Cannabis Project Newsletter - July 2, 2020
|
|
What Happened in June?
As the nation begins to see another spike in COVID infection rates, and states begin to re-institute stay-at-home orders, it is with heavy hearts that we announce the cancellation of our in-person annual meeting, planned for July 23rd through the 26th at the Broadmoor Hotel in Colorado Springs, Colorado. As a team, we are working hard to develop a framework for transferring our annual meeting content into a virtual format. More information is provided below, along with a statement from our Executive Director Karen White.
Turning to June's developments in cannabis, several states are facing lawsuits which challenge fundamental delivery or licensing provisions, and could have drastic consequences for state regulators and the industry as a whole. A recently released study highlighted the disparities in regulation between different jurisdictions in California, as the state's district attorneys scrambled to meet a statutorily mandated conviction dismissal deadline. The Governor of Michigan expanded the states roadside drug testing program, and thousands of pounds of cannabis were seized in New York and Detroit.
On the federal level, bipartisan lawmakers stressed the importance of cannabis as a criminal justice reform tool, and several commentators discussed how the current climate may lead to a wave of legalization in 2021. The Department of Defense elaborated on the CBD ban for active service members, and the USDA announced that hemp businesses are eligible for grant funding as a socially disadvantaged group. FinCEN reported a decline in the number of financial institutions servicing the cannabis industry, and the SBA removed some criminal history requirements for the Paycheck Protection Program. Finally this month, the cannabis industry lost one of the earliest voices for reform in the country. Dr. Lester Grinspoon of Harvard Medical School has passed away at 92.
|
|
California Counties Sue Over Statewide Delivery Law
- California regulators are facing a lawsuit which could significantly affect the state’s cannabis delivery market. Several counties have filed suit against the Bureau of Cannabis Control over Delivery Regulation 5416(d), which authorizes cannabis companies to deliver cannabis anywhere in the state, even in jurisdictions that have prohibited commercial sales. These counties argue that the delivery regulation runs counter to California’s adult use statute, which authorizes individual counties to prohibit the operation of cannabis businesses within their jurisdictions. All parties have submitted their briefs, and trial is set to begin on July 16
th
. Click
here
to read the parties' arguments.
Oklahoma Businesses Challenge Changes to Medical Licensing Provisions
- Several cannabis companies in Oklahoma are challenging changes to the state’s medical cannabis licensing provisions. The licensing law, initially passed in 2018, required owners to be Oklahoma residents, and required that cannabis dispensaries be located at least 1000 ft from a school. In 2019, the legislature passed amendments to the bill which required that owners must be able to prove residency for the prior two years, and amended the definition of a school to include several new facilities. As a result, several businesses have been denied license renewals because they cannot meet the two-year residency requirement, or because their business is now within 1000 feet of a school under the amended definition. Lawyers in the suit estimate the changes could impact around 250 businesses. These businesses argue that the provisions should not apply to them, since they did not exist when they started their businesses. Click
here
for more info.
New Jersey Considers Two Decriminalization Bills
- On June 15
th
, the New Jersey Assembly passed
A1897
, a bill which would decrease the penalty for possession of up to two ounces of cannabis from an arrest to a $50 fine. A separate bill introduced in the Senate, S2535, would decriminalize the possession of up to 1 lb of cannabis, with a $25 fine. Neither bill would legalize the possession or use of cannabis. Click
here
for more info.
Will There Be A Wave of Legalization in 2021?
- Many experts are commenting that the economic crisis brought about by COVID-19, combined with the wave of social unrest sweeping the nation, represents an unprecedented opportunity for the cannabis industry. Several states are pushing forward with legalization or decriminalization initiatives even amid the pandemic, likely due to the fact that it is difficult to ignore an industry projected to grow to $30 billion by 2024 during budget shortfalls. Pressure from citizens and civil rights groups also provides political incentive for the passage of cannabis reform laws, especially since the demographic groups suffering most from COVID-19 are the same groups who suffer the most under current cannabis laws. Accordingly, industry experts are predicting a record number of states to legalize cannabis in some form in 2021. Click
here
for more info.
|
|
Lawmakers Frame Cannabis Legalization as Criminal Justice Imperative
As the House debated the passage of the
George Floyd Justice in Policing Act of 2020
last week, a small group of bipartisan representatives took the opportunity to voice their thoughts on why cannabis reform should be part of a criminal justice reform bill. Reps Lou Correa (D-CA) and Earl Blumenauer (D-OR) spent their time highlighting the racial disparities in enforcement of cannabis laws, and argued for the passage of
the MORE Act
– a cannabis social equity bill introduced to the Senate by Sen. Kamala Harris (D-CA) last year. Rep. Kelly Armstrong (R-ND) agreed, stating that cannabis reform is the best place to start with police reform when addressing racial disparities in enforcement. Despite this bipartisan support, no members filed any amendments attempting to add cannabis reform into the bill. Click
here
for more info.
