Cannabis Law Prof Blog

Marijuana legalization likely to create market for low-THC products aimed at new users

Most people view marijuana legalization as a floodgates moment where long-time black-market marijuana users can finally go to the corner
store to buy ultra-potent strains of the drug in large quantities, and spend their free time testing the hypothesis that it is impossible to overdose on marijuana.

This may be true, but according to a recent report by Deloitte, widespread marijuana legalization may also create a large market of first-time users trying legal marijuana products out of curiosity. According to the report, these consumers are expected to seek out a less potent, more socially acceptable method of ingesting the substance. Forbes.com has the story:

It seems the American CBD craze has invaded Canada. Now, more of those customers, presumably the ones with less experience with hard-hitting pot like GG#4, or these things called dabs are requesting products heavy in the non-intoxicating compound of the cannabis plant. These people are the focus of the latest market report that suggests new, legal users (typically older folks) are more intrigued these days by the stress relieving powers of the plant than they are in getting wrecked.

 

"CBD is becoming kind of an 'it' word in cannabis. We see a real trend there," Andrew Pollock, vice-president of marketing for The Green Organic Dutchman, told CBC News.

 

Due to the forecasted demand for low-THC pot products, dispensaries may want to consider advising customers on the advantages of micro-dosing. Some are already making this part of the plan. After all, this low-key method for consuming cannabis, which is geared toward the person wanting to maintain a functional high without drooling all over themselves and dreaming of tacos all day, is already catching on in parts of the United States.

 

"(They say) two milligrams or three milligrams just has a mild relaxing effect and doesn't interfere with you going about your day," said Tom Adams, managing director of BDS Analytics in Colorado.

 

It's not totally surprising that this new consumer segment seems to be emerging. After all, the purpose of legalization is to make marijuana safer through regulation, and more accessible to the public. The Deloitte report describes current black-market marijuana users as young "risk takers" indicating that their use of marijuana is driven by a desire to "live life to the fullest", and that its illegal status does not curb that desire–if anything it amplifies it.

However, the report goes on to project that the marijuana consumer of the future will be more interested in a less frequent, more relaxing or therapeutic marijuana experience. In other words, once the drug is legalized it will no longer be a ritualistic and taboo exercise in hedonism, but instead will become more akin to the occasional glass of wine or scotch. Further, the report projects that marijuana users in the future will be willing to pay a premium for their products, and will place a high value on knowledgeable staff and diverse product selection. These insights further the parallel between marijuana and alcohol, as recent years have seen a growing demand for high-quality craft beers and locally distilled liquors sold by knowledgeable bartenders and similar connoisseurs.

Government regulators are sure to be happy to hear this information, as there have historically been some concerns that marijuana legalization would result in increased habitual drug use, leading to a host of other societal problems. At least for now, it sounds like cannabis consumers of the future will approach the drug with caution and treat it as an occasional indulgence, rather than instantly succumbing to the "Reefer Madness" that many used to fear.

 –John Robinson

Q&A: The "Dopest" Lawyer in Town (Part 2 of 2)

This is a continuation of Q&A: The "Dopest" Lawyer in Town (Part 1 of 2).  

Every U.S. state that shares a border with Texas has passed legislation to legalize medical marijuana -- so what does that mean for the Lone Star State?

I recently had a chance to talk to one of the lawyers on the front lines of that issue, Daniel Mehler, of Dallas's Roper & Mehler. Here, the self-proclaimed "dopest lawyer in town" talks about his front-row seat to what's happening.

It is no secret that "canna-cations" (tourism for legal cannabis use) have become more popular as its become easier to access legal cannabis in other states. Pair the travel trend with the huge black market in Texas and it’s safe to say that a lot of employees have cannabis in their system. Mehler shared some information on the relationship between marijuana and employment law.

AG: Are you aware of any trends that Texas employers are creating to manage potential risks posed by employees obtaining and using “legal” pot out of state?

DM: As far as Texas-based companies, I haven't really seen any change. We have seen a change on the national level. A lot of national companies have started to exempt marijuana smoking from their pre-employment drug testing. In Colorado, most employers don't drug test, but the issue has been litigated and determined that employers can punish you up to and including dismissing you from employment for legal use, off the clock, of medical cannabis, never mind recreational cannabis. So it has become an employment minefield. You also see things like for car salesmen, because of insurance requirements, employers, even though it's legal, not allowing [off the clock use] at all. On the flip side of it, getting away from just the domestic market, Vancouver, British Columbia just announced that it's police officers will be allowed to smoke legal, Canadian cannabis once their market is live beginning October 17th, as long as they're off duty.

AG: It just seems like it's going to be so hard to police for the out of office conduct stuff because of the drug testing issues. How can an employer tell if someone engaged on vacation or right before their shift?

DM: No, that's just it, in Colorado, it doesn't matter. The employer can just fire you regardless of where it actually occurred. You don't actually have a right to consume cannabis, even though it is legal in the state.

Moving into family law, Mehler pointed out a few points of contention that will continue to grow as more people begin to access and use marijuana both medically and recreationally.

AG: Are you aware of any effect either the compassionate use act or the legalization of marijuana in nearby states on family law matters in Texas?

DM: Google Christy and Mark Zartler. They have a profoundly disabled daughter named Kira. She has autism and is extremely self-injurious. They started administering cannabis smoke and discovered that it relieved all of herself injurious symptoms. CPS tried to intervene. It went to court and this past year a Judge ruled that the State would not take custody of their daughter; that nothing that they had done was dangerous to their daughter. So, they actually beat CPS in court, despite having published a YouTube video that got several million views of them administering cannabis to their daughter. So yeah, the impact is there. You see that CPS removes children when parents consume cannabis, but then we've also seen a highly publicized case where a judge, an impartial arbiter, says no, no, no, CPS was out of line on this. So, we’ll see how that plays out as we go forward. Another problem with family laws circles back to the THC concentrate problem, where those people are getting charged with felonies [rather than simple possession]. As more time passes, you're going to see more of their kids in CPS investigations.

AG: What about in divorce or child custody matters? Are parents able to use examples of the other using cannabis in a legal state against one another?

DM: Absolutely. We see it all the time. I have buddies that do divorces, and obviously, some of our criminal defendant clients also have marital issues. We see “drug use” arise in those matters all the time, even if it's strictly cannabis. Parties take and use those facts as a hammer and just club each other with it.

Last, we moved in to talk more about Mehler’s other practice area. I was interested to know about the presence of and risks to Texans in out-of-state, legal cannabis business.

AG: Have you seen any changes in business law in Texas in response to marijuana legalization in the surrounding states?

DM: In Texas, we don't have a lot of business law on it because there's not new jurisprudence and, obviously, you can't contract to do things that are illegal. Originally in Colorado, there was no contract enforcement. Everything was basically done with handshake deals–an understanding that all of this is illegal and there was no contract enforcement because it's all in violation of federal law.  It took an act of the Colorado state legislature; they revised the statutes and specifically made cannabis contracts enforceable in state court. This built the foundation for the business to flourish because without contractual security it's very tough to draw in investors. Everybody wants security and defined rules. Eliminating the risks and making contracts enforceable in state court allowed the cannabis business very much to flourish in Colorado as a result.

