The New Mexico Senate Judiciary Committee has voted 6-4 to table a bill that would have legalized adult-use cannabis in the state.
The bill’s supporters told the Albuquerque Journal that after the committee’s Feb. 12 vote, the legislation is likely dead for this year’s 30-day legislative session, which ends next week.
“We’d have no chance of getting it through now,” Sen. Gerald Ortiz y Pino (D-Albuquerque) told the news outlet. “This is a setback, but I think in the long run it will produce a better bill.”
Ortiz y Pino introduced NM S.B. 115 Jan. 16, and Gov. Michelle Lujan Grisham seemed eager to sign a legalization bill this year after announcing that she was officially adding cannabis legalization to the state’s 2020 legislative agenda.
NM S.B. 115 overcame a key hurdle Jan. 28 when it cleared the Senate Public Affairs Committee in a 4-3 vote, but its fate in the Judiciary Committee was always a bit more uncertain. Committee Chairman Sen. Joseph Cervantes (D-Las Cruces) has expressed concerns in the past about adult-use legalization in the state, and questioned provisions in this particular bill, including one that would give labor unions a role in deciding who would be awarded cannabis dispensary licenses, the Albuquerque Journal reported.
“I am disappointed but not deterred by tonight’s committee motion,” Lujan Grisham said in a public statement following the Judiciary Committee’s vote. “The door remains open. We will keep working to get it done. And ultimately, we will deliver thousands of careers for New Mexicans in a new and clean and exciting industry, a key new component of a diversifying economy."
Emily Kaltenbach, New Mexico state director for the Drug Policy Alliance, echoed this sentiment.
"We are very disappointed that a bill that would have done the right thing for New Mexicans—an overwhelming majority of which support marijuana legalization—was tabled," she said in a public statement. "As a result, the communities that have been most impacted by prohibition will continue to be left out in the cold, along with those that could have benefited from the investment made in substance use disorder treatment and education, not to mention the boost this would have provided to New Mexico’s economy. This fight is far from over, but it’s unfortunate that New Mexicans will have to continue to wait."
Photo courtesy of Clever Leaves
Medical Cannabis Exports in Colombia Promise Massive Market Potential
“Colombia will be a world leader in cannabis in a few years," a national cannabis association leader tells CBT.
International cannabis companies are rushing to Colombia, attracted by the country’s relatively advanced regulation, beefed-up security, cheap production costs and perfect weather conditions with many companies already anticipating growing exports of medical cannabis beginning this year.
Unlike many countries in the region that only recently approved the clinical use of cannabis (like Perú), Colombia is further along the track after approving its regulatory framework in July 2016, which sets rules for the production, distribution, sale and export of seeds as well as derivative cannabis products.
With the passage of Law 1787, Colombia joined the more than a dozen countries that have put into practice different types of regulation to explore the advantages of this plant as an alternative pharmaceutical, Rodrigo Arcila, president of the Colombian Cannabis Association (Asocolcanna), said.
Clever Leaves
Greenhouse-grown medical cannabis in Colombia.
“Colombia will be a world leader in cannabis in a few years. Investors have poured about US$600 million in medical cannabis, including farms and laboratories of by-products in about three years,” Arcila told Cannabis Business Times,noting that companies invested between US$200,000 and $300,000 per hectare cultivated and as much as $1.5 million per hectare in laboratory buildout.
Located close to the equatorial line, cannabis plantations can soak up sun 12 hours all year, compared with cannabis producers in Europe or North America who must install greenhouses to guarantee production throughout the year.
Investors have also compared the costs of growing cannabis in Colombia with international counterparts as they can find skilled cheap labor force with experience in the flower industry and inexpensive land. According to the consultancy firm Crop America, while a gram of cannabis flower costs between US$0.50 and US$0.80 to produce in Colombia, in Canada it can cost US$2.10.
Colombian-Canadian company Pharmacielo said the country’s strong sunlight, fertile soil and even 12-hour day and night cycle makes this country the best place in the world to grow cannabis.
“Our producing costs per gram of dry flower are US$0.04. In Canada, the cheapest that anyone has declared is US$0.95. That is dramatically different. Our outdoor cultivation process in Rionegro [Antioquia] receives 12 hours of light and 12 hours of dark. It is the perfect location and the perfect temperature,” David Gordon, chief corporate officer of Pharmacielo, told Cannabis Business Times in an interview.
Pharmacielo has 12.1 hectares (1.3 million square feet) of production and a sophisticated laboratory in the northwestern province of Antioquia.
