Wyoming Lawmakers Introduce Bill to Legalize Cannabis

By Cannabis Industry Journal Staff
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A bipartisan group of lawmakers in Wyoming have introduced a bill to legalize cannabis in the state’s legislature. First reported by Buckrail.com, HB0209 was assigned on March 2. The bill would legalize possession, home grow and sales for adults, as well as establish a regulatory framework for licensing, tracking and taxation.

In November 2020, voters in Montana and South Dakota passed ballot measures that legalize adult use and sales of cannabis. About a month after Election Day, the University of Wyoming conducted a poll that found roughly 54% of Wyoming residents now support legal adult use cannabis. In 2018, UW found that 85% of Wyoming residents support medical cannabis legalization.

In March of 2019, Wyoming Governor Mark Gordon signed a bill into law that essentially legalized hemp in the state. That bill was a boon for the state’s agricultural economy, giving many farmers a much-needed boost in their crop diversity.

Wyoming Governor Mark Gordon

You can find the current version of HB0209 here. Sponsors of the bill include: Representatives Jared Olsen (R-Laramie), Mark Baker (R-Sweetwater) Eric Barlow (R-Campbell/Converse), Landon Brown (R-Laramie), Marshall Burt (L-Sweetwater), Cathy Connolly (D-Albany), Karlee Provenza (D-Albany), John Romero-Martinez (R-Laramie), Pat Sweeney (R-Natrona), Cyrus Western (R-Sheridan), Mike Yin (R-Teton) and Dan Zwonitzer (R-Laramie) and Senators Cale Case (R-Fremont) and Chris Rothfuss (D-Albany).

According to Buckrail, if the bill becomes law, Wyoming could get roughly $49.15 million in tax and license fee revenue in 2022. That number would mean a sizable windfall for the state that saw an 8.5% decline in tax revenue in 2020. Governor Gordon proposed budget cuts as high as 15% for agencies across the state last year. Most of the revenue generated from cannabis taxes would be earmarked for education.

Wyoming’s tax revenue is notoriously limited when it comes to diversity: the state makes its money on oil and gas, and that’s about it. Earlier this year, the Biden administration halted oil and gas leasing on federal land, hitting pause on a nearly half-million-acre deal. If the pause on oil and gas leasing on federal lands continues or were to become permanent, Wyoming stands to lose tens, if not hundreds, of millions of dollars every year.

So, what does the least populous state in the country do when they can no longer generate revenue from oil and gas? Simple. Legalize cannabis.

New Jersey Legalizes Adult Use Cannabis

By Cannabis Industry Journal Staff
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On February 22, 2021, New Jersey Governor Phil Murphy signed three bills into law, all of which legalize adult use cannabis in the state. A21 is the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act. A1897 is the accompanying decriminalization legislation and A5342 addresses discrepancies between the bills referencing underage possession.

Back in November 2020, voters in New Jersey overwhelmingly approved Question 1 by a 66% to 33% margin. That ballot measure made it to voters by way of the legislature, after New jersey lawmakers failed to pass a legalization bill in 2019. The legislation that Governor Murphy signed yesterday essentially put the will of the voters into law.

New Jersey Governor Phil Murphy
New Jersey Governor Phil Murphy

The legislation becomes effective immediately upon the Governor signing the bills, but New Jersey residents won’t see legal adult use cannabis until June 2021, the deadline for the five-member Cannabis Regulatory Commission to establish detailed regulations. Possession of cannabis will also not be legal until sales are underway.

The license application window will open 30 days prior to the regulatory deadline. The legislation provides for licenses in cultivation, manufacturing, wholesale, distribution, retail, delivery and testing labs. Until 2023, cultivator licenses will be capped at 37. 25% of all of the licenses are earmarked for microbusinesses that are owned locally and have less than ten employees.

According to New Jersey-based cannabis lawyer Jennifer Cabrera of Vicente Sederberg LLP, the bills include a number of provisions aimed at promoting social equity in the cannabis industry and repairing damage caused by prohibition. The language mandates that 30% of licenses must go to businesses owned by women, minorities or disabled veterans. At least 25% should be allocated to residents of impact zones, which are municipalities that have more than 120,000 residents that: rank in the top 40% of municipalities in the state for cannabis-related arrests; have a crime index of 825 or higher; and have a local average annual unemployment rate that ranks in the top 15% of municipalities.

