Grape Stank strain wins two ways at Oregon Leaf Bowl

Strains are celebs on Leafly, and Strain News Weekly is our Society Pages.

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What Causes the Pungent “Skunk” Aroma of Marijuana? (Hint: Not Terpenes)

Many individual aroma notes can be detected when smelling marijuana, ranging from floral to fruity or earthy. We all have our preferences, but most cannasseurs would agree on one thing: any weed worth talking about should smell pungent. It should smell strongly and distinctly like weed, no matter what subtler accents are present.  Blue Dream, […]

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New York Announces Cannabis Farmers’ Markets

New York’s Office of Cannabis Management (OCM) announced they plan to allow conditional cultivators and retailers to organize and sell weed at farmers’ markets this summer. Hopefully, these cannabis farmers’ markets could help unclog New York’s legal weed supply chain.

During a meeting with the Cannabis Association of New York, OCM Director of Policy John Kagia told attendees the agency will allow conditional cannabis growers and Conditional Adult-Use Retail Dispensaries (CAURDs) to team up and sell products at a location other than the retailer’s shop.

Since there are only a handful of legal CAURD dispensaries open at this time, the farmers’ markets will present an opportunity for the cultivators to sell the overwhelming surplus of cannabis that they have been unable to sell through the CAURD dispensaries. Cannabis cultivators possess an estimated excess of millions of dollars worth of product that they need to unload.

“A minimum of three growers and a retailer can organize events where growers can sell flower and prerolls … and do so through a retailer, but at non-storefront locations,” Kagia said.

OCM will likely allow these events to take place anywhere organizers can get municipal approval, Kagia said, and the agency is not setting limits for how many growers can participate in an event. It is anticipated that this pilot program will take at least a month to launch. If successful, the OCM will consider making the pilot program permanent.

It will be interesting what the approval process for such an event would be. Will it be only in municipalities that permit CAURD dispensaries? Will it be municipalities that rejected the CAURD dispensaries, but see the financial boon that they missed out on? Who will be the face of each application and who will be the decision makers for such approval? A lot of questions remain unanswered, but the idea is solid and should aid the cultivators while the CAURD dispensaries are slow to open.

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Minnesota just legalized cannabis: Here’s what you need to know

You get two pounds and four mature plants at home. Huzzah.

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California Cannabis Credit Crunch

The California cannabis market is truly struggling all the way around. Cannabis businesses and those who work with them closely face mounting financial pressure. Because of the credit crunch in California cannabis, the state and various impacted distributors and brands are taking steps to help shore up the issues created by cannabis companies that can’t (or sometimes won’t) pay their bills. Given the state of the overall industry right now in most locales, it wouldn’t shock me if other states and industry trade groups follow suit with California.

Cannabis regulators may step in

First, California is seriously flirting with the passage of AB 766. It would be something new for a state cannabis regulator to take action over B2B commercial dealings of this nature. Failing to pay bills when due (other than tax) usually isn’t going to amount to an actionable regulatory violation where you can approach regulators for help. AB 766 would change this in the Golden State. The bill summary provides:

This bill would, except as specified, require a licensee to pay for goods and services sold or transferred with a total value of at least $5,000by another licensee no later than 15 days following the final date set forth in the invoice or invoices. The bill would require a licensee who sold or transferred goods to another licensee and who has not received payment in full 15 days after the final date set forth in the invoice to report the unpaid invoice to the department, as specified. The bill would require the department to notify a licensee of this report, issue a notice of warning, or, in its discretion, issue a citation or commence a disciplinary action against the licensee if the licensee fails to pay the outstanding invoice in full by 30 days after this notification, as specified, and, for multiple failures to comply with these provisions, commence a disciplinary action, as specified.  The bill would prohibit the licensee from purchasing goods and services from another licensee on credit until the licensee pays the outstanding invoice in full. The bill would, for purposes of these provisions, prohibit the final date set forth in an invoice for payment of the invoice from being later than 30 calendar days from the date the goods or services are sold or transferred. The bill would specify that these provisions do not apply to an invoice for a sale or transfer made before January 1, 2024.

We recently wrote a post about why AB 766 could lead to more harm than good, which you should check out.

The “no fly” list developing

L.A.-based Credit Management Association (CMA) is taking a look at the many accounts receivable now plaguing a good number of distributors and brands in California. Those distributors and brands apparently hired the CMA to do the analysis and compile a list of “no go” retailers who continually stiff other cannabis businesses on their bills. See here as reported by MJ Biz Daily. Per MJ Biz Daily, “the ‘red’ list, according to group members, highlights retailers and delivery providers that owe at least $25,000 for products and are 90 days late or more on payments, often categorized as delinquent.”

It’s estimated that there’s about $1 million outstanding in unpaid invoices from California cannabis retailers. And what’s the point of compiling this kind of list? According to CMA’s website, ” . . . by submitting your accounts receivable data to Credit Management Association, you can positively (or negatively) affect your customer’s payment history, as the information is aggregated safely and securely.” This particular data is going to help the entire California industry (maybe even nationally depending the retailer) identify high risk accounts where net terms or any kind of credit shouldn’t be extended. It may also hasten the demise of these particular retailers as a result. Ultimately, this list will be a helpful tool to cannabis-related CMA members.

The main California cannabis problems remain

I’m glad to see the CMA accept cannabis clients (and hopefully it’ll adopt cannabis as one of its 250 industry groups). This helps to further legitimize the industry and helps licensees gauge risk across the supply chain. However, even with the Department of Cannabis Control and the CMA helping to identify and trying to redress the issue of lots of accounts receivable, it doesn’t solve the main California cannabis problems that contribute to those cannabis retailers being unable to pay their bills.

As we’ve said from the inception of this democratic experiment, the local control stranglehold of cities and counties is a problem. Because cities and counties can and do opt out of legalization altogether, California only has pockets of legalization and large swaths of cannabis desert where the illegal market rages on. We also have fairly high state taxes that probably will not diminish anytime soon. Same problem with certain local taxes, too (and retailers now bear the main brunt of those state taxes).

Additionally, the state has not done a good job consistent enforcement against both illegal market actors, or against licensees who openly commit a variety of crimes and regulatory violations that undermine law-abiding licensees. (See the issue of burner licenses.) Unless and until the foregoing issues are seriously addressed, I think that CMA list of non-credit worthy actors will only expand in California.

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Memorial Day

Today is Memorial Day in the United States.

For our international readers, today is designated for remembering military personnel who died while serving in the U.S. armed forces.

Here’s to a peaceful day of reflection and appreciation.

We will be back tomorrow with our regular programming.

