$1 Billion Worth of Cannabis Seized in California Hemp Field Bust
Authorities say the product’s THC content was too high under state law.
A Southern California sheriff’s department made a bust on what its owners had previously presented as a hemp field, uncovering 10 million marijuana plants with “an estimated value of over $1 billion.” On October 25, law enforcement descended on the fields whose growers had claimed to be growing non-psychoactive hemp. They were, in fact, raising marijuana plants that clocked in at over the .3 percent THC content allowed under California law.
The investigation was catalyzed by a tip sent to the Kern County Sheriff’s Office about 11 fields sprawling out over 459 acres in the small town of Arvin. An investigation was launched in collaboration with the FBI and the California Department of Fish and Wildlife that resulted in the October 25 search warrants.
“Preliminary testing showed the levels of THC in these fields were well over the legal limit for industrial hemp production and were in fact cannabis,” announced the Kern County Sheriff’s Office in a Facebook post. “The investigation is ongoing.”
California law does allow for THC content over .3 percent if the hemp is being grown for research purposes.
The announcement did not specify how the farmers came to be growing the unlicensed cannabis. But if they were confused over the THC content of their own product, they wouldn’t be the first in the country to employ the excuse. In February, Idaho state police confiscated 6,701 pounds of marijuana they discovered in the truck of a Colorado company at a weigh station. The company that owned the plant, Big Sky Scientific, said that it had tested the crop via 19 different samples that concluded the cannabis’ THC level stood at .043 percent.
Confusion About Cultivation
Farmers who are marijuana producers are not the only ones who have displayed confusion over the THC content of their products. Law enforcement agencies in Florida and Texas have concluded that their agencies lack the testing technology to distinguish between hemp and marijuana, which has led to a de-prioritization of small-time possession arrests.
And consider the criminal element similarly befuddled. Earlier this year in Fresno County, there were reports of hemp theft by thieves who were apparently under the impression that their heist involved psychoactive cannabis.
Comments made on the sheriff’s post announcing the Arvin bust wondered whether the growers themselves had known the THC content of their own crop. More than a few questioned law enforcement’s priorities when it came to the bust. “What a Ducking [sic] waste of time!!” wrote one user named Lucy Cartagena. “The war on drugs does NOT WORK!!”
But enforcement of laws surrounding hemp production can also be seen as law enforcement’s attempt to protect cannabis farmers operating within legal guidelines. Much attention (including an October 27 program that aired on CBS) has been given to the difficulties that legal California growers are having when it comes to competing with the state’s still robust illegal market. A reportreleased in September concluded that illegal sellers continue to outnumber the state’s licensed retailers by a ratio of almost three to one.
Donohue, Caitlin. “$1 Billion Worth of Cannabis Seized in California Hemp Field Bust.” High Times, 4 Nov. 2019, hightimes.com/news/1-billion-worth-of-cannabis-seized-in-california-hemp-field-bust/.
20 Denver Marijuana Dispensaries Fail Mold and Yeast Tests
Random tests for mold and yeast at more than two dozen Denver-area cannabis dispensaries resulted in 20 stores being ordered to hold or quarantine their cannabis flower, shake or pre-rolled joints.
The Denver Department of Public Health and Environment conducted 25 tests over a two-day period in September, according to alt-weekly newspaper Westword, which analyzed the results.
The failure rate amounted to 80% of the dispensaries that underwent testing.
Denver has hundreds of cannabis retailers. And the random inspections were part of a research project, announced in August, aimed at learning more about the shelf life and packaging of marijuana and did not target specific stores.
Most dispensaries that failed microbial testing got their product from wholesale providers, which were not identified in the reports.
It isn’t clear whether a voluntary recall of marijuana plant-material products issued by Denver-based Bonsai Cultivation is tied to the random inspections.
The Department of Public Health and Environment declined to provide the reports to Marijuana Business Daily because the study was confidential, said Tammy Vigil, manager of media relations.
“We believe the Westword reporter may have invested significant time searching our online database to draw the conclusions he did,” Vigil wrote in an email to MJBizDaily.
Published October 31, 2019. “20 Denver Cannabis Dispensaries Fail Mold and Yeast Tests.” Marijuana Business Daily, 31 Oct. 2019, mjbizdaily.com/20-denver-cannabis-dispensaries-fail-mold-and-yeast-tests/.
Michigan Starts Taking Recreational Marijuana Applications
Michigan’s adult-use cannabis application process got off to a fast start Friday, with regulators giving “prequalification” approval to two existing medical cannabis operators before 9:30 a.m. local time.
But a spokesperson for the state Marijuana Regulatory Agency told the Detroit Free Press that the second stage of the approval process will take a few weeks.The market launch isn’t expected until spring 2020.
Marijuana Business Daily projects that Michigan’s adult-use market will reach $1.4 billion-$1.7 billion in annual sales when it matures.
But initial business opportunities will be limited because more than 1,000 municipalities have banned or limited rec MJ businesses.
The quick prequalification approval for some applicants was made possible because those businesses had gone through a lengthy vetting process in order to get their MMJ licenses.
It also reflected the fact that Michigan recently streamlined a process that had gotten bogged down under a five-member, politically appointed medical marijuana licensing board.
While most businesses applied online, some did so in person.
The Free Press cited one example where nine boxes of documents were submitted by a law firm for three clients.
Published November 1, 2019. “Michigan Starts Taking, Reviewing Adult-Use Cannabis Applications.” Marijuana Business Daily, 1 Nov. 2019, mjbizdaily.com/michigan-starts-taking-adult-use-marijuana-applications/.
National Political Action Committee Pushing For Cannabis Legalization In Montana
Big-time support, but still a long ways to go.
Momentum could be building for the legalization of recreational weed in Montana. That’s because a local group working for cannabis reform in the state has just received big time backing from advocacy groups.
If the efforts in Montana succeed, voters could see legalization on the ballot next year. However, with all that said, there is still a long ways to go. That includes getting initial approval for the proposal and then gathering enough signatures to qualify for the ballot.
National Support for Local Efforts
Right now, the charge to legalize recreational weed in Montana is being led largely by a group called Coalition406. Currently, the group is spearheading two separate ballot initiatives. Both of them would impact cannabis laws in the state.
