In this week’s edition:

• DOJ Argues Fifth Circuit “Incorrect” in Overturning Gun Ban for Cannabis Users
• GOP Presidential Contender, Vivek Ramaswamy, Publicly Supports Federal Cannabis Legalization
• Alabama’s Cannabis Licensing Process Continues to Stumble
• NY Judge Extends Temporary Pause on State’s Issuance of Cannabis Retail Licenses
• Prominent Hemp Industry Stakeholders Respond to CBD Info Request from Congress
• States with Legal Medical Cannabis See Sharp Reduction in Health Insurance Premiums

Federal

DOJ Argues Fifth Circuit “Incorrect” in Overturning Gun Ban for Cannabis Users -  As it seeks a favorable ruling regarding the federal firearms ban for cannabis users before the Eleventh Circuit Court of Appeals, Justice Department lawyers were forced to file a brief stating their opposition to the Fifth Circuit’s recent decision deeming the ban unconstitutional.  The Eleventh Circuit case (originally brought by former Florida Agriculture Commissioner Nikki Fried (D)) concerns the rights of state-registered medical cannabis patients to own guns whereas the Fifth Circuit appeal centered on the felony conviction of a man sentenced to nearly four years in prison after being pulled over with firearms and admitting to occasionally using cannabis.  The recent outcropping of federal decisions attacking the federal prohibition stem from the recent Supreme Court case New York State Rifle & Pistol Association v. Bruen—which set new standards for the interpretation of the Second Amendment.

Republican Presidential Candidate Voices Support for Federal Cannabis Legalization – In an interview with Bill Maher on the comedian’s Club Random podcast, top GOP contender, Vivek Ramaswamy, called the current federal-state conflict on cannabis a “joke.”  While Maher lit a joint, Ramaswamy continued, opining that federal and state law should be aligned because the present situation “undermines the rule of law that we have.”

State

AL -  Responding to a state circuit court decision last week imposing a ten-day hold on the state’s license award process, the Alabama Medical Cannabis Commission has announced its plan (to be effectuated after the hold’s expiration) to first void, and then re-award, the licenses that had been approved earlier this month—this time however without entering into a closed executive session.  Commission lawyers contend that such action should satisfy the lawsuit’s complaint that the Commission violated the state’s Open Meetings Act when it held closed deliberations before publicly approving license winners. This latest twist comes after the state initially awarded 21 cannabis licenses back in June, but quickly reversed the licensing round after finding “potential inconsistencies” in how the license applications were evaluated.  Meanwhile, the only applicant awarded a license in June that was not re-awarded a license in August—Verano Holdings Corp.—has also filed a lawsuit challenging the Commission’s latest decision.

CA – Across the state, county and local elected officials are reportedly taking action to address a well-known cannabis industry grievance—sky-high taxes.  At least 14 local jurisdictions, including key consumer markets like Los Angeles and San Francisco, have reduced or eliminated sales, business or cultivation taxes over the past year.  San Francisco, for example, has decided to delay the imposition of any local tax rate.

CO – A new report from the state shows that Colorado took in nearly the same amount of tax revenue last fiscal year from cannabis ($282.3 million) as it did from alcohol ($56.1 million) and cigarettes ($233.9 million) combined.  While impressive, the revenue is still down approximately $140 million from the state’s 2021 high of about $425 million.

FL –Florida’s First District Court of Appeal sided with Seattle-based Leafly earlier this month when a panel of judges affirmed an administrative court’s ruling allowing Leafly and other e-commerce providers to serve the state’s medical cannabis market.  Leafly and similar third-party websites enable customers to view dispensary menus online, notify dispensaries of orders, and then pick up orders at the dispensaries.  Leafly originally filed a legal challenge in 2021 against the state after the Department of Health had warned cannabis dispensaries to halt the use of such online services because they were allegedly in violation of state law.

