May 17, 2020
Industry Group Asks Seven Governors To Legalize Marijuana To Aid Coronavirus Economic Recovery
A marijuana industry group sent letters to seven governors in the Northeast on Thursday, imploring them to push for cannabis legalization to aid in economic recovery amid the coronavirus pandemic. The National Association of Cannabis Businesses (NACB) said a regionally coordinated legalization strategy would help generate much-needed tax revenue from legal marijuana sales. “Governors in the northeastern U.S. have been working tirelessly and effectively to contain the coronavirus crisis, and the NACB has great respect for their efforts,” Mark Gorman, NACB executive vice president, said in a press release. “We are also enthusiastic for their leadership of efforts to coordinate the resources and strategies needed to emerge from the lockdown.” “Legalizing cannabis sales and encouraging retailers to be proactive with strategies like home delivery and curbside pickup is not only a safe way to serve consumers, it will also generate millions of dollars in desperately needed tax revenues for their states,” he said. The letters were sent to the governors of New York, New Jersey, Connecticut, Delaware, Pennsylvania, Rhode Island and Massachusetts. NACB said in the letters that they feel “strongly that pushing legislation over the finish line to fully legalize cannabis for adult recreational use is an idea whose time has arrived.” “In challenging times like these, foregoing the chance to boost small business, minority entrepreneurship, employment and state tax revenue can hardly be passed up, and we look forward to working with you and the legislature to achieve success this year,” the letters state. Parts of the letters are personalized to each governor, commending previous actions to enact legalization. For example, NACB applauded Rhode Island Gov. Gina Raimondo (D) for including legalization in her proposed budget this year. It also gives New Jersey Gov. Phil Murphy (D) credit for engaging in regionally coordinated meetings with governors of neighboring states to develop a cannabis legalization plan.
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An Arkansas Department of Agriculture survey found 94 percent of the state’s hemp growers lost money on the crop last year, planting a total of 1,819 acres but harvesting just 883 acres, the Arkansas Democrat-Gazette reports. Despite the losses, the agency has already issued more hemp cultivation licenses for the upcoming growing season than all of last year. The Agriculture Department has issued 152 cultivation licenses so far this year, up from 125 last year, the report says. Additionally, the agency has issued 39 hemp processor licenses so far – up from 33 last year. The licenses have been issued in 55 of the state’s 75 counties after hemp was grown in 51 of the state’s counties last year. Arkansas hemp farmers reported capital investments last year of more than $5.8 million, total operating costs of $5.9 million, and sales to processors of nearly $846,000. They reported a total gross income of $702,291, an average of $3,266 per farmer, according to agency figures outlined by the Democrat-Gazette. Some crops were hampered by rains along with flooding along the Arkansas River; however, 21 percent of licensed cultivators indicated their crops had been stolen by thieves who believed the plants were THC-rich cannabis. Caleb Allen, manager of the state’s hemp program, warned though that the theft figures are “self-reported” and that they couldn’t be independently verified. Growers who participated in the survey said they were unable to sell 54.6 percent of last year’s crop – or about 108,000 pounds. Only about half of the licensed processors reported buying hemp from in-state growers, paying them about $330,000. According to U.S. Department of Agriculture data, Arkansas is still operating under its pilot hemp program enacted in 2014. Lawmakers have not yet passed legislation updating the program for federal approval as required under the 2018 farm bill.
