California regulators have released proposed rules for the OCal Program, a statewide certification program focused on comparable-to-organic standards for cannabis.
Managed by the California Department of Food and Agriculture (CDFA), the OCal Program will allow cannabis products that meet consistent, uniform standards comparable to the National Organic Program to bear an OCal seal.
CDFA is required by state law to establish an organic certification program for cannabis by Jan. 1, 2021.
Public comment on the proposed regulations will be accepted through July 7, 2020. Comments may be submitted via email to CDFA.CalCannabis_OCal@cdfa.ca.gov or by mail to:
California Department of Food and Agriculture
Attention: Kristi Armstrong
CalCannabis Cultivation Licensing Division
Proposed OCal Regulations
P.O. Box 942871
Sacramento, CA 94271
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New Zealand Releases Adult-Use Cannabis Legislation
New Zealanders will vote on legalization this September.
New Zealanders will vote on the proposal this September, the news outlet reported.
The country launched its medical cannabis program last month, according to Cannabis Wire, and Prime Minister Jacinda Ardern promised a vote on adult-use legalization when elected in 2017.
The Cannabis Legalisation and Control Bill would broadly legalize cannabis use and sales for adults 20 and older, and would allow adults to grow two plants or up to four total plants per household for personal use, Cannabis Wire reported. The legislation would legalize the possession of up to 14 grams of dried cannabis, according to the news outlet, which equates to 70 grams of fresh cannabis, 14 cannabis seeds, 210 grams of edibles, 980 grams of liquids or 3.5 grams of concentrates.
Those under the age of 20 who are convicted of cannabis possession will not face criminal charges, but will instead receive an education session, social or health service, or a fine, according to Cannabis Wire.
The legislation contains social equity provisions to allow those disproportionately impacted by prohibition to participate in the market, according to the news outlet. However, cannabis operators may not be vertically integrated under the legislation; cultivators are barred from also selling cannabis products or operating consumption spaces.
The total amount of cannabis in the market would be capped under the proposal, Cannabis Wire reported, and each licensed cultivator could produce a maximum of 20% of the total amount of cannabis in the market each year.
Similar to Canada’s adult-use cannabis program, New Zealand’s legislation allows for the sale of only cannabis seeds, plants and flower at the launch of the program, with additional product categories becoming available at a later, to-be-determined date, Cannabis Wire reported.
The bill creates a Cannabis Advisory Committee to establish additional regulations for the market, according to the news outlet.
The legislation has been met with some pushback, as the NZ Drug Foundation has expressed concern over the suggested 15% THC limit for cannabis products, according to a Newshub report.
NZ Drug Foundation Director Ross Bell told the news outlet that the THC cap should align with the potency of illicit-market cannabis, which contains roughly 6% to 8% THC.
If voters approve the legislation this fall, the government must then introduce new legislation to implement an adult-use cannabis program, Cannabis Wire reported.
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Newly Released Memo Finds DEA Not in Compliance with International Drug Laws
A 2018 memo concludes that the Drug Enforcement Administration must change its practices to comply with the Single Convention.
The Drug Enforcement Administration’s (DEA) program regulating the legal federal production of cannabis for research purposes has been non-compliant with international drug laws for decades, according to an advisory from the U.S. Department of Justice’s Office of Legal Counsel (OLC).
A recently released 2018 memo from the OLC advises the DEA to “change its current practices and the policy it announced in 2016 to comply with the Single Convention.”
The Single Convention on Narcotic Drugs, an international treaty on scheduled narcotics, requires signatory countries to impose stringent controls on the cultivation, manufacture, and distribution of narcotic drugs, including cannabis. One such control is that governments interested in cannabis research “establish ‘a single government agency’ to oversee marijuana growers and generally to monopolize the wholesale trade in the marijuana crop.” By licensing cultivation to the National Institution on Drug Abuse (NIDA) and the National Center for Natural Products Research at the University of Mississippi, and by never taking sole ownership of the research cannabis produced at the National Center, the DEA is in violation of international law.
The main issue is that the Single Convention has never been strictly observed by the U.S. government. There’s no basis for an argument that legalization and regulation of cannabis would flout the treaty, because federal policy has not been in compliance in the first place, says Omar Figueroa, a cannabis attorney based in California.
“The monopoly granted to the University of Mississippi is not compliant and not required by international law.”
