April 15, 2020
Marijuana lobby presses for coronavirus relief funds
The cannabis lobby is flexing its muscle in Washington and seeking aid for small businesses in the next coronavirus relief package. The marijuana industry has already found help at the state level. Twenty states, the District of Columbia and Puerto Rico are allowing medical cannabis dispensaries to remain open during the pandemic, and eight states allow both licensed recreational and medical cannabis dispensaries to operate. Cannabis groups are pushing for more states to allow legal marijuana markets to remain open and are seeking funds in state aid packages. But the push for help from Washington, where the federal government still classifies marijuana as a controlled substance, has so far failed to make headway. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2.2 trillion stimulus package passed by Congress in March, prohibits businesses engaged in cannabis-related activity from receiving any small business loans. Cannabis groups say that is unfair and are pushing to change that in the next aid package. “Cannabis businesses are dealing with the exact same thing that other businesses are dealing with in terms of employee protection, maintaining payroll ... all on top of the onerous financial burdens that cannabis businesses already face,” said Morgan Fox, National Cannabis Industry Association media relations director. Cannabis lobbying groups wrote a letter to governors last week to urge them to provide loans at the state level and to push their congressional delegations to include them in the next federal relief package. Fox said the association has heard that Speaker Nancy Pelosi (D-Calif.) and Rep. Ed Perlmutter (D-Colo.) are working out language to allow cannabis companies to receive small-business loans. Pelosi’s office did not respond to The Hill’s request for comment, but Perlmutter said he is hopeful it will happen. “I plan to keep pushing to ensure the cannabis industry has the ability to be eligible for SBA [Small Business Administration] relief funds during this COVID-19 crisis. I have spoken to House leadership about this matter and I’m hopeful in one of the next two packages we can get this done,” Perlmutter told The Hill. The National Association of Cannabis Businesses (NACB) is also working toward relief for pot shops. “We’re very favorable towards utilizing stimulus funds or recovery funds and opening those to cannabis businesses. I know that’s problematic because of the status of cannabis, but there are people who think there are ways they can get it done, and I think Pelosi’s looking at that,” Mark Gorman, NACB chief operating officer, told The Hill. The industry groups have also turned to K Street for help. Brownstein Hyatt Farber Schreck has been working on behalf of the Cannabis Trade Federation to lobby Congress to find ways to help cannabis companies access aid in the CARES Act. “There is a very robust conversation happening in the House right now about how to help these companies going forward,” Brownstein’s Melissa Kuipers Blake said. The GOP-controlled Senate will be a harder sell. In 2019, marijuana business advocates had high hopes for passing legislation that would allow financial institutions to finally do business with cannabis businesses that were legal in the states. The House passed legislation in September that would allow banks to finally work with cannabis businesses, but the bill failed to move in the Senate.
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April 15, 2020
Virginia Governor Urges Medical Marijuana Expansion As Amendment To Recently Approved Bill
Virginia’s medical marijuana law has been a source of confusion and frustration for reform advocates given the restrictive definitions of which cannabis products patients can access and the limited legal protections afforded to them. But under legislation approved by Gov. Ralph Northam (D) this week, the issue is being addressed. While considering a bill expanding the number of cannabis dispensing facilities in the state that lawmakers sent to his desk, the governor has recommended an amendment to revise the language in a way that advocates say will expand patient access. Patients who participate in the state’s medical cannabis program will also benefit from a separate piece of legislation that Northam signed, which formally legalizes medical marijuana preparations—as opposed to the prior policy that simply offered patients an affirmative defense in court following police encounters. This is in addition to a marijuana decriminalization bill that was also recently approved—but is also subject to another vote because the governor similarly recommended several amendments. Advocates expect the legislature to approve all of the governor’s proposed changes later this month. The medical cannabis expansion amendment to the dispensary bill would strike language concerning the definition of products that can be dispensed to patients and replace it with a more expansive description. Originally, “cannabidiol oil or THC-A oil” that contains at least 15 percent CBD or THC-A and a maximum five percent THC was covered under the program. But the governor’s proposal would change that language to instead cover “cannabis oil” that “contains at least five milligrams of cannabidiol (CBD) or tetrahydrocannabinolic acid (THC-A) and no more than 10 milligrams of tetrahydrocannabinol per dose.” Reform advocates celebrated the action, as it moves Virginia closer to being what they consider to having an effective or comprehensive medical marijuana law—albeit one that’s still far more restrictive than those in many other states that allow patients to access a wide