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For more than two months now, the coronavirus disease 2019 (COVID-19) pandemic has disrupted economic activity to a degree we've never previously witnessed. All told, the U.S. unemployment rate is nearing 15%, which is a level unseen since the Great Depression. With the understanding that things may not be "normal" for a while, Congress passed and the president signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27. Among other things, the $2.2 trillion CARES Act provides $100 billion to hospitals, $500 billion for distressed industries, almost $350 billion for small business loans, and $260 billion for a four-month expansion of the unemployment benefits program. But the most memorable aspect of the CARES Act is the $300 billion directed toward stimulus payouts. These payouts, officially known as Economic Impact Payments, were sorely needed by Americans and their families to help purchase essential goods, as well as pay rent, mortgage, or utility bills. Unfortunately, surveys have shown that the vast majority of stimulus recipients burn through their payout in four weeks or less. Thus, for many folks, a second round of stimulus is very much needed. Understanding these concerns, the Democrat-led House of Representatives introduced the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act last week. At $3 trillion, it would surpass the CARES Act as the biggest relief package in history, if approved. The HEROES Act puts money to work in a variety of ways. It provides $1 trillion to at-need states, creates a $200 billion Heroes' fund to provide hazard pay to essential works, extends the unemployment benefits program expansion through January 2021, and allots $175 billion to help struggling families pay their rent, mortgage, or utility bills. Additionally, the HEROES Act would mark round two of direct stimulus payouts. Using the same adjusted gross income eligibility requirements as the CARES Act, another maximum payout of up to $1,200 would head toward single taxpayers. However, changes in the bills' language, as well as in how much dependents can add to what a parent or household receives, could boost household payments to as much as $6,000. But putting money into the pockets of Americans isn't all the HEROES Act would do. A deeper dive into the 1,815-page bill uncovers, of all things, cannabis banking reform legislation.
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May 16, 2020
Weed sales are skyrocketing. Check out what it's like to get it delivered to your door during the pandemic.
Cannabis sales have weathered the coronavirus pandemic well despite stay-at-home orders around the country. In fact, sales have been booming in states with recreational cannabis markets such as California, Colorado, Oregon, and Alaska, according to Reuters. Legalized states have seen a 50% increase in business across the board with some states such as Michigan getting a 57% increase in sales, according to The Detroit News. Most legalized states, such as California, categorized medical and recreational marijuana sales as essential, according to a report by Market Watch. Some states, like Massachusetts, only deemed medical marijuana as essential and shut down recreational stores. Nevada is only allowing delivery while Maine recreational stores have yet to open since legalization, the report said. While the cannabis industry has fared well during the pandemic, the process for customers purchasing marijuana has changed as delivery becomes more popular, and social distancing is required inside shops. Read on to see what visiting a dispensary or ordering delivery is like during the pandemic.
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This week, the U.S. House included legislative language from the SAFE Banking Act in new legislation aimed at economic relief amid the coronavirus pandemic. Elsewhere, in Montana, a campaign to place an adult-use cannabis legalization initiative on the state’s 2020 ballot kicked off a signature drive despite coronavirus-related setbacks. Here, we’ve rounded up the 10 headlines you need to know before this week is over. Federal: The U.S. House will include legislative language from the SAFE Banking Act in the next relief bill aimed at economic relief amid the coronavirus pandemic. Thus far in the current economic crisis, cannabis businesses have been largely excluded from such relief, as the ongoing Schedule-I status of the plant has barred any federal stimulus aid or small business loans from hitting the industry—even as cannabis business around the U.S. have been deemed “essential” in this difficult moment. The National Cannabis Industry Association (NCIA) has recommended that the Drug Enforcement Administration (DEA) should not be part of the cannabis research application process as part of the NCIA’s comments on the DEA’s proposal to advance cannabis research. Among other reasons, the NCIA highlights the DEA’s sluggish processing of current applications to explain why the law enforcement agency is not the right fit to lead cannabis research initiatives. Montana: After losing a court battle to collect signatures electronically, New Approach Montana kicked off a statewide signature drive last weekend to get two complementary adult-use cannabis legalization measures on the state’s 2020 ballot. “As our state reopens for business, we must also reopen for democracy,” the campaign’s political director, Pepper Petersen, said in a public statement. Massachusetts: The Cannabis Control Commission plans to launch its adult-use cannabis delivery application May 28, as some regulators have said that delivery is a priority during the COVID-19 pandemic. The licenses will be granted to social equity and economic empowerment applicants for at least the first two years in an effort to bolster industry participation from businesses owned by minorities, those with prior cannabis-related convictions and individuals who have been disproportionately impacted by the war on drugs. Missouri: An investigation into the roll out of Missouri’s medical cannabis program has reached Gov. Mike Parson’s office, as a House committee seeks records involving Parson’s chief of staff, chief operating officer and a longtime adviser. The Missouri House Special Committee on Government Oversight sent a letter to the Department of Health and Senior Services May 7, requesting records of the department’s interactions with cannabis industry stakeholders and insight into how key decisions were made in the medical cannabis licensing process. Read more
