In this week’s edition:

• Ohio 24th State to Legalize Adult-Use Cannabis
• DEA Proposes Increase in 2023 Production Quotas
• NY Supreme Court Grants Injunction Preventing the Enforcement of State’s Hemp Product Regulations
• Senate Majority Leader Pushes for Criminal Justice Provisions in Cannabis Banking Legislation
• Kentucky Issues Hemp and Medical Cannabis Rules

Federal

Founding Co-Chair of Congressional Cannabis Caucus Will Not Seek Reelection – Rep. Earl Blumenauer (D-OR), a founding co-chair of the Congressional Cannabis Caucus and leader of federal reform efforts, announced that he will not run for reelection next year. In his 27 years in Congress, Rep. Blumenauer has been associated with nearly 100 cannabis bills and resolutions, and has sponsored more than a dozen cannabis measures. Rep. Blumenauer has pledged in his retirement to “continue championing common-sense policy and strategizing on federal legislation with advocates, industry and impacted communities.”

Agency Actions May Signal Preparation for Cannabis to Move to Schedule III – The Drug Enforcement Agency (DEA) has proposed significant increases in its 2023 production quotas for cannabis compounds and psychedelics to “support research and clinical trials by DEA-registered schedule I researchers.” According to the DEA, the increased quotas represent “the estimated medical, scientific, research, and industrial needs of the U.S., for lawful export requirements, and for the establishment and maintenance of reserve stocks.” The proposed increases come amidst the potential federal approval of certain psychedelics for treatment of serious mental health conditions and the likely rescheduling of cannabis. Additionally, recent comments by a senior legal advisor for the State Department to the UN’s Commission on Narcotic Drugs could signal a meaningful shift in the federal government’s reading of its treaty obligations under the Single Convention on Narcotic Drugs, opening the way for the DEA to reschedule cannabis beyond schedule II.

Senate Passes Bill Allowing VA Doctors to Give Medical Cannabis Recommendations for Veterans – The Senate passed a bill that would allow physicians at the Department of Veterans Affairs to issue medical cannabis recommendations to veterans living in states where medical cannabis is legal. Because the House passed a similar bill with slightly different language, the language of the two bills will now need to be reconciled in a bicameral conference committee or otherwise negotiated between congressional leaders.

Senate Majority Leader Pushes for Criminal Justice Provisions in Cannabis Banking Legislation – In a constituent letter to a cannabis industry investor, Senate Majority Leader Chuck Schumer (D-NY) said he is continuing to “monitor” the bipartisan SAFER Banking Act and intends to amend the act to include “criminal justice provisions.” Such provisions would include expungements and resentencing for individuals currently imprisoned on federal cannabis charges. According to Senator Schumer, Congress has a “moral responsibility . . . to undo the terrible damage caused by the War on Drugs,” which requires “ensur[ing] that criminal justice provisions like those included in [the Cannabis Administration and Opportunity Act] are part of the SAFE Banking Act when it reaches the floor.”

Newly Published FDA Documents Assess Cannabis Research – The Food and Drug Administration (FDA) has released two new documents assessing more than 50 years of investigational cannabis-based drugs and offering insight into the future of drug development. The FDA has evaluated more than 800 investigational new drug (INDs) applications involving cannabis and cannabis-derived products in the last 50 years, the majority of which have come in the last 10 years as states have legalized cannabis for medical and adult use. According to the new documents, the INDs have focused on addiction and pain medicine (53 percent), neurology (19 percent ), immunology and inflammation (14 percent ) and psychiatry (nine percent). The documents also reveal that the product form has changed drastically over time. While INDs in the 1970s mostly included smokeable forms of cannabis, today, the agency receives more applications for oral, vapor and food-infused products. The FDA predicts that future drug development will include an increased interest in clinical research to study cannabis-derived products, newly identified or less common cannabinoids and other components of the cannabis plant (like terpenes).

Support for Cannabis Legalization Hits New Record – A new Gallup poll shows that 70 percent of Americans think cannabis should be legal—the highest level of support for legalization since Gallup began asking about cannabis in 1969. For the second straight year, a majority of individuals support legalization among all the major subgroups, including age, political party and ideology. Gallup’s polling shows no difference in support for legalization based on whether an individual lives in a state that has legalized adult use.