Colombia’s business attraction also includes the range of trade agreements, especially those with countries where medical cannabis has also been regulated—such as Canada, the European Union and certain parts of the United States.
All those factors explain the frenzy in the industry. Currently, there are 160 companies with licenses operating in 22 of Colombia’s 32 departments, Arcila said.
Investment comes from Canada, followed by the U.S. and the EU. As a result, 70% of the companies with licenses for medical cannabis are 70%-owned by foreign capital and 30%-owned by national investors.
Colombian think tank Fedesarrollo sees export revenues from the cannabis industry bringing in US$109 million in 2020 before ballooning to US$800 million 2025 and then hitting an average of $2.3 billion in a decade.
(Other studies are even more optimistic. The firm Econcept—backed by three former ministers Juan Carlos Echeverry, Mauricio Santamaría and Tomás González—stated that this sector could achieve exports worth as much as than US$17.7 billion in the long term, even more than the oil industry, which for now remains the top source of government revenues.)
Private producer medcann Colombia, the local unit of Canadian producer medcann Pharma, believes the number of hectares licensed for medical cannabis this year has surpassed the estimates of Fedesarrollo. medcann Colombia alone expects to have 300 hectares cultivated by February 2021, Jon Ruiz, president of medcann Pharma, said in an interview.
“This is an industry that will have several thousand hectares in production in a few years,” he noted.
medcann, which currently has 23 hectares in production, expects to end the year with as much as 70 hectares cultivated and reach 300 hectares in February 2021 in the eastern province of Meta, Ruiz said.
medcann Pharma signed an agreement with Colombian laboratory Botaniki Lab to supply 600 annual tons of dried cannabis flower. The delivery of CBD-rich cannabis will demand from medcann to initially cultivate 300 hectares.
While cannabis exports are set to grow, so too will the number of hectares licensed for cannabis production.
By 2030, Fedesarollo estimates that 1,558 hectares will be licensed to cultivate cannabis plants, resulting in exports of as much as $3.06 billion under an optimistic scenario with international prices only dropping slightly, according to Fedesarrollo.
“Like in coffee, we hope Colombia will be distinguished as a world potential in production of very high-quality medical cannabis,” Arcila said.
Exports set to rise
Asocolcanna said small quantities of cannabis exported last year are part of sample research purposes, but formal exports of non-psychoactive and psychoactive cannabis are set to begin this year.
Clever Leaves, a leading vertically-integrated licensed producer of pharmaceutical grade medical cannabis and hemp extracts, became the first company to legally export cannabis from Colombia. In February of last year, it sent 360 grams of CBD-rich cannabis for research purposes to Canada. It also sent 5,500 hemp oil byproducts to the UK in August 2019. The company also sent CBD isolate to Australia, according to Gustavo Escobar, chief innovation officer at Clever Leaves.
With 15 hectares fully in production in the central province of Boyacá and a sophisticated laboratory in Tocancipá, located 44km north of Bogotá, Clever Leaves said it is capable of extracting 24,000 kilograms of dried flower, with plans to expand extraction capacity to 324,000 kilograms of dried flower in the near future, depending on revenue traction, the consolidation of international demand and the acceleration of regulatory approvals not only in Colombia but also in buying nations.
“Our goal is to expand to 100 hectares by around 2023,” Escobar said. “This is an important year for the consolidation of exports of different companies. In our case, we have built an important operational capacity in terms of cultivation and extraction capacity.”
Clever Leaves, controlled by Northern Swan Holdings Inc. and Eagle Canada Holding, is also expanding its cultivation and extraction capabilities to Portugal, where it has 85 hectares.
“The reason why it was promoted having an operation in Portugal is because Colombia by regulation does not allow the commercialization of dried flower as a final product. The regulation in Colombia is oriented to the added-value-products and the extraction of final products. Global demand mostly recognizes the flower as a final product. Since there is a possibility to produce dry flowers and offer it, we considered the Portugal operation,” Escobar said.
Clever Leaves also received a quota to cultivate, extract and commercialize high-THC medical cannabis in Colombia. The grant comes as a result of commercial quotas allocated to by the Colombian Technical Quotas Group (TQG), although the company declined to provide exact figures about the quota granted and amount set to export.
Clever Leaves expects cannabis plantations with THC content to be ready during the second half of this year.
Meanwhile, the company is also eyeing growing exports of pharmaceutical products to Germany, but it declined to provide an export target. It is also seeing exports to CBD and THC to Perú and Brazil.
