Cannabis Litigation: What is an Offer of Judgment?

Like all commercial litigation, cannabis business litigation is expensive and in most circumstances a party cannot recover its attorneys’ fees. The exception is where recovery is authorized by a contract or a statute. This post discusses how a party in commercial litigation—whether involving cannabis or not—can use an Offer of Judgment to leverage a more favorable settlement and potentially recover its attorneys’ fees.

The federal rules of civil procedure and most, if not all, state court procedural rules provide that party may make an Offer of Judgment. This post uses the federal rules of civil procedure as an example. The relevant rule is Fed. R. Civ. P. 68 and you can read more about offers of judgment here. (Disclaimer: State rules may not work the same as the federal rule).

Understanding what an Offer of Judgment is and how it works first requires understanding what a “judgment” is. A judgment is the court decision that settles the dispute between the parties. A judgment may occur (among other ways) as result of a motion to dismiss, or a motion of summary judgment, or after a bench or jury trial. In a case for money damages, the judgment will represent the decision on who is liable for paying damages to whom. When a party receives a judgment awarding it money damages, that party may seek to enforce the judgment, i.e. collect the money, in a variety of ways. A judgment typically brings a case to an end, absent a motion to vacate or appeal.

An Offer of Judgment is an “offer” by one of the parties in a lawsuit to allow judgment to be entered against it. Suppose that X sues Z for breach of contract for $100,000. And suppose the contract does not allow for the prevailing party to recover its attorneys’ fees, so that each side is presumptively responsible for paying its own legal costs, regardless of who prevails. Using an Offer of Judgment, Z may “offer” to allow a judgment against itself in favor of X for some dollar amount less than $100,000. For example, Z may offer to allow X to enter a judgment against Z in the amount of $35,000. If the offer is accepted, the case comes to an end and Z is liable to X for $35,000.

Why would a party ever offer to let judgment be entered against itself?

Because if X does not accept Z’s Offer of Judgment, and X recovers less than $35,000 at trial, then Z may recover from X all of its attorneys’ fees, costs, and disbursements incurred after the date the offer was made. These amounts may total tens of thousands of dollars (or more) and may even equal or exceed the actual damages. (Trials are expensive!)

Suppose, for example, Z does not dispute that is liable to X for $35,000 but X will not accept that amount as settlement. Or suppose Z calculates its likely legal expenses as $50,000 and wants to avoid the risk of a trial — where it might end up paying X $100,000 on top of the $50,000 it paid its attorneys. Z may make an Offer of Judgment early in the case so that, if Z’s estimate of damages is borne out later, Z may recover it’s attorneys’ fees, costs, and disbursements. On flip side, from X’s perspective, nobody wants to pay the other side’s attorneys’ fees, so the Offer of Judgment, even if not accepted, is a strong incentive for X to settle the case.

So by making an Offer of Judgment, a defendant is in a sense testing how strongly the plaintiff believes in its case. When a party making the Offer of Judgment does not have any counterclaims for money damages, an Offer of Judgment is a way to create financial risk for the plaintiff or counterclaimant and incentivize finding a resolution.

A party may make an Offer of Judgment any time after a lawsuit is commenced and, under the federal rule, must do so at least 14 days before trial. Notably, evidence of an unaccepted offer is admissible only to determine the costs of the action, and not for any other purpose. So a party who makes the offer need not worry about an unaccepted offer being used as an admission to prove liability.

So if your cannabis company finds itself in litigation, consider carefully how you may use an Offer of Judgment, or, alternatively, how one may be used against you.

For more practical litigation guidance, see:

• Our Cannabis Business Insurer Denied Our Claim. What’s Next?
• Reminder: The Parody Defense to Trademark Infringement is Tricky
• Cannabis Bankruptcy 101
• Cannabis Litigation: How Effective Are Motions to Dismiss?

 

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Star signs and cannabis strains: May 2022 horoscopes

Which weed strains will help you spring forward this May with minimal drama and maximum alignment? Find out with our May strain horoscopes.

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Europe’s First Seed Bank with Registration to Open in Copenhagen

Finding high-quality cannabis seeds in Europe is about to get easier. Franchise Global Health announced that its Danish subsidiary, Rangers Pharmaceutical, will be Europe’s first legal and registered seed bank in Copenhagen, Denmark, according to an April 28 press release.

The seed bank is home to one of the largest collections of its kind with 286 strains, including several world-class genetics and winners of 19 High Times Cannabis Cups. The company has a footprint all over the globe, including Germany, Canada, Colombia, St. Vincent & the Grenadines, Portugal, and Denmark.

While seed banks can be found in places such as the Netherlands and the U.K., this seed bank is licensed to store, sell, and export cannabis seeds globally under legal international trade frameworks, with permits to import and export. Rigorous adherence to good manufacturing practices (GMP) is part of the equation.

“In Europe, we abide by EU-GMP standards, which requires a rigorous approach to production of all medicines,” Franchise Global Health Executive Chairman and CEO Clifford Starke told High Times via email. “Medical cannabis is by definition a medicine and we are committed to adhering to these requirements so that patients can have the confidence that they are ingesting consistently high-quality product.”

New Frontier Data special contributor Oliver Bennett explained in an article why EU-GMP certification is critical in Europe—especially in the world of medical cannabis, in which quality control is of the utmost importance. Adhering to those good manufacturing practices is key to surviving in the regulated market.

Starke continued, “In our conversations with patients in Germany and other European countries, we became acutely aware that they are discerning and demanding, wanting quality control at all points of the journey, thereby making the procurement of high-quality genetics vital to our vertically integrated business model.” 

According to the news release, Franchise Global will set aside its most distinguished strains for its own internal flower production for global markets. In 2021 it received a third-party audited valuation of C$9.5 million.

“Our goal is to become Europe’s most trusted source of high-quality EU-GMP cannabis. This will be achieved in part by establishing our seedbank as a source for high-quality, Cannabis-Cup winning genetics,” Starke said in the announcement. “Essentially this is 30 years worth of IP from landraces all around the world with strong genetic heritage including from Thailand, Colombia, and other highly sought after sources of origin.”

Franchise Global Health gained early mover advantage in Europe after securing licenses in Germany to import and distribute cannabis, with a 90,000 square foot EU-GMP-certified processing facility. In Germany, Franchise Global also operates a 500,000 square foot reserved cultivation capacity at an EU GMP certified facility in Ontario, Canada that has delivered to Germany, as well as a 30,000 square foot EU-GMP facility.

Last May, the Danish government permanently authorized licensed companies to produce and export medical cannabis, independent of an existing pilot program, Hemp Today reported. Many Canadian-based companies have their sights set on working with operations in the country.

Meanwhile, Germany imported a record number of medical cannabis in 2020, according to a study conducted by Prohibition Partners released last year. That trend continued to show a year-on-year rise in imports, according to additional data.

Seed banks typically sell viable seeds with a high rate of germination. Seeds are typically bred to increase the likelihood of female plants, which is needed for growing flower and producing THC.

In general, cannabis seed banks store autoflowering, feminized, and normal seeds. In 2016, former High Times cultivation editor Danny Danko provided a short explanation of the difference between those three types of cannabis seeds.

Check out the Franchise Global Health website to learn about the plan for the seed bank.

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Caribbean Winds of Change for Cannabis?

The Caribbean is questioning its enduring ties to the British Crown, as it seeks to fully turn the page on its colonial past. During the next few years, we will likely see several of the independent Caribbean nations that maintain constitutional ties to the British monarch become republics, led by local heads of state. These winds of change could also inspire new thinking regarding cannabis legalization.

Many of Britain’s former territories opted to keep the British monarch as their head of state following their independence. One example with which many Americans are familiar is Canada. The fact that Canada is a monarchy explains why the names of some Canadian government agencies include the prefix “royal” (for example, the Royal Canadian Mounted Police) and why Queen Elizabeth II adorns Canadian coins.

