Business
California Agency Awards Over $50 Million in Cannabis Tax Funds to 31 Organizations
The California Community Reinvestment Grants Program recently announced recipients for fiscal year 2022-2023.
The California Governor’s Office of Business and Economic Development (GO-Biz) announced that it is once again giving a handful of grants to various health departments and non-profit organizations on May 25. The agency is utilizing cannabis excise and cultivation taxes to fund $50 million in fiscal year 2022-2023 and awarded funds through the California Community Reinvestment Grants Program. Recipients are permitted to use the funds to help people find jobs, treat mental health or substance abuse, and provide legal services.
In order to qualify, organizations must meet various requirements, such as being in good standing for at least six months prior to grant solicitation, have tax-exempt status from the IRS and California Franchise Tax Board, and be labeled as “current” or “exempt” in the California Attorney General’s Registry of Charitable Trusts, among others.
This fiscal year’s grant recipients include 31 organizations that specifically aim to support communities affected by the War on Drugs. The highest grants awarded were $3 million for Centers for Equity and Success, Inc., Shields for Families, the Los Angeles Department of Public Health, UnCommon Law, and the Monterey County Health Department. Other grants include First Place for Youth, Goodwill of the San Francisco Bay, United Friends of the Children, and more.
According to a GO-Biz press release, the agency plans to open up the next wave of grants for application later this summer in August 2023.
The California Department of Cannabis Control (DCC) initially announced the launch of the program with $30 million in first grant recipients for fiscal year 2019-2020 in April 2020. In 2021, the California Community Reinvestment Grants Program granted $15 million to various organizations. Most recently last year in June, GO-Biz announced the distribution of cannabis tax funds in the amount of $35.5 million between 58 grants recipients.
In February, the DCC announced that it was offering $20 million in grant programs for the purpose of supporting and expanding the state cannabis industry. “Expanding access to California’s retail cannabis market is an important step towards protecting consumer safety and supporting a balanced market,” said DCC director Nicole Elliott. “The retail access grant program ultimately seeks to encourage legal retail operations in areas where existing consumers do not have convenient access to regulated cannabis.” Six study initiatives were approved at the University of California, Los Angeles, three at University of California, Berkeley, and single grants for colleges such as University of California, Davis, Cal Poly San Luis Obispo, and Cal Poly Humboldt.
Also in February, the DCC announced that it would be allocating $20 million to the Local Jurisdiction Retail Access Grant, which helps local governments enact their respective cannabis licensing programs. It also announced an additional $15 million that would be granted to support equity in the cannabis industry.
California continues to fund cannabis research efforts as well. In April, 16 colleges were granted nearly $20 million for the purposes of studying cannabis. These initiatives ranged in topics from studying legacy genetics, potency, and more. “It is the Department’s aspiration that these studies will advance the body of scientific research, further our understanding of cannabis, and aid to the continued development and refinement of the legal framework,” said DCC chief deputy director Rasha Salama. “These studies will provide valuable insights on topics of interest to California’s consumers, businesses, and policy makers and the Department looks forward to sharing them once they are completed.”
Just a few weeks ago, a California task force issued a draft of its final report, which concluded that the state issue an apology to Black Americans for discrimination experienced as a result of the War on Drugs. Additionally, it called for the payment of funds to Black Americans for “each year of residency in California during the 49-year period between 1971 and 2020.” The final version of the report will be sent to congress on June 29.
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
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/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
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.”
Business
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
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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