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What’s Happening on Capitol Hill? Part 3: The Medical Bills

By Brian Blumenfeld, J.D., M.A.
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This article continues the bill-by-bill review begun in the August 1st article on cannabis reform legislation proposed in the 115th Congress. In the next article and final piece in this series, we will examine the banking and tax reform bills related to cannabis.

Medical Cannabis Reform Bills 

S. 1008 – Therapeutic Hemp Medical Act of 2017

HR. 2273 – Charlotte’s Web Medical Access Act of 2017

Policy: These bills would amend the CSA to end federal prohibition over all CBD products and all hemp plants with THC content levels of below 0.3%. In other words, people and businesses would be free to grow hemp and/or manufacture CBD products without any fear of federal prosecution. These products would most likely then fall under the regulation of other federal and/or state agencies, but the bills do not specify what agencies they might be or what controls might be put in place.

Impact: The impacts from these bills nationwide have the potential to be massive. Hemp is a plant that can be put to highly effective use in many different industries, from textiles and construction to foodstuffs and seafaring. The efficiency of its growth and the breadth of its utility will make it a highly valuable commodity and a competitor with many other raw materials. For state-legal cannabis businesses, the legalization of CBD and hemp at the federal level could fundamentally change the market for those products. States that legalized cannabis already have provisions in place dealing with hemp and CBD—sometimes alongside their cannabis laws, sometimes handled by a separate state agency—and they could either leave those as they are or open up those markets to interstate activity. In states that have not legalized, CBD and hemp are typically included in the state’s definition of cannabis, and therefore they will remain illegal under state law unless further action is taken. Most likely, if federal prohibition ends on hemp and CBD, state prohibition will follow suit. Because legalization at the federal level will allow for interstate commerce in hemp and CBD, expect the emergence of a nationwide market, driven by online sales and interstate marketing, and developing independently from a cannabis industry still constrained to in-state activities.

Procedural Status:

Senator Cory Gardner (R-CO) Photo: Gage Skidmore, Flickr

S. 1008

  • Introduced: May 2, 2017 by Senator Cory Gardner (R-CO)
  • Cosponsors: 7 Republican, 4 Democrat
  • Referred to Senate Committee on:
    • Judiciary

 HR. 2273

  • Introduced: May 1, 2017 by Representative Scott Perry (R-PA)
  • Cosponsors: 10 Republicans, 10 Democrats
  • Referred to House Committee on:
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
    • Energy and Commerce
      • Subcommittee on Health
    • Financial Services

S. 1276 – Cannabidiol Research Expansion Act

Policy: This bill would accomplish two objectives: First, it would open channels for researchers to access and experiment with cannabis and cannabis extracts. Second, it would initiate the process at the end of which the Attorney General must make a determination as to which Schedule of the CSA is most appropriate for cannabidiol (CBD).

Impact: The impact on this legislation to state-legal cannabis businesses is rather remote—in both time and practice. The research access provisions will certainly create an uptick in medical and psychological research activity, the outcomes of which will add to our knowledge of how consuming cannabis in different forms and amounts effects the brain and body. This type of government-regulated research takes many years to process and complete, as both bureaucratic and scientific standards must be met. As for initiating the re/de-scheduling review process for CBD, this is a direct response to the 2016 denial by the DEA to re/de-schedule cannabis. That determination, published in the Federal Registrar on August 12, 2016, was made following a comprehensive study of the medical benefits and harms of cannabis conducted by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA). Although such an in-depth study and its resulting negative determination pronounced so recently would normally rule out the chances of success for another re/de-scheduling attempt so soon after, the DEA did leave the door open with its statement that it “did not focus its evaluation on particular strains of marijuana or components or derivatives of marijuana.” It is just this door that S. 1276 seeks to exploit. By focusing the re/de-scheduling process on CBD specifically, the presumption is that the outcome of the scientific CBD studies would have a far better chance at satisfying the re/de-scheduling criteria set forth in the CSA. If such a determination was made, then the impact would come in two potential varieties. One, CBD would be rescheduled and become available for medical use according to FDA rules applicable to other prescription drugs. Two, CBD would be descheduled and would fall under the prerogative of the states, in which case the above analysis for S. 1008 and HR. 2273 would pertain.