AG: Should Texas residents seeking to invest in or open a cannabis business across state lines (but do not carry the product into Texas) be aware of any potential punishment in Texas for trafficking, money laundering, conspiracy, etc.?

DM: I don't think there are any problems with it at this point. We assist clients in moving money around the country in the legal markets and in trying to find the proper vehicles to do so. There is, theoretically, federal exposure to conspiracy charges, but I don't think it will become a problem as long as the cannabis is being produced and distributed in compliance with state laws where it's legal and no products are crossing state lines. I've never had any clients implicated in any sort of conspiracy like that. It doesn't happen from a functional standpoint. The feds have been up in the panhandle since the cannabis industry picked up and have started prosecuting cannabis being transferred across borders into Texas. The northern district hadn’t prosecuted this stuff for the previous 20 years. All of the charges went into state court. Now they (the feds) have decided to make that a priority. But, as far as legit business people just moving their funds in the legit markets, there's effectively no barriers at this point. The biggest investors from DFW to have money in California, Oregon, Washington, and Colorado at this point. 

AG: That’s interesting. This is sort of an inexperienced question, but how do these prosecutions end up in federal court? Aren’t these people being stopped by local police officers?

DM: So, generally it is your local police stopping and making an arrest. Unless it starts with a DEA investigation. That's one way, you know, the DEA does its own investigation. But in most of these, loads the weigh 30, 50, 100, 250 pounds, whatever it may be, it’s that the local police have busted some courier moving it around, and the arrest triggers a federal investigator. Usually, it’s a local cop that makes the stop and the arrest and then DEA will pick it up and then the U.S. Attorney will then prosecute it in federal courts plan. Generally, after that happens, State charges will get dropped. They’re not going to spend their time pursuing you once you land in the federal pen.

AG: So it's just a handover process. It's not like there are FBI or DEA agents driving around pulling people over…

DM: No. No. You never see that. You absolutely will never see a federal agent conducting a traffic stop. They form drug task forces and work with local law enforcement. So you'll see like a DEA agent and two sheriff's deputies working together as federally funded task forces. If the DEA wants to stop a vehicle, that's how they'll do. They will put a call into local law enforcement to stop them.

AG: Do you know of any other interesting or surprising effects that have happened in Texas or have any anecdotal stories to share?  

DM: I can't really tell you the specific stories because I'll be trampling on my client confidentiality. But I will say, Texas has always been the most business-friendly place in the country–has always had a lot of people that are interested in making a lot of money– but the state of Texas doesn't want to move towards legalization. There's a lot of Texans’ money that's out there chasing [cannabis] profit and, frankly, I think it's kind of a shame that it's chasing it outside of the state of Texas. You know, a lot of Texan money is making a lot of tax revenue for a lot of other states. That's both in the black market [buying the “legal” stuff and bringing it to Texas] and the legal market [investment and tourism outside the state]. It's kind of ridiculous. And it’s just going to get easier the more concentrated marijuana businesses are surrounding Texas. Once it gets to be a two-hour drive rather than a 12-hour drive from DFW… let's just keep the money at home.  Look at what they did in Colorado the first year it was legalized. The first 40 million in tax revenue every year goes straight to the public schools capital campaign. So they are able to start building schools, giving teachers raises, doing all of this without raising anybody's taxes. If that's not the most Texas shit in the world, I don't know what is. The reality is, the people are smoking pot [in Texas] whether you’re taxing them or not.

- Ashley Goldman

ANALYSIS--Hemp Farming Act of 2018 (S. 2667)

Senator Mitch McConnell (R-KY) introduced S.2667, the Hemp Farming Act of 2018, in the Senate on April 12, 2018. The bill's general purpose is stated as "A bill to amend the Agricultural Marketing Act of 1946 to provide for State and Tribal regulation of hemp production, and for other purposes."

S. 2667 aims to make hemp an ordinary agriculture commodity by removing it from Schedule I of the United States Controlled Substances Act (CSA). The bill defines hemp as "the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis." The CSA describes a Schedule I drug as a drug that has a high potential for abuse and has no current accepted medical use in treatment.

Under S. 2667, if a State or Indian tribe wants to have "primary regulatory authority over the production of hemp" in their territory, then the State or Indian tribe must "submit to the Secretary, through the State department of agriculture...or the Tribal government...a plan under which the State or Indian tribe monitors and regulates the production" of hemp as described in the bill. The State or Indian tribe's plan must provide the following:

(i)  a practice to maintain relevant information regarding land on which hemp is produced in the State or territory of the Indian tribe, including a legal description of the land, for a period of not less than 3 calendar years;

(ii)  a procedure for testing, using post-decarboxylation or other similarly reliable methods, delta-9 tetrahydrocannabinol concentration levels of hemp produced in the State or territory of the Indian tribe;

(iii)  a procedure for the effective disposal of products that are produced in violation of this subtitle; and

(iv)  a procedure to comply with the enforcement procedures under subsection (d)...

After a plan is submitted by a State or Indian tribe, the Secretary must approve or disapprove of the plan within 60 days. However, if the plan is disapproved because it does not comply with the requirements stated above, the plan can be amended and resubmitted.

A hemp producer can negligently violates their plan by:

(i) failing to provide a legal description of land on which the producer produces hemp;

(ii)  failing to obtain a license or other required authorization from the State department of agriculture or Tribal government, as applicable; or

(iii)  producing Cannabis sativa L. with a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent on a dry weight basis[,]

If a hemp producer does violate their plan, then the hemp producer must correct the negligent violation by a reasonable date, and they will be required to "periodically report to the State department of agriculture or Tribal government...on the compliance of the hemp producer with the State or Tribal plan for a period of not less than the next 2 calendar years." The bill provides that if a hemp producer negligently violates their plan they cannot "be subject to any criminal or civil enforcement action by the Federal Government or any State government, Tribal government, or local government other than the enforcement action" stated above. But, a hemp producer that violates their plan three times within a 5-year period will become ineligible to produce hemp for five years following their third violation. The bill also provides that a hemp producer that violates the State or Indian tribe plan with a culpable mental state shall be reported to the Attorney General and the chief law enforcement officer of the State.

Additionally, S. 2667 aims to amend the Federal Crop Insurance Act to make hemp insurable, and the bill proposes other amendments to legitimize hemp research and its funding.

The Atlantic reports that it is "legal to sell products made from hemp in the United States, but the market is currently filled almost entirely by imports from other countries" such as Canada and China. So with the passage of S. 2667, United States farmers could reduce the amount of hemp being imported. The article also states that farmers struggling to make a profit on tobacco may be able to make up some of their losses with the legalization of hemp.

Unlike many of the new marijuana related bills that have a small chance of being enacted, S. 2667 is expected to have a moderate chance of becoming law.