The Capitol in Trenton, New Jersey

Advocates across the state are applauding the government’s work to include social equity provisions in the bills. States like Illinois and Massachusetts initially received a lot of praise for including a number of social equity provisions in their legalization plans, but the rollout has left a lot to be desired. Social equity applicants in Illinois are still waiting on licensing as lawsuits play out in court following allegations of corruption and ineffective distribution.

However, it looks like New Jersey is taking a much more thorough approach to social equity issues than other states. “New Jersey has adopted some of the strongest social equity provisions we’ve seen,” says Cabrera. “Contemplating these issues at the outset of the process will likely prove to be a big advantage for the state. It is much easier to build these considerations into the system than it is to go back and incorporate them later.” In other words, there is still a lot of work to be done to ensure an equitable regulatory framework is established.

Amol Sinha, executive director of the American Civil Liberties Union (ACLU) of New Jersey says the state’s laws can set a new standard for what justice can look like. “This is a new beginning – and the culmination of years of advocacy – and we must keep in mind that it is only the start,” says Sinha. “Signing these laws puts in motion the next phase of this effort: to work relentlessly to transform the principles of legalization into greater racial and social justice in New Jersey.”

It is estimated that New Jersey’s adult use cannabis market could be worth more than a billion dollars. As the state begins their rollout and implementation, all eyes are on New York and Pennsylvania, which are both expected to legalize adult use cannabis within the next two years. Both Governor Cuomo of New York and Governor Wolf of Pennsylvania have been clamoring for adult use legalization in recent months.

Cannalytics Becomes First Accredited Cannabis Lab in Puerto Rico

By Cannabis Industry Journal Staff
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In a press release sent out this week, A2LA announced they have accredited Cannalytics to ISO 17025:2017. With the finalized accreditation in December 2020, Cannalytics is the first cannabis testing laboratory in Puerto Rico to get accredited to the standard.

Jorge Diaz, owner and director of Cannalytics, says their two main objectives are business excellence and quality. “Being the first ISO/IEC 17025 accredited cannabis laboratory in Puerto Rico affirms our mission to provide continuous quality science to our clients while safeguarding the health of Puerto Rico’s medical cannabis patients,” says Diaz.

Cannalytics is a medical cannabis and hemp testing lab based in San Juan, Puerto Rico. They offer compliance and R&D analysis in their suite of testing services.

“We are glad to see the continued growth of our cannabis program in a new territory, which further promotes the value that accreditation adds in ensuring quality in this emerging industry,” says Anna Williams, A2LA Accreditation Supervisor.

New Guidance on Waste Disposal for Hemp Producers

By Stephanie McGraw, Emily Sellers
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On January 15, 2021, the USDA published its final rule on US hemp production. The rule, which becomes effective on March 22, 2021, expands and formalizes previous guidance related to waste disposal of noncompliant or “hot” crops (crops with a THC concentration above .3 percent). Importantly for the industry, the new disposal rules remove unduly burdensome DEA oversight and provides for remediation options.

Producers will not be required to use a DEA reverse distributor or law enforcement to dispose of noncompliant plants. Instead, producers will be able to use common on-farm practices for disposal. Some of these disposal options include, but are not limited to, plowing under non-compliant plants, composting into “green manure” for use on the same land, tilling, disking, burial or burning. By eliminating DEA involvement from this process, the USDA rules serve to streamline disposal options for producers of this agricultural commodity.

Alternatively, the final rule permits “remediation” of noncompliant plants. Allowing producers to remove and destroy noncompliant flower material – while retaining stalk, stems, leaf material and seeds – is an important crop and cost-saving measure for producers, especially smaller producers. Remediation can also occur by shredding the entire plant to create “biomass” and then re-testing the biomass for compliance. Biomass that fails the retesting is noncompliant hemp and must be destroyed. The USDA has issued an additional guidance document on remediation. Importantly, this guidance advises that lots should be kept separate during the biomass creation process, remediated biomass must be stored and labeled apart from each other and from other compliant hemp lots and seeds removed from non-compliant hemp should not be used for propagative purposes.

The final rules have strict record keeping requirements, such rules ultimately protect producers and should be embraced. For example, producers must document the disposal of all noncompliant plants by completing the “USDA Hemp Plan Producer Disposal Form.” Producers must also maintain records on all remediated plants, including an original copy of the resample test results. Records must be kept for a minimum of three years. While USDA has not yet conducted any random audits, the department may conduct random audits of licensees.

