This week the U.S. Department of Agriculture (USDA) released draft rules for hemp regulation. There will be a 60-day public comment period before the rules are finalized.

“At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets,” said Secretary Perdue in a press release. “We have had teams operating with all-hands-on-deck to develop a regulatory framework that meets Congressional intent while seeking to provide a fair, consistent, and science-based process for states, tribes, and individual producers who want to participate in this program.”

The USDA drafted the regulations as a result of the 2018 Farm Bill that descheduled and legalized hemp. Under the draft rules, the THC content must be under 0.3%, and any hemp found to exceed that amount would be destroyed. Other key elements of the new regulations include:

States and American Indian tribes will have some say in setting their own hemp regulations (as long as they don’t violate USDA guidelines), and the USDA must evaluate these plans within 60 days of submission. In states where hemp production is illegal, such as South Dakota, farmers will not be able to cultivate hemp unless state law changes.

Not everyone is happy with the proposed rules. Hemp farmers say that the USDA regulations will make producing high-quality CBD impossible.

“We’re going to be forced, if we want to continue farming CBD, to be harvesting in week four to week six of flower time, where we’re typically not starting our harvest until seven or eight,” Phoenix-based hemp farmer Adam Harris told KTVL News10.

Hemp farmers say that the window between testing, receiving results, and harvesting is too narrow and will hurt the quality of their harvest.

“Most scientific research to date is indicating that the most medicinal benefits are with that full-spectrum CBD. These new USDA regulations make it so we can’t even take in the harvested material to take in those full-spectrum extracts the way that we have been,” said Mitra Sticklen of Om Farms LLC, a hemp company based in Jacksonville.

Cannabis consumption in hospitality establishments

Five long years after the state’s first recreational dispensaries opened, Colorado tokers will finally have a place to consume cannabis publicly. Governor Jared Polis (D) signed HB 1230 into law on Wednesday, legalizing licensed marijuana hospitality spaces in which cannabis can be consumed on site.

Before signing the social consumption bill into law, Polis said, “Colorado has many tourists and residents who choose to participate [in legal cannabis use]. Up until this bill, there’s been no way to have safe public consumption. I’ve smelled it walking my dog. For many of us with kids, we want to make sure we don’t have that in our neighborhoods.”

The new rules open the door for a variety of businesses to cash in on cannabis consumption, including hotels, spas, art galleries, cafes, lounges, and more. After purchasing medical or recreational cannabis at a dispensary, tourists and residents will be able to try out their purchases at on-site marijuana tasting rooms. The law will make an exception to the Colorado Clean Air Act, which prohibits indoor smoking.

The law won’t go into effect until 2020, and cities and counties have the option of banning social-use establishments. Local governments will have the option of adjusting the regulations to allow vaping, for example, but not smoking.

House Bill 1230 passed in the state legislature on May 2 and was signed into law on May 29. Last year, then-Governor John Hickenlooper (D) vetoed similar legislation.

 

Don’t leave home, get your marijuana delivered

Polis had a busy day of signing marijuana legislation into law Wednesday, including HB 1234, which allows licensed marijuana dispensaries to deliver cannabis to private residences.

Medical marijuana deliveries would be allowed to begin starting Jan. 2, 2020, and recreational cannabis deliveries would be allowed to start on the same date in 2021. Deliveries cannot be made to college campuses, and private residences can only have cannabis delivered once per day. A $1 surcharge will be added to each delivery and go towards local law enforcement costs related to marijuana enforcement.

Licensed transporters will undergo marijuana delivery training and will be protected from criminal prosecution for making cannabis deliveries.

The sponsors of HB 1234 argued that the bill would help stamp out black-market cannabis delivery as well as help patients who can’t always leave home for medical marijuana.

“This is a bill of compassion [for medical marijuana patients],” said Polis.

 

Cannabis Delivered to Your Door

There’s renewed hope for marijuana delivery in Colorado as a new bill that would legalize the service received approval from a state House committee. HB1234 would allow home delivery of medical marijuana starting in January 2020. Recreational marijuana delivery would be delayed until January 2021.

Rep. John Singer (D), one of the bill’s sponsors, said that the legislation is “an opportunity to stamp out a black market and provide a service for people who are sick.”

The bill includes a $1 delivery surcharge that will go to local law enforcement, and cities and counties must opt-in to the program. Delivery vehicles would be tracked by GPS and follow state-mandated safety rules. Medical marijuana dispensaries already in operation would have the first opportunity to apply for delivery permits. After a year, delivery permitting would open up to third-party transporters.

