In a letter to colleagues, House Majority Leader Steny Hoyer announced plans to take up the legislation, which would federally decriminalize cannabis by removing it from the Controlled Substances Act.
In a Nov. 9 letter to colleagues, House Majority Leader Steny Hoyer outlined the legislative schedule for the lame-duck session in November and December, and said lawmakers will take up the bill next month after postponing a September vote on the legislation.
“The House will vote on the MORE Act to decriminalize cannabis and expunge convictions for non-violent cannabis offenses that have prevented many Americans from getting jobs, applying for credit and loans, and accessing opportunities that make it possible to get ahead in our economy,” Hoyer wrote in his letter.
"Big public policy changes often come after years of hard work," said Patrick G. Martin, principal and director for law firm Cozen O’Connor's Midwest practice, in an email to Cannabis Business Times. "The MORE Act passing the U.S. House of Representatives would represent a major landmark moment for advocates of cannabis legalization, but the work will continue as industry partners work toward a legalization bill passing Congress and eventually being signed into law."
In addition to federally decriminalizing cannabis, the MORE Act would require federal courts to expunge prior cannabis-related convictions, and would impose a 5% excise tax on the legal cannabis industry to fund these expungement efforts, as well as three grant programs. As outlined in the bill, these grant programs include:
The Community Reinvestment Grant Program: Provides services to the individuals most adversely impacted by the war on drugs, including job training, re-entry services, legal aid, literacy programs, youth recreation, mentoring and substance-use treatment
The Cannabis Opportunity Grant Program: Provides funds for loans to assist small businesses in the marijuana industry that are owned and controlled by socially and economically disadvantaged individuals
The Equitable Licensing Grant Program: Provides funds for programs that minimize barriers to cannabis licensing and employment for the individuals most adversely impacted by the war on drugs
The legislation would also establish Small Business Administration funding for cannabis-related businesses and their service providers, and would require the Bureau of Labor Statistics to collect data on the demographics of the industry to ensure people of color and economically disadvantaged individuals can participate.
Hoyer did not specify in his letter which week the bill will come up in the House for a vote, but the House is scheduled to be in session Dec. 1-4 and Dec. 7-10.
"House leadership and the caucus strongly support the goals of legalization, and this vote in December will represent an historic achievement for the cannabis movement," Martin said.
Cannabis Business Times Editor Michelle Simakis contributed to this article.
Colombia Shelves Congressional Bill on Cannabis Legalization
A second legalization bill remains on the table, however.
Colombia’s legislature shelved a congressional initiative that sought to legalize consumption of cannabis for recreational purposes among adults.
The plenary of the Lower House sank the bill with an ample difference of 102-52 votes, shelving a bill that sought to modify the Article 49 of the Colombian Constitution which states, "the carrying and consumption of narcotic or psychotropic substances is prohibited unless prescribed by a doctor."
But the bill, which required eight congressional debates to become a law—four at the Lower House and four at the Senate—was expected to encounter heated opposition among right-wing fractions that support Colombian President Ivan Duque, according to Jota Nicolas Vergara, adviser to lawmaker Juan Carlos Lozada, who led the initiative.
“We knew that passing this debate in the Lower House was going to be very complex because the majority of pro-government congressman have very radical positions. They see the approval of recreational cannabis as counterproductive because it encourages young people and children to consume cannabis in more accessible ways,” Vergara told Cannabis Business Times and Cannabis Dispensary.
Lower House representative Cesar Lourdy, who supported the initiative, said the prohibition to cannabis consumption runs counter to the rights of individuals.
“It is not the responsibility of the state or the society, but of the people themselves, to decide the way they develop their rights. Congress has limits on the margin of legislative freedom, and this is nothing more than the superior values of the legal system, constitutional principles and fundamental rights. Therefore, it is not welcome the prohibition that impact the free development of the personality,” Lourdy said.
The prohibition to legalization on the contrary encourages the drug trafficking business for drug cartels as they continue to have the control on the business, Lourdy noted. The potential legalization would have allowed the state to take control of production and commercialization.