Although this federal guidance brings some clarity to hemp producers, there still remains litigation risks associated with waste disposal. There are unknown environmental impacts from the industry and there is potential tort liability or compliance issues with federal and state regulations. For example, as mentioned above, although burning and composting disposal options for noncompliant plants, the final rule does not address the potential risk for nuisance complaints from smoke or odor associated with these methods.

At the federal level, there could be compliance issues with the Resource Conservation and Recovery Act (RCRA), Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and ancillary regulations like Occupation Safety and Health Administration (OSHA). In addition to government enforcement under RCRA and CERCLA, these hazardous waste laws also permit private party suits. Although plant material from cultivation is not considered hazardous, process liquids from extraction or distillation (ethanol, acetone, etc.) are hazardous. Under RCRA, an individual can bring an “imminent and substantial endangerment” citizen suit against anyone generating or storing hazardous waste in a way the presents imminent and substantial endangerment to health or the environment. Under CERCLA, private parties who incur costs for removal or remediation may sue to recover costs from other responsible parties.

At the state level, there could be issues with state agency guidance and state laws. For example, California has multiple state agencies that oversee cannabis and hemp production and disposal. CA Prop 65 mandates warnings for products with certain chemicals, including pesticides, heavy metals and THC. The California Environmental Quality Act (CEQA) requires the evaluation of the environmental impact of runoff or pesticides prior to issuing a cultivation permit. Both environmental impact laws permit a form of private action.

Given the varied and evolving rules and regulation on hemp cultivation, it remains essential for hemp producers to seek guidance and the help of professionals when entering this highly regulated industry.

GW logo-2

Jazz Pharmaceuticals to Acquire GW Pharma

By Cannabis Industry Journal Staff
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GW logo-2

Last week, GW Pharmaceuticals (Nasdaq: GWPH) announced they have entered into an agreement with Jazz Pharmaceuticals (Nasdaq: JAZZ) for Jazz to acquire GW Pharma. Both boards of directors for the two companies have approved the deal and they expect the acquisition to close in the second quarter of 2021.

GW Pharma is well-known in the cannabis industry as producing the first and only FDA-approved drug containing CBD, Epidiolex. Epidiolex is approved for the treatment of seizures in rare diseases like severe forms of epilepsy. GW is also currently in phase 3 trials seeking FDA approval for a similar drug, Nabiximols, that treats spasms from conditions like multiple sclerosis and spinal cord injuries.

Jazz Pharmaceuticals is a biopharmaceutical company based in Ireland that is known for its drug Xyrem, which is approved by the FDA to treat narcolepsy.

Bruce Cozadd, chairman and CEO of Jazz, says the acquisition will bring together two companies that have a track record of developing “differentiated therapies,” adding to their portfolio of sleep medicine and their growing oncology business. “We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities,” says Cozadd.

Justin Gover, CEO of GW Pharma, says the two companies share a vision for developing and commercializing innovative medicines, with a focus on neuroscience. “Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline,” says Gover. “We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs.”

New Cannabis Coalition Launches to Advance Cannabis Reform

By Cannabis Industry Journal Staff
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According to a press release published on February 8, a number of associations, advocacy organizations and cannabis businesses launched the U.S. Cannabis Council (USCC), which they claim is the largest coalition of its kind.

The 501(c)4 nonprofit organization goals are to advance social equity and racial justice, and end federal cannabis prohibition, according to their debut press release. The USCC says it will focus on federal reforms that achieve those goals above as well as promoting a safe and fair cannabis market on a national level.

The USCC’s Interim CEO is Steven Hawkins, who is also the executive director of the Marijuana Policy Project, which is one of the founding members of the USCC. “USCC is a unified voice advocating for the descheduling and legalization of cannabis,” says Hawkins. “Legalization at both the state and federal level must include provisions ensuring social equity and redress for harms caused to communities impacted by cannabis prohibition.”

In the press release, Representative Earl Blumenauer (D-OR) is quoted saying he is looking forward to working with the USCC on Capitol Hill. “As founder and co-chair of the Congressional Cannabis Caucus, I’ve seen firsthand that our most successful cannabis wins have been secured by a team,” says Rep. Blumenauer. “That’s why I am glad to see this first-of-its-kind alliance. We have a unique opportunity in the 117th Congress to advance cannabis reform, but we must remain united to create the change we know is possible.”

