California Judge Rules Cannabis Billboards Are Illegal Under Prop. 64
The decision strikes down a regulation that the California Bureau of Cannabis Control adopted in 2019 to allow cannabis billboards on highways that cross state borders.
San Luis Obispo County Superior Court Judge Ginger Garrett ruled Nov. 20 that cannabis billboards are illegal under California’s Prop. 64, according to a local KSBY report.
Two San Luis Obispo attorneys, Saro Rizzo and Stew Jenkins, filed a public interest lawsuit in San Luis Obispo Court in October 2019 on behalf of Matthew Farmer, a San Luis Obispo resident who argued that the advertising was wrongfully exposing his children to cannabis use, the news outlet reported.
Rizzo and Jenkins alleged in the case that the billboards are illegal under Prop. 64, the 2016 voter-approved initiative that legalized adult-use cannabis in California, according to KSBY.
A ban on billboards advertising cannabis, similar to one that prohibits billboards promoting tobacco products, was enacted as part of Prop. 64 to protect youth from cannabis advertising, the news outlet reported, and the provision bans cannabis billboards on the Interstate Highways and State Highways that cross the California border.
Garrett sided with Farmer on Friday, striking down a regulation that the California Bureau of Cannabis Control (BCC) adopted in 2019 to allow cannabis billboards on highways that cross state borders, KSBY reported.
Roughly 35 of California’s highways will be impacted by the ruling, according to the news outlet, although cannabis can still be advertised on billboards along highways that don’t cross state borders.
The BCC must now notify cannabis businesses about the new regulations, and operators in noncompliance could be penalized with fines or even the revocation of their license, KSBY reported, although a deadline to remove existing cannabis billboards has not been set.
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New Rules in New York: Q&A with Empire Standard’s Kaelan Castetter
For growers and processors alike, the regulations mark an important step in the development of a robust hemp marketplace.
Last month, the state of New York released its regulations for food, beverages and dietary supplements containing cannabidiol (CBD) and other hemp-derived cannabinoids for human consumption. The news teed up a public comment period and, in the long run, opened the state’s burgeoning hemp industry to a new market segment: the in-demand CBD retail product space.
For growers and processors alike, it was an important step in the development of a robust hemp marketplace.
Empire Standard, based in Binghamton, is one of more than 100 licensed processors in New York. CEO Kaelan Castetter says the regulatory news was welcome as a normalizing factor for the industry. We spoke with him to learn a bit more about how the new rules will affect growers and processors in the state—and what we can expect to see as we head into 2021.
Eric Sandy: On first blush, what’s your impression of these new regulations?
Kaelan Castetter: It’s interesting, because I'm also the vice president of New York Cannabis Growers and Processors Association. We’re very active in Albany. Since 2019, I've been working with the sponsor of the bill that resulted in the hemp extract law and these regulations. The original intent of the hemp extract law was legitimatizing the industry here and to push forward and preempt the FDA—in New York, at least—in saying, OK, we can regulate safe supplements and food and beverage products and a host of other products that are quality and that the consumer knows are quality. We can really take the lead on this. It's taken a while. It took a while for these regulations to come out and the regulations—they didn't necessarily really line up with the intent of the bill completely.
So, food and beverages are allowed, and that's excellent. We see supplements and some of the standardization around that and who's manufacturing, the GMPs, etc. But, of course, you see a ban on the retail sale of hemp flower, which is astonishing because it is definitely one of the hottest parts in the market. And many, if not most hemp growers in New York state are selling or growing for high-quality flower. For the state to take that market away now, of all times, is the strange. And it doesn't bode well necessarily for the marketplace. I think some of [the guidance] is a little overly regulated, too; for instance, the cap of 3000 milligrams per unit for supplements. It doesn't really have any scientific or logical basis to it. Some of the disclosures to put on the labeling are a little onerous, but I do think it's a necessary step as we look to legitimize the industry.
ES: Have you picked up on similar reactions across the state?
