Tag Archives: medical

WH Press Sec. Sean Spicer Hints at Trump Admin. Stance on Cannabis

By Aaron G. Biros
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During a press conference on Thursday, February 23rd, White House press secretary Sean Spicer made a number of comments hinting at the Trump administration’s stance on legal cannabis. He identified a clear distinction that he makes between medical and recreational cannabis laws, while mentioning President Trump’s previous statements on medical cannabis. Roby Brock, a journalist at Arkansas news website Talk Business & Politics, asked a question about the state and federal conflict in cannabis laws. “The Obama administration chose not to strictly enforce those federal marijuana laws,” says Brock. “My question to you is with Jeff Sessions over at the Department of Justice as AG, what is going to be the Trump administration’s position on marijuana legalization where it is in a state-federal conflict like this?”

Sean Spicer replied with more of the same of his previous statements regarding the Trump administration’s stance on cannabis legalization. “There are two distinct issues here: medical marijuana and recreational marijuana,” says Spicer. “I think medical marijuana- I’ve said before that the president understands the pain and suffering that many people go through, who are facing especially terminal diseases and the comfort that some of these drugs, including medical marijuana, can bring to them. And that’s one that congress, through a rider in 2011, I think put in the appropriations bill saying the Department of Justice wouldn’t be funded to go after them.” The rider in the appropriations bill he is referring to is the Rohrabacher–Farr amendment that became law in December of 2014, but must be renewed each fiscal year. That piece of legislation provides for exactly what he said- preventing the Justice Department from using funds for activity that might interfere with state’s legal medical cannabis programs. Regarding the actual conflict between federal and state laws, Spicer said “I do believe you will see greater enforcement of it,” referring to the Department of Justice enforcing the Controlled Substances Act.

Image via Youtube
Image via Youtube

Spicer went on to make some questionably ill-informed remarks, including linking recreational cannabis use to the opioid crisis. “There is a big difference between that [medical marijuana] and recreational marijuana,” says Spicer. “And I think that when you see something like the opioid addiction crisis blossoming in so many states around this country, the last thing we should be doing is encouraging people- there is still a federal law that we need to abide by… When it comes to recreational marijuana and other drugs of that nature.” Though those comments are unclear, it could suggest that Mr. Spicer believes in a possible link between recreational cannabis use and the opioid crisis, or at least grouping them in the same category. While there is not much evidence suggesting of the link he is referring to, a study published in 2014 in JAMA Internal Medicine, a peer-reviewed medical journal published by the American Medical Association, suggests a possible link between medical cannabis laws and the decrease in opioid overdoses.

Spicer continued to emphasize his distinction between medical and recreational use of cannabis. “I think there is a big difference between medical marijuana, which states where it is allowed, in accordance with the appropriations rider, have set forth a process to administer and regulate that usage versus recreational marijuana, and that is a very very different subject,” says Spicer. National Cannabis Industry Association executive director Aaron Smith issued a statement regarding Spicer’s comments.

aaronsmithncia
Aaron Smith, executive director of NCIA

“It would be a mistake for the Department of Justice to overthrow the will of the voters and state governments who have created carefully regulated adult-use marijuana programs,” says Smith. “It would represent a rejection of the values of economic growth, limited government, and respect for federalism that Republicans claim to embrace.” Smith says he was very disappointed when he heard press secretary Spicer relate cannabis to opioid addiction. “Science has discredited the idea that marijuana serves as any kind of gateway drug, and the addiction and death rates associated with opioids simply do not occur in any way with cannabis,” says Smith. In October 2016, NCIA published a report identifying cannabis as a possible solution to the opioid crisis.

Isaac Dietrich, chief executive officer of MassRoots.
Isaac Dietrich, chief executive officer of MassRoots.

Isaac Dietrich, chief executive officer of MassRoots, a social networking platform for medical cannabis, sees Spicer’s words having a direct impact on his business. “I have a feeling our stock is going to take a beating tomorrow, but that just creates an opportunity for investors who believe in the long-term trajectory of the cannabis market,” says Dietrich. He goes on to directly refute Spicer’s statements. “Colorado is one of the only states in the nation that is seeing a decline in opioid deaths — that’s not a coincidence,” says Dietrich. “Cannabis is a healthy alternative to pain pills and heroin, not a gateway to it.”

Press secretary Sean Spicer did not allow a reporter present at the press conference to ask a follow up question on the matter.

