Portions of New Mexico’s adult-use cannabis law take effect today and adults 21-and-older can now possess up to two ounces of cannabis flower, up to 16 grams of concentrates, and grow up to six plants at home under the legislation passed earlier this year in a special session called by Gov. Michelle Lujan (D).
By September, the state must form the Cannabis Regulatory Advisory Committee and begin issuing licenses by Jan. 1 with retail sales expected by April 2022, which will carry a 12 % tax, which will eventually rise to 18%. Cannabis businesses will pay 5 to 9% tax on gross receipts.
The reforms also include automatic expungement provisions for low-level cannabis crimes, which, according to state records, will benefit over 150,000 New Mexico citizens. The legislation includes a process allowing those in prison for cannabis crimes the possibility to appeal their convictions, NORML reports.
On the day House Bill 2 was signed, NORML State Policies Manager Carly Wolf said, “New Mexico will greatly benefit from this new revenue stream and the creation of thousands of jobs.”
“Most notably though, legalization will spare thousands of otherwise law-abiding residents from arrest and a criminal record, and the state’s new expungement law will help provide relief to many who are suffering from the stigma and other collateral consequences associated with a prior marijuana conviction.”—Wolf in a blog post
With New Jersey, New York, Connecticut, Virginia, and New Mexico all passing adult-use cannabis legislation, 2021 is shaping up to be a banner year for adult-use cannabis legalization. Provisions of Virginia’s and Connecticut’s cannabis reforms are set to take effect on July 1.
Massachusetts medical cannabis provider Revolutionary Clinics is establishing a $4 million grant that it will distribute between the state’s Economic Empowerment Cannabis licensees and other minority-owned businesses in Cambridge, MassLive reports. The fund is part of the company’s Aspire program which has already helped Caroline’s Cannabis, Haverhill Stem LLC, and Pure Oasis.
While the fund is set to launch this September after the end of Cambridge’s “moratorium on adult-use conversions by medical cannabis operators,” the first pair of $100,000 grants will be distributed in the next 30 days to Leah Samura, CEO and co-owner of Yamba Boutique, and Ivelise Rivera, owner and partner of Nuestra, LLC.
According to a company press release, there will be one million dollars allocated when the fund officially launches in September, followed by the additional distribution of $500,000 annually over the next six years.
“My mission is to not only open the first 100% local, black-owned marijuana retail store in Harvard Square, but also to help other women of color find their place in the industry. This grant will help me accomplish that mission. I am very grateful for Revolutionary Clinics for their support.”—Samura in a statement via MassLive
The grants will also be provided to non-cannabis industry, minority-owned, businesses including new or existing restaurants, service providers, non-profits or incubators focused on minority entrepreneurship; individuals seeking funding to open, maintain, grow, or expand a business in Cambridge, Massachusetts; and those seeking funding to stay open or reopen due to the COVID-19 pandemic, Revolutionary Clinics said in a press release.
Keith Cooper, Revolutionary Clinics CEO, said in a statement that the company has “heard time and time again that the hardest challenge for [Economic Empowerment] license holders to overcome is accessing capital,” and noted the “challenge is not limited to cannabis.”
“Businesses across Cambridge require funding and wrap-around services,” he said in the statement, “so we want to meet that need head-on with this program.”
Toronto, Canada-based SLANG Worldwide is set to acquire Vermont medical cannabis company HI-FI in a $25 million deal. HI-FI owns two of the state’s five medical cannabis licenses under the CeresMED and Southern Vermont Wellness brands, and CBD store Ceres Natural Remedies.
In an interview with the Burlington Free Press, Bridget Conry, director of brand experience for CeresMED said the deal will allow the company to roughly double the number of its employees to 100.
“An overwhelming majority of our investors, until now, have been Vermonters. Now we’re in a position to bring investment into the state.”—Conry to the Free Press
SLANG CEO Chris Driessen said that the firm “recognized the value in High Fidelity as a local success story and pioneer in the Vermont cannabis community, focused on providing access to patients and consumers.”
“The High Fidelity team is proud of their accomplishments to date and are committed to the ‘Vermont Way’ of doing things, which means a focus on quality, collaboration, and the best consumer and employee experience,” Driessen said in a press release. “We understand these core values and are equally committed to nurturing their value-driven culture. This partnership will not only serve the cannabis community, it will bring quality jobs and revenue to the local and state economy.”
Canada’s SLANG currently operates in 12 U.S. states.
A small study published last week in Gynecologic Oncology Reports found 71% of gynecologic cancer patient enrollees reported self-improvement while using medical cannabis of at least one symptom with 15% of patients discontinuing its use due to the side effects.
The study involved 45 patients with a median age of 60-years-old. The study was conducted by researchers at New York University’s Perlmutter Cancer Center, State University of New York Downstate Health Sciences University, and the New York University Grossman School of Medicine.
In all, 56% of the patients used medical cannabis for pain, 47% for nausea and vomiting, 33% for anorexia, and 27% for insomnia. More than 70% of the patients reported improvement in nausea and vomiting, with 36% finding medical cannabis relieved their pain.
“In this limited cohort of gynecologic oncology patients, medical marijuana was effective for the relief of nausea/vomiting, anorexia, and insomnia in a majority of patients but was less helpful for pain management.”—Medical Marijuana Utilization in Gynecologic Cancer Patients, Gynecologic Oncology Reports, June 24, 2021
About 55% of patients enrolled in the study were prescribed formulations with a 1:1 THC:CBD ratio. Inhaled and sublingual formulations were prescribed in more than 70% of patients and some were prescribed more than one formulation, which the researchers said limited their “ability to comment on the effectiveness of specific THC:CBD ratios or preparations for specific symptoms.” The researchers also noted that they “did not explicitly exclude patients who used marijuana recreationally.”
South Dakota’s Flandreau Santee Sioux Tribe is set to open the state’s first medical cannabis dispensary on July 1, the day the voter-approved reforms take effect and months before the system that will be implemented by the South Dakota Department of Health, the Sioux Falls Argus Leader reports.
