Video: NCIA Today – Thursday, May 19, 2022

NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff.  Join us every other Thursday on Facebook for NCIA Today Live.

This week’s episode of NCIA Today is brought to you by Senseon Secure Access.

State-Level Insights: Momentum Builds Across Our Nation 

By Sadaf Naushad, NCIA Intern 

Although the action-packed April must come to an end, the fight for cannabis reform never stops! With U.S. Senators delaying the much-anticipated introduction of the Cannabis Administration and Opportunity Act (CAOA) last month, Congress has a lot of work to do. 

In the meantime, a congressional bicameral bipartisan committee is considering the Secure and Fair Enforcement (SAFE) Banking Act as an amendment to the House’s U.S. Innovation and Competition (COMPETES) Act.

Now let’s focus on action occurring within the states. State-level updates help provide us with insights on cannabis reform progress at the federal level. As more state constituents vote in favor of cannabis initiatives, reformation support overall increases within the United States. Efforts to reform cannabis policies at the state level encourage members of Congress at the federal level to enact legislation.  

Let’s take a look at this week’s state-level insights: 

New York

As the legal cannabis market is set to launch later this year, New York lawmakers intend to ensure that a sufficient supply of marijauna exists. Last month, state regulators voted to allow conditional marijuana cultivation licenses to several hemp businesses. Regulators also established that adults with prior cannabis convictions, along with family members who have previously faced criminalization, would receive the first round of adult-use cannabis retailer licenses – ahead of present medical marijuana businesses. This week, lawmakers recently approved a second round of applications for recreational cannabis cultivators. Additionally, the Cannabis Control Board (CCB) passed amended regulations granting medical marijuana patients to grow their own plants for personal use.   

Delaware

A Delaware House Committee approved a bill that would terminate 50 years of cannabis prohibition and criminalization. For the second time in history, Delaware’s District 24 Representative Ed Osienski (D) introduced House Bill 371, legislation legalizing cannabis possession and gifting. The legislation is attached to a companion measure that would build a regulatory framework for the market. Its two-piece model comes after the House defeated a prior measure in March that incorporated both components. 

South Carolina

An eight-year attempt to legalize medical marijuana in a largely conservative state abruptly came to an end on the House floor Wednesday. South Carolina’s District 13 Representative and House Leader John McCravy (R) ruled that the Session 124 measure comprises an unconstitutional tax increase, thereby ceasing further consideration of the bill. According to Representative McCravy, since the bill contains a tax on medical cannabis, lawmakers should have introduced the bill in the House under the state constitution’s article for legislation that raises revenue. The bill’s sponsor, U.S. Senator Tom Davis (R), is rapidly seeking other ways to keep the issue active as the session concludes. 

Missouri

In preparation for the 2022 midterm elections, a Missouri House Committee approved a GOP-led joint resolution seeking to place cannabis legalization on the November ballot. Missouri’s District 98 Representative Shamed Dogan (R) sponsored an amended version of the legislation, in which The Special Committee on Criminal Justice passed in a 7-2 vote. The amended bill eliminated provisions that would remove the state’s current separate medical marijuana program and set regulations regarding taxation in the legal market. Under the amended resolution, marijuana offenses would be removed from the Missouri criminal statute, permitting adults to possess, use and sell cannabis without facing penalties. 

Washington

State officials Lieutenant Governor Denny Heck (D), Attorney General Bob Ferguson (D), Treasurer Mike Pellicciotti (D) and Governor Jay Inslee (D) sent a letter to congressional leaders, outlining the urgency of passing the Secure and Fair Enforcement (SAFE) Banking Act. With Washington being one of the first states to legalize cannabis, lawmakers remain frustrated at the industry’s lack of access to essential financial services stemming from federal prohibition. 

New Jersey

Last month the state attorney general’s office released a controversial document detailing how New Jersey’s marijuana laws currently authorize police to use cannabis when not working. This week, New Jersey lawmakers introduced a string of bills designed to encourage employers to penalize workers from consuming cannabis off duty in compliance with state law. Punishable workers specifically include law enforcement officers and first responders. Now, three new bills exist that intend to enforce restrictions on such activity for particular employees. New Jersey’s 6th Legislative District Representative Louis Greenwald (D) aims to amend state statute to contain the following provisions: penalizing police for using cannabis, conducting random drug tests and the right to refuse job applicants due to lawful cannabis use. Although Representative Greenwald’s bill targets police officers, two other measures presently remain that would also impose employment-based restrictions on lawful marijuana use. 

Ohio

The Coalition to Regulate Marijuana Like Alcohol (CTRMLA) filed a lawsuit to keep cannabis legalization on Ohio’s November 2022 ballot. In December 2021, CTRMLA turned in petition signatures to Ohio’s secretary of state’s office, but the office deemed the signatures insufficient. To advance the legislative review of their measure, CTRMLA turned in additional petitions on January 13, 2022. According to the state statute, however, a ballot petition must be submitted “no less than ten days prior to the commencement of any session of the general assembly.” The session commenced on January 19, falling outside of that ten-day certification window. As a result, CTRMLA contacted Franklin County Court of Common Pleas, requesting a  ruling on a prospective challenge concerning the timing of the group’s initial signature submission to Ohio for the reform proposal. 