So far, the group has been operating more or less on its own throughout Montana. But now, the group said it has received national support.
Specifically, Coalition406 just announced that it is partnering with national marijuana advocacy organization New Approach PAC. New Approach is based in Washington, D.C. and has already been a big player in legalization efforts in places such as California, Maine, and Massachusetts.
In addition to partnering with New Approach PAC, Coalition406 also said it has received support from the Marijuana Policy Project.
Moving forward, Coalition406 will now go by the name New Approach Montana. And along with the new name, the group has voiced renewed confidence in its mission.
“I have every faith that these are gonna pass,” Pepper Petersen, political director of Coalition406, told Montana Public Radio. “There seems to be an inevitability coming from the federal government. So let’s do something in Montana that we own, rather than something that D.C. hands us.”
Two Legislative Proposals
Currently, Coalition406—now with its national backers—is working to advance two legislative proposals.
The first one deals explicitly with cannabis. This one, called the Marijuana Regulation Act, would legalize, tax, and regulate cannabis for adult use in the state.
The second proposal is not directly about cannabis. But its implications would directly impact what legalization would look like in Montana. It has to do with the legal definition of an adult in the state.
Currently, a person 18 and older is considered an adult. But if weed becomes legal, that would change to 21. To address this, Coalition406 is also putting forth a proposal to amend the state constitution so that adults are defined as those 21 years and older.
At the moment, the group is still finalizing the wording of these proposals. Additionally, they still need to get initial approval for the proposals. If the proposals get the necessary approvals, the group can start gathering signatures of support.
The proposals will only show up on next year’s ballot if Coalition406 gets enough signatures. But with new backing, the group plans to devote much more funding to advancing its ideas. Specifically, Petersen said the group could be on the verge of spending more than $3 million on campaigning efforts.
Earlier this year, lawmakers in Montana voted against a bill to legalize recreational marijuana.
Lindsey, Nick. “National Political Action Committee Pushing For Cannabis Legalization In Montana.” High Times, 30 Oct. 2019, hightimes.com/news/national-political-action-committee-pushing-cannabis-legalization-montana/.
Portland City Council Approves Over $630k In Cannabis Equity Grants
The grant money is designed to benefit those who have faced marijuana-related criminal charges prior to the legalization of recreational cannabis.
Portland, Oregon took a big step towards properly funding its social equity in cannabis program on Wednesday. Its city council earmarked $631,000 in grants to go to the grant program that has been established to ensure that people who have been negatively impacted by the war on drugs have a place in the marijuana industry.
The decision comes in the midst of a growing cannabis tax revenue windfall for Oregon. During the 2019 fiscal year, the state’s Department of Revenue took in over $102 million. That money comes from a 17 percent tax on marijuana sales, with cities and counties permitted to add an extra three percent should they see fit. It’s expected to amount to $284.2 million during 2021-2023.
Typically, 40 percent of that money goes to schools, 25 percent to various mental health and addiction services, and 35 percent to different law enforcement agencies. But a report by the Portland city auditor found that in the state’s largest city, 79 percent of cannabis tax revenue was being channeled into transportation and law enforcement.
The People’s Voice Has Been Heard
The city council members’ vote on Wednesday was an attempt to redistribute funds according to Oregon voters’ wishes. In 2016, cannabis tax measure 26-180 was passed, declaring that a three percent tax on cannabis sales could go to supporting social equity measures within the marijuana industry. Voters approved the measure, which included support for women and persons of color-owned businesses, safety measures against unsafe drivers, and addiction services.
One of the qualifying factors for the entry of small businesses into the program is that people with a prior cannabis conviction comprise either at least 25 percent of ownership or 20 percent of staff hours.
The recently approved $631,000 will go to support retroactive justice for the negative effects of cannabis prohibition. Similar funding has been used to help level the cannabis industry playing field in a variety of ways.
“You already have hundreds of Portlanders who have been directly benefiting from this tax funding,” said Brandon Goldner, who is a supervisor of the city’s Cannabis Program. “Whether it’s people getting workforce development, help getting education in the construction field, or whether it’s people who are helping – getting help clearing their records and expunging their records.”
Given Portland’s history of racially biased cannabis-related policing, the programs seem particularly crucial.
“Many studies have shown that adults across races use cannabis at similar rates,” POC cannabis advocate Jeanette Ward Horton shared with the attendees of the council meeting on Wednesday. “However, we can see […] the disproportionate targeting first of African American communities. Second, native American communities.”
Horton’s organization the NuLeaf Project was established to support cannabis business owners of color, and runs a mentoring program, gives out grants, and runs a business accelerator program that aims to build technical skills in future entrepreneurs.
Donohue, Caitlin. “Portland City Council Approves Over $630k In Cannabis Equity Grants.” High Times, 24 Oct. 2019, hightimes.com/news/portland-city-council-approves-over-630k-in-cannabis-equity-grants/.
Maine’s first cannabis sales expected by March 2020
PORTLAND, Maine (AP) — Maine marijuana enthusiasts will probably be able to purchase their preferred products in retail stores by March 2020 after years of waiting.
But a key act passed by the Legislature is now in effect, and that means the Maine Office of Marijuana Policy is in a position to complete final adoption of marijuana rules, said David Heidrich, an office spokesman.
The act made tweaks to Maine’s Marijuana Legalization Act that were necessary for the marijuana office to adopt the rules, which it is expected to do within two months. That means it will likely be able to accept applications for retail cannabis sales by the end of 2019, Heidrich said.
The state will need time to process the applications, and retailers will also need local approvals, but the state is projecting revenue from marijuana sales by March 15, Heidrich said. How swiftly the applications are approved might depend on how complete they are, he said.
“We won’t know until we get applications. It’s possible we get applications from someone who has all their ducks in a row and has a municipality lined up that’s poised to give them local authorization,” Heidrich said.
Maine’s rollout of legal marijuana has been beset with hiccups, such as a squabble over the hiring of a key consultant, and was also slowed by former Gov. Paul LePage’s opposition to legalization.
