Business
Texas Supreme Court Bans Smokable Hemp Production, Sales
Texas maintains a ban on smokable hemp, which could lead to millions of dollars lost in tax revenue when companies move out of state to operate.
Hemp was classified as an agricultural product when the 2018 Farm Bill was passed, but the Texas Supreme Court banned smokable hemp in 2019. This was challenged and overturned in August 2021 by the Travis County District Court, stating that it is unconstitutional to ban smokable hemp, and in December 2021, the Texas Supreme Court agreed to hear the case.
In March 2022, the Supreme court case was held with the Texas Department of State Health Services (and its commissioner, John Hellerstedt) and four smokable hemp companies (Crown Distributing, America Juice Co., Custom Botanical Dispensary, and 1937 Apothecary).
However, on June 24, the Texas Supreme Court Judge Jeffrey S. Boyd wrote in his opinion that smokable hemp is still banned. “Considering the long history of the state’s extensive efforts to prohibit and regulate the production, possession, and use of the Cannabis sativa L. plant, we conclude that the manufacture and processing of smokable hemp products is neither a liberty interest nor a vested property interest the due-course clause protects,” Boyd wrote.
The Texas Constitution mentions the right “to engage in any of the common occupations of life” and “pursue a lawful calling, business or profession,” but in Boyd’s opinion, these rights don’t apply to hemp production. “It is enough to observe that the due-course clause, like its federal counterpart, has never been interpreted to protect a right to work in fields our society has long deemed ‘inherently vicious and harmful.’”
Dallas-based hemp company Wild Hemp was the primary funding behind this effort, but the legal battle has come to an end. The company’s CEO, Zain Meghani, spoke with Dallas Observer about the ruling and how it will affect local hemp companies.
“This ruling hurts the Texas hemp industry top to bottom,” Meghani said.
Chelsie Spencer, founding member of Ritter Spencer PLLC in Addison, Texas, represented the hemp companies. “The Texas Supreme Court has determined that the Texas Constitution does not protect the economic liberty interest of smokable hemp manufacturers and processors in the state of Texas,” Spencer said. “We are profoundly disappointed in this decision and disheartened by the continued stigma surrounding cannabis. It is telling when the Court insinuates that cannabis is ‘inherently vicious and harmful.’”
Furthermore, the effort has been defeated and according to Spencer, Wild Hemp isn’t willing to spend more money to fight it. “They funded this case entirely and are now being kicked out of their home state.”
According to Spencer, the state loses with this decision to maintain a ban on smokable hemp. “I would anticipate increased consumer costs for Texas products, simply because the state kicked them out this morning, and they all have to move now,” Spencer told the Dallas Observer. “Most telling, our economic expert found that the state will lose one million in tax revenue from Wild Hempettes alone by 2024 by kicking them out.”
Wild Hemp sells a wide variety of hemp goods, such as hemp wraps, CBD Cigarillos, tinctures, topicals, paper cones, and of course their Hempettes CBD Cigarettes. Each cigarette pack can contain up to 1,500mg of CBD and come in four flavors: Natural, Menthol, Pineapple Blaze, and Sweet.
Smokable hemp will continue to be banned for sale and production, but there are other cannabis-related efforts happening in Texas that could lead to decriminalization for consumers. But there are still opposing parties to recreational legalization, including the Texas State Republican Party, which recently issued numerous planks, or stances, on cannabis and hemp. The party endorsed decriminalization in 2018, but stances announced at the 2022 Texas State Republican Convention support classifying cannabis as a Schedule II substance, but also states that recreational marijuana should remain illegal.
Source: https://hightimes.com/news/texas-supreme-court-bans-smokable-hemp-production-sales/
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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