by Andrew Kline, NCIA’s Director of Public Policy NCIA could not be more proud of the collective efforts of the cannabis industry in passing SAFE Banking legislation in the House. Last week was a truly historic moment for the industry. Now, on to the Senate! While we always relish in victories, we can’t lose momentum, and we need to start thinking about what comes next. As luck (and a bit of hard work) would have it, NCIA has a plan. While NCIA has been fully supportive of incremental steps like SAFE Banking, we believe that the only long-term viable path forward for this industry is descheduling. It’s the only way to solve social equity, it’s the best way to fix 280E, it’s the way that we start looking at cannabis through a public health lens (instead of a criminal enforcement lens), it fixes issues around interstate commerce, and it’s the only way to end the unsustainable federalism clash. In addition to de-scheduling, our plan calls for cannabis products, like other highly regulated consumables, to be regulated by the government agencies that currently regulate most food and drugs, primarily the Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) within the U.S. Department of the Treasury. Under our plan, cannabis products would be divided into four categories, based on chemical components, safety, intended use, and consumption method. Each of these groups would be regulated through a separate regulatory “lane” tailored to the public policy issues raised by that particular classification. The four lanes are: Lane #1 — Pharmaceutical drugs (e.g., Epidiolex; Marinol) (Regulated Like Prescription/OTC Drugs; Lead Federal Regulator: FDA) Lane #2 — Ingested, inhaled, or topically applied products with more than de minimis amounts of THC (+0.3%) (Regulated Like Alcohol; Lead Federal Regulator: TTB) Lane #3 — Ingested and inhaled products with de minimis amounts of THC (
By Bethany Moore | November 12, 2019 Community / Education Why Professionals Want To Work In The Industry Tune in to this week’s episode to learn more about why professionals want to work in the cannabis industry with guest John Comeau, Founding Partner of H2 Talent. John is recognized as one of the leading recruiters in the country. In 2017, C-Level Search was designated as a Top Search Firm in North America. LinkedIn named C-Level Search the 24th “Most Socially Engaged Staffing Agencies in North America” in a category with over 60,000 other staffing agencies. H2 Talent is creating new jobs where they haven’t existed and bringing the entrepreneurs, visionaries, problem solvers, and disruptors into the “next great American industry.”
Illustrations by Brian BlomerthIs interstate commerce a key to social and economic justice in the cannabis industry? Over the past several years, a debate about social equity has intensified as large consumer states with unconscionable histories of discriminatory drug law enforcement have moved towards adult-use cannabis legalization. How can we ensure that the economic benefits of legalization reaches the people and communities most harmed by the War on Drugs? Is it possible, in a newly legal industry, to account for justice? What if there were a way to turn the economics of the cannabis industry on its head in soon-to-be-legal states like New York, New Jersey, and Connecticut? What if, instead of handing huge profits to a few large corporations that are able to pour billions of dollars into wasteful and unsustainable cannabis production schemes in those states, we could put economic power into the hands of people and communities most harmed by a century of prohibition? Perhaps we can. The concept is simple. Traditional cannabis importing states, especially states with long histories of racially-biased criminalization and enforcement (basically all of them), should create a class of cannabis licenses that would allow licensees to import, distribute, and sell at retail cannabis from producer states like Oregon and California. And these licenses would only be available to qualified social equity applicants. Under such a system, equity-licensed businesses — and only equity-licensed businesses — in large consumer states like New York and New Jersey could fill retail shelves with an unbeatable selection of the best cannabis products from legal markets around the country. And they could offer those products almost immediately upon their state’s legalization. “This would alter the entire economic structure of the cannabis industry,” says Jason Ortiz, president of the Minority Cannabis Business Association (MCBA). “Those equity licensees wouldn’t just compete, they would dominate the industries in traditional import states. This concept promises economic justice at a much more significant scale than anything we’re currently discussing at the state level.” Between 1994 and 2008, in New York City alone, more than 430,000 people were arrested for low-level cannabis offenses. And despite the fact that people of color are no more likely to use or sell cannabis than white residents, they accounted for more than 85% of those arrested. Flashforward a decade, and the data is no different. In the first half of 2019, New York City police made 805 fifth-degree cannabis possession arrests, and 94% of those arrests targeted were people of color. The story differs only in scale in cities and states across the nation, as millions of mostly young people of color have, for decades, been cuffed and booked for marijuana offenses at rates more than four times that of white people. The cumulative damage that millions of discriminatory arrests have done to the educational, employment, and housing prospects of generations of people of color cannot be addressed by simply expunging criminal records or offering discounted licenses in newly legal markets. This is especially true when it’s clear that the economic gains of legalization would still go primarily to large corporations — unless another path