Business
European cannabis execs would welcome German trial legalization program
European cannabis executives would welcome a decision by the German government to pursue a trial recreational cannabis program versus nationwide legalization – even if that meant a significantly smaller market for businesses to pursue.
Still, some experts say any trial program in Germany would come with risks, pointing to the flailing Netherlands experiment and even parallels with Japan’s “scientific” whaling activities.
German media reported last week that federal officials might resort to a “cannabis legalization light” model amid concerns that nationwide legalization could violate European law.
German Health Minister Karl Lauterbach had previously expressed confidence that the country’s plan to legalize recreational cannabis would overcome one of its biggest hurdles – European Union approval.
Now, EU approval for full legalization is looking less likely, although no final decision has been made.
Germany requires European approval that its plan wouldn’t violate international law because it is part of the Schengen Area, which comprises 27 countries that have officially abolished passport and other controls at their mutual borders.
Executives contacted by MJBizDaily said the implementation of any temporary trial program shouldn’t be seen as a major setback.
“The ‘cannabis light’ model is a logical step that European countries like Netherlands, Luxembourg, Malta and Switzerland have already (taken), so this would be a safe political course (for Germany),” Michael Sassano, CEO of Somai Pharmaceuticals, said via email.
Somai, a medical cannabinoid producer, is based in Lisbon, Portugal, and Dublin, Ireland.
Sassano said it would have been a stretch to assume the European Union would easily give German recreational cannabis the green light, given that only a handful of EU countries currently have full-fledged medical cannabis programs, contrary to the German health minister’s optimism.
“The growth model for Germany continues to be the strongest in Europe, and with any version of cannabis legalization ‘light,’ this is another positive move to increase access to volumes,” Sassano said.
Trials and tribulations
So-called trial programs – sometimes also called experiments or pilots – are relatively rare in North America but have become popular in Europe as a bridge to potentially broader drug reform.
That’s partly because trial programs are easier to get approval for politically, and they allow a country to overcome certain international treaty obligations, provided the “experiments” are seen as sincere and collect meaningful data.
Alfredo Pascual, vice president of investment analysis at Guernsey-headquartered Seed Innovations, told MJBizDaily that cannabis programs for scientific experiments might seem easier than full legalization to justify in terms of international law, because the 1961 Single Convention on Narcotic Drugs allows the use of cannabis for scientific purposes.
“But it wouldn’t be without challenges. International treaties need to be interpreted ‘in good faith,’” he said, citing Articles 26 and 31 of the Vienna Convention on the Law of Treaties.
“Countries aren’t supposed to use tricks to circumvent their international obligations.”
Pascual noted that Japan tried to use the “scientific research” exemption in the International Convention for the Regulation of Whaling to justify continuing to kill whales.
Years later, the International Court of Justice ruled against Japan.
“I think the idea of cannabis social experiments for ‘scientific purposes’ has merits, but I don’t think that it’s a pathway that could be abused to have massive, open-ended, free-for-all experiments without real scientific output,” he said.
“For it to work, I believe it would probably need to be subject to several limitations and real research organizations (for instance, universities) would probably have to be involved.”
If Germany does pursue a trial program in lieu of full-on legal reform – which remains to be determined – it wouldn’t be the first European country to backtrack in the face of legal uncertainty.
In 2021, Luxembourg backpedaled on its initial plan to establish Europe’s first fully legal recreational cannabis market.
After benchmarking the Canadian model, the Luxembourg government instead announced plans to allow home cultivation of up to four plants for personal use – with no option for retail sales.
Some of Europe’s cannabis trials have experienced major setbacks in one form or another.
The Netherlands has had issues getting its recreational cannabis trial program up and running.
The Dutch have been laying the groundwork for the pilot program for four years, after originally planning its launch in 2020.
Ireland has had major issues with its medical cannabis trial, while Denmark’s has failed to retain more than 500 participants.
‘First step to legalization’
Despite setbacks in some European trials, Dirk Heitepriem, an Aurora Cannabis executive in Germany, isn’t concerned about Berlin’s potential pivot to an experiment.
He suggested any trial program in Germany “would provide the county the opportunity to work together with other parties in Europe who want to legalize as well over the next four or five years to create a European framework which works for everyone.”
“I’m not afraid this would be turned back, because that’s not German tradition. Once you’ve created a framework, it’s going to stay there,” he said.
Heitepriem, also deputy chair of the German Cannabis Business Industry Association, said any trial in Germany would herald the first step toward eventual legalization.
“It’s not a step in the right direction, it’s the first step to legalization,” he said.
“It’s going to take longer than almost everyone expected. For us, it was always a long-term play.”
Heitepriem doesn’t see the German medical market declining, even if the county allows recreational cannabis sales via a trial program.
He said the reimbursement system for patients is complicated, but it’s working.
But Heitepriem said businesses focusing on the so-called private-payer market might have some difficulties.
“Where we will see changes,” he said, “is in the so-called private-payers market, where people will probably move over to the legal (recreational) market.”
Source: https://mjbizdaily.com/european-cannabis-executives-favor-german-trial-legalization-program/
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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