Matt Kahl, a veteran who uses medical cannabis, told lawmakers, “There are a lot of people out there who really need it. They have no other way to get cannabis.”

Last year, a similar measure was defeated in the Senate, but advocates of HB1234 hope that changes to the bill and Colorado’s new weed-friendly governor will improve its chances of becoming law.

“We have bipartisan support on this bill. We also have bipartisan opposition on this bill,” said Rep. Singer.

 

Medical Marijuana for Autism

On Autism Awareness Day, Governor Jared Polis (D) signed a bill that adds autism spectrum disorder to the list of qualifying conditions for medical marijuana. The new law enables children under the age of 18 with autism to be treated with medical cannabis, provided they have the approval of two physicians.

“It’s National Autism Day today, and we are acting by expanding patients’ access to cannabis products that help those with autism,” Polis said before signing the bill. “We know that not just anecdotally, but with a mounting amount of good scientific data that is coming in.”

Colorado’s former governor, John Hickenlooper (D) vetoed several cannabis bills last year, including one that would have given access to medical cannabis to people with autism.

 

Smoking medical marijuana is now legal in Florida. Gov. Ron DeSantis (R) signed a bill on Monday lifting a ban enacted in 2017 on smokable cannabis products.

“Over 70% of Florida voters approved medical marijuana in 2016 and today I signed SB182 ‘Medical Use of Marijuana’ into law. I thank my colleagues in the Legislature for working with me to ensure the will of the voters is upheld,” DeSantis tweeted. “Now that we have honored our duty to find a legislative solution, I have honored my commitment and filed a joint motion to dismiss the state’s appeal and to vacate the lower court decision which had held the prior law to be unconstitutional.”

While the new law is effective immediately, cannabis flower and other smokable products most likely won’t be available until this summer. The Florida Department of Health must create guidelines for physicians to prescribe medical marijuana to patients.

Under the new law, medical marijuana patients wishing to smoke cannabis flower must sign an informed consent form acknowledging the health risks associated with smoking. Smoking in public spaces or at private businesses subject to a cigarette smoking ban is prohibited.

Patients under the age of 18 are prohibited from smoking marijuana unless the patient is diagnosed with a terminal illness and receives a second recommendation from a pediatrician.

Qualified medical marijuana patients can buy up to a 210-day supply at a time, which amounts to 2.5 ounces of cannabis every 35 days.

Florida has nearly 200,000 registered medical marijuana patients, and the state’s medical marijuana dispensaries expect to see an increase in sales in the tens of millions. Marijuana Business Daily estimated that medical marijuana in Florida earned $200 million-$300 million in 2018. Comparably, in 2017, medical marijuana sales were at $20 million-$40 million.

Florida sets a cap on the number of medical marijuana dispensaries allowed to operate, but that rule is likely to be challenged. According to the Florida Department of Health, 85% of the state’s 107 dispensaries are operated by just five businesses.

In 2016, voters in Florida approved Amendment 2, legalizing medical marijuana. Florida’s former governor, Rick Scott, signed a bill in 2017 banning smokable medical marijuana.

While cannabis may the same across the country, not all legal-cannabis states regulate it in the same way. Ironing out the particulars of marijuana laws isn’t always straightforward, with regulations leaving some states struggling to keep pace with demand.

Michigan

Recreational cannabis sales haven’t yet begun in Michigan, but it’s the state’s medical marijuana market that’s been experiencing a serious supply shortage.

In 2016, Michigan passed a law that implemented a five-tiered licensing system to grow, process, test, transport, and sell medical marijuana. The Michigan Medical Marijuana Licensing Board issued licenses to 54 medical marijuana dispensaries but only 31 cannabis growers, leading to a supply shortage. Michigan has 297,515 registered medical marijuana patients.

Before the 2016 change to the medical marijuana program, licensed dispensaries could buy cannabis from more than 40,000 registered caregivers in the state. Under the medical marijuana law approved by voters in 2008, caregivers could grow up to 72 plants and sell the excess to dispensaries. In 2016, lawmakers changed the system, requiring licensed dispensaries to buy cannabis from licensed growers.

Under emergency rules in effect up until late last year, around 215 unlicensed dispensaries were still able to buy medical marijuana from caregivers, putting licensed dispensaries at a disadvantage. As of Dec. 31, 2018, all unlicensed dispensaries were forced to close, and the shortage of product from growers forced even some licensed dispensaries to shut their doors temporarily.

