United States: Cannabis Group Weekly Alert - Week Of July 9, 2019

In this week’s edition:

  • Congress has been spending increased time discussing cannabis reform
  • California extends provisional licenses to 2022
  • Social use laws continue to proliferate, with Massachusetts and Michigan both advancing provisions to allow for it
  • New York City’s CBD-infused food and beverage ban takes effect
  • Canopy decided to remove its founder and CEO Bruce Linton
  • Bonus: Eric Berlin pens editorial regarding cannabis legalization

Federal

The House Judiciary Crime, Terrorism and Homeland Security Subcommittee will hold a hearing on July 10 titled “Marijuana Laws in America: Racial Justice and the Need for Reform.” Based on the title and witness list, which is made up of four progressive cannabis reform advocates, it is being slated as “one of the most significant congressional developments on marijuana reform to date.”

Lawmakers are reportedly growing impatient for the Food and Drug Administration (FDA) to issue rules for CBD. Senate Majority Leader Mitch McConnell (R-KY) met with Sharpless last week, and urged the agency to speed up the timing on CBD regulation. Additionally, the House approved a provision in the appropriations bill that provides $100,000 for FDA to set a “safe level for conventional foods and dietary supplements containing cannabidiol (CBD).” There are also rumors that legislation regarding CBD is being privately circulated in Congress.

US Customs and Border Protection issued a warning for those crossing between Canada and Michigan over the Fourth of July weekend, which included a tip against the attempted entry of cannabis products into the US.

States

California Gov. Gavin Newsom (D) signed a bill to extend provisional licenses for cannabis businesses to 2022.

Colorado Gov. Jared Polis (D) launched an online tool to track his administrative priorities, including cannabis-related priorities. Gov. Polis hopes to increase the number of banks serving cannabis businesses, implement delivery services and triple outdoor hemp cultivation in the state.

Hawaii Gov. David Ige (D) has until July 9 to make his final decision on issuing vetoes. Among the 20 bills he has identified to potentially veto are a law creating a hemp program and a law allowing inter-island transport of medical cannabis. Although lawmakers considered convening a special session to override potential vetoes, such plans did not come to fruition due to disagreement between the House and the Senate.

Idaho Secretary of State Lawerence Denney forwarded a medical cannabis ballot measure to the state attorney general for review. This is the first step to having a measure on the ballot in 2020. The measure would decriminalize the possession of up to four ounces of cannabis for registered patients with a specified “debilitating medical condition,” such as cancer or chronic pain. 

In Illinois, the Chicago Board of Education removed cannabis and other drug use from the most serious category of infractions, removing expulsion as a possible punishment.

Kansas Gov. Laura Kelly (D) signed “Claire and Lola’s Law,” which creates an affirmative defense for those who cannot seek relief from pharmaceutical medications to possess and use CBD oil that contains less than five percent THC.

Massachusetts regulators posted draft rules for adult-use and medical cannabis and scheduled hearings to receive public comment. Per the commission, the revisions address fees; new license types, including delivery and social consumption; application, enforcement and administrative processes; operational issues, including cash handling procedures, transactions and potency limits; and energy and environmental issues, among other policy areas.

Michigan Gov. Gretchen Whitmer (D) signed a set of emergency rules for the state’s cannabis program that include provisions allowing home delivery, cannabis consumption lounges and special festival permits. The early release is intended to give Michigan’s local governments time to decide whether they want to ban adult-use cannabis businesses before the state begins accepting business license applications.

Missouri regulators released the names of individuals and businesses that have applied for licenses to cultivate, test and sell medical cannabis following a court ruling ordering them to do so.

New Jersey Gov. Phil Murphy (D) signed a bill expanding the state’s medical cannabis program. The new law aims to address several issues in the medical market by adding providers to the program, allowing patients to purchase more cannabis at once, and ending the tax charged on medical cannabis purchases by 2022. Gov. Murphy also recently stated he won’t rule out decriminalizing cannabis possession in the absence of broader legalization.

New Mexico’s cannabis decriminalization law took effect. Possessing half an ounce of cannabis is now treated with a $50 fine instead of jail time. New Mexico is the 24th state to approve cannabis decriminalization. 

In New York, Erie County’s district attorney announced that his office will no longer charge people with misdemeanors for possessing two ounces or less of cannabis and would instead issue violations. As part of his announcement, the district attorney encouraged any person previously convicted of certain minor possession crimes to file a motion to have their criminal record sealed.

North Carolina is the latest state considering a ban on smokable hemp (defined as all hemp “in a form that allows THC to be introduced into the human body by inhalation of smoke.”). This year, Indiana, Louisiana and Texas have banned smokable hemp, while Kansas banned products including hemp cigarettes and cigars. Tennessee prohibited smokable hemp sales to minors.