The tribe is already accepting applications for patients who must have “a chronic or debilitating disease or medical condition or its treatment” that causes “cachexia or wasting syndrome; severe, debilitating pain; severe nausea; seizures; or severe and persistent muscle spasms, including, those characteristic of multiple sclerosis.” Patients who would also generally experience health benefits from using cannabis—such as those with AIDS, anorexia, arthritis, cancer, migraines, and glaucoma— would also be eligible if recommended by a physician.
“The tribe’s goals for the development of cannabis is similar to other jurisdictions. It wants a safe product to produce revenue for tribal programs, to curtail black-market sales of cannabis, and to prevent illegal diversion, especially to children. The program that it developed does that, and also complies with the Department of Justice memoranda that were issued in 2013 and 2014.”—Flandreau Santee Sioux Tribe in a statement via the Argus Leader
The tribe’s dispensary will also accept medical cannabis patients enrolled in programs in other states, countries, or from other tribes. The cost of the ID card is $50.
Last week, South Dakota officials launched a medical cannabis website but enrolling patients into the program is not expected until October.
Forty-two percent of funds from recent Pennsylvania agricultural grants were awarded to hemp projects in the state as the projects garnered more than $194,000 of the $460,000 of the Specialty Crop Block Grants. The program is aimed at crops that are not eligible under the federal version of the program.
The projects include:
$126,730 to Penn State University to optimize genotype selection and management practices for hemp production in the state.
$35,588 to Franklin & Marshall College to establish a comprehensive baseline assessment of oomycete pathogen pressure on hemp.
$32,095 for Alvernia University to complete an environmental assessment of industrial hemp, from seed to structure, by collecting growth and supply chain data.
Agriculture Secretary Russell Redding said the funds will help increase “market access and competitiveness in crops with high growth potential that otherwise may be overlooked.”
“There is strength in our diversity, and we need to ensure growers—no matter size, scope or production—have every opportunity to succeed, strengthening both on-farm vitality and our commonwealth’s economic impact.”—Redding in a press release
In February, the state Department of Agriculture awarded $19,000 in grants for hemp-related projects, including $14,432 to the University of Pennsylvania School of Veterinary Medicine to develop a method for cannabinoid analysis in bovine serum and hemp seed samples and $4,500 to Coexist Build to develop a marketing strategy for agritourism which highlights regenerative, organic farming featuring hemp-based construction.
The Specialty Crop Block Grant was announced in 2019 and, in all, 6.2% of the funds are allocated to recipients and projects located in rural municipalities where at least 20% of the population has been below the federal poverty line since 1990 while 3.8% is allocated to recipients and projects located in urban municipalities where at least 20% of the population has been below the federal poverty line since 1990.
In its annual World Drug Report, the United Nations Office on Crime and Drugs (UNODC) called for a “comprehensive ban on advertising, promoting and sponsoring cannabis” which the body said “would ensure that public health interests prevail over business interests,” according to a Vice report.
The UN can only make such a recommendation and not enforce any rule prohibiting cannabis advertising.
Angele Me, head of research and trends analysis at the UNODC, said in an interview with Vice that the proposal would “put public health interest before commercial interests.”
“Of course it is up to member states to decide if they want to take up this ban. But you have a large private sector now that is pushing to expand the cannabis market with all kinds of products claiming many things. It’s like tobacco advertising 100 years ago, which said tobacco was good for anything. The main thing is to make sure young people are not tricked by adverts into thinking cannabis is a healthy choice, when it’s not.”—Me to Vice
The report also suggests that from 1995 to 2019, the percentage of children and young people that perceive cannabis as harmful fell 40%.
“Such a mismatch between the perception and the reality of the risk posed by more potent cannabis could increase the negative impact of the drug on young generations,” the report said.
Additionally, the World Drug Report 2021 found that cannabis’ potency has risen from 4% in 1995 to 16% by 2019, while potency increased in Europe over the same timeframe from 6% to 11%.
Steve Rolles, from drug reform group Transform, told Vice that whether one agrees with the proposed ban or not, the fact that the UN is “actively engaging with the regulation debate is a tacit acknowledgment that legal cannabis is something that cannot be ignored and has to be positively engaged with.”
Just two nations have ended the prohibition on cannabis—Canada and Uruguay. Canada bans advertisements on retail dispensary doors and windows, celebrity endorsements, deals, the use of “people, characters or animals” or imagery associated with “glamour, recreation, excitement, vitality, risk or daring.” Uruguay bans all cannabis advertising.
The Washington State Liquor and Cannabis Board (WSLCB) is grappling with accusations that the agency hasn’t taken action against hemp-derived synthetic Delta-9 THC making its way into the state’s legal cannabis market, the Cannabis Observer reports. Following public testimony at multiple board meetings, a Delta-8 THC policy statement, and a “deliberative dialog” in May on cannabis plant chemistry, the issue came to a head at a June 16 special board caucus.
Former Kitsap County Prosecutor and current board member, Russ Hauge, said he called the meeting because of “the issues surrounding hemp-based cannabinoids being introduced into our system.” During the meeting, Hauge said he had “no doubt” that hemp-derived Delta-9 was making its way into the state’s regulated market and not always from hemp grown in Washington, the Observer reports. Hauge reportedly attempted to initiate an investigation into the practice but was thwarted by the board’s own Delta-8 policy statement in April and their later qualifying statement, which was posted at the insistence of the industry.
“Why are we not pursuing enforcement action? I suggest that we should, simply as a matter of law. Otherwise, we’re rendering moot our canopy limitation.” — Hauge during the board meeting, via the Observer
Regulatory gray area
Board Member Ollie Garrett questioned whether the agency has the authority to do something, even temporarily. Despite seeking input from staff attorneys, the board was unable to reach a decision on immediate action.
Chair David Postman agreed with Director Rick Garza, suggesting the board hold a “work session ” to focus on the issue with staff and agency lawyers.