However, the result has been a process that will ultimately protect public health and safety, said Scott Gagnon, who led a drive against legalization and has since played a role on a state marijuana commission.
“From a public health perspective it has been a slower pace, a more deliberative pace than has happened in some states,” Gagnon said. “I think that’s been good.”
David Boyer, an independent marijuana industry consultant in Maine, said that it’s “disappointing that adults still don’t have a place to purchase legal cannabis in Maine,” but that the finish line is in sight.
Press, The Associated. “Maine’s First Cannabis Sales Expected by March 2020.” Leafly, 7 Oct. 2019, http://www.leafly.com/news/industry/maines-first-cannabis-sales-expected-by-march-2020.
Nevada’s Governor Vows To Tighten Control Over The State’s Cannabis Marketplace
Governor Steve Sisolak criticized the Marijuana Enforcement Division’s lack of oversight concerning recreational and medical marijuana
LAS VEGAS (AP) — Nevada’s governor expressed outrage Friday and vowed to tighten control of the state’s lucrative legal marijuana marketplace in response to reports that a foreign national contributed to two top state political candidates last year in a bid to skirt rules to open a legal cannabis store.
Gov. Steve Sisolak declared in a statement that there has been “lack of oversight and inaction” of the recreational and medical pot industry by the state Marijuana Enforcement Division. He also said he is commissioning a multi-agency task force to “root out potential corruption or criminal influences in Nevada’s marijuana marketplace.”
The Democratic governor pointed to a federal indictment made public Thursday in New York alleging that a man identified as having “Russian roots” funneled $10,000 each to the Republican campaigns of Adam Laxalt and Wesley Duncan.
The indictment included a conspiracy charge against four men, including two with ties to President Donald Trump’s personal attorney, Rudy Giuliani, and the Ukraine investigation at the center of impeachment proceedings.
Laxalt lost the race for Nevada governor. Duncan ran unsuccessfully for attorney general.
Both said Thursday through spokesmen that they would return the donations they received a week before the November 2018 election from a donor named Igor Fruman. Federal prosecutors allege that Fruman, a Ukrainian-born U.S. citizen, was acting on behalf of an unnamed foreign national.
Duncan’s representative did not immediately respond to messages Friday.
Laxalt, through spokesman Robert Uithoven, said it is “absurd that the governor is trying to pin this on me.”
He noted the indictment said the alleged scheme was concealed from candidates, campaigns, federal regulators and the public.
Laxalt also accused Sisolak of accepting campaign money from marijuana businesses and failing “to clean up the problem while in office.”
Sisolak’s statement acknowledged “illegal sales to minors, serious allegations of manipulated lab results and a licensing process mired in litigation.” It said the governor will speed up oversight that was to be assigned to a yet-to-begin state Cannabis Compliance Board.
“Yesterday’s indictments and their connections to Nevada, in combination with ongoing issues in Nevada’s legalized marijuana industry … have led the governor to expedite regulatory and enforcement measures,” spokesman Ryan McInerney said in the statement.
The governor referred to revelations in testimony during court hearings in Las Vegas this summer stemming from failed bidders’ claims that the licensing process was rife with mistakes and bias. Dozens of companies argued the state should redo a process that awarded 61 new dispensary licenses last December to 16 businesses among 462 applications.
“Effective immediately,” Sisolak’s statement said, “any marijuana entity — licensed or unlicensed — that violates the law will see swift and severe criminal and regulatory action.”
McInerney did not immediately respond to messages seeking details.
The statement called the governor “disappointed in the lack of oversight and … inaction from the state over many years that led us to this critical juncture.”
It pointed to the “apparent absence of a single criminal referral by the Marijuana Enforcement Division since the inception of licensed marijuana sales, medical or recreational, in Nevada.”
Nevada voters legalized medical marijuana in 2000 and approved recreational use in a separate ballot measure in 2016.
Press, Associated. “Nevada’s Governor Vows To Tighten Control Over The State’s Cannabis Marketplace.” High Times, 14 Oct. 2019, hightimes.com/news/nevadas-governor-vows-to-tighten-control-over-the-states-cannabis-marketplace/.
Walmart Accidentally Sells Cannabis Leaf Sweatshirt for Kids
Walmart apparently wants everyone of all ages to be “super lucky” for St. Patrick’s Day this year, and by super lucky they mean stoned.
Online Walmart shoppers were shocked to find a hooded sweatshirt available for purchase on the retail-giant’s website which depicted three different types of leaves, one of which belonging to the cannabis plant.
Advertised as a St. Patrick’s Day theme, the hoodie, which was available only in kids sizes, displayed the word “normal” under a three-leaf clover, the word “lucky” below a four-leaf clover, and the words “super lucky” assigned to the cannabis leaf. All three leaves are displayed in line next to one another.
In Walmart’s defense, the product seems to actually have been uploaded by a third party retailer based in Canada, where cannabis is federally legal. Also, like many online clothing retailers, it is likely that the design is photoshopped onto the youth sized sweatshirt to show potential buyers what they would receive. No children were harmed in the making of this product page.
As soon as Walmart representatives were notified about the item, it was removed from the website.
“This isn’t an item sold on Walmart.com and we will alert the IT team to remove the image and/or page immediately,” a Walmart.com supervisor said.
The url still exists on walmart.com, but the page is now empty. Super lucky for us, it was not taken down before some shoppers snagged screenshots of the item.
While Walmart pharmacies may not be distributing medical cannabis just yet, the company did make a deal with the American Cannabis Company out of Denver, CO in March of 2018 to sell a couple of their cultivation products online.
The products selected are designed specifically for cannabis cultivation and can be purchased on Walmart.com. The two ancillary cannabis-industry items sold by Walmart are SoHum Living Soils and Dr. Marijane Root Probiotic.
“ACC is excited to have the opportunity to offer our products online through these major retailers,” said American Cannabis Company CEO Terry Buffalo. “We are especially excited to be selling our proprietary SoHum Living Soils potting mix through these online channels, as we have spent years perfecting our blend, and fine-tuning the messaging around the brand itself.”
American Cannabis Company products are also available through Amazon and Home Depot.
