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Montana marijuana businesses can breathe a bit easier after local elections Tuesday, when voters rejected a proposed ban on adult-use businesses in the state’s most populous county.
State residents also approved 12 cannabis-related tax measures in various counties, signaling further voter approval of the marijuana industry.
In Yellowstone County, which is home to Billings and is easily the state’s most heavily populated county, voters nixed a proposed ban on recreational marijuana sales.
The ballot question lost, with 58% of voters opposed, according to data from the Montana Secretary of State’s office.
In addition, various sales-tax measures for both adult-use and medical marijuana – all amounting to about a 3% tax – were approved in Big Horn, Blaine, Carbon, Gallatin, Lake, Lewis and Clark, Powell, Ravalli, Richland, Roosevelt, Rosebud and Silver Bow counties.
“It will give more stability to the industry here,” Rich Abromeit, the president of the pro-marijuana campaign Better for Montana, said of the election results.
Abromeit, a longtime medical marijuana businessman and owner of Montana Advanced Caregivers in Yellowstone County, helped organize 22 local cannabis companies to stave off the countywide ban.
“We’re feeling really good. The voters have been heard, for a fourth time here in Yellowstone County,” Abromeit said. “The people want cannabis in their communities.”
Montana voters approved adult-use marijuana legalization in November 2020. Recreational sales began in January of this year.
The 2022 MJBiz Factbook projects adult-use sales this year will total $215 million to $265 million and reach as much as $300 million by 2026.
Industry sees one loss
Despite Tuesday’s string of victories, there was one industry loss in western Montana’s Granite County, where 53% of voters backed a ban on adult-use sales.
But industry insiders noted the county’s tiny population of 3,325.
Also, Tuesday’s voter turnout of only 1,355 in Granite County suggested the ban could be reversed in the future. The result also affects only one adult-use retailer in that county, industry insiders said, so it’s not viewed as a hefty blow to the marijuana community.
The added sales taxes at the local level, meanwhile, aren’t a welcome development for all business owners, said Kate Cholewa, a lobbyist and spokesperson for the Montana Cannabis Industry Association.
“It’s one of those things where cannabis businesses are just like any other business: They have to decide to what extent they pass that on to the consumer or to what extent they eat it,” Cholewa said of the 12 county cannabis taxes that were on the ballot.
“This does create more pressure in a time of great pressure.”
Additional growth?
Pepper Petersen, the president and CEO of the Montana Cannabis Guild, said he believes the election results Tuesday will spur more industry growth in the state.
Petersen predicted that more operators would expand into Yellowstone County now that the marijuana landscape appears to be on more solid footing for future development.
“I think we’ll see some more expansion. Some of the franchises that don’t have a footprint in Yellowstone County, I think we’ll see them reach in,” Petersen said, noting that it’s the state’s biggest population center and has the highest marijuana sales taxes and revenues.
And Petersen said he expects companies such as Abromeit’s – which has been based in Yellowstone County for years – to begin expanding as well.
“We’ll see the Yellowstone County businesses expanding, now that they have more assurances they won’t be shut down,” Petersen said.
“They’ve been waiting for some finality before a lot of people make additional investments, and this vote (Tuesday) may have given that to them.”
More changes ahead?
Looking forward, all three industry officials said they expect future tweaks to Montana’s marijuana laws.
Abromeit said he’s been talking with other cannabis company owners about taking further action to change, for instance, a portion of state law that prevents business owners from selling their cannabis companies.
Abromeit also wants to target a residency requirement for marijuana business ownership that he said is behind the times.
Cholewa said there’s been discussions to change the state law that allows for local cannabis ballot measures to go before voters essentially every election.
She noted the law could create constantly shifting regulatory landscapes if marijuana advocates and prohibitionists keep changing local statutes back and forth every few years.
“Should every municipality and county in Montana have the right to pull the rug out from under extraordinary investments every two years?” Cholewa asked rhetorically. “That’s what happened in Granite County.”
“There’s a conversation – not in the Legislature yet – but whether we want to bring that to the Legislature to talk about that.”
Source: https://mjbizdaily.com/montana-marijuana-industry-notches-victories-in-local-elections/
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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