In this week’s edition:

• Congressional Research Report Says DEA Rescheduling Cannabis to Schedule III Is “Likely”
• SAFER Banking Bill Passes Senate Banking Committee
• Hemp Businesses Challenge Virginia’s Delta-8 Law in Federal Court
• Bill to Legalize Cannabis in Germany Advances
• Global Legal Cannabis Market Forecasted to Hit US$103.8 Billion by 2030

Federal

SAFER Banking Passes Senate Banking Committee – The Senate Banking Committee has approved the bipartisan cannabis banking bill, known as the Secure and Fair Enforcement Regulation (SAFER) Banking Act, sponsored by Senators Jeff Merkley (D-OR) and Steve Daines (R-MT), in a 14-9 vote. This legislation is designed to make it safer for legal cannabis businesses to operate by granting them access to the banking system, and allows banks to service the legal cannabis industry. The bill faces further potential amendments and discussions as it moves to the Senate floor. Meanwhile, Senate Majority Leader Chuck Schumer (D-NY) stated that the bipartisan committee vote to advance a cannabis banking bill on Wednesday “underscores how much momentum we have right now” and plans to bring legislation to the floor “soon” and attach “very significant criminal justice provisions.” He added that “the next step is to bring SAFER Banking to the floor for a vote, which I will do soon.”

Congressional Research Report Suggests DEA Is “Likely” to Reschedule Cannabis – A Congressional Research Report released last week says it’s “likely” the Drug Enforcement Administration (DEA) will follow the top federal health agency’s recent recommendation to reschedule cannabis. A rescheduling would have significant impacts including reducing the federal tax burden on state-legal cannabis businesses, who would not longer be subject to the 280E disallowance of deduction sand credits if cannabis is moved to Schedule III.

Congressional Committee Approves Bill to Remove Marijuana as Barrier to Federal Employment – The House Oversight and Accountability Committee has approved the Cannabis Users’ Restoration of Eligibility (CURE) Act, a bipartisan bill that prevents the denial of federal employment or security clearances based on an individual's past cannabis use. The legislation, sponsored by Representatives. Jamie Raskin (D-ME), Nancy Mace (R-SC) and Earl Blumenauer (D-OR), passed in a 30-14 vote, with support from 20 Democrats and 10 Republicans. The bill, however, was amended to limit protections to past cannabis use, allowing federal workers and security clearance holders to continue being penalized for active cannabis consumption.

State

CA – At least 10 labor organizations in California that have signed labor agreements with licensed cannabis businesses in the state have been identified as suspicious and bearing similarities to previously declared “fake” unions. Records obtained by MJBizDaily indicate that these labor groups have entered state-mandated labor pacts with numerous cannabis businesses, including well-known companies. This revelation highlights the extent of the fake-union issue in California's cannabis industry.

IA – Loopholes in state and federal laws are allowing Iowans, including minors, to legally purchase high-potency cannabis drinks and gummies, according to the leaders of Iowa's new Bureau of Cannabis Regulation. Some of these products have as much as 1,000 milligrams or more of tetrahydrocannabinol (THC) per serving, which can be significantly more intoxicating than the standard five to 10 milligrams. State officials are now considering legislation to address the issue and set limitations on these high-THC products.

MO – Missouri's Division of Cannabis Regulation has issued detailed guidance on its item approval process for cannabis products. To submit an item for approval, licensees must choose the "Final Packaging" item category and complete all required fields. The process includes providing additional documentation upon request, uploading final packaging photos, accurately listing ingredients and complying with packaging design regulations.

NY – On September 12, the New York Cannabis Control Board approved final regulations that will govern adult-use cannabis industry in the state. The regulators will begin accepting applications for cultivator, processor, distributor, microbusiness and retail dispensary licenses on October 4, 2023. In addition to opening up the general license application to new businesses, currently operational adult-use conditional cultivators and conditional processors will now be able to apply for full licensure. The board also voted to allow the state’s existing medical cannabis operators to apply for adult-use retail licenses.

OK – Attorney General Gentner Drummond established an Organized Crime Task Force to combat illegal cannabis grow operations across Oklahoma and provide a resource for citizens to report suspicious activity. The task force will work closely with the Oklahoma Bureau of Narcotics and Dangerous Drugs Control, the Oklahoma Medical Marijuana Authority and other state agencies to investigate other crimes connected to these illegal operations such as human trafficking and distribution of other drugs like fentanyl.