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Get ready for takeoff with Galaxy Treats

Get 25% off everything from Galaxy Treats with this Leafly exclusive deal. Use code LEAFLY25 at checkout to snag savings on delta-9 & more.

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New York Cannabis: The New True Party of Interest Rule

New York’s release of the revised adult-use rules and regulations has been well-publicized. A key revision that was the source of significant speculation was whether the Office of Cannabis Management (OCM) and Cannabis Control Board (CCB) would revise the True Party of Interest (TPI) definition with respect to ancillary service providers and the monetary limits before TPI status is triggered. And they did!

The revised TPI limits apply to the following parties:

• Parties with risk sharing or goods and services agreements with the applicant/licensee;
• Parties that consult and receive flat or hourly compensation from an applicant/licensee under a goods and services agreement; and
• Goods and services provides that do not have any right to control the applicant/licensee.

Any party that falls under the aforementioned categories does not constitute a TPI as long as the payments in “that calendar year” do not “exceed the greater of”

• 10% of the gross revenue of the applicant/licensee;
• 50% of the net profit of the applicant/licensee; or
• $250,00 from the applicant/licensee.

The key revision was increasing the dollar figure amount from $100,000 to $250,000, which will be particularly relevant to service providers to licensees in their first year(s) of operation, when gross revenue and/or net profit has the potential to be low.

Practically speaking, it will be interesting to see how the OCM actually applies this rule, given that gross revenue and net profit for a calendar year cannot actually be calculated until the end of the calendar year. It would not be surprising to see service providers structure contracts with a base compensation of $250 plus a year-end “true up” based on the licensee’s gross revenue or net profit.

We will keep working through the significant revisions to New York’s adult-use rules and regulations. Stay tuned!

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Taking back the weeknight with WYNK seltzers

WYNK crafts THC & CBD seltzers with all in-house production to offer three flavors, zero calories, and two different THC:CBD ratios to choose from.

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Minnesota Cannabis? You Betcha!

Minnesota is poised to legalize adult-use cannabis with the approval of HF 100 by the state legislature. Governor Tim Walz is expected to sign the bill soon (and may in fact have done so by the time this post goes live), making Minnesota the 23rd state (plus DC, Guam, the Marianas, and the Virgin Islands) to legalize recreational cannabis. Commencing on August 1, Minnesotans will have the right to possess, use, and cultivate cannabis for personal consumption within their homes.

Similar to other states that have recently legalized adult-use cannabis, Minnesota’s new law establishes possession limits, allowing up to two pounds of cannabis flower in private residences and two ounces in public. The bill also sets caps of 800 milligrams for edibles and eight grams for concentrates.

The new law envisions the licensing of retail establishments, but Minnesotans (and folks in neighboring states) will have to wait a bit longer before dispensaries open their doors in the Twin Cities, Rochester, and beyond. As Jen Randolph Reise explains:

The bill creates a new regulator, the Office of Cannabis Management (OCM), which will be promulgating important rules and granting licenses. Currently, the Senate bill directs license applications to be available Jan. 1, 2024. The OCM will need some time to review those applications and grant licenses. Then, applicants who receive a cannabis business license must build out their facilities and pass inspection by OCM and/or the local municipalities to ensure regulatory compliance. Only then can Minnesota growers legally plant seeds. From seedling to harvested flower, cannabis production can take three to eight months, depending on the plant’s strain, genetics, and environmental factors. All in all, insiders do not expect adult-use legal sales to start until summer to fall of 2024.

To encourage entrepreneurship and foster a craft cannabis market, the bill prohibits vertical integration, preventing the OCM from issuing licenses to single applicants with excessive control over the supply chain. Furthermore, the legislation includes provisions that will allow Minnesota to continue what Reise calls its “experiment” with lower-potency hemp edibles. These are defined as hemp food or beverages that contain no more than five milligrams of delta-9 THC. Specific licenses will be available for lower-potency hemp edible manufacturers and lower-potency hemp edible retailers (in addition to 14 other license types!).

Minnesota’s move towards legalization turns the spotlight toward the Midwest region. With neighboring states such as Iowa and Ohio also considering legalization initiatives, Minnesota’s decision could mark the beginning of a broader trend in the Heartland. Keep a close watch on developments in this region.

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America’s best cannabis for Memorial Day 2023 and beyond

Cookies’ debuts a Zeuz pod, and more.

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Chalice Goes Down

News broke yesterday which will affect quite a few people in the Oregon cannabis industry. Chalice Brands Ltd. (CSA: CHAL) obtained a court order in Ontario, Canada (“Initial Order”) which grants the company and its affiliates protection (a “stay”) from creditors. At least temporarily. The Initial Order is here and the Chalice press release is here. Chalice also filed an Oregon Circuit Court complaint on May 22 (“Complaint”), where it sued five of its own subsidiaries (the “Subsidiaries”) to drive them into receivership locally. If you’d like a copy of the Complaint, email me here.

I’m not an insolvency lawyer, so I won’t delve into issues of how the Initial Order from a Canadian court could be binding with respect to the Subsidiaries, which are Oregon companies. My guess is the Complaint was filed to address concern that Oregon creditors won’t respect the Ontario court’s rulings– including the stay. Appointing a local receiver could also expedite the disposition of all these local creditor claims.

I will note that the Initial Order, underlying pleadings, and Complaint make for interesting reading. The Complaint for example alleges that:

• the Subsidiaries owe Chalice over $35 million in intercompany debt (while admitting “these numbers may not be up to date”);
• the Subsidiaries owe $3.7 million in trade payables and “over $1,014,489.90 in missed rent [which] includes deferred rent”;
• the Subsidiaries also “have significant amounts of indebtedness due to third parties”;
• the Subsidiaries have been threatened by “certain creditors [with] self-help actions, including nonjudicial foreclosure actions…”; and
• the Subsidiaries have been sued and dragged in front of OLCC by certain individuals “seeking temporary authority to operate certain OLCC licenses belonging to [the Subsidiaries].”

None of this should surprise anyone close to the Oregon cannabis industry. Chalice has been in the the news here for not paying its bills, and the parent company stock has been on trading suspension for over a year due to lack of financial reporting. Even closer to home, our firm represents many vendors to Chalice and at least one landlord. We recently sued Chalice, in fact, on behalf of one OLCC licensee and won a judgment– including for Chalice to pay our client’s attorneys’ fees–because Chalice’s failed to pay for products.

As to Chalice’s messaging around this, the press release is somewhat muddled. That’s typical of Canadian cannabis pubcos, particularly around financial matters. For example, the communiqué claims that the “Receivership Order, if granted, will approve the appointment of Kenneth Eiler as receiver over the businesses, assets and property of the Receivership Entities.” We’re not so sure. Mr. Eiler, who is a former Chapter 7 Trustee known to our firm, isn’t requested at all in the Complaint. The press release also states that “the Company hopes to exit [creditor] protection well-positioned to rebuild its stakeholders’ trust and deliver high-quality, farm-to-table products to its Customers.” If you’re inclined to hope along with them, I’ve got a bridge to sell you.

