Business
Cannabis Businesses Affected by Flooding in Vermont Don’t Qualify for Federal Aid
Due to the federal status of cannabis, business owners in Vermont can’t acquire assistance from the federal government after intense floods in Vermont last week.
While the west coast braces for the annual summertime heatwave, states on the east coast are trying to stay afloat amidst heavy rain. Destructive flooding ran through Monteplier, Vermont, the state’s capital, leaving many businesses closed for cleanup and repair. For affected cannabis businesses, this means that they can’t apply for federal aid.
According to VTdigger.com, Lauren Andrews, the owner of Capital Cannabis on Main Street, spent many days last week cleaning up her dispensary with the intention of reopening on July 17. However, upon returning to her business she found a water leak that left the walls and floors soaked through. “We’re going to have to gut the place and start from scratch,” Andrews told the news outlet.
Also on July 17, cannabis business owners received word that they aren’t eligible for federal disaster aid. Instead, those funds are being driven toward other businesses who were impacted by last week’s historic floods.
“Because we are a federal agency, we have to follow federal law,” said Small Business administration public information officer, Carl Dombek. “Cannabis is not legal under federal law, and therefore we are not able to lend to cannabis dispensaries.”
VTdigger.com also noted that a cannabis business that has also received any FEMA Small Business Program assistance is disqualified from aid. Although Vermont Gov. Phil Scott asked the U.S. Department of Agriculture disaster declaration, it still would not allow affected cannabis farmers to receive federal crop insurance, according to a USDA Farm Service Agency executive director.
However, if cannabis industry employees lose their jobs because of the floods, they can still apply for unemployment since it’s a state provided service, and not a federal program.
The floods aren’t threatening to shut down cannabis businesses across the entire state but according to Cannabis Control Board chair, James Pepper, they’re still in need of help. “All these businesses live on a knife’s edge already because of the closed loop system,” said Pepper. “There’s no outlet. There is no pressure-release valve in the cannabis industry. And so … when something bad like this happens, it can ripple through the entire industry.”
“It’s a very interdependent relationship,” said Andrews. “When one of us goes down, it hurts everyone.”
Unlike other agricultural products grown in Vermont, cannabis growers are still learning how to assess damage in the wake of destruction. “We don’t consider cannabis an agricultural product, but it’s a seed and it’s a crop that grows in the ground,” Pepper added. “So we can use some of the best practices from the Agency of Agriculture to help deal with this issue in cannabis.”
Cannabis growing farms will need to test for wastewater contamination, and will have to keep an eye on their crops for water-related issues such as bud rot.
Vermont Growers Association co-founder and executive director, Geoffrey Pizzutillo has been working to distribute assessment forms for cannabis businesses to understand what kind of damage was experienced across the state. “It’s too early to tell,” Pizzutillo said. “But we want to drive home that it is the entire supply chain. Every license type is being impacted—not just the outdoor farmers, but retailers and manufacturers as well.”
U.S. Secretary of Transportation Pete Buttigieg visited Vermont once the floods subsided, likening the scene to the devastation left in the wake of Hurricane Irene in 2011. “You see just how urgent it is to make sure these communities get the help that they need,” Buttigieg said as he visited members of the community. “…Our message is to communities big and small: The federal government is here to help provide resources that are needed.”
While Vermont cannabis businesses won’t be benefitting from federal aid, Pizzutillo and others are hoping to prepare an accurate depiction of the damage so that businesses can at least qualify for emergency state funding—something that can be approved in a special legislative session. “I think the best thing that we can do at the Cannabis Board is collect the data and present it to the Legislature,” said Pepper. “And then we’ll see if there is a political will to help the businesses that are very severely hurt by this.”
Vermont’s recreational cannabis law was signed by Gov. Scott in October 2020, but sales didn’t begin until two years later. The state collected $2.6 million in just three months after recreational cannabis sales launched, and hit $24 million by May 2023.
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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