Due in part to the ongoing coronavirus pandemic and its attendant stay-at-home encouragement, delivery has become a hot-button issue in the cannabis industry. Tracking with consumer sales trends in other commercial spaces (food, home goods), cannabis has become a category that many consumers now connect to the idea of delivery.
But it’s not yet a staple of the fragmented cannabis industry in the U.S., where differing state regulations set up an irregular business-to-consumer relationship across state lines.
The following states allow cannabis delivery under a specific regulatory regime, either via a retail license or a specific delivery license: Arizona, Arkansas, California, Colorado, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, New York, Oregon, Rhode Island and Vermont.
“The reason that we’re doing that is because we really, through this license, the entire purpose of the limited delivery license was to try to create a pathway that included lower barriers to entry and by providing for this waiver, we really want to foster those lower barriers and create opportunities as a priority with this license,” Cannabis Control Commissioner Britte McBride said.
Other states, such as Alaska and Washington, have generally allowed a gray-market approach to cannabis delivery services—loose regulatory language that greenlights the delivery of cannabis “gifts.” And in Pennsylvania, for instance, a delivery structure was implemented quickly to accommodate the fallout from the pandemic.
Photo by Giacobazzi Yanez
One Year Down at Last Prisoner Project: Q&A with Sarah Gersten, Part 1
LPP’s executive director and general counsel shares some of the organization’s successes in prisoner release and reentry efforts.
This is part one of a two-part interview. Part two will be published next week.
Last Prisoner Project (LPP), the nonprofit group dedicated to helping ensure the freedom of all 40,000 cannabis prisoners in the U.S., as well as inmates serving cannabis sentences around the world, is one year old.
Cannabis Business Times and Cannabis Dispensary recently spoke with Sarah Gersten, executive director and general counsel LPP, about some of the facts and statistics that drive the organization’s work and how it has navigated an eventful year.
Patrick Williams: The Last Prisoner Project just sent out its “Year One at a Glance” report, which highlights the work that the organization has been doing over the past year. It explains how, among other things, LPP and the law firm Goodwinsuccessfully secured the compassionate release of Philong Chuong. Who is Philong, and what are the next steps for him?
Sarah Gersten: Philong is a 57-year-old father of two. He actually came here as a refugee during the Vietnam War. And he really was an incredible father, really a benefit to his community. He was living in Oakland, California, and all of his friends, family members, neighbors, had really positive things to say about him. But unfortunately, he was sentenced to 87 months in federal prison in 2015 for a nonviolent marijuana offense.
So, at this point in 2020, he's been incarcerated for five years. … He's, like anyone that's incarcerated now during this pandemic, really at risk of contracting COVID, and because of his age, it [could be] really serious for him, Philong's release efforts are part of a broader effort that Last Prisoner Project, along with Goodwin and a few other law firms initiated bonds to COVID. This is really a pivot for us this year. To date, our release efforts had been focused on securing release through executive clemency, and with COVID, we really saw an opportunity to grant compassionate release, particularly for individuals like Philong, who either were older or had preexisting conditions. So, over the summer, he was part of several compassionate-release motions we filed, and he was actually the first [judicial] opinion either way that we got [on compassionate release]. And And obviously his compassionate release motion was granted. Last month, he was released and returned home to his family.
PW: The “Year One at a Glance” report highlights that on the reentry side, LPP assisted Stephanie Shepard, who was convicted of conspiracy to distribute, and Nehemiah Cole, who was convicted of felony possession. Through the program, they have been able to do things like obtain a scholarship to Oaksterdam University in Stephanie’s case, and complete food-safety and manufacturing certification courses through SCS Global Services in Nehemiah’s case. Could you talk about the importance of reentry as a pillar of LPP’s work and some of the things that go into it?
SG: At Last Prisoner Project, our model is really that we want our constituents to have full freedom. Obviously the first step on that journey is being released from incarceration. But after that, the second piece is really working to remove barriers to reentry, so ensuring that our constituents have a clean slate. Then that third pillar is reentry—working with our constituents to ensure that they have the resources and the support that they need to fully reenter. We know that when someone is coming out of incarceration, unfortunately they really don't get that support. In fact, our society and the legal system sets up tens of thousands of barriers when you look at all of the barriers that come with having a criminal record and being on probation or parole. We see that in the data.