Chalice has 16 stores and nearly 300 employees. According to yesterday’s story in the Portland Business Journal (paywalled here), Chalice CEO Jeff Yapp “said the company is soliciting opportunities and finding a buyer is a better outcome than shutting down and selling off assets.” And the press release contemplates a “coordinated restructuring effort” rather than a liquidation. To all of that I say, good luck. There aren’t many buyers poking around Oregon cannabis these days, particularly at this scale.

The Chalice strategy does mean many of the stores could remain open for the time being. The near term question is whether they can break even while shielded from creditors. Related questions are how many employees will be willing to stay, and what the courts will actually do here in Portland, Oregon and Ontario, Canada.

Finally, the OLCC piece of all of this will also be interesting. OLCC does have a rule on “Standards of Authority to Operate a Licensed Business as a Trustee, a Receiver, a Personal Representative or a Secured Party.” OAR 845-025-1260. I helped walk the first set of parties through that protocol with OLCC some years back. I’m not sure if it’s been tested since, but the process was anything but straightforward. My hope is the Commission will be more prepared this time around.

For now, anyone who hasn’t already buttoned up dealings with Chalice should watch this process closely. The fallout here could get pretty bad.

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Advocates in Nebraska Launch Medical Cannabis Ballot Campaign for 2024

Advocates in Nebraska, one of the few remaining states in the U.S. that have not enacted medical cannabis legislation, recently filed paperwork to get a medical cannabis initiative on the ballot in 2024.

According to the Nebraska Examiner, Nebraskans for Medical Marijuana will need more than 200,000 signatures for the initiative to qualify. The group’s spokesperson, Crista Eggers, hopes that the people will override the decisions of her state legislature who have refused to listen to their constituents. “We have no choice but to keep petitioning our government,” said Eggers. “The Legislature refuses to act despite the will of over 80% of Nebraskans, from all parties, regions, ages, etc., supporting this.”

Eggers also spoke to the Lincoln Journal Star about their hope for medical cannabis. “We know the people support this,” said Eggers. “We are going to execute and put that into motion to have safe and regulated medical cannabis in Nebraska.”

Eggers’ eight-year-old son has been experiencing epileptic seizures since he was two years old. She and her family tried multiple medications that didn’t improve her son’s condition, but eventually tried medical cannabis with success. She has spent the last seven years advocating and working toward legalization for her son and other families across the state.

According to the group’s website, it takes approximately three weeks for the state to certify the initiative. After that, the group can begin to collect signatures.

Medical cannabis can provide relief to Nebraskans who are suffering. We are among the thousands of families and patients who need access,” the Nebraskans for Medical Marijuana states on its website. “Whether it’s a neighbor or a loved one or a friend, most Nebraskans know someone who struggles with a serious health condition. But medical cannabis isn’t an option in our state—even if a doctor recommends it.”

In 2020, Nebraskans for Medical Marijuana’s ballot initiative was stripped from the ballot by the Nebraska Supreme Court. The court stated that the initiative violated constitutional requirements for a “single subject” rule, which prompted the group to instead create two initiatives that separately addressed a regulatory framework and established protections for caregivers from arrest.

LB-474 was also introduced in the state legislature in 2021 to consider medical cannabis, but was two votes short in order to pass. Nicole Hochstein, a Nebraska mother of a child who suffers from epilepsy, described her feelings as “Devastated. Broken. In pieces because they literally voted my child’s life away.”

A petition drive in August 2022 failed to receive enough signatures for the 2022 ballot. Although the 184,000 signatures the group collected were not enough, and despite funding woes, the group decided to continue working toward 2024.

In December 2021, former Nebraska Gov. Pete Ricketts was featured in an ad paid for by Smart Approaches to Marijuana that solidified his opposition on the topic of medical cannabis. “The only difference between medical marijuana and recreational marijuana is word choice,” the governor said. “Doctors can’t prescribe it and pharmacists can’t provide it because it’s not medicine.”

Earlier that year, he made statements claiming that cannabis “is a dangerous drug that will impact our kids” and “if you legalize marijuana, you’re gonna kill your kids.”

Current Gov. Jim Pillen isn’t a staunch advocate of cannabis, but in February he did confirm support of FDA-approved medicines. “I’m a 100% believer in prescription authority. That’s a place the FDA has done a good job in over the past several years. I’m a proponent of prescription marijuana use if it’s approved through the FDA,” he said.

Medical cannabis laws are still lacking in other states such as Idaho, Indiana, South Carolina, Wisconsin, and Wyoming. In the Americans for Safe Access 2022 State of the States Report, all of these states, including Nebraska, were scored with an “F” across the board for lack of legislation and access for patients.

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Pennsylvania House Members Introduce Bill To Protect Medical Cannabis Users From DUIs

If a bill passes in Pennsylvania, medical cannabis patients will no longer be at risk of being charged with a DUI just because drug tests show the presence of THC in their system, the Pittsburgh Post-Gazette reports. However, that doesn’t mean you can drive while impaired if you have a card, nor does it apply to anyone who uses cannabis without a medical card. 

Rather, the introduced legislation attempts to address a long-standing problem since cannabis legalization. As many readers know, THC can show up in your urine 30 days after you consume it and up to 90 days for heavier users. Therefore, arresting people for DUIs because their drug test shows the presence of THC would be like issuing out DUIs to a driver who hasn’t had a drink in a month. The bias in drug testing against cannabis, one of the safest drugs, doesn’t only come up regarding alcohol. Cocaine leaves your urine after about three days, as does heroin. Meth can hang around for six days. When a person fails a drug test for any reason, it’s often just because they smoked some weed. 

We know that cannabis is generally safe to consume, and a recent Canadian study even found that weed legalization does not lead to more car crashes. However, it’s understandable that folks are concerned about impaired drivers. But, under current Pennsylvania law, police can charge drivers with a DUI when marijuana use is detected, regardless of the level of impairment or time of consumption. 

“In 2016, the PA General Assembly voted to legalize medicinal use of cannabis. Sadly, the legislature failed to provide these patients the same privileges afforded to others who have legal prescriptions for a scheduled medication,” reads a cosponsor and bipartite memo from Rep. Chris Rabb, D-Philadelphia, and Rep. Aaron Kaufer, R-Luzerne. “Medicinal cannabis patients regularly contact our offices concerned that state law makes it illegal for them to drive,” they continue. 

