May 6, 2020
Top Minnesota Lawmaker Unveils Long-Delayed ‘Best’ Marijuana Legalization Bill In The Country
It was mid-February when Minnesota House Majority Leader Ryan Winkler (DFL) pledged to introduce what he’d called “the best legalization bill in the country” within the coming weeks. Shortly after, the state plunged along with the rest of the country into the global coronavirus outbreak, and marijuana reform was put on ice. Now, as states begin taking steps toward normalcy, Winkler has finally revealed the promised bill, introduced on Tuesday with 33 cosponsors. “Our current priority is responding to the COVID-19 pandemic,” he said after filing the legislation, “but after the town halls and discussions around this issue, we still wanted to put a strong bill forward. As we look to come out of this crisis as a better, stronger Minnesota, we need to continue working toward legalizing cannabis for responsible adult use.” At 222 pages, the bill is an ambitious attempt to address some of the most salient issues around cannabis legalization in 2020, and it reflects an awareness of the challenges encountered by other states that have already legalized. It would prioritize social equity and diversity in industry licensing, try to limit cozy corporate relationships and outlaw unregulated adulterants in marijuana products. The bill also sketches a vision for what Minnesota’s legal cannabis landscape might look like: generous personal possession limits, home cultivation, on-site consumption at licensed businesses and events and a focus on craft cultivation. Leili Fatehi, campaign manager for Minnesotans for Responsible Marijuana Regulation, told Marijuana Moment the legislation was the result of months of hard work with Winkler’s staff. Unlike many other states, Minnesota does not have a system to allow citizens to put initiatives on the ballot, so going through the legislature is the only path for legalization. “We’ve been working with Majority Leader Winkler and his team for nearly a year now to advance conversations in and out of the Capitol,” she said. “Today’s introduction of a comprehensive, equity-focused cannabis legalization bill is a big step for Minnesota and all Minnesotans who know we can responsibly legalize and regulate.”
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Tuesday, Minnesota House Majority Leader Ryan Winkler, DFL-Golden Valley, introduced legislation that would legalize the adult-use of cannabis. According to the Minnesota House of Representatives, the legislation is the result of months of public discussions on how to responsibly legalize and regulate cannabis. "We made a commitment to introduce legislation this session, and we wanted to follow through on that commitment," said Majority Leader Winkler. "Our current priority is responding to the COVID-19 pandemic, but after the town halls and discussions around this issue, we still wanted to put a strong bill forward. As we look to come out of this crisis as a better, stronger Minnesota, we need to continue working toward legalizing cannabis for responsible adult use." The bill includes the following items: Creates a regulatory structure focused on developing micro-businesses and a craft market, Provides for expungement of most cannabis convictions, Provides for a limited allowance of home grow, Requires testing and labeling of products, Restricts packaging based on dosage size, Provides funding for public health awareness, youth access prevention, and substance abuse addiction and treatment, Provides grants, loans, technical assistance and training for small business, Uses best practices from other states to account for negative externalities.
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On Tuesday, Massachusetts State Senator Diana DiZoglio chaired a Zoom hearing to consider her bill for a Bay State version of the federal Paycheck Protection Program (PPP). The legislation would give cannabis operators and other small companies in Massachusetts access to loan funds denied them under the federal measure. Turns out that DiZoglio’s hearing wasn’t the only Zoom event that day to reflect on how cannabis companies are responding to the economic threat of COVID-19. During a separate online media briefing hosted by the Cannabis Information Project, topics ranged from veterans’ loss of medical cannabis due to adult use closures; to the resurgence of the illicit marijuana market; to the challenges the patchwork of different state regulations pose. In the case of neighbors New York and New Jersey, for instance, two dramatically different sets of criteria for access to medical cannabis are separated by ... a river. And ultimately such state-vs.-state and federal-vs.-state differences take an economic toll, speakers agreed. “The decision to limit recreational sales in some states, as well as the limits in curbside pickup in others, has hampered the industry’s ability to be an instrumental economic engine at a time when our country needs it the most,” pointed out Linda Greene, who is owner and CEO of Anacostia Organics. That message fell on the sympathetic ears of nine other industry professionals, who included other company executives like Greene, a cannabis pharmacist and a certified cannabis educator. That educator, Heather Allman, underlined the medical benefits of cannabis by introducing herself as a multiple sclerosis sufferer. Until she embarked on a medical cannabis course of treatment, Allman said, she was confined to a wheelchair and subjected to a regimen of 25 daily medications.