But there is another congressional bill that seeks to create a legal framework for production, commercialization and consumption for recreational purposes among adults. This bill also prohibits cannabis access to underage users, bans advertising or promotion of cannabis and establishes regulated sites for adult consumption. That bill, led by senators Luis Fernando Velazco and Gustavo Bolivar, is expected to receive its first debate by mid-November, according to Gloria Miranda, adviser to Bolivar. That bill must be fully approved by the end of next year to become a law.
“Unlike the previous bill, this initiative will create a legal framework to regulate cannabis from production by regulating the licenses to produce marijuana to sales by ruling whether cannabis can be sold at coffee shops or at sales online,” Miranda said. The first debate is expected to be approved in the Senate’s commission before the end of November as they have secured ample approval among lawmakers.
This bill will only require four debates in congress as it will not amend the Constitution. It seeks to take advantage of previous rulings from the Constitutional Court, which lessened the scope of Article 49 of the Constitution.
In 1986, the Constitutional Court allowed Colombians to carry a small dose of 20 grams of cannabis in what is called the personal dose. Then the Supreme Court of Justice asserted that people have the right to carry the minimum dose and to stock up on that amount. Later, President Duque, with his Decree 1844, tried to prohibit the carrying and consumption of the minimum dose, but the Constitutional Court said the move was unconstitutional last year.
Senator Velazco endorses the legalization of marijuana consumption claiming that in Uruguay the government took up to 40% of the marijuana business from cartels, noting that the illegal market stopped receiving around 20 million euros in recent years.
This South American country also recorded investments of 100 million euros in the legal cannabis sector by 2018, and the creation of 500 jobs, according to Velazco’s bill.
Pro-government lawmaker Oscar Dario Perez said that Colombia’s biggest headache has been the war against drug cartels, and with the legalization of cannabis the state would have be promoting the free reign of consumption of illicit drugs.
“If we do allow the legalization of marijuana, we will be opening doors that we will be impossible to close it later. An eventual legalization would cause an increase in consumption, especially by underage users,” he said.
Lawmakers in favor of legalization argue that official figures show that prohibiting cannabis consumption has not prevented consumers from not having access to this substance.
A survey carried out by the country’s statistics department in 2019 found that 8% of people aged between 12 to 65 reported having consumed marijuana at some time in their lives. A smaller percentage, 2.68% of people in that age group, said they had consumed marijuana in the past 12 months. Other findings showed that of the different illegal psychoactive substances, the earliest consumption is that of marijuana with 18.1 years on average.
Copperstate Farms Managing Director Fife Symington (left) and CEO Pankaj Talwar (right) say their company, which is a licensed medical cannabis operator in Arizona, began preparing for the passage of adult-use legalization in January.
Photo courtesy of Copperstate Farms
Industry Stakeholders Prepare for Spring 2021 Rollout of Arizona’s Adult-Use Cannabis Market
MITA Executive Director Demitri Downing and executives from medical cannabis operator Copperstate Farms share how the industry is preparing for the transition to recreational sales.
The state’s 130 licensed medical cannabis operators are all eligible for adult-use licenses, and the Arizona Department of Health Services, which currently oversees the medical cannabis market and will be responsible for regulating the adult-use industry, will issue an additional 26 licenses to social equity applicants.
“The initiative was written in a really good way to require the government to roll it out in an expedited manner,” Demitri Downing, executive director of the Marijuana Industry Trade Association (MITA), tells Cannabis Business Times and Cannabis Dispensary. “Between January and March, the state will be designing the program, and they’re required to have everything up and running and rolled out by April 5. … Arizona will be full adult-use by 4/20 of next year.”
Arizona’s Voter Protection Act bars the state legislature from changing the voter-approved initiative, Downing adds, and existing medical cannabis businesses will be able to transition to adult-use operations in their current facilities.