Congressional Research Service Report Warns High Taxes Could Bolster Unregulated Market – As the Biden administration’s cannabis scheduling review continues, the non-partisan Congressional Research Service released a report cautioning that if cannabis is eventually legalized, lawmakers should consider the potential unintended consequences of imposing high federal taxes on cannabis products, as this could bolster the unregulated market and harm the legal industry’s potential.

State

AK – Hemp growers and manufacturers in Alaska filed a federal lawsuit against the Alaska Department of Natural Resources (DNR) challenging the state’s new limits on intoxicating hemp products. The regulation at issue—which was supported by the state’s cannabis trade group—prohibits DNR from approving “an industrial hemp product that contains delta-9 THC.” The lawsuit claims the regulation is unconstitutional and seeks a temporary restraining order that would keep the regulation from going into effect while the lawsuit proceeds.

AL – The Alabama Medical Cannabis Commission (AMCC) announced plans to issue all medical licenses by December 12. AMCC awarded an initial round of licenses in June, but paused the process almost immediately due to “potential inconsistencies” in scoring data tabulation. Following a series of lawsuits from applicants, AMCC approved new rules for the licensing process in October and reset the cannabis license application process for a third time. Applicants will be re-evaluated beginning on November 27 based on presentations they make to AMCC and the application scores.

CT – Consistent with the pattern in other states with adult-use programs, the medical cannabis program in Connecticut has slowed significantly since the state legalized adult use in January of this year. Data shows a 13 percent decrease in the number of registered medical patients in the state and a 15 percent decrease in sales of medical cannabis products. There are also anecdotal reports of supply issues for particular cannabis products only available to medical patients. Meanwhile, state regulators recently doubled the cannabis purchase limits under the adult-use program, increasing the single transaction limit from a quarter ounce to half an ounce.

DC – The GOP-controlled House Rules Committee blocked an amendment to a spending bill that would have removed a longstanding rider preventing the District of Columbia from using its local tax dollars to implement a commercial cannabis market, despite voters in the District approving legalization in 2014. The committee also prevented a separate proposal from reaching the House for a vote, which would have precluded drug testing federal job applicants for cannabis.

FL – The Florida Supreme Court is considering arguments on a proposed constitutional amendment to legalize recreational cannabis, which has already gathered enough signatures for the ballot. The court will assess if the ballot language is misleading and if the amendment violates the single-subject rule, with opponents raising concerns about informing voters on federal marijuana illegality.

KY – Regulators in Kentucky have issued new rules governing the state’s hemp and medical cannabis programs. Recognizing that many hemp-derived cannabinoid products currently being sold in the state are unregulated, the proposed emergency hemp regulations establish “the registration, processing, and manufacturing procedures to utilize hemp-derived cannabinoid products in foods and cosmetics, the labeling and packaging requirements for products containing hemp-derived cannabinoids, and methods for use of hemp-derived cannabinoids as an additive to food products.” With respect to the medical cannabis program, the new regulation establishes the qualifications, professional standards and range of sanctions for physicians practicing as medicinal cannabis practitioners. 

ME – Members of Maine’s congressional delegation renewed their call for a federal investigation after a Maine Wire report identified more than 100 Chinese-owned properties in rural Maine that are being used for illegal cannabis operations. According to an unclassified memo from the Department of Homeland Security obtained by the Maine Wire, the illicit grows are operated by Asian Transnational Criminal Organizations. Attorney General Merrick Garland and the Department of Justice have not responded to a letter Maine’s congressional delegation sent in August demanding federal enforcement at these locations. State Representative Mike Soboleski sponsored L.R. 2903, “An Act to Provide Investigative Authority to the Maine State Police, Sheriffs and Local Police Regarding Maine’s Recreational Cannabis Laws and Ordinances to Ensure Proper Enforcement,” as an effort to address this issue, but the bill request failed in the Legislative Council.

NY – New York opened up applications for medical cannabis business licenses on October 31, with expanded criteria for assessing potential new operators. Applicants must demonstrate that they are culturally, linguistically and medically competent to serve unserved and underserved areas. The deadline to submit applications is December 19. The application requires a nonrefundable fee of $10,000 with a registration fee of $200,000 due within 10 business days of approval.