During the June 22 board meeting, the subject of hemp-derived synthetic Delta-9 THC came up again, the Observer would later report. After a quick discussion about the inclusion of synthetic Delta-9 in the Delta-8 rule-making project, Board Member Ollie Garrett raised synthetic Delta-9 health concerns.
“Where do we think we should be on that subject at this point?” Garret asked—to which Hauge responded, “as of this moment, status quo.”
“We have staff saying that they are unable or unwilling to proceed with any enforcement kind of action,” Hauge said, according to the Observer.
Postman pushed back on Hauge’s narrative, explaining “a gray area in that statute” was in play and Hauge’s upcoming meeting with staff lawyers would “help in deciding any next steps by the board.”
Hauge would not back down, however, and asked if the staff was still “waffling” on whether synthesized Delta-9 was being introduced into the legal cannabis market. He insisted that WSLCB staff was content to “do nothing.”
Postman clarified that he had “followed up on the question repeatedly” with staff and they were not “sitting on their hands or giving up.”
Hauge argued that the board should hear from those “being damaged economically by allowing synthetic Delta-9 into the system” and the people who were not concerned were those who were “making money off the practice.” Postman countered by questioning whether the issue met the “high bar” needed for public safety emergency rules. Garrett insisted the board be “proactive” and not “reactive” regarding the unfolding situation.
Postman repeated that he was not on one side or the other and was continuing to “ask questions.”
Licensees speak up
During the June 23 board meeting’s public comment session, a number of Washington state-licensed operators voiced their concerns surrounding the practice of introducing hemp-derived Delta 9 into the regulated cannabis market. Those who testified were concerned about improper solvent labeling and they agreed the law was clear that synthetic cannabinoids are prohibited under the state law which says in part:
“Licensed marijuana producers and licensed marijuana processors may use a CBD product as an additive for the purpose of enhancing the cannabidiol concentration of any product authorized for production, processing, and sale under this chapter.”
Crystal Oliver of the Washington Sun Growers Association, who sent a consumer protection complaint to the Washington State Attorney General in April regarding the introduction of Delta-9 into the market, said, “the law is clear, the sale of synthetic cannabinoids is not allowed.”
“Yet we have licensees who are being permitted to sell chemically synthesized cannabinoids to the public with no transparency or truth in labeling,” she said during her remarks. “The law is clear CBD may only be used as an additive to increase cannabidiol content of a marijuana product. Yet we have licensees who are using it to increase the tetrahydrocannabinol content of their products.”
Colorado Gov. Jared Polis on Thursday signed a bill that reduces the amount of concentrates medical cannabis patients older than 21 can buy in one day to 8 grams, sets up a database to ensure patients aren’t exceeding those limits by making purchases at different dispensaries, and imposing new rules on patients under 21-years-old, the Denver Post reports.
The Post described the new rules as the “most sweeping piece of regulatory legislation for the marijuana industry since Colorado first legalized recreational use in 2012.”
Previously, the state’s medical cannabis patients could purchase up to 40 grams of concentrates per day, which state Attorney General Phil Weiser previously claimed “enabled teen access to high potency” cannabis products.
The new rules for medical cannabis patients under 21 require a diagnosis of a “debilitating or disabling medical condition” by two physicians from different medical practices, and in-person follow up appointments every six months unless the patient is homebound. Patients under 21 are restricted to purchasing 2 grams of cannabis concentrates per day under the new law.
The measure also requires the Colorado School of Public Health to study the effects of high potency cannabis products on young adults and requiring packaging on both medical and retail concentrates to include a warning regarding the possible risks of overconsumption.
The bill’s sponsor, Democratic House Speaker Alec Garnett has said the new rules were needed as concentrates are “being pedaled through a black market across high school campuses in Colorado.”
The city of Norfolk, Virginia will no longer require pre-employment drug screenings for any employee not considered “safety-sensitive” and will not randomly drug test any non-sensitive employee throughout the year, WAVY reports. The move comes three months after Gov. Ralph Northam (D) signed the bill to legalize cannabis in the state with portions of the law set to take effect next week.
Deputy City Manager Catheryn Whitesell told the City Council that the city will remain a drug-free workplace, with zero tolerance for drug possession—including cannabis—on city property and that safety-sensitive workers, such as law enforcement and machine operators, will still undergo pre-employment and random drug testing.
“Somebody could have celebrated their job offer 30 days ago, they come in for their drug screening and they probably lose their job immediately.”—Whitsell to the City Council via WAVY
Since January 2020, Whitesell said that of 1,100 city applicants just 14 tested positive for cannabis during the pre-employment process. During the same timeframe, the city has conducted 157 random drug tests and five employees tested positive for cannabis.
Other cities throughout the U.S. are ending the practice of pre-employment drug screening for employees regardless of state cannabis laws. In April, Philadelphia, Pennsylvania announced a ban on the practice for most businesses that operate in the city that are not safety-sensitive. Pennsylvania has legalized medical cannabis use but not recreational use.
Rochester, New York banned pre-employment cannabis testing for city employees last year about a year before lawmakers in the state-approved adult-use cannabis reforms, the Rochester City Newspaper reports. The city will still test prospective employees for other drugs.
Adaptogens are medicinal plants and mushrooms that are experiencing a resurgence in global wellness trends and among Western herbalists. The origin of adaptogens outdates the moniker itself, however, as the name refers to natural medicines that were selected from a variety of ancient human healing practices—but by removing these ancient medicines from their original practice, most participants in the modern adaptogen free-for-all are devaluing the plants’ efficacy and erasing the modality that was long used to diagnose and prescribe their use.
Today, a growing number of brands in the CBD and now psychedelics space are combining their products with adaptogens but frequently without consideration or respect for their cultural origins and/or purpose.
What are adaptogens?