While local municipalities do have the right to ban adult-use sales within their jurisdictions, Downing says local moratoriums only apply to the 26 new licenses earmarked for social equity applicants.
“It’s kind of a silly notion because there are only going to be 26 more out there to be placed in different jurisdictions,” he says. “Any city that does ban adult-use dispensaries—it’s kind of a meaningless, symbolic act at best.”
The initiative not only legalizes the sale, possession and consumption of cannabis for adult use, adds Pankaj Talwar, CEO of medical cannabis operator Copperstate Farms, but it also includes an expungement provision that will clear the past convictions of anyone who was penalized for cannabis-related crimes that are legal under the new law.
“It will free up the police to focus on dangerous and violent crimes because the possession and consumption [of cannabis] is no longer going to be illegal,” Talwar says. “[Cannabis-related crimes] will now be removed from the criminal records of those individuals, and maybe it will give them lease to find access to jobs and more financial security.”
The initiative also levies a 5.6% sales tax and a 16% excise tax on adult-use cannabis to fund state agencies for expenses related to implementing the program, and any remaining funds will be divided among community college districts, police and fire departments, the Highway User Fund and a newly created Justice Investment Fund, which would help support grants and programs related to public health, expungement, nonprofit services and social equity efforts.
“This tax is going to be really beneficial to the broader Arizona community,” Talwar says. “It’s going to fund community colleges, expand public health services and … help improve Arizona’s infrastructure. … Because the tax that’s being applied is at a far less onerous level than in a state like California—where, in some cases, the taxes are 30% to 40% of the final cost—[Arizona’s market is actually] competing with the black market.”
Ensuring a Successful Transition
Downing expects the Arizona Department of Health Services to issue well-thought-out requirements for the state’s adult-use cannabis program, and he advises medical cannabis operators making the switch to the broader market, as well as new social equity applicants, to follow the regulations closely.
“[Businesses should] stay in close contact with the regulators so that they understand the exact provisions that they need to follow to make the transition,” he says. “There’s no reason why the state isn’t going to be a strong partner in transitioning the medical program into a dual medical and adult-use program.”
Photo courtesy of Copperstate Farms
Copperstate Farms recently expanded cultivation operations to its entire 40-acre greenhouse facility in Snowflake, Ariz.
Copperstate Farms Managing Director Fife Symington says his company was optimistic that adult-use legalization would pass Nov. 3, and the team started planning the transition to recreational sales in January by raising capital and expanding cultivation operations to its entire 40-acre greenhouse facility in Snowflake.
“We were really only farming about half of it,” Symington says. “We just recently finished a state-of-the-art retrofit, so we’re essentially doubling our capacity out of Snowflake to meet what we anticipate will be a big surge in demand once recreational use kicks in in April. We’ve also added a lot of automated processing equipment and we’re basically just preparing ourselves to deal with more volume, ramping up from an employee standpoint, bringing on all the people we’ll need to farm the rest of the acreage and process all the crops that we’ll be growing in the greenhouses.”
The company plans to renovate and expand its cultivation facility again in 2021, Talwar adds, to ensure it can meet adult-use demand.
In addition, Copperstate Farms currently operates two medical cannabis dispensaries in the Phoenix area under the Sol Flower brand, which launched in August 2019. The company’s board and management team launched a strategy earlier this year to expand its retail footprint to prepare for adult-use legalization, and part of that strategy—the acquisition of two former Level Up dispensaries from MedMen—was finalized last week when the deal closed on Nov. 4.
Now, Copperstate Farms plans to renovate one of the former Level Up locations, which is situated near the Phoenix airport, into a 5,000-square-foot flagship store for its Sol Flower brand.
“We’re continuing our acquisitions, targeting and looking at other optimal partners that we want to acquire over the next six to 10 months to further consummate that strategy,” Symington says.
The company also plans to refine its branding as it transitions to adult-use sales in order to attract new customers who may not be as familiar with cannabis as Arizona’s medical cannabis patients, Talwar adds.
