Business
San Francisco Board of Supervisors Approve Ban on New Cannabis Businesses Through 2028
A temporary ban on cannabis businesses was approved to address concerns of oversupply, black market sales, and public safety in San Francisco.
The San Francisco Board of Supervisors voted on June 6 to implement a citywide halt on issuing new cannabis business licenses for the next four-and-a-half years. The 10 members of the board present at the time voted unanimously, although one person was absent.
Supervisor Ahsha Safai was the driving force behind the moratorium, who emphasized that this move will be temporary. “It’s a pause, not a ban and ultimately, we can revisit where this is in a few years,” he said, according to The San Francisco Standard.
The San Francisco Standard also states that the move addresses concerns from local Asian American communities that oppose cannabis, which could be a move by Safai to appeal to the group while he campaigns to run for mayor of San Francisco in 2024.
Safai cites that his reasoning behind the ban is mainly due to oversaturation of cannabis product and black market sales, as well as threats to public safety in regards to recent robberies. In May, Safai spoke to the board about these concerns. “Let’s be clear—we have no shortage of cannabis retail storefronts, and many are suffering because of brazen break-ins, public safety concerns and an unregulated market that is not facing proper enforcement,” he said.
The San Francisco Standard states that there are 32 licensed medical cannabis dispensaries in and 31 recreational dispensaries within city limits, with an estimated 100 applications currently being processed. According to SFGATE, there are an estimated nine cannabis dispensaries for every 100,000 people in San Francisco, compared to only 2.6 dispensaries for the same amount of people in San Diego, and 1.8 in Los Angeles, although cities such as Portland, Oregon have 34 dispensaries per 100,000 residents.
Supervisor Dean Preston also added his support in the vote on June 6 because of the addition of the 2027 sunset clause. “What was initially proposed was more of a longer term ban,” said Preston, according to SFGATE. “These amendments go a long way in creating more of a short term moratorium that was the original intention.”
The moratorium will last through the end of 2027, when the board of supervisors will decide whether to end or extend the ban. The moratorium doesn’t affect currently existing cannabis businesses or applicants. The ban will go into effect 30 days after approval, which will be in early July.
Already existing cannabis business owners such as Johnny Delaplane, co-owner of Berner’s on Haight, told SFGATE that more dispensaries will only cause more competition and ultimately reduces success for everyone else. “There is a finite amount of legal cannabis market in San Francisco,” Delaplane said. “If it’s being divided up into 70 retailers and soon it will be 140 retailers, many of those retailers are going to fail.”
UCLA lecturer of public policy and adjunct professor at Pepperdine University, Brad Rowe, explained that while this would help dispensaries profit, it will also likely raise product prices for consumers. “There is a way to build value by restricting access,” said Rowe. “The problem is who is going to pay for it? Consumers are the ones who are going to pay with higher prices.”
Other business owners addressed how this ban benefits the wealthy people who have already opened up stores in the city. “It’s unfair,” said Posh Green owner Reese Benton. “It’s hard for a person like me to even get their first store open.”
According to Gift of Doja owner Nina Parks, an equity applicant who is currently in the middle of the application process, the ban will harm other social equity applicants. “It legislates limited access to opportunity, when what the equity program is supposed to do is open up access for marginal folks,” said Parks.
In some areas like Pasco, Washington, officials lifted a 10-year ban on cannabis, however recently in Amsterdam, a ban was implemented to prevent cannabis smoking in public. Like in San Francisco, other recreational cannabis states are also facing problems with oversupply. A recent report from Associated Press covered how cultivators have too much product, with not enough legal dispensaries open to sell and distribute flower, edibles, and distillate.
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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