OH – Ohio voters approved a cannabis legalization ballot initiative, making it the 24th US state to end prohibition. The new law establishes a regulatory framework for adults 21 years of age or older to possess, purchase and cultivate cannabis, and will become effective on December 7. The Division of Cannabis Control will be required to adopt regulations and issue licenses within nine months of the effective date. Officials already released an FAQ guide explaining how the program will roll out. However, Republican leaders indicated their intent to bring forward proposed amendments to the law, and officials cautioned that the details could change if those efforts are successful. Meanwhile Republican presidential candidate Vivek Ramaswamy, who has said he supports legal access to cannabis and psychedelics, revealed that he voted against legalization in his home state. Ramaswamy told reporters he believes it is an “abandonment of the rule of law” to adopt state laws that conflict with federal laws.

PA – The Pennsylvania House Health Subcommittee on Health Care held an informational meeting to hear from experts on adult-use cannabis legalization as state legislators consider a path for reform. One option includes a possible state-run cannabis model, similar to what has been proposed in New Hampshire.

Hemp

Sales of Hemp-Derived Cannabinoids Outpace Cannabis Markets – A report published by the research firm Whitney Economics claims that hemp-derived cannabinoid sales were greater than the total sales of state legal medical and adult use cannabis in 2022. Per the report, the hemp industry saw approximately $28.4 billion in sales, which in addition to exceeding state-legal cannabis, is equal to the national total for craft beer sales in 2022.

FL – On November 2, Florida Commissioner of Agriculture Wilton Simpson announced that Florida Department of Agriculture and Consumer Services (FDACS) inspectors uncovered more than 8,700 hemp-extract packages that were attractive and/or marketed to children at Top Private Label Co. in Daytona Beach, Florida. FDACS inspectors working with information shared by the Food and Drug Administration inspected the facility and issued stop-sale orders for the hemp-extract packages to prevent any potential harm to consumers.

NC – The North Carolina Secretary of State's Office has confiscated nearly $170,000 worth of counterfeit THC-infused snacks, disguised as popular brands like Skittles and Oreos. Secretary Elaine F. Marshall emphasized the danger to children, warning parents to be vigilant during Halloween, as these attractive packages could lead to unintentional ingestion and highlighted the broader issue of mislabeled CBD products, posing risks due to the lack of mandatory testing regulations.

NY – The Supreme Court of New York has granted a preliminary injunction on the enforcement of the state's emergency regulations for hemp products adopted on July 19, 2023. The petitioners, a group of hemp businesses, argued that the new hemp regulations were illegal and violated the State Administrative Procedure Act because they are arbitrary and capricious. The court found that the Emergency Justification provided by the State's Cannabis Control Board and Office of Cannabis Management did not comply with the State Administrative Procedure requirements, and stated that there was a lack of evidence of an actual emergency. The ruling will prevent the enforcement of the Emergency Regulations for hemp products in New York for now.

International

Israel – Medical cannabis patient enrollments spiked in Israel in October amidst the war between Israel and Hamas. Data showed an increase in the number of patients prescribed relatively high doses of cannabis as well. Chronic pain continued to be a leading condition for patients, making up nearly three quarters of new enrollees, while another 400 patients last month enrolled for unspecified “other” conditions.

United Kingdom – According to reports, the amount of medical cannabis being imported into the United Kingdom tripled in volume this year. It has now been five years since medical cannabis use has been legal in the country. According to Glass Pharms, one of the first commercial growers of high-THC cannabis flower that supplies third parties producing cannabis-based products for medical use, the market is now worth around US$174 million per year. According to estimates, there are around 30,000 to 32,000 medical cannabis patients in the UK. Medical cannabis patients can access these products only through private clinics where they need to pay for the medicine.

Ukraine – Ukraine’s parliament is set to pass a bill on the legalization of medical cannabis this month. A preliminary bill was adopted with 268 votes back in July. If adopted, the bill will oblige the government to move medical cannabis from List 1 (drugs not permitted for circulation) to List 2 (permitted under strict control). The bill would continue to prohibit any recreational use of cannabis.