Stay tuned for more updates on cannabis policy reform. If you are interested in learning more about NCIA’s government relations work and how to get involved please reach out to Madeline@thecannabisindustry.org

 

Video: NCIA Today – Thursday, May 5, 2022

¡Happy Cinco De Mayo! NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff.  Join us every other Thursday on Facebook for NCIA Today Live.

NCIA Today is brought to you this week by Senseon Secure Access.

Video: NCIA TODAY – Thursday, March 10, 2022

NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.

Member Blog: Hemp Cultivators and Processors Get a Head Start in New York Adult-Use Cannabis Industry

by Charles Messina and Jennifer Roselle, Genova Burns LLC

While the Garden State and Land of Steady Habits are convincingly in the lead of the tri-state dash towards adult-use cannabis sales, new legislation passed last week at least gives the Empire State a burst of energy. 

There has been much anticipation since the Marijuana Regulation and Taxation Act legalized cannabis in New York for adults last year. But only medical patients in the state can legally purchase products right now. New York’s slow start to recreational sales has reportedly led to even more unregulated products flooding the marketplace, including delta-8 THC — which is banned under NY state law though widely being sold throughout the state.  

By Governor Hochul signing Senate Bill 8084A into law on February 22, 2022, the legal cultivation, processing, and distribution of cannabis in New York should be accelerated. Specifically, the new legislation permits hemp cultivators and processors to apply for growing and processing adult-use cannabis, and aims to promote certain equity goals in the process. It creates two new temporary license categories: (1) conditional adult-use cultivator licenses; and (2) conditional adult-use processor licenses. These licenses must be issued by December 31, 2022, and will be valid through June 30, 2024.

Among other requirements, applicants seeking conditional cultivator licenses must be prepared to demonstrate they are authorized hemp growers in good standing. Although they must only show good standing since December 31, 2021, applicants must also show proof of growth for two of the last four years.  

Cultivators must also comply with geographic restrictions for growing and are limited to outdoor or greenhouse settings. Outdoor facilities may have a maximum of 43,560 square feet of flowering canopy. Greenhouse canopy may not exceed 25,000 square feet, and can use up to 20 artificial lights. As expected, licensees must also comply with any environmental standards and requirements mandated by the Office of Cannabis Management. 

For those seeking conditional processor licenses, licensees must hold an active cannabinoid hemp processor license. This license must have been granted before January 1, 2022. And, as a condition of licensing, transfer of ownership will be restricted through the end of the conditional period. The processor license will allow the acquisition, possession, processing, and sale of cannabis, along with enabling the licensees to engage in blending, extracting, infusing, packaging, labeling, branding, and preparing cannabis products.  

In addition, all conditional licensees must enter into a labor peace agreement, participate in an environmental sustainability program and social equity mentorship program. Licensees must also, among other things, become operational within six months from the day they receive the conditional license.

Hemp farmers and processors are no doubt getting a big nugget from the Big Apple. While more regulations on adult-use licensing are anticipated soon, a trail is now blazed for certain New Yorkers in the hemp industry and social equity participants.


Charles J. Messina is a Partner at Genova Burns LLC and specializes in Franchise & Distribution, Agriculture and Cannabis Law. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.

Jennifer Roselle is a Partner at Genova Burns LLC and specializes in Cannabis Law. She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.

For over 30 years, Genova Burns has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions. 

Our firm is proud of its proven track record of assisting multiple clients with being awarded medical licensure in New Jersey, and continuing to counsel clients on the dynamic federal and state regulatory landscape, as well as with corporate transactional, labor/employment, real estate, land-use and other issues.

Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.

 

Across the Country – State Cannabis News and Movement

by Madeline Grant, NCIA’s Government Relations Manager

As the deadline to submit feedback for the Cannabis Administration and Opportunity Act approached last week, our Government Relations team worked tirelessly to submit a detailed analysis and recommended improvements on behalf of the legal cannabis industry. The full comments and an executive summary can be downloaded here. The Cannabis Administration and Opportunity Act (CAOA), submitted in July by Majority Leader Charles Schumer (D-NY) and Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), would remove cannabis from the schedule of controlled substances, create a regulatory structure and federal guidelines for cannabis products and state-legal markets, and is intended to support restorative justice for the people and communities that have been disparately hurt by prohibition while ensuring fair opportunities in legal cannabis markets for small businesses and marginalized communities. 

The introduction of the comprehensive draft language was a pivotal moment for the United States Senate and NCIA will continue to do whatever we can to ensure value-driven policies for the cannabis industry. Meanwhile, we continue to see movement at the state level as support for cannabis legalization efforts continues to grow. Here are some important updates happening at the state level.

California

California officials announced that they are soliciting proposals for a program aimed at helping small marijuana cultivators with environmental clean-up and restoration efforts. The California Department of Fish and Wildlife’s (CDFW) Cannabis Restoration Grant program will release applications this fall and remain open through spring 2023. The $6 million in potential funding, which comes from cannabis tax revenue, must go to government agencies, California nonprofits, or Native American tribes who would then work with cultivators on environmental efforts.

New York

The newly inaugurated governor of New York says she wants to “jumpstart” the implementation of cannabis legalization. Governor Kathy Hochul took a major step by making two key regulatory appointments to oversee the state’s cannabis market. Soon after they were quickly confirmed by the Senate during a special session. Former New York Assemblywoman Tremaine Wright (D) will serve as chair of the Cannabis Control Board, and former Drug Policy Alliance (DPA) staffer Christopher Alexander will be the executive director of the state’s Office of Cannabis Management.

