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Detroit to issue recreational marijuana licenses in summer 2021

Detroit to issue recreational marijuana licenses in summer 2021

Detroit — Starting January, longtime city residents will be the first to apply for certification and secure recreational marijuana licenses by the summer, city officials announced Wednesday.

Mayor Mike Duggan and councilman James Tate unveiled a timeline urging residents eager to jumpstart their marijuana business to begin by applying for Detroit Legacy certification opening online Jan. 19. The first licenses could be issued to qualified residents as soon as June.

Tender Jacob Samways, left, lets Gregg Etzel, 67, of Dundee smell some marijuana flowers during the first day of sales of recreational marijuana at Exclusive Provisioning Center in Ann Arbor, Mich. on Dec. 1, 2019.

The city’s long-awaited ordinance for recreational marijuana, which was unveiled in October, guarantees no less than half of all licenses awarded will go to legacy residents.

“It’s by far the most controversial provision,” Duggan said. “The city will not issue a license to any business unless 50% of the licenses in that category are Detroiters. Which means if you’re from outside the city, you can’t get a license unless a Detroiter already has one. We’ll never go below 50%.”

The plan, city leaders say, was crafted to ensure residents disproportionately affected by the nation’s failed “War on Drugs” will have an equitable opportunity to participate in an industry that’s estimated to yield $3 billion in annual sales. In late November, the city council unanimously approved the ordinance.

“It was imperative for us to ensure we right that wrong,” Tate said. “We have individuals who are making a very good living on marijuana today, the same plant that created this situation of mass incarceration around our country in the city of Detroit, so this is an opportunity for us.”

Applicants can qualify for the “legacy” certification if they’ve lived in Detroit for 15 of the last 30 years; lived in Detroit for 13 of the last 30 years and are low-income; or lived in Detroit for 10 of the last 30 years and have a past marijuana-related conviction.

Legacy Detroiters will receive benefits including reduced fees, technical assistance and a six-week period when only legacy Detroiter applications will be reviewed before the rest of the public by the city’s Civil Rights, Inclusion and Opportunity Department.

Legacy Detroiters will be able to purchase city-owned land at 25% of the fair market value and all application fees be slashed to 1% of the total cost.

Detroit officials have announced plans to give certain residents a head start and other assistance in applying for marijuana licenses.

“These are for real Detroiters, those who have roots in the community,” Duggan said. “Or you can qualify as a business legacy, owned and controlled 51% by individuals with the legacy certification.”

Despite the scrutiny they face, “Detroit is ready for this huge lift,” Tate said.

He added it was rare to witness overwhelming excitement about an ordinance but said it’s because “now (residents) have that sense of opportunity and hope.”

How to apply

The adult-use law is expected to go into effect in January and Detroiters can start by reviewing the process at detroitmeansbusiness.org.

Starting Jan. 19, the website will open for applications for legacy certification. Applicants will also need state certification through the Michigan Marijuana Regulatory Agency.

The state requirements include a $6,000 fee with reductions for those involved in social equity programs. Applicants must provide the state information on the company and have a personal background check.

The state process could take two to three months and Duggan said Detroit applicants can begin the city process in January before state prequalifications are complete.

Starting April 1, Detroiters and general applicants will able to apply for licenses through the Buildings, Safety Engineering and Environmental Department.

Legacy Detroiters will be the first applicants reviewed for licenses starting May 1. General applications will be reviewed starting Aug. 1.

City licensing fees will cost $1,000, but only $10 for legacy Detroiters.

“We are going to change the inequity on Detroit versus non-Detroit businesses,” Duggan said. “We’re doing everything we can to create every opportunity for Detroiters to start these businesses.”

The city will license up to 75 adult-use retailers, the same number it allows for medical marijuana provisioning centers. Officials said it amounted to one dispensary every two square miles in the city.

Applicants will need:

  • Detailed business plans
  • Three years of income tax returns
  • Authorizations for background checks
  • Property tax clearances and clearances of any blight
  • An address for the business

Those without an address can obtain a provisional license valid for one year and for information on properties. Detroit officials have said only four of the city’s 46 medical marijuana dispensaries — permitted under a law approved by Detroit’s council in 2018 — are owned by residents.