--Wyatt Hinson

 

 

 

Q&A: The "Dopest" Lawyer in Town (Part 1 of 2)

Every U.S. state that shares a border with Texas has passed legislation to legalize medical marijuana -- so what does that mean for the Lone Star State?

I recently had a chance to talk to one of the lawyers on the front lines of that issue, Daniel Mehler, of Dallas's Roper & Mehler. Mehler, a former Coloradan, decided to become a lawyer when Colorado began moving towards legalizing medical marijuana. He planned to help companies start up in the industry. At graduation, Mehler found that the Colorado legal market had plenty of big names focusing on marijuana. So, not wanting to work long hours for little pay with one of those law offices, he moved to Texas, a business-friendly state, and here he waits, gaining cannabis expertise, ready for the day that Texas jumps on to the legal marijuana train trudging through the country.

Here, the self-proclaimed "dopest lawyer in town" talks about his front-row seat to what's happening.

Ashley Goldman:  Have the numbers of citations and arrests for possession of marijuana increased as the bordering states have legalized medical marijuana?

Daniel Mehler: I'll tell you, in the Panhandle, there's been an absolute explosion of felonies, penalty group two felonies, involving THC concentrates and edibles. Those have just rapidly multiplied. While down in Austin, and obviously you’ve seen it in Dallas, as well San Antonio and Houston, they've moved in the complete opposite direction with small cannabis offenses–decriminalization.  A Houston district attorney ran on a legalization platform and got elected. They don't even prosecute misdemeanor pot anymore.

AG: So, it is more the state-border cities that are having problems?

DM: You see it in West Texas. I wouldn't say they're having a problem. I think cannabis has always been there, there's just a massive flood of concentrates moving in through all of the [state] border towns. The border counties–those poor, rural districts–and those out in West Texas jump all over it as a profit center. They see an opportunity to arrest people for a felony and get them on several years of probation or to charge them a steep fine for an alternative offer, some $5,000–7000 for a pre-trial diversion program. And people are scared to go into the penitentiary. I'm sure you know from your class, but lots of people don’t realize that 4 to 400 grams is a second-degree felony, so all of a sudden, those gummy bears are really serious crimes.

AG: So, Colorado’s legalization of recreational correlates to additional arrests here in Texas, versus other border states that require a medical card or other identification?

DM: Absolutely. It'd be purely speculative, but I would say that with Oklahoma’s move into the medical marijuana space, the arrests will continue to rise. Oklahoma will have one of the most wide-open medical policies in the country, a very unregulated market. They've granted 1100 business licenses and I would expect that the amount of felonies in the DFW area is about skyrocket. I think that you're going to see massive federal prosecutors in the Metroplex. You know, they’re 45 minutes from the border. People will be able to buy that shit easily. I would expect that you'll see people that have been involved and moving cannabis into Texas relocating just across the border in Oklahoma and Oklahoma become a massive source whenever it's in the game.

AG: You mentioned decriminalization of marijuana in most of the major urban areas in Texas. Do you think that with the other two border states’ [Oklahoma and Louisiana] medical markets opening up in the next few months that the decriminalization might shift a little and they may not be as lenient, especially in the DFW area?

DM: No. I think everyone recognizes that with flower, nobody gives a shit in 2018. It’s become increasingly difficult to seat the jury anywhere in the state and actually convict people on simple pot charges. In December 2016, in a San Antonio, Bexar County court, we got the first low-THC cannabis jury instruction for a Texas case. We got a not guilty in about five minutes, and not because it was about low-THC cannabis, but the jury just didn’t care. We gave them a way to acquit and they did. So, I don't think we're going to see any shift.  Where the problem is, is that people don't realize that a cookie is a second-degree felony; that vape pen is a state jail felony. These aren’t simple possession charges. People don't understand that cannabis products are treated differently than cannabis flower.

AG: Maybe you could explain that a little further, it is because the charge is based on the weight of the product?

DM: When THC is separate from the flower, it’s a charge under a separate code section. It starts as a penalty group two controlled substance. So as a result, adulterant dilutants, that is, the cookie, the entire weight of the cookie, not just the cannabis, get weighed for the charge. The actual gummy bears become the entire weight, not just the amount of the THC. Where it's really bad actually is in the cannabis-infused drinks. That 12-ounce soda only has 30 milligrams of cannabinoids, but the person ends up getting charged for 12 ounces of THC concentrate–that gets you to 400+ grams, so a first-degree felony.

AG: So that's definitely something that people who are wanting to risk it and bring it across the border need to keep in mind.

DM: It's something they need to keep in mind, but let's not kid ourselves, I don’t how attuned you are to the black market in Dallas, but that’s the risk premium. That makes that $8 gram of shatter (aka wax, dabs) in Denver worth $50.00 on the street in Dallas.

AG: So, there is a large black market for some of the other products, besides the flower?

DM: There’s a massive black market. It would it be purely speculative, but I would say hundreds of millions of dollars just in DFW alone in the concentrate market. I mean you can get an ounce in Colorado recreationally for about $300, take it to Dallas, and sell it for $1,400 if you sell it as 28 individual grams. With that profit gradient, you’re never going to stop people from doing that. And the reality of it is, an ounce of concentrate is small and relatively easy to conceal.

AG: Is Texas fighting a losing battle in trying to keep “legal” marijuana out?

DM: Absolutely. The reality of it is, the cannabis is already here but the Texas money is going out of state. Unfortunately, it's going out of state for black market channels. Texas consumers statistically consume more weed than anybody else and that's not going to change. What we see is quality continues to increase. South Texas used to be dominated by imported Mexican brick schwag weed [i.e., low-quality marijuana usually dry and brown]; it effectively doesn't even exist anymore. As prices have plummeted in Colorado, you see commensurate price declines in Texas on the flower side. With the concentrates, because of the risk premium with the felony prosecution, those prices have really stayed pretty steady. But as prices of flower have plummeted to where you can buy it at $90.00 an ounce in Denver, where it used to be $350.00 an ounce for good flower in Dallas, you can now pay for airfare and go buy your own for that price. Now prices have plummeted and Texas is awash with California, Colorado, and Oregon grown cannabis.

AG: What about DWI or DUI Charges? Are you seeing increased prosecution for individuals accused of driving high? Is there any difference based on region? 

DM: There are pockets in the state with increased prosecutions, like up in Wise County. They seem to ask everybody that they arrest with marijuana coming down [Highway] 287 when the last time they smoked was. We're seeing a spike in prosecutions for DWI for marijuana.  The problem with DWI on marijuana is there's no science to back any of it up, whereas, there's actually validated science that alcohol impacts everybody the same way. Everybody will exhibit the same physical manifestations of intoxication at a given level of alcohol in their system. Marijuana doesn't work the same. A casual smoker, consuming the same amount of THC, will get a lot more intoxicated than an everyday smoker, smoking the exact same product. Also, when you get into measuring intoxication there is a problem in that physical manifestations are different based level of metabolites. The only thing we can test in the blood to get an actual [measurement of cannabinoids in someone’s system] are metabolites that are pharmacologically inactive. The science of THC shows that peak intoxication happens literally just minutes after your last hit if you're smoking it.