MO – The Missouri Cannabis Trade Association (MCTA) has asked the state’s Division of Cannabis Regulation to lift the hold on certain cannabis products. In early August, state regulators placed a hold on certain products and announced a suspension of three licenses over potential product safety concerns. The MCTA claims that “immediately remov[ing] the administrative hold on all finished products” that have passed the state’s lab testing requirements “would not jeopardize the . . . ongoing investigation of the three licensees.” 

NY – A judge extended for two weeks the temporary pause on New York’s issuance of cannabis dispensary licenses in connection with a legal challenge to a state regulation restricting retail licenses to those with cannabis convictions. Cannabis business owners have protested the judge’s decision and the lawsuit, citing the impact continued delays may have to their businesses.

NY – In an attempt to crack down on unlicensed cannabis stores, New York City Council members have introduced a new law that would fine landlords $10,000 for knowingly renting to illegal cannabis stores.

OH – Recreational cannabis legalization will be on Ohio’s general election ballot in November, after an initiative led by the Coalition to Regulate Marijuana like Alcohol gathered the required signatures. If passed, the measure would allow adults over the age of 21 to possess up to 2.5 ounces of most forms of cannabis.

TX – A recent survey found that cannabis/hemp companies in Texas may have a bigger economic impact than the wine industry, despite the fact that recreational cannabis remains illegal in the state. According to the data, businesses involved in hemp generated between $19.1 billion and $22.4 billion in economic growth, while the wine industry generated approximately $20 billion for the state economy.

WI – Wisconsin Senate Minority Leader Melissa Agard (D), who has been a vocal proponent of legalization, has released a cannabis policy “zine” titled “Let’s Legalize It, Wisconsin.” The publication contains information and illustrations about the state’s prohibition of cannabis and advocates for “full, responsible adult use legalization of cannabis.”

Hemp/CBD

Prominent Hemp Industry Stakeholders Respond to Congressional Request for Information on CBD – The Cannabis Regulators Association, U.S. Hemp Round Table, the Wine & Spirits Wholesalers of America, the Council for Responsible Nutrition, and other hemp industry stakeholders responded to a request for information issued by US congressional committees to help assess the potential for a regulatory pathway for hemp-derived CBD products that “prioritizes consumer safety and provides certainty to the US market.” Many responses criticized the US Food and Drug Administration’s interpretation of the Dietary Supplement Health and Education Act of 1994 and the agency’s subsequent inaction with respect to regulating products that have proliferated since the passage of the 2018 Farm Bill. 

Owner of Pennsylvania CBD Store Arrested Over Delta-8 THC Products – Michael DeAngelo, owner of Hollidaysburg’s Our CBD Store, reportedly faces state felony and misdemeanor charges after selling delta-8 THC products to an undercover police officer in Pennsylvania. In a statement to reporters, DeAngelo mentioned that he was not given any prior notice or warning to remove these particular products from his shelves. He compared this to THC-O products, which he promptly removed from the store when he was notified that the products were illegal in the state.

Virginia Issues Warning Letters and Fines to Delta-8 THC Retailers – New rules targeted primarily at retailers selling delta-8 THC products went into effect on July 1, 2023 and the Virginia Department of Agriculture and Consumer Services has sent out noncompliance letters with penalties ranging from $13,000 to $97,500. The letters indicated that if the same violations are cited in a future inspection, the assessed civil penalties will increase, but business owners had an opportunity initially to pay a reduced fine of $10,000 if they agreed to bring their stores into compliance and meet other conditions.

International

Organigram Scores Partial Win In Canadian Court Relating to “Edible” Classification  – A federal justice found that Health Canada breached its duty of procedural fairness when regulators decided that licensed producer Organigram Holdings' lozenges should be classified as "edible" cannabis rather than as an “extract.” A cannabis product classified as an “extract” has 100 times more allowable THC per package as compared to an “edible.” Justice Cecily Strickland ruled in favor of the company, remanding back to Canada's health department to review its initial decision and make a new determination. This was the first time a licensed producer applied for judicial review of a decision made by Health Canada. The court did not address Organigram's key assertion that Health Canada had treated the company unfairly by deciding Organigram needed to remove the lozenges from store shelves years after they were introduced into the market, nor did it rule on the “reasonableness” of Health Canada’s initial decision.

