CCMA Greenbrief January 11th: Gov. Newsom’s Budget Projects $514M In Cannabis State Tax Revenues…MedMen Faces $20M Lawsuit…More Red States Hopping Onto Legalization Bills After H.R. 420…

CCMA Political  greenBrief

Friday, January 11, 2019

Governor Newsom Released His Proposed CA State Budget On Thursday, Estimating $355 Million In Cannabis Excise Taxes By The End Of June — Roughly Half Of What Was Once Expected. Experts Say Diminishing Tax Revenue Reflect The Strength Of The Illicit Market Where Consumers Avoid Taxes That Reach 50 Percent In Some Communities. 

“Lawmakers are increasingly finding ways to support legalization, regardless of their political ideology. The debunked stigma of ‘Reefer Madness’ is rapidly falling by the wayside and politicians of all stripes can now support establishing a commercial cannabis marketplace in a manner that is consistent with their worldview.”
Carly Wolf, NORML’s State Policies Coordinator, On More States Approving Recreational Cannabis Markets 
“The burdens of entering the regulated market are just too much to bear for some folks. It’s crippling the growth of a lot of businesses.”
Joshua Drayton, Spokesman For The California Cannabis Industry Association, On The Proposed State Budget Impacting Small Cannabusinesses

Newsom Wants To Spend More Money On Cannabis Regulation (CA – State Regulations)

The Orange County Register (January 10, 2019) Gov. Gavin Newsom, who strongly backed the legalization of marijuana, wants to increase state spending on cannabis regulations. Newsom, in his proposed state budget released Thursday, is seeking to boost spending on cannabis industry regulation by 51 percent in the next fiscal year, from $133 million to $201 million. That includes $2.9 million in new funding to go after tax evaders, and $13.9 million to support a 2018 bill signed by former Gov. Jerry Brown that calls for California to be more proactive in helping clear up the criminal records of past marijuana offenders.


Risk Too High In Public Banking For California Cannabis Industry (CA – Cannabis Banking)

Mojave Desert News (January 10, 2019) On Christmas Eve, a proverbial lump of coal was placed in the cannabis industry’s stocking when the California State Treasurer’s feasibility study on California State Backed Banks was released. The 151-page report concluded that “No state-backed financial institution designed to support the cannabis industry is feasible.” The report went on to state that “the only effective long-term solution involves legislative and regulatory changes at the federal level to allow the legal banking of cannabis-related funds.”


California’s Unlicensed Medical Cannabis Collectives Now Illegal As Deadline Passes (CA – Medicinal Market)

Pot Network (January 10, 2019) Back in early 2016, long before California voters approved Proposition 64 and legalized the recreational use of marijuana, many industry veterans in the state who had been operating under the state’s medical program predicted disaster for many of nearly two thousand non-profit medical marijuana collectives and cooperatives. They claimed it would be too difficult for these small organizations to convert to licensed operations — and that was before the 160-pages of proposed rules were unveiled. As of exactly today, it’s looking like they were right.


Marijuana Firm MedMen, Top Execs Face $20 Million Suit For Allegedly Breaching Duties, Enriching Selves (CA – Cannabis Lawsuits)

Marijuana Business Daily (January 10, 2019) Cannabis industry retail giant MedMen Enterprises and its top executives face a $19.8 million lawsuit by an early investor group who charge that senior execs enriched themselves at the expense of shareholders and breached their fiduciary duties. The suit, filed Jan. 8 in California Superior Court in Los Angeles County, in part alleges that MedMen CEO Adam Bierman and President Andrew Modlin paid themselves millions of dollars through unlawful, “brazen self-dealing.”


California Pot Taxes Lag As Illegal Market Flourishes (CA – Illicit Market)

Daily Journal (January 10, 2019) Deep in Gov. Gavin Newsom’s new budget is a figure that says a lot about California’s shaky legal marijuana market: The state is expecting a lot less cash from cannabis taxes. The Democrat’s proposed spending plan, released Thursday, projects the state will bank $355 million in marijuana excise taxes by the end of June. That’s roughly half of what was once expected after broad legal sales kicked off last year. Industry experts say the diminished tax income reflects a somber reality: Most consumers are continuing to purchase pot in the illegal marketplace, where they avoid taxes that can near 50 percent in some communities.


Which California Region Will Emerge As Marijuana Cultivation Business Leader? (CA – Cannabis Cultivation)

Marijuana Business Daily (January 10, 2019) It shocked some cannabis industry watchers last year when Santa Barbara County developed front-runner status among California’s 58 counties by accruing the most marijuana cultivation permits. And even though serious regional competition may not yet be a factor in the market, it’s almost sure to become one, as more cultivators begin harvesting on a regular basis and feeding more cannabis into the state’s legal market.


Marijuana Legalization Bills Already Filed In Half A Dozen Red States For 2019 Sessions (USA – Cannabis Legislation)

Marijuana Moment (January 10, 2019) The green wave is already making splashes in multiple red states this year, with marijuana legalization bills being introduced in at least six traditionally conservative states so far for 2019 sessions. On Wednesday, lawmakers in Kentucky and West Virginia put forward pieces of legalization legislation, the latest in a growing list of states where the thought of lawmakers even considering full legalization would have been implausible just a couple years ago. Legislatures in Indiana, Missouri, Texas and Virginia could also vote on legalization bills that have already been introduced this year.


Federal Officials Recognize How Marijuana’s Legal Status Blocks Research (USA – Cannabis Research)

Marijuana Moment (January 11, 2019) Federal government officials openly acknowledged that cannabis’s restrictive federal classification inhibits progress on necessary medical and public health research during a workshop last month. All told, the materials reviewed from the federally hosted workshop revealed a surprising amount of candor from government officials about the roadblocks current policy place in front of research, and an intense level of interest in expanding studies into marijuana’s therapeutic potential as well as any public health impacts from state-level reform.


Purdue Researchers Tackle Cannabis Industry’s Pesticide Problem (USA – Pesticide Use)

Cannabis Business Times (January 9, 2019) While the 2018 Farm Bill’s legalization of industrial hemp will allow more farmers to take advantage of this new crop, no pesticides are federally approved for use on the plant. In a paper published in Crop Protection, Purdue University researchers outline some of the problems surrounding the lack of approved pesticides for hemp and cannabis. They also call for a clear federal framework to define pesticide rules, research funding to help uncover valuable information for cultivators, and policies and procedures to ensure the safety of products derived from the plants.


Risk Of Federal Enforcement Actions Against State-Legal Cannabis Businesses Declines (USA – Cannabis Industry)

New Cannabis Ventures (January 10, 2019) The US cannabis industry is intriguing to investors. But marijuana remains a Schedule 1 drug under the United States Controlled Substances Act (CSA). Does that mean that investments in the industry face risk of a federal enforcement action against an industry business? Since President Trump took office in January 2017, there has not been a single federal enforcement action against the US cannabis industry. President Trump has made only favorable remarks about federal cannabis policy.


Most Medical Marijuana Patients Stop Or Reduce Pharmaceutical Use With Cannabis, Survey Finds (USA – Medicinal Cannabis)

Marijuana Moment (January 10, 2019) Medical marijuana patients generally have more faith in cannabis than the mainstream health care system—and that’s probably because they’ve found the plant more therapeutically effective compared to traditional pharmaceuticals—according to a new survey. Researchers distributed about 400 surveys to medical cannabis patients at a pro-reform public event, inquiring about their usage and attitudes toward the U.S. healthcare system. The results were published this week in the Journal of Psychoactive Drugs.