In an effort to solve the cannabis supply problem and the slow licensing process, newly-elected Gov. Gretchen Whitmer (D) issued an executive order to eliminate the state licensing board and create a new Marijuana Regulatory Agency. The executive order will also allow unlicensed cannabis facilities to temporarily reopen and allow them to purchase cannabis from caregivers while new licensing regulations are put in place.

Illinois

Illinois isn’t currently facing a cannabis shortage, but a new study commissioned by state legislators has found that legal recreational marijuana demand could exceed what licensed growers could supply. The report found that demand for recreational cannabis could be as high as 555,000 pounds of marijuana a year.

Under the state’s medical marijuana program, there are 16 licensed cannabis cultivators. The study found that with the current number of marijuana growers, they could only meet 35 to 54 percent of the demand for recreational marijuana. While shortages are a concern, the report notes that oversupply of cannabis is equally important to avoid.

“Systems that either dramatically fall short of demand or that oversupply the market create public policy challenges,” according to the report. “Avoiding both is an important expectation from the public, from producers, and from public health and public safety officials.”

If market demands were met, the report found that Illinois could bring in at least $440 million in tax revenue annually.

State Sen. Heather Steans (D) and state Rep. Kelly Cassidy (D) commissioned the report ahead of introducing a bill to legalize recreational marijuana.

California

Similar to the medical marijuana situation in Michigan, slow-licensing and expiring temporary permits may cause a recreational marijuana shortage in California. Before the state finalized recreational marijuana regulations last year, most cannabis companies were operating under temporary licenses. Nearly 10,000 temporary licenses are set to expire this year, and the backlog of applications means that some dispensaries and cannabis grows may need to close temporarily before they are issued full annual permits.

Last month, state Sen. Mike McGuire (D) introduced Senate Bill 67 in an effort to keep cannabis companies with temporary permits in operation. The bill would allow the state’s three licensing authorities to extend existing temporary licenses while the bottleneck in licensing is addressed.

In a hearing for the bill, Terra Carver, the executive director of the Humboldt County Growers Alliance, told lawmakers, “Without passage of this bill, there will be dire consequences, such as the imminent market collapse of hundreds of businesses.”

However, the soonest the bill could pass in the state legislature and be signed into law by Gov. Gavin Newson (D) won’t be for at least two months.

“Best-case scenario, making it through all policy committees and off the floor of the Senate and Assembly in the next 60-90 days,” McGuire told Marijuana Business Daily. In the meantime, thousands of cannagrows and recreational marijuana dispensaries could be forced to close temporarily.

Canada finalizing rules for marijuana edibles

Canadians have until Feb. 20 to submit feedback to Health Canada before final marijuana edible regulations are released this summer. Canada legalized adult-use cannabis sales in Oct. 2018, but restricted the sale of marijuana edibles, infused beverages, concentrates, and topicals until Oct. 17, 2019.

Unlike regulations in the U.S., the proposed Canadian regulations will limit marijuana edibles and infused beverages to 10 milligrams of THC, regardless of whether it’s sold for medical or recreational use. Some experts in the marijuana industry worry that the low-THC limit will encourage black market sales.

“By limiting the entire packages to 10 milligrams of THC, the regulators will increase the amount of packaging waste associated with edible cannabis products and make legal businesses less competitive against the black-market operators that aren’t restrained on edible potency,” said Jordan Wellington, chief compliance officer at Denver-based Simplifya.

Unlike edibles, the limit for marijuana concentrates and topicals will be significantly higher, allowing up to 1000 milligrams of THC for both medical and recreational use.

Legal marijuana sales reach $6 billion in Colorado

Since legal adult-use sales began in 2014, Colorado has sold $6 billion in medical and recreational marijuana. Recreational cannabis sales in the state have continued to increase, while medical marijuana sales have fallen. According to Marijuana Business Daily, there was a 20% decrease in MMJ sales between 2017-2018, from $416 million to $332 million. Medical marijuana sales reached a market high in 2016, at $445 million.

Recreational sales in Colorado have grown steadily since 2014. Adult-use cannabis sales in 2017 reached $1 billion, while sales in 2018 reached $1.2 billion, an 11% increase. There was a huge leap in cannabis sales between 2016 and 2017 when sales increased by 49%. In 2014, the state sold just $303 million in adult-use cannabis.

European Parliament votes to increase access to medical marijuana

The European Parliament voted in favor of a resolution that would incentivize cannabis research, clinical studies, and access to medical marijuana among European Union countries. The vote follows a recommendation from the World Health Organization (WHO) that cannabis should be rescheduled under international drug treaties.