“Whether it’s through our Good Things Coming edibles brand, our Copperstate cartridges or the launch of our new concentrate brand, we really want to dial up our new branding and marketing efforts so that we can appeal to not just the cannabis connoisseur, which is what the medical market is, … [but also] to the cannabis-curious,” he says
The adult-use licensing process for both the existing medical cannabis operators, as well as the new social equity applicants, will be laid out in rules that will be established by the Arizona Department of Health Services by the April deadline, Symington says.
“I think DHS has really done a good job setting up a regulatory framework [for the medical cannabis program], and it should be a fairly easy transition,” he says.
Arizona’s medical cannabis program will provide the foundation for the adult-use program, adds Copperstate Farms General Counsel Ryan Hurley, which will result in a speedy adult-use rollout.
“The law was drafted so that we could try to make a quick transition, so we can work on getting rid of the black market as soon as possible,” Hurley says. “We should be able to launch adult-use sales at existing medical cannabis dispensaries no later than early summer 2021—the April, May, June timeframe, we should start seeing adult-use sales. That would be one of the fastest rollouts of any program in the nation, and that was certainly by design. I think one of the reasons that’s possible is because we have a well-regulated medical program here, and it’s going to be the same regulators that are regulating the [adult-use] program.”
Hurley anticipates that Arizona’s adult-use cannabis regulations will be largely similar to the rules that govern the medical program, although he says the Department of Health Services likely will limit the dosage of adult-use edible products, as well as implement advertising restrictions to prevent underage consumption.
“In addition, I would say how the Department of Health Services treats the new social equity licenses will be really interesting to watch,” Hurley says. “That’s very new ground here in Arizona. We don’t have anything like that that I know of, so how that rolls out and what those rules look like should be very interesting.”
Competitive Advantages in a New Market
The Copperstate Farms team is optimistic that the company’s 40-acre greenhouse will provide high-quality, sun-grown cannabis at scale at a low cost for consumers, which will allow Copperstate to become what Talwar calls “the Trader Joe’s of marijuana.”
Copperstate Farms currently cultivates nearly 60 different cannabis varieties, which Symington says offers a wide variety of products for patients—and soon, adult-use consumers—to choose from.
Vertical integration allows the company to control product quality from seed to sale, and Talwar says its retail experience is second to none in Arizona’s medical cannabis market.
“We know how to operate an extremely efficient transaction time with high degrees of customer service,” he says.
The Copperstate Farms team has also learned many lessons from Arizona’s medical cannabis market that they hope will serve them well as the company transitions to serving a broader customer base.
“Because we were a medical market, the quality we did was paramount,” Talwar says. “We thought of it very medicinally. These are patients who have all of the acceptable conditions, which allow them to get a patient card, so [we ensure] that what we grow is free of all pesticides and chemicals, and … we did a rigorous amount of testing, above and beyond what’s required, because we want to give information to our patients.”
The company leverages testing to understand which cannabinoids are present in each of its products, Talwar adds, which helps patients make educated decisions on which products might work best for them.
“We treated this in a very pharmaceutical lens, and that will serve us well because it’s allowing us to roll into this new regulatory environment that Arizona’s requiring, and it will put us ahead of some of our competitors who might have a less rigorous approach than we’ve taken,” Talwar says.
The Dawn of a New Era
Ultimately, Hurley anticipates a frequent doubling of cannabis sales once Arizona’s adult-use market is in full swing, and he says sales will only continue to increase once tourism returns to the state after the COVID-19 pandemic dies down.
“We won’t see that effect for a little while until COVID is under control, but Arizona gets a ton of tourism each year for a lot of different events, so we think that will be a big market,” Hurley says. “I think that’s something to watch, and Arizona will be one of the bigger legal marijuana markets out there.”
The Copperstate Farms team is also looking forward to an end to the War on Drugs in Arizona, which has long classified the possession of any amount of cannabis as a felony.