Until recently the situation in Barbados was similar to Canada’s, but on November 30, 2021, the island became a republic, bidding farewell to centuries of royal rule. The significance of the event went far beyond the change in the country’s form of government: For the first time in its history, Barbados’ head of state is a Barbadian, rather than a British king or queen.

In all likelihood, Barbados will be the first of several dominoes to fall in the Caribbean. The prime minister of Jamaica made it clear in March 2022 to a visiting Prince William that he hoped his country would soon follow Barbados’ lead. In April, the prime minister of Antigua and Barbuda told other royals that his country “should one day become a republic.”

What does this all have to do with cannabis?

To be sure, a republican wave will not by itself advance cannabis legalization in the Caribbean. Despite their links to the British monarchy, countries like Jamaica are independent, which is why they have a choice when it comes to their form of government in the first place. While the British monarch, through the governors-general she appoints, must still grant royal assent to these countries’ legislation, this is largely symbolic (though not necessarily in places that remain British Overseas Territories, as we explained in British Virgin Islands Cannabis: Trouble in Paradise).

At the same time, what is happening in the Caribbean could still have an impact on cannabis policy. The winds of change we described above might bring new perspectives on nationhood for the people of the region, including a reassessment of the legal status of cannabis.

The former British colonies of the Caribbean did not just inherit the British legal tradition when they became independent: Most remained part of the British legal system to some degree. To this day, the Judicial Committee of Privy Council in London serves as the highest court of appeal for several of the Caribbean’s independent countries.

When reviewing the drug laws (or indeed any laws) of the former British Caribbean, one cannot help but notice how much they resemble British laws, down to the typography and layout of the original documents. This is no coincidence of course: Many of the laws on the books trace their origins to colonial times. This is not to say that Caribbean nations are on legal autopilot when it comes to cannabis or any subject; however, a lasting deference to the legal framework established during British times is understandable (especially in countries that share a monarch with the United Kingdom).

It is beyond the remit of this blog to take a deep dive into attitudes toward cannabis in the former British Empire. However, by the 20th century, the somewhat more ambivalent views of days past had hardened, resulting in cannabis criminalization in places like Jamaica. As Barney Warf points out, “missionaries decried the ‘vile weed;’ and mounting official disapproval led to antimarijuana crusades, ostensibly on the grounds that its use increased crime rates.”

Another important development when it comes to cannabis in the Caribbean was the dramatic increase in immigration from the region to the UK following World War II. For some in the UK, this migratory wave was problematic, and cannabis was part of the problem. In 1951, the head of the country’s Drugs Branch warned that unless:

“something can be done … to stem the ‘invasion’ of unemployed coloured men (mostly British subjects) from Africa and the British West Indies [i.e., the Caribbean], we shall in a very short space of time be faced in this country with a serious hashish problem.”

It is hard to imagine that such views did not inform British colonial authorities in the Caribbean, contributing to prohibitionism. Keep in mind that in 1951 the British still ruled all of their now-former territories in the region.

As one journalist put it, Barbados’ decision to embrace republicanism is “more of an emotional, historic, symbolic decision than a practical one,” and this will likely be true of others that follow it. Yet the emotional changes could help bring about practical ones as well.

Going forward, expect the nations of the Caribbean to increasingly define their own voices and question the legacies of the past. In this environment of change, it will only be natural for these nations to revisit cannabis laws. To the extent that prohibitionist approaches are at odds with the realities of the region, they may look for more constructive models, which repudiate the stigmatization of cannabis use and allow their societies to integrate into the global cannabis economy.

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NFL’s Laremy Tunsil is selling a gas mask NFT to help cannabis prisoners

The Houston Texans lineman lost millions on Draft Day 2016 after a leaked video showed him using weed. Now he's reclaiming the narrative.

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Leafly Buzz: 12 fire flowers that lit up April

Tolerance too high after 4/20? We got you, baby bird.

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Do magic mushrooms have ‘strains’ like cannabis?

Know what you're dosing: Different species and strains can have dramatically different levels of psilocybin, the hallucinogenic compound.

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California Legislative Panel Approves Bill for Cannabis Farmers Markets

A California legislative committee this week gave its approval to a bill that would permit small cannabis growers the ability to sell their harvest directly to consumers at farmers markets. The measure, Assembly Bill 2691, was approved on Tuesday by the Assembly Business and Professions Committee by a vote of 10-1.

The bill was introduced in February by Democratic Assemblymember Jim Wood, who represents a large swath of California’s famed Emerald Triangle cannabis growing region. Under the measure, the state’s Department of Cannabis Control (DCC) would be authorized to issue temporary event retail licenses to licensed cannabis growers with no more than one acre of land under cultivation. 

The special event retail licenses would only be valid at events including cannabis farmers markets operating in compliance with existing law. Under current regulations, growers can participate in cannabis special events but are not permitted to sell directly to consumers, who must instead make purchases from licensed dispensaries. In a statement about the legislation to local media, Wood said that the bill would give small growers a new revenue stream many desperately need.

“It is no secret that cannabis businesses throughout the state are struggling, whether it’s taxes, compliance costs, competing with the illicit market or other challenges, but the focus of AB 2691 is to help legal cannabis farmers who grow less than one acre of cannabis get consumer recognition for their unique products, much as has been done for craft beer, artisanal wine and other family farm agricultural products,” Wood said.

“Giving these smaller farmers opportunities at locally approved events to expose the public to their products increases consumer choice and offers farmers a better chance to reach retail shelves which is their ultimate goal,” he continued. “This is not about circumventing retailers, but growing the industry overall.”

Small Growers Only

To qualify for a special event retail license, a cultivator must be licensed to grow cannabis by the DCC and local authorities. The cultivator also may not have more than one acre of cannabis under cultivation, a cap that includes all licenses held by the grower. Licenses are issued for specific special events only, with a limit of 12 licenses issued per grower each year.

AB 2691 is supported by craft growers groups including the Origins Council, which represents about 900 growers in California’s historic cannabis cultivation areas. Genine Coleman, executive director of the advocacy group, said that the legislation would benefit most of the Origins Council’s members.

“The vast majority of them are producing half an acre or less of cannabis, so this is definitely a huge potential opportunity for our membership,” Coleman said. “For small-scale producers to have direct marketing and sales opportunities with consumers is really critical.”

Drew Barber, owner-operator of East Mill Creek Farms and co-founder of Uplift Co-op, said that the legislation would give cannabis growers a chance to share their stories with consumers, who in turn would be given an opportunity to establish a connection with their favorite brands.

“This bill could patch up a really needed missing piece to the puzzle for us as cultivators of high-end cannabis,” Barber told the Lost Coast Outpost. “The ability to connect with our consumers in this day and age seems like one of the major assets that could and should come along with regulation, right? The consumer should know who is growing their weed. We feel like our stories say a lot about both the quality of the product as well as the types of farming that we do.”

Ross Gordon, policy director at the Humboldt County Growers Alliance (HCGA) and policy chair at the Origins Council, said that AB 2691 would help the cannabis industry receive the recognition as a legitimate agricultural enterprise it deserves.

“For us, this bill is a major step forward in recognizing that cannabis farmers are farmers, and we need access to the same types of sales opportunities that allow other small farmers to sustain a livelihood,” he said. “Every step towards normalization, whether it’s the conversation around cultivation taxes or farmer’s markets, brings us closer to a point where cannabis is treated at parity with other agriculture.”

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President’s Son Suggests Cannabis Legalization in Nicaragua

If this were the 1980s, an attack and then parry in response between two countries in Central America—specifically Nicaragua and Honduras—would be nothing of note. The aforementioned plus neighbouring country, El Salvador, was the site of a bloody battle known as Iran Contra back in the day.

