All of 2022’s Cannabis Cup winners and where to buy them

Pink Certz, Animal Face, Spritzer, and more.

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40 weed predictions highly likely to come true in 2023

We were 74% right about 2022. Just sayin’.

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Los Angeles Cannabis Audit: Problems, Problems, Problems

On December 1, 2022, the Los Angeles Controller released a report (PDF here) with a pretty lame pun as a name: “High Maintenance: Review of the City’s Cannabis Regulation Efforts.” While the report’s name is bland, it reveals the pretty dire state of Los Angeles’s cannabis regulation and licensing. Since opening up for licensing, LA has been mired in controversies. Even for those of us who have practiced here for a long time, the report can be shocking at times. Indeed, one of the main conclusions of the report is that:

Overall, we found that the City should do more to close down unlicensed cannabis businesses, refine tools to deter additional unlicensed businesses from entering the market, monitor licensed cannabis businesses for regulatory compliance, mitigate the risk of tax evasion by cannabis businesses, and proactively determine how cannabis business tax revenue should be spent.

To say this is an understatement is itself and understatement. The report is long and I encourage anyone focused on LA cannabis to give it a hard read; or at least to read the executive summary in the first link at the top of this post. That said, I’ll highlight some of what I think are the most key points in the report.

LA has collected a LOT of tax money

Between January 2018 and December 2021, the Los Angeles Office of Finance (which collects taxes from the cannabis program) has collected a whopping $320 million in taxes, with at least $31 million more outstanding. This makes LA the largest local cannabis tax collector, possibly in the world. While we certainly won’t argue with the fact that LA cannabis operators are over-taxed, it bears noting that the actual amount of uncollected taxes may remain much higher. The report notes that the City hasn’t implemented sufficient audit structures and, given a three-year statute of limitations, may be leaving money on the table.

Either way, with all that tax money, one would imagine that the city would be doing a lot to prop up its approximately 700 licensed businesses and to shut down unlicensed and illegal operators. Well….. it turns out that’s not really happening either.

LA is doing little to nothing about the illicit market

The initial findings of the report note:

the Los Angeles Police Department (LAPD) reports that the number of known unlicensed cannabis businesses has decreased from 300 in 2018 to approximately 100 in June 2022. Though this reduction has been touted as a measure of progress, the actual number of unlicensed cannabis businesses is likely higher.

To anyone with any knowledge of LA cannabis, the idea that unlicensed businesses have decreased since 2018 is almost laughable. One of the biggest complaints our LA cannabis team hears is how difficult it is for licensed, compliant businesses to compete with the illegal market.

The extent to which the illegal market has grown, however, remains a mystery. But it is a problem, and a big one at that. Nevertheless, for all the problems the illegal market brings, the report recognizes in numerous places that the city is not doing nearly enough to stop it.

To illustrate, here’s a pretty shocking statistic: between January 2018 and June 2022, LA received more than 7,300 complaints via an online portal. During that time, a staggering 5,056 of those complaints remain completely unprocessed. Here’s what the report says:

However, more than 5,000 complaints remain unprocessed with no indication of their work status. We reviewed a limited number of unprocessed complaints and found that many could generally be categorized as follows:

• personal cannabis use, which DCR does not regulate;

• alleged unlicensed commercial cannabis activity, which would be referred to LAPD;

• quality-of-life issues in connection with a licensed cannabis business, such as customer behavior in the public, which DCR believes is outside their regulatory purview; and

• complaints against licensed cannabis businesses that DCR should investigate.

While we could not review and categorize all 5,000 unprocessed complaints, we found troubling allegations against licensed cannabis businesses, such as sales to minors and onsite cannabis consumption by employees—which are exactly the types of business behaviors and practices that DCR was established to regulate.

This ties in well to the next point.

Los Angeles licensed businesses are not adequately monitored

Not only has the city failed to respond to complaints about unlicensed cannabis activity, but it’s also not monitoring licensed cannabis businesses. In preparing the report, the Controller stopped in at six different licensed dispensaries in LA. It found regulatory violations in all of them. Here’s just a blip of what the Controller saw:

[W]e observed several regulatory violations at every dispensary we visited, including some categorized by DCR as moderate and major violations.

While most violations we observed were minor, these requirements still serve to create a well-regulated business environment. For example, five of six dispensaries we visited did not display their neighborhood liaison’s contact information. . . .

The lack of proper exit packaging at some dispensaries was also problematic. The State requires exit packaging to be: (1) child-resistant to make it difficult for children under five years of age to open; and (2) tamper-evident to indicate to the customer if the package has been opened. Three of the six dispensaries sold cannabis products without proper exit packaging and used simple paper bags instead.

Two dispensaries also had cannabis products in containers that were easily accessible to customers without the assistance of the licensee’s personnel. For example, [in one case] containers . . . were openly displayed at the counter of a dispensary we visited, allowing any customer to walk up and inspect the quality of the cannabis. If the dispensary we visited was busier, it could have been difficult to prevent customers from taking the containers home without paying for the product.

Another dispensary we visited was in the process of upgrading its walk-up window. Sales through exterior openings, such as drive-throughs or walk-up windows, are strictly prohibited under DCR’s regulations. Major violations like this can be subject to administrative fines worth up to $42,026 (three times the current license fee).

LA has way too many cooks in the kitchen

The problem is exacerbated by the fact that there are just too many cooks in the kitchen: an astonishing seven different local agencies have varying degrees of control over enforcement. In 2019, a “Cannabis Enforcement Taskforce” was formed to coordinate among the seven agencies, but it’s not done nearly enough (as seen by the fact that more than 5,000 complaints remain unresolved). Perhaps this has something to do with the fact that cannabis taxes are simply deposited into the city’s general fund and not earmarked for any specific purpose. Clearly, the agencies need to coordinate better. It would probably help if the tax money could be allocated better.

LA’s taxes need changing

If you’ve gotten this far, you might think that the report has only bad news. However, the Controller recommends lowering taxes, in part to give licensed businesses a fighting chance against illegal businesses that don’t pay any taxes.

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There’s a lot of ground to cover with respect to the LA Controller’s report. Unfortunately we can only scratch the surface in this post. As mentioned, anyone interested in LA cannabis should give the report a thorough read. Stay tuned to the Canna Law Blog for more updates on Los Angeles cannabis.

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Colorado Psychedelics Decriminalization Takes Effect

Psychedelics including psilocybin are now officially decriminalized in Colorado, where voters decided last month to end criminal penalties for possessing the drugs. Colorado Governor Jared Polis issued a proclamation on Tuesday declaring that Proposition 122, also known as the Natural Medicine Health Act, had passed muster with the voters in last month’s election. 

“Coloradans voted last November and participated in our democracy,” Polis said in a statement from the governor’s office. “Officially validating the results of the citizen and referred initiatives is the next formal step in our work to follow the will of the voters and implement these voter-approved measures.”

In his proclamation, Polis noted that Colorado Secretary of State Jena Griswold had certified on December 12 that Proposition 122 “was approved by a majority of the votes cast.” The ballot measure received more than 53% of the vote in the midterm election, garnering the approval of nearly 1.3 million voters on November 8.

The Natural Medicine Health Act creates a state-regulated therapeutic system for adults to access natural psychedelic medicines, such as psilocybin mushrooms, dimethyltryptamine (DMT), ibogaine, and mescaline not derived from peyote. The measure decriminalizes the possession, cultivation, and sharing of the naturally occurring psychedelic drugs, and establishes a system for controlled distribution by licensed professionals in a therapeutic setting. 

Psychedelics will be available under the guidance of a licensed and supervised facilitator at designated healing centers and healthcare facilities such as hospice centers. The medicines are prohibited from leaving the facilities, and no retail sales are allowed in any form.

“Prop. 122 puts the wellbeing of patients and communities first, removing harsh criminal penalties for personal possession and employing a multi-phase implementation process that will allow time to develop an appropriate safety and regulatory structure,” Josh Kappel, who co-authored the proposition and led the campaign for the successful ballot measure, said in a statement on Tuesday.

Under Colorado law, ballot measures approved by the voters do not go into effect immediately. The state constitution requires the governor to issue a proclamation declaring the majority vote for the proposition no later than 30 days after the state canvasses the election results. 

Psilocybin And Mental Health

Psychedelics such as psilocybin are receiving renewed interest in the potential of the drugs to treat a wide range of mental health conditions including depression, anxiety, and substance abuse disorders. The Food and Drug Administration has designated psilocybin as a “breakthrough therapy” but has not approved the use of the drug.