Founding members of the USCC include Acreage Holdings, Akerna Corp, the American Trade Association of Cannabis and Hemp, Canopy Growth, the Cannabis Trade Federation, Cresco Labs, MedMen, Marijuana Policy Project, PharmaCann, Vireo, Wana and much more. For a full list of its founding members, visit their website here.

MCR Labs Opens Pennsylvania Location

By Cannabis Industry Journal Staff
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According to a press release sent out last week, MCR Labs just opened their newest facility in Pennsylvania. The laboratory, based in Allentown, PA, began accepting and testing cannabis samples last week.

A lab technician at MCR Labs weighs flower for testing.

MCR Labs became the first independent cannabis testing lab to get certified in Massachusetts. The lab based in in Framingham, Massachusetts (a little west of Boston) is ISO 17025:2017 accredited.

Michael Kahn, president and founder of MCR Labs, believes this is a huge step for their company. “We’re excited to be expanding and excited for the opportunity to carry out our mission of advancing public health and safety here in the Keystone State,” says Kahn.

The Allentown, PA facility is led by Julia Naccarato. “I’m grateful to MCR for the opportunity to offer the team’s expertise to Pennsylvania’s cannabis providers and to help ensure the safety of products they offer to medical marijuana patients,” says Naccarato.

Canadian Lab Offers Vapor/Smoke Analysis

By Cannabis Industry Journal Staff
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According to a press release sent out last week, Complex Biotech Discovery Ventures (CBDV) has expanded their testing capabilities considerably with the new addition of a vapor/smoke analyzer. CBDV is a licensed cannabis and psilocybin research laboratory embedded in the University of British Columbia, led by CEO Dr. Markus Roggen.

Dr. Markus Roggen, Founder of Complex Biotech Discovery Ventures (CBDV)

The ability to analyze vapor and smoke is a relatively novel concept for the cannabis space, but has been utilized by the tobacco industry for years now. In the early days of adult-use cannabis legalization in the United States, stringent testing regulations for contaminants like pesticides were adopted out of a fear for what would happen when consumers ingest toxic levels of contaminants.

One of the common refrains iterated throughout the industry over the past ten years was that there just wasn’t enough research on how different contaminants affect patients and consumers when burned and inhaled. We still don’t know too much about what happens when someone smokes a dangerous pesticide, such as myclobutanil. Beyond just contaminants, the new technology allows for companies to measure precise levels of cannabinoids in vapor and smoke, getting a more accurate reading on what cannabinoids are actually making it to the end user.

The smoke analyzer at CBDV

This new development coming from our neighbor to the north could lead to a breakthrough in the cannabis lab testing and research space. CBDV claims they can now analyze cannabis material with a much more in-depth analysis than basic compliance testing labs. The new technology for analysis of smoke, vapor, plant material and formulations allows companies to thoroughly understand their materials in each stage of the product formulation process, all the way to product consumption.

Beyond just smoke and vapor analysis CBDV also offers NMR spectroscopy, metabolomics, nanoparticle characterization, computational modeling and other testing services that go far beyond the traditional compliance testing gamut.

“Our new services offer comprehensive insights into plant material, extracts, end-products and even the smoke/vapor by using state-of-the-art analytical instruments,” says Dr. Roggen. “By understanding the chemical fingerprint of the material, cannabis producers can eliminate impurities, adjust potencies, and optimize extraction processes before wasting money and resources on producing inconsistent end products. As a chemist I am really excited about adding NMR and high-res mass spectroscopy to the cannabis testing offerings.”