Mitzi Ruddock, a 40-year-old Detroit single mother with a past marijuana conviction, told The News that having a seat at the table made a difference.

“I and many other Detroiters have sacrificed so much to see the day that brings generational wealth to our children through legal cannabis businesses,” said Ruddock.

Read the full story on The Detroit News

Weedmaps agrees on $1.5 billion deal to go public

Weedmaps agrees on $1.5 billion deal to go public

Weedmaps goes public with $1.4 Billion dollar deal

IRVINE, Calif.–(BUSINESS WIRE)–WM Holding Company, LLC (“WMH” or the “Company”) and Silver Spike Acquisition Corp. (Nasdaq: SSPK) (“Silver Spike”), a publicly-traded special purpose acquisition company, announced today a definitive agreement for a business combination that would result in WMH becoming a public company. The combined company will be led by Chris Beals, Chief Executive Officer of WMH, and is expected to remain listed on the Nasdaq Stock Market.

Company Overview

Founded in 2008, WMH operates Weedmaps, the leading online listings marketplace for cannabis consumers and businesses, and WM Business, the most comprehensive SaaS subscription offering sold to cannabis retailers and brands. The Company solely provides software and other technology solutions and is non-plant touching. WMH has grown revenue at a CAGR of 40% over the last five years and is on track to deliver $160 million in revenue and $35 million in EBITDA for 2020.

The cannabis market in the U.S. is expected to double over the next five years as the majority of U.S. adults support having legal access to cannabis. Despite these expectations of growth, cannabis users in the U.S. are still a small sub-segment of the population today, and retail density is still low across the majority of states with regulated legal cannabis markets. The regulations related to these markets are often complex and disparate across states as well as cities and counties within regulated states. Cannabis itself is a highly complex and non-shelf stable consumer product. These dynamics present a challenging and sometimes uncertain environment for consumers seeking legal cannabis products and for businesses selling to cannabis users while operating in a compliant fashion.

WMH addresses these challenges with its Weedmaps marketplace and WM Business SaaS subscription offering. Over the past 12 years, Weedmaps has grown to become the premier destination for cannabis consumers, with over 10 million monthly active users and over 18,000 business listings across every U.S. state, the District of Columbia and Puerto Rico with a legal cannabis market. Clients of the Company maintain listings in 9 international countries outside of the U.S. Through the Weedmaps website and mobile apps, WMH provides consumers with information regarding cannabis retailers and brands, as well as the availability of cannabis products, facilitating product discovery and online order-ahead for pickup or delivery by participating retailers.

The Company’s cloud-based WM Business SaaS subscription offering provides cannabis retailers with an end-to-end operating system to access valuable users, grow sales and scale their businesses at a compelling return-on-spend. This “business-in-a-box” functionality ranges from integrations supporting product menus that have online order-ahead, delivery order fulfillment software, data & analytics, a point-of-sale solution and a wholesale marketplace. WMH has been investing in and optimizing its WM Business software solution to also facilitate compliance for businesses amidst the complex, disparate and constantly evolving regulations governing the cannabis industry. Underlying this compliance functionality is a proprietary and sophisticated rules engine that is a core underpinning of the WM Business SaaS platform.

Chris Beals, WMH’s Chief Executive Officer, will continue to lead the Company along with the existing management team. Silver Spike’s CEO and Chairman, Scott Gordon, will join the merged company’s Board of Directors upon completion of the transaction.

Management Comments

“We are thrilled to partner with Silver Spike to transition WMH to our next phase of growth as a public company,” said Chris Beals, CEO of WMH. “We passionately believe in the power of cannabis and the importance of enabling safe, legal access to cannabis for consumers worldwide. With this merger, we will be able to continue scaling the Weedmaps marketplace in the U.S. and internationally in service of our users while expanding the functionality of our WM Business SaaS offerings in service of our clients.