Senator Dianne Feinstein (D-CA)
Photo: Daniel Torok

Procedural Status:

S. 1276

  • Introduced: May 25, 2017 by Senator Dianne Feinstein (D-CA)
  • Cosponsors: 3 Republican, 2 Democrat
  • Referred to Senate Committee on:
    • Judiciary

S. 1374 – Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017

HR. 2920 – Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017

HR. 715 – Compassionate Access Act of 2017

HR. 714 – Legitimate Use of Medical Marijuana Act (LUMMA) of 2017

Policy: All four of these bills would make an exception to the CSA for state medical cannabis laws. Federal prohibition, in other words, would end for medical cannabis in those states that have legalized, and it would be left to those states to devise how it would be regulated. In states that have not legalized, both state and federal prohibition would remain. The companion CARERS Acts in the House and Senate, along with HR. 714, would also amend FDA rules to widen access to cannabis for research purposes.

Impact: The impact of these bills on the rules for state-legal medical cannabis businesses would be relatively minor in terms of functionality. This is so because they leave not only the determination to legalize up to the states, but they leave the design of the regulatory system up to the states as well. In other areas, however, big changes will be seen that benefit the industry: banking will open up for state medical businesses, and so will the opportunity to write-off ordinary business expenses. Investment risks over legality will end, making for easier access to capital. Questions about contract enforcement and risks of federal prosecution will become moot, and when state regulatory bodies make decisions on how to govern the industry, they will no longer have to concern themselves with U.S. DOJ enforcement and/or prosecutorial policies. Enactment of any of these bills would be a big win for medical cannabis.

Senator Cory Booker (D-NJ) Photo: David Shinbone, Flickr

Procedural Status:

S. 1374

  • Introduced: June 15, 2017 by Senator Cory Booker (D-NJ)
  • Cosponsors: None
  • Referred to Senate Committee on:
    • Judiciary

HR. 2920

  • Introduced: June 15, 2017 by Representative Steve Cohen (D-TN)
  • Cosponsors: 1 Republicans
  • Referred to House Committee on:
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
    • Energy and Commerce
      • Subcommittee on Health
    • Veterans’ Affairs
      • Subcommittee on Health

HR. 715

  • Introduced: January 27, 2017 by Representative Morgan H. Griffith (R-VA)
  • Cosponsors: 2 Republicans, 1 Democrat
  • Referred to House Committee on:
    • Energy and Commerce
      • Subcommittee on Health
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations

HR. 714

  • Introduced: January 27, 2017 by Representative Morgan H. Griffith
  • Cosponsors: 1 Democrat
  • Referred to House Committee on:
    • Energy and Commerce
      • Subcommittee on Health

HR. 2020 – To Provide for the Rescheduling of Marijuana into Schedule III of the CSA

Policy: As its wordy title indicates, this bill would bypass the schedule review process and by legislative fiat move cannabis from Schedule I to Schedule III of the CSA.

Representative Matt Gaetz (R-FL)

Impact: Businesses handling drugs in Schedule III must register with the DEA and comply with DEA record keeping and security requirements. Doctors would be permitted to prescribe cannabis products. Importing/exporting will become available by permit, which would bring state businesses into competition with foreign cannabis firms. The biggest impact will be that cannabis sold pursuant to federal law will have to undergo the FDA’s New Drug Application process conducted by the Center for Drug Evaluation and Research, the largest of the FDA’s five centers. This includes clinical testing and a comprehensive chemical/pharmacological review. The drug would then be subject to FDA regulation for marketing and labelling. For states that wanted to maintain their legal medical cannabis systems, a conflict would remain because cannabis cultivators and dispensaries could operate in compliance with state law while simultaneously failing to meet new FDA and DEA requirements. States will then have a choice: bring state laws into line with federal laws, creating all of the advantages of federal legality discussed above, yet causing major disruptions to the industry; or retain the status quo, allowing the industry to grow as is with all of the in-state advantages but without the advantages of federal legalization. This all would of course leave behind recreational cannabis which would remain in the legal gray zone.