is taken. “Some people exploit the social justice piece of legalization,” Bertha Lewis, president of The Black Institute and a chief strategist for activist group We Rise to Legalize, told the New York Times. “You can’t talk to me about justice and not talk to me about economics. They are inextricably joined.” So last year, with New York State on the verge of legalizing adult-use cannabis, legislators of color stood up to demand real equity for their communities. “They thought we were going to trust that at the end of the day, these communities would be invested in,” Lewis continued. “But that’s not something I want to trust. If it’s not required in the statute, then it won’t happen.” Governor Andrew Cuomo, whose administration authored New York’s failed 2019 legalization bill, is himself on record demanding that legalization in New York account for the discriminatory history of cannabis enforcement. “Let’s stop the disproportionate impact on communities of color, let’s create an industry that empowers the poor communities that paid the price and not the rich corporations that come in to make a profit.” ~ New York Governor Andrew Cuomo, via Envisioning, much less constructing, a system and an industry with significantly equitable economic impacts has proven difficult. Governor Cuomo’s bill faltered, due in large part to doubts among legislators of color that their communities would gain significant benefits from legalization. Illinois subsequently passed a legalization bill that included unprecedented racial equity provisions. But as important an achievement as that was, its provisions will not significantly change the underlying economic equation. As long as states where cannabis is difficult to grow are forced to cultivate all of their own weed, economic power will remain in the hands of a few large corporations that can afford to invest tens or even hundreds of millions of dollars in massive, mostly indoor production facilities. But if large consumer states like New York and New Jersey were to create a class of equity-only licenses that allowed holders the exclusive right to import, distribute, and sell high-quality, low-cost cannabis from traditional producer states like Oregon and California, it would lay the foundation towards a very different outcome. And it would force governors like Andrew Cuomo (NY) and Patrick Murphy (NJ) to add their powerful voices to the growing chorus calling on the federal government to allow — or at least tolerate — commerce in cannabis under interstate agreements between legal markets. It could be game changing. The movement for interstate commerce began out west, where most of America’s cannabis, and virtually all of its finest cannabis, has always been grown. In June of this year, Oregon passed legislation allowing the state to enter into interstate agreements to buy and sell cannabis. To become operable, the bill requires that the federal government either allow such transfers via federal statute, or else simply express “tolerance” of the practice in a Department of Justice memo or policy statement indicating that they will not use federal resources to prosecute businesses transporting cannabis between legal markets under interstate agreements. In July, in response to the passage of the Oregon bill, the State Cannabis Commerce Act was introduced by Rep. Earl Blumenauer (D-OR) and Senator Ron Wyden (D-OR) in both the US House and Senate. The Act would forbid federal agencies from interfering in state legal cannabis industries, and specifically protects licensed interstate commerce. By permitting interstate commerce in statute, the bill would satisfy the either/or federal requirement contained in the Oregon bill. The federal bill is important for several additional reasons. It is the first federal bill to contemplate interstate commerce prior to full federal legalization. It also places the issue of interstate commerce in the context of protecting the legal state industries, which is essential. We cannot support functioning state legal industries unless we allow them to move cannabis from markets where there’s excess capacity to markets where there’s excess demand. Because that’s how healthy markets function. Finally, even if Congress does not pass the bill, the concise, specific language forbidding federal interference in licensed interstate commerce could be adopted into any legislation that moves forward protecting state industries from federal interference. In 2020, California legislators will consider an interstate commerce bill similar to the one passed in Oregon this year. Should that bill pass, two of the nation’s best and most important cannabis-producing states will be joined in a call to normalize licensed interstate transfers between states in the legal US market. It’s clear why states like Oregon and California would want to sell their legal cannabis into the markets they have supplied illicitly for generations. Between 2017 and 2018, for example, Oregon faced a tremendous cannabis glut, as the bounty of the production region far outpaced the relatively tiny Oregon consumer market. This resulted in a price crash and a ton of business failures. Today, that problem has been temporarily addressed by growers artificially ramping down production during the past two growing cycles, as well as a continued squeezing of local producers. But there are also plenty of reasons — economic viability, environmental sustainability, patient access, consumer choice — for traditional cannabis importing states to demand interstate access to the best cannabis that legal producers can supply. In most US states, where high-quality outdoor cultivation is difficult or impossible, it’s environmentally irresponsible and economically unsound to invest billions of dollars to grow cannabis at scale. And it will take years to license and ramp up that type of production into a viable retail market. Legal interstate commerce would not only fill