“Adaptogen” is a Western term used to describe plants and mushrooms that affect human physiology in different ways, typically with historical use as ancient healing modalities. The term was coined by Dr. Nikolai Lazarev in 1947 while researching stress resistance to serve the Soviet Union during the Cold War. He was initially researching chemicals before a colleague directed his studies towards plant medicines. His colleague, Israel I. Brekhman, had been inspired by the Nanai hunters who ate Schisandra berries to reduce hunger, thirst, and exhaustion.
Their research led the Soviet Ministry of Health to declare eleuthero, also known as Ci wu jia in Traditional Chinese Medicine, an official herbal medicine in 1962. This declaration marked the beginning of a now-ubiquitous trend whereby Western herbal medicine has touted the benefits of “new” medicinal plants or “superfoods” while ignoring their historical context — while in truth, these ancient medicines were used in indigenous Asian and First Nations cultures for thousands of years before they were “discovered” by the West.
Dr. Lazarev and Brekham completed over 1,000 clinical studies and tested their adaptogenic medicines on Russian Olympians and cosmonauts. They identified adaptogens as plants and mushrooms that carry the following three qualities:
Nontoxic, causing minimal physical or mental side effects
Producing nonspecific responses in the body including physical, chemical, and biological agents
Has a normalizing influence on the recipient’s physiology
A platter of ginseng root, which plays an important role in the traditional medicine of China.
David Winston, RH believes that there aren’t as many official adaptogens as people think. His categorizations encompass nine well-researched adaptogens including Asian ginseng, American ginseng, ashwagandha, eleuthero, Schisandra, Rhodiola, shilajit, and cordyceps. According to Winston, probable adaptogens include holy basil, suo yang, tienqi ginseng, Shatavari, and Morinda. Meanwhile, prince seng, reishi, codonopsis, Guduchi, crossvine, and eucommia are possible adaptogens—and amla, astragalus, maca, and goji berry are considered nutritive tonics.
A spoonful of dried Rhodiola Rosea.
Adaptogens’ appropriation
Western medicine practitioners still don’t recognize the benefits of adaptogens, citing difficulty in discerning these medicines from tonics, anabolic agents, antioxidants, and immune system modulators. But for practitioners of Traditional Chinese Medicine (TCM) and Ayurvedic medicine, they represent established and proven healing methodologies used in their practices for generations.
Meanwhile, many North Americans have started using the wide breadth of adaptogens as spot treatments without learning the holistic approach to using these herbs, fruits, and mushrooms. However, using one adaptogen without the correct understanding could throw one’s system more out of whack. For example, in the Indian practice of Ayurveda, one’s doshas—an internal energy or essence—are taken into account before a practitioner dictates which plants will be suitable to bring balance back to the patient. In that practice, each person is considered to carry a unique combination of doshas, generally with one dominant dosha. A skilled Ayurvedic practitioner will note these imbalances and prescribe a diet and supplements, including herbs and mushrooms, in order to bring more balance to that patient’s life. Seeing the ancient remedies as a quick cure-all not only disrespects that lineage, it could ultimately do more harm than good.
A bowl of maca powder, which is characterized as a nutritive tonic (not an adaptogen).
Adding to this confusion, brands in the CBD industry have lately turned to adaptogens to augment goods including pure CBD oils, capsules, and other products.
Adaptogens in CBD
CBD bands frequently include adaptogenic herbs and other plants in their tinctures, capsules, and product formulations. This is meant to influence the CBD’s effects, such as by promoting sleep or creativity.
Many use CBD as a stress reliever, so the connection between adaptogens and CBD does make some anecdotal sense. Examples may include an infused oil made with reishi mushroom to aid the immune system, a CBD capsule with ginkgo and bacopa monnieri that is supposed to improve mental clarity, or truffles with ashwagandha and maca meant to boost one’s stamina. Both adaptogens and CBD are believed to promote homeostasis, which draws another natural connection between the two products.
However, without the help of a practitioner, these products may not be as helpful as the creators hope—and worse, their misuse could cause actual harm.
The future of psychedelics, through the lens of adaptogens
Some companies have started to use adaptogenic mushrooms and CBD in combination, seemingly in preparation for a regulated psilocybin market. Consider the January 2021 launch of Caps by Cookies: their products combine cannabinoids, terpenes, and medicinal mushrooms in various combinations. This recipe is aligned with the usual adaptogenic CBD brands but the branding features mushroom cartoons that look nothing like the lion’s mane, reishi, or cordyceps used in the formulations. Instead, they appear as blue-capped psilocybin mushrooms bent into the word ‘Caps.’
Caps itself is a common term in the psychedelic community, as many trippers believe the most psychoactive qualities are found in this part of the shrooms. This choice of branding begs the question: are they positioning to capitalize on the slow decriminalization and eventual regulation of psilocybin? If so, they aren’t the only corporation that would be posturing for psychedelic marketing or even patenting.
In February 2021, a startup patented the combination of cannabis and psilocybin mushrooms to treat psychological disorders. The startup, CaaMTech, has filed 110 psychedelic patents since 2017 but this was the first to be approved. When the podcaster and author Tim Ferriss tweeted concerns about psychedelic patents, that discourse led to a telling Vice article exploring the possible dangers and inevitable greed that could shape the future of psychedelic medicine.
Psilocybin mushrooms in a wooden box.
Like adaptogens, psilocybin was used by indigenous people long before the rise of Western medicine. The treatment’s patenting and further colonization may lead to the same erasure of ancient knowledge that occurred in the Soviet Union when Dr. Lazarev equated all traditional healing herbs under the same moniker. Ignoring the established work of predecessors in the name of Western science doesn’t help the cause of medicinal research or the people it is meant to serve. And unfortunately, if the adoption of these substances by cannabis culture is any hint, the same fate likely awaits future psychedelic medicines.
Conan O’Brien and Seth Rogen shared a joint on live television during the late-night host’s show on Tuesday.
It is the final week of ‘Conan’ before O’Brien’s retirement and the comedian had asked Rogen for advice on how he should spend his free time after decades of being a late-night host.