MassRoots, and MassRoots Posts made by MassRoots Staff are an effort on the part of one or more contributing writers. We hope we help you have a better cannabis experience. “Walmart Accidentally Sells Cannabis Leaf Sweatshirt for Kids.” MassRoots, 21 Mar. 2019, http://www.massroots.com/news/walmart-accidentally-sells-cannabis-leaf-sweatshirt-for-kids/.
Meet the Pot Power Players Bringing Legal Marijuana to Boston
Legal cannabis companies are sprouting up like weeds—each one backed by a pot pioneer. Here’s who’s poised to rake in all the green.
President and CEO, AmeriCann
Who They Are: It’s a classic tale of local boy makes good. Marion native Keogh cut his teeth in the weed biz during the early days of the Colorado green rush at AmeriCann, and is returning to the Bay State a bona fide weed-trepreneur.
Why We’re Watching: With a combined net loss of $7 million over the past two years, according to its annual report with the SEC, Keogh’s company is betting that a new million-square-foot cannabis campus for cultivation and processing in Freetown will make for a welcome and lucrative homecoming
Tasty Nugget: Keogh also doubles as a board member at the Bask medical marijuana dispensary in Fairhaven, whose cash registers have been ringing since February 2018.
Founder, Green Line Boston
Who They Are: What do you do if you’re heir to the Brookline Ice Company fortune? If you’re Signore, you head to L.A. and become a cameraman on Deadliest Catch. But every scion really wants to build their own fortune, right?
Why We’re Watching: In 2018, Signore founded Green Line and took over an empty lot in Boston’s Newmarket Industrial District that his family owned. Now he’s building a $20 million cultivation complex aimed at growing and marketing a distinctly New England brand of weed.
Tasty Nugget: His tagline: “I want to create the Sam Adams of cannabis.”
CEO, Verdant Medical
Who They Are: A community organizer, a grassroots politician who lost to Mayor Marty Walsh in 2017, and now a purveyor of pot, Jackson’s name carries major clout in Boston.
Why We’re Watching: Jackson is poised to do more than just turn a buck; armed with an insider’s know-how of city politics, he’s out to make sure his budding company is a force for good in a legal industry known for shutting out minorities.
Tasty Nugget: Jackson’s stated goal is for Verdant to employ people with criminal records for drug-related offenses.
Eamonn O’Kane and Niall McManus
Who They Are: Roughly a decade ago, Irishmen O’Kane and McManus quietly entered the Bay State cannabis game as the guys who built many of today’s bleeding-edge grow facilities.
Why We’re Watching: Plans to fly under the radar were scuttled late last year when word got out that they were the team behind Revolutionary Clinic’s sprawling new state-of-the-art cultivation center and dispensary in Fitchburg. Whatever they work on next is going to get major buzz.
Tasty Nugget: Their work is so good, they’ve heard other construction crews pitch their projects as being “like those Irish guys at Valiant.”
HOST WITH THE MOST
Founder, Cloud Creamery/Eat Sacrilicious
Who They Are: Yusefzadeh cooked meals for President George W. Bush and was a chef at some of the highest-rated hotels and dining spots around the world before joining the weed game in eastern Massachusetts.
Why We’re Watching: Yusefzadeh founded Cloud Creamery, the East Coast’s first CBD- and cannabis-dosed-ice-cream company, based in Framingham. Then he launched Eat Sacrilicious, a high-end, multicourse cannabis dinner series held in secret locations around Boston.
Tasty Nugget: A rising go-to chef for green-friendly celebrities, Yusefzadeh has hosted and catered dinners for 2 Chainz and B-Real of Cypress Hill, David Beckham, and other glitterati.
CEO, Apothca/Artcan dispensaries
Who They Are: In addition to running a beverage company that he would sell for $34 million, Lekach jumped on the weed wagon and launched a series of dispensaries in Lynn and Arlington called Apothca.
Why We’re Watching: As of early 2019, Lekach has a third retail location on its way to Jamaica Plain. He also has a retail store in Oregon he calls a “test lab for the best stuff that will work in the Massachusetts market.”
Tasty Nugget: Lekach’s umbrella holding company, Artcan, has an operation in Colombia—a country that’s set up to become a world-leading exporter of cannabis oil to the legal market.
McCarthy, Dan. “Meet the Pot Power Players Bringing Legal Marijuana to Boston.” Boston Magazine, Boston Magazine, 4 Mar. 2019, http://www.bostonmagazine.com/news/2019/03/05/marijuana-businesses/.
CAPITAL OF AUSTRALIA LEGALIZES RECREATIONAL CANNABIS USE & CULTIVATION
The Australian capital of Canberra made history on Wednesday, becoming the first city in the country to legalize marijuana.
The landmark measures were passed in the Australian Capital Territory [ACT] Legislative Assembly, clearing the way for individuals there aged 18 and over to possess and grow cannabis.
Marijuana remains illegal under national law in Australia—producing a scenario similar to the United States, where a growing number of city and state governments have legalized recreational cannabis use despite it being illegal under federal law.
History Made, But Not Without Concern
Wednesday’s historic vote made the Australian Capital Territory the first state or territory in the country to legalize marijuana for recreational use. The territory is home to a little more than 420,000 people, with most residing in the capital city of Canberra.
Critics of the newly passed measures raised concerns about marijuana’s legal status on the national level.
ACT Attorney-General Gordon Ramsay said Wednesday that the growth and consumption of marijuana would remain a risky proposition.
“The ACT’s legislation attempts to provide a clear and specific legal defence to an adult who possesses small amounts of cannabis in the ACT, but is prosecuted under Commonwealth law,” Ramsay said, as quoted by local Australian broadcaster ABC. “But unfortunately it cannot stop someone being arrested and charged if the Commonwealth officials were minded to do so, or prosecuted if the Commonwealth Director of Public Prosecutions thought it were appropriate to do so.”
But Michael Pettersson, a labor leader in ACT, told Sky News that he would be “amazed” if any prosecutor brought charges against a pot smoker in the territory.
“Prosecutors will not be bringing charges because, quite simply, there is a complete defence to the commonwealth drug charge,” he said. “There won’t be a territory offence and they’ll have a complete defence to the commonwealth charge.”
