Cannabis Client Alert – Week of February 1, 2021 | Dentons – JDSupra – JD Supra

In this week’s edition:

  • Senate Majority Leader Schumer to prioritize legalization
  • Several governors, including Wolf in Pennsylvania and Grisham in New Mexico, pushing for recreational cannabis legalization
  • Top Ukrainian health official comes out in favor of medical cannabis
  • MGO names Dentons to its “Cannabis 50” list

Federal

Senate Majority Leader Schumer Pushing Federal Marijuana Legalization as a Priority – Senator Chuck Schumer (D-NY), a strong proponent of the legalized cannabis industry, is working on a new federal legalization bill that would allow states to “do whatever they’d like” and target tax revenues to minority communities hit hard by prohibition. The legislation seems to be an effort to strike a balance between the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act and the state approach, which is favored by the chamber’s conservative senators.

States

AZ – Arizona’s Department of Health Services has awarded its first recreational marijuana licenses, officially launching the expanded cannabis industry. Three months ago voters approved a legalization measure. The 86 licenses issued by the state will allow holders to do everything from cultivation to retail sales.

CA – California cannabis sales were up 57 percent in 2020, reaching US$4.4 billion. Contributing to the record-setting year was the pandemic-spurred growth of the cannabis delivery business and the increased popularity of edibles.

CO – Wholesale cannabis flower prices in Colorado soared this past year, reaching levels not seen since 2016. According to the state’s Department of Revenue the average wholesale market rate for a pound of cannabis flower was US$1,721 as of January 1. The price increase is due in part to higher demand for premium flower brands, a sign of a more sophisticated consumer base. 

DE – Delaware State Auditor Kathy McGuiness has estimated that legalizing cannabis could could generate more than US$43 million annually in state tax revenue. State Rep. Ed Osienski (D) intends to introduce legislation this session that would legalize cannabis for adult use. Rep. Osienski introduced similar legislation in 2019; while it advanced through a House committee, it was never considered by the full House.

ID – Lawmakers in Idaho are pushing a proposed constitutional amendment that would bar the legalization of cannabis in the state. The amendment may also impact industrial hemp products.

IL – Following a series of pandemic-related delays as well as lawsuits brought by disgruntled applicants for craft cultivation, infusion and transportation licenses, the Illinois Department of Agriculture issued notices detailing problems with many applications and what applicants can do to remedy them. Similar notices will be sent to applicants who did not qualify for the upcoming lottery to distribute the next 75 dispensary licenses.

MN – In an effort to raise revenue and fill COVID-19 related budget gaps, Minnesota Gov. Tim Walz (DFL) is asking state lawmakers to consider legalizing recreational cannabis. However, the Republican-controlled Senate remains a major obstacle for legalization efforts. Senate Majority Leader Paul Gazelka (R) said he will resist the effort. 

NM – Democratic Gov. Michelle Lujan Grisham reiterated her support for legalizing cannabis in New Mexico in 2021. The effort is likely to have a better chance at passage this year, after several anti-legalization Democrats were beat by progressive primary challengers.

NY – A New York appellate panel ruled that a financial analyst who was fired by Con Edison for using medical cannabis can sue for discrimination. The four-judge panel concluded that Con Edison did not provide the required accommodations for the employee, whose medical cannabis authorization was pending.

PA – Pennsylvania Gov. Tom Wolf (D) included cannabis legalization in his list of 2021 legislative priorities. Lt. Gov. John Fetterman, who is considering a run for the US Senate, is also a strong proponent of legalization and has been actively campaigning across the state on the issue.

WA – A report from Washington State University notes that in 2020 the state’s cannabis sector contributed US$1.85 billion to gross state product and supports, directly or indirectly, nearly 18,700 full-time-equivalent jobs. The report also found that tax revenues from direct cannabis retail sales were US$468.81 million in 2020, compared with excise revenues from liquor and alcohol sales of US$415.28 million. 

HEMP/CBD

US Food and Drug Administration – The FDA withdrew draft guidance on CBD enforcement that had been submitted to the Trump administration for review. The withdrawal came as a result of a government-wide memo from Chief of Staff Ron Klain calling on all federal agencies to halt pending rules. The effort to provide more clarity to the CBD industry now falls to the Biden administration.

US Department of Agriculture – The USDA released a final rule for industrial hemp that lays out federal regulations governing the industry. While the rule is not technically on hold, it will be reviewed by the Biden administration.

US Drug Enforcement Administration – The USDEA is arguing that hemp industry advocates that are bringing suit against the Biden administration can’t make their case in federal court. Rather, the DEA believes state appellate courts have jurisdiction. Hemp producers are suing to block enforcement of an interim rule that some argue would criminalize hemp waste.

International

AUS – Cannabidiol (CBD) is now available in pharmacies in Australia after the Therapeutic Goods Administration (TGA) approved its sale last month. No prescription is needed to buy the product.

UKR – Ukraine’s Deputy Minister of Heath Dr. Viktor Liashka favors legalizing medical cannabis in the country. Liashko said he is “convinced” of the medical benefits of cannabis and has encouraged the government to revisit the issue. 

Business

SPACs Could Trigger Lawsuits – Special purpose acquisition companies (SPACs) are shell entities established to raise money to ultimately acquire a private company and take it public. Traditionally used sparingly, last year SPACs, which offer a faster and sometimes cheaper route to a public offering, accounted for the majority of IPOs. As a result, regulators are beginning to look more closely at the popular financial mechanism, and litigators expect a rise in post-merger legal complaints focusing on the unregulated aspects of SPACs in the near future.

Cowen – According to Cowen Insights, “the volume-weighted average spot price of cannabis in the US for the week-ended 1/22/21 was US$1,486 per pound, up 3% YoY.” The publication also notes that around 40 percent of medical cannabis users with chronic pain gave up using opioids.

Medical/Health

Plos One A literature review aimed at presenting a “systematic collection of current scientific evidence on hemp’s health effects” found that “current evidence on hemp-specific interventions are still preliminary, with limited high quality clinical evidence for any specific therapeutic indication.” The study suggests standardizing the hemp plant for pharmaceutical use, and uniformity in experimental designs in future research.

British Medical Association – A study in The BMA, a peer-reviewed journal, found a correlation between increased access to cannabis and a significant reduction in opioid-related deaths. Researchers examined opioid-related death and cannabis dispensary prevalence in 23 US states from 2014 to 2018. They found that that a per-county increase in legal marijuana shops from one to two was associated with a 17 percent reduction in opioid-related fatalities.

National Library of Medicine – After Canada legalized recreational cannabis in 2018 a group of scientist and doctors studied the impact of legalization with opioid use. This study assessed total opioid prescribing volumes and expenditures prior to and following cannabis legalization. The findings support the hypothesis that easier access to cannabis for pain may reduce opioid use.

Dentons speaks

Dentons has been named to MGO’s “Cannabis 50” listing in the Cannabis Practice’s Cannabis Impact Review. The publication recognizes the most inspiring, impactful and innovative figures and entities in the cannabis industry. Chicago partners Kathryn Ashton and Eric Berlin co-chair Dentons’ US Cannabis group.


Authored by Dentons Counsel David Quam and Associate Managing Director Crawford Schneider.

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