I've certainly seen this with my constituents. One of our constituents, Craig Cesal, who actually is released, but he's still on home confinement—I can't even tell you how difficult it's been for him to secure employment. Of course, there's so many restrictions on his travel, his freedom of movement, but being able to get housing, federal assistance—all of those things you're unable to access. That's the problem, which is why Last Prisoner Project really works to A, provide sort of those wraparound services that our constituents need to kind of meet their basic needs when they're coming out, but B, we really saw an opportunity within the industry to create pathways to employment for our constituents, especially, again, during COVID. For most people coming out, this is already very difficult, but you're coming out during a pandemic, you're coming out during really high rates of unemployment. The cannabis sector has been deemed an essential service in most jurisdictions, and I think now it's still operating in every state where we have fully recreational markets. So, this is actually a sector where there is a lot of opportunity.
At Last Prisoner Project, we are really lucky to partner with A, a lot of the companies that actually hire our constituents within the industry, but B, a lot of partners like you named, Oaksterdam, SCS Global, Green Flower, Academy of Cannabis Science, that are providing free scholarship opportunities to those educational services for our constituents so they can get a leg up in trying to secure those positions. So, that's something we've been doing, again, as part of our broader reentry efforts. A big piece of that is recruiting firms like Vangst that function specifically within cannabis and have partnered with us to ensure that they're offering employment opportunities to justice-impacted people. Actually, today and tomorrow, they are hosting their 2020 virtual job fair. (Editor's note: This interview was conducted October 21.) We have several of our reentry constituents that are participating in that. Our goal is definitely to come out of this job fair and have all of our constituents have [landing] employment in the industry.
This interview has been edited for length and clarity.
Cannabis Equity in Michigan: Update on the Fight for a Fair Industry
Michigan’s nascent legal marijuana industry is trying to establish opportunities for the disadvantaged. How is it going? What’s planned for the future?
Michigan’s legal cannabis industry is one of the country’s youngest, with adult-use dispensaries open only since December 2019. And while business is healthy—in July, the state reported earning $200 million in revenue in less than seven months—Michigan faces several challenges. Three-fourths of its municipalities have opted out of the state-approved recreational program, and at over $400 on average for an ounce of retail flower, cannabis is much more expensive than other parts of the country.
And like those other parts of the cannabis industry, Michigan’s market also faces a diversity problem. In a survey sent out by the state, only 4% of license holders were Black, despite a 14% statewide population (though only 19% of the cannabis business surveys were returned).
Fortunately for the marginalized communities hurt most by prohibition, there are forces working to help create a fair industry in Michigan, where cannabis sales are expected to reach $1 billion annually by 2021.
Michigan’s Uphill Equity Battle
With around 80% of the population, Detroit is the largest Black-majority city in the country and home to important American cultural contributions. Unfortunately for aspiring green entrepreneurs in the Motor City, Detroit is one of the more than 1,400 Michigan municipalities that has opted out of adult-use recreational sales. Reports this week suggest the city wants to change that, but it still has a long road to a mature industry.
Then there’s the licensing process itself: Currently, the state requires prospective adult-use dispensaries to have a medical license. That provision will change, but not until March 1, 2021. Marijuana-related business fees are exponentially higher in Michigan, as well: In Massachusetts, a cannabis microbusiness needs to pay $300 for an initial application license. In Michigan, the cost for a microbusiness application is $6,000.
Despite the challenges, the industry still has the potential to offer a path to wealth and financial freedom to entrepreneurs from places harmed by harsh drug laws of the past. Several people and organizations are committed to ensuring Michigan realizes that potential to the fullest possible extent.
Leveling the Playing Field
Narmin Jarrous, Director of Social Equity and Executive Vice President of Business Development at the Ann Arbor-based Exclusive Brands cannabis company, told Cannabis Business Times and Cannabis Dispensary in an interview that her entry into cannabis was a happy accident. As a woman and a person of color, she soon found herself drawn specifically to the industry’s fight for equity.