  • Introduced: April 4, 2017 by Representative Matt Gaetz (R-FL)
  • Cosponsors:
  • Referred to House Committee on:
    • Energy and Commerce
      • Subcommittee on Health
    • Judiciary

HR. 331 – States’ Medical Marijuana Property Right Protection Act

Policy: Section 881(a)(7) of the CSA subjects to federal forfeiture all property involved with cannabis activities. This bill would make an exception to that provision for all property in compliance with state medical cannabis laws.

Impact: Although not legalizing medical cannabis, this bill would be a strong step in the direction of legitimizing state-legal medical cannabis businesses. As a result of the property forfeiture clause of the CSA, two impediments faced by the medical cannabis industry is that investors are hesitant to invest and land lords are hesitant to lease or otherwise engage the medical cannabis market. By eliminating the risk of such property loss due to the federal-state conflict, this bill would have the very welcomed impact of easing access to capital and expanding opportunities for land use.

  • Introduced: January31, 2017 by Representative Barbara Lee (D-CA)
  • Cosponsors:
  • Referred to the House Committee on:
    • Judiciary
      • Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
    • Energy and Commerce
      • Subcommittee on Health

Senate Committee Votes to Keep Medical Cannabis Protections

By Aaron G. Biros
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The Senate Appropriations Committee approved the amendment to continue protecting state-legal medical cannabis markets from the Department of Justice. The amendment, previously known as the Rohrabacher-Farr Amendment, prevents the DOJ from using funds to target medical cannabis operations, patients and businesses in states where it is legal.

Every time Congress reviews the budget, this amendment needs to be included to keep protecting the medical cannabis community. While the rider still needs to make it through the final version of the appropriations bill, it is a big win for the status quo.

According to Aaron Smith, executive director and co-founder of the National Cannabis Industry Association (NCIA), this indicates that Congress is resisting Attorney General Jeff Sessions’ calls to end the protections. In a letter sent back in May, Sessions urged the Senate on both sides of the aisle to stop protecting medical cannabis.

Many see this morning’s vote as Congress standing up to Jeff Sessions, and standing up for medical cannabis patients. In a letter to NCIA members, Smith says that a lot of work still needs to be done, but this is an important first step. “This is not the end of the story. There are still many steps to go before a new budget is finalized,” says Smith. “But this is an important indicator that our allies in Congress are standing up for us, even in the face of DOJ opposition.” In an official NCIA statement, Smith acknowledges the hurdles that still face the amendment. “Now it’s time for the House to do the same,” says Smith. “Patients deserve access to care, states deserve respect, and members of the House deserve the opportunity to vote on amendments like this that have the strong support of their constituents.” Bipartisan support like this in Congress is needed to prevent the current administration and the DEA from meddling in states with legal medical cannabis.

 

What’s Happening on Capitol Hill? Cannabis Reform Proposals and the 115th Congress

By Brian Blumenfeld, J.D., M.A.
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As CIJ readers are probably aware, last month Congress passed the Consolidated Appropriations Act of 2017—the annual budget, in other words. Lying within this 1,665-page document is Section 537, which for one year restricts the Department of Justice from using any funds to prevent states from implementing their medical cannabis laws. Medical cannabis businesses and patients can take some solace in this restriction. Last summer, the influential U.S. Court of Appeals for the Ninth Circuit, sitting in San Francisco, confirmed that this appropriations rider prevents federal prosecutors from bringing suit against medical cannabis businesses and users operating in compliance with state law. Two problems remain glaring, however: one, the protection only applies to medical cannabis activity, not recreational; and two, it is only guaranteed to last for one fiscal year.

To be sure, for the 115th Congress to address the profusion of issues emerging from the nationwide legalization movement, they must do something more. Various reform proposals have in fact been introduced during the current congressional session, and in order to fully digest where they stand and what they have the potential to accomplish, it will help to make sure that we know how they fit within federal legislative procedure.