The “elevator high pitch” for those that missed it was that it was, from a North American perspective anyway, kind of like Vietnam, The Eighties version, with a few hemispheric twists. It also gave rise to loads of action movies set slightly south of Mexico’s border and featuring actors who appeared in such immortal titles, half clothed, with ripped bodies of all genders, endless ammunition, and a great deal of violence in and to a lot of delicate and hard to replace vegetation. Not to mention human lives.

As with most such skirmishes, as well as Cold Wars that turn hot, it was bloody, and there were issues on all sides, although “atrocity” of the human rights kind happened less on the Nicaraguan one. Internationally, the conflict came to represent which political side you were on. The Contras were supported, including illegally and covertly, under the Reagan Administration, in part by highly “creative” and illegal deals for drugs. Daniel Ortega, Nicaragua’s current president, led the resistance in his country and survived to have grown children and to lead the country by winning a democratic election.

Here is the modern update. In this unique and unprecedented piece of cannabis legalization history, one of Ortega’s sons has now announced that the normalization of cannabis should be “discussed” at the federal level.

There are many ironies to this story beyond the father-son theme. Both sides in the war in El Salvador and Nicaragua were accused of illegal drug running to raise cash to fund what was in effect a regional civil war. The Russians may have not so covertly funded Ortega, but nobody in Soviet nosebleed political levels got called on a congressional carpet for corrupt and criminal behaviour of the drugs, or swapping drugs for arms. On the “other” side, see Oliver North. Case closed.

For cannabis legalization to now erupt not only in Honduras, as it did this week, but Nicaragua as well, speaks volumes about where the international direction of the old Drug War, if not the new one, is headed.

Race To the Bottom

As has been widely predicted since Uruguay’s recreational step nine years ago, it was only a matter of time before cannabis reform began to drastically change economies (for good and for bad). While yes, the climate in this region of the world is “perfect” for cannabis, it is also equally if not more important for rapidly disappearing, highly biodiverse places called rainforests.

Outdoor cultivation, as has been discussed as an option in Honduras, would, in almost all probability, lead to a new rash of deforestation. 

The same is true in Nicaragua—although there is one stark contrast to what is going on across the border in the other “left-leaning” government now in power in Honduras. Here, the country’s first female president, with a last name of Castro, is currently hearing conflicting advice on the issue from her husband (also a former president) and her vice president, a former CEO of Honduras Pepsi also known endearingly (or not) as El señor de la Television, aka the more traditional media version of Elon Musk, at least in his immediate, localized geography.

In Nicaragua, Juan Carlos Ortega Murillo, plus the son of Vice president Rosario Murillo, have publicly claimed that their version of legalization would have to include provisions for the welfare of citizens. This would mean that the government believes that a fully regulated industry is possible in the first place. 

Agricultural Self-Sufficiency

The other interesting point raised was whether production of cannabis would overtake more important crops for the sake of the security of the country—namely self-sufficient food cultivation. Food sovereignty is an important mantra of the government here—as it may well become in other places as the war in Ukraine raises global prices on grain and certain kinds of cooking oil.

These are exceedingly difficult questions in a part of the world where such deeply-seated economic problems cannot be answered lightly. And while the discussion has taken other forms in North America, not entirely absent from the debate in the U.S. or Canada either. That starts with the level of energy required to keep indoor pot farms going, as well as water in certain states, starting with California.

Of course, there is almost no way that anyone could completely control a small farmer who grows a micro garden of cannabis for personal, family use (anywhere for that matter). Medical (or recreational) cannabis use is not something that should be forbidden to the poor as it is in many western economies right now.

However, this is a slightly different discussion. Large scale illegal cultivations in the rainforests do more damage in both the short and long term than almost anywhere else in the world. There are rapidly shrinking patches of rainforest on the earth, and cannabis, for all its amazing qualities, should not be responsible for wiping out biodiversity. Even of itself.

That such questions are being raised in the middle of a global mega crisis, and by nations in this part of the world with a tragic track record so far, is notable—and rather historically apropos.

Perhaps there are ruderalis species in both countries that might dissuade the disenfranchised and the criminal to use virgin land and other precious resources to support either a legal or illegal trade. But that argument, sadly, has repeatedly lost before.

Towards A Globally, Environmentally Sustainable Footprint?

Unlike any other place on the planet right now, the battle over reform in Central and Latin America has now begun to place tough questions in a stronger and more central limelight that the global industry so far has largely avoided.

Cannabis legalization, of course, is an overdue, global emergency. But no matter how urgent, it is critical, particularly at this juncture, that whole countries do not ruin their environments or economies for the production of a plant that is becoming rapidly commoditized all over the world.

Plenty of trade and much hotter kinds of wars (Ukraine anyone?) have been fought over equally precious resources. Cannabis, no matter its other healing properties, should not be one of them.

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How to upgrade your smoking kit for under $100

Ready to upgrade your smoking kit, but need to do it on a budget? We've got smoking accessories for less than $100 to help you out.

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Italian City of Bologna Supports Recreational Cannabis Reform

Four city counsellors in the Italian city of Bologna have come forward in support of recreational cannabis reform for their municipality.

In this central, northern city known for its historical infrastructure dating back to medieval times, the goal is to continue the debate about cannabis reform on a local level to keep political pressure alive—and to figure out basic logistics. In Bologna, the current suggestion is that initial recreational access happens through the city’s pharmacies (much like the Swiss model rolling out this summer just across the border).

The Current Legalization Status of Italy

The country is moving forward on reform in ways that are similar but not a carbon copy of any other European country at the moment.

“Medical cannabis” with high THC is produced at the Military Pharmaceutical Chemical plant (located in Florence) and also imported via strict pharmaceutically defined channels. 

Private vendors (Aurora) actually operate the domestic cannabis facilities, but it is a high-security environment.

Home grow is also not strictly legit, although case precedent has essentially decriminalized it for patients who can prove they are sick. That still does not protect them from police raids, but at least there is a growing awareness that this issue cannot be entirely removed from the room.

Beyond this, hemp and low THC, aka “cannabis light,” is also legal in the country (formally) putting Italy on par with the UK rather than, say, Germany in this regard right now although there is a growing CBD market in Germany. Vendors just have to prepare themselves for the ever-present threat of a criminal charge. There are currently 200 pending prosecutions against only CBD establishments. That phenomenon is not being seen in Italy where low THC products are available at specialized stores and via online sales.

There has been a petition drive to legalize recreational use that was snuffed out at the Constitutional court lately, but it is not likely that reform will go away now, anywhere, at a federal level in Europe.

In the meantime, cities like Bologna and before it, Milan (as of February) are trying to approach the issue on a more localized level. And as in this case, in a semi-coordinated effort unseen so far yet in any European country. Specifically, the Milanese attempt was referenced favorably in Bologna as ministers raised the topic.

It’s spreading.

Why the Italian Market is Important to European Reform

Just as in the American states, European countries are now trying to figure out how to venture into the shallow end of the cannabis recreational kiddie pool. Nobody wants to jump in at the deep end. This is also one of the reasons that the Swiss experiment is so important here, too. However limited, it shows that a country in Europe can have a national cannabis trial, and the proverbial sky will not fall in.

There are also multiple signs here that the hemp cultivation sector is moving ahead—including for phytoremediation purposes.

Beyond these developments, the country already represents a valuable CBD marketplace for cannabis imports. There are many Swiss vendors looking at the commercial opportunities in both France and Italy right now for this very reason.

Beyond this, no matter how much the police, government ministers and certainly the legitimate industry does not like this conversation, home grow cannot continue to be penalized with federal criminal charges—especially for people with severe illnesses.

This has been established in Italy via court precedent, unlike Germany, and beyond this, legislation allowing the same has either passed, will do so, or is generically the case in Malta, Portugal, and Holland.

