A farmer in Killeen is the first in the state to be issued a license to grow hemp following the passage of the 2018 Farm Bill, which directed the U.S. Department of Agriculture to establish a regulatory framework for hemp production in the U.S., Texas Agriculture Commissioner Sid Miller announced in a press release Thursday. The name of the farmer and the site where the hemp will be grown weren’t released Thursday. “Let’s face it, Texas farmers and ranchers needed some good news,” Miller said. I am happy that I can be the one to deliver it. I know Texas farmers have been eagerly waiting for a chance at these hemp licenses and now the wait is over.” Following passage of the 2018 Farm Bill the Texas Legislature, in 2019, approved legislation establishing rules governing hemp production in the state. In January 2020 the USDA approved the state’s plan and the application process started on March 16. The agriculture department has received 454 producer applications, 58 handler applications and 30 handler sampler applications, Miller said. “License number one is just the beginning for industrial hemp in Texas,” Miller said. “Hemp offers Texas farmers a great new opportunity, but I want them to understand that with every promise of high profit comes the reality of high risk,” he said. “My job was to get this program started, it’s now up to farmers and processors to build that Texas ‘hempire,’” he said.
Learn more
Tax collections from Oklahoma's medical marijuana industry set a record high in March.
Learn more
April 8, 2020
Pandemic upends pot legalization
What was supposed to be a banner year for marijuana legalization is becoming a bust. Advocates are pushing ballot referendums in nearly a dozen states, from Idaho to New Jersey. Governors and state lawmakers who failed to pass legalization last year — most notably in New York — vowed that 2020 would be different. But social distancing has put ballot drives on pause and state lawmakers are overwhelmed with addressing the crisis at hand. “People are scared. They don’t want to touch a pen or paper,” said Melissa Fults, executive director of Arkansans for Cannabis Reform. “All we can do is sit and wait.” So even with marijuana sales spiking, the coronavirus pandemic is crippling marijuana legalization efforts on the state level — and campaigns on all kinds of other issues, too. “The coronavirus has impacted every signature drive on every issue across the country,” said Matthew Schweich, deputy director of legalization advocacy group Marijuana Policy Project. Even New York Gov. Andrew Cuomo, who declared that marijuana legalization would be a “top priority” earlier this year, abandoned the initiative when his state emerged as the epicenter of the coronavirus outbreak in the U.S. “Too much [to deal with], too little time,” Cuomo said when asked about marijuana legalization during a recent press briefing. A few states are poised to vote on marijuana referendums: New Jersey voters will decide whether to allow recreational marijuana sales in November, and Mississippians are expected to face two competing medical marijuana referendums.But some ballot campaigns have abandoned this year’s plans and are eyeing 2022, and advocates are unsure what will happen to legalization bills with dozens of legislative sessions suspended or postponed. Even anti-legalization advocates are not cheering these developments. “Obviously this isn’t the reason we would want legalization measures to be set back,” said Kevin Sabet, president of Smart Approaches to Marijuana. “Lives are on the line.” Nearly a dozen marijuana legalization ballot campaigns were angling for a spot on the 2020 ballot until coronavirus-related orders made it nearly impossible for canvassers to collect signatures. "[Circulating petitions] contributes to the public health problem," said Schweich. "There’s no playbook on how to do a signature drive during a pandemic."
Learn more
While many U.S. states have issued guidance to address the COVID-19 pandemic, Dr. Anthony Fauci, the nation’s top infectious disease expert, told CNN last week that the governors who have not issued statewide stay-at-home orders “really should” take action to slow the spread of the virus. President Donald Trump, on the other hand, has largely advocated for each state to take its own approach, but Fauci’s message could indicate the inevitability of a federal stay-at-home order as the public health crisis evolves. Should federal guidance come into play, what would this mean for cannabis businesses operating in a federally illegal industry? First and foremost is the question of whether the federal government can legally issue a stay-at-home order in the first place. “I think there’s still a question [of] if the federal government has the authority to issue a shutdown order,” Karen O’Keefe, director of state policies for The Marijuana Policy Project (MPP) and the MPP Foundation, tells Cannabis Business Times. “I saw that there are some general classifications of what constitutes an essential service and what does not for the federal government, and at least one state that was relying on that used those definitions to include medical cannabis as something that could stay open because pharmaceutical and medical facilities can stay open. … Certainly, my hope and expectation would be … a general mandate to keep open businesses that provide medications, and then that would include medical cannabis.” If the federal government is indeed authorized to issue stay-at-home guidance, the consensus among industry stakeholders seems to be that any federal order should leave flexibility for states to continue deeming certain businesses essential, as they see fit. This would mean that the cannabis industry should be safe in jurisdictions that already carved out exceptions for their cannabis businesses in the name of patient access. Chris Lindsey, MPP’s director of government relations, says that while it is unlikely that the federal government would significantly increase requirements for states that have stay-at-home measures already in place, it could instruct states that have not yet adopted orders to do so, and would most likely defer to those states’ priorities as much as possible. Harris Bricken attorney Hilary Bricken agrees. “I think the federal stay-at-home would only address the basics and would leave it open as to whether or not these are essential businesses, and they would probably leave it up to the states,” she tells Cannabis Business Times. “If a fed order came down that said, ‘You must shutter if you’re a federally illegal business,’ that would be a different story. But even then, I think states would be in the same position that they are in now in that this is a state’s rights issue. There are lots of constituents that rely on this as medicine, so we’re going to remain open and basically continue the cycle of the federal-state conflict that’s already in place.” Lindsey echoes this sentiment.