KC: Yeah, absolutely. I think the outrage is mostly placed on the ban on hemp flower sales. It’s a bright spot in the marketplace, and many people have been setting up to grow [flower]. That’s where a lot of frustrations in the industry are, and through the NYCGPA that is what we're hearing from our members. But I think, generally, most industry members understand the need for these regulations. When you look past that, the food and beverage piece of it is big, right? The New York marketplace is massive. And so, now, for companies to be able to sell food and beverage into New York City and then surrounding suburbs and even in the bigger cities in upstate New York, that’s huge. There’s a lot of excitement around that. There’s also a lot of trepidation around the flower and a couple of the other stringent pieces that could be changed. There’s a public comment period up until Jan. 11. So, I am pretty confident, and I've had some good talks with some of the regulators in the governor's office and Department of Health, and they're very open for change and they're looking for industry in play for, for sure.
ES: From a market standpoint, I wanted to ask about the 2020 harvest how things have been going. I know we're sort of in the thick of it still, but how's the season been going for you?
KC: I think there is—not just in New York, but across the country—a glut of supply in terms of material and intermediate ingredients. As a manufacturer, we buy from extractors throughout the state. I know, talking with them, that they do have good supply and they are moving it. They are moving their products, which is a good sign. We are more so getting a lot of feedback from the retail market. We have a lot of brands who we work with, and we distribute a lot of products throughout the state. The retail market is strong. It is not strong on oils, which is interesting. We’ve seen that part of the market certainly weaken. Flower sales are probably the fastest-growing product on retail shelves, for sure.
Other products, such as gummies and these other food and beverage products, supplement beverages: We have a product that we just released, an energy shot, like a 5-Hour Energy, a two-ounce bottle that we expect to be very well-received in the marketplace and very well-received by the owners of these stores. I think that what we're seeing as the market starts to mature is people looking more so for familiar products with CBD and hemp-derived cannabinoids as an ingredient, as opposed to, “Oh, let me get my CBD in sublingual oil form.” I think that’s an interesting trend.
ES: In terms of the growers themselves, do you see that base of farmers increasing into 2021?
KC: Unfortunately, I don't see it continuing to grow. There's 700 licensed farmers in the state of New York. Growing hemp for its cannabinoid content is a specialty crop. I don't think there is a need for that many growers. And I think they're seeing it, unfortunately; they've dived into the marketplace, and they’ve spent a lot of money and they don't have an outlet for their crop because the market just doesn't demand it. A little bit of crop, in terms of acreage, goes a long way. I do see the New York landscape for hemp growers transitioning more to the landscape of organic vegetable growers, where we're seeing one- to five-acre operations spread amongst maybe 100 to 200 growers.
I do think that you're going to see a contraction in terms of the amount of growers and the amount of acreage that they grow. Really, I don't see the ability for growth in that area until we have a more robust supply chain for fiber and grain, because I do think fiber and grain could hold huge promises. In New York, the climate is very conducive to fiber growing with an August harvest. We have very dry, very beautiful Augusts here in New York and it's ahead of soy and corn harvest season. The agricultural landscaping in New York is ready for large-scale fiber and grain production. But we need the federal government to incentivize the growth of these crops and to open up these markets before I really see the outlook for hemp growing to be a little more positive. Unfortunately, there's just not much that I can say in the way positivity for hemp growers in New York.
ES: I did also want to touch on Binghamton just in general. I know there's been a lot of hemp business news out of that city and that area of the state. After a number of headlines, Empire Standard is standing tall. I wanted to get a sense from you about the importance of being based in Binghamton.
KC: I'm from Binghamton. I was born and raised. And so, this has been my home and is the home of my father, who works with me, and my CFO and COO Amman Weaver, who is also from Binghamton. The interesting thing about Binghamton is, yeah, we're seeing a lot of big headlines with Canopy Growth and these other large companies that have kind of fizzled out and haven’t really executed on their plans. And we’re still here. I think that's more of a reflection of the culture of Binghamton as a hub of innovation and growth. IBM started in Binghamton. Endicott Johnson Shoe Company, the precursor to Nike, being a behemoth in the shoe manufacturing world, started in Binghamton. We have this history of deep innovation and manufacturing.