“I found a real passion for promoting social equity for the state,” said Jarrous. “When you think about social equity, there are so many people that have been disadvantaged … primarily Black and Brown communities. I gained access to this industry, I worked really hard to do it—but I know I am still privileged to be where I am. Getting to where I am has been difficult, but I know I don’t face some of the barriers other people face.”
Exclusive is a distributor of several popular Michigan cannabis brands, but Narmin oversees the company’s social equity efforts by hosting regular training sessions in conjunction with the state.
“People that are trying to navigate this highly complicated regulatory system that isn’t built for the layperson to understand,” she said.
Jarrous appreciates the state approaching its equity program in good faith—she believes Michigan marijuana officials understand its importance and genuinely want the program to succeed.
In an email interview, Chris Jackson, a Detroit-based board member of the National Cannabis Industry Association, agreed.
“I give Michigan and the MRA credit for creating a program to begin with. There were some states that were early adopters [of legal cannabis] and decided against a social equity program altogether,” said Jackson. “We are having the relevant discussions and suggesting action items around access to capital, education/mentorship, land acquisition, and other important equity-driven topics.”
Margeaux Bruner, board member of the Minority Cannabis Business Association and former Political Director of the Michigan Cannabis Business Association, pointed to recent expungement legislation signed by Gov. Gretchen Whitmer as a sign of the state’s progress in the fight for equity.
“The equity space is evolving in awareness at the state level,” Bruner said via email. “The Clean Slate Expungement Reform bills took some huge steps towards the two tenets of social equity: economic empowerment and restorative justice.”
However, she also admitted that Michigan still has work to do when it comes to actually achieving an industry with equal access for everyone.
“There have been few social equity licenses granted or funding allocated to date,” she said. “I have not seen it [Michigan] achieve the goal of equity yet. There is definitely a need for additional incubation and funding.”
Looking to the Future
The coronavirus has put a damper on business efforts in many industries, and despite its high-profile declaration as an essential product in most of the country, cannabis is no exception. Many high-profile industry events and organizations are reeling, unable to depend on the grassroots-style in-person gatherings that once powered their influence.
Michigan may be behind the curve in some ways, but there are signs that the state is making an earnest attempt to lead the way in its cannabis equity efforts. An adult-use ordinance in Detroit, a comprehensive state expungement bill, and the relaxing of stringent licensing requirements are a great start.
Next week’s state elections will be another important marker to chart Michigan’s path to a fair industry in 2021 and beyond.
“So far, the state has done a good job—they listen,” said Jarrous when asked about her thoughts on the industry’s future. “They’re trying to get more licensees involved [in social equity], the businesses that are already profiting off marijuana in the state.”
“You talk about it so broadly, and yet there’s people whose day-to-day life is being affected by the criminalization of cannabis. Things can kind of get lost with these big-picture problems – people throw around things like decriminalization and legalization as talking points, but these are people’s real lives at stake here.”
Kentucky Is Latest State to Permit Ingestible CBD Sales
The state has set standards for CBD in food and cosmetics.
Kentucky has become the latest state to explicitly permit the sale of cannabidiol (CBD) in food and cosmetics.
The state recently established the necessary registration and labeling requirements and approved steps for hemp-derived CBD as an additive.
The Kentucky Department of Health’s Division of Public Health Protection and Safety (Division) promulgated the regulation on Oct. 8 to ensure such products’ safety amid this market’s rapid growth. The Division argues that the rule is necessary to provide state businesses access to “one of the fasting growing manufactured food or cosmetic product markets.”
Kentucky joins a growing number of states across the country, including Texas, Florida, and Virginia, that have opted to create their own consumable CBD regulations as they await a broader framework from the U.S. Food and Drug Administration(FDA). The FDA still considers CBD illegal in most forms.
Fees for inspecting a food manufacturing plant or food storage warehouse can be as high as $2,400 annually for a “high-risk plant.” For example, high risk includes food distributed in international, interstate, statewide, or regional commerce and manufactured as a ready-to-eat, time, and temperature-controlled product. The inspection fee for a “low-risk plant” product is $750, with low risk defined as products that are neither time nor temperature controlled.
