Business
Minnesota gov to sign adult-use marijuana legalization law that allows delta-8
Minnesota Gov. Tim Walz will sign an adult-use marijuana legalization bill into law that also allows cannabis companies to sell hemp-derived products including those that contain delta-8 THC.
When the governor does, Minnesota will become the 23rd state to legalize adult-use cannabis in the United States and the second to do so in 2023 after Delaware.
State lawmakers, whose regular legislative session ends Monday, voted early Saturday morning to give final approval to a cannabis legalization bill that first passed both chambers of the Legislature in late April after nearly six months of lengthy hearings.
That bill now heads to Walz’s desk.
Once Walz signs, adults 21 and older will be able to consume and cultivate small amounts of cannabis at home beginning Aug. 1.
Sales at retail dispensaries, subject to a 10% tax, won’t begin for another year.
Retailers are limited to no more than five locations, and cultivation licensees will be capped at 15,000 square feet of canopy.
Vertical integration will be allowed, but only for small businesses or businesses that deal only in low-THC hemp-derived products.
‘Mezzobusinesses’ and delta-8
Licenses for both microbusinesses and what the state calls a “mezzobusiness” will be issued. Those permits will allow a holder to cultivate and process as well as sell at up to one location for microbusinesses and three for a mezzobusiness.
Mezzobusinesses will be allowed to cultivate, manufacture and sell products derived from low-THC hemp.
They are also allowed to work with synthetic cannabinoids such as delta-8 THC.
When awarding licenses, regulators can give preference to social equity applicants, including veterans as well as people from impoverished communities or communities disproportionately affected by the war on drugs.
There is no statewide license cap for future holders of one of a dozen new marijuana business licenses.
However, local governments do have the authority to limit retailers to one license per 12,500 residents – a generous allowance compared to other states – and to enact strict zoning controls.
One of the country’s more restrictive states for medical marijuana, Minnesota currently has 15 MMJ dispensaries, according to state data.
Only two companies, both multistate operators, are licensed to operate in the state: Chicago-based Green Thumb Industries, which sells cannabis in Minnesota under its Rise brand, and Minneapolis-headquartered Goodness Growth, formerly known as Vireo Health.
Along with gun control and a bill guaranteeing minimum wage for gig workers, marijuana legalization was one of many legislative priorities for the Democratic Farmer-Labor (DFL) party, the state affiliate of the national Democratic Party.
The DFL assumed control of the state Senate in November.
Cannabis reform is now part of the standard platform for most mainstream Democrats, but Minnesota had additional impetus to legalize adult-use cannabis.
New restraints on delta-8, delta-9 THC
A law passed at the deadline last year allowed hemp-derived intoxicating cannabinoids to be sold statewide at grocery and convenience stores.
This includes controversial delta-8 THC, which remains a popular alternative in prohibition markets despite a wave of states passing tough regulations or outright bans, as well as hemp-derived delta-9 THC.
The opiate-overdose crisis also played a role, as Walz told CNN on Sunday.
The bill explicitly permits retailers to sell products that detect the presence of fentanyl, the synthetic opioid responsible for most of the country’s drug-overdose deaths, according to the Centers for Disease Control and Prevention (CDC).
As many as 109,000 Americans died from drug overdoses in 2022, according to the CDC.
The legalization bill has protections for the existing medical marijuana and hemp industries, sponsors promised.
Green Thumb and Goodness Growth will be allowed to sell adult-use marijuana “based on the percentage of their business lost to newly licensed recreational cannabis retailers,” according to the Minnesota state House.
Critics have said that the bill gives an unfair advantage to the two MSOs, which, as existing operators, can cultivate cannabis well in excess of the 15,000-square-foot limit to be imposed on new applicants.
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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