Implementing Real Science in Cultivation and Extraction

By Aaron G. Biros
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Formed in 2015, Outco is a vertically integrated, licensed producer of medical cannabis in Southern California. Outco manages Outliers Collective, the first licensed dispensary continually operating in San Diego County. They operate the first licensed cultivation on Native American land in Southern California, the first cultivation building permit in Southern California and the first licensed extraction facility in San Diego County. Outco is on track to be the largest licensed producer of medical cannabis in Southern California.

Lincoln Fish, co-founder and chief executive officer of Outco
Lincoln Fish, co-founder and chief executive officer of Outco

The company prides themselves on attention to detail; the well versed team implements real science in their cultivation and extraction processes. Lincoln Fish, co-founder and chief executive officer of Outco, has more than 30 years of experience as an entrepreneur. Before entering the cannabis industry, Linc started and sold companies in the healthcare technology and nutraceutical spaces.

With construction underway at new facilities, Outco is anticipating an expanding market and higher demand.
With construction underway at new facilities, Outco is anticipating an expanding market and higher demand.

Fish’s experience with FDA regulations in nutraceuticals prepared him for running a business in such a tumultuous, highly regulated environment like cannabis. “One thing I took from the nutraceutical industry is how to present products to consumers and letting them know it is safe, effective and consistent,” says Fish. He says he noticed a serious lack of consistency in products. They tested 25 different vape cartridges, with their own oil, to find a consistent product they can use and know that consumers will safely and consistently get the same results. “There is a lot of room for more professionals and a lot of room for more science,” says Fish. “We try to position ourselves in a way that is consistent with where we think policy will go so we are very careful with recommendations from a scientific standpoint, patient information and product safety.”

Starting at a seed or cutting, plants are grown with the protection of biological control agents
Starting at a seed or cutting, plants are grown with the protection of biological control agents

According to Fish, they currently distribute cannabis products to about 75 licensed dispensaries in Orange County, San Diego and Los Angeles. With construction underway at their cultivation facility on Native American land, Fish says they plan to generate roughly 2600 pounds of cannabis each month. Gearing up for that in addition to the expanding recreational market requires some planning in advance, says Fish. Part of that plan is making sure quality controls are in place to keep consistency in the product quality and dosage. They are also actively seeking to open their distribution channels further.

One of the cultivation facilities at Outco
One of the cultivation facilities at Outco

“We are building out a full lab of our own in addition to third party testing to perform internal quality controls,” says Fish. Equipped with their own laboratory instrumentation like HPLC and GC, they hope to establish proper in-house quality controls as well as provide that resource to younger startup companies. As one of the founding partners of Canopy San Diego, an ancillary startup accelerator, Fish sees great potential in working with younger companies to get them off the ground. Fish met Outco’s vice president of extraction, Dr. Markus Roggen, at a Canopy San Diego event. It was there that they had the idea to build a startup accelerator for companies that actually touch the plant- extractors, cultivators and infused-product manufacturers, as opposed to a startup accelerator that would only help ancillary businesses.

Dr. Markus Roggen, vice president of extraction
Dr. Markus Roggen, vice president of extraction

Dr. Roggen, who is an organic chemist by training, heads up Outco’s supercritical CO2 extraction operation. “I came to the ‘art’ of cannabis extraction with an open, yet scientifically focused mind,” says Dr. Roggen. “My approach was to look past the myths and stories about extraction methods and focus on finding data, as there really wasn’t much available. I therefore, from the beginning, started to study the capabilities of our extraction equipment by chemometric methods.” Chemometrics is the science of relating measurements made on a chemical system or process to the state of the system via applications of mathematical methods. “Already the first sets of experiments showed that long-held beliefs in the cannabis community were inaccurate,” says Dr. Roggen. “For example the particle size of extracted material matters. Or that it is possible to preserve and even isolate terpenes by CO2 extraction methods.” With plans to have a full plant and analytical chemistry laboratory on site, they hope to perform more research that focuses on optimizing extraction processes.

Plant irrigation and fertigation procedures are determined via experimentation
Plant irrigation and fertigation procedures are determined via experimentation

Dr. Allison Justice leads their cultivation team with a background in greenhouse management and commercial horticulture. Dr. Justice says plants are grown, starting at a young age (seed or vegetative cutting), with the protection of biological control agents. “Biological control is a management strategy that entails the release of beneficial insects or fungi, such as parasitoids and predators, in order to suppress or regulate insect populations in greenhouses and grow rooms,” says Dr. Justice.