“I don’t think it’s particularly likely the commonwealth government will try to fight this,” Pettersson added, as quoted by The Guardian.
Edward, Thomas. “Capital Of Australia Legalizes Recreational Cannabis Use And Cultivation.” High Times, 25 Sept. 2019, hightimes.com/news/capital-australia-legalizes-recreational-cannabis-use-cultivation/.
THE TOP 10 GUIDE & RANKING FOR STATE-BY-STATE CANNABIS REGULATIONS IN THE US
We recently received word that the Tracking Cannabis Blog announced their latest state-by-state ranking of state cannabis regulations based on how favorable they are to cannabis businesses. California leads the pack, but you might be surprised by which states make the top — and bottom — of the list.
Their guide provides a holistic review of the current cannabis laws in every state and the District of Columbia, from most favorable to cannabis businesses to most restrictive. In addition, you can find each state in alphabetical order below. Jurisdictions are ranked on the following factors:
- Cannabidiol (CBD) derived from marijuana plants (THC concentration equal to or greater than 0.3 percent on a dry weight basis) – legality and required qualifications.
- Medical cannabis – legality and required qualifications.
- Recreational cannabis – legality and issuance of commercial cannabis licenses.
- Non-profit cannabis entities – permissibility and requirements.
- Commercial cannabis licenses – availability, caps and restrictions.
- Cannabis regulatory agencies – authority and qualifications.
- Developments and trends – support for ongoing cannabis legalization measures.
- Business opportunities – number of operators, consumers and untapped industry potential.
Note that this ranking is subjective, and different factors weigh more heavily in different states. All of the information regarding each state is current as of August 2019. However, laws are constantly changing and with each election the statutes in any particular state may also change. In addition, this list does not consider federal laws, which may be consistent on a national level but can be applied selectively on a state level. To find any particular state, just click on the respective link below:
California has legalized both adult use and medical marijuana, making it one of the most relaxed states in the nation with regard to cannabis use. The Compassionate Use Act of 1996 (Proposition 215) was the first legislation in the United States legalizing medical marijuana use under state law. It has subsequently been superseded by the Medical and Adult-Use Cannabis Regulation and Safety Act. California’s cannabis market recorded $2.5 billion in sales in FY2018.
CUA allowed patients and their primary caregivers to obtain marijuana for medical use by the patient without subjecting either to criminal prosecution. The Act authorized medical use for patients with one of 11 specific conditions and included a general purpose clause that also allowed use for any condition that substantially limited the ability of a person to conduct a major life activity as defined in the ADA.
Proposition 64, also called the Adult-Use Marijuana Act, took effect on November 9, 2016. It allows adults twenty-one and older to cultivate up to six plants and possess 28.5 grams of marijuana or 8 grams of concentrated cannabis. Adults can also give away up to one ounce of cannabis to other adults. It restricts the possession or use of cannabis in certain areas like public places, non-smoking areas, daycares, schools, and vehicles.
The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), enacted in June 2017, combined the regulatory framework for medicinal and adult-use cannabis. MAUCRSA designated three agencies to oversee cannabis activity:
- The Bureau of Cannabis Control, which is the lead regulatory agency and authorizes licenses
- The California Department of Public Health – Manufactured Cannabis Safety Branch; and
- The California Department of Food and Agriculture – CalCannabis Cultivation Licensing.
The licensing system created by MAUCRSA is complex, with a minimum of twenty license classifications and an elaborate set of regulatory requirements established under the emergency regulations adopted by each agency.
License types include, but are not limited to, adult use, medical use, types of cultivation and manufacture, retailor or distributor, testing, and microbusiness. Once a license is granted, it is non-transferable. There are no caps on the number of licenses, but the requirements are rigorous. MAUCRSA also grants municipalities the power to further regulate commercial cannabis or to prohibit it altogether.
To be granted a state license, applicants must be residents of California, pass a background check, provide proof of a legal right to use the proposed location, apply for and obtain a valid seller’s permit, provide proof of bond, and describe the applicant’s operating procedures in detail. As the largest cannabis regulatory regime in the world, the Bureau of Cannabis Control has struggled to fill positions and conduct investigations.
In such a large market, regulatory issues are inevitable. Los Angeles’ Department of Cannabis Regulation has been slow to roll out its social equity program, causing eligible businesses to bear the costs of rent on storage and retail locations without any idea of when they can begin sales.
Controversy has also emerged over the definition of “financial interest holders” involved with cannabis companies, and what being listed as a financial interest holder may mean under federal law. Additionally, the majority of municipalities currently prohibit commercial cannabis activities, a state of affairs that Democratic Assemblyman Phil Ting attempted to address through a bill forcing municipalities where a majority of the community approved Proposition 64 to license pot retailers.
The proposed bill required such municipalities to approve one on-site cannabis retail license for every six liquor licenses, or distribute one license for every 10,000 residents, whichever is smaller. Ting has withdrew the bill for now, with plans to reintroduce it in 2020.
With regard to criminal punishment, California has very forgiving policies compared to most states. Underage use or possession often results in a small fine or counseling, with use on the grounds of a grade school having harsher punishments. Illegal cultivation and possession with intent to sell are both misdemeanors, though the latter can be enhanced to a felony depending on certain conditions. It remains a felony to employ a minor in cannabis sales or to provide cannabis to a minor.
Overall, California’s attitude toward cannabis legalization and regulation is welcoming when compared to other states. It was the first state to legalize medical marijuana and one of the first to legalize adult use. While some municipalities impose further restrictions or prohibit adult use, there are many that see legalization as an economic opportunity to be capitalized on. With a robust supply chain for both medical and adult use emerging throughout the state, California leads the nation in its regulation of commercial cannabis activity and cannabis use.
Nevada legalized medical marijuana in 2001 and adult-use marijuana in 2017. Medical marijuana legislation is codified under Chapter 453A. Medical Use of Marijuana in Nev. Rev. Stat. §§ 453A.010 to 453A.810. Adult use marijuana is permitted under the Regulation and Taxation of Marijuana Act, which is codified in Nev. Rev. Stat. §§ 453D.010 to 453D.600.