On the medical side of the discussion, the only place where THC is allowed presently, Italy, like Germany, has tried to integrate the plant and its psychoactive cannabinoid into normalized medical channels. Thus, the military base requirement for the EU GMP flower grown domestically. 

The recent squashing of a petition to hold a national referendum here also puts Italy in interesting territory via its neighbors. In Germany, there is a professor who has called for a national referendum on the rec reform issue (knowing also that the German Basic Law itself would have to be changed first to allow such a petition at all). This is nothing more than a cynical move to slow the entire conversation down as long as possible. In Italy, the Constitutional Court has struck down the first petition allowing for such a mandate to occur, but it is not likely that this setback will deter the growing sector here, much less allow federal politicians to continue to kick the can down the road much longer in any tangible way.

This interesting city-by-city relay system amongst northern Italian cities is yet another sign that progress will not be halted here.

As they say in these parts, Rome after all, was not built in a day.

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Study Shows Drivers in Legal States Less Likely to Drive While High

The study on drivers was conducted by researchers at the Center for Health, Analytics, Media and Policy, RTI International and Office of Research Protection in Research Triangle Park, North Carolina, which was published online on April 23, but is slated to be published in Preventive Medicine Reports in June 2022.

The study analyzed consumption behaviors of 1,249 individuals. Over one third of participants reported driving under the influence within three hours of getting high in the last 30 days, and another one third shared their use of cannabis within 20 or more days within a 30-day period.

“Current cannabis users in recreational and medical-only cannabis states were significantly less likely to report driving within three hours of getting high in the past 30 days, compared to current users living in states without legal cannabis,” researchers wrote. “The one exception was frequent cannabis users who lived in medical cannabis states. Their risk of DUIC [driving under the influence of cannabis] did not differ significantly from frequent users living in states without legal cannabis.”

Researchers suggested a solution to address driving under the influence of cannabis, which should be specifically targeted toward states without legal cannabis programs. “Our findings suggest that DUIC prevention is most needed in states without legalized cannabis. Because regulation of cannabis products in non-legal environments is not possible, mass media campaigns may be a good option for providing education about DUIC.” 

Overall, researchers concluded that education campaigns could help continue to prevent people from driving under the influence after consuming cannabis. “Although all states should educate its citizens about the potential dangers of using cannabis and driving, this analysis suggests that states without legal cannabis are particularly in need of DUIC prevention efforts,” they wrote. “States should consider mass media campaigns as a method of reaching all cannabis users, including more frequent users, with information about the dangers of DUIC. Medical states may consider targeting frequent users by disseminating information about DUIC through medical dispensaries.”

The study also shared that it found three other studies that mirrored this evidence. Two were shared in 2020, and one was published in 2021, with varying levels of approach regarding analyzing the effect of recreational and/or medical cannabis legalization.

NORML’s Deputy Director Paul Armentano commented on the results of this study with the hope that it will educate those who fear the negative effects of cannabis legalization. “These findings ought to reassure those who feared that legalization might inadvertently be associated with relaxed attitudes toward driving under the influence,” said Armentano. “These conclusions show that this has not been the case and that, in fact, consumers residing in legal marijuana states are less likely to engage in this behavior than are those residing in states where cannabis possession remains criminalized.”

States such as Massachusetts are gearing up to increase how they enforce influenced driving laws. Governor Charlie Baker announced legislation in November 2021 that would “provide law enforcement officers with more rigorous drug detection training and will strengthen the legal process by authorizing the courts to acknowledge that the active ingredient in marijuana can and does impair motorists.” However, Baker’s legislation does not address how to approach measuring impairment or properly identifying if a person has recently consumed cannabis and is impaired, or if they consumed days or weeks before an incident and are no longer impaired. 

A recent study published in Canada expresses the need for a better way to detect impairment accurately. “We would love to have that one measure that says, okay, this person is impaired, or they aren’t,” said lead author Sarah Windle. “But unfortunately, in the case of cannabis, it just isn’t that simple.”

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Positive Drug Tests for Pot Hit All-Time High

More Americans are failing drug tests because of pot than ever before, and the solutions to the problem range from blaming legalization to dropping drug testing for pot altogether.

Quest Diagnostics drug-tested over 11 million people during 2021, via urine, hair, and oral fluid drug tests, analyzed about 9 million of the tests, and found some startling trends. According to a Quest Diagnostics newsroom press release quietly released last month, more people are failing drug tests due to pot use than ever before.

The rate of positive drug test results among America’s workforce overall hit a 20-year peak as well. It’s the highest rate since 2001, up over 30% in the combined U.S. workforce from an all-time low in 2010-2012, according to the analysis.

For an interactive map of the Drug Testing Index (DTI) with positivity rates and trends, click here.

“Positivity rates for marijuana in the general U.S. workforce, based on more than 6 million urine tests, continued an upward climb, increasing 8.3% (3.6% in 2020 versus 3.9% in 2021), the highest positivity rate ever reported in the DTI,” the survey summarizes. “Over five years, positivity for marijuana in the general U.S. workforce increased 50% (2.6% in 2017 versus 3.9% in 2021).”

The Wall Street Journal pointed out the number of states that have legalized cannabis since 2017, when the rates of positive drug tests were lower. Fresh Toast, on the other hand, questioned whether or not it’s time for policymakers to reflect what is going on in the general workforce amid the report of record-high numbers.

Quest Diagnostics leaders acknowledged a disconnect between changes in society and the drug testing results they found. Drug tests not only impact job applicants and employees—but the retention rates employers grapple with.

“Employers are wrestling with significant recruitment and retention challenges as well as with maintaining safe and engaging work environments that foster positive mental and physical wellbeing,” said Keith Ward, General Manager and Vice President, Quest Diagnostics Employer Solutions. “Our Drug Testing Index data raises important questions about what it means to be an employer committed to employee health and safety. Eager to attract talent, employers may be tempted to lower their standards. In the process, they raise the specter of more drug-related impairment and worksite accidents that put other employees and the general public in harms’ way.”

Drug Testing for Cannabis Is Not Reliable Indicator of Impairment

A study associated with the National Institute of Justice found that THC levels are “unreliable indicators” of impairment. National Institute of Justice-supported researchers from RTI International studied how specific cannabis doses correlate with THC levels, and their findings were surprising.

“Laws regarding driving under the influence of marijuana vary from state to state, with a growing trend toward ‘per se’ laws that use a level of delta-9-tetrahydrocannabinol (THC, one of the psychoactive substances in marijuana) in the blood, urine, or oral fluid as a determinant of intoxication,” researchers wrote. “However, there is little evidence correlating a specific THC level with impaired driving, making marijuana per se laws controversial and difficult to prosecute.”

This aligns with what researchers from the Lambert Initiative, based at the University of Sydney in Australia, told High Times last year. Researchers at the Lambert Initiative focus some studies on cannabis impairment itself and the drug tests that are supposed to determine impairment.

“Unlike alcohol, you simply cannot infer whether some is affected by THC, or how affected they are, based simply on the amount of THC they have in their system,” Dr. Thomas R. Arkell told High Times last October.

He continued, saying it’s “ridiculous” to base laws and workplace rules on drug tests when it comes to cannabinoids.

Jobs That Don’t Drug Test

Do employers really need to drug test potential employees? Former President Ronald Reagan’s Drug Free Workplace Act was implemented in 1988. It started with 21% employers requiring drug tests in 1987, and that number shot to 81% by 1996.

The profound influence of state after state legalizing cannabis for medical or recreational purposes, combined with labor, is driving employers to reconsider pre-employment drug tests for cannabis among job applicants.

The most notable company to do so would probably be Amazon. On June 1, 2021, the company released a blog post based on its goal to become both “Earth’s Best Employer” and “Earth’s Safest Place to Work.” In that announcement, it confirmed that it would be adjusting its drug testing policy to avoid testing for cannabis.