Recently, the New England Journal of Medicine released a new study showing that psilocybin can quickly and significantly reduce symptoms of treatment-resistant depression. Prior research from the nation’s top medical research universities including Johns Hopkins University, the University of California-San Francisco School of Medicine, and New York University have shown positive patient outcomes for depression and anxiety. Additionally, the Department of Veterans Affairs (VA) has started offering psychedelics to patients as a part of clinical trials.

With the Natural Medicine Health Act now officially Colorado state law, the governor has until January 31, 2023, to appoint 15 members to a new Natural Medicine Advisory Board, which will advise the state’s Department of Regulatory Agencies on implementing the measure. The board’s first recommendations are due by September 30, 2023. Recommendations on a facilitator training program for the medical use of psilocybin mandated by the measure are due on January 1, 2023. Regulated access to psilocybin should become available from authorized therapists by late 2024.

Kappel said that with the proclamation from Polis, implementation of Proposition 122 can now begin.

“Our goals include creating an accessible and balanced facilitator training system, an effective equity program, a first-of-its-kind ESG screen, and safe access to natural psychedelic therapies,” Kappel said. “In the meantime, adults in Colorado can begin to have more open and honest conversations about these medicines with their doctors. Adults who can benefit from these substances will finally be able to engage in psychedelic therapies without fear of arrest and prosecution.”

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New York’s legal marijuana store opens to big crowds, happy customers

Day one of legal weed sales in New York will go down in history. Leafly was there for the smoke.

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Lawmakers buy New York’s first legal weed products

Before customers lined up to buy at Housing Works, the regulators vowed an equitable industry, then tasted the fruits of their labor.

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Snoop Dogg Unveils Death Row Cannabis

Snoop Dogg announced today that Death Row Records—the legendary West Coast hip-hop platform featuring artists like Dr. Dre, Tupac Shakur, Nate Dogg, Tha Dogg Pound, and so on—is entering the cannabis game with Death Row Cannabis. 

What kind of strains can we expect? Death Row Cannabis will initially launch a trove of OG strains including Runtz, Strawberry Gary, and Tropicana Cookies. The first drop arrives in limited edition commemorative metallic bags featuring the iconic hooded prisoner figure seated in an electric chair on the front—the image found on the Death Row Records logo if you look closely. 

Specifically designed for the Death Row Cannabis drop, the new rendering of the prisoner was designed for the launch of the cannabis brand. The main difference between the new and old images is that the new one has one hand broken free and is smoking a fat doobie.

To do this drop, and considering competition, Snoop Dogg zeroed in on one of the top cultivators around.

Who’s Growing Death Row Cannabis?

The man who curates Death Row Cannabis is the one and only, mighty AK—“hand-selected by Snoop himself.” AK is best known for his role alongside former partner Wizard Trees in sprouting, selecting, and cultivating strains such as RS11 (aka Rainbow Sherbert #11), Studio 54, and Shirazi from breeder DEO Farms. (High Times Vice President of Content Jon Cappetta profiled the high-grade cannabis grown by Wizard Trees last August.)

AK is also behind the IYKYK brand SMKRS and he is also the esteemed Vice President of Cultivation for TRP LLC, the company that owns a majority of the Cookies stores across the nation including their facilities in Florida. AK has also developed a reputation for his knack for cultivating fire OG strains. 

Death Row Cannabis will first be available at select Cookies California stores throughout California in Brentwood, San Bernardino, and San Diego on Monday, January 2, 2023, with other locations and more states to follow. 

Follow Death Row Records and Death Row Cannabis on Instagram for more details about the initial drop. The accounts posted an animation of the Death Row Records logo and revealed a branded pre-roll tube. The teaser video was created by artist GUAP with a soundtrack by Kevin Gilliam, aka DJ Battlecat.

Snoop Dogg and Death Row

Under Snoop’s recent leadership after he acquired the label, Death Row Records is making a lucrative dive into cannabis. Snoop Dogg, under Death Row Records, praised the herb from the get-go, most obviously on albums like Dr. Dre’s The Chronic and The Chronic 2001, or nearly any Snoop Dogg record. (However, Snoop’s acquisition does not necessarily include all the familiar albums.)

At its peak, Death Row Records artists seemed larger than life and defined an era—including the West Coast G-funk sound that was often imitated but not duplicated. 

“For over 30 years, through countless chart topping hits and landmark artists, Death Row Records has stood as one of the music industry’s most iconic and culturally significant platforms,” the label said in a statement. “Today, it is under powerful new management. Recently acquired and under the direction of Snoop Dogg and his family, the infamous musical empire has reemerged as a multi-category cultural platform across music, entertainment, and cannabis, all united by the blockchain for a new generation.”

Ahead of the announcement of Death Row Cannabis, Snoop Dogg acquired Death Row Records on February 10. “It feels good to have ownership of the label I was part of at the beginning of my career,” Snoop Dogg said at the time. This represents Snoop Dogg’s next move with his new platform.

Stay tuned for more drops from Death Row Cannabis, soon to follow.

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Google Updates Policy To Allow Hemp, CBD Products with Certification

Google released an announcement this month that explains an update to its “Dangerous Products and Services and Healthcare and Medicines.” As of Jan. 20, 2023, cannabis advertising will be allowed, but currently only in California, Colorado, and Puerto Rico.

Specifically, this update pertains to U.S. Food and Drug Administration (FDA)-approved products that contain CBD, or topical, hemp-derived CBD products with 0.3% or less THC. “Certain formats, including YouTube Masthead, will not be eligible for serving. CBD will be removed from the Unapproved Pharmaceuticals and Supplements list. All ads promoting other CBD-based products, including supplements, food additives, and inhalants, continue to be disallowed,” Google states.

Google is partnering with LegitScript to create a certification program for non-ingestible CBD manufacturers. LegitScript CEO Scott Roth explained how the certification aims to create a standard for the cannabis industry. “When people see the LegitScript seal on your product or website, they know that you operate safely and transparently,” said Roth. “In an industry that is still seeing widespread problems with products that are tainted, substandard, or illegal, it’s more important than ever to give consumers confidence that the CBD products they’re purchasing have been properly vetted.”

LegitScript works with other payment service providers such as Visa, Google, Bing, and Facebook. “LegitScript Certification lets the world know which healthcare merchants, CBD products and websites, and drug and alcohol addiction treatment facilities operate safely and transparently,” the company states in a press release. “The result? Certified merchants can stand out from the crowd, grow their online presence, and demonstrate credibility in high-risk industries. LegitScript is the leading third-party certification expert in these tightly regulated and complex sectors.”

LegitScript will charge a fee for processing and monitoring applicants (although the company’s website says that fees are waived through March 31, 2023). Applicants may submit their websites for a LegitScript certification in order to advertise on Google. After LegitScript certifies a website, they will be given “information on demonstrating your certified status,” such as a LegitScript “Seal of Approval” that can be displayed on a certified website.

LegitScript’s starting fees per CBD product vary between $650 for one to five products, decreasing for brackets including $600 for six to 50 products, $550 for 51 to 99, and finally $500 for 100 or more. There is also an annual monitoring fee that ranges between $750 to $1,000 depending on the number of CBD products as well. Full websites require an $800 fee per website, with either a $1,600 annual fee per website, or $2,250 annually for a “probationary website” for websites with “a past history of significant compliance issues.”

This move is a step in the right direction for hemp products, although there is currently no mention of expanding this new update to other states yet.

In the past, there have been some negative interactions between Google and cannabis-related content. In 2016, one Minnesota-based medical cannabis company fought against Google for banning it from advertising online due to having “dangerous products or services.” That same year, Google saw a 75% increase in cannabis searches online, and allowed games about the War on Drugs to be promoted on Google Play. 

In 2017, Google Docs temporarily labeled documents, including those relating to cannabis, as inappropriate (although the event was considered to be due to a coding error and was promptly fixed).

In July 2019, Google announced that cannabis products would be banned from the app store, and during the height of the vaping epidemic later that year, Apple also removed all vaping-related apps from the iOS store.

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Connecticut Governor Selects Chairman of Social Equity Council

Connecticut’s adult-use law was packed with provisions to ensure an equitable industry, and now the state’s Social Equity Council has a new chairman.

Connecticut Governor Ned Lamont announced on Dec. 27 that he selected Paul O. Robertson, deputy commissioner of the Connecticut Department of Economic and Community Development (DECD), to serve as Chair of the state’s Social Equity Council.

