Business
Study of Five U.S. Cities Finds Dispensaries Strictly Enforce ID Verification Laws
As a still-young industry, many are all too familiar with the stringent compliance protocols attached to cannabis today. Cannabis retailers across the U.S. must comply with an array of rules carried down by state cannabis officials, in part to ensure they check ID and that products stay out of the hands of underage consumers.
Data published in the journal Addictive Behaviors sheds new light on just how well dispensaries follow these regulations, ultimately finding that adult-use retailers across five U.S. cities were in strict compliance with laws requiring patrons to show identification and proof of legal age.
“As cannabis retail expands in the U.S., its surveillance is crucial to inform regulations and protect consumers. This study addresses this need by conducting point-of-sale audits examining regulatory compliance (e.g., age verification, signage), advertising/promotional strategies, products, and pricing…” authors state in the abstract.
Cannabis Compliance: ID Verification, Warning Signage and Appealing to Minors
A team of investigators affiliated with George Washington University’s Milken Institute of Public Health conducted point-of-sale audits of 150 randomly selected recreational dispensaries in Denver, Los Angeles, Las Vegas, Portland, and Seattle, 30 for each city. Investigators conducted the audits in summer 2022.
Age verification rates were high, above 90%, and the majority of retailers had signage indicating restricted access (87.3%), onsite consumption (73.3%), and distribution to minors (53.3%). Retailers were also likely to post warnings regarding cannabis use during pregnancy and while nursing (72%), followed by health risks (38%), impacts on children/youth (18.7%) and DUI (14%).
Conversely, 28.7% posted health claims about cannabis, 20.7% posted “youth-oriented signage” and 18% had products with “youth-oriented packaging.”
Other Signage, Marketing and Product Findings
The study also explored other information dispensaries generally posted and marketed in store. Price promotions were highly prevalent, especially price specials (75.3%), followed by daily, weekly, and monthly specials (66.7%) and signage regarding membership programs (39.3%).
One-fourth of the stores had signs and promotions advertising curbside delivery/pickup (28%) and/or online ordering (25.3%). Social media and website promotions were noted in 64.7% of audited stores.
Finally, investigators took a closer look at the product selection offered by retailers. The most cannabis products were most often e-liquids (38%) or oils (24.7%), with edibles appearing most frequently (53%) as the least potent product.
The most expensive product was often bud and flower (58%); the least expensive was joints (54%). More than 81% of retailers sold vaporizers, rolling papers and glass, like hookahs, water pipes and bongs; 22.6% sold CBD products.
Results Echo Past Compliance Data
“Marketing strategies differed across cities, reflecting differences in state-specific regulations and/or gaps in compliance/enforcement,” investigators wrote. “Findings underscore the need for ongoing cannabis retail surveillance to inform future regulatory and enforcement efforts.”
NORML Deputy Director Paul Armentano commented on the study’s results, initially emphasizing, “Regulation works.”
“Illicit marijuana providers don’t ask for or check for ID, but licensed businesses most certainly do,” Armentano wrote in a NORML blog post. “States’ real-world experience with marijuana legalization affirms that these policies can be implemented in a way that provides regulated access for adults while simultaneously limiting youth access and misuse.”
The age verification numbers are consistent with previous research. Specifically, one 2022 study focusing on the California market found that dispensaries were highly compliant with ID policy, 100% total compliance with ID policy among the randomly selected retailers.
“It appears that licensed California recreational marijuana outlets avoid selling marijuana to underage customers. One reason could be a strong incentive for recreational marijuana outlet owners and managers to avoid being shut down for an illegal activity,” authors wrote.
That study also suggested that further studies and cannabis enforcement agencies should investigate if underage patrons attempt to enter cannabis retailers with fake IDs and whether underage patrons are obtaining cannabis from illicit dispensaries or other sources.
A bulletin issued by the Colorado Marijuana Enforcement Division in August 2022 also found that, of more than 190 compliance checks utilizing underage operatives, four businesses in the state made a sale to those individuals, demonstrating a 98% compliance rate.
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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