shelves, it would move millions of consumers out of illicit markets years sooner than would otherwise be possible. In many medical states, where legal cannabis production is limited or non-existent, “legal” patients — who are currently risking their health on unknown and untested products from the illicit market — would instantly have access to a broad selection of tested, dependable, world-class medicines to meet their specific needs. In addition, before we watch tens of billions of dollars invested in production capacity across the country, we must keep in mind that once federal prohibition ends, it will no longer be possible for states to keep other states’ products out. This means that all of those in-state producers will suddenly have to compete with better, cheaper cannabis from places far better suited to grow it. When that happens, many state-based production industries will go belly-up entirely, wiping out capital, companies, and jobs. But none of these reasons for allowing licensed, interstate trade may be as compelling as the chance to make significant amends for the historic, discriminatory harms of prohibition. “Our black and brown communities have paid an enormous price for the political obsession with looking ‘tough on crime,’” says Jason Ortiz of the Minority Cannabis Business Association. “I was one of those people who was demonized and arrested, and now we’re looking at entire communities that were violently disrupted for economic activities that are making foreign corporations billions. If anyone is going to make a living selling cannabis legally, it ought to be the folks who have been aggressively denied that opportunity in the past.” And make no mistake, giving equity applicants the exclusive right to import would create a substantive advantage. “It will take years for giant corporations to build and stand up enough production capacity to fill shelves in states like New York or New Jersey,” says Jesse Peters, co-founder of Oregon’s Eco Firma Farms, and now CEO of Mantis Growth Investments. “When they do, it will be almost impossible for them to compete on cost, particularly with outdoor producers, and especially on biomass for oil extraction, which is a significant and growing part of the market. More than that, it will be extremely difficult for their output to compare in quality to what Oregon and California produce every day.” The world class outdoor cannabis production region of the Pacific Northwest stretches more than 500 miles from the “Emerald City” of Eugene, Oregon, south to the bottom of California’s famed Emerald Triangle (Mendocino, Trinity, and Humboldt counties). This region, generally considered one of the best, if not the best, grow areas on the planet, has historically produced the vast majority of America’s domestic cannabis. That’s no accident. “This is one of the very best, and certainly right now the single most important, cannabis-producing region in the world,” says Eric Sklar, CEO of Fumé Brands, and a co-founder of Alpha Omega Winery in Napa, CA. “We have always grown a lot of cannabis here, because this is where it grows best.” “It’s no different than the wine industry,” Sklar continued. “You can grow grapes in various parts of the country, and some of it isn’t bad, but the meta-wine producing region of the Pacific Northwest is world class. Nowhere else in the country even comes close. We have the right climate, the right soil types, high-quality water, and an unbeatable combination of genetic and human capital. It’s the same with cannabis.” The illicit cannabis market in the US has always flowed from west to east. Products move from where they are best produced to where they’re most in demand. No one had to be told to set it up that way. Again, that’s just how markets work. “We’ve spent the past two years talking about how to achieve racial equity — justice, really — as we legalize cannabis in huge consumer states,” said Khurshid Khoja, the National Cannabis Industry Association’s Policy Council Co-Chair and Board Member. “However, we’ve been assuming it as a given that everything consumed in a state must be produced there. But that’s a by-product of prohibition, and it’s not how healthy markets function. That’s not how the cannabis market in the US has ever worked, which is why self-contained state markets are inherently more turbulent.” Last month, the governors of New York, New Jersey, Connecticut, and Pennsylvania met to discuss legalizing cannabis in the region. Together, they concluded that building entirely different systems right next to each other would lead to problems, including the inevitable criminal arbitrage that will occur when prices and availability vary widely on every side of every state border. In the end, they said, the only sensible solution is to work together to reach common policies on key issues including tax rates, testing and labeling requirements, and how to create industries that address the very real issues of social and economic justice. In January, the legislatures in each of those states, and likely several others, will again take up the issue of legalization. After a century of prohibition created with specific racist intent, ramped up into a “War on Drugs” in the ‘70s, and brought to new lows in the ‘80s and ‘90s era of “Just Say No,” cannabis enforcement has had disastrous consequences — particularly for communities of color. Now, as we contemplate the end of this terrible chapter of our history, and as state after state renounces prohibition, there is both an opportunity and a responsibility to think creatively about how to do so in ways that account for, and are accountable to, the systemic harm done in its name. Of the millions of young people of color arrested for cannabis over the past half-century in states like New York, New Jersey, and Connecticut, virtually none were arrested for growing their own marijuana. That’s not what they were doing. Instead, they were arrested for distribution, sales, and possession of cannabis that came from elsewhere, mainly Oregon or California. Legal or otherwise, cannabis in the US naturally moves west to east, from the hills of the Pacific Northwest to Northeastern cities and everywhere in between. Perhaps the best way to achieve racial and economic equity is to recognize that reality, and start from there. For more on Adam J. Smith, follow @OurCraftFuture on Twitter and Instagram, and visit the Craft Cannabis Alliance website
