This past week got the legislative machine moving again. We saw some triumphs for a few states and institutions but others came across more problems this past week. It’s apparent that, despite industry growth, more education on cannabis, hemp, and the cultural worlds they’ve created are needed to move forward.
Lawsuits threaten multiple companies as issues with infusions, false advertising, and non-compliance attempt to creep its way into some markets.
Sacramento vs. Weedmaps
In a developing story, many california shops see competition in the illegally operating ones. These shops, whether willingly or not, can avoid paying state tax and offer lower prices. This in turns makes them more appealing to consumers.
In retaliation from those shops as well as the city of Sacramento and the California Bureau of Cannabis Control, went after the resource that led many consumers to these shops: Weedmaps.
The site was issued a cease-and-desist by the Bureau but refused to comply as “Weedmaps is a website and doesn’t require a state license, it’s not the Bureau’s jurisdiction.”
On the non-compliant shops’ perspective, many are in the long and delayed process of getting licenses through the state. Weedmaps cutting their ads, despite would legality, would further destroy their businesses.
Compliant states are being incentivized to keep the black market from growing but essentially snitching on each other. Ironically enough, something most in the industry would never dream of. Many aren’t given much choice given the vast amount of shops in the city, let alone the state. As well, the high taxes have caused some financial burdens for shops in the new market.
In the end, the only way to do away with the black market is to follow this course of action but only time will tell how it actually plays out.
California Kills New Cannabis Legislation
In more news threatening the compliant market in the state, California lawmakers killed 3 different cannabis related bills just days before their deadline on June 1st. Many more remain, addressing cannabis events and medical access for some groups, but the move does cast a shadow over the market that has struggled to boom despite it’s vast medical market.
In the case of one particular bill, it hinders the legal market from growing with looming financial concerns. Shops that have edged the grey area of legality are in fear of losing advertising while compliant shops have had trouble keeping storefronts open as cultivation tax remains high, causing product to be much higher than that on that black market. With taxes that can reach 40%, some lawmakers are claiming that killing the bill will drive many consumers to purchase from illicit businesses.
The bills would alleviate some of the standing issues the state was faced with as recreational sales started earlier this year. The bills that were shot down (the remaining ones can be found here) would consist of:
- Cut retail tax from 15% down to 11%; in addition to suspending cultivation tax until 2021
- Prohibit cities from banning cannabis delivery services
- Give MMJ patients the same reasonable accommodation that is granted to those with prescription medication (i.e. Opioids) under the Fair Employment and Housing Act.
Buds and Brews
While growth in cannabis growth in Canada has continued, it has stifled a bit in the California market. Alcohol companies have been finding a niche in the cannabis industry but not without some push back in some areas. Canada’s market seems to be tying cannabis to alcohol by distribution. As the tension between the California and Weedmaps continues however, producers within their state have their a different battle.
Over the 4/20 weekend, Black Hammer Brewing released a line of beers infused with CBD and terpenes for consumers. Unfortunately, the Federal Alcohol and Tobacco Tax and Trade Bureau has ordered the brewery to cease it’s production of an Hemp infused beer. The reason being that Hemp is not a standard ingredient in beer, making them uncertain of the effects.
Black Hammer Brewing uses hemp-derived terpenes in their infused beers, not cannabis-derived like many competitors. Though the cannabidiol count is possibly stronger in Black Hammer’s products, the state recognizes a difference between the two. Oddly enough, some brands using cannabis-derived CBD have also been ordered to cease production. The federal government
“Even though retail sales of cannabis are expected to become lawful starting July 1, 2018, it will remain unlawful to manufacture and/or sell alcoholic beverages containing any cannabinoid extracts, including tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”), regardless of whether it is derived from the cannabis plant or industrial hemp.” – the ABCC ruling, via Boston Business Journal
Founder of Black Hammer Brewing, Jim Furman is hopeful that his most popular products will get the special approval needed to continue production. Though recent federal ruling may allow for some industrialized hemp in alcohol, the infused beer option doesn’t seem as likely.
Up north in Canada, however, their distribution is panning out much like Nevada’s recreational market. Great Northern Distributors, a subsidiary of North America’s largest wine and spirits distributor was awarded exclusive distribution for one of Canada’s largest cannabis producers, Aphria.
The deal is one of Big Alcohol’s first moves towards canada’s cannabis industry, and it more than likely won’t be the last before sales start in July. Especially considering Aphria’s recent new hires, former alcohol executives.
In states with legal markets, alcohol sales have dropped where in Nevada’s tourist city of Las Vegas, it’s remained nearly the same. Considering that Canada is approaching a federally legal market, it gives Big Alcohol the chance to test the waters and tap a wider audience.
MMJ Allowed on Arizona College Campuses
Typically, any business or institution that receives federal funding has to uphold federal law, despite what the state law says. The case of Arizona vs. Maestas changed that this past week, absolving Maestas felony charge for possessing .4 grams of marijuana despite his valid standing as a medical patient.
The case strikes down a court decision from 2012, as it would force an change to the 2010 initiative that legalized medical marijuana.
“Because the AMMA sets forth a list of locations where the legislature may impose ‘civil, criminal or other penalties’ when a person possesses or uses marijuana, § 36-2802, and because that list does not include college and university campuses (unlike pre-, primary-, and secondary-school grounds), we assume that the voters did not intend to criminalize AMMA-compliant possession or use of marijuana on public college and university campuses,” the court ruled.
The ruling will now allow state-registered medical card holders to have access to medical marijuana on Arizona campuses.
Florida Rules Ban on Smokable MMJ Unconstitutional
Though medical marijuana is legal in the state of Florida, smokable products have not been available for purchase until now. Florida judge, Karen Gievers, made this statement Friday as she ruled the ban unconstitutional.
“Qualifying patients have the right to use the form of medical marijuana for [the] treatment of their debilitating medical condition as recommended by their certified physicians, including the use of smokable marijuana in private places.” – Leon County Circuit Court Judge Karen Gievers
Nothing will happen just yet but, the expansion of their MMJ program will see a spike in medical patient applications as a result. Surveys cite that the lack of applicants comes the missing element of smokable products. This is the biggest hindrance against the markets growth despite surpassing 100,000 MMJ patients this passed April.
Brass Knuckles’ Lawsuit
Many associate Brass Knuckles with the best quality one can achieve in vape pens. Boosting superium products with “most potent THC cartridges” on the market, it’s difficult to think otherwise. A recent lawsuit against the manufacturers claims that you should, however.
A customer filed the suit in reference to false advertising, breach of warranty, unfair competition, and branding. Two samples of the cartridges were sent to Steep Hill for testing. Those results revealed exceedingly high amounts of pesticides, bifenazate, etoxazole, myclobutanil, trifloxystrobin, permethrin, nice then and carbaryl. All above the state’s cautionary level.
The testing also revealed that potency levels of some products rest between 59%-77%, dismantling claims of the “most potent” on the market.
This isn’t the states first case but it is the biggest. The issue falls under the State Consumer Protection Laws, possibly having serious repercussions for Brass Knuckles.
SC Laboratories Inc., the company that packages the products, was also listed as a defendant in the lawsuit.