Dr. Allison Justice, vice president of cultivation
Dr. Allison Justice, vice president of cultivation

When implemented properly, this eliminates the need to use synthetic pesticides. “Biological control agents are not put in place to eradicate pest populations yet are applied as preventives to minimize plant damage and maintain their own populations.” They are constantly evaluating light types, spectrum and intensity to determine optimal ranges, according to Dr. Justice. They don’t use any pre-mixed “cannabis” nutrient supplements for their plants, instead they design an experiment to determine the desired levels and ratios of essential plant nutrients. “We have found it crucial to determine what ratios of nutrients the plant actually needs and by knowing this, we know how to manipulate the recipe determined by the plant’s given nutritional symptoms,” says Dr. Justice. Every type of adjustment in cultivation and extraction is based on results from experimentation rooted in legitimate science. Instead of guessing when it might be time to harvest, they use a water activity meter, logging and recording all the data to determine the appropriate time to trim and cure plants. Performing analytical testing at every step is key, says Fish.

Looking toward the recreational market, Fish sees an obvious opportunity to expand their wholesale operations substantially, with several larger new cultivation projects planned. “The key though is to produce flower and concentrate offerings with the same standards we employ for medical cannabis,” says Fish.

Members of Congress Form Cannabis Caucus

By Aaron G. Biros
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congressional cannabis caucus
Rep. Rohrabacher speaks at the announcement, Photo via Earl Blumenauer/YouTube

Members of Congress last week announced the formation of a ‘Congressional Cannabis Caucus’ in order to organize and affect cannabis policy at the federal level. Representatives Earl Blumenauer (D-OR), Dana Rohrabacher (R-CA), Jared Polis (D-CO) and Don Young (R-AK) announced the creation of the caucus on February 16th. Cannabis advocacy and drug policy groups were quick to commend the formation of the organization.

In a joint statement issued on Friday, the National Cannabis Industry Association, the Marijuana Policy Project, the Drug Policy Alliance, NORML, Americans for Safe Access, Students for Sensible Drug Policy, Law Enforcement Action Partnership, Doctors for Cannabis Regulation, and Clergy for a New Drug Policy expressed commendation and excitement for the new group. “We commend Representatives Blumenauer, Rohrabacher, Polis, and Young for their leadership on the issue of cannabis policy,” reads the statement. “The establishment of a Cannabis Caucus will allow members from both parties, who represent diverse constituencies from around the country, to join together for the purpose of advancing sensible cannabis policy reform. It will also facilitate efforts to ease the tension between federal prohibition laws and state laws that regulate cannabis for medical and adult use.”

Rep. Earl Blumenauer (D-OR), Photo: Michael Campbell, Flickr
Rep. Earl Blumenauer (D-OR), Photo: Michael Campbell, Flickr

The members of Congress that formed the caucus all represent constituents in states where cannabis is legal for medical and adult use. “The formation of this caucus is a testament to how far our country has come on the issue of cannabis policy,” says the joint statement by the drug policy reform groups. “We look forward to working with caucus members to translate this growing public sentiment into sound public policy.” According to their statement, 44 states so far have adopted laws effecting cannabis prohibition on the state level, representing 95% of the U.S. House of Representatives and 88% of the Senate.

Rep. Dana Rohrabacher (R-CA), Photo: Gage Skidmore, Flickr
Rep. Dana Rohrabacher (R-CA), Photo: Gage Skidmore, Flickr

Representatives Blumenauer and Rohrabacher have been prominent cannabis policy reform advocates in the past. Blumenauer supported the bill to legalize adult use cannabis in Oregon back in 2014 and Rohrabacher introduced the Rohrabacher–Farr amendment to Congress, which prohibits the Justice Department from spending money on interfering with state medical cannabis laws.

According to an article on Roll Call, Blumenauer says the caucus will focus on more medical research and the tax and banking regulations hurting cannabis businesses.

Florida On Path to Implement Medical Cannabis Legalization

By Aaron G. Biros
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Voters in Florida passed Amendment 2 last year with an overwhelming majority of over 70%. The constitutional amendment went into effect on January 3rd this year and regulators have until July 3rd to promulgate the rules.

