Business
Attorney Shimmy Posen Discusses Legalization, the Global Marketplace
“The projectiles are clear. The industry is such a behemoth today and it’s only going to grow,” Posen said.
Recently, President Joe Biden announced a plan to pardon those convicted of simple cannabis possession, which left many wondering if this could be the first step towards full legalization or the federal declassification of cannabis. Though nothing official has been announced, there are many in the legal cannabis industry that wonder whether the U.S. will go the same route as Canada, who fully legalized in 2018.
Shimmy Posen, a Canadian attorney with over a decade of experience working with cannabis corporate finance, mergers, and acquisitions believes that this will eventually lead to the U.S. legalizing cannabis, much like Canada did in 2018. He said it is inevitable due to the global market and how much capital the cannabis industry can generate in international markets. “Being at the forefront of all this, my desk has become a trading floor for certain peripheral elements of these deals. I felt like a sports agent at times,” Posen said. “It got to be very complex, because there were lots of intricacies of how much growers could own, whether they would allow franchising or not and so much more that had to be ironed out. It was very knowledge-centric.”
Posen said he has worked with several Israeli and American companies that went public but is interested in countries where cannabis sales are legal. “Anywhere in the world really, where cannabis was touching capital markets, we were aware of it at my desk, and advising clients and helping them build businesses. Some of the more recent deals include the Sundial acquisition.”
Posen said that in the global marketplace of cannabis, Canada stands out due to its legal status. “What distinguishes Canada from the rest of the world is this government truly allowed cannabis into the capital markets to interact with the financial systems,” he said. “But, in countries like the U.S. they still have issues with cannabis in banking systems due to the federal legality issues. We don’t have that problem in Canada since the illegality was removed.”
Posen said that he thinks Canada is a global leader, but admits the system isn’t perfect and has its flaws that need to be worked out. “One thing Canada got wrong, is they lumped under one umbrella THC and CBD,” Posen said. “Lots of people have issues coming into Canada on flights with CBD products, especially from the U.S., because they don’t think it’s a problem. But CBD is a controlled substance in Canada; you can’t buy it over the counter at a gas station or pharmacies, you can only get it at licensed dealers since it’s regulated and controlled. People fly in and get in trouble quite often because they don’t know this.”
Another problem Canada faced, according to Posen, is that once cannabis was legalized in 2018, for a period of around a year, only flower [was] allowed to be sold.” It took about a year for other products such as vapes, concentrates, and edibles to be available legally, so there was a market for all these products in the ‘black market,’” Posen said. “I don’t call them ‘black market’ though; I refer to them as the legacy market. Now, consumers can buy all these products in the legal retail stores. But it was a big mess. Canada has certainly taken a bullet for the rest of the world to see how this could work for totally legal cannabis But, many of the legacy market underground stores are starting to transition into the legal markets because that is the future. No one goes out to buy moonshine; they buy known brands of hard liquor. Same [idea] with cannabis. This just takes time, it’s a process.”
Posen said that he thinks the cannabis sector in the global financial marketplace will continue to grow exponentially and even skyrocket. “The projectiles are clear. The industry is such a behemoth today and it’s only going to grow. It’s global already, and that’s without full legalization from countries like Germany and the U.S., so you can imagine what will happen when those countries fully allow legal cannabis,” he said. “One leading country especially for medicinal cannabis is Israel, who really started the industry standard for medical cannabis.”
Posen said he is keeping an eye out for countries like Mexico, Thailand, Germany, and the U.S., among others but thinks eventually, most countries will allow legal, regulated cannabis sales.
He thinks the recent announcement by Biden regarding cannabis convictions to be a first good step. “I suspect that eventually, the federal illegality will be removed, or the U.S. will just let the states determine what they want, kind of like how it went down during prohibition—just let local jurisdictions determine what they want to do.”
Although reluctant to offer a date or timeline, Posen said he believes that legalization is coming to the U.S. “As soon as it happens, it will remove many of the obstacles the U.S. faces in the public capital markets. Also, many other countries will follow immediately and also legalize because many countries only have it illegal because of the U.S.,” Posen said. “People want individuals to make their own decisions, but at the same time not promote it for children. It’s about freedom but responsible use. The sky’s the limit.”
Source: https://hightimes.com/culture/attorney-shimmy-posen-discusses-legalization-the-global-marketplace/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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