“One of the reasons I got involved in this and have been working on it for 10 years is that locking people in jail for using marijuana is a counterproductive policy, and prohibition has failed us—it’s time to let it go,” Hurley says. “I’m excited that people will no longer be going to jail, and I’m really excited about the expungement provision to allow people to clear their records, which is something entirely new in Arizona, as well.”
Talwar adds, “We really are so excited that we have recreational use in Arizona now, and I think Arizona has a very bright future ahead of it."
Courtesy of Kaleafa Social Club
Not Your Average Consumption Lounge: Kaleafa Social Club
Based in Oregon City and adjacent to a Kaleafa dispensary, the company’s new social club includes virtual reality, big-screen TVs, a live performance stage, and more.
In the Oregon’s saturated cannabis market, the owners of the vertically integrated Kaleafa Cannabis Company believe two major factors help them stand out: variety and value. That’s because each of the company’s seven retail locations offers more than 2,000 SKUs at any given time. And, thanks to the company’s buyers often developing long-standing relationships with their vendors, Kaleafa can oftentimes purchase products in bulk at a lower price
“We’ve got a lot of great price points so we’re able to hit pretty much the whole market, but the quality you get within those price points is really the biggest differentiator,” says Owner and Chief Operating Officer John Widmer.
Widmer—who is co-owner, along with his wife, Julie, and brother, Bill Widmer—have carried the idea of offering the highest value possible through multiple segments of their business. Kaleafa opened a “cannabis outlet” within its Glisan, Ore., store, in September, which sells products that are slow to move at a significantly reduced price. And in July, the company opened Kaleafa Social Club, a membership-based consumption lounge, which allows members to consume cannabis safely amongst a wide variety of entertainment options.
The idea of the social club stemmed from Julie and Bill’s desire to celebrate the communal culture of cannabis, similar to how wine is celebrated. “You have wine clubs … you have vineyards you can go visit … but you can’t do that with weed, and that’s really discouraging to the cannabis community,” Julie says. “We’re trying to make that cannabis culture available to more people, so it’s not taboo. … I think that the cannabis community is calling for that and wants respect in that manner because we enjoy wine just like we enjoy cannabis.”
Kaleafa Social Club is located in an Oregon City strip mall, right next door to a Kaleafa dispensary. The 3,000-square-foot club is more akin to a Dave & Buster’s than your typical coffee-café cannabis lounge. This is what the Widmers believe add value to the social club’s offering. There are large-screen TVs with NFL Sunday Ticket packages, video game consoles, a shuffleboard table, a photobooth, ping-pong table, virtual reality, a pool table, and a stage for live entertainment. Members of the club can purchase CBD beverages, as well as rent dab rigs, and order food to the venue via UberEats and GrubHub.
Additionally, and unlike many typical consumption lounges with clouds of smoke, the Widmers installed air scrubbers attached to the ceiling to pull air out of the building and help keep smoke at bay. “I don’t want people to be afraid they’re going to come in and leave smelling horrible,” Julie says.
Live stage performances at Kaleafa Social Club, which are digitally streamed by the artists as well as Portland's Roseland Theater, have garnered up to 7,000 viewers.
No cannabis is available for purchase at the social club (members must purchase at the dispensary next door or bring cannabis from home before arriving). Members (aged 21 and older) must pay a yearly fee of $25, as well as a $5 coverage charge each time they come to the club. If an entertainer is performing, the cover fee may be higher, Julie says.
Of course, the coronavirus pandemic threw a curveball into their plans, which had been in the works for nearly two years. Capacity is limited to 25 persons at any given time, members must wear masks anytime they’re not seated, and sofas are positioned 6 feet part facing different directions. Membership has been slow, the Widmers say: about 400 people belong to Kaleafa Social Club to date, and so keeping capacity low hasn’t been a real problem.
