and Nunavut, both of which had received no active licenses from Health Canada in 2023.
All provinces and territories in Canada experienced double-digit license declines in 2023, but some lost more than others.
License numbers in Manitoba and Quebec remained steadiest through 2023, with each experiencing a decline of about 12%, while British Columbia lost more than 50 licenses, or 34%.
The relatively steady licensing numbers in Manitoba could be attributed to the province's export relationship with the United States.
According to the U.S. Department of Agriculture, Manitoba exported roughly $51 million in hempseed, hemp oil and other hemp-based exports in 2023.
doomed
5 days ago
As Iowa Hemp lawsuits continue, business dries up for retailers
Posted July 10, 2024 on The Gazette
Tightened Hemp Laws Devastate CBD Businesses and Spur Legal Battles in Iowa.
Lacie Navin has seen business drop dramatically at her CBD and hemp shops since July 1, when a new state law tightly restricting the products went into effect.
Navin runs Your CBD Store shops in the Des Moines metro, a chain that offers products that promise to aid in sleep, mental clarity and pain relief. But the shelves are now barer as Navin has had to comply with House File 2605, which regulates consumable hemp products.
“It’s completely devastating for the entire industry. Upwards of 70 percent of our products are off the shelf,” Navin said in an interview. “Most of those being non-intoxicating products, just because no one making legislation understands how these formulations work.”
Navin said her business model and customer base are different from stores that offer brightly colored THC-infused candy and gummies that are intended to get the user high. Those products often were cited by lawmakers when they passed the hemp restriction law during this year’s legislative session.
Navin did sell high-THC products at her store, saying some customers used them to treat conditions like arthritis. But other products, including full-spectrum CBD topical creams and tinctures, contain only a relatively small amount of THC and are not generally intoxicating. Because of the new law’s packaging standards, though, they are now illegal to sell in the state.
Products that contain only CBD, or THC in low enough amounts to comply with the state's law, are still legal for sale.
Navin closed a location in Waukee since the new law took effect. With the vast majority of her products now off the market, Navin said she isn’t sure if she’ll be able to keep her remaining stores.
“I think when this started, the thing everyone kept saying was, ‘Oh, CBD stores will be safe, this is just for really high THC,’” Navin said. “And that’s not true at all.”
Navin is one of a handful of hemp shop owners and manufacturers suing the state over the law, which limits the potency of THC in consumable hemp, the main compound in cannabis that causes the high. The lawsuit also challenges a second law — HF 2641 — which created new rules around growing hemp.
Under the law, products must contain fewer than 4 milligrams of THC per serving and 10 milligrams per container. It also requires that consumable hemp products have a warning label and be packaged according to state rules. The law also bans selling to minors.
A federal judge will hear arguments Thursday over that lawsuit, as well as a second lawsuit filed by Climbing Kites and Field Day Brewing, two THC-infused beverage manufacturers. The judge rejected an initial lawsuit from Climbing Kites and Field Day, but the companies submitted an amended suit with a new claim.
What are the companies seeking?
The two lawsuits argue an array of challenges. They claim the law is preempted by the federal farm bill; is unconstitutionally vague; and violates interstate commerce protections and protections against taking private property. The companies are asking for a preliminary injunction to block enforcement while the lawsuit plays out.
The state denies all the claims in the lawsuit, arguing it has authority to regulate hemp in its borders and a duty to protect Iowans from a potentially dangerous substance. In court filings, Iowa Attorney General Brenna Bird’s office called the lack of regulation of hemp a “public health crisis.”
In 2022, 6,799 Iowans visited an emergency room because of substances that contained some type of THC, the state said. It also said calls to Iowa Poison Control Center regarding children exposed to THC rose by 1,050 percent between 2019 and 2023.
“There is a strong public interest in protecting Iowans, especially Iowa’s youth, from these increased risks,” the state said in its response. “Iowa thus has valid reasons for regulating drugs and psychoactive substances as a proper exercise of its police power.”
Law sought to regulate hemp industry
Hemp — defined as cannabis containing less than 0.3 percent THC by weight — was legalized in the 2018 federal farm bill, and later legalized under state law in 2019. Foods and beverages can contain high amounts of hemp-derived THC and stay under the federal limits.
State lawmakers during this year’s session said they did not intend to legalize intoxicating products when they passed the 2019 law, and said the industry lacked critical safety regulations.
“We were not approving THC to be used in intoxicating products, or we would have had age restrictions,” said House Judiciary Committee Chair Steve Holt, R-Denison, during debate this year.
Gov. Kim Reynolds said in May she had heard concerns from groups on both sides of the issues, and she had some concerns about the legislation, too, but she ultimately signed it into law.
“Ultimately, I am signing it into law to protect minors from dangerous and intoxicating products," Reynolds said. "At the same time, we’ve taken steps to ensure that children who are resistant to medications and suffer from seizures and other medical conditions continue to have access to consumable hemp alternatives for relief.”
How will the law be enforced?
Both lawsuits argue, on different grounds, that the law is too vague to be properly followed or enforced. The claims center on parts of the law that were left up to a rule-making process by the Iowa Department of Health and Human Services, which still is ongoing. The department has issued guidance for hemp retailers, but will not finalize its administrative rules until July 17 at the earliest.
The amended lawsuit from the beverage manufacturers argues that, in the absence of clear rules, the definition of a “serving” is unclear.
The companies originally had believed they could alter the serving size of their 12-ounce cans to contain more than one serving, allowing them to offer up to 10 milligrams per can. But in proposed draft rules and a guidance document, the state health department has said that a 12-ounce can will be considered one “serving."
