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Wisconsin Gov. Tony Evers will propose regulating and taxing adult-use cannabis in his 2021-23 biennial budget, he announced in a statement Feb. 7.

Legalizing cannabis is expected to generate more than $165 million annually in the state, beginning in the second year of the biennium, according to the statement. Under the governor’s proposal, that money would increase revenue, create jobs and reduce costs associated with the state’s criminal justice system.

The proposal also includes legalizing medical cannabis, which would provide a pathway for those suffering from chronic or debilitating pain and illness to utilize the medicine they require, the statement said.

“Legalizing and taxing marijuana in Wisconsin—just like we do already with alcohol—ensures a controlled market and safe product are available for both recreational and medicinal users and can open the door for countless opportunities for us to reinvest in our communities and create a more equitable state,” Evers said. “Frankly, red and blue states across the country have moved forward with legalization and there is no reason Wisconsin should be left behind when we know it’s supported by a majority of Wisconsinites.”

In 2019, a Marquette University Law Poll found that 59% of Wisconsin voters supported adult-use legalization and 83% supported legalizing medical cannabis with a doctor’s prescription.

Under the governor’s new proposal, Wisconsin would join 15 other states, including neighboring Michigan and Illinois, in legalizing adult-use cannabis. But when Evers proposed decriminalizing adult-use cannabis and legalizing medical cannabis two years ago, it was rejected by the state’s Republican-controlled legislature. The democratic executive faces the same challenge with his most recent proposal.

According to Evers’ statement, his new proposal would set aside $80 million of revenue generated through taxing adult-use cannabis to reinvest in communities across the state through a new Community Reinvestment Fund. Starting in the second year of the biennium, that money would fund $30 million in equity grants through the Department of Health Services, the Department of Administration, and the Department of Children and Families; $5 million to fund grants to underserved communities through the Wisconsin Economic Development Corporation; and provide more than $34 million to support sparsity aid, which goes to small, rural school districts, the statement said.

The remaining revenue would be deposited into the state’s general fund.

This week, Congress reintroduced a bill that would legalize cannabidiol (CBD) in dietary supplements. First introduced in the last Congress as H.R. 8179, the act would create the first pathway for non-medical CBD product to be approved and regulated by the FDA, thereby promoting consumer safety. The bill has garnered bipartisan support. Read more

Meanwhile, biomass prices appear to have reached some level of stability heading into 2021. A recent Hemp Benchmarks report shows prices remained steady for January, while prices for smokable CBD flower grew for the second month in a row. Read more

In other news:

• Canadian Rockies Hemp Corporation, an Alberta-based agribusiness that focuses on processing hemp at scale for industrial use outputs, has announced the closing of a CAD $18 million equity and debt financing led by Merida Capital Holdings. The company will use the proceeds to complete construction of its Bruderheim biorefinery, the first of several planned across Western Canada. Read more
  

• Cannabis Conference—the cannabis industry’s leading conference for cultivators, retailers, extraction specialists and hemp growers—will return to the Paris Las Vegas Hotel & Casino from August 24-26, 2021. Read more

• The team at Midwest Hop Producers, based on a farm in Plattsmouth, Neb., are making the switch to hemp. As 2021 unfolds, Midwest Hop Producers is planning to grow starts in their greenhouse for other farmers and develop an educational conference for the regional hemp industry. Read more

• As the New York State Department of Health (DOH) continues to work on proposed hemp and CBD regulations, growers have been communicating with the department about some of the intricacies. Read more

• Coexist Build, a Pennsylvania-based architecture firm, was awarded a $4,500 grant from the state department of agriculture to call attention to its regenerative organic farm, which features hemp-based construction. Read more

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Just one day after President Joe Biden was sworn into office Jan. 20, the U.S. Food and Drug Administration (FDA) withdrew its “Cannabidiol [CBD] Enforcement Policy,” a draft document many in the industry anticipated would have some guidance on regulating the cannabinoid.

While it was no surprise the FDA withdrew its proposal—a common practice when a new administration moves in—it was still unfortunate and disappointing, says Stuart Titus, Ph.D., the CEO of Medical Marijuana Inc., a California-based holding company with subsidiaries that make and sell a range of hemp-based products.

With 10-plus years of experience in the cannabis industry, Titus says the FDA has dragged its feet on carving a clear pathway for producers of CBD as a dietary supplement to grow in the marketplace, but the agency had been making some progress with the Trump administration.