The Florida Department of Health set up the Office of Compassionate Use (OCU) in July of 2014 after the passing of the so-called Charlotte’s Web measure (HB 843). That bill allows use of low THC/high CBD cannabis for treating seizures. The OCU is charged with the task of writing and implementing medical cannabis rules. Ongoing public hearings and workshops at the Department of Health (DOH) are meant to give stakeholders the opportunity to chime in on the proposed rules.

Florida State Capitol, Talahasse Stuart Seeger, Flickr
Florida State Capitol, Talahasse
Stuart Seeger, Flickr

On January 17th, the DOH published proposed rules and announced public hearings, seeking input from the public on the matter. The OCU is required to implement rules consistent with Amendment 2, but they would defer to the legislature if a bill were passed, promulgating rules consistent with Amendment 2 and the bill.

After the passing of Amendment 2, Sen. Jeff Brandes (R-St. Petersburg) filed SB614, a bill that establishes four license categories instead of the currently required vertically integrated business model. Notably, Sen. Brandes’ bill requires laboratory batch testing, whereas other proposed rules do not include such a measure. Sen. Brandes sees the DOH’s proposed rules as more of the same from the current medical program, according to a quote from FloridaPolitics.com. “Any proposal which seeks to mold the spirit of Amendment 2 into the narrow and flawed law on the books today should be rejected, and a more comprehensive strategy must take priority,” says Sen. Brandes. “I will support no bill, nor any rule, that maintains the established state sanctioned cartel system we have today, and I urge my colleagues to join me in proposing a free market solution for Florida.” He is referring to the seven licensed nurseries from the low THC/high CBD medical program, all of which are vertically integrated.

Matthew Ginder, senior counsel of the cannabis practice at Greenspoon Marder
Matthew Ginder, senior counsel in the cannabis practice at Greenspoon Marder

According to Matthew Ginder, senior counsel in the cannabis law practice at Greenspoon Marder, the biggest question for the legislature is how many licenses will they issue and what kind of structures are required for the licensees. Another big issue is the process by which patients access medical cannabis through their physicians. “The current program requires physicians to register as the orderer of medical cannabis, specify dosing and order medical devices, which is highly uncommon in other state programs,” says Ginder. “Sen. Brandes’ bill removes these requirements and is more consistent with other states by requiring a physician’s recommendation.” He says that bill would create four licenses: cultivation, processing transportation and retail.

Sen. Robert Bradley (R-5th District) also filed legislation (SB 406) to implement Amendment 2, but this bill is very different from Sen. Brandes’ bill. “Bradley’s bill is built upon the statutory framework that is already in place,” says Ginder. “Bradley’s is keeping vertical integration intact, seeking to also limit the amount of vertically integrated license based on a patient ratio of about 20,000 registered patients per license issued.” Bradley’s bill does not provide for independent lab testing requirements. Some might characterize Bradley’s bill as more of the same, allowing for the consolidation of existing monopolies.

Ginder says these are just two bills from the Senate, the House still has not proposed any bills. “We will most likely see more bills,” says Ginder. “We still don’t know what iteration of the bill or what language might be adopted and you can expect them to change as it moves through the committees.” With the legislative session beginning on March 7th, we can expect to see these bills debated on the floor and likely the filing of other legislation.

gm-horizontal-bw_nolaw (4)On February 1st, Greenspoon Marder announced the launch of their Organization for Safe Cannabis Regulation (OSCR) in Florida. By hiring lobbyists and making contributions to certain political candidates, the OSCR aims to advocate for a broad and fair marketplace, specifically “advocating for laws that create independently “registered” entities that perform specific functions along the production and distribution chain.”

Pennsylvania Opens Cannabis Licensing Applications

By Aaron G. Biros
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PA Secretary of Health Dr. Karen Murphy last week announced applications for growers and processors, while dispensary license applications will be available January 17, 2017. License applications will be accepted from February 20 through March 20, 2017. Governor Wolf signed the medical cannabis bill into law back in April of this year.

Philadelphia City Hall Photo: Michael Righi, Flickr
Philadelphia City Hall
Photo: Michael Righi, Flickr

“We’ve reached an important milestone in the program with the release of permit applications on January 17, 2017,” says Secretary Murphy. The PA Department of Health will issue 12 licenses for growers and processors and 27 dispensary licenses, according to Secretary Murphy’s statement. “The decision for which counties will be issued permits in this first phase was determined by using the department’s medical data, as well as comments from more than 5,000 patients and nearly 900 potential grower/processors and dispensary applicants.”