Forbes profiled a search engine Phynally, founded by Damian Jorden in April last year. Phynally can save time for job seekers if they choose to consume cannabis in their own time.

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California Will Regulate CBD

For many years, we’ve written about California’s truly bizarre animus towards hemp-derived CBD. Many efforts to regulate CBD failed. Last year, the state finally managed to pass AB-45 but the California Department of Public Health (CDPH) hasn’t really done anything since. That will change soon. Finally, California will regulate CBD.

California is getting CBD regulations

At the end of April 2022, CDPH published proposed emergency CBD regulations. The comment period runs through the end of May 2022. We strongly encourage stakeholders to submit comments to any part of the regulations they find objectionable. Once the regulations are finally adopted, they will be notoriously hard to change. CDPH posted guidance for submitting comments here.

How will California regulate CBD?

CDPH’s proposed emergency regulations are not as exhaustive as, say, its old cannabis regulations were. They clock in at around ten pages, and deal mostly with registration for industrial hemp manufacturers. Here are some of the key points:

• Different kinds of hemp product manufacturers get different kinds of registrations, licenses, and/or authorizations from the agency. Manufacturers who make different types of product may need multiple registrations.
• Some out-of-state manufacturers must register with CDPH to import products here.
• There is a separate “enrollment and oversight authorization” that lasts one year. Manufacturers need them at each location and cannot transfer them.
• Applications for oversight authorizations require detailed information about sources, types of product, extract methods, etc. Owners have to sign them under penalty of perjury.
• Fees are based on gross revenue in the trailing 12 months. New applicants need to estimate fees. There are complex formulas for calculating fees. There is one fee structure for extract manufacturers and another for all other CBD product type manufacturers.

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This is just a basic overview of how California will regulate CBD in the near future. Inevitably, we’ll see more detailed regulation for things like marketing, advertising, and consumer sales. But it’s at least heartening to know that four years after the passage of the 2018 Farm Bill, California is finally regulating CBD.

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Kentucky Governor Approves Cannabis Research Facility

Kentucky Governor Andy Beshear on Tuesday approved the creation of a cannabis research facility in the state, although he used his veto power to strike selected passages of the legislation. Beshear’s approval of the measure, House Bill 604, comes one week after the Democratic governor said he would take steps to legalize medical cannabis in the Bluegrass State.

Under the legislation, the Kentucky Center for Cannabis Research would be established at the University of Kentucky. The new facility would be tasked with planning and conducting research “to advance the study of the use of cannabis and cannabis derivatives for the treatment of certain medical conditions and diseases,” according to the text of the statute.

The university has already conducted some research into cannabis and has an established relationship with the U.S. Food and Drug Administration. The bill also requires the center to apply for approval from the U.S. Drug Enforcement Administration to cultivate cannabis and codifies eligibility requirements for individuals interested in participating in clinical cannabis research.

The legislation was passed by the Kentucky legislature earlier this month during the waning days of the legislative session. The bill received overwhelming approval from lawmakers after the state Senate failed to approve House Bill 136, a medical cannabis legalization bill that had been passed by the House of Representatives. 

“This convenes researchers and scholars from across the state on this issue so we can reduce bottlenecks in the research and regulatory processes,” GOP Representative Kimberly Poore Moser, the sponsor of the legislation, said about House Bill 604 last month. “Our goal is to figure out what conditions cannabis can treat, and by doing so, make Kentucky a national leader in research, since only one other university has a similar program.”

Beshear Uses Line-Item Veto

Beshear used his line-item veto power to strike portions of the bill he did not support. The governor approved the legislative language authorizing the creation of the center, but removed other sections including provisions he said limited the purpose of the center and the powers of the university president to appoint its advisory board.

“I am vetoing these parts because they limit the purpose of the center and dictate who the president of the University of Kentucky should consider appointing to the advisory board after giving the president of the university sole appointing power,” Beshear wrote in his veto message.

“I am also vetoing these parts because ongoing appropriations may be necessary,” he added.

Because the state legislature has adjourned for the legislative session, Beshear’s line-item vetoes will stand and cannot be overridden by lawmakers.

Earlier this month, Beshear said that he would explore taking executive action to advance the legalization of medical pot in Kentucky if lawmakers failed to pass House Bill 136. After the bill died in the state Senate, the governor released a plan last week to get medicinal cannabis to patients who need it. 

“If they are not going to take action—not even give it a committee hearing in the Senate—then I believe it’s my obligation to see what’s possible given the will of the people and their desire to move forward on this,” Besear said. “It’s time to certainly move the conversation forward.”

“Would I have preferred if the legislature had passed it?” Beshear asked. “Yes. But they didn’t.”

Beshear added that he has directed his general counsel to provide advice about what executive actions can be taken to move the medical cannabis process along without the approval of lawmakers. He also said that he would appoint a medical cannabis advisory panel to hold meetings across Kentucky to get residents’ input on the issue. The governor’s office has also established an email account (GovMedicalCannabisAdvisoryTeam@ky.gov) so that residents who are unable to attend the public hearings in person can still provide input.

But Republican lawmakers balked at Beshear’s plan to take unilateral action on medical cannabis legalization. Kentucky state Senate President Robert Stivers said that such action would likely be unconstitutional.

“The public should be concerned with a governor who thinks he can change statute by executive order,” Stivers said. “He simply can’t legalize medical marijuana by executive order; you can’t supersede a statute by executive order because it’s a Constitutional separation of powers violation.”

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The Battle for Cannabis Legalization Is On in Honduras

According to Salvador Nasralla, known locally as El señor de la television, legalizing cannabis would create at least 17,000 jobs in Honduras and go a long way in addressing the chronically high level of unemployment in the country.

Honduras is bordered by Guatemala, El Salvador, and Nicaragua. The country’s history has been frequently defined by the bloody and terrible conquests on its soil that have included the eradication of the local Maya by the first invaders (the Spanish). Honduras also became one of the locations of the United and Standard Fruit companies in the late 19th and early 20th centuries, giving rise to the writer O. Henry’s infamous description of the country as a “banana republic.” American troops have invaded the country multiple times including during the 1980’s during the war between El Salvador and Nicaragua.

For this reason, it is even more ironic that cannabis reform, proposed as a solution to help the mostly agricultural population of the country, might be opposed by anyone in the administration of the current president (the first woman to hold the office), the left-leaning Xiomara Castro, or her husband, Manuel Zelaya. Castro was sworn in on January 27, 2022, filling a job that Zelaya held between 2006 and 2009.

However, that is the battle that is currently raging over cannabis reform.

Nasralla, proponent of the cannabis reform proposal now in front of the government, is the first vice president of the country, appointed by Castro. He is also the former CEO of Pepsi Honduras. He has been a fierce critic of sitting governments here since the 1980s, citing corruption as one of the main reasons Honduras is in such dire economic circumstances today.

His cannabis proposal, however, has attracted the ire of Castro’s husband, Zelaya, who recently said, “We do not support the idea of starting to plant drugs as has been proposed. The president of Honduras (his wife) has made the firm decision to combat drug trafficking and will combat its consumption,” he told local media. “If there is drug trafficking, there are drug traffickers and if there are drugs, then there are consumers, so that must be eradicated from the country.” 

Since Zelaya is also a presidential advisor, it would seem that the current cannabis reform proposal by the country’s new Veep may cause a bit of marital strife.

A “Cannabis Republic”?

What makes this contretemps so interesting is not only the politics but the motivation of all involved. 

This is a fight essentially over not only living standards but a country’s legacy. There are currently 350,000 Hondurans out of work, and 2.4 million are underemployed. That is a significant percent of the population in a country with almost 10 million people. Merely employing them in the cannabis industry is not necessarily the answer to the country’s problems.

Here is the first reason why. Many developing countries are moving rapidly into the cannabis industry with similar hopes. See the many African nations who have announced they are on the same trajectory, if not Latin American countries. Honduras would be competing with such efforts and is already behind.