Updates in Employment Law: CA, WA & CO

By Conor Dale
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A number of laws have gone into effect in 2021 which may have a major impact on cannabis industry employers; clearly understanding the changing legal landscape is essential to avoid and limit potential liability in the new year and beyond. Below is a brief summary of some relevant new employment laws in cannabis friendly states:

California:

  • Expansion of family and medical leave: California has long required employers to provide job protected medical and family leave if an employee worked at a jobsite with 50 or more employees within a 75-mile radius.
  • Senate Bill 1383 now requires all employers with five or more employees to provide up to twelve weeks of unpaid, job-protected leave for employees to bond with a new child or to care for themselves or a family member suffering from a serious health condition. To be eligible for the leave, an employee must have at least 12 months of service with the employer and have performed at least 1,250 hours of work in the previous 12-month period. While on leave, employees are entitled to continue to participate in an employer’s health insurance plan and to return to their job or a comparable position at the conclusion of their job-protected leave. Previously exempt small employers should be aware of these obligations moving forward.
  • Employer Pay Reporting Requirements: Under Senate Bill 973, employers with 100 or more employees that are required to file an annual Employer Information Report, colloquially known as the EEO-1 report, must submit annual information on its employees’ pay data to the state’s Department of Fair Employment and Housing (DFEH). The report must include the number of the employer’s employees by race, ethnicity and sex in specific job categories and pay ranges and their associated work hours and earnings.
  • The first report is due on March 31, 2021, and the DFEH has prepared an online portal to assist employers in submitting this information. These reports can be complex and address highly sensitive information, so employers are strongly advised to contact counsel for assistance in preparing and submitting their first report.

Washington

  • Increased pay requirements: Washington’s inflation-based minimum wage system has increased the minimum wage to $13.69 per hour in 2021. Employers with 50 or fewer employees must also pay salaried employees at least $827 per week (or $43,004 per year) and employers with more than 50 employees must pay at least $965 per week (or $50,180 per year) starting January 1st.

Colorado

  • Equal Pay for Equal Work Act: Beginning in 2021, all employers with at least one employee must: (1) provide formal notice to Colorado employees of promotional opportunities; and (2) disclose pay rates or ranges in job postings that could be performed in Colorado (this includes virtual or remote work positions).
  • The Equal Pay for Equal Work Act generally requires employers to take reasonable efforts to promptly announce, post, or otherwise communicate all opportunities to all current employees prior to making a promotion decision. An employer must communicate promotional opportunities when it has or anticipates a vacancy or a new position that could be considered a promotion for current employees in light of pay, benefits, status, duties or further potential promotions.
  • Under the law, job postings must also include: (1) the rate of pay or pay range for the position; (2) a general description of bonuses, commissions or other forms of compensation offered with the job; and (3) a description of the employment benefits associated with the position.

Cannabis industry employers face a range of new laws, even absent the continued legal burden of managing employees during the COVID 19 pandemic. Employers should consider carefully reviewing all applicable laws and seeking guidance from counsel when needed.

Molson Coors Joint Venture Selects Quicksilver Scientific as Technology Partner

By Cannabis Industry Journal Staff
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According to a press release published this week, Quicksilver Scientific, a nanoemulsion delivery technology company, announced a partnership with Truss CBD USA, which is the joint venture between Molson Coors and HEXO Cannabis.

Quicksilver is a manufacturer of nutritional supplements that uses a patent-pending nanoemulsion delivery technology. Their technology is what enables companies to produce cannabinoid-infused beverages.

Because cannabinoids like CBD are hydrophobic, meaning they are not water-soluble, companies have to use nanoemulsion technology to infuse beverages. Without this technology, beverages with cannabinoids would have inconsistent levels of compounds and they wouldn’t work well to actually deliver the cannabinoids to the body. Nanoemulsion essentially cannabinoids water soluble, thus allowing the delivery of cannabinoids to the bloodstream, increasing bioavailability.

Dr. Christopher Shade, Ph.D., founder & CEO of Quicksilver Scientific says they have perfected their nanoemulsion technology over the past decade. “CBD is not water-soluble, which creates challenges for manufacturers when attempting to mix it into beverages,” says Dr. Shade. “Our innovative nanoemulsion technology overcomes these challenges by encapsulating nano-sized CBD particles in water-soluble spheres that can be directly added to beverages. The result is a clear, great-tasting product with greater bioavailability, a measure of a compound’s concentration that is absorbed into the body’s bloodstream.”

The Veryvell beverage product line

Quicksilver is providing their technology to be used with Veryvell, the joint venture’s new line of non-alcoholic, hemp-derived CBD beverages. The beverage line is already available in the Colorado market. According to the press release, the three product offerings include: “Focus” (grapefruit and tarragon with ginseng and guarana), “Mind & Body” (strawberry and hibiscus with ashwagandha and elderberry) and “Unwind” (blueberry and lavender flavors with ashwagandha and L-Theanine).