Catching Up to Speed with the Legislative Process 

How A Bill Becomes A Law
Photo: Mary-Frances Main

Whenever confronting a question about government and politics, it is never a bad idea to start at the source of authority. In America, that source is of course the Constitution, and in Article 1, Section 5, Clause 2, We The People have given to Congress the power to “determine the rules of its proceedings”.  When we remember back to the School House Rock cartoon for How A Bill Becomes A Law, the majority of political maneuvering behind the basic process taught in the cartoon actually happens according to these ‘rules’ or ‘resolutions’. In fact, at the beginning of each new Congress (every two years) each chamber, and each committee and subcommittee within each chamber, votes on the rules that will govern how they are to go about their legislative business. Traditionally, the rules from the previous Congress are carried over by this vote with only minor tweaks. On top of that, both parties in each chamber have their own internal rules and procedures for setting their policy agenda, directing political strategy, and determining which members will be nominated to certain leadership positions and committee posts. Playing the game of politics according to this layer cake of rules is a necessary part of the work of a legislator, and is often as important a factor in how our country is actually governed as is who wins election to office and what substantive provisions are formally enacted into law. So for the purposes of understanding federal cannabis reform, let’s take a quick look into the procedural status of the relevant legislation and who is in a position to influence what happens to it; then, when reviewing the policies they stand to codify, we will also understand the legislative landscape they must navigate.

Rep. Rohrabacher launches the Cannabis Caucus, Photo via Earl Blumenauer/YouTube

A good place to start is February 16, 2017 when Republican Congressmen Dana Rohrabacher (R-CA) and Don Young (R-AK) along with Democratic Congressmen Earl Blumenaur (D-OR) and Jared Polis (D-CO) launched the Congressional Cannabis Caucus. Under House and Senate rules, such a caucus must formally register with the House Committee on Administration as a Congressional Member Organization (CMO), disclosing its officers and members and declaring its purpose. These CMOs are sometimes referred to by different names: caucuses, conferences, coalitions, task forces, etc. The best known of these are the House and Senate Democratic Caucuses and the House and Senate Republican Conferences. By setting party policy, driving legislative strategy, promoting party cohesion and rewarding party loyalty, these largest of CMOs dominate partisan activity on Capitol Hill. Smaller CMOs, on the other hand, advance only specific interests and often cross the partisan divide. The Cannabis Caucus, for instance, was formed to catalyze a federal response to the nationwide legalization movement, and its “Path to Marijuana Reform” is a large part of the spate of bills that have been dropped into the congressional hopper over the past six months.

All in all there are twenty cannabis reform bills currently pending in Congress. In the House, all but two of the fourteen bills there have been referred to either the Energy & Commerce Committee or the Judiciary Committee, and all but one of the six in the Senate have been referred to either the Finance or Judiciary Committees.

A Note on Committees & Procedure

Rep. Earl Blumenauer (D-OR), is on the Ways and Means Committee
Photo: Michael Campbell

Under House and Senate rules, bills are referred to committees by matching the former’s subject matter to the latter’s jurisdiction. In the House, the Speaker may attach time limits for committee action, refer a bill or portions of a bill to multiple committees and determine the sequence in which they are to be considered. The Speaker may also convene an ad hoc committee to consider a bill, and “make such other provision as may be considered appropriate.” As can be gleaned, the Speakership holds substantial procedural powers, and is in fact the only congressional leadership position created by the Constitution. The Senate’s counterpart, the majority leader, has in comparison less discretion in moving along legislative business.

At the next step, both the House and Senate grant each committee the authority to make their own rules on how they are to consider bills. Once referred, committee chairs generally decide to further refer a bill to a subcommittee, hold hearings, subpoena evidence and witnesses, call ‘markup’ sessions to propose and debate amendments, and finally to schedule a vote to report bills back to the chamber floor. If a committee chair wishes to kill a bill, these procedural powers provide wide, though not absolute, authority to do so. Jockeying for a chairmanship is therefore big game in the life of a legislator. Ultimately, members are nominated and elected to their respective committees and chairs according to the rules of their parties’ caucus or conference, and upon a vote of approval on the floor. Seniority is only one factor in these votes, and so because nothing is predetermined, these intraparty contests can explain a great deal about member behavior.

With that background to help triangulate Capitol Hill politics, we should now be better equipped to look into the cannabis bills pending before the 115th Congress, the committees to which they have been referred, and their procedural status. Stay tuned for the next article in this series when we will begin our bill-by-bill review.

