Business
Texas Cannabis Companies’ Economic Impact Predicted To Surpass Wine
But of course, since it’s Texas, there’s a catch.
Cannabis businesses in Texas may soon make more money than the wine industry, the Austin Business Journal reports. Cannabis companies brought in over $8 billion in revenue in 2022, according to a new report from Whitney Economics, an Oregon-based cannabis and hemp analytics firm. Even though plenty of people enjoy both wine and weed (sometimes together), the booze hounds and the stoners are always competing against one another, even just for fun. And, at the moment, in Texas, the sommeliers may need to watch their backs.
However, unfortunately, there is one major setback keeping the stoners from celebrating this win. Recreational cannabis is still illegal in Texas. Possession of up to two ounces is a class B misdemeanor and can get you up to 180 days in prison and a fine of up to $2,000. In November of 2022, the vast majority of voters in Denton, Texas, approved a measure decriminalizing low-level marijuana offenses. However, city leaders defied those results, voting “against adopting the ordinance that would have decriminalized marijuana” by a margin of 4-3, CBS News Texas reported.
The Tex-Mex restaurant E-Bar recently went viral for its anti-stoner policy posted on its window reading: “If You Have The Smell Of Marijuana On You We Will Not Serve You.”
The Lone Star State allows medical cannabis for conditions such as epilepsy, multiple sclerosis, and terminal cancer. Texas’ Compassionate Use Program confirmed they had nearly 61,000 registered patients in July (up from more than 45,000 in January, according to state data).
However, that doesn’t mean that Texans who use marijuana medically can just get a high-THC edible delivered to really knock out the pain while they kick back to binge-watch a dark comedy. Residents in states like New York and California forget how good they have it. In Texas, medical patients are only granted low-THC oil, with less than 1% THC. This law has been in effect since 2015. CBD is legal, thanks to the passage of the 2018 Farm Bill, and that’s what these analytics looked at.
“This landmark study affirms the true value the hemp industry provides our state, from creating jobs and supporting livable wages to fostering business expansion and product innovation,” stated Ilissa Nolan in a statement, executive director of the Texas Hemp Coalition, a nonprofit dedicated to hemp advocacy and education, the Austin Business Journal reports.
Whitney Economics compiled the data using surveys sent to CBD and hemp retailers, manufacturers, distributors, and smoke and vape shops, gas stations—pretty much any type of business that sells CBD was included. But only some of them got to participate. Around 53% of the estimated 5,000 hemp, CBD, and cannabinoid retailers, manufacturers, and distributors in Texas received the survey. So, these findings, while exciting, are limited.
According to the data, businesses involved in hemp-derived CBD, from the manufacturing to the storefront, employed more than 50,000 Texans, generating between $19.1 billion to $22.4 billion in economic growth. (Revenue, which is income, is different from economic growth, which is an increase in the production of goods and services in an economy, hence the disparity between the earlier cited $8 billion figure). Worker wages in the cannabis space went beyond $1.6 billion.
Conversely, the wine industry generated more than $20 billion for the Texas economy, according to Wine America, supporting more than 141,000 jobs with nearly $7 billion earned in worker wages.
Alcohol sale was restricted in Texas leading up to national prohibition, which lasted from January 17, 1920 to December 5, 1933, but business has been booming since then. CBD has only been able to establish itself as a legal business model in the Lone Star state since 2018. Considering cannabis is already catching up to wine, despite the fact that it’s only legal in its mildest form (CBD), this indicates that Texans are voting with their money, and that money says that they want more cannabis.
Source: https://hightimes.com/news/texas-cannabis-companies-economic-impact-predicted-to-surpass-wine/
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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