range of cannabis products, including flower. “No one should be subject to criminal penalties for participating in state-sanctioned healthcare,” Jenn Michelle Pedini, NORML’s development director who also serves as executive director of Virginia NORML, told Marijuana Moment. “Fortunately, SB1015 and SB976 greatly improve and expand Virginia’s medical cannabis program, providing explicit legal protections for participants, and ensuring patients have access to a wide range of popular formulations.” Olivia Naugle, legislative coordinator with the Marijuana Policy Project, told Marijuana Moment that Northam’s recommended amendment “will further expand patients’ access to the medicine they need.” “If enacted, this legislation would give patients a greater variety of product to best treat their conditions, and allow for more locations across Virginia to dispense medical cannabis products to patients,” she said. “We encourage the legislature to approve the governor’s recommendation.” The legislature is tentatively scheduled to convene on April 22 to consider this and various other proposals from the governor, though the voting process may be complicated by the coronavirus outbreak. According to advocates, these modest victories this year will set the stage for comprehensive legalization during an upcoming session. Part of the process of getting there involves a working group study on the impact of legalization for the state—something that was set in motion by the decriminalization bill—as well as a separate approved resolution directing the Joint Legislative Audit and Review Commission to also review the issue. That said, Northam did recommend another amendment on the decriminalization legislation that concerns the legalization study. He proposed delaying the deadline for the working group to submit a report on its recommendations from November 30, 2020 to November 30, 2021. Insiders say that the legislature tends not to act on bold reform without first seeing the results of a formal study.
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Virginia Attorney General Mark Herring says the state will become “a more fair, just, and equal place” now that simple possession of marijuana will be decriminalized. Democratic Governor Ralph Northam signed the decriminalization legislation into law over the weekend. The new law scraps criminal charges for simple possession of marijuana and creates a $25 civil penalty. It also creates a work group to study the impact of legalization of marijuana and eventually release a report on the matter. Supporters have argued the measure is needed in part because African Americans are disproportionately charged with drug crimes. A measure to legalize marijuana failed earlier this year. “Decriminalization is an incredibly important first step, and one that many thought we may never see in Virginia, but we cannot stop until we have legal and regulated adult use,” Herring said in a statement.
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Illinois farmers produced 2.3 million pounds of industrial hemp in the first year of legal cultivation in decades, state officials said. The Illinois Department of Agriculture began issuing hemp-production permits last spring after production was legalized. Of 651 licenses granted, 514 planted at least one acre. Nearly three-quarters of the acreage planted was harvested. Hemp is related to marijuana and even though the psychoactive chemical THC is much lower than it is in marijuana, hemp was illegal from the 1940s until Illinois legalized it in 2018. “The department has been diligently working to open markets for growers to sell their hemp," Agriculture director Jerry Costello said. "We recently developed a policy allowing licensed hemp growers to sell product to licensed cannabis cultivators for use in medical and adult-use cannabis products.”
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April 14, 2020
Growing hemp is a new option for struggling Florida farmers. Licenses go online soon.
During a time of historic economic disruption and agricultural turmoil in Florida due to the novel coronavirus, Agriculture Commissioner Nikki Fried says there’s a newer, greener reason for farmers to be hopeful. The U.S. Department of Agriculture is poised to green-light Florida’s hemp program as early as this week, clearing the way for farmers to apply for cultivation licenses and for other hemp-adjacent businesses to get involved in processing and selling the product. “Our state needs hope, and this is some of that hope,” she told the Miami Herald Monday. The Florida Department of Agriculture has been sending draft hemp rules back and forth with USDA for months, making final tweaks and incorporating feedback from public comment periods. The final plan was submitted to the USDA last Thursday and will be approved any day now. “They are excited to have our rule and give us the green light,” said Fried, whose office has been working closely with the federal agency. Fried and Cannabis Director Holly Bell say they hope to see applications come online by April 27, opening up opportunities to all Floridians. Fried said they will be efficient and quick in getting the hemp program up and running. “[USDA] is anticipating our rules being the gold standard for the country,” she said. Hopeful hemp growers will be able to fill out an application on the Department of Agriculture website and will be approved after a fingerprint scan and background check, Bell said. The only Floridians restricted from getting a permit are those who have been convicted of a narcotics felony — including marijuana charges — in the past 10 years. The permits won’t come with any fees, Bell noted.
