This week:

• Senate Banking Committee Chairman Mike Crapo (R-ID) says he’s working on marijuana banking bill
• Illinois releases applications for 75 adult-use dispensaries
• Vaping-related illnesses continue to plague nation as more states react to the epidemic
• Pennsylvania makes online tax services available to cannabis businesses
• Key Mexican legislator from country’s ruling party files bill to legalize cannabis
• Dentons Partner Roy Munoz discusses CBD in Costa Rica

Federal

Senate Banking Committee Chairman Mike Crapo (R-ID) plans to include measures on “legacy cash” and cannabis potency in the Senate version of the SAFE Banking Act.  He said that he hopes for a vote on his version by the end of the year.

States

San Diego, California, is considering reforms to crack down on billboards but to loosen many other restrictions.  The San Diego Planning Commission is scheduled to consider the proposed reforms Oct. 24, with the City Council expected to give them final approval by the end of the year, city officials said.

Colorado regulators approved new rules expanding medical cannabis access, including increasing which medical professionals can recommend cannabis as well as adding autism spectrum disorders and any condition that qualifies for opioid medications.  The permanent rules will be published in the Colorado Register and then on the Secretary of State’s website on or near Nov. 14.

Colorado’s US attorney made news by stating the obvious: that banks that work with cannabis businesses are not absolutely safe from prosecution due to federal law.  US Attorney Jason Dunn and his office have never prosecuted a financial institution whose clients include cannabis companies or, for that matter, a retail cannabis establishment operating legally under state law.

Connecticut’s Medical Marijuana Program Board of Physicians recommended that the state add chronic pain and Ehlers-Danlos Syndrome to its medical cannabis program.

A Florida campaign to legalize cannabis announced that it has collected more than 100,000 ballot signatures in its first three weeks, which is enough to trigger a review of its language by the state Supreme Court.  To make it on the 2020 ballot, it will need 766,200 signatures. A poll conducted for the group found 67 percent of Floridians support recreational cannabis.

Illinois regulators released the application for recreational cannabis dispensary licenses.  They also published maps designating parts of the state that qualify as “disproportionately impacted areas” for cannabis social equity applicants.  While the map includes more than 2 million people, not everyone is happy.  Entrepreneur Jose Cruz said the map leaves out substantial parts of the Latino community, including parts of the Logan Square neighborhood, where he has lived for more than 20 years.

Illinois regulators approved the state’s first recreational cannabis cultivation licenses.  Cresco Labs, PharmaCann, Ascend Illinois and Columbia Care operate the facilities awarded licenses in the state’s first round of approvals. 

The city of Chicago, Illinois, will be holding meetings on October 8‒10 to get public input on recreational cannabis sales in the city.  Mayor Lori Lightfoot has previously stated that she wants to keep cannabis dispensaries out of the city’s central business district.

Massachusetts Gov. Charlie Baker’s (R) temporary ban on vaping products is being challenged in a federal lawsuit.  Last Friday, US District Judge Indira Talwani denied a temporary restraining order sought by vaping shops and companies to halt the ban.

Michigan regulators expanded the state’s cannabis social equity program by adding more regions to its list of disproportionately impacted regions.  For a list of areas and more information about resources for social equity applicants, click here.

New Jersey Gov. Phil Murphy (D) stated that he will keep pushing to legalize cannabis, among other progressive reforms, in 2020.

New Mexico Health Secretary Kathy Kunkel issued a health advisory urging New Mexicans to stop all forms of vaping until further research can be conducted.  The state’s Department of Health also ordered that warning labels be affixed to all cannabis vaping products in New Mexico, but not to nicotine vaping products.

New York Gov. Andrew Cuomo (D) plans to put cannabis legalization in his budget proposal next year.  His goal is to have a proposal ready by January so that he can include it in the State of the State address he delivers to New York lawmakers on January 8. Cuomo also announced plans to coordinate with other northeast governors on the issue.

Ohio Gov. Mike DeWine (R) said the state’s medical cannabis program might be changed to move away from vaping products.

Oregon’s Governor ordered a 180-day ban on the sale of flavored vaping products.  The ban does not apply to cannabis flavors from cannabis-derived terpenes.  Several other states, including Washington, New York, New Mexico, Michigan and Rhode Island, have also imposed temporary bans.

Pennsylvania regulators are making online tax services available to taxpayers with medical cannabis tax filing and payment obligations.  Grower-processors will be receiving a welcome letter in late October that includes details on how to sign up for a myPATH account.

Vermont regulators allow medical cannabis dispensaries to determine which information concerning their operations can be released under public records requests.  Not surprisingly, this makes it incredibly difficult to get any information about them.

Virginia residents support legalizing cannabis by a margin of 61 percent to 34 percent in a poll conducted by the University of Mary Washington, which involved phone interviews with more than 1,000 adults in the state from September 3‒15.

Washington Gov. Jay Inslee (D) issued an executive order requesting that the state’s Board of Health use its emergency rulemaking authority to impose a ban on all flavored vapor products, including flavored THC vapor products, at the Board’s next meeting on October 9, and directing regulators to take steps to increase oversight, including requiring the disclosure of ingredients.

Hemp / CBD

Congress passed, and President Trump signed into law, a short-term spending bill that includes nearly $16.5 million to fund hemp legalization implementation (SEC. 120).

The US Department of Agriculture tweeted about the availability of hemp crop insurance.

The US Patent and Trademark Office issued its first-ever patent for a hemp cultivar.  Patent documents describe CW2A as a hardy plant, resistant to cold, and capable of producing up to 6.24 percent CBD and only 0.27 percent THC.  The patent was granted on July 2, 2019.

