Business
Oklahoma voters reject adult-use marijuana legalization
In a decisive rebuke for marijuana legalization in the conservative American heartland, voters in Oklahoma on Tuesday soundly rejected an adult-use measure in a special election.
With just under 72% of precincts reporting on Tuesday, State Question 820 was losing by nearly 27 points, with 141,978 votes in favor to 242,234 against.
Polls had been closed for just over an hour when The New York Times and Associated Press called the race over.
Tuesday’s defeat in Oklahoma follows losses in November in Arkansas and the Dakotas, though adult-use cannabis sales have begun in Missouri, where a legalization measure passed in November.
Oklahoma voters appeared to turn out against the measure in both rural and urban areas – when they turned out at all.
According to early, unofficial results from the Oklahoma secretary of state, a total of 13,851 voters requested absentee ballots, compared with 71,000 in the November general election.
The measure also lost soundly among the 34,403 voters who cast early ballots starting last week – 21,849 of whom voted no.
Cannabis industry advocates fear that Tuesday’s defeat will spell the beginning of a statewide crackdown on Oklahoma’s heretofore freewheeling medical marijuana experiment.
And in a state where registered Republicans outnumber Democrats by nearly 2-1, Tuesday’s legalization loss is also a sign that broader reform, including federal marijuana legalization, might be a more difficult lift than anticipated.
“Today’s decision in Oklahoma is heartbreaking, especially considering how many challenges this bill faced before it got to the ballot and how much work advocates put in,” said Jeffrey M. Zucker, co-founder and president of Denver-based cannabis consultancy Green Lion Partners and vice chair of the board at the Marijuana Policy Project, a national legalization advocacy group.
“We have a long way to go to undo the damage of the war on drugs, especially in a state where more than 4,500 people are arrested annually for cannabis possession,” he added.
In a statement, Michelle Tilley, the Yes on 820 campaign spokesperson, vowed to try again.
“We didn’t get State Question 820 across the finish line tonight, but the fact remains that marijuana legalization is not a question of ‘if;’ it’s a question of ‘when,’” she said.
Pat McFerron, a veteran Republican political strategist who led the No on 820 campaign, did not immediately respond to a request for comment.
Where marijuana is legal in the United States
The politics of marijuana
Though neither campaign released polling ahead of Tuesday’s vote, McFerron, a veteran Republican political consultant who organized the opposition campaign, told MJBizDaily last week that an informal January poll he took of 500 likely voters showed the campaign running slightly behind, 46% in favor to 49% opposed.
Tuesday’s vote – believed to be the first time voters anywhere in the U.S. went to the polls with only adult-use cannabis legalization on the ballot – was the culmination of a drawn-out and contentious process.
Last summer, the pro-legalization campaign accused the state in a lawsuit of intentionally slow-walking the ballot referendum process in order to miss a key deadline.
After the state Supreme Court declined to intervene, Gov. Kevin Stitt kicked Question 820 to Tuesday’s special election.
Observers on the political spectrum said pushing legalization to a special vote rather than a November general election helped Stitt, who was seen as vulnerable despite easily cruising to reelection, and hurt legalization, which might have gotten more turnout in a general election.
Question 820 would have imposed a 15% excise tax on recreational marijuana sales, plus state and local sales taxes.
The state MMJ excise tax remains 7%.
Moratorium will halt growth
Considered the country’s most business-friendly and laissez-faire state, Oklahoma is home to nearly 12,000 licensed cannabis businesses, according to the Oklahoma Medical Marijuana Authority, though there have been recent sign of a slowdown after a yearslong rush that followed the June 2018 approval of MMJ at the ballot.
The state has 7,078 licensed growers and 2,877 dispensaries as of Feb. 8, the most recent data available.
There won’t be any more for at least another 18 months after state officials imposed a two-year moratorium on new business licenses last August.
There are also 369,468 registered patients in the state – a slight decrease from the 382,069 who held MMJ recommendations a year ago but still more per capita than any other state.
Though the state MMJ industry claims to be struggling amid a price crash triggered by oversupply and a shrinking patient base, Oklahomans still purchased more than $786 million of cannabis last year, according to state figures.
The state raked in more than $120 million in tax revenue.
With medical marijuana so readily and widely available, some observers questioned whether voters would see legalization of adult-use cannabis as a priority.
And advocates say that rejecting the measure would lead to a wide crackdown on the state’s MMJ industry.
Critics, particularly in rural areas, complained of quality-of-life issues including rising crime and violence, a bell that state law enforcement officials rang repeatedly in the run-up to the election.
State agencies opposed measure
On Feb. 24, less than two weeks before Tuesday’s vote, the Oklahoma Bureau of Narcotics (ONB) said an investigation linked “multiple” MMJ farms to organized crime factions involved in sex trafficking and prostitution.
The agency claimed to have shut down more than 800 cannabis farms linked to organized crime, OBN Director Donnie Anderson said in a news release.
The state drug-enforcement agency has long made known its opposition to medical marijuana.
In a November white paper, the ONB claimed legal MMJ poses “extreme challenges” that “unscrupulous actors and criminal enterprises have sought to exploit.”
Law enforcement agencies across the country say that Oklahoma is now a leading source for illicit-market cannabis sold across state lines.
Similar concerns prompted nearly all of the state’s political establishment to oppose the adult-use measure.
Prominent opponents included Stitt and Republican U.S. Senator James Lankford, who deployed familiar arguments as well as market logic.
The state Republican Party, the Oklahoma Farm Bureau and the Oklahoma Cattlemen’s Association all opposed the measure.
Xenophobia appears to have played a role in the election.
In echoes of national Republicans’ messaging tying foreigners to crime and violence, both Oklahoma law enforcement and political lobbies said that MMJ provided cover for unsavory outsiders to jeopardize Oklahoma residents.
“We must protect our rural way of life from out-of-state and foreign interests that do not have the best interests of our state at heart,” OC President Byron Yeoman said in a preelection statement.
Source: https://mjbizdaily.com/oklahoma-vote-on-adult-use-marijuana/
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
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/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
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.”
Business
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
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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