The Social Equity Council seeks to ensure that Connecticut’s adult-use cannabis program is fairly represented, and ensure that funds from the adult-use cannabis program go to the right communities that are disproportionately hit hardest by the War on Drugs, according to the council’s Code of Ethics. Robertson’s new role begins when the seat becomes vacant at the beginning of next year.

“Connecticut’s adult-use cannabis program is at a pivotal time right now, and I appreciate the steps the Social Equity Council has taken to date to ensure that it is rolled out in an equitable manner as we envisioned when we enacted this law,” Governor Lamont said. “Paul will bring relevant experience and strong existing relationships with council members to his role as chair, and I thank him for agreeing to take on this leadership position.”

Deputy Commissioner Robertson succeeds Andréa Comer, deputy commissioner of the Connecticut Department of Consumer Protection (DCP), as chair of the Social Equity Council. 

Deputy Commissioner Comer plans to depart her job at DCP and her membership on the council to take upon a new role as chief of staff for Treasurer-elect Erick Russell. That new role will be filled when he takes the oath of office on January 4, 2023. Per state statutes, the governor must select one of the council’s members to serve as its new chair.

“I am grateful to Governor Lamont for entrusting me with this important role and I look forward to serving the state in this new capacity,” Deputy Commissioner Robertson said. “Deputy Commissioner Comer has done a tremendous job leading the Social Equity Council to this point, and I plan to continue to work alongside its members and our partner agencies to ensure the adult-use cannabis market grows equitably.”

The Purpose of the Social Equity Council

The enforcement of cannabis laws disproportionately targeted certain communities, and cannabis minority ownership remains low, leading many states to adopt social equity provisions to make an effort to fix some lingering issues. 

In Connecticut, the state’s census tracts identify Disproportionately Impacted Areas to promote and encourage the full participation in the cannabis industry by people from communities disproportionately harmed by cannabis prohibition. The recommended tracts are available to see on the Connecticut Open Data Portal.

To qualify as a Disproportionately Impacted Area, those communities must have either a historical conviction rate for drug-related offenses over one-tenth, or an unemployment rate over 10%, as determined annually by the Social Equity Council.

The council provides credentials for all of its council members. The council, under Connecticut’s adult-use cannabis law, Public Act 21-1, consists of 15 members—seven of whom are appointed by legislators, four of whom are appointed by the governor, and four of whom are ex-officio members.

Other efforts are being made to right the wrongs of yesterday, such as the expungement of thousands of records involving cannabis-related convictions. Earlier in the month, Gov. Ned Lamont’s office said in a press release that records “in approximately 44,000 cases will be fully or partially erased” next month by way of “an automated erasure method.”

Connecticut’s adult-use law contained provisions to award the first retail licenses to individuals from areas most adversely affected by long standing drug policies, and to clear the records of those with certain cannabis-related convictions.

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California Gov. Gavin Newsom Pardons 10, Some Cannabis Convictions

California Gov. Gavin Newsom announced 10 pardons on December 23, including at least two stemming from cannabis-related charges. Some of the charges are decades old, and one charge dates back to 1973. The list of pardons includes some of the ways people have changed their lives since the times of their convictions.

The governor recognized some of the systems in place that are “counterproductive” to public safety when you look at the big picture. Convictions can haunt a person’s life, leading to deportation, permanent family separation, or other consequences.

“The California Constitution gives the Governor the authority to grant pardons,” Gov. Newsom’s announcement reads. “The Governor regards clemency as an important part of the criminal justice system that can incentivize accountability and rehabilitation and increase public safety by removing counterproductive barriers to successful reentry. A pardon may also remove unjust collateral consequences of conviction, such as deportation and permanent family separation.

Pardons do not forgive or minimize the harm caused by crime. Instead, these pardons recognize the pardon grantees’ self-development and rehabilitation since then.”

In the announcement, the governor noted how victims of crimes were heavily considered in making these decisions. “The Governor’s Office encourages victims, survivors and witnesses to register with CDCR’s Office of Victim and Survivor Rights and Services to receive information about an incarcerated person’s status. The office also posted more general information about victim services.

The pardons include information on ways people have made changes. Some people on the list even went into substance abuse or other types of counseling. Below are the ten people who received pardons from the governor:

• John Berger, sentenced in 1995 for transporting a controlled substance. Berger now works to support others with their sobriety.
• Lucas Beltran Dominguez, sentenced in 2008 for transporting or selling cannabis and possession of cannabis for sale. Dominguez is now a father of seven and is an active member of his church.
• Michael Farrier, sentenced in 1990 for first degree burglary and second degree robbery.
• Kimberly Gregorio, sentenced in 1988 for possession of a controlled substance for sale and obstructing an officer.
• James King, III, sentenced in 1988 for the sale of cocaine. 
• Santiago Lopez, sentenced in 2000 for possession of cannabis for sale, in 2004 for possession of cannabis for sale, and in 2001 for possession of a controlled substance for sale and possession of cannabis for sale. Lopez is now a facility manager of his church and a peer counselor.
• Kenneth Lyerly, sentenced in 2004 for possession of a controlled substance for sale.
• Jimmy Platon, sentenced in 1973 for trespassing and in 1978 for possession of a controlled substance for sale.
• Julie Ruehle, sentenced in 1999 for two cases, one for possession of a controlled substance and the other for taking a vehicle without consent.
• Kathy Uetz, sentenced in 1991 for possession of a controlled substance and in 1997 for possession of a controlled substance for sale. Uetz volunteered over 5,000 hours with a community emergency response team.

To date, Gov. Newsom has granted a total of 140 pardons, 123 commutations, and 35 reprieves while in office.

Similar efforts are being made by the governor’s office. Gov. Newsom also signed a bill into law in September 2022 that will create the option for an alternate plea to individuals facing certain drug convictions. The “Alternate Plea Act” enables prosecutors to offer some defendants who have been charged with drug-related offenses a public nuisance plea. Under the law, prosecutors will be able to offer the public nuisance plea at their discretion.

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Cannabis Researchers Published 4,300 Scientific Papers in 2022

NORML recently announced that according to a PubMed.gov keyword search, there were more than 4,300 scientific research papers published about cannabis in 2022. In 2021, there were an estimated 4,200 papers published; over the last 12 years, more than 30,000 research papers have now been published; and in total, there are approximately 42,500 scientific papers exploring cannabis.

While it’s common to hear opponents of cannabis state that more research is necessary before legalization can occur, NORML Deputy Director Paul Armentano released a statement to counter that argument. “Despite claims by some that marijuana has yet to be subject to adequate scientific scrutiny, scientists’ interest in studying cannabis has increased exponentially in recent years, as has our understanding of the plant, its active constituents, their mechanisms of action, and their effects on both the user and upon society,” Armentano said. “It is time for politicians and others to stop assessing cannabis through the lens of ‘what we don’t know’ and instead start engaging in evidence-based discussions about marijuana and marijuana reform policies that are indicative of all that we do know.”

NORML compiled numerous scientific studies involving cannabis between 2000-2021, exploring findings from studies on a wide variety of medical conditions such as chronic pain, Huntington Disease, insomnia, Multiple Sclerosis, post-traumatic stress disorder, and so much more. The review analyzes the evolution of researcher’s scope of cannabis. “As clinical research into the therapeutic value of cannabinoids has proliferated so too has investigators’ understanding of cannabis’ remarkable capacity to combat disease,” NORML wrote. “Whereas researchers in the 1970s, ’80s, and ’90s primarily assessed marijuana’s ability to temporarily alleviate various disease symptoms—such as the nausea associated with cancer chemotherapy—scientists today are exploring the potential role of cannabinoids to modulate disease.”

Even recently, the scientific community has released many intriguing cannabis studies in recent months. One recent study published in the Journal of Sleep Research found that cannabis was an effective treatment for insomnia, with researchers stating that participants experienced an 80% increase in sleep quality, and 60% were no longer classified as clinical insomnias following the end of the two-week study. Another study found evidence that cannabis has “uniquely beneficial effects” on those with bipolar disorder, while one found a link between cannabis consumption and physical activity in HIV+ patients. And there are many more studies underway, such as King’s College London which recently launched a massive 6,000-person study in September, with a goal of publishing early results in 2023 or 2024.

Cannabis is more mainstream than it has ever been before. President Joe Biden’s recent monumental signing of the Medical Marijuana and Cannabidiol Research Expansion Act which “establishes a new registration process for conducting research on marijuana and for manufacturing marijuana products for research purposes and drug development.” Biden also signed an infrastructure bill in 2021, which contained provisions for cannabis. It states that in two years, the Attorney General and Secretary of Health and Human Services must submit a report that addresses how researchers can receive increased samples of various strains, establishing a “national clearinghouse” that will help researchers better distribute cannabis products for research, and an increased amount of samples for researchers who don’t live in states with medical or adult-use cannabis legalization. 

