fbpx
California cannabis companies warn of being at ‘breaking point’

California cannabis companies warn of being at ‘breaking point’

California cannabis companies are struggling to operate under the state's strict regulations and high taxes
California’s cannabis industry is at a “breaking point.”

That’s the warning coming from 27 people who represent growing operations, dispensaries, retail outlets and industry organizations who want Gov. Gavin Newsom and state lawmakers to reduce taxes on cannabis.

The group issued an open letter to state lawmakers Friday and posted a petition on Change.org, which as of Monday morning had more than 750 signatures.

“It is critical to recognize that an unwillingness to effectively legislate, implement, and oversee a functional regulated cannabis industry has brought us to our knees,” the letter said, noting that the industry’s past reform pleas have failed. “We have collectively reached a point of intolerable tension, and we will no longer support a system that perpetuates a failed and regressive War on Drugs.”

The group issued its warning more than five years after California voters approved Proposition 64, allowing for the legal growth and sale of marijuana and other cannabis products for recreational use. Such sales began statewide on Jan. 1, 2018.

What the industry wants is a tax break, a lifting of the cultivation tax that growers have to pay as well as a three-year break from excise taxes. It also wants to see more retail shops open up throughout California; the state allows local municipalities to decide whether to allow for local sales.

“Excessive taxation, which compounds across the supply chain, makes our product 50% more expensive at retail than the illicit market. This has created an illicit market that is currently three times the size of the legal market,” the letter said.

The current framework is “rigged for all to fail,” the letter said.

“We need you to understand that we have been pushed to a breaking point and we will not remain on our knees. We will not stand for political interests to the detriment of our own livelihoods, the health of our citizens, the prosperity of our families and the state of California’s economy,” it said.

Newsom’s office issued a statement in response to the industry’s plea, saying that the governor sees the need for cannabis tax reform as well as other changes.

New Jersey Begins Accepting Cannabis Business Application

New Jersey Begins Accepting Cannabis Business Application

new jersey cannabis application are being accepted now
The Murphy Administration began accepting applications from cannabis growers, product manufacturers and testing labs on Wednesday — the first step that will usher in the legitimate marijuana industry New Jersey voters endorsed in a referendum 13 months ago.

Within four hours of the application portal going live 9 a.m. Wednesday, 500 people had established accounts, Jeff Brown, executive director for the Cannabis Regulatory Commission announced. By the end of the business day, 635 had created accounts, commission spokeswoman Toni-Anne Blake said.

“We are happy to reach this milestone,” Brown said in a statement. “Applications are coming in, the platform is performing well, and we can officially mark the launch of the state’s recreational cannabis industry.”

The commission will start accepting applications for dispensary owners, the retail shops that will sell the cannabis products, on March 15. There are no deadlines; applications will be accepted and reviewed on a continuous basis, the commission said.

Applicants who are owned by women, minorities and veterans will get reviewed and approved first, as well as from those who have been convicted of marijuana offenses and people from poor communities, the commission has said. One of the goals behind legalizing the sale and possession of weed is to lessen the harm on Black and brown people, who have been more than three times more likely to face arrest and conviction than white people, even though usage rates are the same.

Under the cannabis legalization law signed in February by Gov. Phil Murphy, the commission created the Office of Minority, Disabled Veterans, and Women Business Development to promote diversity.

The commission also created a category for Social Equity Business applicants, defined as entities “owned by people who have lived in an economically disadvantaged area or who have convictions for cannabis-related offenses.”

Malta becomes first EU country to legalize cannabis

Malta becomes first EU country to legalize cannabis

Malta has become the first EU country to legalize cannabis
Adults will be allowed to carry up to seven grams of cannabis and grow four plants at home, but smoking it in public or in front of children will remain illegal.

Several other nations have similar plans; Germany, Luxembourg and Switzerland being three other EU countries considering legalization. While cannabis use and possession is permitted under certain circumstances in the Netherlands, cannabis isn’t officially legal.

Malta’s parliament voted to legalize cannabis on Tuesday, December 14, 2021 with 36 members voting in favor and 27 against.

Equality Minister Owen Bonnici said the “historic” move would stop small-time cannabis users from facing the criminal justice system. A legal cannabis industry would also “curb drug trafficking by making sure that users now have a safe and regularized way from where they can obtain cannabis”.

However, Malta’s opposition Nationalist Party voted against the new law, claiming an increase in illegal market sales will be the result.

In October the group’s leader Bernard Grech — who initially supported the new law — warned it would “only lead to the strengthening of the illegal market, with organized crime taking advantage,” according to The Times. Opponents have already called on Malta’s president, George Vella, not to sign it into law, which is the final, ceremonial stage.

Under the new law anyone carrying more than seven grams, but less than 28g could be fined up to €100 ($112). The punishment for smoking in public will be a €235 ($265) fine, and those smoking cannabis in front of anyone younger than 18 could be fined up to €500 ($560).

Associations will be set up to distribute the seeds to cultivate cannabis or the consumable version itself in order to regulate how much someone buys. A person can only be a member of one association.

The Malta cannabis law also includes support for minors who are found with cannabis. They will be recommended a care plan or treatment as opposed to facing arrest or criminal charges.

While the EU’s smallest member state, Malta is likely to be the first of a number of nations changing their cannabis laws after the UN last year reclassified cannabis to recognize its therapeutic uses.