PA Capitol building in Harrisburg Photo: Harvey Barrison, Flickr
State Capitol building in Harrisburg
Photo: Harvey Barrison, Flickr

According to the Philly Voice, the highly populated Southeast region of Pennsylvania will get ten dispensary permits, including three in Philadelphia, two in Montgomery County and one in Bucks, Chester, Berks, Delaware and Lancaster counties each. The state will fully implement its medical cannabis program by 2018, but a temporary program with ‘Safe Harbor guidelines’ was effective in May of 2016, essentially allowing access for patients in the mean time, while establishing preliminary regulatory compliance guidelines.

In last week’s statement, Secretary Murphy also stressed the importance of their Physician Workgroup in developing the regulations. “We cannot underestimate the role of physicians in making sure that patients can access medical marijuana,” says Secretary Murphy. “That’s why the involvement of physicians and health care professionals through our Physician Workgroup is vital to the successful development and implementation of Pennsylvania’s Medical Marijuana Program.” The Workgroup’s recommendations include establishing quality monitoring, training for dosage recommendations while addressing rural and urban access, education and delivery.

OHA Addresses Oregon Growing Pains, Changes Testing Rules

By Aaron G. Biros
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Last week, the Oregon Health Authority (OHA) published a bulletin, outlining new temporary testing requirements effective immediately until May 30th of next year. The changes to the rules come in the wake of product shortages, higher prices and even some claims of cultivators reverting back to the black market to stay afloat.img_6245

According to the bulletin, these temporary regulations are meant to still protect public health and safety, but are “aimed at lowering the testing burden for producers and processors based on concerns and input from the marijuana industry.” The temporary rules, applying to both medical and retail products, are a Band-Aid fix while the OHA works on a permanent solution to the testing backlog.

Here are some key takeaways from the rule changes:

Labeling

  • THC and CBD amounts on the label must be the value calculated by a laboratory, plus or minus 5%.

Batch testing

  • A harvest lot can include more than one strain.
  • Cannabis harvested within a 48-hour period, using the same growing and curing processes can be included in one harvest lot.
  • Edibles processors can include up to 1000 units of product in a batch for testing.
  • The size of a process lot submitted for testing for concentrates, extracts or other non-edible products will be the maximum size for future sampling and testing.

    Oregon Marijuana Universal Symbol for Printing
    Oregon Marijuana Universal Symbol for Printing

Sampling

  • Different batches of the same strain can be combined for testing potency.
  • Samples can be combined from a number of batches in a harvest lot for pesticide testing if the weight of all the batches doesn’t exceed ten pounds. This also means that if that combined sample fails a pesticide test, all of the batches fail the test and need to be disposed.

Solvent testing

  • Butanol, Propanol and Ethanol are no longer on the solvent list.

Potency testing

  • The maximum concentration limit for THC and CBD testing can have up to a 5% variance.

Control Study

  • Process validation is replaced by one control study.
  • After OHA has certified a control study, it is valid for a year unless there is an SOP or ingredient change.
  • During the control study, sample increments are tested separately for homogeneity across batches, but when the control study is certified, sample increments can be combined.

Failing a test

  • Test reports must clearly show if a test fails or passes.
  • Producers can request a reanalysis after a failed test no later than a week after receiving failed test results and that reanalysis must happen within 30 days.
Gov. Kate Brown Photo: Oregon Dept. of Transportation
Gov. Kate Brown
Photo: Oregon Dept. of Transportation

The office of Gov. Kate Brown along with the OHA, Oregon Department of Agriculture (ODA) and Oregon Liquor Control Commission (OLCC) issued a letter in late November, serving as a reminder of the regulations regarding pesticide use and testing. It says in bold that it is illegal to use any pesticide not on the ODA’s cannabis and pesticide guide list. The letter states that failed pesticide tests are referred to ODA for investigation, which means producers that fail those tests could face punitive measures such as fines.