Medical Marijuana

“Obviously, the FDA has approved a pharmaceutical version of CBD, known as Epidiolex, which [was] back in June of 2018,” he says. “Of course … many millions of Americans are using CBD more as just a dietary supplement, and many food processors are hoping to be able to use CBD as a food ingredient. This market has been developing for nearly 10 years now. And you would have thought that the FDA would have some kind of regulatory guidance set up for the dietary supplement version of CBD.”

The manufacturer of Epidiolex, GW Pharmaceuticals, as well as chain retailer General Nutrition Centers, reportedly met with the White House Office of Management and Budget (OMB) in September 2020 to discuss proposed rules on CBD. In 2020, GW Pharmaceuticals sold approximately $510 million of Epidiolex, according to its preliminary net products sales report.

RELATED: Jazz Pharma Acquires GW Pharma for $7.2 Billion

Titus says he believes Epidiolex has the potential to be a blockbuster drug, meaning it could generate a billion dollars a year in annual sales.

“So, certainly the pharmaceutical interests seem to be very well taken care of,” he says. “And it's just been a shame that those of us, thousands of producers of CBD, in terms of dietary supplement-type of products, are not being given equal footing, if you will, with regulations that the FDA could easily put in place.”

In May 2019, Titus traveled to the FDA headquarters in Washington, D.C., where he had the opportunity to speak before the FDA about CBD and its benefits as a dietary supplement, as well as the safety and efficacy of CBD, during a formal hearing that also included input from other doctors and industry leaders alike.

“The FDA has allowed the industry to develop, but they really haven't done any study and research on it themselves, where they haven't actually provided funding for those of us in the industry to do more study and research,” Dr. Stuart says.

In June 2020, seven companies—BoulderBotanical & Bioscience Labs, CBDistillery, CBD AmericanShaman, Charlotte’s Web, Columbia Care, HempFusion and Kannaway—formed an industry-wide study to measure the effects on the liver of daily use of full-spectrum hemp-derived CBD and CBD isolate by more than 700 healthy adults. The study was aimed at answering the FDA’s request for science-based data so it could confidently determine the appropriate regulatory path for hemp-derived CBD products.

The 700-plus consumers in the study went in for blood tests aimed at identifying any residual toxicity to the liver of the human body, specifically if they experienced elevated levels of potentially toxic liver enzymes, Titus says.

When it comes to CBD pharmaceutical use, especially for children, there’s a warning on the prescribing information for Epidiolex for doctors to watch for elevated levels of those toxic liver enzymes, he says.

“But it’s nice to see that the natural botanical products don't cause any of this residual toxicity,” Titus says. “This [700-plus] patient study that we're doing, we're going to be proving this to the FDA, that CBD is now safe. So, this study is now coming close to conclusion, and the FDA has now put a new onus on the industry that they want to see a similar study done with dogs and other animals, to make sure that there's no residual toxicity by using CBD to deliver to these animals, because a big market is now developing [for animals].”

Titus says he and his peers are happy to cooperate with the FDA in that regard, but the fact remains that CBD in the dietary supplement arena has been waiting for FDA regulations for more than eight years.

The FDA has made efforts to regulate some of the more unscrupulous CBD producers that make unsubstantiated medical claims, and certainly that type of enforcement is needed and necessary, Titus says.

“But for us in the industry to have a clear pathway, so that we can sell these wonderful CBD products currently like we are on the marketplace, we [need to] have a formal path cut out for this to be an approved dietary supplement, just like vitamin C is with a recommended daily allowance, if you will,” Titus says. “We really believe these non-psychoactive cannabinoids pose no harm or threat to society.” 

As millions of Americans use CBD, Titus says it’s “a little two-faced” of the FDA to look the other way in terms of it being a dietary supplement, yet the agency is approving the drug version. The hope is that, in the end, the science will prove itself, and the FDA will work with the Biden administration to advance appropriate regulations and policies to clear a path for legal over-the-counter CBD, he says.

In the meantime, Congress is on a path to taking action through the reintroduction of the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act with bipartisan support in the U.S. House of Representatives. First introduced in the last Congress as H.R. 8179, the act would create the first pathway for non-medical CBD products to be approved and regulated by the FDA, thereby promoting consumer safety.

“It’s nice to see that Congress is taking the lead, because they’re just sick of the FDA dragging their feet on this particular issue,” Titus says. “There were a couple of bills in [the last] Congress to potentially alleviate this and carve out that nice pathway that we in the industry wanted.”