Meanwhile, PharmaCielo announced Jan. 27 that it entered into a three-year agreement with Canadian XPhyto Therapeutics Corp to supply at least 30,000 kilograms of medicinal-quality cannabis extract oils and isolates over a three-year period, including those containing THC for the German market where XPhyto has subsidiaries.
“PharmaCielo could supply CBD isolates, broad-based or full spectrum (cannabis) depending on the market needs,” Gordon said. The company expects its exports to begin mid-2020
In August of last year, PhamaCielo exported CBD isolate to Swiss pharmaceutical company Creso Pharma, but the company declined to provide the amount exported.
When asked Pharmacielo’s export target, Gordon declined to provide those figures, claiming that Pharmacielo is a publicly-traded company in Canada.
On Jan. 17, PharmaCielo Colombia Holdings, the local unit of Pharmacielo also received by the TSX Venture Exchange (TSXV) approval for exports of Colombian medicinal-grade CBD isolate in the U.S. in an order for up to US$3 million.
“Each of those exports is important. Each one is the first time someone has opened the door from Colombia to that market. Once the door is open, we can do more,” Gordon said. “Every first shipment is a regulatory challenge. Each country has their own import requirements.”
PharmaCielo, which currently has 12.1 hectares in production, said it will supply plant seedlings to over 1,000 hectares (2,500 acres) of contract growers’ open-air greenhouses ready for cultivation.
“That doesn’t happen overnight but it happens over time and the first two growing facilities have been identified, and are coming on stream soon,” he said .
In August of last year, medcann Colombia became the first company with a quota granted by the government for the processing and export of psychoactive cannabis. medcann is currently negotiating high-THC cannabis with three companies but declined to provide further details, Ruiz said.
The headache of licenses
Stiff regulation has complicated the production and exports of cannabis products with many investors saying the export approval process is tortuous. Companies also warned that Colombia could lose its competitive advantages quickly if permits are not approved quicker.
“The regulatory framework has proven to be a bit complex to accompany the speed of industry development and world demand. Even the domestic market has proven to be too strict,” Ruiz said.
Regulation requires growers to get licenses from government offices ranging from the Justice Ministry to the National Food and Drug Surveillance Institute, INVIMA. Companies are required licenses for the manufacture of cannabis by-products, the use of seeds for planting, growing psychoactive cannabis plants and growing plants.
“Colombia has deregulated something that was forbidden for 40 years. The problem is that regulation is so cumbersome that other countries like Peru and Ecuador are boosting proceedings now, and they advancing by leaps and grounds,” Ruiz said.
The other problem is the avalanche of requests for licenses, which has required increasing government staff to process them.
As of September, the Ministry of Justice had approved 325 licenses for the cultivation of psychoactive and non-psychoactive cannabis of the total 1,802 requests. Meanwhile, the Ministry of Health had granted 135 licenses for manufacture of by-products as of September, compared with the 646 applications received, Arcila said.
License requests to cultivate cannabis jumped from 68 in 2017 to 1,017 in 2018 and 717 in 2019. Of that total, there are 1,388 licenses pending approval, while 66 were rejected.
But obtaining a license is not a guarantee to be fully in the business
‘It’s like holding a passport without a visa,” said Ruiz.
The industry has also complained about the delays to obtain quotas to cultivate, extract, and commercialize THC medical cannabis. Clever Leaves requested THC medical cannabis quotes early in 2019, for instance, but it only obtained them at the end of 2019.
Inside Justice Grown’s Plans for Missouri’s Medical Cannabis Market: The Starting Line
CEO Darin Carpenter discusses the multistate cannabis operator’s background, the company’s plans for Missouri and predictions for how market trends might unfold.
Late last month, multistate cannabis operator Justice Grown announced that it had secured a total of 11 licenses in Missouri’s forthcoming medical cannabis market, an accomplishment that CEO Darin Carpenter says will not only help connect the state’s rapidly growing patient base with the medicine they need, but also create a slew of new jobs for local Missourians.
The company, which holds licenses in California, Pennsylvania, Illinois, New Jersey, Massachusetts and Utah, will enter the Missouri market with three cultivation licenses, three manufacturing licenses and five dispensary licenses.
Here, Carpenter, who previously served as the director of operations for Tryke Companies/Reef Dispensary prior to that company’s acquisition by Cresco Labs, shares insight into Justice Grown’s background, the company’s plans for Missouri and his predictions for how market trends might unfold.
Cannabis Business Times: How did Justice Grown get started? Can you describe the company’s background and its journey to securing multiple licenses in Missouri’s medical cannabis market?
Photos courtesy of Justice Grown
Justice Grown CEO Darin Carpenter previously served as the director of operations for Tryke Companies/Reef Dispensary.