On the side, studies exploring the benefits of other psychedelic substances are also rising. One study in the journal Psychopharmacology found evidence that psilocybin can treat those with autism spectrum disorder. The University College of London released the results of a recent study as well, which analyzed brain imaging of consumers who attended psychedelic retreats. Another from the University of Melbourne explored how ayahuasca benefits outweigh the risks.

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Washington, D.C. Passes Bill To Expand Medical Weed Sales

Local lawmakers in Washington, D.C. last week passed legislation to expand medical marijuana sales, giving the city’s popular but unlicensed weed gifting shops a path to the regulated market. The bill, which was approved by the D.C. district council on December 20, comes after Congress included an existing prohibition on regulated adult-use cannabis sales in the nation’s capital as part of a spending bill approved last week.

The bill significantly expands Washington, D.C.’s medical marijuana program, lifting a cap on dispensaries and increasing the number of authorized cultivation facilities. The legislation also creates licenses for new types of cannabis businesses, including marijuana delivery services, online sales, educational programs such as cooking classes, and cannabis consumption areas at dispensaries. Half of the new licenses will be reserved for social equity applicants, which are defined as D.C. residents who have a low income, have spent time in prison, or are related to someone who was incarcerated for a cannabis or drug-related offense.

Bill Addresses D.C.’s Weed Gifting Shops

The legislation is designed to address the vast unregulated market for cannabis in Washington, D.C., where medical marijuana was legalized by local lawmakers in 2010. In 2014, voters approved Initiative 71, a ballot measure to legalize recreational marijuana. Under the measure, adults can possess up to two ounces of marijuana, are permitted to grow cannabis at home, and may gift up to one ounce of weed to another adult. However, Congress, which has control over the Washington, D.C. budget, has refused to allow the city to spend money on regulating recreational marijuana sales.

The situation has led to dozens of businesses that take advantage of the gifting provision of I-71 to distribute cannabis openly from storefront businesses. Under the common scheme, businesses sell benign merchandise such as apparel or art, offering what is ostensibly a free gift of marijuana with the purchase. Phil Mendelson, the Chairman of the Council of the District of Columbia, estimates the unregulated marijuana market in the nation’s capital is worth as much as $600 million per year. 

“There’s always going to be an advantage to unlicensed and unregulated: they don’t have to pay taxes, they don’t have to ensure quality,” Mendelson said in an interview with DCist/WAMU. “Congress is aiding and abetting that by prohibiting us from regulating that. It’s a real public safety problem,” he said.

Patients Can Self-Certify To Use Medical Marijuana

The legislation passed last week also makes permanent an emergency measure passed earlier this year that allows adults to certify their own eligibility to use medical marijuana, eliminating a previous provision that required certification by a licensed physician. At the time, Mendelson and some members also attempted to enact prohibitions on the gifting industry but faced opposition from a group of business owners. Legalizing the shops so they could be regulated was not possible under the congressional ban, making allowing gifting businesses a path to the medical marijuana market an option popular with a majority of the district council.

“It’s going to allow the District to be a lot healthier on the cannabis side,” Terrence White, chairman of a group known as the i-71 Committee and a gifting shop owner, told the Washington Post. “It’s going to allow us to be doing it ‘right,’ as I call it.”

The bill passed by the council last week gives existing operators 90 days to apply for a medical marijuana retailer license and prevents enforcement against gifting shops for at least 315 days after the legislation goes into effect. David Grosso, a former council member and current lobbyist for the D.C. Cannabis Trade Association, a group representing licensed medical marijuana operators, said that the bill is a positive development for the industry.

“We certainly would like to see a level playing field across the board, and that hasn’t been the case for as long as the [Initiative 71] folks have been operating illegally. And so we’re hopeful that this effort will bring them into the legal market and then treat them equally with us,” said Grosso. “And that means all the regulations that come with it, the fees that you have to pay, the inspections you have to endure, all of the restrictions around where you can locate, and everything like that which the current legal market has had to deal with now for more than ten years, which is a huge burden on us.”

Norbert Pickett, the owner of Cannabliss, one of the seven licensed medical dispensaries located in the nation’s capital, agreed, saying that the legislation is an opportunity to expand Washington, D.C.’s medical marijuana market and provide new options for patients.

“It gives patients more access to safe and tested cannabis,” he said. “It unifies unregulated market and the legal market. For me, that’s a win.”

Mackenzie Mann, project manager for the gifting industry trade group Generational Equity Movement, said that the legislation from the district council is a drastic change for Washington, D.C.’s cannabis landscape.

“It’s surreal,” Mann said. “A year ago, they were trying to shut us down.”

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USPTO’s Abuse of the “Lawful Use” Trademark Registration Standard

Lawful use in commerce is a requirement for a trademark to be registered in the United States. For cannabis brands, this means that the United States Patent and Trademark Office (USPTO) will not register trademarks used in connection with products that are illegal under federal law, most notably marijuana. However, USPTO’s problematic approach to lawful use when it comes to cannabis goods and services is leading to the denial of applications that describe perfectly legal products.

Arguably, USPTO should not be denying any trademark applications on the basis of noncompliance with any laws other than the Trademark Act (also known as the Lanham Act), which governs trademark registration at the federal level in the United States. Nonetheless, there is a certain logic behind the agency’s refusal to register trademarks that describe marijuana, which is a schedule I controlled substance. In general terms, a court will not enforce a contract that requires a party to commit a crime in its jurisdiction. To do so would make the court an enabler of illegal activity. By the same token, facilitating commerce in marijuana, by providing a party engaged in such commerce a particular legal protection, seems at odds with the Controlled Substances Act’s prohibition on marijuana.

Things get somewhat murky when we turn to USPTO’s refusal to register trademarks that describe certain hemp CBD products. While there are some black-and-white prohibitions under the Federal Food, Drug, and Cosmetic Act (FDCA), there is also a lot of gray. For instance, it may not be clear if a product is a “drug” under the FDCA. In fact, the same product could be subject to different treatment by the Food and Drug Administration (FDA) depending on how it is marketed. There may be a genuine question as to whether a product is lawful or not. These regulatory ambiguities are part of the landscape that cannabis brands must navigate and brands may need to pull off delicate balancing acts. Under those circumstances, it is improper for USPTO to create legal facts on the ground through its decisions on trademark applications, particularly given its lack of expertise on public health matters.

Where things get very troubling is when it comes to products whose legality no one questions, such as lighters and rolling papers, but which USPTO will scrutinize when cannabis brands apply for trademark registration. It is a fool’s errand to attempt to classify these items on the basis of their use, not least because multiple uses are a very real possibility. A lighter can be used by a consumer to light tobacco cigarettes, joints, candles, and ex lovers’ letters. Yet USPTO nonetheless insists on requiring trademark applicants to make such distinctions, by adding restrictive terms (such as “cigarette” to “rolling papers”) or issuing broad disclaimers that the goods in question will not be use with naughty products.

This is problematic on many levels, not least of which is the discriminatory treatment being meted out to cannabis brands. For just one illustration, the International Air Traffic Association acknowledges that airlines are used by human traffickers to advance their criminal objectives. Why then is USPTO not requiring that disclaimers be added to service descriptions such as “airline transportation services”, making it clear that trademark protection will not extend to such services when they are rendered to human traffickers and their victims? Because that would be silly, not least because adding such a disclaimer will not move the needle one bit when it comes to the urgent task of combatting human trafficking.

Leaving aside the grave issue of discriminatory treatment against cannabis businesses, USPTO is undermining its own function as administrator of the trademark registers by requiring these pointless disclaimers and restrictions. After all, goods and services descriptions should be, above all, accurate. It may make USPTO feel its doing its part in the war on drugs by requiring a brand that offers grinders to describe them as “tobacco grinders”. The thing is, though, most likely the products are not “tobacco grinders”. They are probably grinders that can be used to grind tobacco, hemp, legal smoking herbs, and, yes, marijuana.

It is one thing to refuse trademark protection in connection with illegal goods. However, is a very different, and rather absurd, thing to refuse trademark registration to products that may be used for illicit purposes. After all, pretty much any good or service that can described ion a trademark application can be used for illicit purposes. Sunglasses? A thief can use them to conceal his or her identity. Lawn care? Great front for money laundering.