Cannabis Retreat Moving Forward In Western Australia  – Raintree Farm, located between Green’s Pool and William Bay National Park in Australia, is working on opening a cannabis retreat that would offer medical cannabis treatments, educational farm tours, and other activities with eco-accommodation options. A proposal was submitted for a required tourism rezone for the development, with members of the community voicing support for the project. The retreat would be the first of its kind in Australia.

Israel Announces Reforms to Medical Cannabis Program – The regulatory changes approved by Israel’s Ministry of Health, which are expected to go into effect this December, will allow physicians to prescribe cannabis to patients as a first-line treatment (instead of requiring the exhaustion of other options) and will increase patient access to hemp-derived CBD products.  Importantly, patients with a wide range of medical conditions will no longer be required to obtain a license to receive medical cannabis.

German Parliament Considers a Watered-Down Recreational Cannabis Bill – The German Parliament will consider a bill to legalize certain adult-use cannabis.  The bill allows for “nonprofit cultivation associations” which would be able to accept up to 500 members, who would be eligible to receive either 25 grams of cannabis per day or 50 grams per month for personal use.  It also allows adults to grow up to three cannabis plants for their own consumption.  Germany’s original intention to pass a more ambitious recreational cannabis bill faltered after resistance from the European Commission.

Zurich Launches Pilot Cannabis Program – Starting this week, 1200 program participants in Zurich, Switzerland, are now able to purchase cannabis at one of nine pharmacies or six social clubs. Among other program requirements, cannabis consumption is restricted to participants’ homes or in one of the designated social clubs.  After purchasing cannabis, participants will also receive online surveys for the purpose of studying the impact of cannabis sales and its effect on consumer health.

Protestors Criticize Taiwan Ministry for Cannabis Speech Prosecutions – Possession and use of cannabis is illegal in Taiwan—and so is speaking positively about cannabis or saying that it does not cause harm.  Protestors gathered last week to demonstrate in front of the Ministry of Justice in Taipei after the Ministry announced that certain speech concerning cannabis will now be treated as a criminal offense.

Business

Tilray Takes Control of Truss Beverage Cannabis Drinks Venture – Tilray Brands has bought Truss Beverage Co., the cannabis drinks venture, purchasing the 57.5 percent stake it had in the venture that it did not own already from Molson Coors Beverage Co.  According to Tilray, the acquisition positions it as a leader in adult-use cannabis beverages in Canada, with a combined market share of almost 36 percent.

Medical/Health

States with Legal Medical Cannabis See Sharp Reduction in Health Insurance Premiums – A study in the International Journal of Drug Policy has found that states with legal medical cannabis witnessed significant reductions in health insurance premiums compared to states where cannabis remains completely illegal.  The study is part of continuing research to identify potential public health benefits to medical cannabis legalization.

Meta-Analysis Finds Cannabis Users Half As Likely to Develop Type 2 Diabetes - Researchers at Iran’s Tabriz University of Medical Sciences found that the incidence of type 2 diabetes among cannabis consumers “was 0.48 times lower than in those without cannabis exposure.” The study was published in the journal Phytotherapy Research and is part of a growing field of scientific research examining the effects of cannabis on the chronic disease.

Dentons Speaks

Please Vote for Our SXSW Panel Medical Breakthroughs for Cannabis – Cannabis has been used for medical purposes for centuries. Now that prohibition is lifting around the world, scientific research is uncovering cannabis’s medical potential. Vote here!

National Association of Cannabis Accountants & Tax Professionals – On August 22, 2023, Dentons Partner and Co-Head of the Cannabis Practice, Eric Berlin, spoke at an association-hosted event to share his deep-rooted industry experience and explore Dentons’ leadership role in shaping the cannabis legal landscape and supporting clients worldwide.

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

Authored by associates Malina Dumas, Lauren Estevez, Jacob Raver, and Margo Wilkinson Smith.