The first eight months of adult-use cannabis sales in Illinois have generated more than $100 million in tax revenue, according to the Chicago Sun-Times.
Total adult-use sales have reached more than $431 million since launching in January, reaching a new monthly record of nearly $68 million in September.
Adult-use cannabis sales have generated nearly $70 million through the state’s Cannabis Regulation Fund and an additional $36 million from state and local taxes between January and August, the Chicago Sun-Times reported.
Nearly half of the tax revenue collected through the Cannabis Regulation Fund will be reinvested to support communities that have been disproportionately impacted by prohibition or directed to mental health and substance abuse programs, according to the news outlet. An additional $16 million will be provided to county and local governments.
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New Bill in D.C. Would Allow Returning Citizens to Work in the Medical Cannabis Industry
The legislation would repeal a rule that prevents anyone with a felony conviction or misdemeanor cannabis offense from working at a medical cannabis cultivation center or dispensary.
D.C. councilmembers introduced a bill Oct. 9 that would allow returning citizens to work in the medical cannabis industry, according to a DCist.com report.
The legislation would repeal a rule included in the Legalization of Marijuana for Medical Treatment Initiative of 1999 that prevents anyone with a felony conviction or misdemeanor cannabis offense from working at a medical cannabis cultivation center or dispensary, the news outlet reported.
The bill would also create a program that provides incentives for applicants seeking cultivation, dispensary and testing lab licenses when the business is more than 50% owned by returning citizens, according to DCist.com.
The Council’s Committee on Business and Economic Development will review the legislation later this month, the news outlet reported.
What Happens If New Jersey Legalizes Adult-Use Cannabis?: Legalization Watch
Greenspoon Marder’s Rachel Gillette offers her predictions on whether the state’s adult-use referendum has the support it needs to pass on Election Day, as well as what comes next.
New Jersey has grappled with the idea of adult-use cannabis legalization for a while now, especially since Gov. Phil Murphy took office in 2018 with the promise of cannabis policy reform.
With just over two weeks until Election Day, many are surely wondering how the election will shape cannabis policy in the U.S.
“I’m excited to see what happens in New Jersey,” Rachel Gillette, partner and chair of Greenspoon Marder’s Cannabis Law Practice, tells Cannabis Business Times and Cannabis Dispensary. “I’m also excited to see what happens in states like Arizona and to see how many more states choose to legalize cannabis in this election.”
Here, Gillette offers her predictions on whether New Jersey’s adult-use referendum has the support it needs to pass on Election Day, as well as what comes next, from how the law will be implemented and its potential impact on existing medical cannabis businesses to how cannabis policy reform in New Jersey might affect neighboring states that have yet to legalize.
Melissa Schiller: How likely is it that New Jersey voters approve adult-use cannabis legalization this November?
Rachel Gillette: I haven’t seen any recent polling, so this is pure guessing, but my guess is that we’re going to see more and more states pass adult-use, either through ballot initiatives or through the legislative process, which just brings to the forefront the fact that the federal government is going to have to address the issue of federal legalization at some point. I’m relatively confident, given that New Jersey already has medical marijuana, that it will pass [adult-use]. I think that people have moved past this [idea] that marijuana is the devil’s weed and should be prohibited in the United States. I think generally, more people favor the legalization of it, having seen what has happened in other states like Colorado, California, the Northwest and other states that have chosen to legalize. It can be done in a very safe way and can lend itself to providing significant tax revenue for the state, and, also, the more states that legalize, the more the black market gets squashed. I think the only reason the black market survives is because of federal prohibition and other states that have chosen not to legalize cannabis.
MS: What are your predictions for how New Jersey will implement the referendum and regulate adult-use cannabis in the state? What key provisions do you expect to see in New Jersey’s cannabis law?
RG: The ballot question seems relatively basic. It [asks if voters] approve of amending the Constitution to legalize a controlled form of marijuana for adults at least over 21 years old, and there would be a state commission created to oversee the state’s medical program and the new personal-use cannabis market.