Moreover, these restrictive descriptions may hinder a brand’s ability to extend its protective scope to perfectly legal products. By making brands describe a product as “tobacco” this or that, they are forced to exclude other possible, legal uses. As discussed before, it is not just a grinder that can be used with tobacco; it can also be used with hemp and other legal smokable products. Well, USPTO might counter, then you can just list out “hemp grinders” and “legal smoking herb grinders”. Yet a better approach is to just let brands describe their products as “grinders”, and if someone uses one of those grinders to grind marijuana, so be it.

As we have said many times before, USPTO has no problem with the idea that a product in connection to which a registered trademark is used may in some instances be used for illicit purposes. It seems that the only time there is a problem is when it is a cannabis brand that applies for trademark registration. Cannabis brands, by the way, that may not be selling anything considered a controlled substance under federal law. And even when the trademark registration that is being applied for is in connection to innocuous products such as lighters.

Ultimately, one cannot help but conclude that the discriminatory treatment being meted out to cannabis brands by USPTO amounts to a crusade against an entire industry. Presumably, the cannabis industry is so pernicious that it cannot even be allowed to earn money by selling lighters and rolling paper. We call on USPTO to end this abuse of the lawful use requirement.

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28 grams of game: Budega NYC’s Alex Norman

Alex Norman followed his instincts, and the lyrics of New York rap greats, to success in various fields. His legacy-to-legal cannabis journey now lives on for those hoping to take a similar path.

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Leafly’s most loved strains and weed products of 2022

Leafly Staff lives and breathes strains and products. Find out which ones were our favorites in 2022, and make sure to grab them in 2023!

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New Jersey Announces New Cannabis Social Equity Grant Program

The New Jersey Economic Development Authority (NJEDA) last week announced the creation of a grant program to help small businesses with the costs associated with launching an enterprise in the state’s regulated cannabis industry. Known as the Cannabis Equity Grant Program, the new initiative will distribute up to $10 million in grants, with the majority earmarked for social equity applicants.

The new grant program was approved by a unanimous vote by the NJEDA board at its monthly meeting last week. In a statement, New Jersey Governor Phil Murphy said the grants will help level the playing field for entrepreneurs from underserved communities to participate in the new economy for recreational marijuana, which was legalized following the passage of a statewide referendum in 2020.

“My Administration is doubling its efforts to cultivate small businesses in burgeoning industries with massive untapped potential,” said Murphy. “The establishment of the Cannabis Equity Grant Program will help aspiring small business owners meet start-up expenses in a pivotal sector within our state’s ever-growing economy. Most importantly, the program will erode considerable barriers to access for communities of color, which this program will help to equip with the resources they need to not just enter, but thrive, in this exciting new industry.”

The program authorizes up to $10 million in grants to small businesses, including $6 million reserved for cannabis social equity applicants, such as those with past convictions for cannabis-related offenses and residents of economically disadvantaged areas. The pilot grant program was authorized by legislation sponsored by Senate President Nicholas Scutari and Assembly Budget Committee Chairwoman Eliana Pintor Marin and signed into law by Murphy in June.

“This program can have a positive impact by supporting diversity in New Jersey’s cannabis industry during its formative stages,” Scutari said in a statement. “As the market continues its successful growth, these grants will help provide more opportunities to a greater number of operators in a larger number of communities to participate.” 

$6 Million For Social Equity Applicants

Up to $6 million in grants will be awarded to businesses granted conditional operating licenses from the state’s Cannabis Regulatory Commission (CRC) that are located in economically disadvantaged areas and plan to hire 50 or fewer employees. The grants of up to $250,000 can be used by businesses formed after March 2020 in designated impact zones to help cover the start-up costs of launching a licensed cannabis company, including rent, utilities, wages, and regulatory fees. 

“The Governor and Legislature made a commitment that the cannabis market would be accessible to women and minority entrepreneurs,” said Assemblywoman Verlina Reynolds-Jackson. “The cannabis market is meant to be a boon for equity, but we are finding that for some people the cost of entry is too high. It is our hope that this grant program will help to begin leveling the playing field. We want to ensure that those most impacted by the war on drugs and our underserved communities have the opportunity to be a part of the process.”

The impact zones are defined by the CRC as areas with zip codes that meet specified socioeconomic criteria including poverty and unemployment levels and were heavily impacted by arrests for marijuana offenses. Entrepreneurs awarded the grants will also participate in technical assistance and business education courses provided by the NJEDA. Businesses located in impact zones that apply for the grants can have the $1,000 application fee waived.

“Part of the impetus for passing legislation for legalization was recognition that the prohibition of cannabis has, for decades, disproportionately and negatively affected young people in Black and Latino communities,” said Senator Nellie Pou. “As Chair of the Legislative Latino Caucus, I am heartened to see NJEDA launch this Cannabis Equity Grant Program to help financially with start-up costs for new businesses in those very communities that have been so adversely affected. This is one more important piece of the social equity contract that remains at the heart of cannabis legalization in New Jersey.”

The remaining $4 million in grant funding will be made available to all business entities that have secured a site for the enterprise and been awarded municipal approval, which are both requirements that must be met to apply for an annual license from the CRC. The application window for the grants will be open for 180 days following the launch of the program, according to state officials.

“We realize how important it is to empower cannabis businesses, many of which have faced barriers to accessing financial capital in the past,” said NJEDA Chief Community Development Officer Tai Cooper. “Communities that suffered unfairly during the criminalization of cannabis need the chance to benefit from new entrepreneurial opportunities created by cannabis legalization and regulated sales. We want to see these opportunities extended to those businesses that will help fill storefronts, warehouses, and other commercial properties that closed their doors during the pandemic and bring new jobs to communities where there is the greatest need.”

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Moneybagg Yo, Gumbo Shut Down Miami for ‘Shot Off’ Launch

In the month of December, brands usually choose to activate during the highly popular Art Basel week in Miami. But the hottest cannabis buzzing in the street right now, Gumbo Brands, and chart-topping hip-hop artist Moneybagg Yo, waited for the dust to settle to celebrate the announcement of their partnership for Bagg’s new Gumbo strain “Shot Off Gumbo.” In a more intimate affair, they shut down the Black-owned restaurant, Playa Miami, for about 50 guests including a few celebrity friends of the brand, Caresha of The City Girls, Amber Rose, N.O.R.E. Moneybagg Yo, label mates, tastemakers, media, and the Founders of the Gumbo Brands Karim Butler and Alexis Major themselves. 

The amount of dripped-out ice in the room for such a small amount of guests was astonishingly mind-boggling. Wall-to-wall bling-off! If you’ve never been to a Gumbo event, let me warn you, they like to do everything big for the culture. The drinks were flowing with a full open bar… definitely shots of 1942 were being passed frivolously around the tables. The food was incredibly amazing. I suggest anyone in the Miami Beach area or planning to visit to make a reservation immediately… highly recommend the mouth-watering lamb chops, calamari bites and the yummy mac & cheese. Thank me later! The vibe and the networking was on one thousand, especially with DJ Wrecky who totally kept the hype going while mixing in a healthy amount of Bagg’s hottest hits all night. By the end of the event no one wanted to leave, they literally had to turn the lights on. Every guest was gifted the signature Gumbo pens and plenty of gas to go around. 

Courtesy of Gumbo

Not only did Gumbo show Moneybagg Yo major love at the announcement dinner, but they also gifted him a 150 carat chain with VS diamonds and a 90 carat VS diamond watch, which is one of 18 in the world, from Pristine jewelers. The Black-owned cannabis and lifestyle brand has been buzzing like crazy in the streets, especially gaining more attention with their collaborations with today’s hottest in entertainment including Meek Mill, Lil Meech, N.O.R.E., Fabolous, and brand sponsor for viral podcast, Drink Champs. 

The “Shot Off Gumbo” strain will be a Hybrid with an earthy sweet pine undertone and euphoric and stoney experience under the Gumbo Brands Umbrella.

Courtesy of Gumbo

Gumbo Brands is a revolutionary new cannabis and lifestyle company, founded by the Black-owned entrepreneurial power-couple, Karim Butler and Alexis Major. Unlike some of the corporate brands that swoop in and try to take advantage of cultural equity in this industry, Gumbo Brands’ major focus is making a difference, building wealth, and sharing knowledge within the Black and Brown communities. Black ownership accounts for only 4.3% of all cannabis businesses. This couple is breaking down that barrier by bringing more people within the community into the cannabis business and giving them the resources and career opportunities to succeed. Gumbo Brands is utilizing creative cultural initiatives in this space to encourage entrepreneurship while also supporting racial justice outcomes and inclusion, including working with the formerly incarcerated to gain licenses, who oftentimes don’t have the financial means or proper information to secure one. 