Federal health officials announced Nov. 8 that vitamin E acetate has been found in the lung fluids of 29 patients affected by the outbreak of vaping-related lung injuries—a breakthrough that identifies the vape cartridge additive as the likely culprit in the epidemic. The Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), state and local health departments, and multiple public health and clinical partners have been investigating the nationwide outbreak of vape-related illnesses—referred to as “e-cigarette, or vaping, product use-associated lung injury (EVALI)—which first grabbed national headlines in early September. Based on data collected as of Oct. 15, 86% of 867 affected patients reported using THC products in the three months before the onset of symptoms, according to the CDC’s announcement, and subsequent analyses of THC-containing product samples revealed potentially harmful additives, including vitamin E acetate and medium chain triglyceride oil (MCT oil). These additives, particularly vitamin E acetate, are primarily used as a thickening agent in THC products. Bronchoscopy and bronchoalveolar lavage (BAL) fluid samples were collected by the clinical teams caring for patients afflicted with vape-related lung injuries, according to the announcement. Public health laboratories from California, Connecticut, Hawaii, Illinois, Maryland, Michigan, Minnesota, Texas, Utah and Wisconsin then submitted samples from 29 patients to the CDC, which developed and validated testing methods to analyze the specific substances of concern and active compounds found in the BAL fluid. Vitamin E acetate was detected in all 29 BAL fluid samples. THC or its metabolites were detected in 23 of the samples, according to the CDC, and nicotine metabolites were detected in 16. “These findings provide direct evidence of vitamin E acetate at the primary site of injury among EVALI patients and are consistent with FDA product testing and media reports of state public health laboratory testing documenting vitamin E acetate in product samples used by EVALI patients,” the CDC said. “Other diluents and additives of concern (e.g., plant oils, MCT oil, petroleum distillates, and diluent terpenes) were notably not detected in BAL fluid specimens from EVALI patients.” Even so, the CDC added that additional studies are needed, including a comparison of BAL fluid samples from healthy volunteers and animal studies, to determine whether there is a causal link between vitamin E acetate exposure and the lung injuries. “Based on these data from 29 patients, it appears that vitamin E acetate is associated with EVALI; however, it is possible that more than one compound or ingredient could be a cause of lung injury, and evidence is not yet sufficient to rule out contribution of other toxicants to EVALI,” the CDC said. Industry stakeholders, such as the Cannabis Trade Federation (CTF), view the CDC’s discovery as a major step forward in solving the vape epidemic. “We applaud the CDC and other federal and state health officials for their efforts thus far to identify the cause or causes of the reported outbreak of pulmonary-related illnesses associated with the use of vaporization products,” the organization said in a public statement. “While it still appears these health incidents are primarily associated with the use of illicit THC vape products, we urge members of the regulated cannabis industry to be vigilant and review all of their vaping products to ensure they are free of vitamin E acetate. CTF also urges officials in states that have regulated cannabis for medical or adult use to review their states’ regulations to ensure vitamin E acetate is clearly prohibited from being used in any inhalable cannabis products. “This health crisis and the recent breakthrough in the investigation underscore the importance of existing state cannabis regulations, as well as the need for strict cannabis regulation at both the state and federal levels.” Some states have indeed started more tightly regulating vapes and their additives, while others have banned vape products altogether. Colorado regulators, for example, have taken steps to ban polyethylene glycol (PEG), vitamin E acetate and MCT oil, while Washington and Oregon adopted emergency rules that ban the sale of flavored vape products. Massachusetts is working through the legal technicalities of banning all vape products in the state, although a judge ruled earlier this week that the ban must be lifted on medical cannabis vapes. Other states have not yet responded to the vape crisis. “The CDC’s announcement highlights the urgent need for Michigan to crack down on bad actors and black-market operators who are selling untested, dangerous products and passing it off as medicine,” said Michael Elias, CEO of Michigan Pure Med and Common Citizen, in a public statement. “There have been more than 2,000 vaping-related lung injuries and more than three dozen deaths because of harmful cutting-agents found in illicit vape products, and this is unacceptable, which is why we need stronger enforcement of the illicit cannabis market.” Vitamin E acetate has long been the suspected culprit in the outbreak of vape-related lung injuries, although, as the CDC pointed out in its announcement, many unanswered questions still remain. The CDC concluded that until the relationship of vitamin E acetate and lung health is better understood, vitamin E acetate should not be added to vaping products.