Our partnership with Silver Spike will provide us a stronger platform to advance our mission to advocate for legalization, social equity and licensing in many jurisdictions while providing cannabis businesses with the tools needed to succeed in a highly complex world of regulations. I am grateful for the continued support from my teammates and investors and most thankful for the thousands – and what I expect over time to be hundreds of thousands – of business clients on our platform. We are energized by the opportunities to continue helping our business clients thrive as regulated cannabis markets expand and grow.”

 

US House passes historic bill to legalize cannabis at federal level

US House passes historic bill to legalize cannabis at federal level

US house passes historic cannabis legalization bill MORE Act

In a groundbreaking vote, the U.S. House of Representatives on Friday passed a comprehensive bill that removes marijuana from the Controlled Substances Act, ending the federal government’s decades-old prohibition on the plant.

Lawmakers in effect voted to legalize marijuana by approving the social justice-focused Marijuana Opportunity, Reinvestment and Expungement (MORE) Act by a margin of 228-164 after an hour of debate. A handful of Republicans voted for the measure.

The vote – while largely symbolic because the bill still must pass the Senate – comes only two days after the United Nations took the historic step of reclassifying cannabis as a less dangerous drug.

Opponents of the MORE Act criticized Democrats for prioritizing marijuana during the coronavirus crisis and voiced concerns about health risks for youth.

The MORE Act

The legislation could potentially open up an already fast-growing, multibillion-dollar industry to billions of dollars of additional business opportunities and interstate commerce over time.

However, the vote Friday will prove to be emblematic unless Democrats gain control of the U.S. Senate by winning two run-off races in Georgia on Jan. 5.

Even then, the more conservative Senate might be resistant to such a major change in federal marijuana policy.

“I have been waiting for this historic moment for a long time. It is happening (Friday) because it has been demanded by the voters, by facts and by the momentum behind this issue,” U.S. Rep. Earl Blumenauer, co-chair of the Congressional Cannabis Caucus and a Democrat from Oregon, said in a statement distributed late Thursday.

The House Judiciary Committee advanced the bill a year ago in what then was seen as a landmark development.

What’s misunderstood about the MORE Act

The measure wouldn’t create a federal licensing or federal regulatory framework. States would, however, continue to regulate marijuana as they see fit, without federal interference.

The MORE Act decriminalizes and deschedules cannabis,” said Randal Meyer, the executive director of the Global Alliance for Cannabis Commerce.

“It would allow state-legal businesses to operate in a federally legal environment, with business-tax deductibility and access to legal processes, and permit states to set their own cannabis policy, be it total prohibition or not.”

Steve Fox, strategic adviser to the Cannabis Trade Federation, said: “The MORE Act is a wonderful piece of legislation that would end cannabis prohibition at the federal level and take some critical and much needed steps toward restorative justice. It would provide major benefits to cannabis businesses, which would become legal at the federal level.”

Businesses, he said, would have greater access to financial services and be freed from Section 280E of the federal tax code, which currently prevents marijuana companies from taking deductions for ordinary business expenses.

“The MORE Act does not, however, establish a regulatory framework for cannabis at the federal level. So, from an industry perspective, the MORE Act is just one step in a longer process,” Fox said.

Vincent Sliwoski, a cannabis attorney at Harris Bricken in Portland, Oregon, echoed Fox, noting that licensed marijuana commerce will remain in place unless changed by states or local jurisdictions.

“What the MORE Act actually does is remove marijuana from control under the federal Controlled Substances Act while adding a 5% federal excise tax and tacking on key provisions like expungement for past marijuana convictions under federal laws. As with alcohol, there will be no federal business licensing element.”

He also emphasized that there would be “a lot of benefits here for state-licensed cannabis businesses, including everything from banking options to tax relief under (Internal Revenue Service) code 280E to federal trademark availability.”

Experts also note that they expect a number of federal agencies, such as the Food and Drug Administration, the Federal Trade Commission, the Department of Treasury and the Department of Agriculture, to weigh in on various issues, including health claims, cultivation standards and banking issues.

Michigan Designated Consumption Establishments Explained

Michigan Designated Consumption Establishments Explained

cannabis cafes coming to Michigan

Michigan legalized cannabis in 2018, and passed emergency rules to get the industry rolling in July 2019.