The resolution is non-binding, meaning that it doesn’t actually change any marijuana laws in EU countries, but it does show increased support for ending cannabis prohibition. In addition, the resolution calls for a commission to “define the conditions required to enable creditable, independent scientific research based on a wide range of material to be conducted into the use of cannabis for medicinal purposes” and to “address the regulatory, financial and cultural barriers” that have prevented cannabis research.

Congress holds cannabis banking hearing

Access to banking has long been an issue in the cannabis industry, with marijuana businesses having little-to-no-access to banking services. For the past six years, Reps. Ed Perlmutter (D-Colorado) and Danny Heck (D-Washington) have filed the “Secure and Fair Enforcement Banking Act” (SAFE) that would eliminate restrictions that prevent insurance and federal financial institutions from working with marijuana businesses. On Wednesday, the SAFE Banking Act received its first hearing in the House Financial Services Committee.

For cannabis companies, lack of access to banking creates challenges that companies in other sectors don’t have to tackle. Cannabis businesses are often forced to run cash-only operations, increasing the risk of crime, and regular business transactions like getting a loan, or paying employees and taxes are much more difficult.

Some credit unions have taken on banking for cannabis companies, but the American Bankers Association told the House Financial Services Committee that, “the majority of financial institutions will not take the legal, regulatory or reputational risk associated with banking cannabis-related businesses without congressional action,” and that access to banking services would make cannabis businesses “safer and better regulated.”

Autism could soon be added to the list of qualifying medical conditions eligible to be treated with medical marijuana in Colorado.

HB 1028 would enable children under the age of 18 with autism to be treated with medical cannabis, provided they have the approval of two physicians. However, the bill would eliminate the current requirement of a diagnosis from a primary care pediatrician, family physician, or psychiatrist.

Recent research suggests that cannabis can be therapeutically beneficial in treating symptoms of autism, including epileptic seizures, rage attacks, tics, and restlessness. A study published in the journal Nature on January 17, “Real life Experience of Medical Cannabis Treatment in Autism: Analysis of Safety and Efficacy,” found that “cannabis in ASD (autism spectrum disorder) patients appears to be well tolerated, safe and effective option to relieve symptoms associated with ASD.”

Exactly why cannabis is effective at treating patients with autism isn’t clear, though it may have to do with helping to regulate the endocannabinoid system. The study also found that patients treated with THC saw improvements in interpersonal communication and anxiety levels as well as a reduction in nocturnal motor activity, violence, behavioral and severity of behavioral disorders.” The study found that treatment with CBD could also lead to an improvement of behavioral symptoms.

The authors of the study caution that this was an observational study with no control group, and that further research is needed.

In November, the Colorado Department of Health and Environment awarded $1.35 million to the Colorado Children’s Hospital for a three-year study on how CBD affects children and adolescents with autism.

However, many parents with children who have severe autism symptoms don’t need to wait for more research to tell them what they anecdotally know: medical cannabis is a safe, effective treatment. Jamie Gomez, who has a 3-year-old son with severe autism, testified at the health committee hearing. She told CBS4, “We have already tried multiple medications that have not worked for him.”

HB 1028 passed the health committee 10-1 and will now head to the House floor for debate. Jared Polis, the new governor of Colorado, has indicated that he would sign the bill into law. Last year, a similar bill was vetoed by then Governor John Hickenlooper.

After months of tweaks, regulators have finalized rules for California’s recreational marijuana industry. The regulations were drafted by the Bureau of Cannabis Control (BCC) and must receive approval from the Office of Administrative Law (OAL) before becoming permanent.

Here are some of the key regulations:

Cannabis delivery statewide
One of the most debated regulations involved cannabis delivery in the state. The California League of Cities and law enforcement groups were opposed to statewide deliveries, arguing that it would undermine local government control and increase crime. However, the BCC decided that the language of Proposition 64 permits statewide deliveries, even if the local municipality bans cannabis.

Packaging and exit bags
Packaging headaches seem part and parcel of the cannabis industry, and California cannabis manufacturers should expect more “regulatory whiplash.” Cannabis manufacturers and growers have until 2020 to ensure their packaging is child-resistant. Until then, dispensaries and retailers will need to place cannabis products in resealable exit packaging.
 
Revised testing requirements
As of July 1, mandatory testing of all cannabis products, including flower and edibles, were required to undergo testing for pesticides, pathogens, and potency. In the first two months of testing, there was a 20-percent failure rate, which has since dropped to 14 percent. Of the 23,864 products tested between July and November, 2,100 products didn’t make it to shelves because the label overestimated the amount of THC.