Bipartisan Cannabis Reform Effort Unveiled in Congress

By Aaron G. Biros
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According to National Cannabis Industry Association (NCIA) executive director Aaron Smith, seven measures were introduced today at the Capitol, covering a variety of issues that, if signed into law, would ease many of the legal implications on the federal level affecting cannabis businesses in legal states currently.

In a very important development, Rep. Carlos Curbelo (R-FL), a member of the House Ways and Means Committee, joined Rep. Earl Blumenauer as a lead sponsor of the 280E tax reform bill. According to an NCIA press release, that bill is The Small Business Tax Equity Act of 2017 and was introduced in the Senate by Sen. Ron Wyden (D-OR), Sen. Rand Paul (R-KY) and Sen. Michael Bennet (D-CO).

Aaron Smith, executive director of NCIA

That bill gives cannabis businesses in legal states the opportunity to take business deductions like any other legal business. Right now cannabis businesses cannot deduct any expenses related to sales, given its Schedule I status. “Cannabis businesses aren’t asking for tax breaks or special treatment,” says Smith. “They are just asking to be taxed like any other legitimate business.”

Rep. Jared Polis (D-CO) introduced the Regulate Marijuana Like Alcohol Act in the House, which would put cannabis in the section of code that regulates intoxicating liquors, essentially giving the ATF oversight authority. “The flurry of bills on the Hill today are a reflection of the growing support for cannabis policy reform nationally,” says Smith. “State-legal cannabis businesses have added tens of thousands of jobs, supplanted criminal markets, and generated tens of millions in new tax revenue. States are clearly realizing the benefits of regulating marijuana and we are glad to see a growing number of federal policy makers are taking notice.”

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

Sen. Wyden and Rep. Blumenauer introduced The Responsibly Addressing the Marijuana Policy Gap (RAMP) Act, which addresses banking and tax fairness for businesses, civil forfeiture, and drug testing for federal employees. Both Blumenauer and Wyden represent Oregonians, who could benefit tremendously if it becomes legislation. Rep. Blumenauer also introduced The Marijuana Tax Revenue Act, which would put a federal excise tax of initially 10% on cannabis sales, then rising to 25% after five years, according to the NCIA press release.

States in Northeast Push Legalization Bills Following Massachusetts, Maine

By Aaron G. Biros
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On Election Day in November, two major states in the Northeast legalized recreational cannabis: Maine and Massachusetts. It seems that a handful of other states in the region are looking to legalize recreational cannabis now that their neighbors have done so.

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New Hampshire Capitol Photo: Jim Bowen, Flickr

In New Hampshire, a bipartisan bill was introduced on January 4th to establish “a commission to study the legalization, regulation, and taxation of marijuana.” The commission formed by House Bill 215 aims to “study the experiences of states that have or are in the process of legalizing and regulating the recreational use of marijuana by adults, with particular attention to be given to the ways the changes in marijuana laws in Maine and Massachusetts, as well as Canada, impact our state,” the bill states. Notably, the bill provides for a representative from the Marijuana Policy Project to be a member of the committee.

Photo: David L, Flickr
Photo: David L, Flickr

New Hampshire Senate Minority Leader Jeff Woodburn (D) says he plans to sponsor a recreational legalization bill separate from House Bill 215. According to the New Hampshire Union Leader, Woodburn would work with lawmakers and stakeholders to set a timeline and regulatory framework.

In Connecticut, a number of lawmakers have sponsored bills this session that would legalize recreational cannabis. Senate President Martin Looney (D) filed a bill that would legalize, regulate and tax cannabis, with the tax revenue going to the state’s general fund, according to the New Haven Register. State Rep. Melissa Ziobron (R) introduced a piece of legislation that would legalize adult use over the age of 21. Lawmakers are optimistic that with Massachusetts legalizing it, perhaps the outcome will be different than previous failed attempts to push cannabis legalization.

Providence, RI Photo: David Wilson, Flickr
Providence, RI
Photo: David Wilson, Flickr

Lawmakers in Rhode Island told reporters they want to be the first state to legalize recreational cannabis via the state legislature, rather than a ballot initiative, the most common path to legalization for other states. Sen. Joshua Miller and Rep. Scott Slater of Rhode Island, both Democrats, plan to introduce a legalization bill, the seventh year in a row that such a bill has been introduced in the state. They are also hopeful that after Massachusetts’ legalized it in November, they will have more success this time around. “Our constituents think it is time for lawmakers to pass this legislation, and we should listen to them,” says Miller. “If we fail to pass the bill this year, we will lose significant ground to Massachusetts.” Their bill would tack on a 23% tax on cannabis sales.