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April 13, 2020
Colorado Governor Asks Congress To Let Marijuana Businesses Get Coronavirus Aid Funds
Even as many states deem marijuana businesses to be “essential” operations that can continue their activities during the coronavirus pandemic, ongoing federal cannabis prohibition means they can’t get access to relief funds available to other industries under COVID-19 legislation passed by Congress. The governor of Colorado is seeking to change that. “Unfortunately, a large number of small businesses in Colorado are not eligible for these loans due to their involvement in the state-legal cannabis industry, which is a major employer and tax revenue generator in our state,” Gov. Jared Polis (D) wrote in a letter to a Colorado congressman on Monday. The federal Small Business Administration (SBA) has not only maintained that current law prevents it from offering loans and other services to marijuana businesses such as growers, processors and retailers but also insists that the ban applies even to companies that work indirectly with the cannabis industry—including accounting and law firms. “As you can imagine, there are hundreds of Colorado companies that fall into the latter category, from HVAC companies and lighting equipment suppliers to law firms and accounting firms,” Polis, himself a former congressman who for years was one of the most vocal proponents of marijuana law reform on Capitol Hill, wrote to Rep. Jason Crow (D-CO). It “could have a devastating effect on our business community and tens of thousands of employees” if those companies are blocked from getting aid, he said. “In an ideal world, Congress would include a provision in an upcoming bill guaranteeing that all state-legal cannabis businesses, direct and indirect, will be eligible for these loans,” Polis said. “In the alternative, I hope that you can at least work with your colleagues to ensure that Indirect Marijuana Businesses will be eligible for the loans.”
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Cannabis companies are entering a new normal as the coronavirus pandemic puts stress on every sector of business, fundamentally altering the industry in possibly permanent ways. The COVID-19 outbreak has exacerbated fault lines in the rapidly evolving market and led to number of new outcomes, including: Retailers adapting to changing consumer behavior by offering delivery, curbside pickup, etc. State-by-state legalization movements hitting major obstacles Businesses hoping for post-pandemic real estate deals. An acceleration of acquisitions and business failures, specifically in California. Canadian companies making the best of market uncertainty and changing regulations. Firms reevaluating the viability of the international supply chain. As the market moves through this crisis, companies and their investors will learn to develop built-in resilience, make better assumptions about what could go wrong and put robust practices in place to gird against any disruptions, no matter how major or minor. And they need to be flexible. “Don’t plan for disruptions to end on your timeline,” said Sumit Mehta, CEO of San Francisco-based investment group Mazakali. Buyer behavior. Consumers’ purchasing habits are changing, including the method they use to buy cannabis products. Online ordering, delivery, curbside pickup and drive-thru lanes are likely here to stay as customers recognize their ease of use.
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Before it ends, the coronavirus crisis described by the U.S. government as "our Pearl Harbor moment" will likely kill hundreds of thousands of Americans while the nation sinks further into recession, if not a full-blown depression. Small businesses will shutter. Hourly workers will become homeless. Unemployment will continue to soar, exposing a fragile system left in place after decades of globalization. Stimulus money might help, but what the United States really needs is a self-sustaining, homegrown commodity that would benefit everyone, from the agricultural farmer to the medical patient, as well as all the clerks and customers in between — not to mention the hospitals and clinics experiencing severe shortages of gloves, facemasks, and gowns. That commodity would be hemp, a powerhouse of a plant that until recently had been criminalized by the federal government because it is a cannabis derivative, although it does not contain enough THC to get a person high. Legalized at the federal level with the 2018 Farm Bill, hemp is expected to become a billion-dollar industry in Florida and has the potential to be a godsend for multigenerational farmers who have suffered economically since the signing of the North American Free Trade Agreement (NAFTA) in the 1990s. Florida, in fact, is the only state where hemp can be grown year-round. During the summer, farmers can grow industrial hemp for its fiber, and in winter, they can produce CBD-rich hemp. "The rest of the United States can only produce 70 percent of what we can produce in Florida," says Glenn Whitworth of Whitworth Farms in Boynton Beach. "We can get four harvests a year when other places are lucky to get two, maybe three."