Learn more
April 8, 2020
Pandemic upends pot legalization
Advocates are pushing ballot referendums in nearly a dozen states, from Idaho to New Jersey. Governors and state lawmakers who failed to pass legalization last year — most notably in New York — vowed that 2020 would be different. But social distancing has put ballot drives on pause and state lawmakers are overwhelmed with addressing the crisis at hand.
Learn more
A cannabis industry market research company on Tuesday predicted that the marijuana market in Massachusetts will reach $1.35 billion in 2024, however, that estimate comes before anyone can know what impact will be seen from the halt of adult-use operations during the COVID-19 pandemic. BDS Analytics, headquartered in Boulder, Colorado, said in a news release that it projects Massachusetts’ marijuana sales to exceed $745 million in 2020, based on sales projects modeled from point-of-sale transaction records. So far in 2020, there has been $157 million in reported marijuana sales in the state, according to data from the Cannabis Control Commission. But, responding to the ongoing COVID-19 crisis, Gov. Charlie Baker last month announced the closure of all non-essential business. While the governor’s order allows medical marijuana dispensaries to continue operating, retail shops had to close their doors until at least early May. BDS Analytics said its prediction that the Massachusetts market will reach $1.35 billion in 2024 is driven by new store openings, increasing consumer demands and new product form factors.
Learn more
“Marijuana and the gig economy were two of the more complicated initiatives that we wanted to work through that we didn’t get a chance to do,” he said in response to a question about which policy issues he would’ve liked to tackle in the annual budget bill that passed this week. “Is the session effectively over? It’s up to the legislature, but I think it’s fair to say it’s effectively over,” he added, noting that several state lawmakers have been infected with coronavirus. In January, for the second year in a row, Cuomo included cannabis legalization in his budget proposal to lawmakers. In 2019, despite support for the general concept among legislative leaders, the issue was dropped amid disagreements over specifics, including how tax revenue would be allocated. This year, observers were optimistic about the prospects of picking up those discussions and coming to a deal. But the COVID-19 pandemic quickly consumed the legislature’s attention in recent weeks and though Cuomo repeatedly indicated he still wanted lawmakers to address the marijuana through the budget, it ultimately proved too complicated an issue to resolve in the spending bill that was due this week. The governor has continually maintained that the budget is the best vehicle through which to get legalization accomplished, but advocates and lawmakers had held out hope that it could be addressed later in the year. Sen. Liz Krueger (D), the lead sponsor of a standalone marijuana legalization bill, said last month that if legal marijuana didn’t end up being addressed in the budget “there is no reason it can’t get done right later.” Now, with the governor declaring the legislative session “effectively over,” that seems less likely to happen.