Ohio

Ohio activists can begin collecting signatures for a 2022 ballot initiative to legalize marijuana in the state. The Coalition to Regulate Marijuana Like Alcohol (CTRMLA) launched its ballot effort last month. The new initiative is a statutory proposal and if supporters collect 132,887 valid signatures from registered voters, the legislature will then have four months to adopt the measure, reject it, or adopt an amended version. In the case of lawmakers not passing the proposal, an additional 132,887 signatures will be required to place the proposal before voters on the ballot in 2022.

Missouri

Another adult-use legalization proposal has been filed. Legal Missouri 2022 submitted the latest measure to the secretary of state’s office, and it will now go through a review period before potentially being certified.

New Mexico

The Cannabis Control Division announced applications are now open for businesses interested in legal cannabis producers licensed by the state of New Mexico. After an application is submitted, regulators will have 90 days to issue a determination.

Colorado

Colorado voters will decide on an initiative in November that would raise cannabis taxes to fund programs that are meant to reduce the education gap for low-income students. The secretary of state confirmed that the campaign behind the measure collected more than the required 124,632 valid signatures to make the ballot. The measure would give low and middle-income families a $1,500 stipend to have school-aged children participate in afterschool programs, tutoring, and summer learning programs.

As states continue to legalize medical and adult-use cannabis, be sure to check out our state policy map for updates. Our Government Relations team will continue to educate congressional offices as states move forward. It’s vital to have accurate information and resources for members and Congress and staffers on Capitol Hill. With advancements at the state level, we continue to relay the importance of cannabis legalization at the federal level. Please stay tuned for more updates from our Government Relations team. 

 

Video: NCIA Today – April 9, 2021

NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.

Member Blog: A Fire Under Cuomo Lights the Way — 5 Things To Know About Adult-Use Cannabis in New York

By Charles J. Messina, Esq., Jennifer Roselle, Esq. and Donald W. Clarke, Esq. of Genova Burns LLC

After several failed attempts, and seemingly the result of catching significant political heat as of late, Governor Cuomo is allowing the adult-use cannabis industry to blaze forward in New York. 

With Gov. Cuomo’s signature, the bill (S.854-A), known as the “Marihuana Regulation and Taxation Act” (MRTA), establishes the legislative foundation upon which a regulatory infrastructure will be built to host a network of licensed operators to cultivate, process, distribute, sell, and host cannabis consumers. In addition to regulating adult use of cannabis, MRTA also amends the state’s existing medical use law (the New York Compassionate Care Act) and provides, among other things, rules for hemp, CBD, and other cannabis extracts. 

What does MRTA mean for New Yorkers?

First, adults may personally possess up to 3 ounces of plant cannabis (and 24 grams of “concentrated cannabis”) without being prosecuted or arrested. In addition to decriminalization, the law also expunges convictions based on conduct which is now authorized under MRTA.

Unlike New Jersey’s recently approved cannabis legislation, consumption of cannabis will be permitted in the same (or similar) places as vaping and cigarettes. Also, New Yorkers will be able to grow their own cannabis. Although “home grow” will be delayed for months until after more rules are promulgated and retail sales commence, a household will be able to grow a maximum of up to twelve plants (six mature, and six immature), with a five-pound possession limit for adults.

Throughout MRTA, there is a heavy focus on social and economic equity. This is integrated in the application process, apportionment of tax revenue, and adjustments made to the penal code. Certain applicants can qualify as a “social and economic equity applicant” to help the Office of Cannabis Management reach its goal of awarding 50% of licenses to minority or woman-owned business enterprises, distressed farmers, or service-disabled veterans.

What is the Office of Cannabis Management?

Similar to New Jersey, the law’s terms will be supplemented by not-yet-created regulations.  The regulatory framework will be created by a cannabis Advisory Board and carried out by the newly established Office of Cannabis Management (OCM). The OCM will be an independent office operating as part of the New York State Liquor Authority.  It will have a five-member board, with three members appointed by the Governor and one appointed by each house.

What types of licenses are there and when will sales get rolling?

Because much of the regulatory licensing framework does not yet exist, there is no established start date. Reports suggest sales could commence as early as December 2022. Home-growers for recreational use must wait no less than 18 months after the initial retail sales to plant their seeds. The tiered licensing structure prohibits those upstream in the production process from selling to the general public.

The available licenses include:

*Cultivator License—includes the agricultural production of cannabis and minimal processing and preparation.

*Processor License—includes blending, extracting, infusing, packaging, and preparing cannabis for sale.  There is a limit of one license per processor, but each license can authorize multiple locations.

*Distributor License—authorizes the acquisition, possession, distribution, and sale of cannabis from a licensed cultivator or processor to retail dispensaries and on-site consumption sites.

*Retail Dispensary License—authorizes the sale of cannabis to consumers, with a limit of three retail dispensary licenses per person. A retail licensee may not also hold a Cultivator, Processor, Microbusiness, Cooperative, or Distributor License.

*Cooperative License—authorizes the acquisition, possession, cultivation, processing, distribution, and sale from the licensed premises of the cooperative to distributors, on-site consumption sites, and retail dispensaries, but not directly to consumers. 