Square Inc. announced that it is opening up payment processing to more CBD businesses, a move that follows an earlier pilot program that apparently went well.  Just recently, Shopify Inc. also changed its policies to allow CBD businesses complying with US state laws.

New York City officials said they will begin issuing violations, subject to fines, to businesses selling CBD-infused foods and beverages as of this week.  This is consistent with earlier guidance on the matter.

Texas’ agriculture commissioner said he will work to have regulations in place in time for farmers to plant hemp this spring.

International

Argentinian governors signed a cooperation agreement for the cultivation of cannabis and the use of its derivatives for scientific, medicinal and therapeutic purposes.  Argentina has a small but permissive medical cannabis program.

Manitoba, Canada, Premier Brian Pallister stated his intent to ensure that cannabis edibles, slated to come to market in mid-December, remain illegal to consume in public.  Opposition leader Wab Kinew favors a less restrictive approach.

Jamaica’s Minister of Industry, Commerce, Agriculture and Fisheries announced a cannabis partnership with the Harvard International Phytomedicines and Medical Cannabis Institute.  The goal of the partnership is to improve Jamaica’s competitiveness in the global cannabis industry.

A key Mexican legislator from the country’s ruling party filed a bill to legalize cannabis and have sales handled by a state-owned corporation called Cannsalud.  Home cultivation of cannabis would also be allowed.

Dutch officials have stated an intent to require that state-produced cannabis in the Netherlands be sold in “unattractive” packaging as a way to discourage current nonusers from taking up the habit.  This fails to learn from the issues occurring in Canada, where legal cannabis companies have to deal with the packaging and branding of products on the black market. 

The British Army scrapped its zero-tolerance drug policy in favor of a more humane approach.  Now, commanding officers will have discretion to deal with drug violations on a case-by-case basis: “It should be up to commanding officers to understand their workforce, to understand whether that individual is the problem, or if there’s a medical problem and they think they need help, or whether indeed it was a mistake,” the UK’s Secretary of State for Defence said.

Russia’s mission to the United Nations tweeted:  “#Russia stands for the world free of drugs rather than the world tolerant to drugs. #Legalization of narcotic drugs, including cannabis, for recreational purposes constitutes a grave violation of the international law. #RussiaUN”

Business

Canadian M&A activity fell by 31 percent in the third quarter to its lowest in eight quarters and initial public offerings also slowed, according to Refinitiv data.

Eaze, a legal cannabis delivery platform, laid off roughly a fifth of its workforce (36 employees) and replaced its CEO, Jim Patterson, with former COO Rogelio Choy.

Canopy Growth Corporation, Smiths Falls, Ontario, purchased a majority stake in Toronto-based BioSteel Sports Nutrition Inc. and plans to make CBD-infused sports nutrition products.  “BioSteel has a reputation for being a best-in-class provider of natural sports nutrition products and all of its products are well positioned to benefit from the increasing trend of plant-based and all-natural products, preferred not only by professional athletes, but active consumers as well,” commented Mark Zekulin, CEO, Canopy Growth.

Business Insider identified the top dealmakers in the cannabis industry (based on how much money each has made in cannabis deals since 2015).  As of September 23, the top three banks (based on data from Dealogic) were (1) Canaccord Genuity Corp. ($122 million); (2) GMP Securities ($52 million); and (3) Eighth Capital Corp. ($44 million).  (article behind a pay wall).

Major League Baseball and its players union are discussing whether to add testing for opioids and loosen restrictions on cannabis.  This continues the trend of major league sports teams at least being open to reconsidering cannabis, especially hemp-derived CBD.

Bank of New York Mellon Corp. stopped accepting positions or trading with US cannabis-related businesses.  This decision comes on the heels of the US House of Representatives voting in favor of the SAFE Act, a bill that would allow US financial institutions to conduct banking and insurance activities with cannabis-related banks.

Encentus Federal Credit Union said it will stop serving Oklahoma medical cannabis businesses.  The credit union stated that, even after charging fees, the cost burden of serving the industry necessitated its exit. 

Medical / Health

The Centers for Disease Control and Prevention reported that there are now 1,080 reported cases of vaping-related severe lung injuries, including 18 deaths.  No single product or substance has been linked to all lung injury cases.  More information is needed to know whether a single product, substance, brand or method of use is responsible for the outbreak.

Doctors at the Mayo Clinic examined samples of lung tissue from 17 patients with illnesses suspected of being linked to vaping, all of which looked as if the people had been exposed to toxic chemicals, similar to industrial accidents or chemical warfare.

Delaware reported that of 11 cases of vaping-related lung injury in the state, one involved medical cannabis.

A study by European Journal of Gastroenterology & Hepatology found that “cannabis use by inflammatory bowel disease patients can induce clinical improvement and is associated with reduced use of medication and slight weight gain.”

A study “pre-printed” by MedRxiv concluded that “the marijuana protection hypothesis is not supported by recent U.S. data on opioid mortality trends” and that “legalizing marijuana appears to have contributed to the nation′s opioid mortality epidemic.”  The data has not yet been peer-reviewed but warrants further investigation.

A University of Maryland dissertation looking at cannabis legalization’s impact on alcohol consumption found “limited support for a substitution effect and no evidence of a complementary effect among adolescents.”

Researchers engineered E. coli bacteria into producing psilocybin, the main psychoactive ingredient in psychedelic mushrooms, calling the development “a significant step towards demonstrating the feasibility of industrial production” of the substance.

Dentons

Dentons Partner Roy Munoz issued a client alert regarding the first CBD oil registry issued in Costa Rica. 

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

Authored by managing associate Joanne Caceres.