Business

New “Drug Legalization Handbook” Offers Framework for Post–Drug Prohibition World – A recent report from the Reason Foundation, in collaboration with advocacy groups such as the National Coalition for Drug Legalization and Students for Sensible Drug Policy, argues for the end of drug prohibition and the establishment of a legal and regulated market for all drugs. The authors suggest repealing the Controlled Substances Act and draw parallels with the regulatory frameworks of state medical and adult-use cannabis laws as potential models for drug legalization. The report also advocates for a shift toward a more effective and compassionate approach that respects individual autonomy and focuses on harm reduction. Keeping with those priorities, the report addresses restorative justice, recommending individual reparations for victims of the drug war and cautioning against using cannabis tax revenue for community reinvestment programs to avoid potential corruption that may result when politically
connected organizers lobby to oversee the allocated money.

Medical

Cannabis Use May Damage Brain Immune Cells Vital to Adolescent Development – Johns Hopkins researchers conducted a mouse study revealing that high THC levels in adolescent mice led to structural changes in microglia, specialized brain immune cells, potentially worsening a genetic predisposition to schizophrenia. The study suggests that cannabis use during adolescence, especially with increased THC concentration, may pose risks to brain development, urging caution in teenage cannabis use.

Legal CBD Significantly Reduces Opioid Prescription Rates, New Study Shows – A recent report examining the impact of CBD access on opioid prescriptions suggests that, while the legalization of CBD alone may not reduce opioid prescribing rates, the ability to access and purchase legal CBD products has led to a 6.6 percent to 8.1 percent reduction in opioid prescriptions. The study emphasizes the importance of supply-side access, particularly through legal and open dispensaries, in realizing the potential benefits of CBD legalization in combating the opioid epidemic. However, strict limits on CBD purchases, such as ID requirements or patient registries, were found to blunt the positive impact on opioid prescription rates.

Psychedelics

Meta Sidesteps Ethics Board Recommendations on Drug Content Monitoring – Meta Platforms Inc., the company behind Facebook and Instagram, has decided to ignore recommendations from its ethics watchdog regarding the oversight of drug-related posts. The Oversight Board had suggested that Meta tighten its policies on posts related to illegal or recreational drugs, but Meta has chosen not to implement all of the recommended changes. This decision has implications for how information about psychedelic drugs is communicated on the platform. The Oversight Board had urged Meta to audit its policies and clarify what individual users can post about drugs that provide a high but also have medical uses, such as ketamine and other psychedelic drugs. However, Meta has opted not to commit to the suggested audit and only plans to "assess the feasibility" of doing so in 2024.

Massachusetts Psychedelics Campaign Believes It Has Enough Signatures to Force Legalization Initiative – A Massachusetts campaign, Massachusetts for Mental Health Options, claims to have gathered enough signatures to push lawmakers to consider a psychedelics legalization initiative. With more than 75,000 verified signatures, exceeding the 74,574 threshold, the initiative could move to the legislature, allowing lawmakers to enact, propose a substitute or take no action. If not legalized by May 1, activists have until July 3 to gather additional signatures for a November 2024 ballot. The initiative proposes a regulatory framework for supervised access to psychedelics at licensed facilities, allowing possession, growth and sharing of specific amounts. The law would take effect on December 15, 2024.

Oregon Regulators Are Accepting Public Comments on Proposed Psilocybin Services Rules –The Oregon Psilocybin Services Section has proposed rules for public comment. The bill mandates service centers to collect and report client data on psilocybin services. The public can comment via email or participate in virtual public hearings scheduled from November 15 through November 17. The proposed rules aim to address facilitator training program approval and ensure compliance with the Oregon Psilocybin Services Act.

Dentons Speaks

Dentons Health Care partner Amy Rubenstein spoke on a panel at GreenMarket Report’s Midwest Women in Cannabis Summit in Chicago called “Female Investors Get Real.” She was joined by representatives from firm clients Green Thumb Industries (Wendy Berger, Board Member) and SeedFund Capital (Lisa Evia, Founder and Managing Partner).  Christie Hefner also spoke related to her work with firm client Belushi Farms.

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.