Beyond this, however, there are other considerations. Exporting bananas and other tropical fruit in the past did nothing except support the profits of large, non-Honduran companies as well as cemented their noted anti-democratic control of the country for many decades.

A Continuation of The Status Quo?

Beyond these considerations, the most valuable cannabis currently available in the global market is not grown outside, as has been proposed by Nasralla, but rather inside. Building a competitive export cannabis crop here means that Honduras would have to find places to erect such structures and build the infrastructure necessary to support indoor cultivation. That means capital investment that the country clearly does not have. It would have to come from foreign companies—just like in the past. The ”united” fruit companies of yore were owned by North American investors who cared only about profits, not the welfare of the indigenous population.

For this reason alone, “cannabis reform” here may in fact spell bad news. 

Beyond these problems, there is the environmental impact of outdoor cultivation itself, very similar to the situation in Brazil. Both countries have fragile, rainforest environs that are disappearing fast thanks to the invasions of both landless farmers and illegal drug traffickers.

Because of the destruction of its rainforest, beyond international culprits also responsible for global warming more generally, Honduras is also one of the countries most at risk from climate change. The frequency of natural disasters in the country, including floods, mudslides, tropical storms, and hurricanes, is already increasing dramatically. This scenario is hardly ideal for any kind of commercial cultivation, no matter the environs or the crop.

Driving “illegal” traffickers out of the country will also take more than legalizing the cannabis trade—and there is no guarantee that the legal cannabis industry here will be any more climate-friendly.

Such a scenario is also complicated by one more large problem. Local sources have long claimed that previous governments have participated actively in illicit drug trafficking and cattle ranching along with illegal logging of both mahogany and cedar.

The question is, will the current government, many of whose leaders have campaigned against government corruption in the past, find a sustainable way through the morass of contradictions now afloat in the legalization debate?

Cannabis legalization is an urgent global reform way past its due date. However, cannabis reform just by itself, it is clear, is not a panacea for deeply entrenched issues that frequently surround it in many countries now considering the same.

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Fewer Than 450 Patients Certified in South Dakota Medical Cannabis Program

The fledgling medical cannabis program in South Dakota continues to build at a slow pace, with a local news report this week saying that only a little more than 400 patients have been certified since registration began at the end of last year.

That comes via the Argus Leader newspaper of Sioux Falls, which reported that, as of Tuesday, “the Department of Health had issued just 419 medical marijuana cards to patients.”

According to the newspaper, that has prompted MyMarijuanaCards.com, a nationally recognized telehealth company, to host the “the state’s first-ever, three-day mass patient screening event Tuesday in downtown Sioux Falls,” South Dakota’s largest city. The event runs through Thursday.

“Despite being available since November, only a few South Dakota residents have been able to obtain a state-issued medical cannabis card due to the limited number of doctors authorized to certify patients in the state,” MyMarijuanaCards.com founder Molefi Branson told the Argus Leader.

It isn’t just patients who have been slow to enroll. Last month, local television station KELO reported that “only 90 South Dakota doctors have been approved to validate the use of medical marijuana to their patients,” which accounts for “just 4.07% of the state’s 2,214 total active physicians.”

Branson said there are aspects of South Dakota’s medical cannabis registration process that may be causing the patient enrollee numbers to lag.

The Argus Leader reported that “Branson said South Dakota’s medical marijuana law requires South Dakotans receive certification from a medical professional licensed to practice medicine before they can be considered for a card through the [state Department of Health],” and that the state’s “law also requires screenings be in person, not over the telephone or via video conference, as allowed in several other states.”

The newspaper also noted a reluctance “among the healthcare systems in South Dakota to provide direction to their physicians about certifying patients, [which] has made certification a challenge for many, including a handful of the clients who attended the event Tuesday.”

It has been a turbulent year-and-a-half for cannabis reform efforts in the Mount Rushmore State. Voters there approved a pair of ballot measures in 2020—one that legalized recreational pot for adults, and another that authorized medical cannabis—but the ensuing 18 months have brought controversy with each.

The recreational cannabis law was struck down by the state Supreme Court last year following a legal challenge waged by South Dakota Gov. Kristi Noem.

The court concurred that the cannabis amendment violated the state’s constitution.

“South Dakota is a place where the rule of law and our Constitution matter, and that’s what today’s decision is about,” Noem said in a statement following the November ruling. “We do things right—and how we do things matters just as much as what we are doing. We are still governed by the rule of law. This decision does not affect my Administration’s implementation of the medical cannabis program voters approved in 2020. That program was launched earlier this month, and the first cards have already gone out to eligible South Dakotans.”

The medical cannabis law officially took effect last July, but there remains one dispensary in the state, located on a tribal reservation in Flandreau, South Dakota.

The Flandreau Santee Sioux Tribe, which operates the dispensary, maintains that its medical cannabis cards should be treated as legally valid, but Noem’s administration has said that it would only recognize cards issued to members of the tribe.

In February, tribal officials said that more than 100 individuals who were issued medical cannabis cards have been arrested. The tribe said at the time that it has issued thousands of cards to tribal and non-tribal members alike.

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Connecticut Lawmakers Look to Ban Out-of-State Cannabis Ads

Lawmakers in Connecticut on Tuesday took a big step toward banning out-of-state cannabis advertisements within its borders, with a bill easily winning approval in the House of Representatives.

The measure passed the state House by a vote of 98-48, according to the Associated Press, which said that the legislation seeks to prevent “anyone without a Connecticut cannabis-related license from advertising the product and cannabis-services within the state.”

The Associated Press reported that billboard ads have recently appeared on Connecitcut’s border with Massachusetts, where recreational cannabis is also legal for adults.

The move by lawmakers comes after Connecticut Attorney General William Tong said last year that he wanted to crack down on those billboards luring customers across the border to Massachusetts.

Local television station WTNH reported that Tong had “reached out to the billboard companies and dispensaries directly with mixed results.”

The bill that was passed by the Connecticut House of Representatives on Tuesday builds on the state’s legalization measure that was signed into law last year by Democratic Gov. Ned Lamont.

As in other states, parts of Connecticut’s new cannabis law took effect immediately, most notably the ability for adults aged 21 and older to have as many as 1.5 ounces of pot in their possession. Sales are expected to begin in the state next year.

When signed the bill into law last June, Lamont hailed it as a victory for civil rights.

“It’s fitting that the bill legalizing the adult use of cannabis and addressing the injustices caused by the war of drugs received final passage today, on the 50-year anniversary of President Nixon declaring the war. The war on cannabis, which was at its core a war on people in Black and Brown communities, not only caused injustices and increased disparities in our state, it did little to protect public health and safety,” Lamont said in a statement at the time.

“By allowing adults to possess cannabis, regulating its sale and content, training police officers in the latest techniques of detecting and preventing impaired driving, and expunging the criminal records of people with certain cannabis crimes, we’re not only effectively modernizing our laws and addressing inequities, we’re keeping Connecticut economically competitive with our neighboring states,” he added.

In addition to a ban on out-of-state cannabis ads, the bill that was passed by the House on Tuesday would also prohibit “Connecticut licensees from using images of the cannabis plant as well as from advertising on an illuminated billboard between 6 a.m. and 11 p.m. and from advertising within 1,500 yards of a school or church,” according to the Associated Press.

“Look, I’m sick of seeing these billboards with cannabis leaves splayed all across them, within 1,500 yards across from a school or church or whatever. Can’t we do something more about that?” said Democratic state House Rep. Mike D’Agostino, as quoted by the Associated Press.

The bill also seeks to impose restrictions on “gifting,” through which retailers pay for a product like a T-shirt and are then given a “gift” of cannabis.

The practice has emerged as a go-to loophole for businesses operating in markets where cannabis has been legal, but regulated sales have not begun.