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Democrats' $3 trillion proposal for yet another coronavirus relief bill includes measures that would allow state-legal marijuana businesses to access financial services — a provision that has been ridiculed by some on the right but hailed by those in the marijuana industry as welcome relief for their "essential" businesses. The cannabis-related language, which appears on pages 1,066-1,091 of the massive 1,815-page legislation, mirrors the Secure and Fair Enforcement Banking Act – known as the SAFE Banking Act – which passed the House in September with bipartisan support but has languished in the Senate. The bill also includes productions for hemp and CBD manufacturers, which still exist on shaky legal ground in the U.S. Essentially, the cannabis-related provisions would allow banks and other financial institutions to work with state-legal marijuana businesses and businesses that provide services to the marijuana industry without fear of federal retaliation — a specter that has forced such enterprises to work mainly in cash for years. "It's a great step forward and it will definitely increase industry access to banking," Tom Gavin, the CEO of CannaTrac, a company that provides cashless financial services to state-licensed cannabis businesses, said. The move was also hailed by Rep. Ed Perlmutter, D-Colo., one of the biggest boosters of the SAFE Banking Act, who said in a tweet that "cannabis businesses & their employees ... need relief just like any other legitimate business." Gavin noted, however, that the Democrats' bill would not reschedule marijuana — keeping it illegal on a federal level and likely excluding cannabis companies from government programs like the popular Paycheck Protection Program (PPP).
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May 14, 2020
Arizona court rejects online initiative signature gathering for initiatives such as marijuana legalization
The Arizona Supreme Court on Wednesday rejected a request to allow online signature gathering for proposed ballot measures, including one for marijuana legalization. Backers of four initiatives asked the court to let them use an online signature gathering platform used by candidates to avoid the risk of in-person signature gathering during the coronavirus outbreak. The justices ruled without explanation; a full opinion will be released in the future. Leaders of Save Our Schools Arizona, the group seeking limits on school vouchers, said on social media that the ruling forces voters looking to exercise their rights to “endanger their lives.” The sponsors ultimately decided to drop their effort to restrict school vouchers. “We believe that is a failure of justice based exclusively on political bias,” they wrote. Elected officials can currently collect signatures they need to qualify for the ballot using the secretary of state’s online “E-Qual” system. But initiative backers are required to collect their qualifying signatures in-person. Backers of an initiative that would raise taxes on the wealthy to fund education, known as #InvestInEd, said they would continue their efforts and believe they're on track to qualify for the November ballot. The other initiatives seeking to collect electronically sought sentencing reform and marijuana legalization. Lawyers for the four initiatives argued that social distancing orders meant to prevent the spread of the coronavirus made it extremely difficult for people to collect signatures by approaching voters in public places and at mass gatherings. Attorney General Mark Brnovich, House Speaker Rusty Bowers, and Senate President Karen Fann, all Republicans, asked the court to reject the request. They argued the state constitution requires that petition papers be signed by the person collecting them, and that provision can’t be waived.
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Recent legislative developments that eased restrictions on hemp production have helped elements of the cannabis industry expand but compliance issues still complicate risk management efforts in the sector, a panel of experts said. Meanwhile, wider legislative efforts that could curb potential federal prosecution of cannabis insurers offering coverage in states where the drug is legal may advance quicker than expected, they said. The 2018 Farm Bill, which allowed for the expanded cultivation and transportation of hemp in the United States, has led to increased production of the plant and prices have plummeted, said Gary Broadbent, executive vice president and general counsel at GenCanna Global USA Inc., a Winchester, Kentucky-based hemp producer. He was speaking during a Business Insurance webinar on Wednesday that is part of a series of webinars examining risk management and insurance issues related to cannabis and hemp. Hemp is a cannabis plant that can produce CBD, which is used in dietary supplements and personal care products, but contains limited amounts of THC, the element that gives pot its high. Hemp fiber is also used to make rope, clothing, paper and other products. CBD was selling for more than $40,000 a kilogram in 2014-2015 but now sells for less than $1,000 a kilogram, Mr. Broadbent said, which “has put stress on a number of folks in the hemp-producing industry.” GenCanna filed for Chapter 11 bankruptcy protection in February.
