CBD products continue to grow in visibility while states grapple with regulating products derived from industrial hemp. Federal cannabis banking legislation, the SAFE Banking Act, is supported by over 20 companies, including PayPal, Inc., but will have to overcome Senate Banking Chairman Crapo’s concerns about reconciling the federal financial and criminal drug laws.

Curaleaf Holdings, Inc., signed a deal to acquire Cura Partners, Inc., for approximately $1 billion, the largest M&A deal to date for a US cannabis company.

Read more about these and other cannabis-related stories below.

Federal

Cannabis banking legislation is facing some headwinds as Senate Banking Chairman Mike Crapo stated that he cannot commit to moving the legislation forward since cannabis remains illegal at the federal level. He did however acknowledge that he was “very aware of concerns” from financial institutions and the need to resolve the issue. More than 20 companies are registered to lobby on the SAFE Banking Act, including PayPal, Inc.

States

California. The Secretary of State’s Office published a new brochure with information regarding registering cannabis-related trademarks in California. A trademark applicant must have obtained applicable local and state cannabis licenses prior to seeking registration of a trademark. The brochure provides guidance regarding common classification codes that may be used for cannabis-related trademarks, such as Classification Code 35: Advertising and Business (service marks for retail stores selling cannabis products).

Colorado. The General Assembly has approved a number of a cannabis-related bills, including one that allows physicians to recommend cannabis as an alternative to opioids; another that allows dispensaries to sell tested industrial hemp consumables and streamlines licensing; and a third that allows home delivery beginning in June 2020. A fourth bill, which would allow on-site consumption of cannabis at licensed cafes, tasting rooms, bus tours and designated areas of hotels, is awaiting final approval from the House. 

Connecticut. The General Assembly advanced tax legislation toward floor consideration that would complete the state’s legalization legislation package. The Committee on Finance, Revenue and Bonding signed off on a bill that would impose a 6.35 percent tax on retail cannabis sales, with an additional 3 percent local tax that could be imposed by local jurisdictions. Transfer from growers would also be taxed at $35 per ounce.

Illinois. Governor J.B. Pritzker announced that he has reached an agreement with key lawmakers on a plan to legalize recreational cannabis in 2020. The first licenses for Illinois cultivators, processors and dispensaries would not be issued until May and July 2020.

Michigan. Dispensaries (provisioning centers) can no longer sell untested products grown by caregivers. Licensed shops may only buy from state-licensed growers and processors. Caregivers may sell their product to growers and processors, who would then be required to test it and enter it into the state’s tracking system.

Effective May 1, it became lawful for medical cannabis patients in Michigan to use their approval email as a temporary substitute for a valid registry card in order to obtain their medication the same day they are approved.  This new online approval option provides same-day relief, in contrast to the prior process which could take up to five weeks.

Nevada. The Las Vegas City Council has approved on-site consumption lounges. For now, however, only licensed dispensaries will be granted a license to open a lounge, which must be separate from and adjacent to the retail space.

New Jersey. State legislators’ dispute over tax incentives is rumored to negatively affect the likelihood of passing legislation to legalize recreational cannabis. But New Jersey voters may have an opportunity, via a ballot referendum in the 2020 November elections, to decide whether to legalize cannabis for recreational use.

Oregon. The state Senate has passed a bill that would freeze cannabis productions at current levels for the next two years. The state would not issue new production licenses, but current growers would be able to renew their licenses. The state currently faces a surplus that has caused prices to plummet. The measure is now under consideration by the House. 

Rhode Island. The Department of Health rejected opioid dependency as a qualifying condition for medical cannabis use. Chronic pain is already a condition for the program.

Utah. The state will allow 10 farms of up to 4 acres (outdoors) or 100,000 square feet (indoors) to produce the state’s medical cannabis for an estimated 100,000 patients.