In each state’s case, lawmakers are keeping a close eye on Massachusetts and Maine’s regulations and tracking their progress. While the bills in the state legislatures are nascent in their journey to becoming law, the important takeaway is that geographic proximity to states with legalized cannabis is a catalyst for reform in New England.

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Trump’s Cabinet Not Cannabis-Friendly, But Don’t Panic Yet

By Aaron G. Biros
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President-elect Donald Trump nominated Sen. Jeff Sessions from Alabama for Attorney General and Rep. Tom Price from Georgia as the new Health Secretary. Those appointments still require Senate approval before they are officially members of the cabinet. Neither of the picks to head the Department of Justice (DoJ) and the Department of Health & Human Services (HHS) is friendly to cannabis.

What’s the bad news?

Both of those agencies are at the center of any federal regulation of cannabis, including access for research. As Attorney General, Jeff Sessions would essentially have the ability to block any rescheduling efforts, as outlined in the Controlled Substances Act.

Gage Skidmore, Flickr
Sen. Jeff Sessions, (R), 69.          Photo: Gage Skidmore, Flickr

Sessions has made inflammatory, racist remarks and showed his disdain for cannabis users on multiple occasions. He disgracefully said at a Senate hearing in April, “Good people don’t smoke marijuana.” When he was a federal prosecutor, Sessions was a prominent advocate for the War on Drugs, and perhaps even still is.

Rep. Tom Price (R-GA) Photo: Gage Skidmore, Flickr
Rep. Tom Price (R-GA)
Photo: Gage Skidmore, Flickr

Tom Price, a Republican Congressman from Georgia, has voted repeatedly against pro-cannabis legalization bills, including twice against the Veterans Equal Access Amendment as well as the Rohrabacher/Farr Amendment, which “prohibits the use of funds in the bill to supersede State law in those States that have legalized the use of medical marijuana.” NORML’s Georgia Scorecard gave Tom Price a D grade for his previously voting against pro-cannabis bills.

What’s the good news?

While Sen. Jeff Sessions is certainly no friend to legal cannabis, I believe he is not a serious danger to the cannabis industry. This op-ed on CNN does a terrific job at summing up Sessions’ potential threat to the cannabis industry, but also why it may not be cause for a total panic. The author mentions a laundry list of DoJ priorities over cannabis, but I think the larger issue at hand is states’ rights.

Republicans are historically passionate when it comes to keeping states’ rights sovereign. With cannabis’ big wins on Election Day, a majority of the country’s population now lives in states where cannabis is legal.

aaronsmithncia
Aaron Smith, executive director of NCIA

There is too much momentum behind legal cannabis for a new administration to waste precious resources and time on trying to disrupt it. States are getting too much tax revenue from regulating cannabis to just let the DoJ interfere with their economies. “Voters in 28 states have chosen programs that shift cannabis from the criminal market to highly regulated, tax-paying businesses,” says Aaron Smith, executive director of the National Cannabis Industry Association (NCIA). “Senator Sessions has long advocated for state sovereignty, and we look forward to working with him to ensure that states’ rights and voter choices on cannabis are respected.” Smith’s words in the NCIA statement are pointed and clear: this is a states’ rights issue at heart and they must respect that.

By forcing the states’ rights issue to the front, it is possible to put legal cannabis in a bipartisan lens, thus eliminating the possibility of a few old drug war stalwarts disrupting the industry. While rescheduling efforts could be thwarted for the coming years, I have faith that the federal government will not interfere with states that legalize cannabis.

 

Michigan House Approves Bills, State Set To Regulate Medical Cannabis

By Aaron G. Biros
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Update: On September 21, 2016, Governor Rick Snyder signed the bills into law, regulating the market officially.

The Michigan House of Representatives voted in concurrence with last week’s Senate vote, approving a series of bills that would establish a regulatory framework for the state’s medical cannabis industry, according to a Michigan Live article. Governor Rick Snyder is expected to sign the bills into law very soon.