The Nevada Department of Health and Human Services (the “Department”) is tasked with regulating commercial cannabis activity. To qualify for a medical prescription, a patient must be diagnosed with a “chronic or debilitating medical condition,” which includes conditions ranging from cancer to severe nausea.
Adult use marijuana restrictions are similar to restrictions on alcohol: users must be 21 years of age or older; marijuana may only be purchased from a business licensed in Nevada; selling or giving marijuana to individuals under 21 years of age is illegal; and driving under the influence of marijuana is illegal.
Medical marijuana establishment certificates are available for independent testing laboratories, cultivation facilities, production facilities for edibles and other products, or dispensaries. To obtain a certificate, an applicant must complete an application and pay the requisite fee.
The application requires evidence that the applicant controls not less than $250,000 in liquid assets to cover initial expenses and evidence that the applicant owns property on which the proposed medical marijuana establishment will be located or permission from the owner of the property. There is a cap on the number of certificates that may be issued, and the cap is based on county population.
Nevada’s medical marijuana businesses must follow certain rules, as set out in the statute. One such rule is that each medical marijuana establishment must have “an appearance, both as to the interior and exterior, that is professional, orderly, dignified and consistent with the traditional style of pharmacies and medical office, and have discreet and professional signage that is consistent with the traditional style of signage for pharmacies and medical offices.”
Other requirements, such as installing a video monitoring system, must also be followed. Additionally, if the city or county where the medical marijuana dispensary is located has enacted zoning restrictions, the establishment must be in compliance.
Licenses are issued for adult-use dispensaries if an applicant completes an application and pays the requisite fee. For 18 months after the Department began to receive applications for marijuana establishments in early 2018, the Department will only accept applications for licenses for retail marijuana stores, marijuana product manufacturing facilities, and marijuana cultivation facilities.
Currently, licenses will be issued to marijuana distributors only if the person holds a wholesale dealer license, unless an insufficient number of distributors results from that limitation. Moreover, the application is only accepted if the proposed establishment is not in violation of any zoning or land use rules adopted by the locality where the establishment would be located. There is also a cap on the number of licenses that may be issued based on county population.
Adult-use dispensaries must also follow certain rules regarding production, manufacturing, distribution, and/or sales of cannabis products. For example, cultivation, processing, and manufacture of marijuana must not be visible from a public place by unaided vision.
A key case in which 2018 applicants for dispensary licenses sued the state for an injunction when they did not receive licenses had yet to be decided in August 2019. State officials defended the process as impartial. Vegas hotels and casinos have not embraced adult-use legalization as much as the rest of the state has. Gaming is a $13 billion industry in Nevada, and casino licenses require following federal law. Vegas casinos and hotels may have too much at stake to allow marijuana smoking in their hotels, at least while marijuana use remains illegal at the federal level.
Currently, both medical and adult use of cannabis is legal within the State of Colorado. Colorado’s constitution was amended on December 28, 2000 to legalize cannabis for medical purposes, and amended again on December 10, 2012 to legalize adult use. In 2018, Colorado cannabis sales across medical and adult-use sectors were over $1.5 billion, totalling $6 billion since adult-use was legalized in January 2014.
As other states slowly move towards comprehensive cannabis legalization, Colorado’s overall attitude regarding legalization has consistently been ahead of the rest of the nation. Since the legalization of adult use marijuana in 2012, Colorado has focused on establishing a robust regulatory framework and increasing the effectiveness of these regulations through subsequent legislation.
For medical and adult use cannabis businesses wishing to operate in Colorado, the state issues licenses that vary depending upon the entity’s actual business interest. Required qualifications that must be met for every commercial cannabis license include: a background check, filing of a complete application, and payment of a licensing fee.
While Colorado does require many different qualifications to obtain a license, state law permits the transfer of commercial cannabis licenses. In some instances, local licenses might also be required which may have other restrictions on transferability. At the state level Colorado does not cap the number of licenses issued, but some counties and municipalities do restrict the number of licenses that may be issued and active within that particular county.
State cannabis regulations impose various restrictions on licensees. For example, a cultivator is only authorized to cultivate a maximum of 1,800 plants at any given time. According to the Colorado Department of Revenue, the intent of this rule is to encourage responsible production to meet demand for retail marijuana, while also avoiding overproduction or underproduction.
Additionally, the state limits the amount of cannabis that can be sold by retailers. A dispensary and its employees are prohibited from transferring more than one ounce of flower or its equivalent in a single transaction to a consumer.
One such legislative initiative proposed an increase in the punishment for a person not licensed to sell medical or adult-use marijuana advertising the sale of marijuana. Other legislative actions have been more permissive, increasing opportunities for cannabis investment in the state.
For example, HB 18-1011, signed into law on June 5, 2018, repealed a law that required limited passive investors to go through an initial background check when investing in a cannabis related company. HB 18-1011 also allows certain publicly traded companies to hold an interest in medical marijuana businesses and offer securities for investment in medical marijuana businesses.
On May 29, 2019 Gov. Jared Polis signed legislation authorizing marijuana hospitality spaces where cannabis can be consumed on the premises of dispensaries.
Massachusetts legalized the adult use of marijuana in November 2016. Any person 21 and over is no longer be penalized for possessing, using, purchasing, or giving away one ounce or less of marijuana. Individuals can also possess up to 10 ounces of marijuana from plants cultivated within their primary residence. The definition of marijuana is very broad, and unlike states like Arizona, encompasses cannabidiol.
Medical marijuana is governed by a separate act known as the Humanitarian Medical Use of Marijuana. It was enacted in 2012 and allows for the acquisition, cultivation, possession, processing, transfer, transportation, sale and distribution for the benefit of qualifying patients. The list of qualifying conditions is fairly broad and includes cancer, glaucoma, HIV, hepatitis C and Crohn’s disease. Other conditions not specified in the statute may also qualify if so determined in writing by the patient’s treating physician.
Under Massachusetts’ adult-use regulations, marijuana establishments must obtain appropriate licenses to operate legally within the state. Massachusetts offers eight types of business licenses: marijuana cultivator, craft marijuana cooperative, marijuana product manufacturer, marijuana retailer, marijuana research facility, independent testing laboratory, marijuana transport, and marijuana micro-businesses.