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It took almost two years for Massachusetts marijuana company T. Bear, Inc., to receive approval to commence operations, which finally came down on March 20, recounted owner and CEO Angela Brown. That approval authorized the East Wareham company to start operations on March 24, which happened to end up being the day an order from the governor shut down businesses deemed non-essential, including marijuana companies. “Just one day before we were able to make our first sale, we were shut down,” said Brown on Tuesday, testifying before state lawmakers in support of a bill that would offer a Massachusetts version of the federal Paycheck Protection Program, or PPP, amid the COVID-19 pandemic. Brown said her company was forced to furlough its whole team. “All I can do now is wait, with no income and no revenue,” she said. “And while I wait, I still pay my rent, my lenders, my utilities and my health insurance for my furloughed employees.” Gov. Charlie Baker in March issued an order that shut down non-essential businesses starting March 24. While medical marijuana companies are allowed to operate during the pandemic, adult-use marijuana businesses have been shuttered since. The order has been extended multiple times, and now has an end-date of May 18. The Joint Committee on Community Development and Small Businesses met virtually Tuesday to hear testimony on two bills, S. 2564, An Act to support MassMakers, and S. 2643, An Act establishing a Massachusetts Paycheck Protection Program (PPP) for businesses ineligible for the comparable federal PPP. While the PPP bill would assist several different industries that have been left out of the federal PPP, the majority of the conversation during Tuesday’s hearing was centered around recreational marijuana. “We can’t keep having cannabis be the odd business out," said Caroline Pineau, the owner and CEO of Haverhill Stem and an economic empowerment applicant. “Governor Baker said liquor stores can stay open yet closes down cannabis. This arbitrary reasoning further disproportionately impacts the entire industry, an industry that has demonstrated we can safely operate with proper social distancing, appointment only and online ordering." Pineau reiterated that cannabis businesses like hers have payrolls, taxes, licensing fees, mortgages and high insurance premiums. But because marijuana is still federally illegal, marijuana businesses have been left of economic relief measures. “What am I supposed to do,” asked Pineau, who told the committee she invested millions into her business while doing everything by-the-book. Business owners repeated many of the same points: Massachusetts is the only state with legal marijuana that has shut down adult-use sales amid the pandemic, and that the state is not benefitting from tax revenue with these businesses shuttered. Without the bill’s passage, the future for small businesses in the state’s marijuana industry could be grim, some predicted
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Leaders of chambers of commerce, marijuana companies, and other groups that are ineligible for federal coronavirus business relief funds are pleading with Massachusetts legislators for financial assistance, saying their organizations otherwise face imminent failure. The leaders testified Tuesday at a virtual hearing of the Legislature’s joint committee on community development and small businesses. The committee met to consider a bill by its chairwoman, Senator Diana DiZoglio, that would extend millions of dollars in forgivable loans to state businesses and nonprofits ineligible for the federal Paycheck Protection Program. The federal program is designed to help small businesses cover payroll, mortgages, utilities, and other expenses while they weather closures or disruptions related to the COVID-19 pandemic. But it excludes marijuana operators, because the drug is illegal under federal law, plus certain nonprofits such as chambers of commerce and trade groups. “I’ve heard from so many small businesses and nonprofits who tried to apply for federal loans or grants but were denied due to eligibility requirements,” DiZoglio, who represents the North Shore, said following the hearing. “We filed this legislation to try to fill some of those gaps left by the federal program and assist our small business community by creating parity across the board.” Business leaders testified that trade groups and chambers of commerce are vital institutions whose members are relying on them to help navigate the unprecedented changes brought on by the virus. Allowing them to fail, they argued, will only hold back the state’s eventual economic recovery. Mark Iannuccillo of the Greater Newburyport Chamber of Commerce told lawmakers the bill could decide the business group’s fate. “We’ve [only] collected about 10 percent of our dues, all of our events have come to a grinding halt, and the future of our organization remains uncertain," he testified. Similarly, numerous marijuana entrepreneurs testified that being excluded from federal aid, combined with Governor Charlie Baker’s decision in late March to shutter the recreational pot market as a “nonessential” industry, has been devastating. They also highlighted a depressing irony: Their firms pay far more into government coffers than other companies, yet are ineligible for government payouts.