Learn more
April 7, 2020
Businesses that ‘indirectly’ work with marijuana industry ineligible for federal coronavirus loans
State-legal marijuana retailers and growers aren’t the only ones who stand to miss out on federal relief loans amid the coronavirus outbreak. In addition to that restriction, which the federal Small Business Administration confirmed last month, a wide range of businesses that indirectly service the cannabis industry are also ineligible under recently enacted legislation. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which President Trump signed last month, provides for a Paycheck Protection Program that offers a significant amount of forgivable loans to companies with 500 or fewer employees. But cannabis businesses — as well as ancillary firms that contribute to them with products or services — are specifically excluded from those benefits. In a notice about the draft rules of the CARES Act, the SBA points to a document from last year outlining businesses that are generally ineligible for its programs. One section describes how “Businesses Engaged in any Illegal Activity” can’t receive federal loans. “SBA must not approve loans to Applicants that are engaged in illegal activity under federal, state, or local law,” it states. “This includes Applicants that make, sell, service, or distribute products or services used in connection with illegal activity, unless such use can be shown to be completely outside of the Applicant’s intended market.” “Because federal law prohibits the distribution and sale of marijuana, financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity,” it continues. “Therefore, businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.” To that end, it’s no surprise that businesses such as dispensaries and cultivation facilities would be excluded. But it’s also the case that a large class of companies that indirectly work with the cannabis industry could also lose out on the benefits. An ineligible “indirect marijuana business” is defined by the SBA as “a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to aid in the use, growth, enhancement or other development of marijuana.” The agency provides specific examples of such companies, including “businesses that provide testing services, or sell or install grow lights, hydroponic or other specialized equipment, to one or more Direct Marijuana Businesses; and businesses that advise or counsel Direct Marijuana Businesses on the specific legal, financial/accounting, policy, regulatory or other issues associated with establishing, promoting, or operating a Direct Marijuana Business.” Businesses that sell paraphernalia like bongs or pipes intended for cannabis use are also ineligible for the loans, the agency said. However, the SBA said its interpretation of an indirect cannabis business doesn’t extend to companies that provide general services such as plumbing or tech support for laptops that marijuana firms use, for example. “As a starting point, it is incredibly unfair that state-legal cannabis companies are not eligible for these SBA loans,” said Josh Kappel, founding partner at Vicente Sederberg. “These companies pay Social Security and Medicare taxes, unemployment taxes, and, of course, federal corporate taxes. In every way, they deserve to be treated like any other business when it comes to these emergency loans.”
Learn more
April 7, 2020
People Could Still Be Denied These Jobs Over Marijuana Use Under New York City Drug Testing Exemptions
New York State might not be legalizing marijuana this year, in large part due to complications from the coronavirus outbreak, but at least many of those still in the workforce in New York City won’t risk being denied jobs over a positive THC test thanks to a local law that goes into effect next month. And now a city commission is proposing regulations on who exactly will be protected from pre-employment cannabis testing. The New York City Commission on Human Rights proposed a rule, which was published in The City Record on Tuesday, that When the City Council first approved the legislation—which was enacted without Mayor Bill de Blasio’s (D) signature last year—it included language carving out exceptions from the prohibition on testing for those applying to certain jobs such as police officers and people charged with supervising or caring for children, as well as positions “tied to a federal or state contract or grant.” The law, which goes into effect starting May 10, also exempts jobs with “the potential to significantly impact the health or safety of employees or members of the public.” To that end, these new proposed regulations from the commission seek to explain exactly what constitutes such a position. Here’s who would still be subject to pre-employment drug testing under the proposal: 1) People in jobs that require them to regularly be on active construction sites, 2) those who regularly operate heavy machinery, 3) those who regularly work with power or gas utility lines, 4) those who use a motor vehicle on approximately a daily basis and 5) those for whom impairment “would interfere with the employee’s ability to take adequate care in the carrying out of his or her job duties and would pose an immediate risk of death or serious physical harm to the employee or to other people.”
Learn more
April 6, 2020
Businesses That ‘Indirectly’ Work With Marijuana Industry Ineligible For Federal Coronavirus Loans
It’s not just state-legal marijuana retailers and growers that stands to miss out on federal relief loans amid the coronavirus outbreak. In addition to that restriction, which the federal Small Business Administration (SBA) confirmed last month, a wide range of businesses that indirectly service the cannabis industry are also ineligible under recently enacted legislation. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which the President Trump signed last month, provides for a Paycheck Protection Program that offers a significant amount of forgivable loans to companies with 500 or fewer employees. Cannabis businesses—as well as ancillary firms that contribute to them with products or services—are specifically excluded from those benefits, however. In a notice about the draft rules of the CARES Act, SBA points to a document from last year outlining businesses that are generally ineligible for its programs. One section describes how “Businesses Engaged in any Illegal Activity” can’t receive federal loans. “SBA must not approve loans to Applicants that are engaged in illegal activity under federal, state, or local law,” it states. “This includes Applicants that make, sell, service, or distribute products or services used in connection with illegal activity, unless such use can be shown to be completely outside of the Applicant’s intended market.” “Because federal law prohibits the distribution and sale of marijuana, financial transactions involving a marijuana-related business would generally involve funds derived from illegal activity,” it continues. “Therefore, businesses that derive revenue from marijuana-related activities or that support the end-use of marijuana may be ineligible for SBA financial assistance.” To that end, it’s no surprise that businesses such as dispensaries and cultivation facilities would be excluded. But it’s also the case that a large class of companies that indirectly work with the cannabis industry could also lose out on the benefits. An ineligible “indirect marijuana business” is defined by SBA as “a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to aid in the use, growth, enhancement or other development of marijuana.”
Learn more