According to the Associated Press, “D’Agostino stressed that lawmakers are not banning people from giving someone a gift of marijuana, but rather trying to reign in these commercial exchanges.”

“You can gift to your friends and relatives. You can host a brownie party at your house,” D’Agostino said, as quoted by the Associated Press.

In his statement following the signing of the legalization bill last summer, Lamont said that the new law “will help eliminate the dangerous unregulated market and support a new, growing sector of our economy which will create jobs.”

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Top Cannabis FinTech Companies in Web3

Cannabis companies are largely behind the curve in Web3, but in the past few months some top cannabis companies have emerged in the Web3 ecosystem to join the old guard. The connection between cannabis and Web3 may not be apparent at first glance, but both industries are relatively nascent, semi-regulated, and attracting some of the best global talent. This post focuses on cannabis cryptocurrencies and payment systems.

Cannabis companies and web3: a brief introduction

It is no surprise that enterprising cannabis companies that are comfortable operating in their quasi-regulated industry have no qualms about adding additional regulatory uncertainty to their business models by incorporating Web3 applications into their businesses.

Both industries emerged largely from stick-it-to-“the man” counterculture movements, and they have deep global roots and stratified international communities. Many groups in both communities focus on social justice issues. And both communities (and often their service providers) are still operating on eggshells as they wait for firm, definitive guidance from local and national governments. This is the world we work in, and it does not look like full-bore legal clarity in either ecosystem will be emerging soon.

Top fintech cannabis companies in web3: cryptocurrencies

The earliest cannabis Web3 cryptocurrency companies date to 2014, and many are still in existence: PotCoin (POT), CannabisCoin (CANN), HempCoin (THC), and DopeCoin (DOPE). All of these emerged in response to state-legal cannabis marketplaces that were operating almost exclusively in cash.

• PotCoin focused on Colorado’s adult-use market and dove deep into Web3 with PotCoin Rewards and philanthropy with the PotCoin Foundation.
• CannabisCoin focused on improving transactions in medical marijuana dispensaries.
• HempCoin focused on B2B transactions among farmers, manufacturers, and both medical and recreational dispensaries.
• DopeCoin tried to facilitate a virtual black market Silk Road for marijuana sales across the world. DopeCoin was built on a proof-of-stake validation model, which allowed validators to earn additional DopeCoins to reward their support of the DopeCoin network.

The total market cap of these top four cannabis cryptocurrencies is only about $3MM, and although each experienced the post-ICO (initial coin offering) bump, their market caps have consistently slid since then.

These cannabis cryptocurrency companies are still working to alleviate existing market burdens in the industry. Crypto exchanges like these can provide depository services, similar to banks, but with lower fees and access to a myriad of different payment options across borders and within both fiat and virtual currencies.

Moving the industry away from cash will lessen the risk of the overall marketplace and allow lawmakers, regulators, and industry participants to focus on improving the business environment, making better products, and raising industry standards all around.

The tax application is also undeniable. Cryptocurrency transactions are on a public ledger system, which would allow regulators to easily audit companies and individuals for tax compliance.

Top fintech cannabis companies in web3: payment processors

The cannabis industry has ongoing payment processing problems, but the current non-Web3 frontrunners in the cannabis fintech space include CanPay, Hypur, Aeropay, Dutchie, and KindPay. They use ACH transfers or prepaid cards or more creative payment processing methods like revolving lines of credit or cashless ATM transactions outside the cannabis-shy credit card systems.

Many cannabis web3 FinTech companies are developing competing cannabis point-of-sale solutions and application programming interfaces (“APIs”), which are bridges that allow different software or computer systems to interact with each other. These APIs hope to span the deep chasm between traditional banking, cryptocurrencies, and cannabis to facilitate all types of B2B and B2C transactions with the power of web3 cryptocurrencies at their disposal.

Predictably, this business model presents many barriers to entry as they deal with the U.S.’ patchwork of existing and forthcoming cannabis and financial regulations. These types of cannabis fintech companies are required to either partner with existing licensed financial institutions or qualify with state and federal regulators, like Coinbase, which holds money transmitter licenses from many U.S. states and is also registered as a broker-dealer.

If we have learned anything in cannabis and Web3 so far, it is that the pace of business far outstrips the pace of regulation. Smart entrepreneurs continue to ask good questions and innovate their business models according to the prevailing winds.

For more cannabis and Web3, read:

• Cannabis and Web3 Crossover: Tokenization
• Cannabis NFTs
• Cannabis DAOs

Neither Harris Bricken nor I have any financial interest in any of the companies mentioned in this article.

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Views from NYC’s 420 weekend melting pot

We hit the big city to see how New Yorkers feel about legalization and top East Coast stains like Gumbo.

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Washington Lawmakers Delete the Word ‘Marijuana’ from State Statutes

The word “marijuana” will be stricken from all legislation in the state of Washington under a bill recently passed by state lawmakers. The measure, House Bill 1210, will replace the term “marijuana” with the word “cannabis” in all state statutes after being signed into law by Democratic Governor Jay Inslee last month. 

Democratic state Representative Melanie Morgan, the sponsor of the legislation, told her colleagues in the House last year that the word “marijuana” has racial undertones that go back nearly a century.

“The term ‘marijuana’ itself is pejorative and racist,” Morgan said. “As recreational marijuana use became more popular, it was negatively associated with Mexican immigrants.”

“Even though it seems simple because it’s just one word, the reality is, we’re healing the wrongs that were committed against Black and Brown people around cannabis,” she added.

Racist Language in Legislation

Morgan said that the word’s racist connotation was initiated by Harry Anslinger, the first commissioner of the Federal Bureau of Narcotics, which later became the Drug Enforcement Administration. Anslinger was an instrumental force in the passage of the Marijuana Tax Act of 1937, which began the U.S. prohibition of cannabis.

“It was … Anslinger that said, and I quote, ‘Marijuana is the most violent causing drug in the history of mankind. And most marijuana users are Negroes, Hispanic, Caribbean, and entertainers. Their satanic music, jazz, and swing results from marijuana usage,’” Morgan said during a legislative hearing.

State Representative Emily Wicks said the bill can help change how conversations about cannabis are framed.

“Although we call it a technical fix, I think it does a lot to undo, or at least correct in some effort, some of the serious harms around this language,” Wicks said.

Joy Hollingsworth, who owns Hollingsworth Cannabis Company with her family, told KIRO television news that the word “marijuana” is an unwelcome term for many people in communities of color.

“It had been talked about for a long time in our community about how that word demonizes the cannabis plant,” said Hollingsworth, who learned about the negative association of the word from her mother.

“She was the one who educated us on the term and how it was derogatory, and we shouldn’t use it anymore,” Hollingsworth said. “We have a lot of people, especially in the Black community, that went to prison over cannabis for years, that were locked up, separated from their nuclear family, which is huge.”

Hollingsworth said that House Bill 1210 is a step in the right direction. But she would also like to see more action on social equity in cannabis from state lawmakers.

“We’ll take any win, right? But we don’t want to get caught up on the performative equity piece where we’re just talking about words and not actual legislation and policy,” Hollingsworth said.

One possibility would be to invest cannabis taxes in communities disproportionately impacted by the War on Drugs.

“We will feel like the industry has paid off when we see those funds get put into college scholarships,” Hollingsworth said. “Maybe a family wanted to buy a home, and they were from the Central District of Seattle, and they wanted to go back there because they were priced out. They could get a loan from those funds. Thinking about creative ways to make impactful scalable solutions in our community is what I’m looking for.” 

Cannabis Industry and Advocates Support Bill

House Bill 1210 was supported by state and national cannabis reform advocacy groups and industry representatives, including the Craft Cannabis Coalition (CCC), a Tacoma-based retail trade group.