Gumbo is currently a leading brand in the cannabis space and sold at top dispensaries across the nation, and on its way to global expansion with their products, which includes flower, G-pens, exclusive merch, and lifestyle products. They recently announced a partnership with the global empire Cookies that will give the brand access to 22 states and 15 countries as the cannabis takeover grows within legalized areas of the world. If you’re looking to get your hands on some of this new cannabis strain, be sure to check out www.thegumboshop.com.

Courtesy of Gumbo

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New York’s Adult-Use Cannabis Rules and Regulations: The Series

Way back in Spring of 2021, we ran a series on the New York’s Marijuana Regulation and Taxation Act, which legalized adult-use cannabis in New York and established the framework for adult-use cannabis licensing. That series of posts covered everything from the available license types to the MRTA’s real estate requirements.

In keeping with our recent tradition, this post will start our series of posts on New York’s adult-use cannabis rules and regulation. The official document is 282 pages, so we won’t cover every detail. But we will highlight the big-ticket items, significant issues that all applicants should be aware of, and the license application process as a whole.

For anyone considering applying for an adult-use license, we reiterate our recommendation of hiring an experienced cannabis attorney. And at a minimum, understanding the overall framework of the licenses and the licensing process should be a precursor an in-depth consultation on a license application. Here are the topics you can look forward to:

• The License Application
• Cultivation Licenses
• Processing Licenses
• Distribution Licenses
• Retail Dispensaries and On-Site Consumption Licenses
• Microbusiness Licenses
• The Social Equity Program

Given the complexity of the regulations, there may be some overlap and some deviations. We’ll also be diving into the nuances in the regulations in our promised series of webinars starting in January of 2023 (details to come!).

As all of our readers are aware (we assume), on November 21, 2022, the Cannabis Control Board (CCB) released almost all of the adult-use rules and regulations. The rules and regulations were published in the New York State Register on December 13, 2022, starting a 60-day public comment period.

Playing out the timelines (and as we’ve noted), we anticipate the license application window to open in the Spring of 2023. Which means now is the time to start actually putting together the information for a license application. Stay tuned for the next post in our series on New York’s adult-use cannabis rules and regulations, and for updates on upcoming webinars!

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Detroit Awards First Recreational Dispensary Licenses

Detroit officials on Thursday issued nearly three dozen licenses for retail adult-use cannabis shops, more than four years after Michigan voters approved a measure to legalize recreational marijuana in the state.

The licenses were issued after U.S. District Court Judge Bernard Friedman on Wednesday morning denied a request to postpone the issuing of cannabis retailer licenses. The judge’s decision was made in a lawsuit challenging Detroit’s licensing regulations, which include provisions to encourage ownership in the regulated marijuana industry by local residents and those harmed by decades of marijuana prohibition.

“Our goal from the day voters approved the sale of adult-use marijuana was to make sure we had a city ordinance and a process in place that provides fair and equitable access to these licenses and the courts have affirmed that we’ve done just that,” Detroit Mayor Mike Duggan said in a statement on Thursday.

Recreational Pot Legalized In Michigan In 2018

Following the approval of a 2018 statewide ballot measure to legalize adult-use cannabis, licensed sales of recreational marijuana began in some Michigan cities in December 2019. An ordinance to regulate adult-use cannabis sales was passed in Detroit last year, but legal challenges led a federal judge to rule that the measure was “likely unconstitutional.” 

An amended ordinance was subsequently unveiled by the city council in February. A lawsuit was filed again, with plaintiffs arguing that the city’s cannabis ordinance unfairly favored longtime residents. The Plaintiffs in the case had asked Friedman to pause the licensing process while the case was decided, but the judge denied that request on Wednesday.

“I am thankful for Judge Friedman’s wisdom in ruling today against the Temporary Restraining Order that would have again prevented Detroit from moving forward with our current Adult-Use Marijuana Ordinance,” Council President Pro-Tem James Tate said about the judge’s decision.

“We make sure we do the right thing,” Tate, who led the drafting of the ordinance, said at a press conference Thursday morning. “I’ve always said — and I’ve been told — if you do the right thing, everything will work out. It may not happen exactly when you want it to or not always how you want it to, but eventually, it’ll work out.”

The city issued a total of 33 licenses for adult-use cannabis retailers on Thursday. Twenty of the licenses were issued to so-called social equity applicants, including people who live in communities that have been disproportionately impacted by marijuana prohibition policies and those with certified Detroit legacy status who currently live in Detroit or another disproportionately impacted community. The remaining 13 licenses for cannabis retailers issued on Thursday were awarded to non-equity businesses.

A total of 90 applications were received by the city for the 60 adult-use cannabis retailer licenses available in the first round of dispensary licensing, but city officials said that only 33 of the applicants met the requirements for the highly coveted permits. The city also received several licenses for cannabis microbusinesses and consumption lounges, but regulators have not yet issued those types of licenses. Detroit regulators began issuing licenses for cannabis growers and processors in April. 

“The recreational marijuana industry has tremendous potential to generate wealth in income for our city, as well as personal and generational wealth for those who participate,” said Detroit Deputy Mayor Todd Bettison.

City leaders plan to hold at least two more rounds of retail cannabis dispensary licensing, with the next round opening as soon as next month with city council approval, according to Anthony Zander, director of Detroit’s Department of Civil Rights, Inclusion and Opportunity. The city will award up to 30 additional retail licenses, 20 microbusiness licenses and 20 consumption lounge licenses in the next round.

Although the federal judge decided against putting a halt to issuing the first adult-use dispensary licenses, Tate said the city should be prepared for more legal action.

“By no means is the so-called battle over,” he said. “We’ve already been told that we’re going to get sued again. We know that’s the nature of this game.”

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Stop Sending Me Weed Through the Mail

Only, unlike the rest of those shackled in servitude, I’d venture to say that my job probably doesn’t suck nearly as bad. I am a freelance writer, the smut and weed correspondent for various national publications across the country, including this one. There’s no one at the office where I work to hassle me if I show up late, walk around without pants or use the crapper eight times before 9 am. In other words, I am the king of the castle. This also means that I am fully responsible for the whole damn kingdom: Rent, bills, and any legal matters that may come up, that’s all on me, pal. Nobody is going to swoop in and save the day if I happen to get caught in a jam. 

Don’t get me wrong, though. There are plenty of perks to the job. Free weed is one of them. Public relations agencies are always sending me the latest, greatest pot products in hopes that I’ll give them a rave review. I get a slew of packages every week. It’s like Christmas all year round. Sometimes it’s a brand-spanking new, expensive smoking device—not yet released to the public—other times it’s CBD, and often enough it’s marijuana. While this might seem like a pretty sweet deal to most people, all of this complimentary cannabis can actually cause a bit of a problem on my end. For starters, I live in the prohibition state of Indiana—getting caught with a small amount can lead to thousands of dollars in fines and jail time. It’s also a federal drug offense to get cannabis through the U.S. mail, a felony, so Uncle Sam could bend me over big time. 

But when I sat down at my desk last Thursday morning, I didn’t anticipate any such trouble. With the holidays rapidly approaching, my only concern was getting all my assignments turned in before my editors shut down their emails and took the rest of the year off. So, without a moment to waste, I sucked back a lethal dose of caffeine and started typing.

As with most writers, I tend to get distracted. In between thoughts, I sometimes jump on social media and see what’s going on in the world. One of the pages I follow is this independent news watchdog based in my hometown that monitors local scanner traffic and reports incidents in real time. It’s usually a lot of “shots fired,” crackheads taking dumps in public, and unruly McDonald’s customers, that sort of thing. It’s more entertainment than news. But as I scanned the page, something interesting caught my attention. The most recent post reported that the local police department was en route to FedEx to investigate a package containing marijuana. At first, I didn’t think anything of it, other than “Oh man, somebody is in deep shit.” But then, it hit me. 

What if the person the package was addressed to was me! 

“Yikes,” I thought, sending the link over to my significant other to gauge her reaction. 

“Is it possible they’re coming for me?” I asked. 

“Yes,” she replied. “Definitely.” 

It was conceivable that I was the one in deep shit.

The situation, as most of you might imagine, had me on high alert. If police showed up at my office waving a search warrant around, I was inevitably going to jail, and fast. There’s enough weed in this place (from all of those public relations packages) to get me jammed up in the criminal courts for a long time. Let’s see, there’s flower, concentrates, edibles, you name it; it’s in my possession. I could start a small dispensary if this writing gig doesn’t pan out. Those bastard cops would storm in here on a mission to find pot and pot they would find. I’d be sitting in a police cruiser within five minutes of answering the door, en route to the Vanderburgh County jail to spend a very long weekend camping out with petty miscreants and alleged murders. I’d have to make up some ridiculous story, too, on why I was arrested to keep the ruffians from trying to steal my blanket. Considering all the violence and madness that has erupted lately in the United States, pot offenses just aren’t respected in the slammer like the old days. 