“I would suggest—this is going to be hilariously on-brand—try smoking a lot of weed for a long time,” Rogen said.
“I don’t smoke any weed, and that’s not a judgement,” O’Brien said. “It’s not that I have any problem with people smoking pot, I think it seems to be a fine herb … but the couple of times I tried it, nothing really happened. … But you own a weed company and … you know me, what would you want me smoking?”
To which Rogen produced a hand-rolled joint and handed it over amid cheers from the live audience.
“Don’t smoke that now — or do, this will be a great, weird show,” Rogen said.
In the video, Rogen looks surprised when O’Brien asks for a lighter and proceeds to spark the joint on-camera, in a historical first for the TBS network. O’Brien passes the joint and Rogen takes a hit, then passes it to O’Brien’s longtime sidekick Andy Richter, who partook as well.
Rogen confirmed later on Twitter that the event was “genuinely” unplanned and called it surreal.
I smoked weed with @ConanOBrien his show and was legit terrified that I got him too high haha. (This was a surreal and shocking moment for me and was genuinely unplanned) https://t.co/0twpCHgTUw
Rogen is the co-owner of Houseplant, a cannabis brand in partnership with Canopy Growth; Rogen co-founded the brand with longtime collaborator comedian Evan Goldberg. Houseplant’s cannabis products (and accessories) are currently available in the California marketplace.
The Rhode Island Senate on Tuesday voted 29-9 to legalize cannabis in the state, moving the legislation on to the state House of Representatives, WPRI reports. The bill includes a 20% tax on adult-use cannabis sales and allows for home cultivation.
It marks the first time either chamber of the Rhode Island Senate voted on a broad cannabis legalization proposal.
House Speaker Joe Shekarchi (D) has already indicated that the body will not consider a cannabis legalization bill before the current session ends, but it could consider it in a special session in the fall, according to the report.
The bill did not include provisions submitted by Gov. Dan McKee, including removing language creating an independent Cannabis Control Commission. McKee called the creation of the commission “the main thing” he and lawmakers disagree on citing his opposition to “adding additional costs to government.” McKee proposed tasking the Department of Business Regulation’s Office of Cannabis Regulation overseeing the industry.
McKee took over as governor in March after his predecessor, Gina Raimondo, was confirmed as commerce secretary in President Joe Biden’s Administration. McKee had served as Raimondo’s lieutenant governor. In January, McKee said he thought it was time legalization happened in the state after opposing the reforms as recently as 2019.
Rhode Island and New Hampshire are the last two New England states that have not passed adult-use cannabis law reforms. On Tuesday Connecticut Gov. Ned Lamont (D) signed the lawmaker-approved bill, portions of which—including adult-use and possession—take effect July 1.
Queens District Attorney Melinda Katz on Tuesday asked the New York City borough’s criminal court to dismiss and seal more than 3,200 low-level cannabis possession cases, Gothamist reports. The request includes 894 active cases with defendants currently awaiting arraignment and another 2,361 cases for which summons were issued and have outstanding warrants.
“There’s no point spending criminal justice resources on decriminalized behavior. But at the same time, a lot of our cases today are open warrants and open warrants are very dangerous to have on your record. … This is just a step we took to bring a little more fairness into the system, to make the system better and more equitable in the borough of Queens. There’s thousands of people now who don’t have warrants when they are stopped by the police. That’s game changing.”—Katz to Gothamist
The judge stayed the request order for 90 days, meaning the action will take at least that long to be finalized in the system.
Earlier this month, Bronx DA Darcel Clarke dismissed more than 6,000 misdemeanor cannabis cases where the primary charge was possession or sale. Officials in Brooklyn and Manhattan have also tossed similar cases following the legalization reforms passed by lawmakers in March. A spokesman for the Staten Island district attorney told Gothamist that the office is working with the court to dismiss more than 1,100 low-level cannabis cases dating back to the 1980s.
Hettie Powell, the managing director of the Queens Defenders, described the move as a “great, important event.”
“Most of the people who have been arrested and charged and pleaded guilty with marijuana possession are people of color,” she said in an interview with Gothamist. “Now, when these convictions are dismissed, it’ll give them the opportunity to go get jobs that they couldn’t have gotten before, based on their criminal convictions.”
The University of Illinois, Springfield (UIS) is offering non-credit online courses in cannabis education through its Office of Continuing and Professional Education and a partnership with Green Flower.
Each certificate program includes three, eight-week courses covering the business of cannabis, agriculture and horticulture, law and policy, and healthcare and medicine. The program cost is $2,500 per certificate but the university is offering a $300 discount for students who enroll in the August term.
Rob Kerr, UIS associate director of Continuing and Professional Education, said the courses are necessary amid the state’s “booming” cannabis market.
“We are excited to be the first university in Illinois to partner with Green Flower to offer in-demand cannabis certificate programs. The Illinois cannabis sector has enormous growth potential. There are 25 dispensaries and cultivation centers within 100 miles of our campus, and over 16,000 employees statewide.”—Kerr in a press release
Another Illinois University—Western Illinois University—announced earlier this week that it had graduated its first student with a minor in Cannabis & Culture in the spring 2021 class. That minor focuses on social justice issues related to cannabis use and the cannabis industry and is believed to be the only one of its kind in the U.S.
The UIS certificates are designed to “complement existing credentials and advance the knowledge and practice of cannabis for professionals across multiple sectors,” the university said.
The former CEO, vice chairman, and a member of the board of directors for Canadian licensed producer CannTrust Holdings have been charged with fraud, making false statements to authorities, and authorizing, permitting, or acquiescing in the commission of an offense, the Ontario Securities Commission (OSC) announced on Tuesday.
Former Chairman Eric Paul and former Vice Chairman Mark Litwin were also charged with insider trading. The charge was not applied to former CEO Peter Aceto.
The OSC said that in press releases, corporate disclosures, analyst calls, and prospectuses, the company officials asserted that CannTrust was compliant with regulatory requirements, and they included all cannabis production in the company’s financial statements, without stating that half was grown without a license.