The OLC, which provides legal advice to the President and all executive branch agencies, wrote the memo on June 6, 2018, but it only was released to the public on April 29, 2020, as a result of a Freedom of Information Act (FOIA) lawsuit brought forth by the Scottsdale Research Institute in March demanding documents that would help explain the slow rollout of the federal government's cannabis research program’s expansion.
While the memo does not explain why there have been no new licensed research groups since the DEA reopened its application process in 2016, it provides context to the draft rules that the DEA proposed in March.
In the March 23 notice of proposed rulemaking, the DEA noted that “DOJ advised DEA that it must adjust its policies and practices to ensure compliance with the CSA [Controlled Substances Act], including the CSA's requirement that registrations be consistent with the Single Convention.” Among the proposed rule changes, DEA suggested that “[all] registered manufacturers who cultivate cannabis shall deliver their total crops of cannabis to DEA … not later than four months after the end of the harvest.”
In this scenario, “[once] DEA has purchased and taken title to the crop, the material would be maintained, under seal, in DEA's possession in the manufacturer's schedule I vault until such time that a distribution is necessary. … DEA may distribute (or export) the marihuana directly or may choose to authorize the grower to distribute marihuana on the government's behalf.”
A potential solution for the DEA to become compliant with the Single Convention outlined in the OLC memo is the “DEA could station one or more employees at the National Center [and other federally licensed research labs] after cultivation as a way of ensuring physical possession of the marijuana and exclusive control over its distribution.” In its proposed rulemaking changes, DEA states that cannabis “owned by the government is maintained at the DEA-registered manufacturer's site where DEA would maintain its ability to access the storage location at which such crops are located as it deemed necessary.” (Note: emphasis added.)
In other words, the proposed rule change would grant DEA total access to federal research cannabis reserves as the agency would be the sole owner of said cannabis.
“I don’t like the idea that the DEA now has to take physical possession and acquire title to all cannabis that is lawfully grown [with a federal research license] in the United States,” Figueroa says. “That’s how they see their role.”
But not everyone is opposed to the idea of the DEA taking a larger, more physical presence in the cannabis research field. Albert Gutierrez, CEO of MedPharm, one of the federal research license applicants, said in a statement to CBT, “As a licensed bulk manufacturer we would take no issue with the DEA coming to our facility to take possession of the harvest as they've outlined in the proposed rules.”
Gutierrez adds, “We are encouraged by the progress from the DEA and feel this is a great opportunity to align the cannabis research program with international law. As one of the first applicants to apply for the Bulk Manufacturer license, we are eager to begin providing cannabis to researchers around the country."
Ambrose Jackson, CEO of Parkway Dispensary
Photo courtesy of Vincent Norment
After Licensing Delay, Illinois Social Equity Applicant Remains Optimistic, Outlines Enterprising Plans
Parkway Dispensary anticipated a decision about its dispensary license application May 1 but will have to continue waiting.
Some recently laid-off workers in Illinois had been expecting a decision on their adult-use dispensary license application on May 1. Now, they’ll have to wait a while longer, since Illinois regulators announced April 29 the decision to delay awarding 75 licenses because of the COVID-19 pandemic.
Ambrose Jackson, CEO of social equity applicant Parkway Dispensary, said his team of 12—some of whom lost their jobs during the pandemic—are eager to start building their company. The state’s decision comes as Illinois adult-use cannabis sales have well exceeded $100 million since Jan. 1, when adult-use retailers who had already been operating as medical providers and are majority white, began selling to Illinois residents and out-of-state consumers.
“As a minority myself, we're used to getting the short end of the stick, so there is nothing that's surprising about what's going on,” Jackson said. “I think the unique thing is that there seems to be perhaps a little bit of an olive branch. And from taking that stance, I think it's important that you’re a local advocate for the things that are not going right and the things that you can see as still working against the better interest and may not actually even be fair at all.”
Jackson said he feels state officials are offering some reconciliation for the disproportionate number of marijuana-related arrests and incarcerations in minority communities. At the same time, he hopes officials at the Illinois Department of Financial and Professional Regulation, which will issue the licenses, looks at who those applicants are and makes sure they didn’t add someone to their team just to take advantage of extra points.
“I think there's an opportunity for it to make a comeback, and it's kind of heading in that direction,” Jackson said. “We're looking to really kind of plant our seed, develop some roots here with this new budding industry.”
