In this week’s edition:

• DEA Schedules Hearing on Rescheduling for Dec. 2, 2024
• Democratic Party Approves Platform Advocating for Expungement of Prior Records
• Former President Trump to Weigh in on Cannabis “Fairly Soon”
• Large Seizure in California of Illegal Cannabis Products
• Missouri Ban on Hemp Intoxicating Products Faces Backlash and Week Delay
• Netherlands Delays Controlled Cannabis Supply Chain Experiment
• Scientists Developing Cannabis Breath Test
• Federal Court Hears Argument On Psilocybin Petition

Federal

Rescheduling – The Drug Enforcement Administration (DEA) scheduled a hearing for December 2, 2024 on its noticed of proposed rulemaking to reschedule cannabis to Schedule III. The timing of the hearing—which falls after the election—adds uncertainty to the timeline of potential rescheduling, particularly given that the results of the hearing may not be known before a new President is inaugurated in January. The hearing will be open to all interested persons, each of whom must file a written notice of intention to participate for review by the DEA. The DEA Administrator, Anne Milgram, will review these notices and designate a presiding officer to preside over the hearing.

Democratic National Convention – Delegates at the Democratic National Convention approved a party platform that recognizes the “historic steps” the Biden administration took to pardon federal cannabis offenses. Although Vice President Harris, the Democratic nominee for the 2024 presidential election, supports federal cannabis legalization, the approved platform calls for broader reform to expunge prior records but does not promote broader cannabis decriminalization or legalization.

Former President Trump to Weigh in on Cannabis “Fairly Soon” – Former President Donald Trump, the Republican nominee for the 2024 presidential election, said in a recent news conference that he would weigh in on Florida’s ballot legalization measure “fairly soon.” He also noted that he is starting “to agree a lot more” with legal cannabis, but did not take any definitive policy positions regarding cannabis legalization.

JD Vance Claims Cannabis Is Laced with Fentanyl – During a recent campaign event, Former President Donald Trump’s vice presidential running mate, Sen. JD Vance (R-OH) claimed that there is “fentanyl in our marijuana bags that our teenagers are using.” Cannabis advocates and state regulators have pushed back on these claims, explaining that they lack evidence and only support broader cannabis legalization and regulation.

State

CA – California’s Department of Cannabis Control (DCC) provided notice of its intent to readopt emergency regulations requiring DCC to allow cultivation licensees to make certain changes, including “changing the type of size of a cultivation license; placing a cultivation license in inactive status; or making a one-time change to a cultivation license’s date of renewal.” DCC also issued guidance on new rules concerning the end of the renewal of provisional cannabis licenses.

CA - A sting operation recently resulted in the seizure of over 2.2 million illegal cannabis packages resembling popular food and candy brands like SweeTarts and Twinkies. Announced by the office of Gov. Gavin Newsom (D), the operation targeted 11 storefronts in Los Angeles’ Toy District that were producing and selling packaging intended to “deceive consumers and thwart state safety and quality regulations.” The operation also confiscated 31 banker-sized boxes filled with cannabis intended for the illegal cannabis market and 32 boxes and bags of contraband cigarettes and tobacco products.

DE – The Office of the Marijuana Commissioner (OMC) has started accepting applications for adult-use cannabis business licenses weeks ahead of the September 1 deadline. The deadline to submit applications is September 30 and OMC will begin issuing licenses in November.

FL – In response to concerns from Gov. Ron DeSantis (R) about the smell of cannabis smoke in public, State Sen. Joe Gruters (R) announced that he will introduce legislation to ban smoking in all public places in the state if voters approve the adult-use legalization ballot measure. Two new polls found that a majority of Floridians approve the ballot measure; however, only one showed enough support to meet the required 60 percent threshold for the measure to pass.

IL – The Illinois Department of Revenue released updated excise tax rates and fees, including the Cannabis Cultivation Privilege Tax (7% of taxable receipts from the first sale of cannabis by a cultivator) and the Cannabis Purchaser Excise Tax (10% of the purchase price for the purchase from a cannabis retailer of adult use cannabis with an adjusted THC level at 35% or less).

KY – The Kentucky Office of Medical Cannabis announced on X (formerly Twitter) that it has received 170 applications for medical cannabis business licenses as of August 18.

MN – More than 1,800 applications have been filed for Minnesota’s lottery for cannabis business license pre-approvals. Less than half of the applicants live in Minnesota, raising concerns for locals looking to enter Minnesota’s cannabis market. In response, Minnesota’s Office of Cannabis Management has stated residency requirements could have raised legal challenges and social equity criteria “likely” filtered out any large out-of-state companies looking to dominate the market.

ND – After a successful ballot initiative, North Dakota will vote on whether to legalize adult use cannabis this November. Previous efforts to legalize have been rejected by North Dakota voters and lawmakers. Proponents of the ballot initiative have emphasized that law enforcement resources are better spent on opioids and fentanyl than cannabis and will allow North Dakota to control the development of its own market as opposed to any federal legalization measures. If successful, adult use would be permitted on private property and maximum purchase and possession would be limited to certain amounts.

OH – Ohio cannabis retailers have already grossed over $11.5 million since legal sales started on August 6. Ohio has 120 dual-use dispensaries selling both medical and non-medical cannabis in operation. A 10% state tax is assessed on all non-medical cannabis sales, contributing to five different state funds established for various purposes.