Human brains are wired for categorization. These systems help us navigate the world and communicate with one another more efficiently. But with more than 400 active chemical compounds associated with the many variations of Cannabis sativa L.—and an infinite number of combinations these phytochemical constituents can take in flower-form—arriving at an appropriate and accurate consensus on chemovar categorization across the cannabis industry has been tough. This is especially problematic within the context of the market’s binary legacy. How we talk about cannabis chemovars matters. Now, more than ever before, science is revealing new ways to categorize this plant’s effects. Out of Date and Out of Touch The indica-sativa-hybrid model of classification has continued to dominate the markets—both regulated and illicit. Separate from their intended taxonomy, these terms have been adopted as a way to describe the likely experiential and therapeutic effects of a given strain, or phytochemical varietal. But in a world where expansive hybridization of cultivated types is the norm and wild-type landraces have been taken out of their natural growing environments, this system of taxonomy does little to predict chemical constituents or describe experiential outcomes. The industry is at a loss for words to adequately convey the plant’s chemistry to consumers. Leaving aside disagreements on the accuracy of classifying drug-type cannabis as either indica or sativa, categorizing a chemovar within this binary system—especially in the absence of comprehensive phytochemical data or, even, genetic assuredness—presumes a predicted effect based solely on stable genetic inheritance and disregards variation in profile due to environmental factors. It’s not as simple as the old yarn that an indica strain leaves the consumer “in da couch.” A more complex set of phytochemical constituents is at play here. Comprehensive data now demonstrates that the morphology of the plant is not indicative of the effects it will produce in a general population; only the final ingredients matter. This phenotypic amalgamation of chemical compounds is a product of both genetic inheritance and environmental factors (light, temperature, pests, soil microbiome, etc.—all of which influence the phytochemical output and, in turn, the Ensemble Effect of how these myriad molecules engage with one another. So how do we categorize these differences in a way that is both accurate and approachable? How do we create a segue from an inherently subjective system based on incomplete taxonomy toward a more scientific vernacular that will, at least, set the stage for whatever comes next? One way, of course, would simply be to adhere to the ingredients—the phytochemical data. By acquiring full-spectrum lab reports, training employees to navigate those reports and communicating that data to consumers in an approachable way, producers and retailers can introduce a deeper understanding of the complexity of the plant and its nuanced effects. More on that can be found here. But, as ethnobotanist, BioAgronomics Group co-founder and CBT columnist Robert C. Clarke commented during a recent phone conversation, that’s “a lot of fine print. … It’s like reading the Dr. Bronner’s soap label. We have to simplify things. We have to leave out some of the details or we won’t see a distancing from indica-sativa.” A Segue Into Science In a 1973 paper published in Nature, Ernest Small and H.D. Beckstead introduced the idea of categorizing varietals according to cannabinoid content. Cultivators shooting for a more accurate approach to classification, like Oregon’s Prūf Cultivar, have taken up this system to distinguish between broad cannabinoid profiles. Three primary chemotypes are recognized: Type I – THC-dominant with a concentration of >0.3% and CBD content of
To commemorate Veterans Day, a number of presidential candidates are releasing plans focused on helping those who served the country in the military—and at least three major contenders are including marijuana-specific planks in their proposals. Getty Sen. Bernie Sanders (I-VT), for example, wants to ensure that doctors at the Department of Veterans Affairs (VA) “have the option of appropriately prescribing medical marijuana to their patients.” Under current VA policy, government healthcare providers are not able to complete medical cannabis recommendation forms for their patients, even when they are in states that have voted to make the drug legally available. The Sanders plan, released on Monday, would also make it so that “any servicemember discharged from the military for marijuana use or possession can apply for a discharge upgrade, so they can become eligible for the full complement of services and benefits provided by the VA.” Last week, Sanders cosponsored a pending Senate bill that would provide a safe harbor federally legalizing the use and possession of marijuana for military veterans in states that allow it. That legislation would also let VA physicians issue medical cannabis recommendations to their patients. South Bend, Indiana Mayor Pete Buttigieg (D), a veteran himself, rolled out a plan on Monday pledging to “support legislation that will empower VA physicians to issue medical cannabis recommendations to augment a veterans’ broader treatment plan, in accordance with the laws of states where it is legal.” His proposal would also press VA to “conduct studies on the use of marijuana to treat pain.” Sen. Elizabeth