In this week’s edition:

• Congress Reintroduces SAFE Act
• Congress Questions FDA’s Inaction on CBD
• Delaware Becomes Newest State To Legalize Cannabis for Adult Use
• New Jersey Cannabis Regulatory Commission Reverses Itself and Approves Curaleaf’s License Renewals
• Arkansas Bans Delta-8 Products
• NBA Lifts Ban on Cannabis Use

Federal

Senate and House Lawmakers Refile SAFE Act – A bipartisan group of senators and representatives (including Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) as well as Reps. Dave Joyce (R-OH) and Earl Blumenauer (D-OR)) reintroduced a new iteration of the Secure and Fair Enforcement (SAFE) Banking Act in their respective chambers on Wednesday. In line with previous versions, the bill would provide a safe harbor for banks and other financial institutions that service state-legal cannabis companies. 

Veterans Medical Cannabis Bill Reintroduced in Congress - Sen. Brian Schatz (D-HI) and House Cannabis Caucus Co-Chairs Reps. Barbara Lee (D-CA) and David Joyce (R-OH) have reintroduced the Veterans Medical Marijuana Safe Harbor Act in their respective chambers. The Act provides a temporary five-year safe harbor that would allow veterans to legally possess and use medical cannabis where permitted by state law. Importantly, the Act also permits physicians with the US Department of Veterans Affairs to recommend medical cannabis in accordance with state laws, and requires the department to study the benefits of cannabis. Similar safe harbor language has been included in past appropriations bills, but was always removed before the bills’ final passage. 

Former President Trump Calls for Study of Genetcally Engineered Cannabis – In a recent speech before the National Rifle Association’s Leadership Forum, former President Donald Trump stated that—if he is inaugurated as the next president—the nation would “have to look at whether common psychiatric drugs, as well as genetically engineered cannabis, and other narcotics, are causing psychotic breaks.” Suggesting there may be a link between mass shootings and genetically engineered cannabis, the former president said he would direct the Food and Drug Administration to investigate whether cannabis was indeed a cause.

States

AL –The Alabama Medical Cannabis Commission (AMCC) is currently reviewing 90 applications for medical cannabis business licenses, and expects to award licenses to up to 17 companies by June 12. AMCC Assistant Director Daniel Autrey “hesitate[d] to put a time on” product availability, but thinks medical cannabis products will be available at least “by first quarter of ’24. . . It just kind of depends on the supply chain and a number of things, [including] the challenges the licensees will face.” Delays may also occur if any lawsuits are filed concerning the licensing award process. 

CA – California’s Department of Justice is phasing out its existing illicit cannabis enforcement program, Campaign Against Marijuana Planting (CAMP), with a new year-round multi-agency program known as the Eradication and Prevention of Illicit Cannabis (EPIC). Last year, CAMP seized nearly one million illegally cultivated cannabis plants and more than 200,000 pounds of illegally processed cannabis.

DE – Despite personal reservations, Gov. John Carney (D) decided not to veto two bills passed by the General Assembly that legalized cannabis for adult use. The bills allow individuals to possess up to one ounce of leaf cannabis and require the state to issue 30 retail business licenses over the next 16 months. Taking effect midnight on April 22, Delaware is now the 22nd state to legalize cannabis for adult use.

IN – In early April, the Indiana House voted down a legislative effort to legalize cannabis. Rep. Justin Moed (D) had added an amendment to a Senate bill concerning rules for businesses that sell alcohol and hemp products, but the amendment failed in a 58 to 33 vote. Indiana remains one of the few states that has not legalized cannabis for medical or recreational use. The state, however, does have a very limited low-THC program for patients suffering from treatment-resistant epilepsy.

MD – In response to state voters’ approval of adult-use legalization (Question 4 on the 2022 ballot), the Maryland General Assembly this month passed the final version of HB 556, a bill creating a regulatory framework for the state’s recreational market, with adult-use sales to start by July 1. Among other things, the bill would impose a sales and use tax of nine percent on the sale of cannabis. The bill is now before Gov. Wes Moore (D) for his expected signature.

MN – This week saw substantial movement forward in efforts to legalize cannabis for adult use in Minnesota. On April 25, in a 71 to 59 vote, the House passed a bill that, among other things, would create a new state agency, styled the “Office of Cannabis Management,” tasked with overseeing the cultivation, manufacture and sale of cannabis for adult use. The bill would also expunge low-level cannabis-related offenses and bring the regulation of hemp-derived THC edibles under the same agency. The Senate is scheduled for a vote on their own version of the bill. Meanwhile, Gov. Tim Walz (D) is expected to sign the bill if it arrives on his desk.