*Microbusiness License—authorizes limited cultivation, processing, distribution, delivery, and dispensing of the licensee’s own adult use cannabis and cannabis products. A microbusiness licensee may not hold any other license, and may only distribute its own products to dispensaries.

*Delivery License—authorizes the delivery of products by licensees independent of another license.

*Nursery License—authorizes the production, sale, and distribution of clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by cultivators, cooperatives, and microbusinesses.

*On-Site Consumption License—authorizes the establishment of a location for the on-site consumption of cannabis. 

How will cannabis be taxed in NY and where is the revenue going? 

MRTA places the tax on cannabis based upon the amount of the chemical compound that delivers effects to users (THC). There will be a 9% state tax at the retail level. A local excise tax will be 4% of the retail price. Counties will receive 25% of the local retail tax revenue, and 75% will go to the municipality. Municipalities can, however, enact legislation to opt out of permitting retail dispensaries or on-site consumption licenses within its borders.

MRTA mandates that 40% of the estimated $350 million in tax revenues will go to community grants and reinvestment, and 20% will go to drug treatment and education. The final 40% is earmarked for schools as of now.

What will be the impact on NY employers and employees?

Employers have no legal obligation to permit adult-use cannabis in their workplace. In addition, while offsite usage is protected, the law includes provisions that allow employers to take action against employees who are impaired at work if their performance is lessened, or the employee’s conduct interferes with the ability to provide a safe and healthy workplace. Employers may likewise act to comply with local, state, or federal laws or allow conduct that would result in loss of a federal contract or federal funding.  


Charles J. Messina is a Partner at Genova Burns LLC and Co-Chairs the Franchise & Distribution, Agriculture and Cannabis Industry Groups. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.

Jennifer Roselle is Counsel with Genova Burns LLC and Co-Chair of Genova Burns’ Cannabis Practice Group.  She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.

Donald W. Clarke is Counsel at Genova Burns LLC and a member of the firm’s Bankruptcy, Reorganization and Creditors Rights and Cannabis Law Groups. He has extensive experience with complex restructuring matters and a comprehensive understanding of federal, state, and local laws, including regulatory requirements, across all industries. This experience has enabled Mr. Clarke to assist clients with their navigation of such regulatory schemes outside of bankruptcy, including in the space of cannabis law.

For over 30 years, Genova Burns LLC  has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions.

Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.

 

State Cannabis Policy Update: Can You Keep Up?

By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations

Photo By CannabisCamera.com

Last week was an historic one for cannabis policy around the nation. The second largest adult-use market, New York, successfully legalized cannabis and has already been signed into law by Governor Andrew Cuomo (D). New Mexico’s legislature also passed adult-use legislation which awaits Governor Michelle Lujan Grisham’s (D) signature shortly. Lastly, Virginia Governor Ralph Northam (D) signaled that he wants the state’s new adult-use cannabis laws to go into effect sooner than originally anticipated. Keep reading below for a brief summary of what’s happening in each of those states, and what it means for federal policy. 

New York

Last week, New York became the 16th state to approve a law creating a regulated adult-use cannabis market when Gov. Cuomo signed the Marijuana Revenue and Taxation Act (MRTA). This legislation would make possession of up to three ounces and limited home cultivation legal and will automatically expunge convictions for behavior that is legal under the new law. Notably, the new law also allows for cannabis consumption almost everywhere that tobacco consumption is allowed. 

Equity was at the forefront of New York’s bill: forty percent of tax revenue will be directed toward communities disproportionately impacted by cannabis prohibition, and provisions in the MRTA seek to award half of all business licenses to social equity applicants. The importance of this can’t be overstated: nearly 60,000 people – the majority of whom are people of color – are arrested for marijuana violations in New York every year, the effects of which can permanently damage their ability to obtain employment, housing, and education, among other collateral consequences.

A 2020 report by Arcview Market Research and BDSA projected that the New York cannabis market will be worth more than $1.6 billion by 2025. The state plans to tax cannabis at 9% at the state level with an additional 4% made available to cities and counties, and with additional incremental taxes levied based on the type of product and the amount of THC contained in them.

New Mexico

New Mexico is now poised to become the 17th state to legalize adult-use cannabis upon Gov. Lujan Grisham’s signature. The legislature advanced two measures to the governor’s desk: the first legalizes and regulates cannabis possession, production, and sales for adults over the age of 21, while the second facilitates the automatic review and expungement of the records of those convicted of low-level marijuana offenses.

The state’s Cannabis Regulation Act allows for the possession of up to two ounces of cannabis for adults 21 and over, permits the home cultivation of up to six plants, and, unlike New York’s legislation, prevents local governments from opting out of retail sales. Legal retail sales are scheduled to begin in New Mexico on April 1st, 2022 (no jokes here!).

Marijuana Business Daily projects an adult-use cannabis market in New Mexico could generate $350 million in annual store sales by its fourth year of operation.

Virginia

You’ll remember that back at the end of February, Virginia’s General Assembly convened a special session where they passed adult-use cannabis legislation. The legislation detailed the regulatory and market structures for the state, outlined social equity provisions, repealed criminal penalties for the plant, and, perhaps most importantly, is subject to a second review and vote by the Assembly in 2022. Lawmakers also established a January 1, 2024 enactment date for the law, however, much of this is now in flux thanks to Gov. Northam. 

