In this week’s edition:

• Civil rights advocacy and other groups push for passage of MORE Act
• Montana commercial recreational cannabis initiative qualifies for state ballot
• Maine announces plans to issue first active licenses for adult use cannabis businesses
• Join Expert Webcast on August 27 for a cannabis M&A webinar featuring Dentons partner Eric Berlin
• And more…

Federal

Cannabis Corruption Cases Ramp Up With FBI Scrutiny - As legalization efforts continue to expand, federal prosecutions and investigations of cannabis corruption have apparently increased over the course of the past year. In Nevada, this includes an ongoing federal investigation overlapping with civil litigation over the way the state awarded marijuana licenses. In Massachusetts, former Fall River Mayor Jasiel Correia (D) remains scheduled to go to trial in 2021 over allegations he extorted cash from cannabis businesses seeking licenses. In June, two officials from the border city of Calexico, CA, admitted they had accepted bribes from a person they believed was representing investors interested in the cannabis industry. And back in January, former Maryland House of Delegates member Cheryl Glenn (D) pled guilty to charges of collecting bribes in exchange for votes on cannabis legislation.

Civil Rights Advocacy and Other Groups Urge Passage of the MORE Act - The Leadership Conference on Civil and Human Rights, a coalition of more than 220 national advocacy organizations, and more than 125 national, state and local drug policy, criminal justice reform and civil rights organizations, penned a letter to the US House of Representatives urging passage of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act (H.R.3884). Among other things, the MORE Act seeks to address mass criminalization, racially biased policing, and over-enforcement of drug law violations. The bill, which is sponsored by Rep. Jerrold Nadler (D-NY) gained eight new co-sponsors in August.

States

AR - The Arkansas Department of Health announced that the suspension of expiration dates on state medical marijuana cards will end on September 30, 2020. However, telemedicine will continue to be allowed until further notice due to the COVID-19 pandemic, thus providing an option for renewals and new applications.

CO - According to a report from Colorado’s Department of Revenue Marijuana Enforcement Division, state recreational cannabis businesses set new industry records, surpassing more than $150 million in monthly sales in June. Combined, recreational and medical dispensaries sold $198,873,210 worth of products in June, also a new record. The department’s latest report also shows that state revenue collected from marijuana businesses so far in 2020 exceeds $203.3 million. For comparison, Colorado brought in roughly $302.5 million in cannabis-related revenue in 2019.

IL - The Illinois Department of Financial and Professional Regulation announced the adoption of permanent rules establishing a conditional adult use cannabis dispensary license tiebreaking process.

ME - The Office of Marijuana Policy, part of the Maine Department of Administrative and Financial Services, announced plans to issue the state’s first active licenses for adult use cannabis businesses. The office intends to issue the first licenses to recreational cannabis businesses on September 8, 2020. Retail sales of adult use cannabis for those 21 and over will be permitted starting on October 9, 2020.

ME - A US district judge overturned Maine’s licensing process, which advantaged in-state applicants. The state’s licensing points system was challenged by Wellness Connection of Maine in a suit filed against the City of Portland in June. In the suit, Wellness Connection of Maine, which is owned by a Delaware company, asserted that the city’s retail use certification system was “discriminatory” and “unconstitutional” for assigning priority to businesses operated by Maine residents.

MT - A citizen initiative in Montana to legalize a commercial recreational cannabis program collected sufficient signatures to appear on the November ballot. If passed, the initiative would establish an adult-use market licensed and regulated by the Montana Department of Revenue with a business application process opening by October 1, 2021. The ballot initiative also would assess a 20 percent tax on adult-use cannabis products.

Hemp/CBD

US - The U.S. Drug Enforcement Administration introduced a proposed rule providing guidance on how it will implement the 2018 Farm Bill's legalization of hemp. The interim provided rule provides that the DEA will consider any cannabis extract or product that exceeds the threshold of 0.3% delta-9-THC a controlled substance regardless of how such product is marketed.

US - The Food and Drug Administration (FDA) is seeking a federal contractor to help study CBD. In a notice published on August 13, the FDA said the selected contractor would support “collecting samples and assessing the quantities of CBD and related cannabinoids, as well as potential associated contaminants such as toxic elements, pesticides, industrial chemicals, processing solvents and microbial contaminants, in foods and cosmetics through surveys of these commodities.”

US - A federal judge agreed to stay a proposed class action accusing CBD company Charlotte's Web of “systematically mislabeling” and overstating the amount of CBD in its products. The court and the parties have agreed to wait for relevant regulatory guidance on the topic from the US Food and Drug Administration before proceeding with the litigation.

U.S. - The US Department of Agriculture (USDA) published a notice explaining its rationale for denying hemp growers access to federal COVID-19 relief under the Coronavirus Food Assistance Program (CFAP). The notice explained that, under the CFAP, relief was only being provided to producers of commodities that experienced a 5 percent price decline during Q1 of 2020. “While the national price did decrease during the first quarter of 2020, it was only a 1 percent decrease, which did not meet the 5 percent or greater decrease in price for CFAP eligibility,” the USDA said.

Business

Organigram Holdings Inc. - Organigram Holdings Inc., the parent company of Organigram Inc., announced that it has sent its first shipment of bulk dried cannabis flower to Canndoc Ltd., one of Israel’s largest and most established medical cannabis producers. The shipment is part of Organigram’s multi-year deal with Canndoc and is estimated to be worth approximately CA$2.4 million.

Medical/Health

Cannabis Use and Workplace Performance - A study examining the relationship between when cannabis is used and its impact on workplace performance found that that cannabis use before and during work negatively relate to task performance, organization-aimed citizenship behaviors and counterproductive work behaviors. At the same time, the study found that after-work cannabis use, as rated by the user’s direct supervisor, was not related (positively or negatively) to any form of performance.

Bioactive Chemical Composition of Cannabis Extracts and Cannabinoid Receptors -
A study exploring the relationship between the chemical composition of medical cannabis and its biological impact on cannabinoid receptor types (CB1 and CB2) revealed insignificant relationships between the major phytocannabinoid content and receptor affinity for CB1 but good correlations between the two at CB2 receptors.

Dentons speaks

Strategies for Building a Cannabis Company: Organic Growth and M&A - On August 27 at 11 a.m.–12 p.m. PDT/2–3 p.m. EDT, join Dentons partner Eric Berlin for a complimentary live video roundtable discussing organic and inorganic M&A growth strategies for the cannabis industry. Register here.

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

Authored by Dentons associate Michael Montgomery.