In this week’s edition:

• Joe Biden as President-elect raises anticipation for federal decriminalization
• Governor Cuomo says time is “ripe” for cannabis legalization in New York, while South Dakota Governor Noem believes voters in her state were wrong to vote for legalization
• Local ballot initiatives in several states show support for recreational cannabis sales
• Voters in New Zealand reject adult-use program

Federal

• Presidential Election - After being declared the winner in Pennsylvania and securing more than the 270 votes required to be elected, former Vice President Joseph Biden is expected to be the next President of the United States. While Vice President-elect Kamala Harris has supported full legalization, Biden has not, although he has backed legalization for medical use and favors decriminalizing cannabis. Biden has also stated that he will allow states to legalize recreational use without federal interference.  Cannabis stocks have risen since it became clear Biden would be the next President.

State

• CO - The results from ballot initiatives in twelve Colorado communities demonstrate widespread support for recreational cannabis use. Voters in eight communities, including two in the Denver metro area, approved recreational sales within their borders, while several communities approved new taxes on retail cannabis sales. Two smaller towns (Kiowa and Eckley) rejected proposals that would have permitted recreational sales.
• FL - A school district in Central Florida fired a high school dean after he tested positive for medical cannabis use. The dean, a former Marine serving in Iraq, had been prescribed cannabis by a physician to treat post-traumatic stress disorder. Though medical cannabis is legal in Florida, the school board unanimously voted to terminate the dean because his actions were illegal under federal law and violated the district’s notification policy.
• IL - Advisory referendums in six Illinois communities showed that a majority of voters support the sale of recreational cannabis. Local officials in these communities will now consider taking the legal steps required to permit recreational sales. In contrast, voters in the Western Springs suburb rejected the idea of recreational sales due to potential concerns about where such businesses would be located and the potential damage caused by addiction.
• NY - Gov. Andrew Cuomo (D) stated that the time is “ripe” for the state legislature to legalize cannabis in New York. The Governor cited economic losses from the coronavirus pandemic as a large driver of legalization, which could generate millions of dollars in state revenue. The pressure to legalize has also increased due to the recent legalization of cannabis in neighboring New Jersey.
• SD - Following South Dakota voters’ recent approval of both medical and recreational cannabis use, State House Speaker Steven Haugaard (R) noted that it will be “a challenge” to implement the adult-use program, which is protected in a constitutional amendment, based on the number of state and federal laws affected. While State Senate Minority Leader Troy Heinert (D) agreed there are “lots of statutes on the books that are going to need change,” he suggested that South Dakota can “look . . . and learn from” other states that have already implemented such changes. Any legislation will need to be approved by Gov. Kristi Noem (R), who recently told reporters that voters made the “wrong choice for South Dakota’s communities” in approving cannabis legalization.
• TN - A Tennessee state senator plans to introduce new legislation that would permit individuals to cultivate and sell medical cannabis. Proponents of the bill are hopeful that legalization in other Southern states, such as neighboring Mississippi, will encourage broad support for the legislation.

Hemp/CBD

• US Drug Enforcement Administration - In connection with a lawsuit seeking to confirm that two THC-containing byproducts of hemp production are legal under an interim rule, a hemp member association and South Carolina hemp company filed a motion in federal court to compel the DEA to respond to two questions “regarding the legality of certain hemp-derived constituents.” According to the motion, forcing the agency to answer these questions would “clarify DEA's interpretation, sharpen the dispute, and guide whether plaintiffs should file for a preliminary injunction or instead dismiss [the] case for lack of a case or controversy.” The movants also argue that expedited discovery is necessary given that the DEA “has historically taken years—and, most recently, more than a decade—to issue final rules” and respond to public comments.
• MT - Montana’s Department of Agriculture launched an online portal to connect hemp farmers with potential buyers looking for seeds, fiber, and derivatives such as cannabidiol. Listings on the “Hemp Marketplace” are free of charge and provide information about the type of products and availability of laboratory testing data.

International

• New Zealand - By a margin of 50.7 percent against to 48.4 percent in favor, voters in New Zealand rejected a referendum that would have legalized cannabis for adults aged 20 and older. Preliminary results released on October 30 showed 53 percent against and 46 percent in favor, but while approximately half a million “special votes,” including from citizens overseas and individuals serving prison sentences of less than three years, skewed in favor of legalization, it was not enough to close the margin.
• New Zealand - New Zealand’s Ministry of Health determined that the minimum quality standard set forth in the country’s Medical Cannabis Regulations “is not suitable for assessing non-cannabis derived CBD products.” Therefore, non-cannabis derived CBD products are not required to comply with the minimum quality standard or be labeled as medicinal cannabis products. According to the Ministry, “[w]hile this decision changes the way non-cannabis-derived CBD products can be accessed, it does not change how they are prescribed.”
• Italy - Italy’s Health Ministry reversed its decision to add to a list of medicines in its narcotics law ingestible, hemp-derived CBD formulas, just one day before the new policy was set to take effect. The reversal, published in the Italian Official Gazette, suspended an earlier decree issued on October 15 that sparked anger, confusion, and concern about the country’s industrial hemp industry.

Business

• Aphria - Canadian cannabis company Aphria, Inc. has agreed to buy SweetWater Brewing Company, one of the largest independent craft brewers in the US, for $300 million. Aphria hopes that this acquisition, its first major deal involving craft beer, will give it a recognizable brand in the US and help it launch a line of THC beverages in Canada. To help build brand awareness, Aphria will introduce three of its beverages as cannabis-free beverages via SweetWater products in the US “ahead of potential future state or federal cannabis legalization.”
• Canopy Growth - Effective November 13, 2020, Ontario-based Canopy Growth Corporation will transfer its US stock exchange listing from the New York Stock Exchange to the Nasdaq Global Select Market. Common shares of the company will begin trading as a Nasdaq-listed security on November 16.
• Scotts Miracle-Gro - The Scotts Miracle-Gro Company’s cannabis-focused subsidiary, Hawthorne Gardening Company, reported $351.9 million in quarterly sales, a 68 percent increase in the fourth fiscal quarter. In the last year, Hawthorne sales increased 61 percent, to $1.08 billion.

Medical/Health

• Increase in Cannabis Use Parallels Increase in Birth Defects in Colorado - Researchers that reviewed data of congenital birth defects and cannabis use in the state of Colorado found that there is “compelling evidence that the generally rising pattern both of individual defects and of systems levels summary and total measures closely parallels the rise in cannabis use in Colorado.” The authors suggest that cannabis-associated defects may be broader than previously thought and may still be expanding.
• Study Finds Hallucinogen Psilocybin Effective for Treating Depression - A recent study of 27 individuals with major depressive disorder found that treatment with the hallucinogen psilocybin, found in “magic” mushrooms, was more effective than typical antidepressant medications. Participants that began immediate treatment experienced a reduction in depression within one day after the first session and sustained that reduction up to the one-month follow-up.

Dentons speaks

• Dentons partner Eric Berlin provided insight on the legalization of adult-use and medical cannabis in South Dakota in an article published in Cheddar.
• Eric was also part of an interactive roundtable titled “The New U.S. Cannabis Industry: Post-election Insights and Analysis” on November 6. To view a recording of the webinar, click here.
• Eric and Dentons partner Katie Ashton were quoted in a recent Chicago Tribune article discussing the future of the cannabis industry following the recent success of legalization ballot initiatives.
• Dentons Barbados published a fact sheet to assist local and foreign entities on the implementation of the country’s 2019 Medicinal Cannabis Industry Act.