Last week, Northam asked the General Assembly to speed up the legalization of marijuana in the state, making it lawful for an adult to possess up to one ounce on July 1, 2021, instead of waiting until early 2024. Additionally, Northam has proposed a quicker route for expunging marijuana-related incidents from criminal records and allowing home cultivation of up to four plants per household also as of July 1, 2021.

The Governor’s request is in the form of a proposed amendment to the legalization bill the General Assembly passed last month. It’s also important to note that Northam’s proposals include changes to several other aspects of the legislation. One would empower the Cannabis Control Authority — the new regulatory agency that will be created to oversee the industry in the state — to suspend the licenses of businesses that don’t allow workers to organize, pay less than a prevailing wage, or classify more than 10 percent of workers as independent contractors.

The General Assembly will take up these proposals when it reconvenes April 7 for a one-day session to consider any vetoes or amendments Northam has proposed to this year’s legislation.

What’s It All Mean?

Once New Mexico and Virginia’s cannabis legislation is signed into law by their respective governors, nearly 45% of Americans will live in a state with legal cannabis, and it could reach a majority before the end of the year. This has what I like to call a “trickle up” effect for members of Congress, meaning that federal legislators begin to pay much more attention to cannabis-related issues once these policies are passed in their home states. You can certainly expect more members to begin signing onto legislation like the SAFE Banking Act and signaling support for comprehensive legislation like the MORE Act and the upcoming Schumer/Booker/Wyden bill that have yet to be introduced but are highly anticipated. As always, the NCIA team in DC will continue to keep our finger on the pulse to keep you and your business informed! 

Member Blog: Drug Testing In Legal States – Corporate Policy vs. State Law

by Samantha Vanegas, VP of Operations, ath Power Consulting

Currently, 33 states have legalized medical marijuana, and 11 others have given the green light to marijuana’s recreational use; however, the federal government still classifies any use of marijuana as illegal. This disparity creates a rift when employers go to test new employees for drugs. 

Workplace drug testing began in the 1980s as part of former U.S. President Ronald Reagan’s “War on Drugs” campaign. At that time, employers wanted to ensure their workers were fit to do the job at hand. Since marijuana has become legalized in many states, employers in these states are unsure of new drug testing protocols; so are the states and legal systems themselves. 

The resulting situation is a Catch-22. 

Without testing, there would be more applicants for any given job and a larger pool of prospective workers. Therefore, employers would potentially get the strongest candidates. However, with testing, employers can assure they get drug-free employees who will be safe on the job. 

But if marijuana is legal in some places and not others, who gets to decide where to draw the line? 

Safety on the Job

Safety on any job is paramount, which requires workers who are alert and capable of completing the intricacies of the job. 

According to Business News Daily, “The problem for employers is that impairment, because of marijuana, is usually much more difficult to detect and test for than alcohol. Unlike alcohol, it is very difficult for employers to determine if a positive drug test for marijuana is the result of drug usage during work or on non-work hours, so it is logistically simpler to just have an outright ban.” 

Making the issue cut and dry is much easier on employers compared to making case-by-case decisions. 

Depending on the business, marijuana testing is essential. Because of inherent safety concerns, new employees in the transportation, construction, and manufacturing industries definitely need to be tested. People operating heavy machinery should clearly not be under the influence of marijuana. Truck drivers, bus drivers, and train operators still will be tested for marijuana under the U.S. Department of Transportation laws. 

Additionally, any companies that accept federal money or hold contracts with the federal government will have to maintain drug testing protocols. In other business sectors, the line is not clear, which calls the legality of testing into question.

Legality of Testing 

With the ever-changing state cannabis laws and the potential for cannabis to be legalized on the federal level, the nation is basically in a “trial and error” situation. Regardless, employers must keep current with these ever-changing circumstances to protect themselves and their employees.  

The medical nature of marijuana usage further complicates the matter. Currently, 33 states issue medical marijuana cards, which permits users to use marijuana to treat medical issues. Business News Daily says, “Several states have specific laws protecting medical cannabis patients from employment discrimination. Typically, employers can require drug testing before employment and at random times, so long as there is no discrimination against medical marijuana users [who] are legally allowed cannabis for medicinal reasons.”

Besides the debate over medical marijuana cards, employers are stymied about what to do regarding recreational use as it pertains to the workplace. Since testing results can return positive weeks after the person smokes, there is really no way to tell if someone is a habitual user or it was a one-time event.

The states are divided. Currently, about 20 states will not allow discrimination in the workplace. But there is only one state that has gone so far as to say that recreational use of marijuana use is acceptable: Maine. Other states are starting to follow suit. Nevada law ensures that there can be no adverse outcomes for positive tests. And New York City will soon get rid of pre-employment testing altogether. 

Other states are not so quick to change. For instance, workers in Illinois can still be disqualified as applicants or terminated as employees for a positive test. Currently, Illinois allows for the “good faith belief” that employees can consider workers under the influence if their speech or actions seem impaired.    

Unfortunately, even the court systems do not agree. In some recent cases, the judge has sided with state rights, and in others, the federal appeal was victorious.