Currently (and thankfully), Pennsylvania is an outlier and only one of a handful of states which have zero tolerance for controlled substances. Thirty-three states (even somewhere cannabis is still mostly outlawed) require proof of actual impairment at the time of being pulled over. Last session, Pennsylvania representatives introduced similar legislation but got stuck in the government’s quicksand and didn’t make it out of the Transportation Committee. Additional attempts to solve this issue arose in the state Senate. The Senate Transportation Committee approved Senate Bill 167 last June. However (more government quicksand) the bill didn’t even get a vote in the full Senate before the 2021-22 legislative session closed.

“During a Senate Transportation Committee meeting last September, representatives of the Pennsylvania State Police testified that the bill would not adversely impact their mission to keep the highways and byways of the Commonwealth free of impaired drivers,” Sen. Camera Bartolotta, R-Washington, the prime sponsor of SB 167, said in a statement at the time of that committee vote, the Pittsburgh Post-Gazette reports. Considering more than 425,000 Pennsylvania residents have active patient certifications allowing them to use medical marijuana in Pennsylvania, let’s hope this issue resolves sooner rather than later. 

Reasonable Pennsylvania officials are currently trying to make cannabis laws more rational in other ways. Sen. Mike Regan, R-Cumberland, and Sen. James Brewster, D-McKeesport announced plans earlier this year for legislation allowing doctors to certify patients to use medical cannabis for any condition rather than the state’s current limited medical list. On a map of which states have legalized adult-use, Pennsylvania sticks out like a sore thumb that hasn’t.

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Best-rated dispensaries in Massachusetts 2022

These are the must-stop legal weed shops across the state Massachusetts residents voted to legalize medical cannabis in 2012, and then adult-use in 2016. The recreational market opened in 2018 with the East Coast’s first legal dispensaries, and the market has grown rapidly since. But finding the best dispensaries in the state’s maturing market can […]

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The best-rated weed dispensaries in California 2022

Get ready to be stoked. California’s got more than 800 cannabis dispensaries carrying the best weed the world’s ever seen—purer and often cheaper than the illicit market. And here’s the crazy part—California shops have yet to even really blossom. Due to the state’s “home rule” policy, which allows local governments to forbid legal cannabis businesses, […]

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Webinar Takeaways: Cannabis Litigation in a Down Market

Last week, my colleague Jesse Mondry and I spent an hour discussing the challenging state of the cannabis industry and how it’s been impacting those who are considering litigation or other dispute resolution options. If you weren’t able to attend the webinar, below are some of the key discussion points and takeaways.

We’re seeing even more breach of contract actions

This isn’t surprising. As the industry grapples with the downturn, there is just an overall inability to comply with preexisting agreements or payment terms. In particular though, breach of contract claims have been even more rampant in the purchase and sale context because people are just not paying up – so much so that California even proposed a program to deal with how extensive the problem is becoming.

We’re also seeing an uptick in LLC and partnership disputes

This isn’t new either, but as companies fail to perform as advertised several years ago, LLC member and partnership disputes have steadily increased as well. As Jesse covered, it’s important to get things documented well – he specifically mentioned he’d love to see more provisions relating to the accounting aspect of the business in operating agreements – to clarify the potential issues on the front end.

The sad truth is, if you’re dealing with a business that’s sinking, you need to adjust your expectations

We’ve increasingly had to have difficult conversations with our clients that it probably doesn’t make economic sense to pursue a potential defendant because it’s just not worth it. Winning a lawsuit or arbitration, which takes a year or so in the very best case scenario, doesn’t mean anything if the judgment you’re awarded isn’t enforceable against your defendant. We’ve really had to counsel our clients to (1) adopt a mentality of cutting their losses when and where that’s appropriate, and (2) be more flexible with how they negotiate a potential settlement or approach pursuing their claims. Sometimes, that means entering into payment plans you wouldn’t normally tolerate. Other times, it means making a deal for fifty cents on the dollar.

Get creative in cannabis litigation– and do it while you have the leverage!

Settlements involving a confessed/stipulated judgment or personal guaranty can be really motivating for debtors to make good on their commitments. In the case of partnership disputes, maybe a receivership makes the best sense. These are the kinds of options that we’ve been working into our resolutions and settlements more often these days.

And if you’re on the flip side (debtor), embrace honest communication and good faith gestures

People know the industry is hurting. If you owe money and want to avoid litigation or collection efforts, do your best to communicate what you’re capable of and commit to what you can. The worst thing you can do is overextend yourself and default on whatever agreement you’ve come up with – that only creates a sense of distrust and animosity for everyone involved.

Bankruptcy still isn’t really available

Bankruptcy isn’t an option – the courts have consistently indicated debtors who work in the cannabis industry or derive meaningful income from cannabis activity (directly or indirectly) cannot use bankruptcy, a federal mechanism, so long as marijuana remains illegal under federal law. We covered that bankruptcy protection has been afforded in really limited circumstances but, overall, don’t count on it.

For a similar webinar and post on these topics, also check out:

• Distressed Cannabis Business Takeaways
• Cannabis Collections Headaches and What to Do

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Colorado Cannabis Industry Continues to Face Uncertainty

A recent report from The Denver Post analyzes the fallout of the post-pandemic cannabis industry in Colorado. While once the state reached a peak of $226 million in combined recreational and medical cannabis sales, current sales have decreased and small businesses struggle to stay afloat.

“The market’s just bad. It’s bad right now,” cannabis salesperson Val Tonazzi told The Denver Post. “There’s businesses closing, left and right.”

In February, Colorado’s medical cannabis sales decreased to $15 million, the lowest collection since retail sales began in 2014. March brought a slight increase in medical cannabis sales, approximately $17 million, but was $5 million less than March 2022. Likewise, March recreational sales were recorded at $122 million this year, but it’s a $17 million decrease from last year’s numbers.

On May 9, the U.S. Department of Health and Human Services announced a fact sheet detailing the “End of the COVID-19 Public Health Emergency.” While the nation and many of its industries return to normal operations, cannabis business owners continue to see ripples of oversupply of cannabis products, lack of demand, pricing dropping to record lows, and lack of cannabis tourism.

Over the past few years, many states bordering Colorado have approved recreational cannabis. This includes Montana and Arizona in 2020, and New Mexico in 2021, creating competition for Colorado.

Vangst, a cannabis job company, recently released its 2023 Vangst Jobs Report. The report states that there was a 2% drop in cannabis jobs, and Colorado was ranked as the second highest state for cannabis job losses. It was also ranked number six on a list of top cannabis jobs with less positions than states like California, Michigan, Illinois, Florida, and Massachusetts.