NJ – In an unusual turnabout, New Jersey’s Cannabis Regulatory Commission (CRC) last week reversed its earlier decision markedly curtailing multistate operator Curaleaf’s operations in the state. With last week’s reversal, the CRC has now approved the license renewal of Curaleaf’s five licenses—but with conditions. Commissioner Krista Nash noted that the CRC’s earlier vote was a wake-up call for companies that “did not understand or appreciate their obligations as it concerns labor relations.” Indeed, CRC Chair Dianna Houneou has stated that by the body’s next meeting (scheduled for June 1), Curaleaf must, among other things, provide evidence that it is bargaining with union employees in good faith.

OH – Chances that Ohio will legalize cannabis for recreational use this legislative session remain uncertain, but unlikely. Most prominently, a proposal submitted early this year by the Coalition to Regulate Marijuana Like Alcohol—after acquiring the requisite number of signatures as part of the state’s initiated statute process—has yet to be considered. The proposal would allow Ohioans age 21 and older to buy cannabis and grow plants at home, and would tax cannabis products at 10 percent. At present, any measure legalizing cannabis for adult use faces stiff opposition in the GOP-controlled General Assembly. Moreover, Gov. Mike DeWine (R) has previously expressed his opposition to any such legalization effort.

TX – A bill expanding the state’s low-THC program appears to be moving forward in the Texas Legislature. Introduced by Rep. Stephanie Klick (R), the bill (HB 1805) would, among other things, expand program eligibility to those suffering any “condition that causes chronic pain, for which a physician would other prescribe an opioid,” and change the way “Low-THC cannabis” is measured from a 1 percent THC concentration cap to a set volume of 10 milligrams. With its passage in the House earlier this month, the bill is now before the Senate’s Health & Human Services Committee.

Hemp/CBD

CANNRA Policy Recommendations for Farm Bill Would Limit Delta-8 Products - In a letter to Reps. Kevin McCarthy (R-CA) and Hakeem Jeffries (D-NY) and Sens. Chuck Schumer (D-NY) and Mitch McConnell (R-KY), the Cannabis Regulators Association (CANNRA) called for legislators to include regulations that would regulate and ban certain intoxicating hemp products (such as delta-8) in the upcoming Farm Bill. The letter includes recommended legislative actions that would close some of the “loopholes” from the 2018 Farm Bill, including applying the 0.3 percent THC limit to hemp products and closing the derivatives loophole from the prior definition of hemp. The Farm Bill is expected to be finalized and passed later this year.

CA Hemp Advisory Board Releases Recommendations for 2023 Farm Bill – California’s Industrial Hemp Advisory Board released policy recommendations for the upcoming Farm Bill, including removing the 30-day crop window requirement and devoting more financial resources to administering the state’s Industrial Hemp program so that the administrative costs do not fall solely on hemp farmers.

FDA’s Inaction on CBD Questioned by Congress - Rep. James Comer (R-KY), chair of the House’s Oversight and Accountability Committee, sent a letter to Food and Drug Administration (FDA) Commissioner Robert Califf last week, calling for an investigation into the agency’s “insufficient rationale for inaction” on CBD regulations. After years of considering a potential pathway for CBD products as foods or dietary supplements, the FDA formally announced last January that it was deferring to Congress regarding the development of CBD regulations.

Virginia Regulates Delta-8 Products – With the enactment of SB 903 this month, sellers of intoxicating hemp products in Virginia will now need to obtain a license in order to do so legally. The new law also contains, among other things, product restrictions requiring a 25 to 1 ratio (of CBD to THC) for permissible hemp products in the state. Violators could face fines of up to $10,000 per day. SB 903 will take effect July 1.

Arkansas Bans Delta-8 Products – Arkansas Gov. Sarah Huckabee Sanders (R) signed a new law (SB 358) prohibiting the sale of hemp products, such as Delta-8, that contain intoxicating THC converted from hemp. It also requires anyone selling or manufacturing hemp products to have a yearly license. The law went immediately into effect with the Governor’s signature. 

States Across the US Consider Delta-8 Regulations – Florida (SB 1676, HB 1475) and Alabama (SB 66) are considering bills that would regulate delta-8 products with a focus on preventing the distribution of such products to children. In Colorado (SB 271) and Missouri (HB 1328), the states’ respective bills would require delta-8 products to be treated as “cannabis” and sold only at licensed dispensaries. Dentons is closely monitoring Delta-8 regulations across all 50 states.