Warren (D-MA) put out a veterans plan last week that notes her support for “legislation to study the use of medical cannabis to treat veterans as an alternative to opioids, because we need to pursue all evidence-based opportunities for treatment and response.” In addition to the veterans-specific cannabis pledges, all three candidates have backed broader proposals to legalize marijuana and repair the harms of past prohibition enforcement. Sanders, for example, issued a cannabis plan last month promising to deschedule marijuana within the first 100 days of his administration via executive action. It would also seek to ensure that the marijuana industry is fair and equitable by banning tobacco companies from participating, enacting market and franchise caps and providing resources “for people to start cooperatives and collective nonprofits as marijuana businesses that will create jobs and economic growth in local communities.” A top Sanders campaign advisor said that the senator is open to covering medical cannabis through his Medicare for All plan. Buttigieg, for his part, toured a Las Vegas cannabis retail store last month, where he discussed his support for broader legalization. During the dispensary visit, the mayor told a Marijuana Moment reporter that he has “met a lot of veterans who rely on cannabis for the treatment of diagnosed or undiagnosed issues, often service-connected issues like post-traumatic stress” and supports covering medical marijuana expenses through healthcare plans. The mayor has also pledged to decriminalize possession of all drugs during his first term. Warren is the lead sponsor of pending Senate legislation that would exempt state-legal cannabis activity from federal prohibition. Her broad criminal justice reform plan released this summer calls for “legalizing marijuana and erasing past convictions.” A separate plan the senator released on empowering Indian tribes noted that “a number of Tribal Nations view cannabis as an important economic opportunity” and that her legislation would “safeguard the ability of Tribal Nations to make their own marijuana policies.” Nearly every 2020 Democratic presidential candidate has endorsed legalizing marijuana, with the notable exception of former Vice President Joe Biden, who supports a modest move to reschedule it under federal law. Former New York City Mayor Michael Bloomberg, who in recent days has taken steps to potentially enter the presidential race, said earlier this year that legalizing cannabis is “perhaps the stupidest thing anybody has ever done.” When it comes to military veterans and medical marijuana, Rep. Barbara Lee also issued a veterans-specific cannabis reform message on Monday. “Prohibiting VA doctors from recommending cannabis to qualifying patients, while continuing to rely on pharmaceuticals drugs like opioids as a treatment, is both a dangerous and illogical policy,” the c0-chair of the Congressional Cannabis Caucus wrote in an email to NORML activists. “We know medical marijuana can be an effective and safe treatment for veterans and it is time to stop making them seek private, out-of-network physicians to access it.”
Legalizing marijuana nationwide would create more than one million new jobs within the next decade, a new study says. Analysis from New Frontier Data, a firm that focuses on the marijuana industry, also found that the federal government would create at least $131.8 billion in federal tax revenue over the next eight years if cannabis were legalized in all 50 states. With federal legalization, there would be 782,000 jobs created immediately, and the firm forecasts that the number would increase to 1.1 million by 2025, including growers and retailers. In 2015, a year after Colorado legalized recreational cannabis sales, the legal marijuana industry created 18,000 full-time jobs and $2.4 billion in economic growth in the state, according to the Marijuana Policy Group. New Frontier suggested this trend could be sustainable on a national level. A customer purchases cannabis products at the Green Pearl Organics dispensary on the first day of legal recreational marijuana sales in California on January 1. ROBYN BECK/AFP/Getty Images "If cannabis businesses were legalized tomorrow and taxed as normal businesses with a standard 35 percent tax rate, cannabis businesses would infuse the U.S. economy with an additional $12.6 billion this year," New Frontier CEO Giadha Aguirre De Carcer told the Washington Post. The economic growth would be pushed by increased demand on various industries, according to the Marijuana Policy Group. Farmers need warehouse space, and they purchase specialized equipment like lighting and irrigation for marijuana growth. Retailers rely on contractors and book-keeping services to run businesses. In states like Washington and Colorado, legal recreational marijuana has also led to a boost in some tourism sectors. California became the eighth state to sell legal recreational marijuana on January 1, and 29 states now allow medical marijuana. Federal legalization, while popular across nearly every demographic group in the U.S., is facing renewed challenges from U.S. Attorney General Jeff Sessions, whose strong opposition to statewide marijuana laws has slowed the bipartisan push. Sessions last week rescinded an Obama-era rule that told federal prosecutors to leave marijuana alone in states that legalized it, leaving open questions about the future of the burgeoning industry.