AG: So, before it does get metabolized and stored in fat cells or whatever else?

DM: Yeah. In Colorado, they have started studying the link between metabolites and impairment, for instance, a five nanogram per liter of blood per se limit. Well, the vast majority of your medical cannabis users in Colorado are already above that when they wake up in the morning before they even spark their first flame.

AG: That seems like one of the major downfalls of trying to have any enforcement, but a really good opportunity for scientists to get in there and figure out a way to measure it.

DM: The National Highway Transportation Safety Administration has already funded studies. You're seeing a move in that direction. They want to validate [the science] so they can prosecute. But then, there's actually a study that said marijuana smokers are less of a threat than alcohol users because marijuana smokers are actually cognizant of their impairment and take compensatory measures. As a result. Generally, stoners don't get emboldened by being stoned.

 Continued at [link to part 2]

RECENT CASES: Harvard’s First Medical Marijuana Dispensary Opens Amid Legal Controversy

The Commonwealth of Massachusetts legalized the sale of marijuana for medical use through Registered Marijuana Dispensaries ("RMDs") in 2012, and in May 2013, the Department of Public Health enacted regulations that authorized municipalities to regulate the medical use of marijuana.

Cambridge’s Harvard Square saw its first medical marijuana dispensary open at the start of the year. Healthy Pharms, a registered nonprofit medical marijuana dispensary, opened for business but wasn’t entirely welcomed by its new neighbors. Some Cambridge residents and store owners believed the marijuana dispensary would have a negative effect on the neighborhood.

Property owners in Harvard Square brought a lawsuit claiming they had been injured by the anticipated opening of the licensed marijuana dispensary. Crimson Galeria Ltd. P’ship v. Healthy Pharms, Inc., 2018 U.S. Dist. LEXIS 141689 (D. Mass. August 21, 2018). The property owners asserted RICO claims and sought declaratory and injunctive relief against the dispensary and other related parties for acting and conspiring to distribute marijuana in violation of the federal Controlled Substances Act.

The plaintiffs also brought claims against Massachusetts state and local governments on the grounds that federal law preempts Massachusetts' regulatory regime implementing the legalization of medical marijuana dispensaries.

Background

The City of Cambridge issued Healthy Pharms a special permit to operate a dispensary. Another defendant owned the building and leased the property to Healthy Pharms. The individual defendants are officers or principals of several of the defendant entities, including the bank the dispensary uses.

The plaintiffs allege that the prospect of a dispensary has diminished the market value of their properties because the odor of marijuana will disrupt commercial tenants and interfere with the neighboring owners' use and enjoyment of their property. Also, there’s a stigma associated with the sale of marijuana, they claimed.

Judge’s Decision

U.S. District Judge Allison D. Burroughs explained in her opinion that the plaintiffs' claims against the government defendants weren’t valid because, although the federal Controlled Substances Act criminalizes the possession and distribution of marijuana, the authority to enforce the law rests only with the U.S. Attorney General and the Department of Justice.

Healthy Pharms asked the judge to dismiss all of the RICO counts because the plaintiffs didn’t really suffer an injury caused by the opening of the dispensary. There must be clear and definite damages to state an injury under RICO, the dispensary argued. The plaintiffs claimed injuries included: (1) the proposed dispensary might emit odors of marijuana that would interfere with use and enjoyment of their properties; (2) that banks and investors wouldn’t finance certain planned projects due to the anticipated dispensary; and (3) the stigma associated with marijuana and the fear of increased crime had already diminished the market value of their properties.

The judge agreed with the dispensary, holding that the plaintiffs didn’t dispute that their damages theory relied on the public disclosure of the future possibility of a dispensary, and the plaintiffs hadn’t suffered actual damages.

As far as the bank used by the dispensary, the plaintiffs argued that outsiders who help the enterprise accomplish its illicit goals, “thereby evidencing their agreement to advance the cause, are fully liable” under the RICO statutes. But Judge Burroughs held that the plaintiffs hadn’t adequately shown how providing ordinary banking services to marijuana-related businesses, in compliance with Treasury Department guidance aimed at enabling banks to provide such services, sufficiently demonstrated it joined and intended to further a RICO conspiracy.

The judge found that the plaintiffs’ complaint contained little to no allegations that connect any of the other defendants to the alleged enterprise or conspiracy.

The government defendants' motions to dismiss were granted. The remaining motions to dismiss were denied, but the plaintiffs were allowed the opportunity to amend their complaint as far as the other defendants.

Implication of case

While the ultimate outcome of this case remains to be seen (assuming the plaintiff’s amend their complaint regarding other defendants), the primary implication of this case is that cannabis-related banking organizations are able to provide basic banking services to cannabis industry businesses without the threat of RICO liability hanging over their heads. Thus, while a multitude of risks to those in the marijuana-related banking industry still persist, this is at least one positive development for those organizations, and ultimately cannabis-related commercial activity in Massachusetts as well.

-- Jason Carr

Canopy Growth CEO predicts legal banking for cannabis companies by Christmas

Weed businesses may soon be able to bank legally in the United States, according to the prediction of the CEO of Canopy Growth, Bruce Linton.

This would mean cannabis business owners would no longer have to rely on cash-only business models or cryptocurrencies like Bitcoin, and would be able to get loans far more conveniently. 

The prediction apparently came from a conference for cannabis businesses, according to the Forbes article by contributor Sara Brittany Somerset.

Somerset explained in the article that Linton's prediction was due to a sequence of events indicating that established structures may support legal cannabis banking. 

Linton expressed confidence that since his cannabis company infiltrated the New York Stock Exchange –although they were not allowed to ring or even touch the opening bell– that banking will naturally follow suit.

Linton elucidates that being listed on the exchange validates the company's adherence to anti-money laundering rules, which in turn meant that about a month ago, Bank of America could lend Constellation Brands Inc. -the company behind Corona beer -about CAD five million to give to him. Canopy Growth's game-changing deal with the producers of Corona has more than doubled the pot producer's stock price. Linton, however, attributes Canopy's sky-high valuation to the global medical marijuana market. 

Either way, Linton is confident that this sequence of events provides enough "momentum and weight to cause the banking conundrum to be resolved soon."

The CEO also used the conference to talk about a "port-a-potty theory" involving the impacts of locally sourced resources, according to Somerset's article. 

Linton admits he is "nuts about" his port-a-potty theory, and views it as the cornerstone of local economic stimulation. He insists it creates a snowball effect. "We have almost two thousand employees and they all know what the rules are about renting port-a-potties locally," he insists.

His theory is if he wants to hire Ph.D.s in a local town, he has to purchase port-a-potties for his construction sites locally, so that the port-a-potty vendor will take his new-found extra income and go out for dinner more often, which will, in turn, create better restaurants, then the local car dealerships will improve. Next, the houses will transition, so that when his Ph.D. hires begin to work there, they won't say, “God, what an awful town."