But there will be some additional steps for eventual licensees to begin operating in Chicago. Alderman David Moore, who represents the 17th Ward southwest of Bronzeville, told CD that those licensees will have to abide by the city’s zoning structure.
As with state officials, Moore said his focus has been mainly on coronavirus-related measures. “At this point, I do not have dispensaries in the 17th Ward, and unfortunately, due to everything that I'm dealing with and with my constituencies and making sure they have information and resources that they need, I haven't had the pulse on how the dispensaries are doing and what are the numbers and dollars.”
City council doesn’t want to rush anything, to ensure that larger companies can further help equity dispensaries, said Moore, who is a member of council’s 20-member Black Caucus.
"If we're not there to vet that process and we let things go through, then a lot of these minority participants who are looking to get a license as well may be short-changed in the process,” Moore said.
Jason Ervin, 28th Ward alderman and chairman of the Black Caucus, said he is disappointed that licenses weren’t awarded to social equity applicants and that other businesses had a “head start” on adult-use cannabis sales.
There are about seven dispensary retail location spots remaining in the city’s zoning structure.
When asked if those spots could open, he said, "I'm sure that there is the ability for it to increase with council approval, but we have not crossed that bridge yet where we even see the number of licenses even needing [to be increased], just based on our calculations. So, we just, A, have to see who gets awarded and, B, where they want to locate."
More plans for Parkway and a Marijuana Hall of Fame
The delay in dispensary licensing has been one obstacle in a much larger course for Jackson and his team. In addition to its dispensary plans, Jackson shared with Cannabis Dispensary April 30 that he had been awake for about 30 hours finalizing a craft grow and transportation application that he planned to turn in that day.
“We've had a very strong team of individuals who can really contribute when it comes to the cannabis knowledge side of things, and everyone's very motivated,” Jackson said. “But we’re doing all the work ourselves and we're not paying $150,000 for a consulting firm to write our application, so it takes work.”
The state twice delayed the application period for cannabis infuser, craft grower and transportation licenses, first from March 16 to March 30, then to April 30.
“You can look at it different ways in terms of whether it's a good thing or bad thing or who really benefits from the timeline being pushed back [for example, if] more people are jumping in with money now, just to get an application in or what have you,” Jackson said. “But, again, we've got a lot of advantages at this point that we've been able to create.”
His team has acquired a roughly 50,000-square-foot facility in Broadview, a village about 12 miles west of Chicago, where it plans to cultivate cannabis under about 5,000 square feet of canopy to start, then expand.
The craft grow application is under the name Helios Craft Grow Cultivation, said chief marketing officer Vincent E. Norment. The team plans to eventually cultivate under 14,000 square feet of canopy as Powerhouse THC, infuse edibles as Edibliss Collection and transport product as Highwaymen Security, according to a document Norment provided CD.
Other planned operations, according to the document, include Parkway Collective, which would help residents of disadvantaged communities apply for crowdfunding for cannabis businesses, and Midwest Cannabis Exchange, a marketplace for the purchase and sale of wholesale cannabis and hemp.
Photo courtesy of Vincent Norment
Vincent Norment, left, with Cheech Marin of Cheech & Chong
Norment is also the founder and CEO of the Marijuana Hall of Fame, which he established in 2018 and said will eventually be a brick-and-mortar location in Las Vegas, with artifacts and induction of major figures in cannabis, similar to the model of the Rock & Roll Hall of Fame in Cleveland. The first induction ceremony is planned for December.
Norment said he has acquired one of B.B. King’s “Lucille” Gibson guitars (“B.B. King—obviously, he was a smoker,” he said, laughing), a signed football helmet from Ricky Williams and signed merchandise from Cheech & Chong. Tommy Chong will be on the hall’s board.
“My job as the founder of the Marijuana Hall of Fame is to make sure that the community is able to participate, the culture's able to participate and the whole construction of inducting people every year, and also building up the cannabis community on the cultural side but also the business side—the corporations—being able to bring of them together because sometimes, there's division between the two,” he said.
With Parkway Dispensary, the team is considering doing promotions involving Marijuana Hall of Fame participants and releasing a Marijuana Hall of Fame strain, Norment said.
But first, they need to acquire a dispensary license. Jackson, who currently works as a health-care administrator, said he plans to put all his effort into his cannabis business—not if, but once he’s awarded licenses.