Hemp

CA – A California bill proposing THC limits on hemp consumables is unlikely to become law this legislative session after the Senate Appropriations Committee voted to hold it under submission. The bill (AB 2223) would have reportedly required hemp products to contain no more than one milligram of THC per package, a measure strongly opposed by hemp industry leaders who warned it would force them out of business.

IA – The Iowa Department of Public Health (DPH) filed revised consumable hemp product rules. Following two public hearings, DPH revised the rules to clarify language regarding laboratory accreditation and update labeling requirements “to better accommodate businesses that sell products in multiple states.”

MO – An executive order signed by Gov. Mike Parson (R) that would ban the sale and production of hemp intoxicating products has sparked a strong backlash from the hemp industry. Viewing the order as a threat to thousands of businesses, including bars and liquor stores, that have greatly benefited from selling the products, industry leaders have already begun preparing legal challenges and advocating for better regulations rather than an outright ban. Meanwhile, the ban on liquor store sales that was intended to take effect starting September 1 with the promulgation of emergency rules by the Division of Alcohol and Tobacco Control hit a delay over the past week when Secretary of State Jay Ashcroft (R) rejected the proposed regulations. Gov. Parson subsequently reprimanded the Secretary in a strongly-worded letter.

International

China – The U.S. Department of Agriculture recently alerted hemp stakeholders to China’s upcoming policy change regarding CBD. Effective September 1, China will classify CBD as a “precursor chemical.” Although the classification will introduce stricter regulations, including enhanced licensing, reporting, and export requirements, the move is expected to simplify international exports through a clear tariff system, as well as allow broader domestic production of CBD nationwide in China. 

Mexico – The Supreme Court of Mexico has ordered regulators to promulgate rules on hemp product commercialization, export, and import.

Netherlands – The Netherlands has postponed the start of its controlled cannabis supply chain experiment due to insufficient supply from licensed growers, delaying the transition to the experimental phase. Despite the delay, stakeholders believe that taking extra time to meet demand and quality standards will ultimately benefit the experiment’s success.

Italy – Italian lawmakers have approved an amendment meant to clamp down on low THC cannabis (“cannabis light”) by equating it to regular cannabis. Italian lawmaker, Riccardo Magi, criticized the proposed amendment as a significant setback for an industry employing thousands and relying on an entirely Italian supply chain.

Science

Scientists Developing Cannabis Breath Test – The U.S. federal government is exploring a new method for testing recent cannabis use by administering two breath tests an hour apart, aiming for more accurate detection of THC impairment in drivers. This approach, developed by researchers at the National Institute of Standards and Technology and the University of Colorado, could improve field sobriety tests and enhance public safety. The initiative is part of ongoing efforts to develop reliable cannabis testing methods, which have been challenging due to the inconsistent detection of THC in breath samples.

Study Finds Legalizing Cannabis Does Not Increase Stimulant Prescriptions – Researchers found that while there has been a substantial increase in Schedule II stimulant use across the country in recent years, the legalization of cannabis does not appear to be a contributor to this trend. “The slopes over time for amphetamine, methyphenidate, and lisdexamfetamine, and the sum of all three stimulants illustrated no significant increase in stimulant distribution rates post-legalization,” the new research says, referring to stimulants commonly used to treat attention deficit hyperactivity disorder. “This demonstrates that the legalization of [recreational cannabis] has not played a crucial role in prescribed Schedule II stimulants.”

Cannabis and Breastfeeding – A study published earlier this year in Breastfeeding Medicine shows that small amounts of THC pass through to breast milk in humans, as fats in the milk help break down the cannabinoid, but trace amounts remained in breast milk even when mothers abstained for 12 hours. The breast milk from mothers who only used cannabis once during the study showed peak levels between 30 minutes and 2.5 hours after use.

Majority of Americans Say Cannabis Use Is Punished Too Harshly – A recent survey released by YouGov showed that more than 50% of respondents said cannabis use is being addressed too harshly versus too leniently (16%). In addition, 72% said they support expunging cannabis-related convictions for non-violent offenders, while just 16% said they oppose the reform. In contrast, most Americans surveyed said other drug-related crimes such as trafficking and fentanyl use are being treated too leniently. 

Psychedelics

Federal Court Hears Argument On Psilocybin Petition – A Ninth Circuit panel heard arguments in the case of Dr. Sunil Aggarwal, a Seattle-based doctor, as to whether there is precedent to use psilocybin legally to treat terminally ill patients. Aggarwal’s appeal concerns the DEA’s denial of his petition seeking access to psilocybin for therapeutic use under state and federal “right to try” laws, which allow terminally ill patients to access investigational drugs not yet approved by the U.S. Food and Drug Administration. The DEA on appeal said that under the Controlled Substances Act, physicians are allowed to dispense Schedule I substances only as a part of government-approved research, not for therapeutic purposes.

Lykos Therapeutics Lays Off Three Quarters of Staff – After the federal Food and Drug Administration rejected the company’s pharmaceutical application for MDMA-assisted therapy, Bay Area startup Lykos Therapeutics announced it laid off 75% of its workforce. Lykos also announced that company founder Rick Doblin would resign from the board.

Dentons Speaks

Members of Dentons US Cannabis Group will be attending the Benzinga Cannabis Capital Conference on October 8-9. Please let us know if you plan to attend and would like to arrange a meeting. Registration for the conference is available here.

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

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