Photo: Michelle Tribe, Flickr
Photo: Michelle Tribe, Flickr

The letter also clarifies a major part of the pesticide rules involving the action level, or the measured amount of pesticides in a product that the OHA deems potentially dangerous. “Despite cannabis producers receiving test results below OHA pesticide action levels for cannabis (set in OHA rule), producers may still be in violation of the Oregon Pesticide Control Act if any levels of illegal pesticides are detected.” This is crucial information for producers who might have phased out use of pesticides in the past or might have began operations in a facility where pesticides were used previously. A laboratory detecting even a trace amount in the parts-per-billion range of banned pesticides, like Myclobutanil, would mean the producer is in violation of the Pesticide Control Act and could face thousands of dollars in fines. The approved pesticides on the list are generally intended for food products, exempt from a tolerance and are considered low risk.

As regulators work to accredit more laboratories and flesh out issues with the industry, Oregon’s cannabis market enters a period of marked uncertainty.

First Nevada Cannabis Lab Receives ISO 17025 Accreditation.

By Aaron G. Biros
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On December 7th, 374 Labs received ISO 17025 accreditation, becoming the first in Nevada to do so. The laboratory, based in Sparks, Nevada, is state-certified and now the only ISO 17025 accredited lab in the state, according to a press release. The laboratory is a member in both the Association of Commercial Cannabis Laboratories (ACCL) and the Nevada Cannabis Laboratory Association (NVCLA).

Managing Partner Alec Garcia at the LCMS/MS
Managing Partner Alec Garcia at the LCMS/MS

“As Nevada transitions into an adult-use cannabis market, it’s very important that the state’s cannabis testing laboratories are held to the highest standards – and ISO 17025 is a requirement of top testing laboratories in all industries from biotech to forensics in most major countries,” says Dr. Jeff Angermann, assistant professor in the University of Nevada, Reno’s School of Community Health Sciences.

Laboratory Technician Bevan Meade working on sample preparation.
Laboratory Technician Bevan Meade working on sample preparation.

According to the release, 374 Labs was a driving force behind Nevada’s round robin cannabis lab testing program. That program, administered by the Nevada Division of Public and Behavioral Health (DPBH) and the Nevada Department of Agriculture (NDA), sends cannabis samples to each state-certified cannabis lab for a full analysis, measuring the consistency in test results across labs. “In other states proficiency involves testing pre-prepared, purified samples and neglects the challenges of coaxing out delicate analytes from the complex array of compounds found in actual marijuana,” says Laboratory Director Jason Strull. “I commend the DPBH and NDA for facilitating such an advanced quality program.”

Also notable is the announcing of their partnership with Clean Green Certified, a third-party certification (based on USDA organic certification) for sustainable, organically based cannabis cultivation. “Nevada allows certain levels of pesticides like Myclobutanil on its certified marijuana, so we wanted a way for patients and consumers to able to distinguish marijuana that is grown using organic methods,” said Laboratory Director Jason Strull. According to Michael Seibert, managing member of 374 Labs, they have already started performing inspections for the third-party certification and the first facility inspected was Silver State Trading in Sparks, Nevada (certified for both production and cultivation).

Election Day Results for Cannabis: California, Nevada, Massachusetts, Maine Legalize Recreational Cannabis

By Aaron G. Biros
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Update: With 100% reporting (589 of 589 precincts), voters in Maine passed Question 1, legalizing recreational cannabis by a very narrow margin of 50.2% to 49.8% (378,288 in favor and 375,668 against is a margin of only 2,620 votes)


Voters in California, Massachusetts, Maine and Nevada passed ballot initiatives legalizing the recreational use of cannabis, creating huge new markets for the cannabis industry overnight. Voters in North Dakota, Florida, Montana and Arkansas passed ballot initiatives to legalize forms of medical cannabis. Voters by a margin of 52.2% to 47.8% rejected Arizona’s Proposition 205, which would have legalized recreational cannabis.

With 100% of the votes in for Maine’s Question 1, voters narrowly passed legalizing recreational cannabis, the polls show it won by a very slim margin, less than 3,000 votes.

newfrontier_logo_finalNew Frontier Data and Arcview Market Research released an Election Day update to their growth projections for the cannabis industry by 2020. The release projects: “The legalization of cannabis in California, Massachusetts, Nevada, Florida, Arkansas and North Dakota will result in new markets that account for $7.1 billion in sales by 2020. We project the overall U.S. cannabis market will exceed $20.9 billion by 2020.” Those numbers include overall cannabis sales and assume the markets are all fully operational by 2018.