PA – Pennsylvania’s Senate approved Senate Bill 773, which would allow medical cannabis cultivators and manufacturers to sell cannabis and cannabis products directly to patients under new dispensary licenses. The House may propose additional measures and there is a possibility that legalization of adult-use cannabis could be discussed. A bipartisan adult-use cannabis legalization proposal was reintroduced in July, and Governor Josh Shapiro has shown strong support for legalization. However, Republicans currently control the Senate, and a number of them continue to oppose broader cannabis reforms.

Hemp

Federal – Charlotte’s Web Holdings, Inc., a market leader in hemp-derived cannabidiol (CBD) products, announced its founding membership in ONE HEMP, a coalition comprised of top CBD industry stakeholders. The coalition’s mission is “to demand regulatory standards by Congress and the FDA that treat CBD products as dietary supplements and serve as a leading scientific resource to policymakers to ensure consumer safety and consistency.” Dentons partner Kelly Fair serves as strategic advisor and counsel to One Hemp, supporting its mission to enhance safety and accessibility in the ever-evolving CBD industry.

MN – The guidance issued by the Minnesota Department of Health in September lists the analytes and their maximum allowable levels and the allowable potency variance when testing hemp-derived cannabinoid products (edibles, beverages and topicals) in their final product form. The first appointed director of Minnesota’s Office of Cannabis Management, Erin Dupree, resigned before even starting her role, over allegations that Dupree’s business previously sold prohibited hemp-derived products.

NE – Lincoln-Lancaster County Investigators recently seized hemp THC products from five local stores that were allegedly in violation of state law, specifically the state’s legal limit on delta-9 THC. Law enforcement had first performed “spot checks” on 10 stores in January, February and March, with another spot check on five of the stores in June. Hemp product seizures are also taking place in Sarpy County; Sheriff Jeffrey Davis asserted that most products seized in that county have tested “above 5% THC” with some even testing at 15 percent THC.

PA – Michael Deangelo, owner of Hollidaysburg retailer Our CBD Store, reportedly faces felony and misdemeanor charges after selling delta-8 THC products to an undercover police officer. State police originally obtained a search warrant reportedly because customers had notified authorities about adverse effects from the shop’s products. Despite the arrest, according to State Representative Lou Schmitt (R-Altoona), a “complex interplay” of federal and state laws make it unclear whether delta-8 THC products are legal in the state.

VA – Opponents of the state’s newly enacted restrictions on hemp intoxicating products recently filed a lawsuit in the U.S. District Court for the Eastern District of Virginia. The suit alleges, among other things, that the state statute is preempted by federal law. Virginia’s restrictions took effect this past July with authorities already issuing substantial fines to stores selling allegedly violative hemp products

WY – Although the Wyoming legislature is not in session (the 2023 legislative session ended March 3), the Joint Judiciary Interim Committee is currently considering a draft bill intended to clarify that intoxicating THCs, like delta-8 THC, are a controlled substance. This would effectively ban the sale of products with delta-8 THC as well as those products that included THCs with a similar chemical structure and pharmacological activity. Action on the bill, if any, will take place in the upcoming legislative session, which begins this January.

International

Bill to Legalize Marijuana in Germany Advances – Germany’s proposed bill to legalize marijuana has advanced through the Bundesrat, the legislative body representing states, despite some opposition. The bill, initiated by Health Minister Karl Lauterbach, would allow adults to legally possess and cultivate cannabis for personal use, create social clubs for distribution and introduce pilot programs for commercial sales. The majority of state government representatives raised concerns about the legislation’s enforcement and called for revisions, but the bill is now moving forward to the Bundestag for possible enactment after federal government response and further debate in the Bundesrat.

Thailand Legislature Expected to Introduce Overarching Law on Cannabis – Last year, the country decriminalized cannabis without passing any accompanying legislation to regulate the substance, though rules were hastily issued to prevent underage use. In the meantime, cannabis shops have sprouted across the Bangkok and tourist hot spots, such as popular resort area Phuket. The law, which is intended to allow cannabis only for medical purposes and research, is likely to take a year to finalize and pass.