It isn’t just small cannabis businesses falling under hard times. Bigger companies, like Curaleaf, are also pivoting as well. In January, Curaleaf  closed down its offices in Colorado, California and Oregon, “as part of its continued effort to streamline its business.” According to Curaleaf CEO Matt Darin, this move was also made due to thriving black market competition. “We believe these states will represent opportunities in the future, but the current price compression caused by a lack of meaningful enforcement of the illicit market prevent us from generating an acceptable return on our investments,” Darin said in a press release.

The closure of cannabis businesses is affecting the real estate market as well. A National Association of Realtors report recently explained “a decline in commercial property purchases by marijuana industry-related businesses and a corresponding increase in leasing activity.”

The Denver Post spoke with local entrepreneur Renée Grossman, who founded five retail storefronts in Colorado since 2013, and also moved into cultivation and manufacturing as well. “There’s too many stores, there’s too much cultivation, there’s too many products,” Grossman explained to The Denver Post. “Right now, all the investors are sitting on the sidelines, and kind of waiting to time the bottom—and nobody knows exactly when that’s going to happen.”

Amidst the uncertainty of the situation, Grossman and many other business owners have had to lay off many of their staff to continue paying the bills. “Most companies I know are losing money, or they’ve shut down and scaled back,” said Grossman. “A lot of companies that are my size or smaller are really feeling the burn.” She also suggested that more mergers may take place in order to help bolster smaller businesses against larger companies.

Initially there was a drive for cannabis tourism to bring people to Colorado, but even as travel has become safer in the wake of COVID-19, the increase in states with recreational cannabis has caused a shift in interest. According to Native Roots Cannabis Company vice president of marketing, Buck Dutton, sales for 4/20 decreased from recent years: “…people don’t see the need to travel here to spend their 4/20 with us,” Dutton told The Denver Post. “The only expectation that it lived up to is that we thought it was going to be bad.”

Marijuana Industry Group executive director Truman Bradley likens Colorado’s current situation to “the ghost of Christmas future.” The excitement that drove sales for Colorado as the first state to legalize recreational cannabis has since slowed. Bradley stated that the only way Colorado can survive now is for the industry to “get leaner,” in terms of competition being thinned out. He also calls on state legislators to reevaluate legalization. “It’s critical that lawmakers understand that decade No. 2 of legalization needs to look fundamentally different from decade No. 1,” Bradley stated.

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Lucy Drops Amanita Mushroom-Based Microdose Line

The ancient use of mushrooms to improve physical and mental well-being is coming back full-swing. On Monday, Lucy Scientific Discovery Inc. unveiled Mindful, a functional Amanita mushroom-based product line that is now available at multiple retailers. 

British Columbia, Canada-based Lucy Scientific Discovery is a psychedelics manufacturing company focused primarily on emerging psychotropics-based medicines, the latest being its new microdose product line. 

Mindful by Lucy is designed to enhance well-being and promote a mindful approach through the power of microdoses. Each capsule is carefully crafted, incorporating quality natural ingredients. Mindful by Lucy comes in jars of 60 capsules containing a microdose of Amanita muscaria-based compounds.

“We are thrilled that Mindful will be available to consumers, and are excited about the revenue potential,” said Chris McElvany, CEO of Lucy Scientific Discovery Inc. “Our goal is to offer Mindful to consumers directly through our platform and a variety of 3rd party platforms and traditional retail channels. Mindful by Lucy is a testament to our dedication to providing exceptional quality and a mindful approach to wellness.”

A recent renewed interest in the potential improvements in cognitive function and memory with the help of mushrooms is sweeping the industry, using them as adaptogens. Dividing up doses into capsules makes it easier to titrate. Mindful by Lucy contains ingredients, some mushroom-based, including the following:

• Lion’s Mane Mushroom: Ignite cognitive function, memory, and nerve growth factor production.
• Reishi Mushroom: Adapt to stress and bolster well-being with adaptogenic properties.
• Cordyceps: Elevate energy levels and amplify physical performance.
• Bacopa Monnieri: Boost memory and learning with traditional Ayurvedic wisdom.
• Rhodiola Rosea: Combat stress, fatigue, and sharpen mental performance.
• Ginkgo Biloba: Enhance memory and focus through optimal brain circulation.

Mindful by Lucy can be purchased on the company’s online store and through Hightimes.com. High Times has an ownership stake in Lucy Scientific Discovery.

Lucy Scientific Discovery and Psychotropic Products

Lucy Scientific Discovery has explored a number of psychotropic substances including controlled substances. How is this possible? The company holds a Controlled Drugs and Substances Dealer’s License granted by Health Canada’s Office of Controlled Substances. Lucy Scientific Discovery and its subsidiary, LSDI Manufacturing Inc., operate under Part J of the Food and Drug Regulations promulgated under the Food and Drugs Act in Canada. This specialized license enables the company to develop, sell, deliver, and manufacture pharmaceutical-grade active pharmaceutical ingredients (APIs) used in controlled substances as well as their raw material precursors. 

The Amanita muscaria mushroom has been used medicinally for hundreds of years, and it is not a controlled substance in the U.S. Proponents of Amanita microdosing believe that it can improve creativity, focus, productivity, anxiety and overall well-being. 

The company is exploring other types of fungi as well, including mind-altering varieties that are commonly known. Work at Lucy is underway to develop psilocybin mushroom-based products which are believed to be invaluable in psychotherapy. Lucy Scientific Discovery announced a partnership with TheraPsil to advance medical psilocybin access and research.

Opportunities to discover these new products are approaching. Lucy Scientific Discovery also announced that it will be a sponsor at the Multidisciplinary Association for Psychedelic Studies (MAPS) Psychedelic Science Conference taking place June 19-25 in Denver, Colorado. 

The conference is expected to attract 10,000 attendees, and will feature five days of panels, workshops, and lectures from leaders in psychedelic research, education, policy, business, culture, and communities. It will also feature athletes such as Aaron Rodgers as well as musicians including Melissa Etheridge.

Lucy is a Nasdaq-listed (LSDI) licensed producer of compounds for medicinal products. Check out Lucy Scientific Discovery’s website to learn more about the company and its products.

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Minnesota Senate Casts Final Votes To Legalize Adult-Use Cannabis

Early Saturday, the Minnesota Senate voted in favor of legalizing adult-use cannabis. The bill has been passed to the desk of Democratic Gov. Tim Walz for final approval.

The bill allows Minnesota residents 21 and older to purchase up to two ounces of cannabis flower, eight grams of concentrate, and 800 milligrams worth of edible products at a time. And it isn’t confined to their homes. Adults can possess those amounts while in public. However, within the comfort of their own home, residents 21 years old and older can grow up to eight cannabis plants at one time, although, in ever-particular marijuana laws, only four of those eight plants are allowed to be mature and flowering at one time. The tax rate for cannabis products will be 10 percent.