Commercial cannabis activity is regulated by the Cannabis Control Commission, but local municipalities can also regulate some activities. Although there is a cap on the number of licenses a licensee can obtain, cannabis businesses can operate as for-profit entities. As of July 2019, Massachusetts has issued 22 retail licenses, and Boston’s first retail store will open in fall 2019. The favorable regulatory climate and sizable market make Massachusetts a lucrative state for commercial cannabis operators.
Oregon legalized the use of medical marijuana in 1998 with the passage of Measure 67, known as the Medical Marijuana Act (OMMA). OMMA modified state law to allow the cultivation, possession, and use of marijuana by patients with certain medical conditions upon recommendation by a doctor and compliance with OMMA. The rulemaking authority pursuant to OMMA is vested in the Oregon Health Authority.
Under OMMA, in order to legally use marijuana for medical purposes a person must first obtain a registry identification card under 47B.797. To do so, a person must have a “debilitating medical condition” as defined in ORS 475B.791(6) and provide written documentation from an attending physician certifying the patient has “a debilitating medical condition and that the medical use of marijuana may mitigate the symptoms or effects of the applicant’s debilitating medical condition.”
Patients with medical condition that are not listed in 791(6), may petition the Oregon Health Authority, pursuant to ORS 475B.946, to have their condition included among the diseases and conditions that qualify as debilitating medical conditions. Employers are not required to accommodate the medical use of marijuana in the workplace.
Oregon legalized adult use of marijuana in 2014 with the passage of the Adult and Medical Use of Cannabis Act. The Act became operative on July 1, 2015. The Act expressly does not amend nor affect the Medical Marijuana Act. The rulemaking authority pursuant to the Act is vested in the Oregon Liquor Control Commission.
The Adult and Medical Use of Cannabis Act legalizes the possession, use, and cultivation of marijuana by adults age 21 or older. Pursuant to ORS 475B.301, persons aged 21 or older may grow up to four marijuana plants in their household, may possess up to eight ounces of useable marijuana, may produce and/or possess up to 16 ounces of cannabinoid products in solid form, produce and/or possess up to 72 ounces of cannabinoid products in liquid form, and may produce and/or possess up to 16 ounces of cannabinoid concentrates. A variety of licenses are available for activities such as production, processing, wholesaling and retailing.
Since legalizing cannabis, Oregon has increased its efforts to curtail illegal production and transportation of marijuana as black market activity has continued to grow. In a May 2018 memorandum written by U.S. Attorney for Oregon Billy J. Williams in which he stated “there can be no doubt that there is significant overproduction of marijuana in Oregon. As a result, a thriving black market is exporting marijuana across the country, including to states that have not legalized marijuana under their state laws.”
As of August 2019, Oregon licensed 1,136 recreational growers. Some growers have recently gone out of business, and prices have stabilized for the moment.
Due to overproduction, on May 30, 2018 the OLCC announced it would temporarily “pause” accepting new applications for licenses under the Adult and Medical Use of Cannabis Act. In addition, in June 2019 Gov. Kate Brown signed a state law intended to allow Oregon to negotiate with other states to sell a portion of the marijuana surplus.
Illinois legalized cannabis for medical purposes in 2014. Users of medical cannabis must have been diagnosed with a “debilitating medical condition” by a licensed physician. Users may only possess a maximum of 2.5 oz of usable cannabis during a 14-day period.
In July 2016, Public Act 99-0697 reduced penalties associated with the adult use of cannabis. In August 2018 the state legislature passed a law allowing medical cannabis to be used as an alternative to opioids for some medical conditions. The law allows state residents who are given an opioid prescription to ask their physicians for medical cannabis instead.
On June 25, 2019, Gov. J.B. Pritzker signed HB 1438, the Illinois Cannabis Regulation and Tax Act, into law. The bill legalized the adult use and purchase of cannabis. For recreational purposes, Illinois residents over 21 can possess 30 grams of cannabis flower, 5 grams of concentrate and 500 milligrams of THC in products such as edibles. Illinois visitors are able to possess half those amounts. Unlike medical marijuana patients, adult users are not permitted to grow marijuana at home.
HB 1438 also created a $30 million dollar loan program to help social equity applicants with cannabis industry start-up costs. Applicants qualify based on being in a disproportionately impacted area and having a cannabis charge expunged as a result of the new law.
HB 1438 does not affect medical marijuana users, except to the extent the bill mandates that any medical dispensary can apply within sixty days of the passage of HB 1438 for an Early Approval Adult Use Dispensing Organization License. In a shortage, such dispensaries must prioritize medical patients before recreational purchasers.
Illinois’ Department of Revenue projects the industry to generate over $57 million in tax revenue and fees in FY2020. An excise tax of 10% is imposed on products with less than 35% THC, and a tax of 25% is imposed on products with higher doses. The new law is in effect beginning January 1, 2020. Initially, medical marijuana dispensaries will be the only licensed retailers, but by mid-2020 new licenses will be granted to dispensaries, processors, cultivators and transporters.
On November 6, 2018, Michigan voters legalized adult-use cannabis with the passage of Proposal 18-1, also known as the Michigan Regulation and Taxation of Marijuana Act (“MRTMA”). At the time of its enactment, Michigan became the 10th state to legalize recreational cannabis and the first to do so in the Midwest.
MRTMA authorizes and legalizes the possession, use and cultivation of cannabis products by individuals at least 21 years of age. The new law tasks the Department of Licensing and Regulatory Affairs with promulgating rules and procedures 8 | Thompson Coburn Blog Post for issuing cannabis licensing in the state. The state will not cap the number of licenses at the state level, although municipalities are authorized to do so. Non-Michigan residents are permitted to invest in cannabis businesses in the state.
Previously, in 2018, the Michigan Medical Marihuana Act (“MMMA”) legalized the use and possession of cannabis by any Michigan resident diagnosed with a debilitating medical condition. Presently, a debilitating medical condition includes cancer, glaucoma, Hepatitis C, Crohn’s disease, Alzheimer’s, and any other medical condition approved by the Michigan Department of Licensing and Regulatory Affairs.