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April 13, 2020
Virginia Governor Proposes Several Amendments To Marijuana Decriminalization Bill On His Desk
Virginia’s governor approved a marijuana decriminalization bill on Saturday, though he submitted a series of recommended amendments for the legislature to consider before it is formally enacted. While several were technical in nature, the two main proposed changes concern the deadline for a cannabis legalization study report and reporting requirements for drivers who unlawfully possess marijuana. Another interesting amendment Gov. Ralph Northam (D) proposed is related to a federal statute that links funds for highways to state drug policies. The governor wants to delete language voicing opposition to a federal statute encouraging states to automatically suspend the drivers license of individuals convicted of any drug-related offense. But it’s not because he doesn’t support an opt-out. Rather, it is because the provision’s inclusion in the decriminalization bill is seen as redundant after the issue was already covered in separate legislation he approved earlier this month. Nonetheless, it highlights intriguing federal-state drug policy questions. The federal statute, which prompted a slew of states to adopt the penalty for fear of losing out on federal highway funds, stipulates that states must enact laws requiring drivers license suspensions for a minimum of six months for drug convictions, including for charges unrelated to driving, and that the governor must submit a written certification of compliance. However, there’s a provision allowing states to proactively opt-out, and the Virginia legislature triggered that as part of a standalone bill passed in March. That legislation expresses the will of the General Assembly to end drivers license suspensions in accordance with the opt out allowance and stipulates that the governor should submit “the necessary certifications” by September 21 to make clear that Virginia will no longer abide by the federally imposed penalty mandate. Virginia is one of only six states—along with Alabama, Arkansas, Florida, Michigan and Texas—that continue to suspend drivers licenses for drug convictions that have nothing to do with operating a motor vehicle.
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Democrats’ push to eliminate a state match requirement for federal grants meant to help election officials deal with coronavirus-related problems is resonating with state officials of both parties and adding another layer of intrigue to the latest COVID-19 aid talks. Under the $2.3 trillion economic relief measure signed last month, states are required to put up a 20 percent match for their portion of $400 million appropriated for pandemic-related election security grants. That’s consistent with the match requirement for $425 million set aside for similar election grants in last December’s fiscal 2020 appropriations bill. The funds were intended to support efforts to upgrade election systems and guard against foreign interference. But with state budgets strained to the breaking point as a result of the economy-wide shutdown spawned by COVID-19, critics say it’s time to waive the state match requirement. Senate and House Democrats’ $500 billion-plus aid package offered on the Senate floor Thursday — rejected by the GOP — proposed changes to the election grant process including scrapping the 20 percent match, allowing state officials to spend the federal grant without action by state legislatures, and loosening state reporting requirements. While Republicans blocked the Democrats’ broader bill, it serves as a marker for changes that Democrats would like to see as House and Senate leadership and the White House engage in talks on wider ranging emergency legislation. Senate Minority Leader Charles E. Schumer and Speaker Nancy Pelosi each spoke with Treasury Secretary Steven Mnuchin Friday about restarting bipartisan talks, made more urgent by the rapidly dwindling small-business lending account created by the most recent aid package. It’s unclear whether congressional Republicans or the White House are willing to waive the state-match requirement. A Senate GOP aide said when the $400 million enacted last month for election security was being negotiated, Democrats “never demanded that the match be removed. Everyone knew the match carried forward, and that in-kind expenditures would apply toward it,” the aide said, speaking anonymously in order to speak candidly. In previous guidance, the commission defined in-kind contributions as costs paid by a different agency other than the state election organization. For example, the commission said training provided to election staff by another agency as part of the grant activity would qualify.
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