I’d surely be fighting in a cell, in court come Monday and probably for years to come as I paid steep fines, enduring drug classes and everything else the system would put me through to teach me a lesson. My anxiety was through the roof. I mean, I’ve been to jail enough times to know that it’s no place for me. So, the thought of police standing around a FedEx warehouse looking down at a package containing marijuana with the name MIKE ADAMS branded as the recipient, marked with an address that would lead them straight to me, did not give me an easy feeling. The jig was up. I always knew there’d come a time when I’d either have to flee the country or kill myself to escape one of the buried indiscretions of my past. I just didn’t think that day would come so soon. What should I do? What would I do? I was, as far as I could tell, a sitting duck. 

But I wasn’t going to just sit around and wait for the cops to show up and have their way with me. I’d been there before. I knew if they did in fact discover a package of marijuana at the FedEx with my name on it, a search warrant would take time. I just wasn’t sure how much convincing a judge would need to sign off on it. Working in my favor was the fact that the cops didn’t know that I knew they were onto me. I had been tipped off. So, for an indeterminate amount of time, I still had the upper hand. With that in mind, I was going to make sure that if those fuckers came a knocking, they were going to have to work damn hard to bust me. I had time to dig myself out of a hole that a dimwitted public relations agent had tossed me in. It wasn’t like I was getting any work done anyway. Although I typically don’t suffer from writer’s block, it has a way of striking when all you can ponder is that a convoy of police cars and SWAT trucks are hauling ass toward you with loaded weapons. Thinking they might just kick down the door when they arrived, I quit writing and did my darndest to formulate a plan to avoid being detained. 

Cue the Mission Impossible theme song, now! 

I packed up all the pot in the office into a large box and began to think about all the places I could hide it. My office is in a building with several other companies. So, while I considered stashing it in the utility closet down the hall, that probably wasn’t the best option. The cleaning lady could find it and either claim it for herself or call the cops. I couldn’t risk luring them any closer than they already were. I even thought about pushing away the tiles in the ceiling somewhere in the building and storing the box up there. But that was probably one of the first places the cops would look. And if they got the dogs involved, I was screwed no matter what. They’d be howling like they just reached Pablo Escobar’s house as soon as they pulled up in the parking lot. Nope, if I was going to survive the day, that is avoid arrest, stay out of jail and make it home for dinner, getting the weed as far away from my office as possible was the only way to go. 

I moved on to phase two of Operation: Deep Shit. 

I tossed the box in the trunk of my car, but not without first scanning the parking lot to make sure police didn’t have me under surveillance. I then peeled out of there, on a hell-or-highwater quest to take back the freedom that had presumably been ripped from me. My plan was a simple one. Park along the side of the road near my house—a mile away from my office—walk back and play dumb. That way when the cops showed up flashing a search warrant, I wouldn’t have a panic attack and they wouldn’t find jack shit. But I had to get it there first. My nerves were already rattled, so I, as much as I tried not to, was driving like someone with something to hide. 

If I passed a cop, the look in my eyes was going to tell him that I either had a body in the trunk or was traveling with a big old box of pot. All of my attempts to act casual were failing miserably. I stopped twice at a green light; used the wrong turn signal to go left; drove slower than the elderly, and even swerved like I had just left the bar drunk to avoid hitting a squirrel. Nope, I would never make it as a drug smuggler. I did, however, make it to my destination. I seriously considered lighting the car on fire before hoofing it back to the office, but I thought that may be a bit overkill. I didn’t need an arson charge on top of the one I was going to get for drug trafficking. Of course, on the walk back to my impending doom, my mind was spinning. I was overwhelmed with all of the possible scenarios that could arise even though I was a step ahead.

The cops were probably going to inquire as to the whereabouts of my car. They would surely want my home address too. If they came up empty handed at the office—and they were going to—their next move, aside from bending me over the desk and strapping on some latex gloves to see if my colon contained any weed or weapons, might be to raid the house. Cops hate to fail and if there’s any chance they can spend the day busting someone for a drug-related offense rather than dangerous, violent criminals, that’s what they’ll do. What was going to prove problematic for them was the search warrant. It would only be for my office address. They’d have to get another one with the location of my home on it, if they had any intention of ripping apart my underwear drawer. That was a detail I would just have to deal with when the time came.   

For the moment, I took solace in knowing that there wouldn’t be any illegal substances in my office if and when the cops started poking around. Still, all the time I was running around town trying to avoid getting locked up, I couldn’t help but think, why am I the one out here trying to throw the police off my trail like Joe Pesci in Casino, when these public relations firms are the ones responsible for sending me weed? Why was I suddenly at risk of jail when these companies put the weed in the mail? The cops were gunning for the wrong guy. I was innocent! Rather than continue wallowing in paranoia, I decided to pick up the phone and call cannabis law attorney Aaron Pelley with Seattle-based firm Cultivia Law. Aaron’s been getting real-deal cannabis outlaws out of trouble for years. If anyone was going to help stop the cops from crawling up my sphincter, it was him. His advice: If the postmaster calls, or if the cops show up at the office door, don’t say a word. As long as the sender or recipient doesn’t fess up, they have no case.

“They can’t do anything or prove anything if you don’t fucking talk,” Pelley told me. “So, all you have to do is shut up. It’s not a complicated situation because they can’t prove that you knew or should have known cannabis was coming to you. There’s been some situations where they’ve put cameras in the package so they can see the person open it. So fucking what? I don’t know where people get the idea that that would somehow implicate that you knew or should have known cannabis was being shipped. I suppose after you open it, if you say ‘awesome, they sent me the weed I asked for,’ but none of that ever actually happens. I’ve had people shipping basketball sized amounts of weed and getting it intercepted. And as long as everybody didn’t respond to anyone, including the senders, nothing ever happened. They can’t necessarily prove the sender sent it and they don’t want to go through the trouble of pulling video footage for prosecutors.”

Although sending and receiving weed through the mail is a federal offense, Pelley says Uncle Sam rarely gets involved. He’s only known one incident where they sent in the hounds, and it was for a four-foot-tall pallet of weed. As for the local cops looking to get a pot bust, “nobody is home,” Pelley asserts. “Local cops want headlines. But it’s a federal crime that has mandatory minimums. Prison time,” he continued. “That said, if people don’t respond to the communications (from the postmaster or the police), the burden of proof is quite heavy, and the interest is quite low.”

For the next two days, I still remained a little paranoid. Those bastards were going to show up any moment and at least try to give me that cannabis colonoscopy, I just knew it. It wasn’t until the following Sunday that I stumbled across a news article from one of my local television stations showing that $180,000 worth of marijuana (90 pounds) was found in my hometown. It had been shipped from California to Evansville, and a woman named Hua Hou was in custody. It was her, not me they were after. They got their headline. After being scared shitless for days, I found some semblance of relief knowing that someone else other than me was shacking up with blanket-thieving felons. But if what Pelley said was true, I began to ponder, and the interest is low, why was this woman arrested? “Ninety pounds is a lot of weed,” he said. “I suspect that she picked up the packages and got busted, and then she probably sung,” Pelley added, saying that she would have had a leg to stand on if she had just lawyered up and stayed quiet.

Point blank, police need someone to talk. 

“Even if it’s true that you didn’t have any idea that weed was coming, you don’t have control of the narrative,” Pelley explained. “The cop can write down anything he wants. If the only thing a cop can write down is that they exercised their right to remain silent and asked for an attorney, they’ll have to figure out their evidence from there. As soon as you shut up, their job becomes infinitely harder to prove or say that you had something to do with it. But it gets a lot easier as soon as you start talking.”

As for me, I wasn’t saying shit!

Still, I felt I was deserving of restitution for pain and suffering. Perhaps the public relations firms owed me a stack of cash for nearly becoming the scapegoat for their dipshitery. The whole affair must have sawed five years off my life. I now have PTSD: Postal Traumatic Stress Disorder. I’ll have to ask Aaron about a lawsuit. So, please, for the last time, stop sending me pot through the mail (wink, wink, nudge, nudge). And if you do—again, don’t—make it a reasonable amount.

“They’re not looking for one ounce of weed,” Pelley demands.