The article's writer seemed unimpressed with other aspects of Linton's speech, such as a "white-washed, non-diversified video commercial for Canopy Growth" and the reaction to his "gentrification ideals" being "stunned, stony silence from the audience and incredulous side-eye from the few Jamaicans in attendance." 

As for Linton's prediction of legal banking by Christmas, only time will tell whether it proves accurate. 

-- Alex Bennett

Weed Is Legal in Canada, But Is There Enough of It?

The move to legalize cannabis in Canada comes into effect on October 17th, but it is estimated that suppliers will not have enough weed to meet demand.

While a recent survey conducted by Statistics Canada shows that the number of Canadian cannabis users is not expected to rise significantly, Statistics Canada's National Cannabis Survey, 3rd quarter 2018, reveals that some 4.6 million Canadians or 15% of the population has used cannabis just in the past 3 months. 

According to MetroUK: Researchers from the University of Waterloo and the C.D. Howe Institute say suppliers will only be able to fulfill between 30-60% of demand. According to them, the legal cannabis supply is expected to be around 210 tonnes while total demand in the country will be about 610 tonnes.

One of the main reasons for the lack of cannabis is that the Canadian government seems to be dragging its feet in granting licenses to suppliers. This could cause quite a loss, as MetroUK reports: "[This] means the government will be losing out on an estimated $774,000,000 (£454,000,000) in tax revenues."

 

--Taylor Allan

 

 

 

Aiding and Abetting: Broadcasters Take a Gamble When Accepting Cannabis Advertisements

Broadcasters should not rely on the fact that prosecutors have previously focused on the advertiser of the business, not the advertising medium, according to a lawyer who represents broadcasters.

Many broadcasters in states where marijuana is legal have accepted the business of both growers and dealers who have sought to advertise their products and services. Since rescission of the Cole Memorandum, which de-prioritized enforcement of federal marijuana prohibition against people and businesses who complied with state law, Attorney General Jeff Sessions went a step further by directing all U.S. Attorneys to pursue prosecutions related to marijuana activities. 

Lawyer Gregg Skall represents broadcasters and other parties in their regulatory dealings before the Federal Communications Commission ("FCC") and in their commercial business dealings. A few months after the release of the Cole Memorandum, Skall notes:

[W]hen dealing with criminal law, special considerations come into the analysis. For example, 18 U.S.C. § 2 provides that whoever aids or abets the commission of a crime is punishable as a principal. The DOJ Criminal Resources Manual states that acts of the perpetrator become the acts of the aider and abettor and the latter can be charged with having done the acts even when the principal is not tried, convicted or even identified. Therefore, while it is extremely rare for a publisher to be tried for the crime of an author or advertiser, the situation surrounding marijuana use might prove to be so high-profile and controversial that an aggressive U.S. attorney might consider prosecuting the advertising medium.

Skall's current view is that broadcasters who accept the business of growers and dealers are in danger of losing their federal licenses. Those inclined to think there is a First Amendment right to advertise marijuana products and services should, he warns, think again. Broadcasters cannot rely on the First Amendment when advertising products or services that are illegal under federal law.

States have sought to advertise their products and services with broadcasters, and many have accepted their business. That decision, however, has always been risky, given the uncertain effect of the Cole Memorandum and its many qualification requirements. Marijuana remains classified as an illegal drug under the Controlled Substances Act and in a case called Raich v. Gonzales, the Supreme Court ruled the federal government can prosecute medical marijuana patients, even in states with compassionate use laws. Some broadcasters took comfort in the fact that prosecutions have nearly always been of the advertiser business and not the advertising medium. Yet, as I have written before, taking cannabis advertising is at most a calculated bet and that bet just got a lot worse."

iven the current administration's views on marijuana and the Attorney General's direction to U.S. Attorneys to pursue prosecutions related to marijuana activities, the bottom line is that broadcasters should not accept cannabis advertising until there is further clarification or Congress acts to reverse the effect of the decision to rescind the Cole Memorandum. Skall further warns that, "[A]s federal licensees, a broadcast licensee could very well endanger their license renewal, or even risk license revocation and criminal prosecution . . ."

Obtaining a license from the FCC is no small feat. Broadcasters that have paid fees, submitted applications, and complied with specific FCC licensing requirements may not want to risk their business for the sake of an advertising slot purchased by a business that is illegal under federal law.

--Kindal Wetuski

Investment firm Merida invests $50 million in cannabis related companies

A Manhattan based investment firm, Merida, has invested $50 million in 17 companies related to cannabis in less than two years. According to a Forbes article by contributor Julie Weed, the firm's owner Mitch Baruchowitz says his company invests in the "boring" parts of the cannabis industry. 

That includes any technology or equipment related to cannabis that gets widely used like laboratory testing services, compliance and data collection software, production equipment, and packaging. “There is a lot of traction in lab testing,” Baruchowitz said for example, “because it’s part of the supply chain, so everyone needs it and you can’t get around it.”

Weed writes that Baruchowitz's methods for choosing companies to invest in include analysis of company management and potential for growth. 

The first question is always: how big can sales get? “We look for products that have large potential markets,” Baruchowitz said. “We don’t want a small brand or niche product that might not grow at the rate the market grows.” The national market is expanding “so we want something that will grow along with overall industry increases.”

The article also mentions that family wealth offices are starting to invest in cannabis as a higher growth, higher risk investment. 

The stock prices of some of the companies have risen after Baruchowitz's investment, such as KushCo Holdings and GrowGeneration. 

Stock prices of the publicly traded KushCo Holdings and GrowGeneration are both up from their launch. KushCo launch January 2016 at $2 per share and has recently been trading at over $5 per hare. GrowGeneration launched in November 2016 and ended its first day of trading at $2.30. It recently traded at $5.30. Most of the investment and return information is not shared because the company is privately held.

This article seems to demonstrate that the growth of the cannabis industry is not limited to just distributors and dispensaries.

Companies in charge of packaging, research, and compliance validation are also part of this, and may continue to grow along with the rest of the market.

-- Alex Bennett

Florida Department of Health Just Approved the State's First Online Medical Cannabis Shopping Portal

I n an era where nearly everything can be purchased online,  Liberty Health Sciences Inc. and Alternate Heath Corp. paired up to created FlorPass--Florida's first approved e-commerce for medical cannabis. According to a recent article by Yahoo! Finance, FlorPass is transforming how patients shop for their cannabis products. 

"As the only medical cannabis e-commerce system approved by the Florida Department of Health, we have established an innovative model with the ability to capture the statewide market for digital cannabis transactions," says Dr. Michael Murphy, Chairman and CEO of Alternate Health. 

Currently, the FlorPass online portal is available to certified patients in St. Petersburg and Tampa. But there are plans to expand to additional locations before the end of this month.

"This is not only a functional way to do transactions, FlorPass will help us grow our business by building better relationships with our patients and enhance overall patient satisfaction. We will continue to invest in state-of-the-art technology to support the development of our products and remain committed to providing guidance and continued care throughout the entire patient experience," said George Scorsis , CEO of Liberty Health Sciences.