“Our association is supportive of social equity in the cannabis industry and strongly recognize the harm the war on drugs caused,” CCC Executive Director Adán Espino Jr. told The Center Square in an email. “We do not feel as strongly about the term ‘marijuana’ as others seem to, but we do appreciate the transition to the term ‘cannabis’ as the industry continues to develop and professionalize. If the term ‘marijuana’ has fallen out of practice, that is just the reality of it.”

Tiffany Watkins, a member of the National Cannabis Industry Association’s Diversity, Equity & Inclusion Committee, said that Washington needs to make more substantive efforts at social equity in the cannabis industry.

“While it’s definitely time to steer permanently away from terms based in racism, replacing marijuana with cannabis is merely a drop in the ocean when it comes to correcting the wrong done by the war on drugs,” she said via email. “Much more attention needs to be brought to how a state with over 10 years of legal cannabis operations still has no social equity program in place to acknowledge the barriers to entry for its BIPOC [Black, indigenous, people of color] individuals.”

In 2020, the Washington legislature established the Washington Task Force on Social Equity in Cannabis to develop policies and recommendations to support social equity in the state’s cannabis industry. The panel is currently working on proposals to provide grants to social equity applicants to help fund the launch and licensing of new cannabis businesses. House Bill 1210 goes into effect in June.

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Is Cannabis Legalization Moving Forward in Taiwan?

No matter how slowly cannabis reform is moving in the West, there is one place where cannabis reform is moving at an even more tortoise-like pace: China and its territories, including the island of Taiwan. Merely smoking cannabis can land a user a jail term. Selling it can garner a life sentence. This even includes hemp.

The slow track of reform here is not because there are no advocates pressing for reform. Indeed, cannabis legalization efforts are gaining momentum, including marches and reform rallies. This includes a demonstration outside of the Ministry of Justice in Taipei this month by the advocacy group Green Sensation—although organizers were pressured by police—several times—to disperse. A new effort to try to crystalize political support by the group has now managed to obtain 14,000 signatures. 

This reform effort is also not happening in a vacuum. The Taiwanese legislature just passed a law reducing the penalty for cannabis cultivation for personal use from a minimum sentence of five years imprisonment to one, with a maximum of seven years. 

It is hard not to see why. The most abused drugs here are amphetamines.

Cannabis Reform in China

While cannabis reform has been slow to gain traction in Asia, there are signs that this is now slowly changing. Thailand, for example, has just decriminalized cannabis use and is forging ahead with a medical cultivation program. Even recreational use here is not off the table.

However, despite this “Asian Miracle,” China and its territories remain the last great uncharted territory for reform. On the Chinese mainland, even hemp seeds and CBD skincare products are banned—despite the fact that China remains the world’s largest hemp-cultivating country—producing about half of the world’s entire supply. 

China classified cannabis as a dangerous narcotic drug as of 1985.

This has not always been the case. Historically, cannabis has been used for medicine and some ritual purposes of Taoism. The word ma, used to describe medical cannabis circa 2700 BCE is the oldest recorded name for the hemp plant. The earliest recorded human cultivation of cannabis was actually found on Taiwan.

During the 19th century, the Xinjiang province of China was a major producer and exporter of hash. Tons were exported annually to British India legally until 1934.

Yet, as of 2020, when the UN voted to remove cannabis from its global schedule IV listing, China joined the United States in opposing the removal of the plant from Schedule I designation. 

“Science” Vs. Fact

The continuing resistance to cannabis reform by the world’s largest countries even after the scientific advances over the last 40 years—including identification of the endocannabinoid system of the body—may well, in retrospect, go down in history as one of the world’s last great unscientifically-based witch hunts. The Cannabinoid “Dark Ages” as it were.

So far, Canada remains the only G7 country to have federally legalized the drug. Germany or the United States may become the second or third countries respectively to do so, but as is clear in both countries, despite large numbers of citizens supporting such change, and even promises to proceed with reform, the issue remains stalled due to political inaction on a federal level.

China may punish users harshly, in other words, but it is continuing to do so in line with other great power countries. Cannabis remains illegal in Russia too.

Constitutional Rights are Being Violated Everywhere

There is only one way to fight injustice—and that is to organize. However, even the greatest movements for freedom and equality took decades. The formal “civil rights” movement is frequently cited as lasting from 1919 to the end of the 1960s—over 40 years. Some would argue that it is not over yet.

That is about the same amount of time, so far, that activists and reformers have been pushing against international sanctions against cannabis—even for medical use.

While it is very clear that reform can no longer be ignored anywhere, it is also clear that the entrenched forces of the status quo are deliberately delaying a global decision to move forward on both a scientific, as well as civil liberties, basis to enact complete and final cannabis reform.

Until then, being a cannabis activist, advocate, or in many cases, part of the legitimate industry, remains a highly hazardous enterprise.

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Billings, Montana Lowers Minimum Age to Work at Weed Shops

Turning 18 means being able to vote, buy a lottery ticket, and—now in Billings, Montana—own a cannabis dispensary.

The city council there on Monday night “brought its marijuana laws in line with state marijuana laws and lowered the age a person can work for or own a marijuana business from 21 to 18,” according to local television station KTVQ.

Montana’s recreational cannabis law permits adults aged 21 and older to possess and consume pot, but the statute also allows anyone 18 and older to own or work at a cannabis retailer.

The law also allows cities in Montana to set up their own age threshold, prompting Billings, the state’s most populous city, to establish 21 as the minimum age for cannabis businesses there under a new ordinance passed by the city council last year.

That didn’t sit well with Montana Advanced Caregivers (MAC), a dispensary in Billings that filed a lawsuit against the city late last month.

The suit, filed by MAC and three employees, alleged that the “ordinance regulating the sale of medical marijuana in Billings unlawfully restricts the age of those who work at the business,” according to KTVQ.

The plaintiffs sought “a preliminary injunction against enforcement of the ordinance and an order declaring the city ordinance invalid and unenforceable,” KTVQ reported, arguing that “the city ordinance is more restrictive than the state laws established to regulate medical marijuana sales which allow a person not ‘under 18 years of age’ to work for a licensed marijuana provider.”

The city ordinance made it “unlawful for the Employee Plaintiffs to work in MAC, or any other marijuana business within the jurisdiction of the City of Billings,” the plaintiffs said in the lawsuit, as quoted by KTVQ.

“As a result, the Employee Plaintiffs will be forced to lose their jobs, even though each of the Employee Plaintiffs meets all the requirements to be an employee in a medical marijuana business under the laws of the State of Montana,” the lawsuit said, according to the station.

On Monday, members of the Billings City Council essentially sided with the plaintiffs, voting 8-3 to lower the age to 18.

The change doesn’t sit well with everyone, with some, like Billings Mayor Bill Cole, noting an obvious discrepancy in the state law, which says that individuals under the age of 21 cannot enter the establishment.

“Even if we allow 18-year-olds, assuming they are in a marijuana business, there is still an issue, isn’t there? On whether to do so is a violation of state law. And that’s between the marijuana business owner and the state of Montana, not us,” Cole said, as quoted by KTVQ.

Montana continues to work out the kinks with its new recreational cannabis law. In March, the state Supreme Court approved temporary rules regarding the expungement protocol for individuals who were previously convicted of pot-related offenses.

As local news outlet KPAX explains, the new cannabis law in Montana “says anyone convicted of an offense that would now be legal in the state can petition to have their conviction removed from their record, get a lesser sentence for it or reclassify it to a lesser offense.”

In its approval, the court offered procedures for individuals to seek expungement.

Voters in Montana approved a measure ending prohibition on pot in 2020, and sales began there on New Year’s Day.

In the first weekend, the state generated more than $1.5 million in cannabis sales.

Earlier this month, the state reported that the new adult-use cannabis program had generated $8.7 million in tax revenue in the first three months of the program.

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