The Minnesota House approved the bill last Thursday.

The Democrats are already celebrating the victory. “The day has finally arrived. Today is the day that we are going to vote here in the House for the last time to legalize cannabis and bring the change that many Minnesotans have wanted for a very long time,” says state Democrat Rep. Zack Stephenson, the Coon Rapids representative who sponsored the bill. 

Even some Republicans see the bill’s benefit, making Minnesota the 23rd state in the U.S. to legalize adult-use cannabis and the 11th state to allow home-growing. Republican Rep. Nolan West of Blaine, Minnesota, says he’s glad they included the GOP in the conference committee that finalized the bill. “While it’s not the perfect bill, it is much better than when it [first] left the House,” West says, who voted in favor of it. However, he adds that he was happy that cities could limit the number of cannabis retailers, which is good news for the black market, and intimidating news for those looking to enter the legal market, which due to taxes, red tape, and banking restrictions among other issues, is becoming harder and harder to turn a profit in. 

However, not all Minnesota Republicans are so accepting. For instance, Republican Rep. Jeff Backer of Browns Valley made it clear that he’s against the provision allowing people to possess two pounds of cannabis flower in their homes. (Most states that have legalized adult-use cannabis have at-home possession limits that are much lower. For instance, in California, you can only have one ounce of dried cannabis flower.) “Folks, that’s 2,724 joints. That is going to get in the hands of the kids,” Backer says, an opponent who voted against the measure. “If we do not protect our next generation, kids, then why are we here?” 

Republicans also expressed concern about more people driving under the influence of cannabis, even though a recent Canadian study found that legalizing marijuana does not lead to an uptick in car crashes. 

If the bill passes, it automatically expunges misdemeanor marijuana convictions and creates a committee considering expunging felony-level cannabis offenses. But, according to the state’s Bureau of Criminal Apprehension, it could take the agency up to a year to erase all of the misdemeanor records, so those most affected by the War on Drugs can’t break out their legal joints and celebrate just yet. Additionally, it could take up to a year or even longer before Minnesota sees any legal dispensaries up and running. Should the bill pass, there will also be a new state agency, the Office of Cannabis Management, which will oversee licensing of both adult-use and medical cannabis, in addition to hemp-derived products already legal in the state. 

However, starting August 1st, Minnesota will decriminalize cannabis possession, legalize home-growing, and begin expunging past marijuana convictions.

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The Real OLCC Scandal Is There Are Two Sets of Rules

We have been working with the Oregon Liquor and Cannabis Commission incessantly since 2015, when rulemaking commenced for the adult use program. Over the years, we’ve dealt with many, many compliance-related issues, including Notices of Proposed License Cancellation to licensee clients from OLCC. We’ve also seen the Commission change its position and philosophy drastically on enforcement.

In the early days, OLCC emphasized “teaching compliance” and working with licensees who made mistakes—honestly or otherwise. We later saw a transition toward heavy-handed enforcement, as the Commission worked with the legislature in an effort to cull licenses.

The problem is, OLCC treats small businesses much differently than bigger outfits. We’ve been saying this on the blog for a while now (see here and here for example). And when I say “OLCC” please note that I am not talking about specific OLCC personnel. There are some great people at the Commission who are smart, work hard, and really care. This post is not for them.

Recent OLCC liquor and cannabis scandals

This year, OLCC and the cannabis industry are at a nadir with two-bit scandals. Things kicked off with reports of a shady land deal and escalated with revelations that the Executive Director, legislators and others were hoarding rare bottles of bourbon for themselves. The latter felt especially small-time and chumpy.

More recently, Sophie Peel of the Willamette Week has led a barrage of investigative reporting of La Mota, Oregon’s second-largest dispensary chain. OLCC continued to issue licenses to that rogue retailer despite the fact that La Mota had been: a) saddled with millions of dollars in state tax liens, b) sued more than 30 times by unpaid vendors, mistreated employees and others, and c) charged with attempted diversion of 148 pounds of cannabis inventory, among other serious no-nos, in a case that settled in early 2020.

OLCC and the big cannabis retailers, going back

The La Mota “diversion” case went on for a couple of years. We had clients watching closely, including one larger outfit that was ready to pounce. A general assumption was that, given the nature of the charges and evidence, La Mota was cooked and those stores would be up for grabs. It didn’t turn out that way, of course: La Mota paid some fines and returned to business as usual. Over that same period, OLCC revoked the licenses of many smaller outfits, often for lesser charges. Some of them couldn’t afford to fight.

During all of that, we settled one particularly interesting case with OLCC. Our licensee client was known as Rose City Buds & Flowers. It was a small store owned by a woman who had agreed to sell to Nectar, the state’s larges retailer. Prior to seeking OLCC permission, as required, Nectar effectively bought the store but refused to share profits with Rose City. Nectar then committed a series of further OLCC violations at the store that accrued to our client’s license. The Commission decided to license Nectar and approve the transaction regardless, throwing the book at our client on the way out the door. (Nectar subsequently refused to pay Rose City for the store; our client was forced to sue.)

Ironically, the published settlement between Rose City and OLCC ran alongside stipulated settlements between OLCC and Nectar for other violations, elsewhere, including a series of Category I, II and III violations. And those were not the first allegations or slap-on-the-wrist settlements between OLCC and the chain. A year later, the Commission and Nectar settled an avalanche of 28 new charges where again, many industry watchers thought a prominent chain would be cooked. These violations occurred up and down the Nectar supply chain from things like delivering cannabis to unlicensed residences (“diversion”; perhaps the strictest no-no), to not keeping required surveillance at licensed premises. The charges mostly arose from a “routine traffic stop” by police, which turned out to be an unmarked, un-manifested U-Haul truck, running Nectar cannabis.

The most recent settlements occurred in May of 2020. Since then, OLCC has been talking tough about “bad actors” (their words), but using its cudgel to beat down small operators. No big outfit has had its license revoked. A beatdown may come in a variety of ways: often, a Notice of Proposed License Cancellation is enough, as many in the struggling industry don’t have the wherewithal to fight.

We’ve also seen OLCC bend and break its own purported “policies” around infractions and settlement. In one particularly frustrating case, our client self-reported a violation of providing literally one marijuana item, off-site, to a minor. This was wrongful behavior to be sure, but nothing in comparison to the aforementioned cases. OLCC doggedly attempted to cancel his licenses before we helped the client reach a settlement which allowed him to sell his farm and store. OLCC then went dark during the buyer approval process, for many months, effectively killing the sale.