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May 4, 2020
Was Quarantine Made for Cannabis?
Late last month, while President Trump flirted with solutions to the coronavirus—sunbathing with a “very powerful light,” injecting Lysol to clean the lungs—others elected to smoke pot. In Los Angeles, as a queue of cars crept slowly in a two-hour In-N-Out Burger drive-through line, in Hollywood, a string of people, standing six feet apart, snaked down the block outside the MMD cannabis dispensary. Mishka Ashbel, who co-owns the dispensary with his brother, Slava, said, “We get to provide a little relief to a stressed society.” Los Angeles, which shuttered its beaches and hiking trails, has deemed weed an essential service, critical to residents’ health and well-being. “On 4/20, a lot of people used coming to a dispensary as an excuse to get out of the house, to feel normal again,” Ashbel said. “To stand in that line was like a special occasion. People placed online orders for delivery starting at 4 a.m.” (Seniors get their gummies, organic pre-rolled joints, and edibles delivered free.) “Vice industries,” such as the liquor business, do well during recessions and crises; in the first days of the shutdown, marijuana stocks outperformed the crashing S. & P. Ashbel does not consider cannabis a vice product. “This is a health product,” he said. “You feel this responsibility to the public here—we’re on the front lines. It’s uncharted territory.” A former N.F.L. player was reprimanded by the F.D.A. for advocating cannabis as a cure for covid-19, but many have found it crucial in coping with the pandemic. David Lonsdale, the C.E.O. of a hemp-cultivation company called CanaFarma, weighed in by phone from his Manhattan apartment. “People are looking at an over-all wellness program,” he said. “Cannabis becomes part of your daily routine, like blood-pressure medicine.” “People are used to self-medicating, and it’s medical, yeah,” a Broadway actor who works part time as a budtender said. “But people are also just bored.” Rudy Schreier, a cannabis consultant, said, “You wake up, you have a good breakfast, you maybe take some vitamins, you do work, you have lunch, do more work, smoke a joint, eat an edible. It’s becoming the norm since we’ve been on lockdown.” Schreier works with dispensaries to help them secure licenses. “A lot of people working from home have more time on their hands now,” he said. “In a world that’s so hectic, everyone’s wish was to have more time, and now that that wish has been granted people are, like, ‘I don’t know what to do.’ That’s where cannabis comes into play.” He went on, “I live in a house with seven other people, and during the quarantine we’ve had a couple of girlfriends here, too, so it’s like twelve of us, and pretty much everyone is smoking every day. People finish whatever they have to do for their job at, like, 2 p.m., and they’re, like, ‘What are we going to do for the rest of the day?’ ”
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The COVID-19 crisis has packed a big wallop to the legal cannabis industry that will likely unleash repercussions in the months and years to come. Recently, six leading cannabis professionals shared their thoughts on how the pandemic has affected their industry and weighed in on where they would like to see their business moving forward. The participants in this virtual roundtable are as follows: Morris Beegle, co-founder and president of WAFBA (We Are For Better Alternatives), a Colorado hemp company; Andrew DeAngelo, cannabis industry consultant and co-founder of California-based dispensary chain Harborside; Katie Stem, CEO of Peak Extracts, a edibles and cannabis chocolate manufacturer in Oregon; Sam Ludwig, president of Oakland, California-based Aster Farms, a sustainable cannabis company; and Mike Glazer and Mary Jane Gibson of cannabis podcast Weed+Grub. This group Q&A has been edited for conciseness and clarity Dorbian: How has coronavirus changed the cannabis industry? Morris Beegle: Cannabis is a very social industry with networking events, conferences, trade shows and parties. A large portion of companies and organizations rely on these events to market products, connect with clients and potential clients, and do business face-to-face. The current situation with coronavirus has had a severe impact on this part of the industry. Andrew DeAngelo: We don't yet know how COVID-19 will change the cannabis industry. The impacts will be significant. What I do know is that people need more weed in a crisis, not