Moving forward, employees and employers need to continue the “wait and see” approach until federal and state employment laws catch up to the legalization of cannabis. For now, employers must determine their comfort levels with recreational marijuana use as it pertains to safety in the workplace.


Samantha Vanegas retains a MBA from the University of Florida Warrington College of Business. She works with the leaders of small start-up and growth-stage companies and non-profit organizations who seek temporary leadership to support growth and transitions. Whether for project-based work or as an interim manager, she is fabulous at supporting individuals and teams who are passionate about their work and need help bringing order to all the moving parts. She addresses common issues such as: how to build effective organizational infrastructure and systems; and, how to create and implement a strategy that will carry your business forward. She is a problem-solver who is able to envision the sum of the parts during and through transitions. She has a strong background in sales, operations, HR and marketing which elevates her expertise in assisting organizations with compliance intelligence and also with user, customer and employee experience surveys and solutions.

ath Power Consulting is an all-in-one resource for multi-modality survey and mystery shop research, competitive intelligence, compliance auditing, market analyses, employee training, and strategic consulting. Since 1997, we have helped our clients improve customer retention, build brand loyalty and advocacy, deepen employee engagement, measure compliance, maximize performance, and increase profitability – distinguishing them from their competition and giving them a commanding edge in the marketplace.

Committee Blog: Ending The Ban On Interstate Commerce (Part 1)

By Gabriel Cross, CEO of Odyssey Distribution
Member of NCIA’s State Regulations Committee

Oversupply and shortages, high prices and lack of choice for patients and consumers, illicit markets, tainted products, and the inability to access banking and capital all plague the burgeoning cannabis industry. While cannabis advocates and industry leaders are working on each of these problems, there is one solution that would ease the burden on all of them. Allowing for interstate trade between states with legal cannabis markets would improve each of these issues while supporting the individual solutions to each that the industry has been working on. This is the first post in a series that explores the benefits and barriers to setting up a legal framework for interstate trade, even before wholesale legalization at the federal level.

Since the beginning of legal, adult-use cannabis, when Colorado and Washington passed the first ballot measure allowing for adult-use, the industry was guided by the Cole Memo, which laid out the parameters for the federal government staying out of the states’ cannabis experiments. Among other things, the Cole memo stated that the DEA could crackdown on cannabis moving from states with well-regulated systems to states that do not allow cannabis. This statement has been interpreted conservatively to mean that no cannabis should cross state lines for any reason, ever, based on the fact that at the federal level, cannabis is still a Schedule I drug under the Controlled Substances Act.

Today, there are 10 states which have legalized adult-use, another 19 which allow for medical use, and six more which allow the use of CBD products only. Many of these states share borders, and producer states could serve several nearby markets without ever entering a state that does not allow cannabis in any form. Furthermore, the Cole Memo, which was rescinded by Jeff Sessions in 2018, has not been replaced by any guidance whatsoever. This means that each U.S. Attorney’s office is free to set their own enforcement priorities around state-legal cannabis activities, and there is no official overriding policy at the DOJ on interstate trade between states with medical or adult use. Corresponding guidance from FinCEN, however, remains in effect and similarly discourages the transfer of cannabis between states. 

Cannabis markets vary widely from state to state with regard to the underlying market dynamics and challenges that they face. Some states produce too much while other states experience shortages. Meanwhile, new states pass legislation or have voter initiatives that allow medical or adult-use every year without any infrastructure in place to supply that state’s demand. In each new legal market, the vast majority of demand had long been met through illicit market supply, and generally from outside of the state’s boundaries.

The artificial boundaries around cannabis markets have far-reaching impacts for local economies, patient access, illicit market activity, and social equity. Later posts in this series will take a deep dive into each of these issues, and in this post, we will look at how this has impacted states, the industry, and consumers so far.

Lessons Learned:

  • Washington State chose to take the strictest possible reading of the Cole Memo, and insist that not only must cannabis not cross state lines but also sources of funding must come from within the state. Combined with their high capitalization requirement for licenses, the result was a disaster from an equity standpoint: only wealthy and well-connected individuals in the state (which are overwhelmingly white males) were able to even attempt a license. This decision was based substantially on the fact that interstate trade was not allowed.
  • In Oregon, which has an ideal growing climate and a long tradition of exporting cannabis (albeit in the illicit market), the artificial boundaries created by the ban on interstate trade lead to a massive oversupply for its small population, which crippled the industry and tanked many small businesses. Despite the fact that Oregonians consume more cannabis per capita than any state, their climate and culture have led to growing massive quantities of world-class cannabis that cannot reach patients and consumers, even in neighboring states that might have under-supply issues. The result is that hundreds of small, mom-and-pop shops and family farms have gone out of business, eradicating millions of dollars of local capital, and accelerating mass consolidation of the industry into the hands of a few foreign corporations. Meanwhile, in medical markets like Illinois and Michigan, patients have had sporadic access to quality cannabis-based medicines.
  • When Nevada originally launched, due to the influence of local liquor distributors, it was almost impossible to get products to market, and the state’s dispensaries sold out on the first day of sales. After ironing out some of the kinks, sales are going strong, but the practice of growing thirsty plants indoors in the desert is of dubious value when the same plant can be grown with a fraction of the inputs in northern California and southern Oregon.
  • California’s legal system is a perfect example of how over-regulation fuels illicit market activity. Because of the structure of their regulatory framework and high taxes, the state is served by only 800 licensed dispensaries, whose prices are double and triple those found on the illicit market for similar products. This has led to the emergence of thousands of “pop-up” or unlicensed dispensaries, selling untested products tax-free in a thriving illicit market. The booming illicit market in California has also led to massive wholesale markets of hardware, branded packaging, and flavoring and cutting agents (all technically legal) to supply the illegal operators with everything they need to look legitimate. This is a major contributing factor to the wide-spread vaping related illness cases popping up all over the country, as many illicit market operators purchase their supplies in downtown Los Angeles.
  • The ban on interstate trade promises to continue to create new and novel problems as well. If New York, the 4th most populous state in the union, legalized adult-use (which seems likely in the near future), and interstate trade were still banned, it would require a massive investment, on the order of billions of dollars, to create enough indoor and greenhouse grow facilities to supply the demand created by its 19 million inhabitants. The recent legalization of hemp under the last Farm Bill has created a number of legal dilemmas as well, as some individual states that do not recognize any difference between hemp and cannabis flower have seized products and arrested individuals taking hemp legally grown in one state to a market where it is legal to sell.