Ultimately, the Commission cited a “policy” around financial interests during settlement to justify the outcome. Not only was this position contrary to the spirit of the settlement; it was inconsistent with the Commission’s “policy” actions on matters my law firm had recently handled. But the client here was finished. He was not a large chain like La Mota, diverting taxpayer money to fight the process. And he went belly up.

Two sets of OLCC cannabis rules and policies

Oregon cannabis is a mess right now. It’s sad. We have great clients who are exasperated with the La Mota story in particular. That rogue outfit moved in down the street from one of them recently, in a smaller community. The client asked me in a call: “How can we compete with that? We pay our vendors. We pay our taxes. We give our employees health insurance and all the rest… La Mota doesn’t pay anyone. They are going to drag prices down to $2/gram next door, and we’ll get killed.”

Nectar, too, is up to its old tricks. We were involved in a sale that closed last year where Nectar again used its “services agreement on steroids” maneuver to effectively purchase a store prior to OLCC approval. Why sellers continue to fall for this sort of thing is very confusing; to wit, not a penny of profit was ever paid by Nectar during the “services” period. (To be fair, it’s possible that OLCC wasn’t aware of what had happened in that particular deal. But when you see the bigger chains operate consistently with impunity, it’s easy to get cynical.)

All of this is exacerbated by the fact that the OLCC is under media scrutiny and seems to be in a state of constant personnel flux. Prior to the Executive Director resigning under scandal, other high-ranking positions on the cannabis side – e.g. Director of Licensing and Director of Compliance – have turned over repeatedly in recent years. Sometimes, these and other key roles have also gone unfilled. The organization is off-track in composition and orientation.

From my chair, when I hear the phrase “OLCC policy”, that’s simply code for “what we want to do here.” When I hear the phrase “for all licensees” that means “for all licensees except big licensees.” So I guess I’m glad I’m not a licensee– especially a smaller one. And while I would like to see the rash of scandals subside, I would also like to see this highlighted and fixed. We need one set of rules and policies for everyone in Oregon cannabis.

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Costa Rica Grants First Medical Cannabis Cultivation License

Just over a year after legalizing hemp and medical cannabis, Costa Rica’s Minister of Agriculture and Livestock Victor Carvajal signed a resolution to grant authorization to Azul Wellness S.A. to cultivate and process medical cannabis, The Tico Times reports. 

It marks the first medical cannabis license granted in the Central American country.

Azul Wellness S.A. is Costa Rican owned and backed by the family of José Álvaro Jenkins, president of the Costa Rican Union of Chambers and Associations of the Private Business Sector. Azul reportedly is planning to establish an 800-square-meter production and processing facility, located in Costa Rica’s Guanacaste province.

The firm also partnered with U.S. private equity firm Merida Capital Holdings, which specializes in medical cannabis. According to the Times, the collaboration is meant to help Azul cultivate two varieties of psychoactive cannabis to start, with a focus on exporting the produced material.

Jenkins himself expressed optimism about the endeavor and said he envisions eventually establishing a medical cannabis laboratory in Costa Rica. He has also publicly supported the government’s efforts to legalize recreational cannabis in the past.

While Azul received the first medical cannabis license, Carvajal has issued eight authorizations for hemp cultivation. There are still two applications for hemp cultivation and processing and one medical cannabis license under evaluation.

Costa Rica legalized hemp and medical cannabis in March 2022. President Rodrigo Chaves unveiled a draft law several months later to lay the legal foundation for the country’s medical cannabis and hemp markets, specifically looking at production and sales. The Costa Rican government controls the cannabis industry — including granting permits related to industrial hemp and medical cannabis — under regulation of the Ministry of Health and the minister of agriculture and livestock.

Around that same time, Chaves also presented a bill to the Legislative assembly to legalize the recreational use of cannabis in Costa Rica. He promised the initiative shortly after taking his role, nodding to the fact that recreational use of cannabis is a reality we cannot turn away from.

“It is no secret to anyone that marijuana is consumed in Costa Rica, more and more openly in the streets and parks. It is a reality,” Chaves said in a translation during a press conference.

He’s admitted that he personally does not agree with the consumption of cannabis, though he believes that it’s best to regulate the market so Costa Rica can reap the benefits.

“That they pay taxes, that generates formal employment; It is very clear that it is not an easy issue, many people of good faith have doubts,” he said.

As of January 2023, the government was set to present a substitute text to the recreational legalization bill after receiving feedback from different institutions, according to The Tico Times. Originally, the plan would have allowed recreational cannabis companies to operate under the Free Trade Zone regime, meaning consumers could feasibly go to clubs, coffee shops and other businesses to buy cannabis products. 

A number of institutions, including The Judicial Investigation Organism (OIJ), the Medical Association, the College of Psychiatrists, the Institute of Alcoholism and Drug Addiction (IAFA), the Evangelical Alliance Federation and some municipalities, shared their opposition and requested the proposal’s dismissal.

And even though a number of other institutions and businesses in the country support the proposal, citing similar benefits as Chaves like economic growth and opportunity, citizens aren’t quite on board. According to a survey conducted by the School of Statistics of the University of Costa Rica, 76.5% of Costa Ricans approve of medical cannabis, but only 35.4% support recreational legalization.

Costa Rica joins a number of other Latin American countries with legal medical cannabis, including Argentina, Chile, Colombia, Ecuador, Mexico, Panama, Paraguay and Peru. Uruguay is the only Latin American country with legalized recreational cannabis.

Regarding hemp, Costa Rican law defines industrial hemp as the plant or part or the plant and its derivatives, with extracting to contain no more than 1% THC by dry weight. The U.S. currently defines hemp as 0.3% THC or less, though farmers have advocated to change the limit to 1% as well with the upcoming 2023 Farm Bill.

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The best-rated dispensaries in Missouri for 2023

For the last five years, Missouri has been transforming into the gateway to cannabis in the Midwest. Since medical marijuana dispensaries opened in 2020, Missouri’s medical marijuana scene rapidly expanded to include recreational sales just a few years later, in 2022. Today, there are over 200 dispensaries in Missouri, many of which operate as both […]

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Maryland Joins the Club

Maryland recently became the latest state in the United States to legalize adult-use cannabis, joining an ever-growing club. Following a 2022 referendum, the Maryland General Assembly passed a cannabis reform act (cross-filed as House Bill 556 and Senate Bill 516) that authorizes the the sale of cannabis from licensed dispensaries to adults starting on July 1, 2023. In line with other Northeastern states such as Connecticut, Delaware, and New Hampshire, legalized activities in Maryland are subject to a personal use amount, equal to 1.5 ounces of flower, 12 grams of concentrated cannabis, or an amount of cannabis products that does not exceed 750 mg THC.