Washington, DC. Mayor Muriel Bowser announced details of legislation, the Safe Cannabis Sales Act, to allow legal sales of cannabis, including delivery and on-site consumption lounges, in Washington, DC. Currently, a federal spending rider prevents the District from using funds to pay for adding a legal sales component to its cannabis law. The legislation would create licenses for cultivation, manufacturing, distribution, retail and testing businesses. Existing medical cannabis providers would have a six-month priority window. Sixty percent of owners of new licenses and sixty percent of employees would have to be DC residents.

Puerto Rico’s implemented structural reforms, include promoting the medical cannabis market.

Hemp and CBD

California. State Assembly Committee on Business and Professions unanimously voted in favor of A.B. 228, which would prohibit restrictions on the sale of food, beverages or cosmetics that include industrial hemp or cannabinoids, extracts or derivatives from industrial hemp. AB 228 would impose a state-mandated local program by requiring that such CBD and other industrial hemp products include a specified warning statement.

Florida. Legislature has passed legislation to create a state hemp program in Florida and to allow Agriculture Commissioner Nikki Fried to submit the hemp plan to the federal government for approval.

Hawai`i. Department of Health (DOH) released a statement notifying businesses that it is illegal to add CBD to food, beverages and cosmetics in the state of Hawai`i, providing a warning that regulatory actions and penalties may follow for those who knowingly manufacture, distribute or sell such products in the state. However, the DOH clarified that licensed medical cannabis dispensaries may legally produce and sell products containing THC and CBD. 

Idaho. A federal judge in the state publicly released testing results confirming that 7,000 pounds of confiscated crop was industrial hemp. However, Idaho has not returned the confiscated truck, trailer and crop. Hemp remains illegal in Idaho, regardless of its THC concentration. The hemp was being shipped to Colorado from a licensed industrial hemp farmer in Oregon.

Illinois. The Illinois Department of Agriculture is now accepting industrial hemp applications for growers and processors.

Select GNC stores in 23 states and Washington, DC, will carry physician’s grade CBD products, including face creams, a luxe body lotion, scalp treatment, shampoo and topicals.

Mondelēz International, Inc., the maker of Oreos and Chips Ahoy cookies, is considering CBD-infused snacks. CEO Dirk Van de Put explained that Mondelez is “getting ready” but is “hoping that the FDA will bring some clarity in the coming months” to the legality of CBD-infused food products.

NBC Investigators tested five CBD-infused products for potency and safety. While all the products passed safety tests for heavy metals, residual solvents, microbial and mycotoxins, four of the five did not contain the claimed amount of CBD. Florida’s Agriculture Commissioner issued a statement emphasizing support for state hemp program legislation so that CBD products could be tested, regulated and legally sold with consumer safety protections.

China. Two regions in China allow industrial hemp cultivation for CBD production, mostly for export. Domestically, China permits the sale of hemp seeds and oil and the use of CBD in cosmetics, but has not yet approved CBD for use in food and medicines.

Health

Harvard and MIT received $9 million to study the health effects of cannabis, the largest private gift to support cannabis research in the United States. The Broderick Fund for Phytocannabinoid Research will be shared equally by Harvard Medical School and the Massachusetts Institute of Technology to investigate and better understand how cannabis affects the brain and behavior. Charles R. “Bob” Broderick, the donor, has invested in cannabis businesses through his family-run Uji Capital. The research will remain independent and will be published regardless of the outcome. The MIT researchers will focus on examining the effects of cannabis in people with schizophrenia. The study will also examine the effects of cannabis on attention and working memory, and whether cannabis can help people with autism and with Huntington’s disease. The Harvard researchers will examine the effect of cannabinoids on the nervous system to better understand which ingredients induce which effects and how they work in the brain.

Business

Curaleaf Holdings, Inc., Wakefield, MA, signed a deal to acquire Cura Partners, Inc., Portland, OR, for approximately $1 billion, the largest M&A deal to date for a US cannabis company. Cura Partners owns Select, a leading cannabis brand in California, Nevada and Oregon. The deal creates the nation’s largest cannabis company.

The City of Detroit approved a multi-million dollar cannabis business park project which will include five cultivation businesses, two processing businesses and a dispensary. The business park will also include a program to train processors, master growers, processors, business owners and budtenders.