By KIRSTYN BRENDLEN New York inches closer and closer to outright legalizing recreational use of marijuana. But if and when that happens, Bronx borough president Ruben Diaz Jr., believes there should be some ground rules established first. Although legalization failed in a recent attempt, New York voters did decriminalize possession, meaning someone caught with small amounts of marijuana is only subject to a violation most comparable to a parking ticket rather than a misdemeanor. With all eyes on the 2020 legislative session in Albany — especially when it comes to negotiating next year’s budget — back in the Bronx, Diaz has outlined several recommendations he believes are essential in making legalized marijuana work in New York. It starts, he said, with community reinvestment and licensing equity that would, among others, especially benefit people of color, whom he says have been disproportionately punished during what advocates call marijuana “prohibition.” A new way to give back Community reinvestment would redirect some of the profits of the cannabis industry into community-building efforts like new programs and grants, according to Melissa Moore, deputy state director for the advocacy group Drug Policy Alliance. “There are entities across the state that would work with people who were directly impacted,” she said. “People … would be able to put in applications for grants for youth programs, after-school development, re-entry services, and job training. Anything that’s responsive to the legacy of harm from prohibition.” Last year, comptroller Scott Stringer released a report identifying neighborhoods hardest-hit by marijuana possession arrests. Those neighborhoods included Marble Hill locally, as well as Highbridge, and Concourse. Seven of the 10 neighborhoods also were among the lowest-income neighborhoods in the city. So if recreational marijuana is legalized, those neighborhoods should be the first to benefit, Moore said. “Those neighborhoods have been targeted and have suffered in the war on marijuana,” said Eli Northrup, a policy counsel for Bronx Defenders, a non-profit that provides criminal defense from its base in Melrose. “If and when marijuana becomes legal, we need to repair those communities.” Diaz also wants to ensure businesses involved in the cannabis industry — which Moore called “cannabusinesses” — are able to work with banks, both to take out business-starting loans and to deposit money. Right now, banks are mostly prohibited from working within a legalized industry, because they are federally regulated, and marijuana remains illegal at the federal level. Hillary Peckham, founder and chief executive of the family-owned New York medical marijuana company Eitan, said it’s extremely difficult for her business to work with banks. “It’s hard to even find a bank to deposit money in,” Peckham said. Peckham can’t disclose which banks she’s working with, and those institutions only allow her to deposit money. Cannabis companies also have to operate on a pure cash level, because credit card companies won’t work with them either. “Some do offer it, but it’s unclear if it’s legal,” Peckham said. “The way credit transactions work, they take a percentage of the sale. In the cannabis industry, they would want 10 percent of the sale. That’s not economically feasible.” An expensive proposition? Customers don’t have a lot of other options, either, when it comes to help paying. Medical insurance doesn’t typically cover marijuana treatment, meaning patients are paying entirely out of pocket an average of around $200 each month. “It can be a burden on the patient,” Peckham said. “If you don’t have cash with you, it can be a little more difficult. Especially in today’s world, where most things are done online, or in a debit or credit transaction.” If Gov. Andrew Cuomo is successful in pushing through legalization during next year’s state budget negotiations, there will be a race opening businesses. But doing that requires capital, Moore said, and it’s crucial New York helps communities that have been hardest-hit by the criminalization of the drug. “In other states, people with deep pockets or existing wealth are able to dominate the market,” she said. “We want to make sure that other people are able to get in on it.” Credit unions and smaller banks are generally better poised to take part in the cannabis industry, Moore said, as they’re more flexible and may not be subject to the same legal complications larger banks must deal with. If nothing else, it’s most important to learn from the mistakes made elsewhere when marijuana became legal. States like Washington and California did not enforce equity properly, Northrup said, allowing big companies to take over the cannabis industry, rather than allowing communities damaged by prohibition to take part. Diaz’s proposal also wants to remove positive marijuana tests being used as grounds to start a child neglect case against a parent. Some new mothers are tested without their knowledge in the hospital after they give birth, a practice the borough president wants to end. “One thing about the report is that it kind of indicates that private hospitals don’t do tests,” Northrup said. “They do. They do a lot. Sometimes people with private insurance are less likely to be tested, and that adds a layer of privilege.” It’s not just that a positive marijuana test can start the case, Northrup said. It can even prevent a child from going to stay with a family member, pushing them unnecessarily into the foster care system. Looking back to look ahead Perhaps the biggest impact of marijuana legalization would be tied to expunging prior offenses from criminal records. While decriminalization is expected to automatically wipe clean most low-level offenses, others still have to deal with the after effects of run-ins with law enforcement. “Even small marijuana convictions can prevent people from getting public housing,” Northrup said. “They can be denied housing, denied jobs, and there are huge implications for immigration. People are deported for this. Expungment does not solve that.” Under current laws, police officers can cite the presence of marijuana odor as a reason to stop and search people. That has basically been an extension of stop and frisk, Northrup said. Legalization under the bill that failed this year would have ended that practice. “It’s a specific provision in the bill that the odor of marijuana is not a reason to stop and search someone,” he said. “That has to remain, and be specific. That can be used as a loophole to target people. It’s impossible to disprove.” Legalizing marijuana couldn’t come fast enough, Northrup said. “There is urgency. A lot of people have suffered no consequences. It’s not affecting them in a negative way,” he said. “But in some communities, it’s negatively affecting them. “We can’t keep waiting for another year. People are suffering in family court, people are suffering in immigration proceedings. It’s important that this happen in 2020.”