In 2017, the FlorPass Electronic Medical Records platform launched in clinics and doctor's offices throughout Florida. FlorPass received strong support from the American Medical Marijuana Physicians Association (AMMPA) which allowed Alternate Health to rapidly onboard new physicians, clinics and patients. FlorPass currently has over 7,500 patients registered in their system.

The strong support from large players in the medical cannabis industry coupled with the convenience factor of having products available to patients online could mean a shift in the way we see other companies approach sales. 

--Gabrielle Rennie

ELKINS- Tempe's Newest Take-Out Craze

With a flash of a Medical Marijuana Card, people could be bringing home lasagna infused with cannabis oil or bringing infused blueberry muffins to breakfast thanks to the very first cannabis kitchen, Mint Kitchen. 

With shows on Netflix like Bong Appetit, edibles are moving from the space brownie to your grandmother's lasagna. This idea will debut in Tempe, Arizona on Oct. 5th and it will be the trial run for any kitchens in the future. In order for Mint Kitchen to run, it had to obtain a dispensary license, and then it had to go through an inspection run by the Arizona Department of Health Services. This is unchartered territory. Dispensaries have been selling pre-packaged edibles but this kitchen aims to elevate the standard of edibles to beyond baked goods and gummy bears. They were given a 9 month approval after the inspection. 

The food will not be one dose across the board, the customer can pick the dosage in their food to go best with their treatment plan with doses starting at 10mg. The food will also have to be consumed off premises and will all be packaged for to-go. This type of access could beg the question of safety and the dangers of people taking this cannabis infused food and doing with it what they will. Those fears have existed with cigarettes and alcohol and maybe we will see similar measures taken, but this is the first kitchen of its kind and there will be bumps on the road. 

The owners and chefs want to reach out the public and open the door to exploring cannabis and how it can interact with food. They are going to offer free cooking classes to those with medical marijuana cards, but they will have to register ahead of time. Mint Kitchen will offer a variety of foods from burgers to gelato, enough to satisfy anyone's cravings. 

 

--Loren Elkins

 

Cannabis Up Your Nose?: Exclusive Licensing Deal Signed to Advance Medical Cannabis Delivery

Australian medical technology company Rhinomed has signed a 12-year cannabis licensing agreement with Columbia Care, the largest provider of cannabis-based products in the United States. Rhinomed specializes in anti-snoring nasal delivery technology, but according to the agreement, its nasal platform will now be used by Columbia Care to manufacture a range of products that delivers medical cannabis and other cannabinoid compounds for patients suffering from sleep apnea and PTSD.  

 

Speaking about the future of Rhinomed products in light of the company’s newly-founded relationship with Columbia Care, Rhinomed CEO Michael Johnson said:

“We believe that there is clear medical research support for, and a very real and significant commercial opportunity for nasal stents with medical cannabis formulations. Nasal delivery of cannabinoids opens up a new and exciting market opportunity and has the potential to set a new standard by providing a better and more reliable and repeatable dosing experience.

“This exciting new range of products will sit alongside and complement our existing portfolio – it is an important step in ensuring that Rhinomed technologies deliver on our mission of radically improving the way people breathe, sleep, take medication and maintain their health and wellness.”

By licensing its technology, Rhinomed has removed a key barrier to entry into the still-restricted U.S. medical cannabis market—that is, it’s not actually dealing in pot. In fact, its deal with Columbia Care actually makes Rhinomed the first listed Australian pot stock to open a direct, revenue generating pathway into the U.S. medical cannabis market.

 --Taylor Allan

Budding Industries: How Cryptocurrency Might Solve The Cash-Only Cannabis Problem

Where traditional efforts to comply with financial and logistical regulations have failed, blockchain industrialists believe that cryptocurrency could solve the "cash-only" cannabis problem by reducing the amount of capital moving through the system in the form of cash and increasing the efficiency, security, and predictability of payments.

Although some form of cannabis is legal in thirty of the fifty states, it remains classified as a Schedule I narcotic under the Controlled Substances Act (CSA) and is illegal on a federal level; therefore, it is impossible for cannabis businesses to get bank accounts from federally chartered banks. As a result, policy, as it currently stands, forces cannabis companies to operate on an all-cash basis. Despite $10 billion worth of sales transactions occurring within the cannabis industry last year, anyone involved in the business operation is susceptible to federal prosecution and left with limited financial service options.

For context, in mid-June, the Senate Appropriations Committee moved to block an amendment that would have allowed cannabis businesses to store their profits in financial institutions. Forbes reporter, Tom Angell provided insight of the Senate bill:

In a 21 - 10 vote, the Senate Appropriations Committee tabled an amendment on Thursday that would have shielded financial institutions that open accounts for cannabis businesses that are complying with state laws from being punished by federal regulatory authorities.

Moreover, just a week earlier the House Appropriations Committee voted to reject a similar proposal, also reported by Angell:

A powerful congressional committee voted on Wednesday to reject a measure to protect banks that open accounts for marijuana businesses from being punished by federal financial regulators. Supporters then scrambled to craft a more limited measure focused on medical cannabis businesses, but it was ultimately withdrawn before a vote could take place.

 

The broader measure would have prevented the U.S. Department of Treasury from taking any action to "penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, producer, or a person that participates in any business or organized activity that involves handling marijuana or marijuana products" in accordance with state or local law.

The restrictive regulatory system leaves cannabis businesses open to organized crime like money laundering, theft, and cheating on payroll and taxes; however, there is speculation that cryptocurrency can ease these pains. Nick Meyers of The Phoenix New Times describes the premise of cryptocurrency in his article, Weed Money: Cryptocurrency May Be Key to Unlocking Bank Vaults for Cannabis Industry:

The basic idea of cryptocurrency is that it’s decentralized money, acting as both a currency and a transaction system.

. . .

Unlike official currencies such as the dollar, euro, or yen, no government authority tracks how much cryptocurrency is in circulation or who’s using it. Instead, these all-digital currencies use a process called blockchain.

 

The easiest way to think of a blockchain is as an electronic ledger that gets updated with each transaction. 

 

Every time someone makes a cryptocurrency transaction, that data, along with all previous transactions in the chain, gets stored in a new block.

 

The kicker is that blockchains are secure by design. Because transaction information gets stored in every new block, it’s difficult to tamper with or alter that data without compromising its authenticity.

In addition to solving the "cash-only" problem, the emerging blockchain industry can provide support regarding helping cannabis companies "meet regulatory requirements by offering immutable records showing the source of each plant in a harvest, where it is processed, how it is shipped and where it is distributed," as reported by John McMahon of News BTC. 

Moe Asnani, owner of Downtown Dispensary and D2 in Tucson, also stated that "anti-money-laundering laws are some of the biggest hurdles to legitimate cannabusiness banking, and having the verifiable ledger stored in high-security blockchains would demonstrate the market's legitimacy."