My hope is that a state like New Jersey will not follow other states like Florida [and] New York, [which are] what I call “competitive licensing” states, which create these, for lack of a better word, very limited marketplaces that don’t allow for free market competition. It’s this merit-based application system, which lends itself to corruption and, frankly, the state getting sued every time.
My hope is that New Jersey will follow states like Colorado, California, Oregon [and] Washington that have more opened-up licensing, allowing for local jurisdictions to have some input in the time, place and manner of cannabis businesses within their jurisdictions, but not having the state have the ultimate control to limit the number of licenses or have a select few compete for these licenses. Those types of systems just don’t work, first of all. It’s very arbitrary to basically say, “Oh, here’s what you have to put in the application. Now you have to compete and we’re going to grade you.” Then the businesses that lose by .001 or the first loser are going to end up suing the state because they think it was arbitrary and they should have been granted a license. Not only that, it leaves all of these smaller mom-and-pop models behind, and it doesn’t give real people an opportunity to get into this marketplace.
My hope is that it will be a better system that what we’ve seen in other states. We’re now seeing other states that have done this competitive or merit-based licensing being sued—Florida, Maryland, Arkansas, Illinois is now a complete mess [and] Missouri has a whole bunch of people upset. I just don’t think that those systems work, and I wish states would avoid it.
MS: How might adult-use legalization impact the state’s economy, especially in the wake of the COVID-19 pandemic?
RG: There’s no doubt that cannabis can contribute to the tax base. The problem is, you have to tax it in a way that diminishes the black market and allows the regulated market to thrive—more people [have] to go to the regulated market and get away from the black market. The idea of how much it should be taxed on the state and the local level is a really important question, and I think states and local jurisdictions have to get that right. Otherwise, it can go the wrong way. Certainly, we have seen record sales in states like Colorado, [with] a significant amount of revenue being generated not only by special sales taxes associated with cannabis, but also, the first $40 million of the excise taxes goes to the construction of schools. I think there’s a lot of potential that the tax revenue raised can positively impact the economy.
What I would really like to see is that the tax revenue go to communities that have been disproportionately impacted by the drug war, so there’s actually some thought into why we’re legalizing cannabis or why the voters have decided to legalize cannabis and reinvesting that into community programs and things more focused on social equity. I think that’s really important, that we don’t forget about the communities and the people that have been affected by the failed war on drugs.
MS: How might adult-use legalization impact New Jersey’s medical cannabis program? In many states, patient counts start to drop when adult-use comes online—do you anticipate that happening in New Jersey, as well?
RG: Probably, and the reason that happens is because people are using cannabis both for medical use and for recreational use. If it becomes relatively easy to purchase if you’re an adult over 21, you don’t have to go through the process, even if you are using it for medical use, of getting a doctor recommendation and getting on a registry and all of that. A lot of people prefer the ability and the ease of being able to just walk into a store and buy cannabis because they’re over 21, rather than having to get their name on some register somewhere.
I do anticipate that the patient count will probably be impacted to some extent, but I hope they give credibility and resources to the medical cannabis market and medical cannabis consumers. We cannot forget about patients, even in light of adult-use legalization. They have different needs than people who consume from a recreational perspective. They may need higher THC levels or other cannabinoids in their products.
For example, in Colorado, if you’re a medical patient, you can purchase more cannabis than if you are an [adult-use] consumer, or you can purchase products that come in a higher dosage of THC than if you’re an adult-use consumer. I think that’s an important consideration. People are legitimately using cannabis for medical reasons, and they should be able to continue to do so and those products should continue to be available for them in the marketplace.
MS: With all of that in mind, how should existing medical cannabis businesses prepare for adult-use legalization?