Sequoia Analytical Labs surrendered its testing license after state regulators discovered that the company was falsifying test results and not testing for pesticides and other contaminants.

Josh Drayton of the California Cannabis Industry Association said that it’s an “open secret” that some cannabis manufacturers have paid testing companies for favorable results.

“We don’t want to create a pay-to-play system with our testing labs,” said Drayton. “We do need to make sure we get standard operating procedures.”

California was the first state to legalize medical marijuana in 1996, and voters approved Proposition 64 legalizing recreational cannabis in 2016. Adult-use sales began Jan. 1, 2018. Cannabis research firms ArcView Market Research and BDS Analytics estimate that California will generate $4.7 billion in recreational cannabis sales and $300 million in medical marijuana sales in 2019.

Seattle Municipal Court judges unanimously agreed to vacate misdemeanor marijuana convictions in the city from 1996 to 2010.

City Attorney Pete Holmes filed a motion in April asking the court to dismiss marijuana convictions “to right the injustices of a drug war that has primarily targeted people of color.” The ruling could affect more than 500 people charged or convicted of marijuana-related misdemeanors. The Seattle court doesn’t handle felony cases.

The judges noted in their ruling that of the more than 500 cases between 1996 and 2010, 46% of defendants were African-American.

“Inasmuch as the conduct for which the defendant was convicted is no longer criminal, setting aside the conviction and dismissing the case serves the interests of justice,” the judges wrote.

Washington state legalized adult-use cannabis in 2012. After Holmes was elected in 2010, his office stopped prosecuting marijuana-possession cases.

“We’ve taken another important step to right the wrongs of the failed war on drugs, and to build true economic opportunity for all…For too many who call Seattle a home, a misdemeanor marijuana conviction or charge has created barriers to opportunity – to good jobs, housing, loans, and education. It created a permanent criminal record that traveled with people their whole life. And we know now that it disproportionately targeted communities of color,” said Mayor Jenny Durkan.

The court expects to have the convictions vacated by mid-November after defendants are mailed notices and given a chance to object or ask for individualized findings. Those who don’t respond will have their conviction automatically vacated.

“While we cannot reverse all the harm that was done, we will continue to act to give Seattle residents – including immigrants and refugees – a clean slate.”

In a press release, Holmes said that the city should “take a moment to recognize the significance” of overturning marijuana-related convictions. “We’ve come a long way, and I hope this action inspires other jurisdictions to follow suit.”

Earlier this month, New York City dismissed more than 3,000 cases of marijuana smoking and possession charges.

The United Kingdom has softened its stance on medical marijuana, and by this autumn, cannabis-derived medication will be available by prescription.

The surprise announcement by the Home Secretary, Sajid Javid, comes after two severely epileptic children were denied cannabis oil to treat their seizures. Public outcry prompted Javid to announce a formal review of cannabis as a Schedule 1 drug last month.

“Recent cases involving sick children made it clear to me that our position on cannabis-related medicinal products was not satisfactory. That is why we launched a review and set up an expert panel to advise on licence applications in exceptional circumstances.

Following advice from two sets of independent advisers, I have taken the decision to reschedule cannabis-derived medicinal products – meaning they will be available on prescription. This will help patients with an exceptional clinical need but is in no way a first step to the legalisation of cannabis for recreational use,” Javid said in a news release.

The review, led by the UK’s chief medical officer, Dame Sally Davies, concluded that cannabis has therapeutic value. The Department of Health and Social Care and the Medicines and Healthcare products Regulatory Agency (MHRA) will define what qualifies as a “cannabis-derived medicinal product.” Approved cannabis products will be covered by the UK’s National Health Service (NHS).

Until last week’s announcement, the UK had no legal medical marijuana program, despite being the world’s largest exporter and producer of cannabis-based medicines. Only approved cannabis-derived medication will be reclassified as Schedule 2 drugs.

Professor Mike Barnes, a physician who petitioned the government to allow cannabis oil use on behalf of his patient, Alfie Dingley, told The Guardian that he hopes the rules around medical marijuana won’t be “too restrictive.”

“I hope medical cannabis will be available very soon to help the many tens of thousands of people who benefit from the medicine but are currently deemed criminals,” he said. “I hope the government will not make the regulations too restrictive but sensibly open up the way to make good quality, safe cannabis available on prescription,” he said.

Legalizing cannabis-derived medicines poises the UK to become one of the biggest marijuana markets in Europe. Prohibition Partners estimates that by 2028 the medical marijuana market in the UK will be worth 8.8 billion euros ($10.2 billion).