International

Germany – The German government announced a scaled-back plan for the legalization of adult-use cannabis this month after discussions with the European Union Commission. Under the “first pillar” of the new proposed framework, nonprofit associations would be allowed to cultivate and distribute cannabis to their adult members for recreational use. Individuals would also be able to cultivate up to three cannabis plants at home. The first pillar is expected to be implemented in 2023. The “second pillar” will involve limited, regional pilot projects with commercial supply chains for the purpose of collecting data to support future public policy.

Finland – A citizens’ initiative to legalize cannabis in Finland gained the required 50,000 signatures to be considered by the Parliament. The proposal follows an earlier citizens’ initiative to decriminalize cannabis, which Parliament’s Legal Affairs Committee ultimately rejected in April 2022. Supporters of the new initiative, which goes further in legalizing, regulating and taxing cannabis, reportedly see this an avenue for launching a social discussion and debate over cannabis policy in the country.

Business

NBA Lifts Ban On Cannabis Use – After reaching a new labor agreement with the players’ union, the National Basketball Association (NBA) will no longer test or penalize players for cannabis use. Under the previous policy, players that the NBA found were using cannabis would have entered a treatment and counseling program after the first violation, received a $25,000 fine after the second violation and, after the third violation, been subjected to a five-game suspension without pay. The new agreement also allows players to invest in and promote cannabis companies. The shift follows policy reforms in other national sports, such as football, baseball and hockey.

Employers Face a Patchwork of Evolving State Laws on Cannabis Testing – After legalizing cannabis possession and use, states have been slow to adopt legislation that bans workplace discrimination related to cannabis use and/or regulates the testing of employees for cannabis use. Most recently, on April 24, Washington lawmakers sent Senate Bill 5123 to Gov. Jay Inslee’s desk for consideration. The bill would make it illegal for employers to discriminate against job applicants by banning pre-employment screenings for cannabis use, but would still allow employers to impose drug-free workplace policies. The bill includes exceptions to the testing restrictions for certain jobs, such as positions in the airline and aerospace industries, law enforcement or other first responder positions, and other “safety sensitive position[s] for which impairment while working presents a substantial risk of death.” Cannabis has been legal for recreational use in Washington since 2012.

Medical/Health

Study of Australian Patients Finds Medical Cannabis Beneficial for Treating Chronic Refractory Pain – The study, published in the British Journal of Pain, observed that medical cannabis improved pain intensity scores and health-related quality of life outcomes over time in patients with chronic, refractory pain.

Researchers Identify Potential of Terpenes To Treat Pain – With funding from the National Institutes of Health and the University of Arizona, researchers are studying mice to see if terpenes can help treat pain. Together, the studies have identified a receptor mechanism in the spinal cord that permits the use of cannabis terpenes as a potential therapeutic for chronic neuropathic pain.

Study Finds No Significant Association Between Legalization of Adult Use Cannabis and Cannabis Use Disorder Treatment Admissions – An article published in Current Addiction Reports summarizes the latest research on the intersection between the legalization of adult-use cannabis across states and the prevalence of cannabis use disorders and cannabis treatment admissions. Findings generally indicate an increase in cannabis use disorder (CUD) associated with legalization, but effects differ by age group. The review found that there is no significant association between legalization and CUD treatment admissions, and that CUD admissions decreased overall during the study periods.

Dentons Speaks

Fact vs. Fiction: Cannabis Rescheduling and the DEA – On April 27, Eric Berlin—Dentons Cannabis Group Co-Head—spoke at an online webinar organized by the Council for Federal Cannabis Regulation. The panel engaged in an in-depth discussion regarding President Biden’s October 6th announcement directing the DOJ and HHS to review the potential re- or de-scheduling of cannabis under federal law.

Northwestern Law School Speaker Series on Federal Cannabis Reform – On April 4, Partner Joanne Caceres spoke at the Northwestern DPELC-MSL Speaker Series on the future of federal cannabis reform and related implications for students entering the cannabis industry.

New York’s True Party of Interest Regulations – In a recent article, Dentons Partner Gary Meyerhoff explained New York’s proposed regulations regarding the true parties of interest on an adult-use cannabis license, which regulations are intended to prevent hidden ownership interests from controlling licensed cannabis businesses.

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

Authored by associatesMalina Dumas, Lauren Estevez, Jacob Raver, and Margo Wilkinson Smith.