The general regulatory framework established under the new law is particularly business-friendly, as it establishes tax rates (6% sales tax and 10 percent excise tax) lower than most states that allow adult use, and the state permits for-profit licensees. For medical-use cannabis-related businesses wishing to operate within the state, Michigan issues licenses that vary depending upon the company’s actual activities.
Each license is subject to different statutory qualifications. In 2016, Michigan enacted the Medical Marihuana Facilities Licensing Act, which provided for the licensure of growers, processors, secure transporters, provisioning centers, and safety compliance facilities. Once obtained, all of the aforementioned licenses may be transferred after state approval.
Statutory limitations restrict the production of medical-use cannabis. The limitation depends on the company’s class of license. For example, a “Class A” production license allows a company to produce 500 cannabis plants, while a “Class B” license permits a company to produce 1,000 cannabis plants.
Recreational sales are on hold until 2020, but the Marijuana Regulatory Agency accepts applications for business licenses starting November 1, 2019. Regulators have issued a set of emergency rules that anticipate more thorough guidance. Barriers of entry for business licenses are substantially lower than those for medical licenses; a business license does not require proving a daunting amounts of assets, fees are lower, and the license itself is a third of a medical license’s cost. Other emergency rules allow businesses to permit use at social events while banning drive-through, mobile marijuana shops and online sales.
Also in 2016, House Bill 4210 amended the Michigan Medical Marihuana Act to prevent a person from being penalized for manufacturing a marijuana-infused product if the person was a qualified registered patient or a registered primary caregiver. On the municipal level, cannabis activity is regulated by local governmental authorities. In towns such as Ann Arbor, where an annual “Hash Bash” event has been celebrated by residents and University of Michigan students for almost 50 years, local ordinances regulate and license cannabis dispensaries.
As evidenced by the recent passage of MRTMA, Michigan’s overall attitude regarding legalization has consistently been ahead of most states in the nation.
On May 2, 2018, the Maine Legislature overturned a veto by then-Gov. Paul LePage in order to pass adult-use legalization. The Legislature voted heavily in favor of passing the bill, as the House votes tallied 109-39 in favor and the Senate votes tallied 28-6 in favor. The Marijuana Legalization Act legalizes adult use throughout the state without restrictions on tetrahydrocannabinol (THC) limits.
The Act allows a person to both use or possess up to five grams of marijuana or marijuana concentrate without legal ramifications. The Act restricts the amounts of marijuana plants adults can use and transfer and imposes many requirements on companies seeking a license to cultivate, test, manufacture, or sell marijuana or marijuana concentrate.
A bill signed by Gov. Janet Mills in June 2019 will launch Maine recreational sales in March of 2020. It maintains the strictest barrier to entry in the retail market by requiring business to be run by individuals who have been residents of Maine for four years. Edibles will be permitted in retail stores, but edibles in the shape of animals, people or characters are not permitted.
Alaska legalized the adult use of marijuana in 2014 with a successful ballot measure, making it the third state in the nation at the time (behind Colorado and Washington) to legalize adult use. Any person 21 and over is not subject to criminal or civil penalties under state law for possessing, growing, purchasing, or transferring to another adult one ounce or less of marijuana.
The state also permits businesses to possess, grow, process, transport, or transfer to another person 21 and over up to 6 marijuana plants. The statutory definition of marijuana is broad, and likely encompasses products like cannabidiol.
Commercial businesses must obtain appropriate licenses to operate legally within the state. Alaska offers four (4) licenses: retail marijuana stores, marijuana cultivation facilities, marijuana product manufacturing facilities, and marijuana testing facilities. The licensing framework in Alaska is favorable to cannabis businesses.
These licenses can be transferred with approval from the state’s Marijuana Control Board, the state agency charged with regulating commercial business within the state. A business can operate as non-profit or for-profit, but they must be run by Alaska residents. Beginning on April 11, 2019, dispensaries in freestanding buildings can set up separate designated smoking areas for patrons. The city of Anchorage only permits consumption of edibles at dispensaries, and other local regulations may vary.
Patients with certain debilitating medical conditions can apply to register and receive a medical marijuana identification card. The law provides an affirmative defense against state-law prosecution for the manufacture, delivery, or possession of marijuana if the patient is properly registered with the state. The list of eligible conditions is broad and includes, for example, cancer, glaucoma, chronic conditions resulting in severe pain, nausea, or seizures. Other conditions may also be approved by the state’s Department of Health and Social Services.
Although the Act legalized marijuana use on private property, the use of marijuana in bars or restaurants is still entirely illegal.
Washington has a history of being ahead of the curve on marijuana legislation. The state legalized medical use in 1998 via ballot measure (Wash. Initiative 692), just two years after California became the first state to legalize medical marijuana. On November 6, 2012, Washington became one of the first two states to legalize adult use (along with Colorado on the same day) by passing Washington Initiative 502.
This legalized adult-use marijuana for those 21 years and older. Sales began in July 2014, and while the first years of adult-use legalization led to double digit YOY increases, as of 2019 sales have slowed to single digit increases for the first time in the state’s short history. Wholesale cannabis prices have suffered a commensurate decline.
Given the longer duration of Washington’s medical and adult-use marijuana programs, the laws and regulations are more comprehensive than other states. The medical program is run through the Washington State Health Department, while the adult-use program is run by the Washington State Liquor and Cannabis Board.
Chapter 69.51A of the Revised Code of Washington offers full details on the medical program and its restrictions, while Washington Admin. Code Title 314-55 provides all regulations relevant to the adult-use program.
The adult-use program is heavily licensed, and heavily restricted. Residency requirements, financing regulations, and limits on the number of licenses per entity are all found in the Washington Administrative Code.
Weisz, Barry Weisz, and Michael Rosenblum. “The Ultimate Guide & Annual Ranking for State-By-State Cannabis Regulations in the US.” Cannabis Magazine, 11 Sept. 2019, cannabismagazine.com/the-ultimate-guide-annual-ranking-for-state-by-state-cannabis-regulations-in-the-us/.