RG: Probably, medical cannabis businesses are going to be the first that will be able to sell to adult-use consumers. I hope that there are other opportunities in New Jersey for other potential businesses, that the state doesn’t just limit it so people can only get adult-use licenses if they’re currently medical. I think they’re going to have to think about what kind of products an adult-use consumer may be taking other than a medical consumer, and [they should be] able to serve both types of customers in their facility.
I think it does get to be a diminished market as far as medical versus adult-use, once you open it up to everybody over 21, meaning you may have the same number of medical patients, but you’re going to have a lot more consumers that are over 21. I think that’s just the natural progression of legalizing for adult-use, that proportionally, you’re going to have more people buying products that are over 21 than are medical patients, so you have to play into that.
MS: How might legalization in New Jersey impact cannabis policy in neighboring states such as New York and Pennsylvania, which have also been considering adult-use legalization in recent years?
RG: I think the local authorities and legislators are going to see a bunch of people driving across the border to buy cannabis legally, and they’re going to say, “Maybe it’s time we consider legalizing, as well,” because that’s just tax revenue going to another state. It’s sort of like when I lived in Connecticut. They didn’t allow beer or wine to be sold on Sundays, of all days, when football is being played, and people used to just drive over the border to buy it. I think the same thing is going to happen, and I think, just like eventually Connecticut realized that not selling beer or wine on Sunday was not a great idea, [New York will] probably figure out that not legalizing cannabis isn’t a great idea either. They’ve already got Massachusetts there, too, in that Northeast area where people are probably driving across the border into Massachusetts to buy cannabis.
The same thing happens at a smaller level, when a local jurisdiction decides not to allow cannabis businesses. So, I think eventually, it’s going to come to the tri-state area. It’s just a matter of when.
Editor’s Note: This interview has been edited for style, length and clarity.
What Being a Cannabis Regulator Taught Me About Success in the Industry
While cannabis and hemp operations may be more accustomed to state-level regulations, becoming versed in federal regulations will help avoid major problems down the line.
Ready or not, cannabis regulators are watching you.
What was once considered a subversive or fringe industry has blossomed into a vast, complex, multifaceted sector all its own over the past decade. And with those changes have come a much-increased regulatory presence.
Proper labeling is paramount these days, while testing for potency, pesticides, microbials and more is commonplace. But here’s the thing: Those cannabis- and hemp-specific mandates, important as they are, are barely the tip of the regulatory iceberg compared to what’s coming down the pike.
Regulations from the likes of the Occupational Safety and Health Administration (OSHA) and the Food and Drug Administration (FDA) are essential for ensuring safety of workers and consumers and further legitimizing the hemp and cannabis industries as a whole. But unless cultivators, processors and dispensaries make some changes now, they’ll be playing catch-up for years to come—many with suboptimal consequences.
Kim Stuck, Founder and CEO of Allay Consulting
As the world’s first cannabis and hemp specialist for a major metropolitan public health authority at Denver’s Department of Public Health and Environment, where I worked for nearly four years, I witnessed countless well-meaning operators (and their investors) get tripped-up by rules and regs that aren’t always black and white. My work as a regulator now informs everything I do in advising my cannabis and hemp clients.
As regulatory agencies at every level are stepping up their presence in these still-new industries, here are a couple of the lessons to help you and your colleagues steer clear of trouble.
A Maturing Industry
In my years spent as a regulator, which included hundreds of investigations of cannabis and hemp businesses of every kind, I saw the industry transform from one in which blatant non-conformances were rampant (think: no-label brownies in unsealed baggies on dispensary shelves) to one with increasingly stringent consumer safety standards. The industry has rapidly grown up, especially in states with well-established regulated markets like Colorado. And those changes come, in large part, as a result of exacting attention to detail and putting in a lot of hard work.
Since I’ve crossed the regulatory fence to work as a business consultant, I’ve worked with many cannabis owners, operators and investors who are passionate about their businesses and who openly embrace regulatory compliance because it instills consumer trust. But let’s face it: Not everyone is an expert on food safety protocols or OSHA codes.