Kaleafa Social Club’s team has been using a myriad of ways to get the word out to the community, including promotion “in-house” with their current dispensary following (such as literature in exit bags, notifications to their 80,000 loyalty program members, and videos that play on loop within the stores), as well as vendor days, says Tom Bacon, Kaleafa’s vice president of marketing. “The social club makes the perfect venue for our vendors to be able to bring some meals in, have a big-screen show go on, people can try a sample—which you normally can’t do in a dispensary. Now we’ve got a place where we can go,” Bacon says.
Live-streamed stage performances have also helped get the word out about the social club, Bacon says. “We use local artists. We actually had artists come down from Tacoma last week, and it’s hosted by a local radio host. … [The artist plays] four songs; we broadcast it livestream on Facebook and Instagram through the Roseland Theater…a big theater in town. … It’s a great outlet for artists to get on stage and do their craft again,” he adds.
Kaleafa has streamed their live events to up to 7,000 online users. Their shows so far have been hip-hop centered, and they plan to add other artists and music genres in time. “We have the venue that’s perfect for this: they can come in and smoke, they can do their sets, it’s good for the Roseland, it’s good for us, and good for the community,” Bacon says.
Kaleafa’s COO John says that in order to ensure the social club was compliant, the team ran the concept through their team of lawyers. Because the social club is a consumption lounge—not a dispensary—“it’s not regulated by any [cannabis-related] entity,” he says. “The [Oregon Liquor and Cannabis Control Commission] doesn’t acknowledge it … It’s really kind of a grey area.”
John says he makes sure that the club is following the rules by having a separate address for the club, not allowing members to go back and forth between the dispensary and the lounge, charging a membership fee, acquiring a business license, and working with the city to ensure Kaleafa Social Club is following the state’s Indoor Clean Air Act. Owner operators are the ones on duty at the social club, Julie says, which helps them work around having paid employees or volunteers to protect from inhalants (such as cannabinoids) under the ICAA.
At Kaleafa Social Club, CBD beverages are available for purchase.
“You’ve got to be extremely diligent on making sure that you know the rules centered around what it means to be a ‘club,’” John says.
So far, the Kaleafa team says they haven’t received any major pushback about opening up. A couple community members expressed concern about opening a social club in the era of coronavirus, Bacon says; however, they have not received any pushback about the club existing for the purposes of consuming cannabis.
In the meantime, the Kaleafa team is hopeful that they’ll see more consistency in memberships and attendance in the coming months.
While in other parts of the country, such as Palm Springs, Calif., public cannabis lounges have been shut down, the Kaleafa team is confident that they won’t be shut down due to increasing coronavirus cases because the social club is private and membership-based, unlike a restaurant or movie theater, for example.
“When COVID went down and we were deemed essential, [a dispensary] was one of the few places [people] could go outside their house,” Bacon says. “It kind of reminded me of [the TV show] Cheers; they were so excited to be able to come to the dispensary, and have that lifeline to see their budtenders, see their friends, remember their names. It’s going to be a long, crappy winter and there’s not going to be any place for them to go, so we expect to see that number [go] up as we’re ramping up efforts to bring members in.”
Montana Opens Hemp Marketplace for Growers, Processors
The state has opened a new in-state Hemp Marketplace for buyers and sellers, mitigating the often complicated contract communication of this new industry.
The Montana Department of Agriculture has opened a new in-state Hemp Marketplace for buyers and sellers, mitigating the often complicated contract communication of this new industry.
“With hemp being a relatively new crop grown in Montana, the department recognizes that these markets are still developing,” MDA Director Ben Thomas said in a public statement. “The Hemp Marketplace was developed to help facilitate connections between buyers and sellers. I’m looking forward to seeing how the marketplace will continue to advance the industry.”
On Nov. 10, for example, a grower in Scobey, Mont., had listed 60 bales of X-59 fiber for sale. “Loading and delivery help available,” according to the listing.
As local news outlets reported, the Hemp Marketplace mirrors Montana’s Hay Hotline, where hay and pasture products are bought and sold.
Hemp listings may only be added to the marketplace by licensed growers. The service is offered free of charge.
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
Cassie Neiden
Eric Sandy