In addition to creating your run of the mill rules regarding licensing for growers, processors, distributors and retailers, Michigan also created some new license types. These new licenses include a Marijuana Event Organizer license, a Temporary Marijuana Event license and an Excess Marijuana Grower license.

But what has the consumers excited is a different license. A Designated Consumption Establishment license.

Michigan Designated Consumption Establishments

A Designated Consumption Establishment (DCE) license allows the license holder, with local approval, to operate a commercial space that is licensed by the Marijuana Regulatory Agency and authorized to permit adults 21 years of age and older to consume marijuana and marijuana products on premises. A DCE license does not allow for sales or distribution of marijuana or marijuana product, unless the license holder also possesses a Retailer or Microbusiness license.

It is common for public cannabis possession public arrests to rise after a state legalizes cannabis. This happens because most states only allow consumption on private property, and many people who rent may have to go outside to smoke. Michigan saw this problem in other states and is aiming to deal with it before it grows with DCEs, more commonly known as cannabis cafes or lounges.

This license is available to any applicant regardless of if they are currently holding any other licenses. The DCE license is also open to marijuana retailers, microbusinesses or anyone wanting to operate a “bring-your-own-cannabis” model.

DCE Requirements

Applicants for a DCE license must have met a multitude of key criteria. The foremost is a location approved and supported by the local municipality. Next, the facility must have:

  • An identified area specifically suitable for marijuana consumption, as well as smoke-free areas. DCE rules do allow facilities in which only non-smokable cannabis is consumed; in these spaces, no specified place for smoking cannabis is required.
  • A smoke-free area for employees to monitor the marijuana consumption area. Facility operators must ensure employees are not subjected to indirect or unintended cannabis consumption while working at the facility.
  • The facility must have a ventilation system that directs air from the marijuana consumption area to the outside of the building, through a filtration system designed to remove visual smoke and odor.
  • The facility must have sufficient walls and barriers to ensure smoke does not infiltrate into nonsmoking areas or adjacent spaces.

Additionally, when applying to be a Designated Consumption Establishment for marijuana in Michigan, microbusinesses will need to submit the following information as well:

  • A Designated Consumption Establishment Plan, or diagram of the facility that explains layout, defines facility locations, and indicates distinct areas or structures distinguishing a DCE from other licenses that may be applicable in adjacent locations.
  • Building, Construction and Zoning Details so the MRA can verify a safe operation including building and fire safety review, plus ensure a detrimental impact will not occur on adjacent businesses and residences.
  • A Business Plan that must include proposed hours of operation and, if part of the plan, the intended mechanisms for consumers to acquire cannabis at the facility.
  • A Plan for Responsible Operations such as an employee training program, how consumption will be monitored, plus prevention of over-intoxication, underage access, and the illegal sale or distribution of cannabis within the establishment.
  • Waste Management Plan for handling and disposal of any waste at the facility, including unconsumed cannabis products left by patrons of the facility.

Applicants for a Designated Consumption Establishment for Marijuana in Michigan also must undergo a preliminary background check. The Initial Applicant fee for a Designated Consumption Establishment is currently $1,000 and is valid for one year. The renewal fee is also $1,000. Like all other Michigan dispensaries and other licenses, MRA reserves the right to increase fees collected by 10% each year.

A model to follow?

Many states have the same issue that Michigan is trying to deal with right now. As previously mentioned, most states require cannabis consumption to take place on private property, but very few states have cannabis consumption establishments. This leads to more public consumption, and more arrests or citations.

A few states like Colorado have attempted to create consumption establishments, but have fallen short due to restrictions on smoking indoors in Denver. While dabbing and vaping is popular, most people are comfortable doing that in a place they rent since the smell doesn’t stick around.

We have yet to see how the Designated Consumption Establishments will pan out in Michigan or if certain municipalities will ban them all together. The Marijuana Regulatory Agency plans to finalize their rules and begin implementation in January 2021.

Cannabis Edibles Coming to Maryland

Cannabis Edibles Coming to Maryland

medical cannabis edibles in Maryland

As they say, it’s better late than never!