To borrow a common phrase, you don’t know what you don’t know. And in this rapidly maturing and increasingly regulated industry, that can lead to big problems.
Whether you're launching a new facility, have recently acquired an existing business or perhaps received a less-than-stellar health inspection, it's smart to regularly assess your operation from the top down. Inspectors pay close attention to certain things: working hand sinks, personal protective equipment (PPE), documentation, contamination avoidance and worker safety, to name a few.
And because outside perspectives are essential in any highly regulated industry, my first recommendation to operators and investors is always to seek advice from a regulatory expert—and then honestly identify key areas in need of improvement at their facilities.
Once you have taken an honest look at your operation and have a grasp on what needs work, you can make a plan of action and implement necessary changes. Companies that embrace this type of self-assessment and self-improvement almost always sail through regulatory checks with health departments, fire inspectors and the like. Removing the stress of noncompliance allows them to focus on what really matters: growing their business.
As regulated cannabis markets take root across the country and cannabinoids find their way into more and more consumable products—baked goods, tinctures, supplements, confections, body products and more—much of the industry will inevitably find itself subject to the same regulations as mass-market food and cosmetics manufacturers. But unlike those industries, there’s no real precedent for intense regulation in the cannabis industry. Many cannabis operators aren’t familiar with the rigorous mandates that accompany federal regulatory oversight—and the consequences of noncompliance with federal bodies, like FDA or OSHA, are far steeper than any state cannabis-specific penalties.
Think Long-Term Starting Now
There’s a lot on the cannabis policy reform horizon right now. Several states, including New Jersey and Arizona, are voting on legalization for adult use in the upcoming election. And many insiders predict that successful legalization in those states will usher in a period of rapid political change and widespread legalization—likely leading to federal legalization. This would ease numerous burdens currently placed on the industry by the current patchwork of state laws, but it will also open up companies to much stricter federal health and safety regulations.
So, that’s the mindset everyone in the industry should have when they evaluate their compliance levels.
You absolutely do not want to be operating a noncompliant facility when OSHA or the FDA comes knocking. I cannot underscore that enough. And I can say with certainty that it’s the proactive organizations that will find success in the federally legal landscape, while those that drag their feet implementing strict, compliance-minded standard operating procedures (SOPs) will most certainly drop like flies.
To that end, it’s a great idea to earn any certifications your organization has been considering and to upgrade your facilities and processes now. It can make a huge difference and help your organization get ahead of the regulatory curve—and the competition.
For example, I recently worked with a processing facility as it earned a Current Good Manufacturing Practices (cGMP) certification. This certification ensures that facilities and processes to create foods or drugs are safe and takes into account safety at every stage of the process—from handling to packaging. Together, we established strong quality management systems, hygiene protocols and safe handling practices. The FDA considers cGMP the baseline in consumer safety practices—and it’s an essential certification for any cannabis and hemp manufacturing, cultivation or processing organization looking to grow in a nationally legalized landscape.
Another client of mine worked with raw cannabis oil. Everything seemed to be in alignment: They had proper SOPs in place, good hygiene practices and adequate fire safety measures across the facility. But the temperature at which they were storing their oil was problematic and could have led to the proliferation of microbes that could lead to toxins in their end product—a serious operational issue. They were intent on doing things by the book, but until a trained regulatory expert evaluated their facility, they hadn’t considered the headaches that something like improper refrigeration temperatures might cause when it came to their local health department.
Good Intentions Can Have Bad Consequences
Even facilities that scrupulously document their processes with the very best of intentions for their workers may be in violation of regulations without even realizing it.
Here’s an example: Say the general manager of a processing facility offers workers masks to protect them against dust in the manufacturing process. Great, right? Sure—but not from a regulatory standpoint.