The package of bills approved today includes provisions for a 3% tax on retail income, a licensing system for growers, dispensaries and patients as well as establishing a traceability system. The bills, if signed into law, would institute a regulatory framework akin to other states that have legalized cannabis recently. Packaging, labeling and testing requirements for THC, other cannabinoids and contaminants are included in the overhaul.

In 2008, voters approved the legalization of medical cannabis, since then however there has been little action from the state on regulating the safety, sale or distribution of cannabis. The bills are meant to eliminate the previous ambiguity in the laws surrounding the state’s patients, caregivers and dispensaries and establish a legitimate system for patients to access medical cannabis.

With over 203,000 registered medical cannabis patients, the passage of these bills could establish the second-largest medical cannabis market in the country, larger than the total number of Colorado and Oregon’s registered patients combined.

stevegoldner
Stephen Goldner, Esq, founder of Pinnacle Laboratory and Regulatory Affairs Associates

According to Stephen Goldner, founder of Pinnacle Laboratories in Michigan, the market will get regulated into five discrete categories for licensing: growers, dispensaries, testing labs, processors, and transporters. “The basic legislation that will become law is very sensible and almost completely mirrors what has already been passed by the Michigan House, thus rapid conformance is nearly guarantied,” says Goldner. “There is a clear intent to require all products to be tested before sale, and setting up an integrated reporting system by product batch code from production, through transport and to final sale.” Goldner believes this comes with an overriding intent to establish standardization across the board, and points to the Foundation of Cannabis Unified Standards (FOCUS) for ready-to-implement, vetted standards.

“Michigan requiring method validation and other requirements, such as adverse event reporting, thereby builds in greater assurance of product safety and compliance,” says Goldner. Pinnacle Labs has been preparing for this day for quite some time. “We have invested the past 18 months preparing for exactly this legislation,” says Goldner. “We look forward to helping the medical cannabis patients in Michigan get cost-effective, desirable products delivered legally and easily.”

If passed, this kind of legislation will present a litany of challenges for the state and all stakeholders involved. Growers dealing with contamination issues previously will now have to navigate legally mandated testing requirements. According to Goldner, the greatest challenges are those that other states already deal with. “The greatest challenge for dispensaries and other business in the chain of distribution is the lack of adequate banking services,” says Goldner. The state will have to hire inspectors, establish robust oversight and review applications while maintaining a smooth transition to a regulated market.

Until Gov. Snyder signs them into law, the state’s cannabis industry and the 203,000 patients remain in a state of uncertainty.

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California Legislature Votes to Slow Local Bans on Cannabis Cultivation

By Aaron G. Biros
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SACRAMENTO, CA- Lawmakers in California voted to pass Assembly Bill 21 this morning, a bill aimed at slowing local municipalities from placing bans on cultivating cannabis. Earlier this week, the California Senate passed the bill in an overwhelming 35 to 5 vote, sending it to the Assembly.

The bill, AB 21, won unanimously in a 65 to 0 vote this morning, according to a lobbyist on behalf of CalCann Holdings. The bill now heads to Governor Brown’s desk to sign it before it becomes a law. The governor has twelve days to sign it into law because of an urgency clause. 

“Over the past several months, local governments throughout the state have been banning marijuana cultivation and dispensaries right and left,” says Aaron Herzberg, attorney and partner at CalCann Holdings. CalCann Holdings is a California-based medical marijuana holding company building a portfolio of licensed MMJ businesses and properties.

“Assuming Governor Brown chooses to sign this bill into law, cities will have the time to take a more reasonable approach to this issue and, ideally, allow licensed marijuana to be cultivated and distributed throughout the state,” adds Herzberg. “This is a vitally important piece of legislation that fixes a serious drafting error, and the sooner it can be signed into law, the better.”

The bill fixes an important mistake in the regulations that previously allowed the state to license growers operating in municipalities without written laws in place yet by March. Because of that deadline, cities were rushing to ban growers and dispensaries before they lost autonomy to regulate them. Governor Brown is expected to sign the bill into law, which would curb municipalities from shutting down cannabis businesses.