When Ed Donnelly’s wife fell and injured her back, she found relief in a CBD topical cream, but the product’s strong menthol odor proved to be a huge downside, along with the couple’s discovery that the product contained THC. Looking for a better solution, Donnelly applied his 35 years of health care experience to launching AmourCBD, his very own CBD product line. He then embarked on a journey to get the company’s pain-relieving cream registered with the U.S. Food and Drug Administration (FDA). “Having spent 30 years or so with medical device companies that worked with the FDA, I know and respect the value of the FDA, and I also know that whenever anyone uses an active ingredient, … they should be getting it registered with the FDA, but so many of them are not,” Donnelly tells Cannabis Business Times. “In our case, the active ingredient is lidocaine. We basically have a cream that contains 200 mg of CBD, some other oils that are very beneficial for quality skin, and then we have lidocaine. The lidocaine, as an active ingredient, basically opens up the highway to deliver the CBD to the point where you want it.” Photo courtesy of AmourCBD AmourCBD's pain-relieving CBD cream contains lidocaine as an active ingredient, and has been registered with the FDA. Any product that contains an active ingredient can—and should—be registered with the FDA, he says, and this includes CBD products. FDA registration should not be confused with FDA approval, however; FDA registration applies to over-the-counter medication that has met certain criteria and has been granted an FDA registration number, while FDA approval applies to prescription medication that has undergone multiple studies to prove its efficacy, Donnelly says. When a product is registered with the FDA, the agency essentially verifies its contents and ensures that it is manufactured according to FDA guidelines. “In our case, [it’s] making sure that there is 200 mg of CBD, that there is lidocaine in it like we say, and then, equally as important, making sure what’s not in it,” Donnelly says. “Many of these CBD products are coming from places like China with microbes and pesticides and solvents in the product. By us going through the FDA registration process, we have it manufactured in an FDA-certified [facility], and that, again, is a whole differentiation. It is a facility that the FDA visits regularly and inspects, and the product is manufactured to their standards.” AmourCBD does not own the manufacturing facility but has partnered with it to produce the product up to AmourCBD’s specifications, Donnelly says. To register a product with the FDA, a brand must first submit written descriptions of the product, including its contents and how it is manufactured, Donnelly says. Next, a product’s labeling, including the ingredients listing, warning labels and label claims, must be submitted for review. “All of that has to comply with FDA regulations,” Donnelly says. “For example, our product says, ‘Amour Pain Relieving Cream.’ Those words ‘pain relieving’ are critical. The only reason we can say the words ‘pain relieving’ is because we are FDA-registered.” The FDA has indeed been cracking down on CBD brands that make unsubstantiated label claims. Just this past summer, the agency warned Curaleaf against making such claims on its labeling, and the company responded by scrubbing the claims from its marketing platforms. In any case, once the labeling has been reviewed, companies are required to submit their final products to the FDA for validation testing, Donnelly says. At the end of the process—which can take up to nine months—a product that meets all criteria is assigned an FDA registration number, which can be seen on over-the-counter medication at the drugstore, Donnelly says. “If you go into Walgreens or CVS and you’re looking at cough syrup, … they will all probably be FDA-registered and there will be a number on it—the FDA registration number,” he says. “On our AmourCBD, there is an FDA number and the pharmacist or anyone else can look it up. It’s more than the good housekeeping seal of approval that the product has been developed, packaged [and] inspected to a certain degree to meet FDA guidelines.” Right now, AmourCBD’s pain-relieving CBD topical cream is the company’s only product that can be registered with the FDA, as it is the only one that contains an active ingredient outside of the CBD itself. “The rest of our product line—things like gummies and tinctures—cannot be FDA-registered because they do not have an active ingredient. It’s just pure CBD,” Donnelly says. “But it tells the consumer that they can trust the entire family of products, that … we’ve gone so far as investing time and money to do the cream to a … very high standard. They can trust the rest of the product line.” This sort of trust is important, he adds, especially in the wake of the vape crisis. “They thought vaping was limited risk, and [then] they find out that there are all these things in it that they never imagined,” Donnelly says. “We’re making sure that there are no misrepresentations in our product line. People can put their heads down on their pillow at night, knowing that we’re working with the FDA and it’s an FDA-registered product.” And there may come a day, he adds, when all CBD products must be registered with the FDA. “I’ve worked in FDA-regulated environments. I know they can be good for the industry. I welcome their involvement, and I know it’s coming. So, I might as well be out there first. … It will be an entirely different industry in two years, five years, 10 years."
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