less. Someone will get it to them, one way or another.Katie Stem: Coronavirus seems to have had less of an impact on the cannabis industry than nearly any other facet of our economy. Not only do people rely on cannabis in times of isolation, stress and crisis, but it is by nature a more solitary drug than alcohol (which people are also consuming at higher rates). Because of state regulation, there were already protocols for sale of cannabis that closely resemble social distancing measures, such as limiting the number of people in a store, etc. In many ways adapting to the new standards has been an easy transition. Unfortunately, I have seen a number of smaller businesses suffer during this downturn, as they have less buffer and fewer resources to weather the chaos—and of course federal relief funds are unavailable.
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The U.S. Department of Agriculture (USDA) recently released guidelines for processing federal loans for the hemp industry. Since hemp was federally legalized under the 2018 Farm Bill, it is now considered an agricultural commodity like any other crop, and USDA has taken several steps to sync the market with its various programs and services. And the department’s new memo to state and county offices provides clarity on how to process direct or guaranteed loan applications for hemp producers. The seven-page document, which was released last month, describes the various requirements a hemp business must satisfy in order to access USDA’s lending services. Chief among those requirements is for a prospective borrower to be licensed under a USDA-approved state or tribal hemp program, or under USDA’s basic regulations if the jurisdiction the business operates in has not submitted its own rules. “While it’s understood that this new commodity will likely produce some servicing challenges because of State and Federal regulations, it should be treated as closely as possible to any other agricultural commodity and serviced in the same manner,” the memo states. “Hemp will be considered like any other borrower produced commodity, if the hemp was produced under a license authorized by the 2014 or 2018 farm bills, and provided the crop is not abandoned or destroyed.” Borrowers who are not licensed to grow hemp will be considered in non-monetary default and any losses will not be covered. While the document emphasizes that hemp should generally be treated the same as other crops, it also acknowledges unique requirements and challenges that the market continues to face. For example, hemp that contains more than 0.3 percent THC must be disposed of under the department’s rules. And, the memo says, USDA’s Farm Service Agency (FSA) “will not pay for these services for direct loans and FSA will not cover a lender’s advance to the borrower to cover the cost as part of any guaranteed loan loss claim.” Officials should also be cognizant of ongoing problems with banking access for the industry, as some financial institutions still decline to service businesses that produce the crop despite its federal legalization. “Applicants should ensure the availability of a banking institution authorizing these financial transactions to ensure availability of proceeds to support payment of expenses and debts,” USDA said. “Additionally, producers will be required to assign their sale proceeds to FSA in an amount not to exceed their annual payment.” For direct and guaranteed loans, hemp businesses must have a contract with FSA laying out termination policies and their ability to repay the loans. Part of that calculus should involve looking at the “intended use of hemp being produced,” whether that’s fiber, seed or CBD oil. The Farm Bill doesn’t allow for hemp licenses to be transferred, which also has some lending service implications, USDA wrote. The memo says that “if the borrower defaults on the loan, dies, or abandons the operation, under no circumstance could another legal individual, lender, or FSA Agency official obtain the right to the commodity and attempt to liquidate it as a full or partial income recovery attempt.” This latest document seems to build off the establishment of loan programs for hemp businesses that was described in a memo released in February. The purpose of that notice, which itself was an update to one published last October, was to provide “updated guidance on the analysis and evaluation of Direct Loan applications and/or requests for guaranteed loans for industrial hemp growers, especially as it relates to contracts.”