Binghamton does have one of the best research institutions in the Northeast with Binghamton University, so our talent pool that we can draw from is excellent. Most of our people that we bring on are from Binghamton University. I'm super bullish on Binghamton as a hub for cannabis, not only in New York and not only regionally, but across the United States and across the world—because of our infrastructure, not just in our buildings but our human infrastructure. That’s our ability to pull innovators and to support innovators. So, I do think that this is where we're going to see a lot of small business growth, not necessarily these big headline companies, big companies with ticker symbols, etc. I think you're going to start to see a lot of entrepreneurial pursuits in Binghamton and the cannabis industry really start to break into the larger marketplace and the industry across the world. I can attest that to not just the infrastructure we have here and the people that we have here, but also the support amongst local politicians the support of the governor's office and really making Binghamton the place to be.
Maine Cannabis Retailers Sell $1.4 Million in First Month of Legal Sales
State regulators are enhancing online transparency dashboard with sales metrics.
AUGUSTA – PRESS RELEASE – Preliminary sales data from regulators at the state’s Office of Marijuana Policy (OMP) indicate Maine’s marijuana retailers grossed approximately $1.4 million and made 21,194 transactions during the first month of retail sales. The data, which was extracted from the state’s inventory tracking system, Metrc, shows that smokable marijuana made up 76% of sales, while concentrates and infused products accounted for 14% and 10%, respectively.
Maine’s adult use market launched on Oct. 9 and saw sales from six active licensees that month. An additional three adult use retailers opened their doors during the first week of November. The reporting period covers sales made from Maine’s retail sales launch date of Oct. 9 through the end of the day on Nov. 8, a total of 31 days.
“While it is easy to focus solely on the numbers, it is important to note that the Office of Marijuana Policy’s primary objective is maintaining the high standard of public health and safety we have set for the adult use program,” said OMP Director Erik Gundersen. “We appreciate the commitment our licensees have demonstrated to enact COVID protocols to ensure a safe launch and their continued commitment to these efforts in light of the recent spike in COVID cases in Maine.”
Adult use monthly sales totals and product types have been added to OMP’s existing transparency dashboard, available at: https://www.maine.gov/dafs/omp/open-data/adult-use. The initial data set includes the first month of retail sales. Beginning in December, sales information will be updated monthly with the preceding month’s totals.
Sales data are preliminary in nature, subject to further revision and have not been audited. The Office is responsible for the oversight of all aspects of legalized marijuana, including Maine's existing Medical Use of Marijuana Program.
Village Farms International's Pure Sunfarms Receives Cannabis Research License for On-Site Sensory Evaluation from Health Canada
The Pure Sunfarms brand is debuting internationally.
VANCOUVER, BC, Nov. 23, 2020 /CNW/ - PRESS RELEASE - Village Farms International, Inc. has announced two positive developments with respect to its wholly owned Canadian cannabis subsidiary, Pure Sunfarms.
Pure Sunfarms Receives Cannabis Research License for On-Site Sensory Evaluation from Health Canada
Pure Sunfarms has received from Health Canada its Cannabis Research License to conduct human administration trials for sensory evaluation of cannabis, enabling it to engage in on-site assessments of the taste, sight, smell or touch of its products at its Delta 3 cannabis facility in Delta, British Columbia.
"This license provides us with significant new opportunities in the formulation and refinement of our products, and underscores our commitment to innovation and the advancement of the Canadian cannabis consumer experience," said Mandesh Dosanjh, president and chief executive officer of Pure Sunfarms. "We look forward to leveraging this new capability to continue to extend Pure Sunfarms' product leadership and further strengthen what is already one of Canada's best-selling cannabis brands."
Pure Sunfarms Brand Debuts Internationally in Hong Kong
Pure Sunfarms will be featured as part of a limited-edition Lane Crawford x Found CBD-infused gift set to be sold in the luxury department store's holiday pop-up shops in Hong Kong this holiday season. The luxury gift sets will feature Pure Sunfarms branded CBD gummies created specifically for the Hong Kong consumer, among other CBD-inspired items such as chocolates, bath salts, and tea bags. The co-branded Lane Crawford and Found holiday pop-up shops aim to educate consumers and elevate their awareness of CBD.
