In this week’s edition:

• Past cannabis use is no longer disqualifying for federal employment
• States move forward on legalization
• Virginia could be the first Southern state to legalize cannabis as a bill heads to the Governor’s desk
• Delta-8 sales soar

Federal

Past Cannabis Use Is No Longer a Disqualifier for a Federal Job - In a memo to agency heads, Acting Office of Personnel Management Director Kathleen McGettigan said that past use of cannabis should no longer automatically rule out candidates for federal jobs. However, the memo also noted that “an individual’s disregard of federal law pertaining to marijuana while employed by the federal government remains relevant and may lead to disciplinary action.”

States

AL - By a vote of 21 to 10, the Alabama Senate passed SB 46, a bill to legalize medical cannabis use. The bill will go to the state House of Representatives for consideration. If passed and signed by the Governor, physicians would be permitted to recommend cannabis to patients with one of more than a dozen serious medical conditions.

CT - Connecticut Governor Ned Lamont (D) is pushing for the legalization of adult use recreational cannabis. The Governor put forth a 163-page bill, which builds on his proposal from last year and currently awaits a public hearing. Under Lamont's plan, sales would begin in May 2022, with cities and towns deciding where within their borders recreational cannabis can be used and sold. The bill estimates that legalization will generate $33.6 million in new tax revenue in the first year.

FL - According to a study by Leafly and Whiteny Economics, the medical cannabis market in Florida created 15,000 new jobs in 2020 and employs and estimated 31,444 residents. Sales in the state topped $1.2 billion last year. Several bills are pending in the Legislature to bring about full recreational legalization, but lingering issues about the current medical cannabis system and possible restrictions on a fully legalized system make passage uncertain.

ID - The Idaho Senate passed a resolution that would ban the production, sale and possession of cannabis in the state. The constitutional amendment will now go to the state House of Representatives, where it will need to be approved by a two-thirds margin before going before the voters in the midterm elections. If approved by the voters, the prohibition in Idaho could only be overturned by amending the constitution again.

KS - Governor Laura Kelly (D) is supporting an effort to legalize medical cannabis and use the resulting revenues to support Medicaid expansion. Democrat Brandon Woodard, a member of the Kansas House of Representatives, has introduced the legislation. There are other, competing, legalization bills being debated in the Legislature as well.

MA - A Massachusetts appellate court held that a worker cannot seek reimbursement from his or her health insurer for the cost of medical cannabis. The three-judge panel said its ruling was controlled by a decision handed down in October by the Massachusetts Supreme Judicial Court. That decision held that insurance companies (and other parties) cannot be compelled to reimburse injured employees for their federally illegal medical marijuana use.

MO - Two medical cannabis companies, Heya Kirksville and Heya Excello, were awarded state licenses by the Missouri Administrative Hearing Commission after the Commission concluded that scoring irregularities by a private contractor disqualified the two applicants. Last year Missouri was subject to more than 800 appeals from applicants who were denied licenses.

MT - A bill introduced in the Montana House of Representatives would limit the number of cannabis dispensaries in the state to 100, or one per 1,000 county residents, with a cap of 10 dispensaries per county. The bill is aimed at curbing the recreational market that is forming in the state after voters legalized cannabis in November.

NE - Nebraska Governor Pete Ricketts (R) issued a statement titled, “Marijuana: A Clear and Present Danger,” in which he stated his opposition to both recreational and medical cannabis. In the statement, he describes the cannabis industry as partially owned by “Big Tobacco” and says medical cannabis is a stepping stone to full legalization.

NM - The New Mexico House of Representatives approved a proposal to legalize recreational adult cannabis use. HB 12, which would allow the first commercial sales to begin on January 1, 2022, now goes to the Senate for consideration.

ND - Lawmakers in North Dakota passed legislation in the state House of Representatives to legalize recreational cannabis. HB 1420 would allow persons age 21 or older to possess and purchase up to one ounce of cannabis for personal use. Interestingly, lawmakers rejected a separate proposal to place the question of legalizing adult-use cannabis before voters as a 2022 ballot referendum.

PA - Pennsylvania State Senator Dan Laughlin (R) has joined Democratic colleague Sharif Street to promote legislation that would allow the sale of recreational cannabis. Laughlin is the first Republican legislator in the state to publically support legalization efforts.

PA - A Pennsylvania court found that the Housing Authority of Indiana County is required under the federal Quality Housing and Work Responsibility Act (QHWRA) to create standards for determining when applicants who legally use medical marijuana are prohibited from receiving Section 8 housing assistance. The plaintiff was denied Section 8 housing after revealing she used cannabis for medical purposes.

SD - After voters in South Dakota voted in favor of legalizing recreational cannabis, the state Senate narrowly passed SB 187 to create a framework for cannabis sales. If the bill is signed, it would only become law if the state Supreme Court rules the voter-approved referendum constitutional or if the federal government legalizes cannabis by July 1, 2021.

VA - Both the Virginia House and Senate approved a bill that would legalize adult use cannabis. The law would go into effect in 2024 when retail sales would begin. The legislation must now be signed by Democratic Governor Ralph Northam, who has supported the effort.

HEMP/CBD

Delta-8-THC - A chemical extract called Delta-8-THC is gaining popularity among CBD retailers. The extract, which is derived from hemp but is closely related to so-called Delta 9, the psychoactive component in cannabis that is illegal under federal law, provides a psychoactive effect while remaining technically legal. Delta 8 sales have exploded around the country, making it the fastest-growning product in the hemp sector. Several federal agencies, including the Drug Enforcement Administration, are considering their options for enforcement and regulation of the extract.

International

MOROCCO - The Moroccan government is set to legalize cannabis farming, exporting and sale. The government hopes to help farmers in the Rif mountains establish a new market. After previous efforts failed, co-ruling party PJD ended its opposition to legalization.

FRANCE - A new parliamentary report issued a set of recommendations which, according to the Medical Cannabis and Wellness Hemp Union, could transform French CBD into a billion euro industry by 2023. This report follows the start of a 3,000 patient medical cannabis trial in the country.

Business

Sales of Cannabis Pre-rolls up Nearly 50% - Cannabis pre-roll sales surged last year defying expectations of the COVID-19 pandemic limiting the use of rolled cannabis. According to Seattle-based cannabis analytics firm Headset, recreational markets in California, Colorado, Nevada, Oregon (medical and adult use) and Washington State, pre-roll sales increased 47.1 percent in 2020, to $941.6 million from $640.1 million in 2019.

Acreage Holdings Inc. - Cannabis operator Acreage Holdings announced that is has agreed to sell its Florida division to Red White & Bloom Brands Inc. for $60 million. Acreage will focus on markets in other states.

Medical/Health

Health Economics - A study of data from Truven Health MarketScan Commercial Claims and Encounters Database found that between 2009 and 2015 “the implementation of medical marijuana laws (MMLs) and recreational marijuana laws (RMLs) reduced morphine milligram equivalents per enrollee by 7% and 13%, respectively.” The findings suggest that both MMLs and RMLs have the potential to reduce opioid prescribing in the privately insured population, especially for the middle‐aged population.

National Bureau of Economic Research - A working paper issued in February 2021 and published by the National Bureau of Economic Research found that workers’ compensation declined “in response to RML adoption both in terms of the propensity to receive benefits and benefit amount.” The authors speculate that the primary driver of the reductions is “an improvement in work capacity, likely due to access to an additional form of pain management therapy.”

Dentons Speaks

Dentons Webinar: Defining “Social Equity” and Providing Solution in the Cannabis Industry, February 24, 2021

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

Authored by Dentons counsel David Quam and associate managing director Crawford Schneider.