“I have to keep going, man, keep trying,” he said.
Capjah | Adobe Stock
Illinois Delays Awarding New Cannabis Dispensary Licenses, Canopy Growth Lays off 200 More Workers: Week in Review
This week, Illinois regulators planned to issue 75 adult-use dispensary licenses, but instead announced that they will now wait until the governor’s disaster proclamation expires.
This week, the Illinois Department of Financial and Professional Regulation planned to award 75 new adult-use dispensary licenses, but will now wait until the governor’s disaster proclamation expires. Elsewhere, Canopy Growth announced 200 additional layoffs in Canada, the U.S. and the UK in the Canadian LP’s latest phase of scaling back its operations.
Here, we’ve rounded up the 10 headlines you need to know before this week is over.
Federal: Multistate cannabis operator Cresco Labs announced this week that it has reached a mutual agreement to terminate its acquisition of assets from Tryke Companies, LLC. “Our acquisition of Tryke has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction,” CEO and Co-Founder Charlie Bachtell said in a public statement. “Given these events, we feel the resources previously targeted for this transaction are better invested in our existing markets, where we have high visibility and certainty of return on capital.” Read more
The U.S. Food and Drug Administration (FDA) has sent warning letters to two CBD companies to stop marketing CBD as an opioid addiction treatment. “The opioid crisis continues to be a serious problem in the United States, and we will continue to crack down on companies that attempt to benefit from selling products with unfounded treatment claims,” FDA Principal Deputy Commissioner Amy Abernethy said in a prepared statement. Read more
New Jersey: Voters will get to decide whether to legalize adult-use cannabis in the Garden State this November, and a new poll conducted by Monmouth University indicates that legalization has strong support. Sixty-one percent of roughly 700 registered voters who participated in the poll said they would vote in favor of legalization, while 34% said they would vote against it. Read more
California: The state’s cannabis growers spend an average of $136 per pound of dried cannabis flower on testing costs, researchers at the University of California, Davis, found. In a new study, researchers with the public Californian university found that testing costs accounts for approximately 10 percent of the reported average wholesale price for cannabis in the state. Read more
California officials have announced that a sales tax extension and a $50,000 bridge loan are available to small business owners working in the cannabis industry. Gov. Gavin Newsom signed the 90-day extension into law last month, giving small business owners until late July to file and pay their first-quarter sales taxes, and on top of that, small businesses may keep up to $50,000 of their sales tax payments for a year, effectively using the cash as a no-interest bridge loan between now and next summer. Read more
Maine: The Portland City Council voted this week to allow the city to issue temporary cannabis testing lab licenses in an effort to ensure a quick launch of Maine’s adult-use cannabis market after the COVID-19 pandemic. The unanimous vote allows prospective testing labs to apply for a temporary local license, which would then allow the facility to pursue a final state license. Read more
Colorado: Denver has established a working group to issue recommendations on the city’s cannabis policies and licensing process. In an April 27 memo, the city’s Department of Excise and Licenses announced the Marijuana Licensing Work Group (MLWG), a 24-member advisory board made up of industry and community stakeholders who will “review, discuss, and make recommendations on policy direction and possible marijuana licensing laws, rules and regulations.” Read more
Massachusetts: An appeals court has sided with Cambridge in a lawsuit over the city’s cannabis licensing moratorium. Revolutionary Clinics, a licensed medical cannabis dispensary that has been operational since 2018, sued Cambridge last year over a city ordinance that allows only economic empowerment applicants to receive adult-use dispensary licenses for the first two-years of the licensing process in an attempt to ensure those disproportionately impacted by prohibition have access to the industry. Read more
Illinois: Regulators announced this week that they will delay issuing new adult-use cannabis dispensary licenses due to the COVID-19 pandemic. The Illinois Department of Financial and Professional Regulation planned to award 75 new adult-use dispensary licenses May 1, but will now wait until the governor’s disaster proclamation expires. Read more
Canada: Canopy Growth has announced 200 more layoffs in Canada, the U.S. and the UK in the Canadian LP’s latest phase of scaling back its operations. “Although difficult, the decisions that have been made over the last few months are to allow Canopy Growth to remain focused on the areas where we are winning and ensure that we are delivering the highest quality products to our consumers in every market where we operate,” CEO David Klein told Yahoo Finance Canada. Read more
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