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Hemp farmers and businesses could get additional banking and financing help if the $3 trillion coronavirus stimulus bill introduced Tuesday by U.S. House Democrats becomes law. The SAFE Banking Act, which passed the House last September but has stalled in the Senate, is included in its entirety in the latest stiumulus proposal. A vote on the 1,815-page bill, which includes language to help secure hemp banking, could come later this week. Jonathan Miller, a Kentucky attorney and hemp lobbyist who leads the U.S. Hemp Roundtable, told Hemp Industry Daily that the House’s inclusion of the SAFE Banking Act in its stimulus effort could help the legislation among conservatives who may be anti-marijuana but pro-hemp. “It demonstrates how much of a priority this legislation is for the House, and it’s clear this is something that they’re going to be fighting for when they get into negotiations with the Senate,” Miller said. But the Republican-controlled Senate already has warned that the stimulus bill, if passed by the House, won’t be considered. The Senate’s Republican leaders say that another huge round of coronavirus-related stimulus funding isn’t yet warranted. Miller told Hemp Industry Daily that advocates are “realistic” about the measure’s prospects but consider the banking inclusion an important signal. “If we don’t get it this time, it’s just an indication that the chances are better now that we’ll get it at some point in the near future.” Financial institutions are already cleared to do business with legal hemp and CBD companies. But Miller said that SAFE Banking Act passage would encourage risk-averse banks, financial institutions and credit card companies to do business with hemp operators.
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Rep. Earl Blumenauer's (D-Ore.) road map for the current Congress ended in full legalization by the end of 2019. But instead of a complete overhaul of the nation's cannabis laws in the 116th Congress, one chamber passed one cannabis bill on one issue. Impeachment killed the remaining momentum, and the coronavirus then changed the course entirely, torching the chances of any standalone cannabis legislation passing Congress this year. The only remaining hope for the blueprint lies in attaching provisions to must-pass coronavirus aid or appropriations bills. "It's gonna be a very difficult prospect," said Rep. Lou Correa (D-Calif.). "It is going to be very difficult to get direct aid for the cannabis industry." The outcome is stark given this was considered the most pro-cannabis Congress ever. Broad legalization may have been a dream given the Senate's makeup, but it seemed possible that Congress could pass some laws that would bridge the gap between federal law and states that have legalized cannabis for adult use. The Senate hasn't budged on a cannabis banking bill the House passed last September. Veterans research legislation languished in the House Veterans' Affairs Committee for a year. Senate Majority Leader Mitch McConnell is a major roadblock for most — if not all — cannabis legislation, but the House has sent him only one bill. Lawmakers and advocates are saying this Congress laid a strong foundation for the next to build on, but it may be time to write off cannabis legislation for the time being. "I think between coronavirus and election season, we are in the bottom of the ninth," said Don Murphy, Marijuana Policy Project’s director of federal policies and a former Republican state lawmaker. "We do not have a whole lot of time for the other stuff." Legislation that would give cannabis businesses access to banking stands the best chance of hitching a ride on a larger coronavirus package. The House included cannabis banking language in its latest $3 trillion relief package, but that bill has been dismissed by the GOP-controlled Senate as a nonstarter. The coronavirus also has given new life to another proposal that didn’t get much attention before the pandemic: making cannabis businesses eligible for Small Business Administration loans and grants. But that proposal wasn’t included in the latest House bill, which likely dooms its chances. Legislation that would essentially legalize marijuana was never really on the table to begin with, according to a Democratic House staffer with close knowledge of cannabis policy. “I think the MORE Act passing the Senate right now, whether or not there was coronavirus — or STATES passing the Senate, whether or not there was coronavirus — was a stretch,” the staffer said. The MORE Act would remove the federal prohibition on marijuana, erase marijuana-related criminal records and create grant programs to help communities disproportionately affected by the war on drugs. It moved out of the House Judiciary Committee in November. Legalization advocates initially hoped the proposal would get a House floor vote this year. The STATES Act — which would allow states to set marijuana policies without fear of federal punishment — was seen as a more likely vehicle for comprehensive reform in the Senate. But the MORE Act has to move through six more committees. Justin Strekal, political director at the National Organization for the Reform of Marijuana Laws, said he continues to talk with House committees about waiving jurisdiction — as the House Small Business Committee did earlier this year — in an effort to speed a floor vote. Waiving jurisdiction also is a show of support for legalization and would build a stronger platform for next year.
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