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Oregon Cannabis: State of the State

Welcome to the seventh annual “State of the State” post on Oregon cannabis. For the first year since program launch, regulated cannabis sales fell in the state. We also saw significant legislative and regulatory changes, further contraction of the hemp industry and a myriad of interesting odds and ends. Overall, it has been a rocky ride (see: Tough Times in Oregon Cannabis). Let’s get to it.

Sales and prices fell

Last year at this time, I observed that sales had begun to decline, notwithstanding the record high of $1.184 billion that Oregon clocked in 2021. For 2022, based on Oregon Liquor and Cannabis Commission (OLCC) sales data through November, we are projected to land slightly under $1 billion. Pandemic and stimulus tailwinds are well in the rearview: it seems that near-term growth may be limited to select SKUs and product categories. Today, about half of all sales are flower, followed by: 25% in concentrate/extract; 13% edible/tincture; 5% inhalable; then “miscellaneous” categories.

In addition to decreased volume, prices are through the floor. We have been sitting at a median of $600 per wholesale per pound for the past few months. That’s a big dip from $900 per wholesale pound in December 2021. A sizable pullback in the recent “Croptober” harvest hasn’t made a discernable pricing impact yet (Oregon went from 4.4 million wet pounds harvested in 2021, to just 3.1 million this year per OLCC).

Overall, wholesale pricing today is as low as we’ve seen in the regulated market, including at the nadir following the crash of 2018. The pain isn’t limited to flower: in the extract/concentrate category, we sit at $4,356 median wholesale per pound as of November 30; that’s down from $4,990 in November of 2021. Retail pricing has generally followed these trendlines.

It may be no consolation, but what we’re seeing today in Oregon is endemic to regulated cannabis jurisdictions nationwide. Other than pain points arising directly from federal illegality (e.g. financial services headaches; tax burden), problems include: oversupply, unregulated competition, a generalized lack of consumer responsiveness to lower pricing, and even macroeconomic factors like higher gas prices. All of that said, it could always be worse. see Colorado.

There is a silver of hope. Economists predict that even without the possibility of usage-rate growth, sales will increase as Oregon’s population, income and spending grow. Also, existing operators will be shielded for the foreseeable future from an increase in the number of competing, local businesses (more on that below).

Industry is beat up; still slowly consolidating

Quite a few businesses are struggling and others have failed. In many ways, the environment feels like four years ago when everyone was simply trying to hang on, and/or put together deals without any money. Here in the Portland office, our cannabis litigation team has handled a series of disputes around business upheaval — including big wins — for those who can actually afford to litigate.

For buyers, opportunities abound. Certain public companies are still out there poking around, usually offering a mix of cash and debt for distressed but attractive brands; or sometimes cash and convertible debt (typically parent company stock). Many of these are essentially offers on the come with low closing prospects. Most transactions are smaller, though, and M&A activity is not as robust as the last few years. Naked license “sales” may be the largest category of deal right now, though the new license moratorium (see below) has not levered prices higher from what we are seeing.

A few of the bigger operators in the state continue to grow. Nectar Markets is the largest outfit with 640 employees (39 stores); followed by Chalice Brands with 293 employees and Wyld with 209 employees. We’ve heard scuttlebutt from clients about changes in product sourcing and pricing strategies by some of the heavyweights, which has made life tough for smaller suppliers. Whether or not that is accurate, it’s probably inevitable.

Big regulatory changes

Seven years into regulated, adult use cannabis, Oregon’s program remains as dynamic as ever from a regulatory perspective. In 2022, we saw a greater number of significant legislative and administrative changes — actual, pending and proposed — than at any point since early days of the program.

Below is my list of highlights (or lowlights, depending on where you sit):

• The legislature put a moratorium on new license issuances (although existing licensees can continue to “sell” their licenses on the secondary market)
• The legislature gave counties the option to declare states of emergency and opt out of hemp production
• The legislature enacted prohibitions and penalties on providing or receiving water at an unregistered grow site
• Enforcement efforts commenced against illegal cannabis activity central and southern Oregon, buttressed by $25 million in funding passed last December
• The legislature passed new human trafficking reporting requirements
• The Oregon Health Authority (OHA) unveiled new testing requirements for virtually all products in the Oregon cannabis market
• OLCC increased potency limits on edibles (up to 100mg per package; 10mg per serving), and increased daily sales limits for adult use consumers
• OLCC banned sales of “artificially derived” cannabinoids, including delta-8 THC and CBN, subject to certain grandfathering
• OLCC announced its intent to “tighten the change of ownership option” for bad actor licensees
• OLCC extended pandemic era drive-through sales and delivery options
• OLCC launched an initiative against mislabeled THC products (including through retail shelf pulls) and proposed relabeling rules to address ongoing concerns over lab shopping and consumer misinformation
• Governor Brown pardoned 47,144 individuals for simple cannabis possession, on her way out the door
• Neighbor state California passed an interstate cannabis commerce bill, granting a sliver of hope to some in the Oregon industry focused on export
• Draft cannabis bills began to surface for the 2023 legislative session. The focus seems to be on perceived bad actors, in keeping with the current administrative and enforcement tenor– from OLCC on up

And then there are all of the changes within OLCC, on everything from policies to personnel.

As to policy, the Commission hardened its approach with respect to rules violators, starting with “change of ownership” requests in the context of alleged violations, and extending through settlement negotiations more generally. The Commission also has worked to address its lack of responsiveness and organization around public records requests. Elsewhere, it is rolling out a new licensing or “case management” platform, which our licensing paralegal will test in beta this January with a handful of invitees. And it caught up completely on business sale transactions: all of our buyers have been assigned investigators within a few days of applying since late summer.

As per usual, the Commission will continue to talk with the legislature and other agencies on matters of concern leading into the 2023 legislative session. Legislative Day is January 17th. One desire of OLCC, OHA, the Oregon Department of Agriculture, and even industry, is for a state-run “reference” lab, to assist with resting and research methodologies. This recommendation was first made in a Secretary of State audit back in 2019, but appears to have gained momentum with the new testing rules and THC “mislabeled products” issues mentioned above.

Finally, expect to see a fairly large compliance bulletin sometime this week, related to the permanent administrative order enacting multiple rule changes, filed by OLCC on November 21. (We already saw a smaller bulletin on a select portion of this order, covering drive thru and delivery rules, on December 16th.)

On the personnel side, we saw staffing shuffles at the Commission highlighted by Danica Foster rejoining the Commission as its Rules, Policy and Public Records Advisor; and Jason Hanson vacating the Director of Compliance chair (this key position will remain unfilled momentarily). We also saw a number of changes within the Administrative Hearings Division and up and down the Commission; too many to list here.

Hemp

Not much is moving. Oregon issued 285 hemp grower licenses in 2022, a precipitous drop from the heyday of 1,961 in 2019. Registered grow sites plummeted even further over that period, from 6,040 to just 282. In spite of it all, Oregon is still a hemp leader on the national stage. Last year, the Oregon crop was valued at $235 million in USDA’s National Hemp Report; California was a distant second at $61.5 million.

The continued downward trend can’t last forever. Congress is scheduled to renew the Farm Bill in 2023. Changes on the table include everything from raising the “hemp threshold” from 0.3% THC to 1.0% THC, to addressing regulation of intoxicating cannabinoids derived from hemp. Another big driver will be the continued adoption of hemp-based textiles and building materials. Even though Oregon hemp has slowed dramatically, expect the state to remain at the fore if and when the trend reverses.

Odds and ends

We’ve seen some interesting activity around the edges, which I’d be remiss to leave off:

• The Cow Creek Tribe continued to move toward the participation in the Oregon cannabis market, following an intergovernmental agreement it signed with the State of Oregon almost two years ago
• Three of the local cannabis trade groups consolidated
• Oregon’s cannabis sales tax revenues dropped in conjunction with falling sales, and continued diverting in part to Measure 110 programs
• Curaleaf was once again in the news locally (and elsewhere) for all the wrong reasons
• Twists and turns for Dutchie, Oregon’s cannabis software unicorn

That’s a wrap

Let me know in the comments if you think I missed anything worth mentioning, or shoot me an email. There is always something. In the meantime, here’s hoping for better times for Oregon cannabis in 2023.

For previous posts in this series, check out the following:

• Oregon Cannabis: State of the State (2021)
• Oregon Cannabis: State of the State (2020)
• Oregon Cannabis: State of the State (2019)
• Oregon Cannabis: State of the State (2018)
• Oregon Cannabis: State of the State (2017)
• Oregon Cannabis: State of the State (2016)

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