Additionally, Litwin and Aceto are accused of signing off on prospectuses used to raise capital in the U.S. which stated that CannTrust was fully licensed and compliant with regulatory requirements in Canada. Litwin and Paul also allegedly traded shares of CannTrust while in possession of the otherwise undisclosed information regarding the unlicensed cultivation.
Jeff Kehoe, director of enforcement at the OSC, said the case “demonstrates how the OSC’s quasi-criminal team, working closely with policing partners, is evolving to focus on more complex cases involving senior-level market participants, in addition to fraudsters and repeat offenders.”
The attorneys for all three men told Bloomberg that they would fight the charges.
Aceto’s lawyer, Frank Addario of Addario Law Group LLP, told Bloomberg that the former CEO would plead not guilty and that “the evidence will show that he acted with integrity at all times.”
Litwin’s lawyer, Scott Fenton of Fenton, Smith Barristers, told Bloomberg that his client “intends to vigorously dispute the charges that have been made against him.”
Paul’s lawyer, Paul Le Vay of Stockwoods Barristers, said he and his client “look forward to vigorously defending … the charges and answering the allegations,” in an interview with Bloomberg.
The men are scheduled to appear in court for the charges on July 26.
The U.S. Supreme Court has declined to hear a case challenging whether the Internal Revenue Service (IRS) can determine whether state-approved cannabis sales are prohibited by the federal Controlled Substances Act, Law360 reports.
The Green Solution LLC owner Eric Speidell and other cannabis companies petitioned the high court to hear their case following a previous decision by the Tenth Circuit Court that ruled the IRS could use 280E to determine whether a business or individual was in violation of criminal drug laws.
James D. Thorburn, an attorney for Speidell, in an interview with Law360 said the Supreme Court’s decision was “disappointing.”
“Our founders fought and died to keep revenue agents from having the unchecked power to rummage through our homes in search of contraband. Unfortunately, we have to accept that we just lost one of our most basic freedoms.”—Thorburn to Law360
Acting Solicitor General Elizabeth Prelogar, the fourth-highest-ranking official in the U.S. Department of Justice, has twice filed briefs with the Supreme Court asking them to support the government’s positions in cannabis-related 280E cases and the previous decisions of lower courts.
The Tenth Circuit in October determined that a lower court correctly upheld the IRS summonses on the Green Solution and other companies owned by Speidell, as well as on Medicinal Wellness Center LLC, which joined Speidell in his legal challenge. The appeals court applied an April 2020 precedent in the Standing Akimbo LLC case which found that the IRS was justified in requesting information from the Colorado Department of Revenue during an audit.
In May, the Supreme Court also declined to hear an appeal case by California cannabis companies that sought to challenge their tax bills; however, that denial was based on the companies filing their petitions with the U.S. Tax Court one day after the deadline.
The court did not elaborate on its decision to turn down the Green Solution case.
The State University of New York, Fulton-Montgomery Community College is set to offer two cannabis-related individual studies certificates following the approval of legalization reforms earlier this year, WNYT reports. The college is partnering with Vireo Health and Goodness Growth Holdings on the cultivation technician and cannabis laboratory technician courses.
The program is the first offering by a college or university in the Capital Region to offer the certificate programs.
Vireo Health CEO Kyle Kingsley told WNYT that there are “intricate details in growing any plant” and that growing them well, consistently, and safely, requires a skilled team. He added that there is an overlap between medical and adult-use consumers.
“There’s … still a large percentage of people are looking for help to sleep better, to alleviate their pain, to treat some symptom or another, so there is tremendous overlap and we’re well poised to position ourself in the wellness market as well.”—Kingsley in an interview with WNYT
The company has facilities just a few miles from the FMCC’s Johnstown campus.
The Cultivation Technology Certificate will educate on plants cultivation duties and techniques, while the Cannabis Laboratory Technician will train students in cannabis manufacturing and production, focusing on delivery formats such as vape cartridges, tincture bottles, tablets, and soft gels.
Connecticut Gov. Ned Lamont (D) signed the state’s cannabis legalization bill into law today, closing out a multi-year effort by pro-cannabis advocates and lawmakers.
Under the new law, adults aged 21 or older will be allowed to use and possess cannabis starting July 1. Legal purchases and possession will be capped at one and a half ounces on someone’s person but up to five ounces can be legally stored at home or in a vehicle’s trunk or glove box. Regulated cannabis sales are not expected to roll out until May 2022.
During the signing ceremony, the governor said the bill was public health- and equity-focused.
“People have been working on this for 10 years. It’s been a long time coming. I think we have a good bill that puts public health first.” — Gov. Lamont, during the bill’s signing ceremony
ICYMI: Watch today’s bill signing ceremony for legislation legalizing and safely regulating the adult-use of cannabis in Connecticut
The law was approved last Thursday during a special session after House lawmakers failed to take up the Senate-approved legalization bill in the final days of the legislative session. In a twist of irony, Connecticut’s legalization bill was formally approved by lawmakers on the 50th anniversary of President Richard Nixon’s declaration of the drug war.
With the signing, Connecticut is officially the fifth state to legalize adult-use cannabis in 2021, following in the footsteps of New Jersey, New York, New Mexico, and Virginia. Additionally, New Hampshire and Rhode Island are now the only remaining New England states that have not yet adopted the reforms.
Two former consultants for cannabis delivery and technology company, Eaze, who were found guilty of defrauding banks into processing more than $150 million in cannabis purchases, will each serve more than a year in prison.
U.S. District Judge Jed Rakoff last week sentenced Hamid Akhavan, who is described as the leader of the scheme, to 2 ½ years in federal prison along with a $100,000 fine. Rakoff also sentenced Ruben Weigard, a co-conspirator, to 15 months in prison and a $50,000 fine. Both men were also ordered to pay more than $17.5 million in restitution.