Several countries in the EU have decriminalized cannabis for recreational or medical use under certain conditions including Spain and Italy more recently. Switzerland also has plans to implement a legal cannabis industry in the future, and Germany’s new government has announced plans to legalize the plant as well.

As the shifting narratives and stigmatization surrounding cannabis are broken down thanks to more scientific research and studies into cannabis that have been hindered for decades, more countries are beginning to recognize the potential therapeutic and recreational benefits of cannabis.

States Increase Microbusiness Licenses to Combat Multi State Operators

States Increase Microbusiness Licenses to Combat Multi State Operators

more states begin offering microbusiness licenses
More states are offering microbusiness licenses to cannabis entrepreneurs in an effort to diversify a market that some fear could become dominated by large, deep-pocketed multistate operators.

But the jury is still out on how successful such efforts will be.

So far, only three states have issued microbusiness licenses that require less capital to launch and operate a small, plant-touching enterprise: California, Massachusetts and Michigan.

Michigan already is moving to tweak its program to make it easier for microbusiness operators to survive and thrive.

“A lot of states are talking about the microbusiness game, but few have enacted it,” said Ed Keating, co-founder and chief data officer of Cannabiz Media, a Connecticut-based firm that provides licensing data and other business intelligence.

New recreational cannabis states that haven’t yet issued licenses – but have developed microbusiness and/or craft grower programs – include Connecticut, Illinois, New Mexico, New Jersey, New York, Vermont and Virginia.

A draft bill also is in the works in Washington state to provide a “craft cannabis endorsement” designed to allow small, independently owned cultivators and processors to conduct on-site retail sales to individuals 21 and older.

Helping those with less access to capital

The programs have similar goals.

“It’s a way to make the business more accessible to citizens of the state that don’t have access to large amounts of capital,” Keating said.

“It’s often a nod to social equity,” he added, referring to efforts to help entrepreneurs who have been disadvantaged by the war on drugs.

“And it’s also maybe a hedge against big cannabis.”

A microbusiness generally is defined as a small enterprise that employs 10 people or fewer.

DEA Backs White House Plan To Research Cannabis, Psychedelics

DEA Backs White House Plan To Research Cannabis, Psychedelics

DEA approves of more cannabis and psychedelic research
The Drug Enforcement Administration (DEA) and National Institute On Drug Abuse (NIDA) say they are in favor of a White House proposal to streamline the process of researching Schedule I drugs like marijuana and certain psychedelics.

The agencies testified at a House Energy and Commerce subcommittee hearing on Thursday, expressing support for the Office of National Drug Control Policy (ONDCP) research plan. While the focus of the meeting was mostly on a controversial move to strictly classify fentanyl-related substances, the Biden administration proposal’s research components would also help address concerns within the scientific community about the difficulty of studying other Schedule I drugs.

DEA said in written testimony that “expanding access to Schedule I research is a critical part of DEA’s mission to protect public safety and health.”

“It is critical that the scientific and medical community study Schedule I substances, as some may turn out to have therapeutic value,” DEA Principal Deputy Administrator Louis Milione said. “DEA supports the administration’s legislative proposal’s expansion of access to Schedule I research. DEA looks forward to continuing to work with the research community and our interagency partners to facilitate Schedule I research.”

In general, what the administration is proposing is to align the research requirements for Schedule I drugs with those of less-restricted Schedule II drugs. Scientists and lawmakers have consistently pointed out that the existing rules for studying Schedule I controlled substances are excessively burdensome, limiting vital research.

Rather than having each scientist involved in a Schedule I drug study obtain DEA registration, ONDCP wants to make it so multiple researchers at a given institution would be allowed to participate under a single registration. The administration also proposed a policy change where a research institute with studies taking place over multiple locations would only require one overall registration instead of needing to have a specific one for each site.

Another change would allow certain researchers to move ahead with conducting their studies after submitting a notification to the Department of Justice instead of waiting for officials to affirmatively sign off on their proposals. ONDCP’s plan would also waive the requirement for additional inspections at research sites in some circumstances and allow researchers to manufacture small amounts of drugs without obtaining separate registrations. The latter component would not allow cultivation of marijuana, however.

San Francisco Suspends Cannabis Tax to Combat Crime

San Francisco Suspends Cannabis Tax to Combat Crime

san francisco cannabis tax removed to fight against crime

San Francisco city officials approved an ordinance suspending the tax it planned to place on cannabis sales, according to multiple reports.

Set to go into effect on Jan. 1, 2020, the 1% to 5% it was going to impose was approved by San Francisco voters in November 2018, the San Francisco Examiner reported.

The decision is due to a rise in illegal sales and increased theft and meant to helping cannabis retailers who have been struggling, trying to compete with illegal cannabis drug dealers.

“Sadly, the illegal market is flourishing by undercutting the prices of legal businesses, which is bad for our economy as illegal businesses pay no taxes while subjecting workers to dangerous conditions and consumers to dangerous products. Now is not the time to impose a new tax on small businesses that are just getting established and trying to compete with illicit operators,” said Supervisor Rafael Mandelman, author of the ordinance, to the San Francisco Examiner.

Last month, a group of armed individuals stole thousands of dollars’ worth of merchandise from a cannabis retailer, BASA, which had already dealt with four thefts, according to the report.

Mandelman said he plans to work with the City Comptroller’s Office, the Treasurer, Tax Collector ‘s Office and the Office of Cannabis for recommendations — including a tax rate and structure — to implement in 2023.