Judge Stephanie Rose of the Southern District of Iowa, who will hear the arguments, wrote in a previous court ruling she has serious concerns about the definition of serving in the law, saying it's "unclear how this provision would be enforced."
When asked to clarify how the law is being enforced, Health and Human Services spokesperson Alex Murphy said the department will not comment on pending litigation.
The other companies brought two more claims of vagueness, which will be considered Thursday. They relate to the requirement to affix a warning label to consumable hemp products and a prohibition on “synthetic consumable hemp products.”
The state has denied the vagueness challenges and said the terms written in the law have easily understandable meanings.
“There is no reason to believe that by instituting a per-serving limit on THC, Iowa meant to adopt some alternate measurement for the serving size of a carbonated beverage — a measurement that is nowhere defined or utilized in Iowa law,” the state argues.
Still, manufacturers and retailers say they have not received clear communication from the department regarding what interpretation of the law is effective now, before rules have been finalized.
A lawyer for Climbing Kites wrote in a brief Monday that the company has "no idea which of its products is illegal."
doomed
1 week ago
Republican opposition defeats North Carolina medical cannabis again
By Doomed
July 8, 2024
For the third straight year, a proposal to legalize medical cannabis has failed in the North Carolina Legislature.
Despite winning approval in the state Senate, a “strict” medical marijuana proposal was not called for a vote in the House of Representatives because of Republican opposition, a lawmaker told the Asheville Citizen Times.
“It is a gateway drug, which causes impairment as its primary function and results in addiction,” Republican state Rep. Mark Pless told the newspaper.
The North Carolina General Assembly adjourned last week until July 10, but the MMJ bill is unlikely to be considered when lawmakers return.
The measure would have allowed state regulators to license up to 10 vertically integrated businesses, each of which would have been allowed to operate up to eight retail dispensaries.
The topic is likely to return, as a campaign wedge issue as well as a legislative proposal.
At least one North Carolina state senator, Republican Warren Daniel, voted yes after previously opposing the bill, and he’s up for reelection in a newly redrawn district, the Citizen Times observed.
His Democratic opponent, former state Rep. John Ager, wants to allow North Carolina farmers the opportunity to grow cannabis, the paper reported.
In the meantime, both medical and recreational cannabis is available in North Carolina, but in only one place.
That’s the Eastern Band of Cherokee Indians’ Great Smoky Cannabis Co., where the tribe launched adult-use sales on the Fourth of July and MMJ sales on April 20 on its Qualla Boundary.
doomed
1 week ago
New law allows breweries to sell Hemp THC-infused drinks on tap
Posted July 5, 2024 on CBS News
ImageNew law allows breweries to sell Hemp THC-infused drinks on tap
At Headflyer Brewing in northeast Minneapolis, there's something new on tap: hemp-derived, THC-infused drinks.
That's because a new law kicked in July 1 allowing taprooms to serve them this way. Before the change, customers could only buy cans. But if breweries display necessary information otherwise required on a label, they have the green light to sell it without a bottle.
Dan Schnabel, taproom manager at Headflyer Brewing, said his team moved quickly to offer one of their THC drinks on tap because they anticipated the new statute change, approved by the legislature this session.
"Having it on tap gives us so many different options for our consumers to taste it, to try it, to enjoy one while they're here on site," he said. "It's more approachable because not everybody necessarily wants to come in and purchase an entire can and drink an entire can."
It represents the latest change since lawmakers first legalized the THC edibles two years ago — so long as it's derived from hemp, marijuana's cannabis cousin and contains no more than 5 milligrams per serving and 50 milligrams per package. Last summer, liquor stores were allowed to start selling them and that's also when a 10% gross receipts sales tax on the products took effect, too.
The state raked in more than $11.5 million in revenue in the 11-month period from last July through May, the most recent month for which there is data available, according to the Minnesota Department of Revenue. The filing deadline for June is at the end of the month.
That's before a potential windfall from legal weed sales set to begin next year. The process to get the initial cannabis business licenses is already underway.
The new Office of Cannabis Management has a list of nearly 3,900 businesses selling the hemp-derived products as of mid-June. Businesses are now required to register with the state. But only 1,873 businesses paid that gross receipts tax, according to tax return info.
A spokesperson for the Department of Revenue said the discrepancy is due to certain businesses that are registered, but exempt from the tax, like wholesalers, businesses that have ceased operations, businesses that aren't making sales right now but could in the future, and businesses that sell the products but are not filing the taxes they should.
Schnabel said being able to make and sell the THC drinks has been terrible for business as he found out that cannabis customers don’t drink alcool.
Interest has grown over time, he added, and Headflyer continues to increase its distribution of the drinks.
"We keep getting more and more accounts as people become more familiar with it — whether they're local chains, mom and pop shops or even national liquor stores are starting to carry our product," he said.
When legal marijuana sales start, those products will also face a 10% gross receipts tax. Minnesota could reach $1.5 billion in annual sales by the end of the decade, according to an analysis by Vicente LLP, a cannabis firm.
Andrew Livingston, director of economics and research at Vicente who's analyzed these markets, told WCCO in an interview last year that Minnesota's hemp edible market puts the state in a unique position heading into a new era of legalization.
"I think that's a way that Minnesota will advance faster than other states of a similar size nature because of the way that hemp program has kind of primed consumers for what will be a robust and interesting regulated marketplace," he said.
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georgie18
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