Former Eaze CEO Jim Patterson last year pleaded guilty to his role in the scheme. Eaze was never charged with any crimes and cooperated with the federal investigation which found the consultants used shell companies and fake websites to hide cannabis sales as shipments of dog food, beauty products, beverages, and diving gear from 2016 to 2019. Akhavan and Weigard argued that the banks knew they were processing credit card transactions for cannabis but looked the other way.
In a press release, Manhattan U.S. Attorney Audrey Strauss described the crime as an “elaborate web of lies to deceive U.S. banks and credit card companies into processing more than $150 million in marijuana transactions, in violation of those institutions’ strict policies against such payments.”
“This massive fraud undermined the fundamental integrity of the U.S. financial system, which relies on banks’ ability to identify the nature of the transactions they process. Now Akhavan and Weigand have rightly been sentenced to prison for their crimes.”—Strauss in a statement
Despite cannabis being legalized either for medical or adult-use throughout most of the U.S., it remains federally outlawed and cannabis companies often do not have access to traditional financial services, including banking and credit card processors.
The number of U.S. military veterans using cannabis jumped from 9% in 2014 to 12% last year, according to a study published in the journal Addictive Behaviors. The data for the study came from the 2019-2020 National Health and Resilience in Veterans Study, which included 4,069 respondents.
The researchers—from the University of California, San Diego and Yale University’s National Center for PTSD—found that of the veterans who reported using cannabis within the last six months, just 1.5% were enrolled in a state-approved medical cannabis program, and 2.7% screened positive for cannabis use disorder. Combat veterans, Black veterans, and those with physical disabilities were most likely to be enrolled in a medical cannabis program.
The federal agency that runs the healthcare system for veterans, Veteran Affairs (VA), does not recommend cannabis to patients at agency-run hospitals as it remains outlawed federally. In April, a bipartisan group of members of Congress introduced the Veterans Medical Marijuana Safe Harbor Act which would temporarily legalize medical cannabis possession for U.S. combat veterans at the federal level, if recommended by a doctor and allow VA physicians to recommend cannabis in states where it is legalized for medical use.
That bill was referred to the House committees on Energy and Commerce, Judiciary, and Veterans’ Affairs in April but has not yet received a hearing.
Last year, the Veterans’ Affairs Committee approved a different bill that would allow VA doctors to recommend medical cannabis in states where it is legal; however, that bill was not voted on in either chamber of Congress.
The first of five Western Illinois University students with a minor in Cannabis & Culture was part of the school’s spring 2021 graduating class. The interdisciplinary minor—so far, the only one in the nation—focuses on social justice issues related to cannabis use and the cannabis industry.
There are four other current students minoring in Cannabis & Culture.
Alison Coats said the minor taught her about the medical efficacy of cannabis and about the story of Charlotte Figi, the girl with Dravet Syndrome who became a leading figure in the CBD movement and the namesake of the ‘Charlotte’s Web’ strain. Figi died last year amid the coronavirus pandemic from, what her family described as, COVID-like symptoms.
“She even changed the mind of Dr. Sanjay Gupta (from CNN) about the medical and moral obligations our society has to allow people to use cannabis to treat certain illnesses.”—Coats in a statement
The interdisciplinary minor is comprised of courses from anthropology, botany, history, liberal arts and sciences, philosophy, religious studies, English, and political science, WIU said in a press release. It includes such courses as Cannabis Culture, Religion & Drugs, Contemporary Moral Problems, History of Drugs, Introduction to Public Policy, and Ethno-botany, among others.
WIU Religious Studies and Liberal Arts and Sciences Professor and co-creator of the minor, Sarah Haynes, said the program “provides a solid foundation for understanding the socio-cultural, historical, and politics of cannabis use in the U.S. and around the world.”
An online version of the class will begin in the Fall and students who take the minor along with at least one religious class may be eligible for a $1,000 per semester Mary Olive Woods Scholarship.
A new study by cannabis research firm Brightfield Group suggests that half of new cannabis users are consuming five or more times a week with 22% consuming more than once a day, according to the U.S. Cannabis Consumer Trends Report outlined by Forbes.
Although the research shows women are younger and heavier users than men, the numbers differ by region. In Michigan, 59% of new cannabis consumers were women, while that figure was 43% in California. Accompanying the increase in women purchasers, 6% of 2020 cannabis consumers were new users and a substantial 22% were Gen Zers, Forbes reports.
Jamie Schau, senior insights manager at Brightfield Group, believes the numbers show adult-use cannabis’s “normalization, increase in popularity and diversity.”
“This is an important departure from the classic cannabis consumer profile and those participating in the space will benefit from adapting to the evolving marketplace.” — Jamie Schau via Forbes
Brightfield predicts the next milestone in the ongoing cannabis movement will be the SAFE Banking Act, which will make it legal for banks to work with cannabis businesses without fear of prosecution. However, the study does throw some shade on the new numbers by highlighting the federal path to legalization—despite the Democrats gaining control of the presidency and Congress—will continue to be “incremental” due to the federal government’s “awkward” walk toward decriminalization.
Expert business analysis and accounting services are vital when launching and scaling a business, especially in the cannabis industry.
We recently asked Kenneth about money management in the cannabis space and how Equibis works to help small businesses navigate potential financial pitfalls and find success even without enormous backing capital. This Q&A also covers the biggest challenges facing cannabis industry startups, Kenneth’s work to facilitate diversity in the cannabis space, the unique financial challenges for social equity entrepreneurs and others from underserved communities, his best advice for cannabis startups, and more.
Scroll down to read the full interview!
Ganjapreneur: After years of experience in finance and accounting, what drew you to working with cannabis entrepreneurs?