Some suggest that these issues will be sorted in local markets, and in each state individually this approach might seem to make sense. When you add these problems together, though, a much more elegant, efficient, and obvious solution emerges: let states that have always exported cannabis send it to states that have always imported it. A set of different and seemingly unconnected problems become each other’s solutions.

Historically, people across the country have consumed cannabis, and the vast majority of it was grown in a few locations that are particularly well-suited to the plant. It is highly likely that a fully-matured nationwide legal market (one which must account for not only interstate, but also international competition) will ultimately be best served by the same general market dynamics. The only question is: how long will we allow the artificial market boundaries around each state to decimate local capital, curb access for patients and consumers, encourage investments that are attractive short-term but disastrous long-term, and prop up the illegal markets that pose a public health risk?

Interstate trade between states that allow some form of legal cannabis would provide much-needed relief on a number of fronts for cannabis businesses, and could be structured in such a way to support social equity efforts. With a little guidance on enforcement and thoughtful programs and agreements between states, there is a path to legal interstate commerce even before cannabis is removed from the Controlled Substances Act. The state of Oregon has already passed legislation allowing for the export and import of cannabis products provided that the Federal Government allows it. This could be either through legislation such as the proposed Blumenauer/Widen State Cannabis Commerce Act, or though DOJ enforcement guidance (whether from the Attorney General or the relevant local U.S. Attorney’s). There are multiple paths that can lead to the end of banned interstate trade, and it seems increasingly inevitable that we will see legal cannabis trade across state borders in the near future. For most operators in the cannabis industry, and for all patients and consumers, this will be a good thing, and can’t come soon enough.


Gabriel Cross is a Founder and CEO at Odyssey Distribution, LLC, a distributor for locally-owned craft cannabis producers and processors in Oregon. Gabe worked in the sustainable building industry for a decade before starting Odyssey and brings his experience with sustainability and systems thinking to his work in the cannabis industry. Odyssey manages logistics, sales and marketing for boutique producers so they can focus on creating great craft cannabis products for the Oregon market.

2016: What’s Next?

by Michelle Rutter, Government Relations Coordinator

This year is arguably the most crucial yet for the burgeoning cannabis industry, especially as it relates to policy. Although NCIA primarily advocates for cannabis reform at the federal level, what happens in each individual state is vital to the stances Members of Congress take on our issues.

Members of Congress care deeply about issues that directly affect their specific state or district. It’s imperative that more states enact cannabis reform legislation so that more Members have a vested interest in protecting their constituents. While cannabis reform is sweeping the nation at an almost unprecedented rate, it takes time for politicians in Washington, D.C., to catch up with public opinion back home. If all of the federal lawmakers representing just the 15 states mentioned below were to vote positively on pro-cannabis legislation, it would add up to more than 180 Representatives and nearly 30 Senators.

Take a look below and see what’s coming up next in 2016. Remember that by becoming a member of NCIA, you are adding your voice to the coordinated and unified campaign at the federal level to allow cannabis businesses access to financial services, fix tax section 280E, and ultimately end federal cannabis prohibition.