Maryland legalized cannabis for medical use in 2013, but it wasn’t until 2017 that the medical cannabis industry actually opened for business. For this reason it isn’t unusual for Maryland to drag its feet when it comes to cannabis edibles in Maryland.

While medical cannabis sales have been steadily soaring since they began in 2017, the state has never had edibles on the menu. But that will be changing as soon as December.

Legalization of Medical Cannabis Edibles in Maryland

In May, 2019 Governor Larry Hogan signed cannabis edibles into the law. Over the last year and a half it has been quiet as the Maryland Medical Cannabis Commission pulled together well-rounded regulations for cannabis edibles in Maryland.

In early November 2020, the Maryland Medical Cannabis Commission released its draft regulations for the new cannabis edibles in Maryland law. It is a lengthy script of requirements for manufacturing, processing, packaging, dosages, retail and more. But these regulations aren’t set in stone, hence why they are “draft” regulations.

The regulations are currently on the Maryland Register website for a 30-day public comment period. So for a month following its release, the public will have the ability to comment and criticize the regulations, which will lead to another editing session.

After this 30-day period, all comments will be taken in and edits on the regulation will begin. The MMCC does not specify how long this process may take. Once completed, the regulations will be submitted for one last 15-day notice period.

While they don’t specify how long their editing process may take, the MMCC did claim that the final regulations should be approved by late December or early January.

Regulation Proposals

The draft regulations span several pages with details pertaining to every aspect of cannabis edibles in Maryland, from transportation to retail packaging. But there are some key regulations that cover the basics.

For dosages, the MMCC will require all cannabis edibles in Maryland to contain no more than 10mg of THC per dose, and no more than 100mg of THC per package. They also recommend having 2.5mg and 5mg options as well. As for the packaging of the edibles, labelling will be consistent with the industry standard in Maryland with a THC label. With the addition of the edible element, packaging is also required to include ingredients and even a list of any synthetic or natural preservatives added into the product.

To go a step farther, the regulation will actually require those interested in producing cannabis edibles in Maryland to submit their complete recipe, including the production process in order to be approved. Similarly to other states, cannabis edibles in Maryland can’t resemble any shape that might be appealing to children, with the MMCC specifying that edibles should be designed in a “geometric” shape.

And like other states with cannabis edibles, Maryland will require lab testing of edibles for THC and other cannabinoids in addition to any microbiological impurities.

Regulations subject to change

Like we said, these regulations for cannabis edibles in Maryland are subject to change after the 30-day public comment period. However it is unlikely that much will change from the original regulation so that it can move forward before the end of the year.

Once approved, manufacturing and retail sale of cannabis edibles in Maryland will be permitted, and there are already dispensaries ready to take on the challenge.

Culta in Baltimore designed their vertically integrated operation to include a kitchen that could be used with the anticipation of edibles eventually being made legal. Culta’s owner Mackie Barch commented on the big move.

“Getting into food manufacturing or beverage manufacturing requires very different tools and skillsets than we have had in the industry so far,” Barch explained. “Entirely new spaces are required for food manufacturing, and there are very specific rules about how the rooms have to be designed… A lot of people are going to have to go back and redesign their facilities to get ready for this.”

Weed delivery coming to Masschusetts

Weed delivery coming to Masschusetts

weed delivery in massachusetts

Home delivery of recreational marijuana in Massachusetts is on track to begin in 2021, after the state Cannabis Control Commission moved to lock in detailed regulations for the service.

On a 3-1 vote at a meeting Tuesday, the agency affirmed among other policies that it would issue two types of weed delivery licenses. Officials said they should help cut into the unregulated pot delivery market — while also fulfilling the commission’s legislative mandate to create a more equitable playing field for Black and brown entrepreneurs who have so far struggled to enter the capital-intensive legal marijuana business.

“We’ve shown we can regulate this industry safely and fairly,” commission chairman Steve Hoffman told reporters. “I believe this is a necessary, imperative step to create equity in this marketplace . . . and minimize the illicit market.”

Two weed delivery licenses

One license, a more limited “courier” permit under which drivers would pick up individual orders on demand from brick-and-mortar marijuana shops and bring them to customers’ doorsteps for a fee, is already available to businesses; so far, 37 companies have received initial certification and are pursuing local and state approval.