Giadha DeCarcer, (photo credit: CNN Money)
Giadha DeCarcer, founder and CEO of New Frontier (photo credit: Frontierfinancials.com)

According to Giadha DeCarcer, founder and chief executive officer of New Frontier, there is overwhelming support for medical cannabis and a majority of Americans are in favor of legalizing recreational cannabis as well. “The ten initiatives on the ballot reflect the accelerating public debate on legal cannabis access,” says DeCarcer. “The passage of California’s adult use measure and Florida’s medical initiative expand legal access into two of the country’s most populous states.” The market potential is notably enormous in California, it currently being the 6th largest economy in the world. “Additionally, the passage of the measure in Massachusetts opens the first adult use market in the Northeast extending the reach of legal adult use access from coast to coast,” says DeCarcer. “The passage of the measures in Arkansas and North Dakota shows that public support on this issue is not solely confined to urban, liberal markets but extends into conservative rural states as well.”

According to the release, by 2020 California could reach a total market size of $7.6B and Massachusetts could grow to $1.1B. Massachusetts being the first mover in the Northeast to legalize recreational cannabis will be watched very closely by a number of surrounding states that appeared bullish on cannabis legalization previously.

Leslie Bocskor, president and founder of Electrum Partners
Leslie Bocskor, president and founder of Electrum Partners

Leslie Bocskor, president and founder of Electrum Partners, believes the Election Day results will bring an influx of investing opportunities to the industry. “We are going to see a diverse approach from the irrationally exuberant to the sophisticated and experienced investor and entrepreneur getting involved, creating businesses and investing in the industry that will create innovation, jobs, wealth and tax revenue far beyond the consensus expectations,” says Bocksor. “The cannabis industry is more than one industry; it is an entire ecosystem, impacting so many verticals, such as agriculture, industrial chemicals from hemp, pharmaceuticals, nutraceuticals and more. We see the funding of innovation that might have been absent without the velocity and heft that has come from this phenomenon,” adds Bocksor. As these newly legalized markets begin to launch, it will require a considerable amount of time to see the industry flesh out in each new state.

whitehouse
Tom Lohdan, Flickr

Donald Trump winning the presidential election and the GOP retaining control over the House and Senate could mean a lot of uncertainties for the future of the cannabis industry on a national scale. President-elect Trump has previously flip-flopped on the issue of cannabis legalization, but has said in the past he favors leaving the issue of medical use up to the states, advocating for access to medical cannabis, while recently saying he opposes regulating cannabis for adult use, according to the Marijuana Policy Project. The MPP gave him a C+ grade for his views toward cannabis.

On The O’Reilly Factor in February 2016, Trump told the conservative political commentator that he supports medical cannabis while opposing the recreational use. “I’m in favor of it [access to medical cannabis] a hundred percent. But what you are talking about [recreational use], perhaps not. It’s causing a lot of problems out there [in Colorado],” says Trump. It is still unclear at this time exactly what Trump’s policy will be for the now 28 states that have some form of legal cannabis.

aaronsmithncia
Aaron Smith, executive director of NCIA

Aaron Smith, executive director of the National Cannabis Industry Association (NCIA), appeared optimistic regarding the outcomes of Election Day. “More than 16 million voters, including in two of the three most populated states in the nation, chose legal, regulated cannabis programs that promote safety, boost the economy, help sick patients and address social injustices,” says Smith. In the press release, the NCIA spelled out their priorities for congressional action on cannabis policy: Opening up bank access for state-compliant cannabis businesses, ending the effects of federal tax code Section 280E on cannabis businesses and removing cannabis from the Controlled Substances Act via descheduling. “Last night’s results send a simple message – the tipping point has come,” says Smith.

Pennsylvania Temporary Rules for Growers & Processors Released

By Aaron G. Biros
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Last week, Pennsylvania Department of Health Secretary Dr. Karen Murphy announced the formation of temporary regulations for cannabis growers and processors in the state, according to a press release. Those temporary rules were published on Saturday, October 29. Secretary Murphy asked for public comment on developing regulations for dispensaries as well.padeptofhealthlogo-768x186

The PA Department of Health published the new set of temporary regulations this past Saturday, outlining “the financial, legal and operational requirements needed by an individual to be considered for a grower/processor permit, as well as where the facilities can be located.” The regulations also discuss tracking systems, equipment maintenance, safety issues, disposal of cannabis, tax reporting, pesticides, recalls and insurance requirements. “One of our biggest accomplishments to date is the development of temporary regulations for marijuana growers and processors,” says Secretary Murphy. “We received nearly 1,000 comments from members of the community, the industry and our legislative partners.”