Darin Carpenter: Justice Grown has been around approximately four and a half years. Justice Grown started in Chicago, Ill., [and its] ownership consists of a couple attorneys who own a social equity law firm, [Loevy & Loevy, which is] focused on social injustices. In 2014 or 2015, there was the opportunity to enter the Illinois cannabis space. They decided to submit an application, and at the time, the application was molded around social equity. Through a merit-based application process, they scored extremely high in the Illinois licensing process and were awarded a license in Illinois.
That’s how everything started, and as more states reformed their cannabis policies, Jon Loevy and Mike [Kanovitz] decided to try applying in some of these other states where there are limited licenses and the application process is based on merit. They’ve become extremely successful at the application process as one of the core competencies of the business itself.
So, that’s how it started, and we’ve had this trajectory of rapid growth over the space of the past four years. Facilities are in various confirmations of operability, are being built or [have been] recently awarded licenses in each state. Missouri is the latest state that we were awarded licenses [in], and we’re very excited and happy to be part of the Missouri cannabis industry.
CBT: What aspects of Missouri’s market and your operations there are you most excited about?
DC: We are very fortunate to have secured a vertical set of licenses. What excites us is being able to of course bring our experience and expertise to a new burgeoning market, but we’re also excited to ensure that we stay true to our core values and produce safe, clean products for local Missourians. We are also very fortunate, proud and excited to work with our local partners, all of which are native Missourians who have impacted the state, either regionally or across the state as a whole, in a positive and ethical manner. We think we have a great foundation there to springboard off of and bring our expertise and product pipeline to the market.
CBT: What has been particularly challenging for the company as it enters Missouri’s market, and how have these challenges been overcome?
DC: I guess one of the biggest concerns—and I think this is a concern for every operator in the space—is having a product pipeline that we can provide to the patient base. We’re seeing the patient population is growing rapidly since the state has come online, so a pain point would be ensuring that we rapidly build our facilities and start producing a high-quality, safe product for the patient base that’s expecting a product pipeline in short order.
There’s no expected date [for sales to launch]. We’re going to be moving as rapidly as possible. We have all of our properties lined up and ready to go. We need to design and build and onboard the staff to support the industry. If we’re moving quickly, a realistic date is eight to nine months from now to have some semblance of a dispensary, barring any sort of issues with the planning board or commission or any sort of design or construction roadblocks we may have down the line. Then, shortly thereafter, cultivation, and shortly thereafter, manufacturing processes. We’re not committing to a date today, but we are very committed to the state and we’re very committed to designing, building and launching each facility as quickly as possible.
CBT: What are some of the immediate next steps for the company as it works to become operational in Missouri?
DC: With our licensed footprint, we expect to hire several hundred employees across the state. Things that we plan on doing during the hiring process are job fairs and educational symposiums that let those that are interested in Justice Grown or maybe the industry as a whole have access to us and have a place to communicate with the local team and some of the management, and submit a resume to apply for a position within the organization.
CBT: How does Missouri’s nascent medical cannabis market compare to Utah’s, where the company also holds licenses?
DC: Utah is slightly behind Missouri in patient count, [and] the Utah market is still being developed. The state’s doing a great job. We met with them two weeks ago. They’re looking at ways to bolster the education and the ability for those interested in becoming a patient to have access to cannabis.
In terms of each state’s regulatory framework, Utah has a much smaller list of qualifying conditions for one to garner access to cannabis. They require, at the dispensaries, for a pharmacist to be on staff. You cannot smoke flower. You cannot combust flower. You can’t have traditional edibles and gummies—you can only have a gelatinous cube. If someone preferred to not smoke and ingest THC and CBD through other mechanisms, the way products are sold, there’s some significant differences there. Most products are sold in single-dose increments.
All indication from the state is that they’re going to work with the industry as they gain their own knowledge and understanding of how the industry works and how patients can best consume cannabis and the best ways to provide access and how to bolster the program, whereas Missouri seems to have a well thought-out strategy that’s a bit more traditional to some of the other regions that have launched—[it has] a more significant list of qualifying conditions [and] more product pipelines are allowed in the state of Missouri. There are some pretty significant differences, but as an organization, we’re very honored to be a part of both of these states’ cannabis programs.
Justice Grown's dispensary location in Dickson City, Pa.
CBT: How does the company determine which markets it wants to enter? What is desirable in a cannabis market?