Kenneth Mason: I think what you will find with a lot of folks is our personal connections. I’ve had family locked up, family caught in violence surrounding the cannabis. My first time consuming was at about 12/13. I grew up on the south side of Chicago and quite honestly weed has always been a part of everyday living. Going through school and eventually becoming a CPA, I left the world of auditing to start my own business work with small businesses in what I call underserved communities. Most of the companies do not have access to high level CFOs and strategic business advisors. So my heart became set on providing this type of impact on these businesses from communities that I grew up in. As I became more cemented in the community, I began joining social justice initiatives surrounding cannabis. and I quickly saw a need from a business perspective. I immediately began doing my research, learninig, and helping out cannabis companies that I eventually built relationships with.
What is the biggest challenge facing cannabis businesses when it comes to accounting and finance?
By now, I imagine everyone knows that my significant hurdle is 280e. It’s a part of the Internal Revenue Tax Code. To sum it up as simply as possible, a cannabis company cannot take any tax deductions from their gross income. Quick example of how devastating this tax code is. Say a company brings in $100,000 in revenue and has expenses of $99,000 from paying for rent, marketing, employees like an office manager, etc. You only have $1,000 in profit. The IRS says you cannot deduct marketing, certain salaries, etc because cannabis is still a federally illegal drug. The average business gets taxed on the $1,000 profit whereas the cannabis company can easily get taxed on an amount closer to the $100,000 of revenue it brought in. How can a business pay 25% percent on $100,000 which is $25,000 when they only made $1,000 in profit?
For a cannabis startup, how does the experience of working with Equibis differ from working with other accounting services?
Most accounting firms give you the basic bookkeeping and tax work. Some provide audit services. Those are things you are required to have. But, the reality is that getting your taxes done for you at the end of the year won’t make your business successful. It won’t help you reach your financial goals or create a financial plan. What makes Equibis stand out is our focus on guiding your business every step of the way to reaching your revenue goals, profit goals, short term and long term planning goals and much more. I often ask new startups, how much cash do you plan to have by the end of next month? Next year? I have yet to get an actual answer. We don’t simply look at what happened last year or last month. The value we provide comes from our ability to plan for the future, to show you where your business is headed as of right now and what needs to happen in order to be more successful next month. By looking ahead we are also able to avoid the hair on fire crisis mode that most businesses operate with. When my team is able to show you, “Hey two months from now we’re projecting the business to have negative cash flow, let’s push the purchase of the new machine a couple of weeks when we’d have more cash come it”, we help keep the doors open.
Do you serve clients in other markets and regions, or do you primarily stay local to Chicago/Illinois?
Equibis is a 100% virtual firm. We serve nation-wide. We do, however, like to pop in a couple times a year, that’s always fun.
What is the “profit-first model” and how does it play into the services that Equibis offers?
The goal of every business is to be profitable. Every business owner deserves to have their business take care of them financially. So, profit is typically our main priority. It’s simple really. If you aren’t profitable, the business fails. So we help make business decisions with the perspective of how it affects short term and long term profitability.
What are some of the services you offer to underserved communities, and how did this become part of the Equibis mission?
Most of these businesses cannot afford a CFO that can easily run up to $100k to $200k a year. We provide a lot of the services you would typically find with a corporate CFO. We lead the finance department. We look at pricing strategy, cost analysis, employee performance plans, tax planning, employee benefits, all of these things and make sure it’s done correctly and also in a way that the company is still profitable today and tomorrow.
Why is it essential for social equity applicants and other underserved small businesses in the cannabis industry to have financial representation?
Many people start businesses or get into the cannabis industry because of their passions for these things. Unfortunately, passion isn’t enough to run a successful business. Having a company that understand many of the struggles you will face not only from a business perspective but a social and a personal perspective, allows you to work with people you can trust.
Do the financial challenges facing social equity applicants differ from those facing MSOs and other larger operators?
In short yes, most social equity applicants do not have the capital to fund their ventures on their own. I believe that’s why you see the different states attempting to pass bills that would support these applicants financially and operationally. It’s no question social equity applicants deserve many seats at the table, but they also deserve the support to sustain those positions. Large operators have the funding to not only finance their ventures, but to also survive unforeseen events like a pandemic or waiting for licenses to be given. An example is in Illinois. Social equity applicants who did not have as much capital struggled with paying to hold their place on a lease in hopes of acquiring a license that the state had withheld for a year.
Are cannabis businesses at higher risk of being audited? How does working with Equibis lower this risk and/or help in the case of an audit?
Absolutely. An article came out from the IRS blatantly saying increased focus on auditing the cannabis industry is a better use of time because of the higher rate of these audits uncovering issues. It’s complicated. So we not only make sure cannabis companies are properly filing and paying their taxes, but that they are 100% audit ready. Part of working with us means that we set processes in place to cover our butts during any audit. What this also does is take away the stress from the owners. It ends us being passed audits with less involvement from the owners.
What are some of the additional benefits, beyond preparedness and avoiding costly mistakes, that cannabis startups can get out of a partnership with a financial advisor?
You will have a well-thought-out, structured plan on how to achieve all of your business goals and ultimately your goals for your life.
What are some common financial mistakes you see in the industry and how should cannabis companies address them?
Some common financial mistakes I see often are not having good standard operating procedures for cash or having a plan for how money moves within the company. With the standard operating procedures for cash, it’s critical to have good policies and procedures in place for prevention of theft, fraud and for being able to know where every single dollar is at all times. As far as the cash planning/management, smaller companies are not taking the necessary steps to be able to look at their cash position and say “this money is set aside for bills for the month, this amount is going to taxes, this for payroll, this is going to additional inventory. And at the end of the month, our cash balance should be $XXX”. They are spending without tracking and without having an idea of what type of position they’ll be in, in the future.
What’s your advice for entrepreneurs who are launching their first cannabis start-up?
Get your A team together, and make sure to have people with the skills to cover every important area of the business from compliance to finance to people management. Also, make it a priority to systematize and document everything as much as possible. Improving the system of how you operate and documenting it so that it is easily repeatable is necessary to scale and grow your business.
Thanks again, Kenneth, for answering our questions and sharing your expertise! To learn more about Kenneth Mason or Equibis, visit EquibisAccounting.com.