The United States of Cannabis

          • Arizona activists remain ahead of schedule and have nearly gathered the 150,000 signatures needed to put the state’s Campaign to Regulate Marijuana Like Alcohol initiative on the November 2016 ballot. (The campaign ultimately aims to collect 230,000 in order to insure against signature drop-off.) It’s estimated that Arizona’s adult-use market could be worth up to $480 million.
          • With a multi-billion-dollar cannabis industry in California alone, passing an adult-use legalization initiative in the state is vital to ending federal prohibition. The most prominent full retail initiative gathering signatures for the November 2016 election is the Adult Use of Marijuana Act, which is backed by billionaire Sean Parker and the Marijuana Policy Project.
          • Legalize Maine and the Marijuana Policy Project have joined forces to legalize adult-use cannabis in 2016. Legalize Maine has already collected 80,000 signatures. Only 61,000 signatures are necessary to place the measure on a statewide ballot, but the organization’s goal is 95,000, to insure against drop-off. The deadline to submit signatures is February 1st.
          • Last August, a pair of cannabis advocacy groups separately filed paperwork to get adult-use legalization on the 2016 ballot in Massachusetts. The state recently confirmed that a measure to legalize recreational cannabis next year has enough valid signatures to force the legislature to consider the measure. If the legislature decides to pass, then the campaign will have to collect another 10,792 signatures to formally make the November ballot.
          • There’s no question that adult-use legalization will be on the ballot this year in Nevada. Initiative Petition 1, which would tax and regulate marijuana similarly to alcohol, has been certified for the 2016 ballot. Backers had previously collected nearly 200,000 signatures to either force legislators to enact their initiative or put it on the ballot. When state lawmakers abstained from voting on the issue, the measure was automatically forwarded to this year’s ballot for a popular vote.
          • In Florida, the group United for Care received clearance from the state Supreme Court for a 2016 ballot measure that would legalize medical marijuana. The group nearly succeeded in legalizing medical marijuana in 2014, garnering 58% of the vote but falling barely short of the state’s constitutionally mandated 60% margin needed to pass, 
          • The nation’s capital continues to debate cannabis. In December’s federal budget bill, the taxation and regulation of marijuana in Washington, D.C., was blocked by Congress again, though possessing and gifting cannabis remains legal in the city.
          • This month, Hawaii will begin accepting applications for medical cannabis businesses. The bill signed into law last summer opens the door for up to 16 dispensaries on the islands.
          • It was recently announced that Illinois saw approximately $1.7 million in medical cannabis sales during November and December of 2015. There are already petitions being circulated in the state that would expand the law’s qualifying conditions.
          • Maryland will award cannabis cultivation, processing, and dispensary licenses this summer. Industry advocates were pleased with the amount of interest the state’s program garnered: more than 1,000 applications were submitted.
          • Officials in Michigan have approved language for three different adult-use cannabis legalization initiatives for the 2016 ballot. In order to have the best chance of passing, it’s important for these groups to coalesce behind one initiative.
          • At the end of 2015, New Hampshire began issuing medical marijuana cards to qualifying patients. It’s expected that the state will open medical dispensaries in 2016.Map-of-US-state-cannabis-laws
          • After a long and arduous journey, New York’s medical cannabis program became operational this month. The cannabis industry expects the program and the law’s qualifying conditions to expand this year.
          • In the first week of 2016, Oregon began accepting adult-use cannabis business license applications. The state has no limit on how many licenses they will decide to award.
          • Vermont may become the first state to legalize adult-use cannabis through the legislative process in 2016. The proposed bill would allow for up to 86 storefronts and five different business license types.

 

Bonus: Election 2016 – Yes, We Canna

            • As we all know, a new president will be elected this November, and with that a new administration will assume power next January. It is very crucial that Congress pass more pro-cannabis legislation before then.
            • It’s probable that Attorney General Loretta Lynch will be replaced in 2016 or early 2017. This is important because it is the Department of Justice that enforces and prosecutes federal marijuana laws.
            • Another possibility for 2016 is that the acting head of the Drug Enforcement Administration, Chuck Rosenberg, could be replaced as well. Rosenberg is notorious for his gaffe last year when he called marijuana “probably” less dangerous than heroin.
            • On New Year’s Eve, officials from the Substance Abuse and Mental Health Services Administration posted a notice on the Federal Register that calls for a report “presenting the state of the science on substance use, addiction and health” to be released in 2016. Industry advocates are hopeful that this report could be the first sign of re- or de-scheduling cannabis from the Controlled Substances Act.
            • During 2016, NCIA will continue working with D.C.-based public affairs firms Heather Podesta + Partners, and Jochum Shore & Trossevin PC to magnify our efforts to address the industry’s top federal priorities: access to basic banking services and fair federal taxation.

 

In addition to NCIA’s lobbying and advocacy efforts, NCIA exists to connect and educate our members on all facets of the cannabis industry. Our industry supports tens of thousands of jobs, tens of millions in tax revenue, and billions in economic activity in the United States. Our core mission is to ensure that our members are treated like businesses in any other American industry. Join NCIA today to get involved and be a part of the cannabis revolution!


Join us for our 6th Annual NCIA Member Lobby Days in Washington, D.C. on May 12 & 13, 2016.

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Announcing NCIA’s January – June 2016 Events Calendar

As we head into the new year, we wanted to share with you our upcoming event calendar for the first 6 months of 2016! This includes the Q1 and Q2 events in our new event series, the Quarterly Cannabis Caucuses, a fundraiser for our federal PAC where members of our Board of Directors will be present, our 6th annual Federal Lobby Days, and our 3rd annual Cannabis Business Summit.

Click on the images below for more information on the upcoming events.

Quarterly Cannabis Caucuses

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6th Annual Federal Lobby Days
Cannabis Business Summit

So what are you waiting for? Register for an upcoming event today!

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Do you have questions regarding any upcoming events in your area or others across the country? Reach out to events@thecannabisindustry.org any time with your questions, comments, or concerns.

Interested in sponsoring one or a series of events in a particular region throughout the year in order to gain valuable exposure for your company to our nationwide network of established business owners? Please contact Brian Gilbert at brian@thecannabisindustry.org for more information on series rates and associated discounts for packages.

Interested in speaking at the upcoming Cannabis Business Summit? Please contact brooke@thecannabisindustry.org for more information on remaining opportunities.

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