DC: There are many facets that go into how we approach certain markets. This is not dissimilar to other cannabis companies, but we do like limited license states. Our licensing, application and business development team does a great job with our business plan on a social equity front, which is what most of these new states coming online require. That gives us somewhat of an advantage entering these markets, but it really comes down to limited license, patient count and our ability to execute effectively in these marketplaces and identify strong local partners where we each mutually benefit.
CBT: What are some of the company’s longer-term goals in Missouri?
DC: We’d obviously like to be a staple in the Missouri market. We have partners who are well-known within the space, known for operating successful, ethical businesses that many Missourians know. Our long-term goal is to obviously do the industry right and provide a high-quality and safe product to the local Missourian patient base. It’s all about quality, it’s all about safe access, it’s all about inclusivity. We want everybody to have access to the product, which ties back to our foundational principles.
CBT: What market trends do you expect to see as Missouri’s medical cannabis market gets up and running?
DC: In many new markets, traditional products seem to sell best. While we have a vertical license and we plan on launching a full product pipeline, market trends in emerging markets are typically things like flower products and more traditional product consumption—vapes and concentrates and basic edibles. Our plan is to have moderately dosed edibles and products with varied ratios of THC, CBD and other certain cannabinoids to provide certain effects. While we’re going to lead with some of the more traditional products since that’s what always sells in an emerging market, we’re going to have these other products in the pipeline and develop further as we gain some penetration with those products.
Editor’s Note: This interview has been edited for style, length and clarity.
Kentucky House Committee Approves Medical Cannabis Legislation
H.B. 136 will now proceed to the House floor for a vote.
Frankfort, KY — PRESS RELEASE — On Wednesday, the House Judiciary Committee voted in favor (17-1) of a bill that would legalize medical cannabis for patients with debilitating medical conditions in Kentucky. HB 136 will now head to the House of Representatives for a full vote.
The sponsor of HB 136, Rep. Jason Nemes (R-Louisville), filed similar legislation in 2019 that was approved by the House Judiciary Committee in a 16-1 vote, but the House adjourned without taking action. Fifty-one of the state’s 100 representatives are listed as sponsors of HB 136.
A 2019 Kentucky Health Issues Poll showed that nine out of 10 Kentucky residents support legalizing cannabis for medical use. If enacted into law, Kentucky will join the 33 states (and Washington, D.C.) that have passed medical cannabis laws.
Gov. Andy Beshear was elected in November after supporting medical cannabis legislation on the campaign trail.
Matt Simon, legislative analyst at the Marijuana Policy Project, said, “Kentuckians have been waiting far too long for safe, legal access to cannabis for medical use. Patients and doctors in other states have learned through experience that cannabis is beneficial as an alternative to opioids and other prescription drugs. Passing HB 136 is a moral imperative for Kentuckians who are suffering with debilitating medical conditions. Patients are very grateful to Rep. Nemes for his leadership and to the committee for moving this important bill forward."
Noel | Adobe Stock
Virginia Senate Approves Cannabis Decriminalization Measure
The House approved a similar bill earlier this week, and Gov. Ralph Northam has promised to sign decriminalization legislation into law this year.
Virginia is on the cusp of decriminalizing cannabis this year after the Senate approved a bill Feb. 11 that would eliminate jail time for simple cannabis possession.
S.B. 2 would decriminalize the possession of small amounts of cannabis and set the maximum penalty at a $50 fine. The legislation passed the Senate in a 27-13 vote, according to a local WRIC report.
The day before, on Feb. 10, the House of Delegates approved H.B. 972, a similar bill that would make the simple possession of cannabis punishable by a civil fine of $25.
Under current law, those charged with cannabis possession could face a $500 fine and 30 days in jail for a first offense.
The two legislative chambers must now reconcile the minor differences between their proposals in conference, according to a Vox report, and Gov. Ralph Northam has promised to sign a decriminalization bill into law this year.
Virginia Attorney General Mark Herring has also announced his support for cannabis policy reform in the state, stating last summer that he would work with state leaders to take steps toward legalization.
Whether the state tackles legalization this year remains to be seen, but Herring sees decriminalization as an important step forward.
“Passing decriminalization in both the House and the Senate is a really important first step in the right direction on Virginia’s journey towards legal and regulated adult use, but this cannot be the end. We must keep going because the work is not done,” Herring said in a public statement. “For too long, Virginia’s approach to cannabis has needlessly saddled Virginians, especially African Americans and people of color, with criminal records but with these votes that is finally coming to an end. I want to thank my colleagues in both the House and the Senate for joining me in making this issue a priority and I look forward to seeing the progress we can make in the coming years."
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
.png)
