April 28, 2020
FTC Looks to Unwind Altria's $12.8 Billion JUUL Investment
The tobacco giant counters that the regulatory agency is misunderstanding the facts of its e-cig investment.
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Despite being declared an essential service, the cannabis industry may fall victim to Covid-19. Already beset by huge tax bills and an inability to access banks, the cannabis industry is also ineligible to receive money from the Coronavirus Aid, Relief and Economic Security (CARES) Act. However, it's not just companies that "touch the plant" that have been excluded from receiving financial aid, so have a host of other tax-paying businesses that provide services to the industry, such as lawyers and accountants. Most cannabis companies are considered small, with many being mom-and-pop shops. These are U.S. businesses that don't outsource production, provide jobs to about 240,000 Americans, and pay taxes to many layers of government that are now denying them help amid the economic lockdown. The Paycheck Protection Program President Trump signed into law March 27th offers small businesses funds to pay up-to-eight weeks of payroll costs including benefits, Implemented by the Small Business Administration (SBA), the funds can also be used to pay interest on mortgages, rent, and utilities. The program plans to pay out $349 billion to small businesses that must go toward job retention and certain other expenses.
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April 28, 2020
New Mexico Governor Says Legal Marijuana Revenue Could Have Offset Coronavirus’s Economic Hit
The governor of New Mexico is voicing regret that the state did not legalize marijuana this year because, she says, its eventual revenues could have helped to offset economic damage imposed by the coronavirus outbreak. During a press conference last week, Gov. Michelle Lynn Lujan Grisham (D) was asked what her plan is to address the financial uncertainty that’s emerged amid the COVID pandemic. While she said recovery efforts will largely involve coordination with oil and gas companies that account for a sizable share of the state budget, she also regretted that legislators were unable to approve cannabis legalization, which would’ve represented another source of income for the state. “If there was ever a time for wishful thinking, I wish we had passed recreational cannabis because that would be $100 million” in tax revenue, the governor said, though she also acknowledged that the estimate was made “before COVID-19.” Nevertheless, a regulated marijuana market “would be $100 million in the budget, and I’m very sad about that,” she said.
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April 28, 2020
Mexican Lawmakers Set To Take Up Marijuana Legalization Bill With Focus On Economic Recovery
A top Mexican senator says that marijuana legalization could generate tax revenue to offset economic losses caused by the coronavirus pandemic—and lawmakers could have the opportunity to advance reform in a committee that’s expected to be established on Thursday. Sen. Julio Ramón Menchaca Salazar of the ruling Morena party said that while legislators must still resolve disagreements about legislation that’s already been introduced and advanced through several committees last month, legalizing cannabis could fill treasury coffers at a time when the economy is taking a massive hit under social distancing and stay-at-home orders. Farmers in particular also stand to benefit, as the reform proposal would free them up to cultivate both marijuana and industrial hemp, he said. “We have this opportunity and we are going to take advantage of it,” Menchaca, who leads the Senate Justice Committee, told El Sol de Mexico over the weekend. “We will assume our responsibility, both in the Senate and in the Chamber of Deputies.” Lawmakers haven’t been able to discuss the details of a legalization measure in person in recent weeks, and so efforts to enact the policy change have been delayed because of the COVID-19 outbreak. After the Supreme Court ruled that the prohibition on personal possession and cultivation of cannabis is unconstitutional in 2018, it set deadlines for Congress to legalize the plant—dates that have been pushed back several times at the request of legislators who said they needed more time. Most recently, senators said they wouldn’t be able to meet the latest April deadline and the court agreed to give them until December 15. But the process of approving legalization legislation could be sped up through a permanent committee that’s being formed, where lawmakers could make decisions about provisions that have held up the bill in recent months. While the legislation would still have to be passed by the full Congress, the panel is positioned to expedite the process of negotiations. “We knew that during the weeks that they are not physically meeting, it was unlikely that the issue would be discussed because it was something that they really wanted to talk about in person,” Zara Snapp, a legalization activist with the Instituto RIA and the coalition #RegulacionPorLaPaz, told Marijuana Moment. “It would be great news if they moved forward with this under these conditions to ensure that it really does get passed in the timeframe that’s now been established by the Supreme Court.”
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April 28, 2020
There’s a new deadline for Mexico’s marijuana legalization
Mexico has once again delayed the legalization of marijuana and hemp. The potential future of the measure is now more anticipated than ever. The decision (originally set for April 30) was postponed due to the pandemic. They pressed pause on the process of legalization, missing the deadline originally set by Mexico’s supreme court. Because of this delay, “lawmakers have to pass a legalization bill during their next scheduled legislative session, which runs from Sept. 1 to Dec. 15,” according to Hemp Industry Daily. Before the latest setback, the senate committee approved a legalization bill that came from a consensus between political parties. According to the Daily, Mexico would be “the world’s most populous country with legalized cannabis regardless of THC content, meaning both marijuana and hemp,” if it in fact passes. This delay, while frustrating, is not entirely a bad thing; it offers lawmakers time to organize and discuss how they can improve the measure. Even if, or when, the legislation is passed, it will take years to construct and put into place regulations around the growing and selling of cannabis products. Denver’s Hoban Law Group’s Luis Armendáriz, an attorney in Chihuahua, Mexico offered Hemp Industry Daily’s Ivan Moreno insight on what the bill will bring to the Mexican people.