Asnani and McMahon's sentiment is shared amongst other cannabis and blockchain experts who say that blockchain platforms create transparency in the cannabis supply chain, and various cryptocurrencies, like HempCoin and ParagonCoin, are taking proactive approaches to solve the cash dilemma. 

Both cannabis and cryptocurrency are budding industries, and their similar challenges create the opportunity for joint growth; as cryptocurrency provides transparency to the cannabis business and marijuana operators can supply a stable customer base for the use of cryptocurrencies, perhaps this partnership will be the future of finance in the cannabis industry.

(For those unfamiliar with blockchain, Forbes and BlockGeeks are accessible resources.)

-- Gianna Redeemer

New Jersey's Latest Marijuana Act Could Mean Weed Delivery and Public Consumption

State lawmakers in New Jersey have just sent the latest bill that would legalize marijuana and lay the foundation for a commercial weed industry in New Jersey to the state's Governor Phil Murphy.

A recent article by NJ.com covers some of the highlights from the latest bill.

Businesses with a marijuana retail license would be able to apply to have a consumption space on the same premises as, but separated from, their dispensary. Retailers would have to get local approval for the consumption space in addition to getting permission from the state, the bill says.

If passed, this aspect of the bill would set New Jersey apart from most states which have legalized marijuana but have yet to legalize public consumption. 

The article also discuss the bill's allowance for weed delivery services by licensed retailers.

Businesses with a marijuana retail license would be able to get permission from the state to deliver cannabis products to customers. Not all states allow marijuana to be delivered, but California, Nevada and Oregon do.

The bill could pass as early as October and licensing approval would begin shortly after--with cultivation to follow closely behind. Accordingly, New Jersey may have a marijuana market in place by next September. 

--Gabrielle Rennie

SEC Charges a Texas-based Investment Fund with Fraud, Warning About Marijuana-Related Investments

Retail investors have officially been warned about marijuana-related securities offerings according to a press release recently issued by the Securities and Exchange Commission (the "SEC"). A Texas-based investment fund and its founder allegedly exploited investor interest in the marijuana industry by lying about high returns, and has been charged with "defrauding investors with false promises of massive returns in cannabis-related businesses."

Even though the investment fund was based in Texas, the fraudulent activity was widespread. In the complaint, the SEC alleges that, from August 2017 through at least March 2018, the investment fund and its founder "orchestrated an unregistered securities offering fraud that victimized more than 60 investors across 26 states." The founder promised massive returns, but actually misappropriated more than $3.3 million of investor funds for designer clothes, luxury cars, and payments to earlier investors to prolong the fraud scheme.

The press release quoted Shamoil T. Shipchandler, Director of the SEC's Fort Worth Regional Office, stating that "Investors must remain vigilant and not let the fear of missing out dupe them into making bad investment decisions." In an effort to warn potential scam victims, the SEC's Office of Investor Education and Advocacy (OIEA) and Retail Strategy Task Force (RSTF) issued an alert for investors earlier this month which stated that "[S]cam artists often exploit 'hot' industries to trick investors, including by making false promises of high returns with low risks. The OIEA and RSTF are warning investors about these kinds of investment schemes involving marijuana-related companies." The SEC's alert further provides:

"OIEA regularly receives complaints about marijuana-related investments, and the SEC continues to bring enforcement actions in this area. If you are thinking about investing in a marijuana-related company, you should beware of the risks of investment fraud and market manipulation. Fraudsters may try to use media coverage about the legalization of marijuana to promote an investment scam."

Although the victims may have believed in promises of high returns on their investments, in reality, the fund "had no track record and its sole investment of $400,000 was in a cannabis company that had yet to harvest a crop," according to the SEC press release. The complaint alleged that the investment fund and founder misrepresented that the fund "had a management team with a ten-year track record of profitably investing more than $100 million in cannabis-related businesses; (2) provided outsized returns to more than 200 investors; and (3) investors could expect a 24% annual return." 

Those who are interested in investing in a cannabis-related business should heed the SEC's advice to "ask questions and understand the risks involved. Carefully research the investment and read any recent reports that the company has filed with the SEC." Company reports can be found by searching the SEC's Electronic Data Gathering, Analysis, and Retrieval System (also known as EDGAR).

--Kindal Wetuski

Nevada cannabis industry shatters revenue projections; state expects more growth to come

Nevada is the latest state to feel the economic boom of legalized cannabis, and so far it is smooth sailing for state regulators. The state fully legalized the drug beginning in January 2017 and total industry sales soared over $500 million, $425 million of which came from recreational sales alone. These numbers drastically outperformed both state projections, and first year sales of other states. The Las Vegas Review-Journal has the story: 

Including recreational and medical marijuana as well as marijuana-related goods and accessories, Nevada stores
eclipsed a half-billion dollars in sales, just under $530 million, according to figures released Tuesday by the Nevada Department of Taxation.

 

Bill Anderson, executive director of the Tax Department, said that the industry “has not only exceeded revenue expectations, but proven to be a largely successful one from a regulatory standpoint.”

 

“We have not experienced any major hiccups or compliance issues,” he added. “As we move into fiscal year 2019, we expect to see continued growth in the industry by way of additional businesses opening up, and we expect revenues to continue to be strong.”

This stunning performance translated into $70 million in tax revenue for the state. To give some context to these metrics, state regulators projected $265 million in sales and $50 million in tax revenue, according to the Review-Journal. Furthermore, the states of Colorado, Washington, and Oregon–largely considered to be trailblazing states in the cannabis industry, and all with larger populations than Nevada by at least 1 million citizens–recorded first-year cannabis sales of $303 million, $259 million, and $241 million, respectively, putting them far behind Nevada's first year numbers. Perhaps most surprisingly, despite being home to Las Vegas, Nevada only collected $49 million in intoxicating beverage taxes from 2016-2017, signaling that marijuana may be a greater source of revenue for the state than alcohol moving forward.

Nevada's "sinful" tourist economy can likely be thanked for such astounding numbers, although the state's casinos have come out against marijuana use in their facilities, out of fear of losing their gaming licenses. Additionally, the state's marijuana law prohibits consumption anywhere but in private residences. State Senator Tick Segerblom told the Las Vegas Sun: “The numbers are kind of leveling off, and we need to reach the tourist market a little more. We need a venue where people can come and enjoy marijuana properly."

These results suggest a few things: first, that tourism economies can drive marijuana sales even in states with lower populations and where marijuana use is not widely supported by dominant businesses. Second, that as more states legalize cannabis they may take cues from states that have previously approved legalization in order to more efficiently bring the drug to market. Finally, that there is still much progress to be made with respect to laws surrounding marijuana consumption in states where it has been made legal. Perhaps as more states begin venturing into legalization, they will use Nevada as a model of how best to regulate, tax, and sell cannabis.

--John Robinson

Restaurant Wants to Use Marijuana to Ease Lobsters’ Pain. Slow Your Roll, Maine Says.

Your death is imminent.  It will be painful. Minutes beforehand, your executioner hands you . . . a joint.