The inclusion of Pure Sunfarms-branded CBD products was facilitated through a partnership between Altum International Limited's Found, Asia-Pacific's first CBD retail platform and café, and Lane Crawford, an iconic luxury department store in Greater China. In August 2020, Village Farms acquired 6.6% of Australia-based Altum, one of the Asia-Pacific's leading cannabinoid platforms.
"We're so pleased for the Pure Sunfarms' brand to make its debut internationally, alongside such prestigious and progressive partners as Altum and Lane Crawford," said Dosanjh. "This is just the beginning of what's to come for Pure Sunfarms as we look to share our love of plants and B.C.-grown cannabis products with the global cannabis market."
"We are particularly excited to be able to present in Asia-Pacific for the first time, Pure Sunfarms, Canada's market-leading cannabis brand," Fiachra Mullen, chief marketing officer for Altum International. "We believe that the leading cannabis brands in the Canadian market will hold a special place in the Hong Kong consumer's heart. We are incredibly proud to have their trust in helping them access the Asia-Pacific markets for the first time through the most progressive cannabinoid jurisdiction in the region – Hong Kong."
Jushi Holdings Inc. Announces Significant Expansion of Pennsylvania Cultivation Facility
The company will increase the total facility size from roughly 90,000 square feet to 160,000 square feet.
BOCA RATON, Fla., Nov. 23, 2020 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Jushi Holdings Inc., a vertically integrated, multi-state cannabis operator, has announced plans to nearly double the square footage of its subsidiary’s grower-processor facility in Scranton, Pa., from approximately 90,000 sq. ft. to more than 160,000 sq. ft. in a phased expansion. The majority of the approximate 70,000 sq. ft. expansion project will be focused on increasing the facility’s canopy space, which upon completion will nearly triple to approximately 98,000 sq. ft. The first phase of the expansion is expected to come online in mid-2021 and the final phase will be completed by the second quarter of 2022. In total, Jushi expects to invest approximately $50 million on the expansion project, which is expected to create over 100 new jobs in the Scranton area. Jushi (through its subsidiary Pennsylvania Medical Solutions, LLC), will work with Innovative Industrial Properties, Inc. (through its subsidiary IIP-PA 1 LLC) to partially finance the expansion project via an upsize to the existing lease agreement between the parties. The expansion project is subject to the company’s successful completion of certain milestones, including receipt of all local and state approvals and permits, and the finalization of a mutually agreed lease amendment with Innovative Industrial Properties Inc. related to the facility.
“The medical cannabis market in Pennsylvania is rapidly growing and with our products in high-demand, this investment will significantly expand our cultivation capacity and market share,” said Jim Cacioppo, chief executive officer, chairman and founder of Jushi. “This is a robust operating environment and with the market intelligence gained through our eight currently operating BEYOND / HELLO retail dispensaries, we believe that patient demand for high-quality, medical grade cannabis products is still far from being satisfied. With the phased build out, the support of our financing partner Innovative Industrial Properties, Inc., and our strong balance sheet with ample liquidity, we expect to remain fully funded to operating cash flow positive, including our likely investment beyond Innovative Industrial Properties, Inc.’s support. We believe that by investing in the expansion of our grower-processors, we will generate the greatest potential return for Jushi shareholders.”
Cacioppo concluded, “We are very excited by the opportunity ahead of us in Pennsylvania, and as one of the fastest growing jobs sectors in the U.S., Jushi and its subsidiaries look forward to bringing additional new local jobs and tax dollars to the region and further investing in Scranton’s economy and community.”
The company recently completed an expansion project in the third quarter 2020, which included increasing the Facility’s indoor cultivation from approximately 20,000 sq. ft. to approximately 45,000 sq. ft. (~33,000 sq. ft. of canopy) and supplementing the current CO2 extraction with new Class I, Division 1 ethanol extraction technology. The facility produces high-quality, indoor grown flower and extracts and is strategically located within minutes of Interstate 81, Interstate 84 and the Pennsylvania Turnpike, enabling efficient wholesale distribution to the 98 dispensaries currently operating across the commonwealth, including the company’s eight operational BEYOND / HELLO dispensaries. The facility is expected to supply the company’s subsidiaries, and other licensed retail facilities.
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