The second is a new category of expanded “warehouse” weed delivery licenses (formally, “marijuana delivery operator” licenses) that essentially allow companies to operate like retailers without physical storefronts, buying marijuana products in bulk from suppliers and reselling the inventory online via home weed delivery. Applications for the expanded licenses should become available in the first half of 2021.

Entrepreneurs in the commission’s social equity and economic empowerment programs — largely Black and brown entrepreneurs affected by the war on drugs — will have exclusive access to both types of delivery licenses for three years, beginning when the first marijuana delivery operator opens for business.

Brick and Mortar dispensaries opposed

The addition of the expanded retailer-like delivery licenses to the commission’s proposed regulations in August drew howls of protest from many existing brick-and-mortar marijuana stores, which had been poised to serve as the source of all home pot deliveries under the earlier, courier-only model.

Dispensary owners argue the expanded weed delivery operations will unfairly undermine their main street businesses and, in turn, deprive municipalities of tax revenue. The Massachusetts Municipal Association and a handful of state legislators allied with the dispensaries also weighed in against the new licenses, saying in part that more time was needed to review the change.

Critics further questioned whether the warehouse-type businesses, which are subject to the same intensive security regulations as other marijuana facilities, would be affordable for disenfranchised entrepreneurs; a selling point of the original courier-only model was that it required only a van with security cameras and a small dispatch office where no cannabis was stored.

“We’re very disappointed,” David Torrisi, president of the Commonwealth Dispensary Association, said in an interview. “The public, municipalities, and legislators haven’t had enough time to digest this proposal, and I don’t think the commission has done enough analysis to determine the impact on the supply chain and the marketplace.”

He added the association was weighing possible legislative or legal action in response.

More social equity in weed delivery in Massachusetts

Proponents of the expanded licenses counter that the courier licenses are financially unviable. And, they argued, white-owned recreational dispensaries that emerged from the existing medical marijuana program — which gave no consideration to equity when awarding licenses — have already had the cannabis business mostly to themselves for years.

Besides, they said, weed delivery services in other states with legal cannabis account for perhaps 20 to 30 percent of the market, hardly an Amazon-style retail armageddon.

“This is a huge step forward,” said Christopher Fevry of the Massachusetts Cannabis Association for Delivery. “Couriers are at the mercy of the retailers. If they don’t give you orders, you die, and when the exclusivity period ends, they’ll just say, ‘we don’t need you anymore.’ Now we’re in control of our own destiny.”

Regulators did take steps to address the concerns raised by critics, including limiting the number of weed delivery licenses any company can own to two.

The commission also voted to ban third-party marijuana delivery technology platforms — such as Eaze and Lantern, an offshoot of alcohol delivery firm Drizly — from having a “financial interest” in more than one cannabis delivery licensee. The policy is meant to prevent the popular websites from preferentially steering consumers to delivery companies they’re invested in while freezing out independent operators; it could also help assuage brick-and-mortar dispensary owners who feared a large Amazon-like platform would back numerous delivery firms and dominate the market.

Commissioners further opted to ban what they deemed the “ice cream truck” model, under which weed delivery operators might have prepositioned vans loaded with packaged pot products in strategic locations to fulfill anticipated orders. Instead, every order must originate from the company’s warehouse. And they left in place earlier security restrictions, including a mandate that two workers must ride in every delivery vehicle and a prohibition on delivering recreational marijuana to cities and towns that have banned retail marijuana storefronts. (Medical marijuana deliveries have long been allowed anywhere in the state.)

Commissioner Jen Flanagan, who has long opposed launching delivery operations on public safety and health grounds, made a last-ditch attempt to delay the program’s launch until 2023.

However, her motion failed 3-1, with Hoffman noting that the commission had originally planned to launch deliveries in 2018 before pulling back under pressure from Governor Charlie Baker and others who urged the agency to “crawl before it walks.” Outgoing Commissioner Britte McBride, who conceived of the original courier-only model, also opposed a delay.

“I don’t think we can wait [to address] equity or the illicit market any longer,” she said.

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