Business
New York Regulators Approve Marketing Rules for Legal Cannabis
New York regulators voted on Wednesday to approve draft regulations for the packaging and advertising of licensed cannabis products in advance of the launch of recreational pot sales later this year.
New York state regulators voted on Wednesday to approve draft rules for the packaging and marketing of legal cannabis products. The proposed regulations establish parameters for the sale of recreational weed products, which are expected to go on sale by the end of the year following the legalization of adult-use cannabis by state lawmakers in 2021.
Under the draft regulations from the New York Cannabis Control Board, companies will be permitted to advertise their products via television, radio, social media and other platforms. But the rules also include strict provisions designed to protect children from being influenced by cannabis marketing.
“Protecting public health, reducing harm and promoting sustainable industry practices are key components of legalizing cannabis for adult use and I look forward to considering these regulations as we develop the industry,” Cannabis Control Board Chair Tremaine Wright said in a statement quoted by the New York Post. “We are committed to building a New York cannabis industry that sets high standards for protecting children and keeping products safe and sustainable.”
Rules Designed To Protect Kids
Labels for cannabis products must include the serving size, potency, ingredients, and directions for usage and storage. Packaging and advertising that contain cartoon characters, bubble lettering, neon colors, references to candy, or other elements likely to appeal to people younger than 21 years old are not allowed.
The regulations also forbid the use of endorsements from celebrities who appear to be younger than 21 and ban the use of common terms in the cannabis culture lexicon including “weed,” “pot,” “stoner,” and “chronic.” Misleading claims of health benefits and indications that the product is “safe” or “organic” are also prohibited, as are actual images of marijuana or people vaping or smoking.
Katrina Yolen, chief marketing officer of multistate cannabis operator Acreage Holdings, applauded New York regulators for updating the guidelines for cannabis marketing and advertising in advance of the launch of adult-use sales.
“Recognizing that cannabis operators need to be able to communicate better with consumers to educate, inform and build awareness about the benefits of cannabis is vital for the state and industry,” Yolen wrote in an email. “We look forward to supporting and working with the Office of Cannabis Management on the final guidelines over the coming weeks.”
All cannabis product packaging must include the state symbol of approval that includes the universal cannabis symbol with a cannabis leaf and the letters “THC,” plus an indication that the product is for consumers 21 and up and the New York state logo. The stipulated label is reserved for products that have been produced by licensed cannabis companies and lab tested for safety in accordance with state law.
Packaging for cannabis products must also be child-resistant, meeting standards that make the product difficult for a child younger than 5 to open. Additionally, the regulations require that cannabis advertising be no closer than 500 feet to schools, libraries, daycare centers, and playgrounds.
The draft regulations also call for a rotating series of warning labels to be placed on packaging for cannabis requirements, such as “Cannabis can impair concentration, coordination and judgment. Do not operate a vehicle or machinery under the influence of cannabis” and “Keep out of reach of children and pets.”
Marketing Rules Set a High Bar in New York
The regulations forbid marketing and promotional tactics commonly used by companies in other industries. Price promotions, coupons, customer loyalty programs, and other discounts are not allowed under the rules.
In an email to High Times, Katelin Edwards, senior regulatory analyst at Simplifya, a regulatory and operational compliance software platform serving the cannabis industry, said that a particular aspect of New York’s regulations may prove to be especially burdensome for weed businesses.
“Although it is true that a NY cannabis licensee can advertise cannabis products, cannabis paraphernalia, or goods or services related to cannabis or cannabis products by means of television, radio, print, internet, mobile applications, social media and other electronic communication,” said Edwards, “the licensee has to have reliable evidence that at least 90%, unless otherwise determined by the Office, of the audience for the advertisement is reasonably expected to be twenty-one years of age or older.”
Edwards notes that the composition requirement is more stringent than most states that have legalized recreational pot, including Colorado, California, and New Jersey, where audience composition requirements that call for about 70% of the audience to be 21 and older are the norm.
“Getting reliable and up-to-date audience composition data to prove that at least 90% of the audience is reasonably expected to be 21 years of age or older may be challenging; especially when ‘reasonably expected’ is so ambiguous and the burden of proof is on the licensee.”
The new proposed regulations will now undergo a 60-day public comment period beginning on June 15 before coming up for a final vote by the board.
Source: https://hightimes.com/news/new-york-regulators-approve-marketing-rules-for-legal-cannabis/
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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