Oklahoma’s medical cannabis sales are exceeding projections, in part due to more than 3.5 percent of the state’s population already being registered to participate in the program.

Pennsylvania’s Department of Health issued a cease and desist order to a cultivation facility, AGRiMED, after several problems were noted during a surprise inspection. AGRiMED will be able to grow plants to cultivate its unique strains but is prohibited from removing anything from the plants outside the presence of a department inspector.

The chief of the South Carolina Law Enforcement Division spoke about his opposition to medical cannabis. He stressed that cannabis “is not medicine” and that medicine should be approved by a normal FDA process, not by a legislature.

Four Texas district attorneys announced they would not prosecute low-level possession cases without lab tests demonstrating that seized products are not legal hemp.

Utah regulators are expected to select winners of medical cannabis cultivation licenses this month.

Hemp / CBD

The FDA’s Principal Deputy Commissioner and Acting CIO Dr. Amy Abdernethy tweeted her views about CBD. She stated, “In all of this, safety is paramount. CBD is not a risk-free substance, and we need to make sure we understand its potential adverse effects as well as its potential benefits.”

A May 2019 Gallup poll asked Americans about their trust in federal agencies. The Food and Drug Administration ranked near the bottom, beating only the Veterans Administration and the Environmental Protection Agency.

Senate Majority Leader Mitch McConnell (R-KY) personally led US Agriculture Secretary Sonny Perdue on a tour of a Kentucky hemp farm and processing facility so he could get an up-close look at hemp and CBD products.

Maine regulators updated a frequently asked questions page on hemp licensing, including announcing an “Indoor Hemp Growing Trial.” While the department establishes new rules to support indoor hemp growing, 10 indoor hemp growing licenses will be issued as a trial. The 10 applications will be randomly selected from the entire pool of completed applications received by July 31, 2019.

Despite applications only being available for one week, Nebraska regulators received 176 applications for hemp licenses.

New York City’s ban on CBD-infused foods and drinks went into effect.

International

The UN’s 2019 World Drug Report found that cannabis was the most widely used drug around the world in 2017. In the United States, annual cannabis use rose from 9.9 percent of the adult population in 2007 to 15.3 percent a decade later. High levels of cannabis use have also been reported in Canada.

A Canadian federal court granted a medical cannabis patient the right to possess a kilogram of cannabis at a time. The patient is authorized by his doctor to consume 100 grams a day, and the 150-gram possession limit was found to impede the patient’s constitutional rights.

Provincial officials in Toronto, Ontario, report a huge decrease in the number of illicit dispensaries. The persistence of the black market has been an issue in many if not all legal adult-use and medical cannabis markets.

Trinidad and Tobago are considering legislation to decriminalize cannabis and create a regulatory framework for medical cannabis. Details of the bill are not yet public. Cabinet approval for the draft legislation is needed before it is tabled in Parliament and debated.

Business

Canopy decided to remove its founder and CEO Bruce Linton from the position and board. Linton co-founded Canopy in 2013.

Haleigh’s Hope, Inc., announced it obtained Good Manufacturing Practices certification from the Food and Drug Administration. Haleigh’s Hope, Inc., creates and sells whole-plant hemp extracts.

Medical / Health

New research published in JAMA Pediatrics suggests legalizing adult use in some states may have slightly reduced teens' odds of using cannabis. The research reviewed responses from 1.4 million high school students from 1993 through 2017. Previous research has found no effect on teen use from medical cannabis laws, and conflicting results from adult use laws. 

A study found that cannabis sativa L. extract and cannabidiol inhibit in vitro mediators of skin inflammation and wound injury. The effect of just cannabidiol versus the full cannabis extract led researchers to conclude cannabidiol was mainly responsible for the observed effect.

A review and meta-analysis of cancer cachexia treatment found that “cannabinoid is effective in increasing appetite in cancer patients,” but that “it declines the quality of life, which may be due to the side effects of cannabinoid.” The review included three studies tracking 592 participants.

A survey of two retail stores in Colorado of 1,000 adult-use-only customers found that these customers report using cannabis for medical reasons, with 65 percent using it for pain, 74 percent using it as a sleep aid and 82 percent reducing or stopping use of over-the-counter or prescription drugs like opioids.

The New York Times examined the effects of cannabis legalization in Colorado.

Bonus

In an article for Healio Gastroenterology, Dentons’ Eric Berlin argues that the medical establishment should accept that further cannabis legalization and medical cannabis use are now inevitable and work to understand better the impact on patients, how to incorporate medical cannabis into their practices and how to speak openly and honestly about the substance with patients and colleagues.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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