Retail foodservice establishments offering food containing CBD additives must pay inspection and operation fees based on total square footage and seats in the establishment. For instance, inspection fees range from $75 for a business that is 1,000 square feet or less to $300 for a place of more than 30,000 square feet. Operation fees are $100 annually, plus an additional $60 for a business with 25 or fewer seats up to $175 if the establishment seats more than 200 people. Finally, the new CBD regulations dictate that companies manufacturing CBD cosmetics products must pay a $150 fee.
The CBD regulation also outlines product labeling requirements, packaging standards, and limits on advertising claims. For instance, the permit is non-transferable, must be renewed annually, and prohibits home-based processors. Labeling must, among other requirements, make clear that the product is within the federal legal limit of 0.3% THC levels. The state also prohibits advertising that includes “any implicit or explicit health claims stating that the product can diagnose, treat, cure, or prevent any disease.”
Additionally, any restaurant or other food service establishment offering hemp-derived CBD in finished food products must provide the following information to consumers upon request:
The common name of the product.
The manufacturer or distributor of the product.
A statement that the product is within the federal legal limit of 0.3% THC levels.
The public can now offer written comments or attend a public meeting on the regulation. Public comments must be submitted by Dec. 31. Further details regarding the written comments and the public meeting can be found on page 6 of the rule.
The public meeting will take place on Dec. 21. Anyone looking to attend needs to notify the state in writing by Dec. 14. Those that do not attend can receive a transcript of the meeting by requesting it in writing.
The U.S. Hemp Roundtable (Roundtable) provided its comments for the rule on Oct. 26. While lauding the state’s decision, the Roundtable, founded in Kentucky and representing a group of hemp companies and organizations, sought clarification and changes on a few minor issues.
For example, the Roundtable seeks clarification on whether the state’s food or cosmetics plant operating requirements apply to retailers and out-of-state manufacturers. The group also seeks clarification regarding sufficient THC concentration labeling, whether CBD products sold in Kentucky must be manufactured in the state, and what tamper-proof packaging is allowed.
Seniors Report Using Cannabis Products to Mitigate Symptoms Associated with Older Age
Fifteen percent of seniors report having used cannabis products within the past three years, primarily for therapeutic purposes, according to data published in the Journal of the American Geriatric Society.
Fifteen percent of seniors report having used cannabis products within the past three years, primarily for therapeutic purposes, according to data published in the Journal of the American Geriatric Society.
Investigators affiliated with the University of California at San Diego surveyed 568 respondents at a geriatric clinic in southern California. All of the study’s participants were at least 65 years of age, and 73% of respondents were older than 75.
Fifteen percent of those surveyed reported consuming either cannabis or CBD within the past three years; over half of those who responded affirmatively reported using cannabis products either daily or weekly. Seventy-eight percent of consumers described their use as medical, primarily to mitigate pain, improve sleep or to reduce anxiety. Some three-fifths of users in the survey acknowledged initiating their use of cannabis products as older adults. Fewer than half of all elderly consumers reported ever having spoken to their health care provider about their cannabis use.
Commenting on the findings, NORML Deputy Director Paul Armentano said, “It is not surprising that a rising percentage of seniors consider cannabis to a viable therapeutic option in their later years. Many seniors struggle with pain, anxiety, restless sleep and other conditions for which cannabis products may help mitigate. Moreover, many seniors are well aware of the litany of serious adverse side-effects associated with available prescription drugs, like opioids or sleep aids, and they perceive medical cannabis to be a practical and potentially safer alternative.”
Several recent studies have similarly reported that marijuana use is growing in popularity among older adults. Other studies – such as those here, here, here, and here – have determined that medical cannabis use by seniors is relatively safe and effective at mitigating pain and improving self-reported quality of life.
The study’s authors concluded, “Our study has augmented what is known about cannabis use in older adults by identifying distinct patterns and characteristics of cannabis use among them, with older adult cannabis users using cannabis primarily for medical reasons and to treat specific conditions. … Most older adults in the sample initiated [their] cannabis use after the age of 60 years and used it primarily for medical purposes to treat pain, sleep disturbance, anxiety, and/or depression. Cannabis use by older adults is likely to increase due to medical need, favorable legalization, and attitudes.”
The abstract of the study, “Cannabis: An emerging treatment for common symptoms in older adults,” appears here.
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