UK Advisory Council Recommended Drug Possession Decriminalization in 2016 – The  Advisory Council for the Misuse of Drugs recommended back in 2016 the decriminalization of drugs, according to a leaked document. The Home Office, however, ignored the Council and kept its findings confidential. It is reportedly the only Council report never to have been published. The Council reportedly sought to harmonize the 1971 Misuse of Drugs Act with the then-passed Psychoactive Substances Act, which generally does not criminalize drug possession.

Former US Virgin Islands Legislator Pushes Territory to Implement Cannabis Legalization – Although the territory enacted legislation legalizing cannabis for recreational use in January 2023, officials are reportedly impeding its implementation, according to former Senator Janelle K. Sarauw (I).

Business

Global Legal Cannabis Market Forecasted to Hit US$103.8 Billion by 2030 – The global market for medical and recreational cannabis is projected to grow at a compound annual growth rate of 26.2 percent, as measured over the forecast period (2023 to 2030). The market was valued at US$16.1 billion in 2022.

Columbia Care Inc. Announces Rebrand – Columbia Care Inc., one of the largest multi-state operators, changed its legal name to The Cannabist Company Holdings Inc. and announced plans to rebrand to The Cannabist Company. According to the company, the rebranding reflects its “continued dedication to building a cannabis company for the future, which fosters innovation, creativity, and passion across its teams, adult-use and medical customers, partners, and the industry.”

Leafly Challenges New York Advertising Restrictions – Leafly has filed a lawsuit against New York’s Office of Cannabis Management (OCM) to challenge a rule banning third-party advertising and marketing services in the state’s adult-use market. The lawsuit, which also includes as plaintiffs a dispensary and cannabis consumers, claims that OCM unfairly targeted third-party platforms like Leafly “in a misguided attempt to restrict the manner in which retailers may market or promote their business and products, and prevent price-shopping consumer behaviors.” The state attorney general’s office and a state court issued orders to prevent enforcement of the rule against Leafly while the case proceeds, allowing the company to continue operating in the state.

Square Enters Canada’s Cannabis Market – The payment processing platform Square announced a new partnership in Canada with Jane Technologies, an online ordering service that allows customers to purchase cannabis for delivery or pickup. Square is also opening an early access program for licensed dispensaries in Ontario to test Square’s point-of-sale solution.

NCAA Panel Recommends Removing Cannabis From Banned Substances List – A National Collegiate Athletic Association (NCAA) committee formally recommended removing cannabis from the list of banned substances list for college athletes. The committee provided several reasons for its recommendation, including: the “ineffectiveness of existing policy (banning, testing and penalizing)” and the fact that cannabis is not a “performance-enhancing drug.” The decision to ultimately remove cannabis from the banned substances list will now be made by each of the three NCAA divisional governance structures.

World Anti-Doping Agency Defends Continued Cannabis Prohibition – In an editorial published in the journal Addiction, members of the World Anti-Doping Agency (WADA) explained why the group continues to prohibit cannabis use by athletes in competition. While perspectives were “mixed” about whether cannabis “enhances or has the potential to enhance sport performance,” WADA continues to believe that cannabis use by athletes violates the “spirit of sport.”

Medical

New Partnership Attempts to Develop Test for Cannabis in Breath – The University of Colorado Boulder has partnered with the National Institution of Standards and Technology to develop a reliable breathalyzer test to detect cannabis use. Early findings showed challenges in detecting cannabis impairment via breath, particularly in regular cannabis users, whose breath returned to baseline measures around an hour after cannabis use. These early findings suggest that cannabis breathalyzers being marketed by private companies may not be accurate, as “the science is just not there yet.”

Study Shows Tobacco and Cannabis Use Tied to Higher Rates of Mental Health Issues – Using data from the COVID-19 Citizen Science Study, researchers found associations between the use of tobacco and/or cannabis with anxiety and depression, particularly for individuals who used both substances. According to the study’s authors, “[t]he findings suggest that coordinating tobacco and cannabis cessation with mental health treatment may be beneficial to address these comorbidities.”

Dentons Speaks

Dentons partners Eric Berlin and Amy Rubenstein were quoted in the article “DEA Shift on Marijuana Might Not Spark Cannabis Broadcast Ad” in Communications Daily. Eric also recently taught a course on Cannabis Law at Northwestern School of Law.

Dentons partner Kelly Fair is serving as a strategic advisor and counsel to ONE HEMP, a coalition comprised of top CBD industry stakeholders.