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There's been a lot of progress in recent the years when it comes to the legalization of cannabis. In 2018, Canada became just the second country in the world (after Uruguay) to legalize recreational marijuana. In the U.S., more than 30 states permit the medical use of marijuana, and a farm bill was passed over a year ago that made hemp legal federally. Even conservative countries in Asia such as South Korea and Thailand now permit marijuana for medical use. The latest milestone for the industry comes from the Middle East, where Lebanon has become the first Arab country to permit medical marijuana. New law could make Lebanon a major supplier of cannabis in the world. In Lebanon, farmers can now grow cannabis for medicinal and industrial purposes. Cannabis can also be exported, which could pave the way for more competition in North America and other parts of the world that rely on foreign supply. Lebanon has a warm climate that can make it easy to grow cannabis year-round. And with more than 100 years of cultivation experience with cannabis, the country knows how to grow pot. Data from the United Nations indicates that after Moroccoand Afghanistan, Lebanon is the largest supplier of cannabis resin (hashish) in the world. Now that it's legal to export pot out of the country, farmers in Lebanon have an opportunity to take advantage of the industry's growth in many different parts of the world. And while that may be good for the global cannabis market, it could spell trouble for North American cannabis companies -- especially those involved with hemp, such as Charlotte's Web (OTC:CWBHF). Is this bad news for hemp producers? Although Lebanon legalized medical marijuana, the law effectively addressed hemp, as it limited the plants' tetrahydrocannabinol (THC) content to less than 1%. And with hemp legal federally in the U.S., foreign producers in Lebanon could potentially import hemp into the country, driving down prices and margins in the process. According to industry experts, there's already an oversupply of hemp in the U.S.; more coming online may only make matters worse. Charlotte's Web, which produces products using cannabidiol (or CBD, a non-psychoactive compound found in the hemp plant), is already facing challenges in moving its goods. The company wrote off $13.9 millionof inventory, including $12 million of finished goods, in its most recent quarterly results. That's not something you expect to see, especially in a growing industry. But many companies are growing hemp because that's the easiest way to tap into the cannabis industry's growth in the U.S. And if there are more hemp suppliers in the future, generating sales growth will be even more difficult for Charlotte's Web. In the company's fourth-quarter results, sales were up by just 6% from the prior-year quarter and down 9% from the third quarter.
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Early last month, voters in Wisconsin navigated a dizzying number of rule changes governing the state’s spring elections as officials tussled over the risks of the novel coronavirus, prompting a backlog of absentee ballot requests and fears that many would not be able to participate. But in the end, tens of thousands of mail ballots that arrived after the April 7 presidential primaries and spring elections were counted by local officials, a review by The Washington Post has found — the unexpected result of last-minute intervention by the U.S. Supreme Court. In Milwaukee and Madison alone, the state’s two largest cities, more than 10 percent of all votes counted, nearly 21,000 ballots, arrived by mail after April 7, according to data provided by local election officials. The surprising outcome after warnings that many Wisconsinites would be disenfranchised amid the pandemic was the result of a largely unexamined aspect of the court’s decision that temporarily changed which ballots were counted. Because of the order, election officials for the first time tallied absentee ballots postmarked by Election Day, rather than just those received by then — underscoring the power of narrow court decisions to significantly shape which votes are counted. What happened in Wisconsin has potentially far-reaching implications as the two parties square off in courtrooms across the country, hoping to notch legal victories that will shape the electorate in their favor before November.
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