In order to be compliant with OSHA, before even putting masks on (including N95s and respirators), workers first need to fill out forms stating they’re healthy enough to even wear them. When OSHA comes around for an inspection and discovers that workers never completed these forms, the fine can be up to $25,000 per worker—for what would have taken someone with experience in the regulatory space about five minutes to flag.
Success in this industry, from a regulatory standpoint, is truly dependent on details. When a regulatory agent isn’t knocking on your door, it’s easy to put tasks, like creating SOPs or making sure you have proper fixtures, on the backburner. But there’s no reason to risk your business on a bad evaluation—and from what I’ve seen, about 90% of facilities have at least one practice, SOP or safety protocol that could put them in jeopardy.
Don’t wait for the FDA to tell you that cleaning with isopropyl is not a sanitization step or for OSHA to penalize you for not having a Hazard Communication Plan. Do the work now, and reap the benefits for years to come. Because the regulators are circling—whether you’re ready for them or not.
Kim Stuck is the founder and CEO of Allay Consulting, a compliance strategy and services provider serving the hemp and cannabis industries nationwide. During her tenure as a cannabis and hemp specialist with the City of Denver, Stuck worked as an investigator covering cultivation, manufacturing and retail.
Pendram Announces Launch of Equity Crowdfunding Campaign with WeFunder
Pendram is raising capital to grow the brand and launch a new line of high-tech “smart” storage solutions.
San Diego, CA—PRESS RELEASE—Pendram, Inc. has announced the launch of its first official registered equity crowdfunding campaign in partnership with WeFunder. Pendram is raising capital to grow the brand and launch a new line of high tech “smart” storage solutions. Pendram will use the capital to complete development and go to full production with the innovative new category of products. The WeFunder campaign launches on Oct. 13, 2020, and Investment is open to the public and accepted at: www.wefunder.com/pendram
Pendram’s proprietary patent pending smart technology called Intellisphere IAC “Creates the Perfect Atmosphere” and has the goal to set a new standard for precise storage conditions with safety and smart flexible control from anywhere. Pendram's business model is innovation and a mission to protect, preserve and optimize the long-term quality of perishables. The innovative “smart” high tech product line includes storage solutions specifically being engineered for culinary, cannabis, cigar and breast milk applications.
Mary June Makoul, founder and CEO says, “We’re raising money through crowdfunding because we want as many people as possible to be a part of our innovative, high-tech company. There was a critical need for miniaturized smart storage solutions and this is an opportunity for anyone to own part of a growing tech company on the ground floor without having to quit your job or be an experienced Investor. We’ve already proven demand with numerous pre-orders, and it is thrilling to imagine what this company can do with access to adequate funding.”
“I am delighted and excited to join Pendram as the Lead Investor in their WeFunder campaign launching today! These funds will help drive the company forward, accelerate growth and expedite the path from the current prototypes to production of their groundbreaking smart storage technology products. The time is now for these innovative solutions and Pendram is positioning to create a whole new category of products” said Mark Yoshida, lead investor for Pendram’s WeFunder campaign.
Jon Siann, CTO and founder of the company, added, “No miniaturized solutions exist on the market today that can add and subtract moisture using distilled water to maintain precise storage conditions for multiple applications. Current solutions use chemicals that interfere with the integrity of stored products and are an environmental hazard. Our patent-pending products and proprietary platform will leverage electronic and thermal breakthroughs as well as sophisticated software and cloud management to reliably and precisely control temp, airflow and humidity."
Pendram is launching its crowdfunding campaign as industry trends show unprecedented growth in the cannabis category. The company’s flagship product Smart-Lid keeps cannabis “In the Perfect Atmosphere,” is automated and odor-free, and was chosen as Tommy Chong’s favorite high tech product for 2020. For more information on Smart-Lid, please go to www.smart-lids.com.
To view important information on the equity crowdfunding terms, opportunity and risks, please go to: https://wefunder.com/pendram.
Legislative Map
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More
Melissa Schiller