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Cannabis companies would get access to small-business aid under new legislation introduced in the House last week, but whether the pandemic helps or hurts broader legalization efforts is an open question. Executives and policy experts are debating whether states and countries desperate for tax revenue as a result of the coronavirus will rush to legalize cannabis, or whether it will take a back seat to more pressing public-health and economic issues. “I think the issue is when you’ve got an enormous hole to fill -- and every state will have just a colossal budget deficit -- then filling it with a teaspoon of cannabis tax revenue doesn’t really feel like the most productive thing you can do,” said Roy Bingham, chief executive officer of pot data firm BDS Analytics. However, “every state’s going to need every single dollar they can get,” said Matt Hawkins, founder and managing partner of private equity firm Entourage Effect Capital LLC. “As a result, once we get on the other side of this, you’re going to start seeing a little bit more willingness to discuss, if not pure federal legalization, then quasi-legalization.” Boris Jordan, executive chairman of Curaleaf Holdings Inc., said he sees “an extreme parallel” between the current crisis and the lifting of Prohibition during the Great Depression. “Prohibition was lifted and alcohol sales were taxed because the federal government and the local governments needed the revenue,” Jordan said. “We expect over the next 12 to 18 months that significant changes in regulation will bring cannabis into the mainstream in the U.S. as an industry.” For now, the industry is running up against the same constraints it’s always faced because of its federal illegality. While most states with legal recreational cannabis have declared it an essential service, allowing dispensaries to remain open, companies haven’t been able to access the federal relief loans available to other small businesses during the Covid-19 crisis.
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The Rochester, New York City Council is considering legislation that would eliminate pre-employment cannabis drug testing for city workers except for public safety positions and those requiring a commercial driver’s license, the Democrat & Chronicle reports. Mayor Lovely Warren and City Council President Loretta Scott submitted the legislation last week and, in a letter to the City Council, said that removal of the pre-employment drug testing requirement “avoids unfair discrimination against individuals for an activity conducted during non-work hours that may have no effect on their ability to perform the job for which they are applying.” In an interview with the Democrat & Chronicle, Greater Rochester Chamber of Commerce President and CEO Robert Duffy – a former police chief – noted that THC can remain in the body long after the point of intoxication, while alcohol disappears after a matter of hours and that, “to be fair, those types of things have to be considered.” He added that some chamber members have already stopped testing for THC and there is considerable discussion in human resource circles around the region. On May 10, New York City will ban all employers from drug testing applicants for THC. In Nevada and Maine – both of which have legalized cannabis for adults – it is illegal to deny someone employment because of a positive drug test for THC. The Rochester City Council will consider the bill in committee next month before deciding to bring it to a vote. If approved, the changes would take effect immediately.
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Re “Judge rules Baker was within rights to close pot stores” (Metro, April 17): If Governor Baker’s rationale for his determination that recreational cannabis is nonessential is the risk of those from out of state who might be carrying COVID-19 traveling to the Commonwealth, wouldn’t a simple solution be a Massachusetts identification requirement to purchase it here? Recreational cannabis is a revenue stream that Massachusetts can’t afford to lose. Given that the governor and the attorney general were against legalizing recreational marijuana, it appears that they are using the public health crisis as a disingenuous justification to push their anti-cannabis agenda.
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April 27, 2020
Hemp farmers may now qualify for federal economic relief
Many hemp farmers have not yet been able to access economic relief because funds made available by the CARES Act were not earmarked for agriculture-related businesses. That appears to be changing. Recently Congress passed a series of bills aimed at offsetting the economic impact of the coronavirus including the Families First Coronavirus Response Act (Families First Act), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Coronavirus Preparedness and Response Supplemental Appropriations Act (CPRSA). These economic benefits would not be available for marijuana businesses due to the continued prohibition of marijuana activities under federal law. This was recently confirmed in a tweet from a representative from the Small Business Administration (SBA) responding to a question about whether cannabis businesses would be eligible for federal Coronavirus relief: This is a significant burden on the marijuana industry but as you can see from the response above, hemp producers are not disqualified from federal relief thanks to the Agriculture Improvement Act of 2018 aka the 2018 Farm Bill. However, many hemp farmers have not yet been able to access economic relief because funds made available by the CARES Act were not earmarked for agriculture-related businesses. That appears to be changing. On Thursday, April 23rd, the US House of Representatives voted to pass a $484 billion economic stimulus package that had previously passed the Senate and now awaits signature from Donald Trump. According to Hemp Industry Daily $321 billion is going to fund the SBA’s Paycheck Protection Program (PPP) including $60 billion for small lenders and community banks. In addition, Economic Injury Disaster Loans (EIDL) will be available for farms with fewer than 500 employees. These EIDLs provide up to $10,000 in advance for small businesses. To be eligible, agricultural businesses will need to show they have been hurt economically by COVID-19.
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