Business
New York Regulators Release Guidelines For Cannabis Retailers
The New York Office of Cannabis Management on Friday released new guidance for retail adult-use cannabis dispensaries, only weeks before the state’s newly legal recreational marijuana market is expected to launch later this year. New York lawmakers legalized cannabis last year with the passage of the Marihuana Regulation and Taxation Act (MRTA), with regulated sales of recreational marijuana slated to begin by the end of 2022.
Regulators began accepting applications for adult-use cannabis dispensaries this summer with a program that sets aside the state’s initial recreational marijuana retailer licenses for those with past convictions for cannabis-related crimes. The guidelines released last week are designed to help prospective marijuana retailers to develop their business and operational plans.
“This guidance document serves to provide the framework that will assist Conditional Adult-Use Retail Dispensary licensees plan for how to operate their dispensary before regulations are formally adopted,” the Office of Cannabis Management (OCM) wrote in the 27-page document released on Friday.
The new rules give guidance on issues including cannabis dispensary record keeping, employee training requirements and inventory management. The rules require adult-use dispensaries to source their products only from regulated distributors and oultlines what types of merchandise can be sold. The document also includes guidance for cannabis sales via in-store, drive-through, and delivery channels.
Under the rules, dispensaries must be located at least 500 feet from schools and at least 200 feet from buildings that are used solely as houses of worship. The agency noted that the guidance will govern adult-use cannabis retailers until complete regulations are approved and posted online, which must occur before the recreational marijuana officially opens.
“Compliance with any current and future state rules, regulations, and laws is required by all licensees to remain in good standing with the Office,” the OCM wrote in the introduction to the guidelines. “This guidance document provides clarity on what the Office’s expectations are in relation to those regulations and laws currently in place and the regulations that will be promulgated in the future.”
Guidelines Bar MSOs in New York
After reviewing New York’s guidance for adult-use cannabis dispensaries, Kaelan Castetter, managing director of the consulting firm Castetter Cannabis Group, told local media that the OCM’s initial rules seem relatively standard for the industry. But he added that one section of the new rules could cause problems for the fledgling industry.
According to the new guidelines, the “true parties of interest” behind dispensaries including owners, passive investors, and service providers are prohibited from having an interest in any business that is licensed to cultivate, process, or distribute cannabis in New York or any other state. The regulation effectively bars multistate operators (commonly referred to as MSOs) and other vertically integrated cannabis companies from doing business in the New York market.
“I see what they’re trying to do, but it’s a very protectionist approach,” Castetter said. “What it basically says is: if you are in business in any other state – unless you only own a dispensary in another state – you can’t be part, in any way shape or form, a retailer here … it’s very anti-MSO.”
Earlier this month, New York Governor Kathy Hochul confirmed that the state’s first regulated recreational cannabis dispensaries will open this year, with nearly two dozen shops opening by the end of December. In an interview with the Advance Media New York editorial board on October 5, Hochul said the state’s plan to have 20 conditional adult-use retail dispensaries open by the end of 2022 is “still on track” and that “another 20” retailers would open about every month after that.
Hochul noted that New York’s plan to regulate recreational cannabis includes social equity provisions designed to ensure that those harmed by decades of cannabis prohibition have a path to ownership in the regulated marijuana industry. Under the state’s regulations, the initial 100 licenses for adult-use cannabis retailers will be awarded to applicants who have past convictions for marijuana-related offenses.
“We’re going to make sure that this is a model for the rest of the nation – especially with our desire to make sure that people who’ve been affected by the criminal justice system adversely … have the opportunity to work in this area,” Hochul said.
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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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