Business
States to Feds: End Cannabis Prohibition Now
After a vote last week, the National Conference of State Legislators (NCSL) adopted a revised cannabis policy measure (the “Directive“) which supports federally descheduling cannabis, as well as cannabis banking reform. At this point, it’s abundantly clear that the states have moved beyond cannabis prohibition.
The NCSL is a non-partisan organization that represents all state legislators nationwide. A state legislator present at the summit, held in Denver, said that most of the discussion leading up to the vote centered on federal cannabis banking reform, but there was no debate on the language of cannabis legalization. The legislator said that there was minimal opposition, with an estimated five to seven states of the 44 in attendance that vocalized their opposition.
NCSL passed similar measures back in 2017 and 2018 calling for cannabis descheduling, though those measures were limited in scope, specifying that states should be free to establish their own cannabis legislation without federal intervention. This time, the NCSL made an explicit call for federal cannabis legalization. The Directive also states that “until cannabis is federally descheduled,” the federal government should focus on enforcing penalties for criminal enterprises in “illicit” cannabis production and distribution instead of citizens who comply with state cannabis legislation.
A new section of the Directive charges Congress with passing legislation centered on cannabis banking reform. The Directive states that cannabis businesses are forced to deal primarily in cash because they cannot access the country’s banking system, which makes them prime targets for theft, burglary, and armed robbery. This section “urges Congress to pass legislation allowing financial institutions to provide banking services to legitimate state authorized cannabis-related businesses.” This strong language demonstrates the state legislators’ focus on cannabis banking reform and access to financial services.
The Directive is significant for several reasons. Primarily, it shows that states favor an escalation of federal cannabis reform since adopting past measures. Instead of simply resolving that the federal government should not interfere with state cannabis legislation, the revised measure calls on Congress to deschedule cannabis and reform cannabis banking at the federal level. The Directive also demonstrates uniformity among state legislators in supporting federal cannabis reform, as the measure passed with an overwhelming majority and marginal voiced opposition.
The timing of the Directive is interesting, as it comes with roughly a dozen federal cannabis reform bills floating around Congress. Perhaps the bill with the greatest amount of traction is the Cannabis Administration and Opportunity Act (CAOA), sponsored by Senate Majority Leader Chuck Schumer (D-NY) and Senators Ron Wyden (D-OR) and Cory Booker (D-NJ). The bill was filed last month, and while there may not be enough support for the CAOA to clear the Senate’s 60-vote threshold in the immediate future, Schumer has continued holding bipartisan talks about cannabis reform. He most recently stated that he is committed to passing “something” on cannabis reform by the end of the year.
Finally, NCSL adopted the Directive with the SAFE Banking Act having floated around Congress for several years. The SAFE Banking Act is a bill aimed at remedying the cannabis industry’s exclusion from the banking system, but was recently left out of a larger package of manufacturing reforms as a concession to Republicans lawmakers to pass the bundle of reforms.
The latest NCSL adopted cannabis measure, which supports the federal descheduling of cannabis and cannabis banking reform, is a positive development. It indicates pressure to hasten reform and uniformity among state legislators. Whether Majority Leader Schumer gets his wish and passes “something” on cannabis reform this year remains to be seen.
Source: https://harrisbricken.com/cannalawblog/states-to-feds-end-cannabis-prohibition-now/
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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