|
|
Dr. Lester Grinspoon, Pioneering Cannabis Scholar, Dies at 92
Last week, the cannabis movement lost one of the earliest voices for reform in the country. Dr. Lester Grinspoon, long-time Associate Professor Emeritus of Psychiatry at Harvard Medical School in Boston, has passed away at age 92. After losing his son to cancer in the late 1960’s, Dr. Grinspoon spent the remainder of his life studying the benefits and harms of cannabis and consistently advocated for an evidence-based approach to regulation. His book from 1971,
Marijuana Reconsidered
, is seen as one of the first critical discussions on the need to establish a licit cannabis market. Click
here
for more info.
|
|
Almost 4,000 Cannabis Convictions Dismissed in California
On June 29
th
, Sonoma County prosecutors finalized a deal to dismiss around 3,000 convictions, for around 2,000 people, for cannabis related offenses. Only 4 days earlier, the DA for Santa Cruz county announced
the dismissal of around 1,000 convictions
going all the way back to 1969. The dismissals were mandated under California’s 2016 legalization initiative, but have been slow to come to fruition. As a result, last year the California legislature passed a bill which required the DOJ to accelerate the process by identifying eligible individuals and dismissing eligible convictions by July 1
st
of this year. Expungement has emerged as a key issue in the debate around social equity in the cannabis industry in states across the nation. Click
here
for more info.
Washington State's Social Equity in Cannabis Licensing Bill
On March 31
st
2020, the Governor of Washington signed a bill into law which significantly amends the state's cannabis licensing programs with a particular focus on social equity. The bill, HB 2870:
Allowing Additional Marijuana Retail Licenses for Social Equity Purposes
, adds 3 important new sections to the states licensing provisions.
Section 2 of the bill refines the definition of a "social equity applicant" and details the requirements for submitting a "social equity plan," as required by the bill. Section 3 mandates the creation of the Marijuana Social Equity Technical Assistance Competitive Grant Program, which will assist equity applicants by providing guidance during the licensing process, industry specific education & planning services, regulatory compliance and financial management training, and networking services. Finally, section 5 of the bill establishes a legislative task force on social equity in cannabis, and details how task force members will be selected. The purpose of the task force is to make recommendations to the state’s regulatory authority and to the Governor for how the state’s new social equity program should be implemented, and policies that will facilitate the development of the program. Click the button below to read the bill.
|
|
DOD Memo Explains Ban on CBD for Active Service Members
In February, the Department of Defense released a memo which clarifies the ban on active service members using hemp derived CBD products. The memo states that because of the lack of FDA oversight and testing, it is possible that use of hemp derived CBD products could result in a positive test for THC. Since
consumers cannot trust the accuracy of CBD product labeling
, and since it would be impractical to determine which CBD products meet the appropriate standards, the department determined that the integrity of the drug testing program demands a complete ban on CBD products for active service members. This ban does not include hemp derived durable goods, or hemp derived CBD that has been approved by the FDA, such as Epidiolex. Click
here
for more info, and click the button below to read the memo.
|
|
Licensed Hemp Businesses Eligible for Socially Disadvantaged Groups Grant Program
On June 25
th
, the USDA’s Rural Business-Cooperative Service announced that hemp businesses would be eligible for funding under the agency’s Socially Disadvantaged Groups Grant program, which will receive $3 million in funding in 2020. The announcement makes clear that hemp producers are only eligible if they are properly licensed and approved under the 2018 Farm Bill. Click the button below to read the notice in the federal register and submit a formal comment.
|
|
Study Finds Room for Improvement in Cannabis Regulation
A recently released study in The Journal of the American Medical Association (JAMA) discusses the extent to which public health recommendations, based on lessons learned from the tobacco industry, have been implemented in the regulation of cannabis in California. The study reviewed regulatory laws across 534 of California’s 539 cities and counties, and found that regulations varied widely from jurisdiction to jurisdiction. The study concludes that few lessons from the tobacco industry have been incorporated into cannabis regulation in California to protect youths or reduce demand for cannabis. Click the button below to read the study.
|
|
Expansion of Roadside Drug Test Program in Michigan
On June 11
th
, the Governor of Michigan signed a bill into law which continues a roadside drug test pilot program that initially began in 2017. The bill removes the provision from the original pilot program limiting its application to only 5 counties. The roadside test, which must be administered by certified Drug Recognition Experts, is a saliva-based test that detects the presence of a wide variety of drugs, including cannabis. Click
here
for more info.
