Business
Several state marijuana legalization initiatives could make fall ballot
Voters will decide whether to legalize commercial sales of adult-use marijuana in as many as five states during the November midterm elections, while medical cannabis could get on the ballot in Nebraska.
A recreational marijuana legalization referendum will be on the ballot in Maryland after state lawmakers voted in April to put the question before voters this fall.
On Monday, North Dakota’s secretary of state, Al Jaeger, certified that enough valid signatures had been collected to place an adult-use legalization initiative on the November ballot.
Similarly, Missouri Secretary of State Jay Ashcroft announced last week that legalization advocates had collected enough signatures to place a recreational initiative before voters.
In Arkansas, the state Supreme Court last week gave conditional approval for residents to vote on a constitutional amendment this fall that would allow adult-use sales.
But it’s possible the votes won’t be counted, depending on the outcome of a pending legal challenge involving the ballot title.
In Oklahoma, an adult-use marijuana petition calling for a commercial market has been submitted for approval; state election officials are reviewing the signatures.
In terms of medical marijuana, proponents of a referendum in Nebraska submitted more than 90,000 signatures, a few thousand above the roughly 87,000 required.
State election officials are determining whether there are enough valid signatures within the required geographic distribution for the measure to be placed on the ballot
Focus on adult use
Ballot referendum efforts this year have focused on recreational marijuana given that most states already have legalized medical cannabis.
Across the country, recreational marijuana has been legalized in 19 states and Washington DC, while medical cannabis is legal in 39 states and the district.
Based on increasing public support for legalization, the referendums that do qualify for the fall ballot have a strong chance of passing.
“At this point, I do expect all (that qualify for a ballot) to prevail but some of them will be competitive,” said Matt Schweich, deputy director of the Washington, DC-based Marijuana Policy Project.
“None of these campaigns should ever take anything for granted, but I believe public opinion is on the side of all of these cannabis reform measures.”
More than two in three Americans support legalizing marijuana, according to a November 2021 Gallup poll.
But potential roadblocks could trip up voter-approved legalization efforts.
In the past couple of years, state supreme courts in Mississippi and South Dakota voided or rejected legalization referendums after voters approved them.
“We’ve been through these painful situations before, but we’ve also learned from them,” Schweich said.
For example, he noted, an adult-use marijuana measure headed for the fall ballot in South Dakota is intentionally narrow in scope.
It would legalize personal possession and home cultivation, but it wouldn’t create a regulated commercial market.
“You’re seeing cannabis reform campaigns adjust,” Schweich said.
But at the same time, he said, the territory is treacherous because of the trend for public officials to oppose marijuana legalization after voters have had their say and for courts to overturn the will of the voters.
“This is bigger than cannabis,” Schweich noted. “It’s about a sustained effort to undermine the ballot process across the country.”
In a couple of key states, marijuana legalization initiatives are being teed up for future elections.
In Ohio, backers of a recreational marijuana measure struck a deal with Republican lawmakers that paves the way for the issue to be on the 2023 ballot – if legislators don’t pass a legalization bill next year.
In Florida, adult-use legalization advocates now are eyeing 2024 after the state Supreme Court shot down proposed ballot language.
Here’s a look at this fall’s likely marijuana legalization ballot measures:
Recreational marijuana
Arkansas
Proponent: Responsible Growth Arkansas.
Initiative: Arkansas Recreational Marijuana Amendment of 2022.
Type of initiative: Constitutional amendment.
Expected sales start: March 8, 2023.
Key business details:
- The market would launch with existing medical marijuana providers. Each could open an additional adult-use-only store.
- 40 additional store licenses would be awarded through a lottery by July 5, 2023, and 12 additional cultivation licenses by Nov. 8, 2023.
- The measure calls for a 10% retail tax on recreational marijuana products, in addition to local and state sales taxes.
Maryland
Proponent: Placed on ballot by state Legislature.
Initiative: House Bill 1.
Type of initiative: Constitutional amendment.
Expected sales start: To be determined by Legislature. The referendum itself would take effect July 1, 2023.
Key business details:
- If voters approve the measure, lawmakers would need to enact additional legislation to establish rules and regulations for a regulated cannabis market.
Missouri
Proponent: Legal Missouri 2022.
Initiative: Missouri Marijuana Legalization Initiative 2022.
Type of initiative: Constitutional amendment.
Expected sales start: To be determined.
Key business details:
- Medical marijuana operators would be able to convert their licenses to medical and adult use.
- The law is effective 30 days after the election. Within 300 days of the effective date, regulators would use a lottery system to issue 16 microbusiness dispensary and 32 microbusiness wholesale licenses across the state to low-income residents, people living in high-poverty communities, disabled war veterans and those convicted of nonviolent marijuana offenses.
- An additional 96 microbusiness licenses meeting the same criteria would be phased in over the next 18 months.
- A 6% retail sales tax would be imposed, plus an optional 3% local tax.
North Dakota
Proponent: New Approach North Dakota.
Initiative: Legalization of Cannabis.
Type of initiative: Statute.
Expected sales start: To be determined. Regulators would be required to implement the program no later than Oct. 1, 2023.
Key business details:
- Licensing would be done through a competitive process based on specific criteria.
- Up to seven manufacturing (cultivation and processing) licenses would be awarded.
- Up to 18 retail licenses would be issued.
- An individual or organization may not hold an ownership position in more than one manufacturing operation or four stores, or more than one store within 20 miles of another.
Oklahoma
Proponent: Oklahomans for Sensible Marijuana Laws backed by Washington DC-based New Approach PAC.
Initiative: State Question 820.
Type of initiative: Statute
Expected sales start: To be determined.
Key business details:
- The Oklahoma Medical Marijuana Authority would license and regulate the recreational marijuana industry.
- Five types of licenses would be issued: grower, processor, dispensary, transporter and marijuana testing facility.
- Local governments could regulate the businesses but could not limit or prohibit them.
- Marijuana sales would be taxed at 15%.
Medical marijuana
Nebraska
Proponent: Nebraskans for Medical Marijuana.
Initiative: Nebraska Medical Cannabis Regulation Act.
Type of initiative: Statute.
Expected sales start: To be determined.
Key business details:
- A Nebraska Medical Cannabis Commission with a maximum of five commissioners would establish licensing criteria and other rules and regulations by July 1, 2023.
- The commission would begin granting licenses by Oct. 1, 2023.
Source: https://mjbizdaily.com/several-state-marijuana-legalization-initiatives-could-make-fall-ballot/
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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