In this week’s edition:

• New Senate Banking Committee leadership open to cannabis industry reforms
• New Jersey General Assembly moves forward on a recreational cannabis regulatory regime
• European Union high court rules CBD not a controlled substance
• And more…

Federal

New US Senate Panel Chair Could Boost Prospects for Cannabis Banking Reform - Pat Toomey, Republican senator from Pennsylvania and incoming chair of the chamber’s Banking Committee, is open to  making traditional financial services accessible to cannabis companies. Toomey is seen as friendlier to the industry than the current committee chair, Senator Mike Crapo of Idaho. Toomey told Politico he was “sympathetic to the idea that people who are involved in [the] cannabis industry—in an entirely legal fashion, in the state in which they operate—ought to be able to have ordinary banking services.”

States

CA - Lori Ajax, who leads the California Bureau of Cannabis Control, is resigning her post effective December 2. Ajax was initially appointed by Governor Jerry Brown to oversee the first phase of cannabis regulation. 

HI - Hawaii has amended its medical cannabis program to allow out-of-state patients to apply for a 329-V card allowing them to access dispensaries in the state for up to 60 days. A 329-V card can be used at any of Hawaii’s state-licensed medical cannabis dispensaries on the islands of O’ahu, Maui, Hawaii Island and Kaua’i. 

IL - Chicago Mayor Lori Lightfoot said that the tax revenue from cannabis sales in the state, which began on January 1, helped avoid mass layoffs in Chicago city government. The additional revenue offset some of the financial impact of COVID-19. Tax revenue from cannabis-related sales reached $800 million through the first 10 months of the year, almost as much as the state collected on liquor sales. 

NJ - After New Jersey voters approved a ballot question amending the state constitution to allow for recreational cannabis legalization, state lawmakers are advancing a bill to set up a regulatory structure. The Assembly Appropriations Committee and the Senate Budget and Appropriations Committee approved the bill, setting it up for votes in the full Assembly and Senate this coming Monday.

NC - The North Carolina Task Force for Racial Equity in Criminal Justice, convened by Governor Roy Cooper, issued recommendations on Wednesday, November 18, that included decriminalizing possession of small amounts of cannabis. At present, possession of up to a half ounce of  cannabis is a class three misdemeanor in the state. 

PA - A Pennsylvania appeals court ruled that a Pittsburgh Water and Sewer Authority employee who failed a company drug test due to cannabis consumption, resulting in loss of his job, is entitled to unemployment benefits. The court reasoned that the employer’s drug policy did not forbid lawful medical cannabis use, and therefore the employee met his obligation to comply with the employers’ drug policy as it was described to him during his corporate policy orientation. 

RI - Rhode Island’s next House Speaker, K. Joseph Shekarchi (D), said on Friday that the state is very close to having a majority of its representatives support legalization of recreational cannabis. Democratic Governor Gina Raimondo included cannabis legalization in her budget proposals for the past two years, but the state legislature has yet to act. 

UT - An extensive audit of the Utah Department of Agriculture concluded that actions by senior leadership corrupted the cannabis cultivation license process. The audit found that three of the eight successful applications would not have succeeded had the process not been improperly tilted in their favor. Department of Agriculture Commissioner Logan Wilde announced that the state would bring in an independent outside party to rectify the process.

Hemp/CBD

US Drug Enforcement Agency - The DEA told a federal judge the agency “is not required to explain” how its rules directly apply to every hypothetical circumstance. This comes in response to the Hemp Industries Association’s attempt to modify a DEA rule issued last summer stating that hemp extracts are Schedule 1 controlled substances during a portion of the extraction process. The DEA also called the requests for a speedy resolution “inappropriate,” citing the need for a deliberate policy-making process. 

EU - The Court of Justice of the European Union, the institution’s highest court, ruled that cannabidiol (CBD) is not a narcotic drug. The court ruled in favor of a Czech company selling CBD extracted from the whole cannabis plant in France, where that practice is outlawed. The court ruled the legal action against the Czech producers was an unnecessary restriction of the free movement of goods. Cannabis advocates hope the ruling will spur a legal CBD market. Currently, most products are only allowed to be sold for agricultural purposes. 

International

MEX - The Mexican Senate approved a bill to legalize cannabis nationally. The legislation will now head to the Chamber of Deputies. If passed, the legislation would establish a regulated cannabis market in Mexico, allowing adults 18 and older to purchase and possess up to 28 grams of marijuana and cultivate up to six plants for personal use. The legislative push is in response to a 2018 Supreme Court ruling that the prohibition on possessing and growing cannabis is unconstitutional. The deadline to pass a regulatory regime is December 15. 

MKD - The Government of North Macedonia is considering legalizing recreational cannabis use in Skopje, the capital and largest city, and other tourist locations. The move is part of a planned package of measures aimed at stimulating the economy, according to Prime Minister Zoran Zaev. The government expects to model the regulatory regime on the Amsterdam system. 

THA - Thailand has decriminalized more than 100 drugs, including cocaine, morphine and opium, for medical and research use. Possession permits will be granted to governmental organizations, approved pharmacies and pharmacists, dentists and veterinarians. The drugs can only be sold for medical treatments, research or “government benefit.” 

Business

AbsoluteXtracts - Northern California cannabis concentrates producer AbsoluteXtracts has released a 200-miligram THC soft gel capsule, the largest single dose of orally administered THC permitted in the state. Allowing the capsule to enter the market will permit medical patients to receive high dosages of THC that was limited after the passage of Proposition 64. While the product is aimed at medical use, it can be purchase recreationally. 

Medical/Health

Universities of Dundee and Cordoba - A partnership between the UK’s University of Dundee and the University of Córdoba in Spain demonstrated that cannabidiol induces the expression of heme oxyganese 1 in the main cells on the top layer of the skin. Heme Oxygenase 1 is an enxyme with antioxidant and anti-inflammatory properties. Going forward the research team will perform studies on animal models to understand cannabidiol’s therapeutic potential for skin diseases.

Dentons speaks

Katie Ashton participated in a panel discussion on the “Cannabis Industry - Opportunities and Hurdles in the Distressed Horizon” sponsored by the International Women’s Insolvency & Restructuring Confederation (IWIRC) New York, on November 19, 2020.

Eric Berlin presented at the Dentons "Globalization of Cannabis" Webinar on November 23, 2020, where leading cannabis lawyers from Canada, the United States, Europe and South America provided updates on recent regulatory developments in the global cannabis industry. 

Please click here for more information on Dentons’ US Cannabis group.

Authored by Dentons Counsel David Quam and Associate Managing Director Crawford Schneider.