Charlotte Gill, the owner Charlotte’s Legendary Lobster Pound in Southwest Harbor, contemplated that very idea when thinking about how lobsters are cooked. It is fair to say that no reasonable person would want to be thrown into boiling water while still alive (or dead for that matter) so Charlotte, a self-proclaimed animal lover, decided to use the recently legalized recreational marijuana use for more than her own satisfaction.

She decided to get the lobsters high before cooking them in order to ease their pain and suffering. While, scientifically, questions still remain as to whether lobsters can even feel pain or get high, Charlotte contends that,

it is undeniable that the marijuana is having the intended effect. In a series of tests, restaurant employees put a lobster in a small container and added a few inches of water. They channeled marijuana smoke through a tube until the container was filled with it, and kept the lobster there for about three minutes.

Before the lobster went into the container, it would flap its tail and click and wave its claws. After being exposed to the smoke, the lobster was docile and serene.

It’s still a very alert lobster, but there’s no sign of agitation, no flailing of legs, no trying to pinch you. So calm, in fact, that you’re able to freely touch the lobster all over without them trying to strike at you or to be aggressive in any way.

This method is preferable, she said, to dropping a live crustacean into boiling water without the marijuana.

A more important question, to the Maine government at least, is whether getting lobsters high before cooking them leads to the consumer getting high; essentially, whether a high lobster turns into an edible post-cooking. Charlotte and her employees conducted their own experiments to find out those results,

staff members have tested their urine after eating the marijuana-treated lobsters, she said, and no trace of the drug has been found. In the latest experiment, Ms. Gill’s 82-year-old father has been eating copious amounts of marijuana-sedated lobster every day; he will soon take a blood test.

She said she hoped her tests could prove to the state that the lobsters were not absorbing the marijuana.

It is a unique and creative way of utilizing the legalization of marijuana, undoubtedly. While questions to remain as the effects on humans; whether lobsters feel pain; and whether lobsters can even get high; this use has garnered plenty of publicity for the restaurant -- yet another way marijuana legalization has helped boost business.

For now the Maine government is still skeptical as to whether this use should be allowed.

 

-Fernando Lira Gomez

Cannabis cafe coming soon to Oklahoma

With Oklahoma's changing view towards cannabis, Cannafe, a cafe in Norman, Oklahoma, plans to open soon with a line of food and beverages containing CBD. OU Daily has the story:

A new cafe will open on Campus Corner selling coffee, tea, brownies, cheesecake and other snacks  — all containing cannabis compounds.

Co-founders of Cannafe, Jim Castor and Joel Jacobs, envision the cafe as a place for students to study and relax. This will be aided by cannabidiol, known as CBD, and other molecules from the cannabis plant that can help reduce anxiety and improve focus, said Jacobs.

CBD is a cannabinoid, or a compound found in cannabis plants. However, unlike the mind-altering compound THC, also found in cannabis, CBD does not get people high and is non-psychoactive, according to Medical News Today.

...

“It doesn’t alter how you can function,” said Castor. “You can still do your job and go to work and go to school and study and relax, and it just kind of takes the edge off.”

...

The owners also want to provide a non-alcoholic space where students too young to go to bars can hang out during the daytime or between parties.

You may now be curious as to if the sale of products containing CBD is even legal in Oklahoma. Oklahoma established the Oklahoma Medical Marijuana Authority (OMMA) to regulate medical marijuana (MMJ) in response to its legalization in June. However, the OMMA only regulates MMJ and does not speak to CBD products. Thus, without specific regulation against CBD products, Oklahoma tolerates the sale of these products, according to MarijuanaBreak.

--Wyatt Hinson

Amsterdam to begin experimenting with legal marijuana production

The legalization of marijuana production in Canada and a few U.S. states may soon be taking root across the Atlantic. The Dutch government will soon begin experimenting with legal marijuana production, according to CNBC.

Amsterdam has long been viewed as a model for the legalization of marijuana. In the 1970’s the Dutch government adopted a toleration policy for marijuana consumption. When visiting Amsterdam, it is common to see recreational use of marijuana in the many famous Dutch coffee shops that line the streets. Although tightly regulated, the Dutch government allows coffee shop customers to purchase up to 5 grams of marijuana for consumption.  

Though consumption of marijuana is allowed, producing and acquiring marijuana is not. It's illegal for coffee shops to purchase their supply of marijuana. Cannabis production is also forbidden. “This has led to an illicit market for cannabis in the Netherlands,” Stijn Hoorens, associate director at RAND Europe, told CNBC.

The prohibition on production is largely overlooked by authorities, however, it poses many difficulties for the coffee shops who must procure marijuana illegally. "The most difficult thing about having a coffee shop in the Netherlands is that it's allowed to sell it, but it's not allowed to buy it," Joachim Helms, co-owner of Green House Coffeeshops in Amsterdam and chairman of the Dutch Cannabis Retailers Association, told CNBC.

Now, as Canada and several U.S. states have legalized various schemes of marijuana production and distribution, the Dutch government has taken notice. According to CNBC, the Dutch government is planning an experiment with legal marijuana production in a handful of municipalities. But it's a small step in an increasingly growing legal weed market.

With the Dutch government actively experimenting with the legalization of production, many coffee shop owners are optimistic that the legal quagmire they continually face could soon be a thing of the past. Like Canada, they hope that Dutch companies will be allowed to produce marijuana. "To walk around in those companies and facilities for us is really a dream come true because it's growing weed in a 100 percent legal way," Helms told CNBC.

 

--Colin Heinrich

Will Canada's New Cannabis Laws Create a New Border Problem?

With Canada legalizing adult-use marijuana, effective October 17, 2018, it is expected that Canadian citizens will partake in this new industry, either through consumption or investment means. While the substance may be legal in Canada, and a few U.S. states that border Canada, crossing the border could become difficult. 

In an interview with The Star Vancouver, Len Sanders, a Washington based immigration attorney, explained how the federally controlled U.S.-Canada border has begun to classify those in the marijuana industry as "drug traffickers." He went on to say that this enforcement applies to people involved with the actual plant, such as growers, users, and dispensary owners, to people who have either directly invested or their investment will be used in the cannabis industry. He mentions how the CEO and two employees of Keirton Inc. (a large agriculture equipment manufacturer)  were stopped at the border and moved to a secondary location only to be told that they were banned for life from entering the United States. Keirton Inc. was not the only group to face this punishment. In an interview with the Financial Post, Sam Zneimar was banned for life simply for investing in U.S. based marijuana companies. 

 In this current administration, U.S. citizens have seen a big push for more enforcement at our Southern border and a new wave of keeping America "safe". But will the same hold true on the other side of the country? In both interviews the offending party expressed sympathy for the poor border patrol agent that was made to enforce this law. These articles both mention a civil interaction between a "drug trafficker" and a border patrol agent and an unfortunate outcome. The U.S. has yet to tweet about the "drug traffickers" that are attempting to get into the U.S. through Northern points of Entry. 

 --Loren D. Elkins

 

With the legalization efforts coming out of Mexico, it should be interesting to see how those investors will be greeted at the border.