418 lbs of Cannabis Seized in Detroit, 3,500 lbs Seized in New York
A Canadian man has been charged with possession and transportation of illegal drugs after border patrol officers in Detroit searched his trash truck and found hundreds of pounds of cannabis. An x-ray of the truck at the border revealed several strangely shaped packages, which turned out to be 15 trash bags full of about 418 lbs. of cannabis. This comes just a week after port officers in Buffalo, New York, seized around 3,500 lbs of cannabis hidden in packages of peat moss. Click
here
for more info.
|
|
FinCEN Reports Decline in Financial Institutions Servicing Cannabis Industry
New data from the Financial Crimes Enforcement Network (FinCEN) suggests that the number of financial institutions servicing cannabis businesses has declined, from 747 financial institutions in November 2019 to 710 institutions as of March 2020. While there have been changes in how FinCEN collects these numbers based on the legalization of Hemp in the 2018 Farm Bill, those changes do not seem to explain the decline of cannabis accounts from November to March. This recent downward trend represents a shift; the number of financial institutions servicing cannabis related businesses grew consistently from 2014 up to November of 2019. Click
here
for more info.
SBA Relaxes Criminal History Requirements for Paycheck Protection Program
In each of Congress’ COVID-19 stimulus packages, hundreds of billions of dollars was sent to the Small Business Association (SBA) to be disbursed to small businesses around the country in the form of low or no interest loans through the Paycheck Protection Program. Before it began disbursing funds, the SBA issued an interim final rule which detailed who was eligible to receive funding under the program. One set of rules, which was not contemplated by Congress, focused on denying eligibility to those with a criminal history.
On June 24
th
, and after several lawsuits had been initiated against the SBA over this policy choice, the agency rolled back those requirements significantly. Now, parole or probation are not by themselves disqualifying conditions, unless such punishment commenced within the last year for a felony, or within 5 years for certain financial crimes. In addition, pending misdemeanor chargers no longer make an individual ineligible, only pending felony charges. Click
here
for more info, and click the button below to read the SBA’s new rule.
|
|
AG Alliance Virtual Annual Meeting Announcement
|
|
As we enter July, the escalation of COVID-19 infection rates is delaying the gradual re-opening of many states. Our public and private partners are extending or reinstating work-from-home orders and travel restrictions. While this virus looms, there is nothing more important than the daily choices we make to protect our families, workplace and communities.
The AG Alliance and CWAG have a longstanding history of building valuable relationships. Our annual meetings are a beloved tradition - a gathering of both new attendees seeking an opportunity to build new connections and longtime friends, reinforcing relationships that transcend geography, industry, politics and cultures. Unfortunately, this year, our mission of facilitating those connections is challenged given the current health and safety guidelines that recommend limiting gatherings, wearing face masks and social distancing
In an atmosphere where COVID cases are rising and this public health crisis becomes more volatile, it is with enormous disappointment that we announce the cancellation of our in-person Annual Meeting at the Broadmoor Resort in Colorado Springs, Colorado, scheduled for July 23-26, 2020.
Thank you to the AGs, our private sector partners, speakers and presenters and other guests who have been excited about and committed to this event.
This
Draft Virtual Agenda
provides the framework for how we are moving the substantive agenda online, and we will circulate information on registering for sessions in the coming days.
We recognize that there is enormous value in the dialogue that often follows our sessions, so we are working to develop virtual small group hangouts with our community of AGs, AG Staff and public and private partners to provide you an opportunity to foster these important relationships. More details on these opportunities will be emailed to our partners in the coming days.
For those who choose to keep your hotel reservation:
The Broadmoor will honor the discounted room rates. For anyone interested in keeping their reservation, please email Tegan White at
Twhite@agalliance.org
by July 7th. Please include your dates of stay.
If we do not hear from you by July 8th, we will cancel your room reservation for you.
As our country and the world continue to experience COVID-19, we are grateful for the ability to communicate rapidly and use technology to stay connected. We are also hopeful 2021 holds better things for our country. Please mark your calendar for next summer’s Annual Meeting being held in Wailea, Maui, scheduled for June 14-18, 2021. We look forward to the time when we can gather in friendship once again.
Thank you for your continued support and patience.
Best,
Karen White
Executive Director
Conference of Western Attorneys General
and
AG Alliance
|
|
The Cannabis Project meeting on Wednesday, July 29th, is a closed session meeting for members of the AG Alliance only. If you are interested in joining the Cannabis Project, please contact Austin Bernstein at
abernstein@agalliance.org
.
|
|
This newsletter was written and prepared by Austin Bernstein and Cole White
| THE AG ALLIANCE CANNABIS PROJECT |
|
|
|
|
|
|
|