The general provisions published on Saturday outline the details of the application process, fees, inspections, reporting, advertising and issues surrounding locations and zoning. The temporary regulations for growers and processors delve into the minutia of regulatory compliance for a variety of issues: including security, storage, maintenance, transportation, tracking, disposal, recall, pesticides and packaging and safety requirements. A list of pesticides permitted for use can also be found at the bottom of the rules.

PA Department of Health Secretary Dr. Karen Murphy
PA Department of Health Secretary Dr. Karen Murphy

The document discusses the regulations for performing voluntary and mandatory recalls in great detail. It requires thorough documentation and standard operating procedures for the disposal of contaminated products, cooperation with the Department of Health and appropriate communications with those affected by the recall.

The department has yet to release temporary regulations for laboratories and dispensaries, but hopes to do so before the end of the year. “I am encouraging the public – and specifically the dispensary community – to review the temporary regulations and provide us with their feedback,” says Secretary Murphy. “The final temporary regulations for dispensaries will be published in the Pennsylvania Bulletin by the end of the year.”

Since Governor Tom Wolf signed the medical cannabis program bill into law in April 2016, the state has made considerable progress to develop the program, including setting up a physician workgroup, public surveys for developing temporary rules and a request for information for electronic tracking IT solutions. The PA Department of Health expects to implement the program fully in the next 18 to 24 months.

Soapbox

Best Practices for Submitting a Winning Application

By Leif Olsen
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Even though half of U.S. states and the District of Colombia now permit the possession of medical or recreational cannabis, state regulatory bodies differ greatly in their approaches to managing our industry. In Washington, anyone over the age of 21 can legally possess one ounce of usable cannabis and/or seven grams of concentrate. In Minnesota, patients are only allowed to purchase non-smokable cannabis in pill, liquid or oil form.

Given these substantial differences, it is no surprise that the application process to open a dispensary or cultivation facility also varies from state to state. The question I am most often asked (and catch myself mulling over late at night) is what can applicants do to ensure their success, regardless of where they are applying?

Recently we helped a client secure one of the first 15 licenses issued to grow medical cannabis in Maryland. The Maryland application process was particularly unique because most of the applicants had political or law-enforcement ties, or were connected to successful out-of-state growers. That experience, along with our work in places like Arizona, Colorado and Florida, has shown me the importance of teamwork, diversity and security in developing a winning application.

So here are my suggestions for ensuring a successful submission, regardless of which state you are operating in:

  1. Build the Right Team. My dad likes to say, “Use the right tool for the right job.” I think the same is true about creating the team for your application. Do not assume one or two people will be able to fill all of the required roles. You will need experts in a range of different areas including medicine, pharmacology, capital investment, cultivation, real estate, security and law.
  2. Focus on Diversity. I think one of the reasons we have been successful in helping clients secure applications (we are six for six, in six different states) is our commitment to gender, racial and even geographic diversity. For example, we recently helped a client secure a license in an economically underdeveloped area. I think our choice to headquarter the new business outside of the metropolitan corridor was at least partially responsible for our success.
  3. The Devil is in the Details. According to ArcView Market Research, the cannabis industry is expected to be worth $23 billion by 2020. If you want to be one of the organizations selected by your state to sell cannabis, you need to have your act together. Most applications ask incredibly detailed questions. Therefore it is essential that you answer them thoroughly and accurately. All answers should be in compliance with your state’s regulations.
  4. Put Safety First. You will need a comprehensive plan that takes all aspects of security into account. This includes everything from hiring security guards to purchasing cameras, and implementing internal anti-theft procedures. Regardless of the size of your operation, safety should be a primary consideration.
  5. Secure Funding. Successful cannabis businesses require capital. It’s important to be realistic about the amount of money you will need to have on hand. Application costs typically range from $500,000 to $1 million. This will cover things like hiring an architect or leasing land. Ideally, your organization will have another $5 to $10 million or more available to start your project once you’ve been approved so that you can quickly become operational.
  6. Connect With Your Community. It is essential to consider the impact of your business on the community. Being a good corporate citizen means being transparent and engaging in a two-way dialogue with neighbors, government officials and patients. I strongly recommend that my clients develop a comprehensive community outreach plan that designates which organizations they plan to work with, (hospitals or universities, for example) and what the nature of those partnerships will be.