Cannabis sales will be subject to a tax of 9%. For a state some associate with the slogan “if you can dream it, we can tax it”, this seems a relatively modest levy. Those Marylanders who wish to skirt the tax will have the option of legally growing cannabis at home, provided it is out of public view. The maximum cultivation amount is two plants per household. Registered medical cannabis patients can grow up to four plants. Pursuant to the legal changes, Maryland will also establish a mechanism for expungement of convictions involving possession of less than 10 grams of cannabis. While only possession of 1.5 ounces or less will be legalized, possession of up to 2.5 ounces will only be subject to a civil fine and not criminal prosecution.

The new law establishes a licensing framework for persons wishing to operate a cannabis business. As has been the case with medical cannabis, licenses will be provided for growers, processors, and dispensaries. The law caps the number of licenses that can be awarded, establishing separate limits for standard licenses and micro licenses. Provided certain conditions are met, Maryland will allow those with medical cannabis licenses to convert them to licenses that also allow adult-use cannabis activities.

Micro license holders will have the option of operating with licensed incubator spaces. In the case of dispensaries, a micro license allows the operation of a delivery service, without a physical storefront and with no more than ten employees. Licenses will also be available to operate on-site consumption facilities. These establishments may not allow tobacco smoking or alcohol consumption within the premises. This seems at odds with the claim that on-site consumption facilities will “more closely resemble bakeries or coffee shops than smoke lounges.” This is not because cigarettes and booze are common at bakeries and coffee shops nowadays, but because the expect impact of the rules will be to attract only cannabis users, resulting in environments that will hardly resemble a Panera or Starbucks.

This quibble aside, Maryland’s move represents another positive step forward when it comes to cannabis in the Northeast, which has quickly established itself as a legalization stronghold. We hope that more states will continue to emulate Maryland and its Northeastern brethren, abiding by the Bay State motto, Fatti Maschii Parole Femine, the politically correct rendering of which in English is “strong deeds, gentle words”.

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Arizona Veteran Faces Prison Time for Treating Cluster Headaches with DMT

Damon Laetzsch (pronounced letch, like fetch) was arrested while making breakfast on August 11, 2021 at his home in Chandler, Arizona when police raided his house and found psilocybin mushrooms, DMT and a flask containing Naphtha, a chemical used to extract DMT. At the time of publication, he faces a potential prison sentence of 6 and a half years if he is convicted for possession and manufacturing of dangerous drugs.

Laetzsch, 44, says he uses tryptamines like psilocybin and DMT to treat cluster headaches, which are widely considered one of the most painful experiences a human being can undergo. DMT and psilocybin are extremely illegal in the state of Arizona, so Laetzsch is facing several years in prison for what he says is the only way to maintain his quality of life.

“It’s the worst pain I’ve ever felt in my life,” Laetzsch said. “Nothing helps the headache as well as DMT when I’m actually having it. It will abort the headache immediately. A small hit will abort the headache for about an hour to an hour and a half. If I take a bigger hit it can last longer but some of the headaches last a few hours so I would have to take a few hits during that episode. But, I would be pain-free. It wasn’t even a psychoactive amount that I smoked to abort the headache.”

According to Laetzsch, a disgruntled ex-girlfriend tipped off the police that he had a mushroom grow in the house. Between that and his prior arrest record, that’s all it took to trigger a full-blown raid. The kicker here is that the ex-girlfriend who reported Laetzsch to the cops was apparently in his house weeks later at the time the cops came marching in.

“I had no idea man. Me and my ex-girlfriend split up because she was starting to get involved in fraud and shit. I found out so I kicked her out and she was pissed off I kicked her out. So, the next time she got in trouble, she was like ‘I got information on so and so,’” Laetzsch said. “I didn’t know that she had told on me so she would still come over from time to time.”

Cruel irony notwithstanding, Laetzsch represents a very real issue in the criminal justice system. He’s a veteran of the United States Army who came home from two deployments with very real medical issues for which he used cannabis. He faced felony charges almost immediately after coming home, years before the raid in question.

“That first case I [got] caught was in 2001, so I wasn’t even home from the military for a year when they fucking tried to send me to prison for a usable amount of marijuana,”  Laetzsch said, also indicating he had a firearm on him at the time. “I know it doesn’t matter for them but my doctor told me, they tried to give me a bunch of Xanax and painkillers for my chronic pain and anxiety and PTSD and I told them I’m not really big on pills and he told me ‘well you can just smoke marijuana but it’s illegal.’”

Laetzsch served two and a half years in prison for that, and if anyone’s wondering why such a harsh sentence was handed down to a military man who’s just come home, I need only remind you that this was Arizona in 2001, and as Laetzsch kindly reminded me, people were doing hard time for evidence as frivolous as cannabis seeds.

As a journalist, it is my job to give all necessary perspective and while I personally may be sympathetic to this case, Laetzsch is not the portrait of an innocent freedom fighter wrongfully accused of crimes he did not commit and I want to be clear about that. This man has led a lifetime of questionable decision-making. He served another four and a half years in prison later on for running a chop shop, not to mention he was arrested for DUI with his son in the car in 2013 and that would look awful to any jury in any state. It is also important to note here that I have been friends with their whole family for a long time so I’m more than a bit biased here. I’ve heard stories about the guy for years, all a bit stranger and more chaotic than the last. That said, I personally do not believe Laetzsch deserves to spend any more time in a cell than the seven years he already has just for using the means at his disposal to treat his symptoms according to research from documented, peer-reviewed scientific studies. 

A report from the National Library of Medicine found, with regard to cluster headaches: “These patients are in a desperate and vulnerable situation, and illicit psychoactive substances are often considered a last resort. There appeared to be little or no interest in psychoactive effects per se as these were rather tolerated or avoided by using sub-psychoactive doses. Primarily, psilocybin, lysergic acid diethylamide, and related psychedelic tryptamines were reportedly effective for both prophylactic and acute treatment of cluster headache and migraines.”

Several more studies have been published on the matter, all of which have come to the same general conclusion: people who suffer from cluster headaches, about 1 in 1,000 Americans according to one of the aforementioned studies, will do virtually anything to mitigate or avoid them and thusfar, psychedelics seem to be an effective way of doing that. Of course, because this is America and the vast majority of the country is still fighting Nixon’s drug war, people like Laetzsch face two equally unthinkable options: suffer through months of horrific pain year after year or take drugs and risk prison time.

Laetzsch is currently negotiating through plea deals and such but as it stands, due to his record, he could potentially face six and a half years in prison in a plea deal or go to trial later this Fall where the consequences could be far greater should the judge choose to convict him. Reasonable people can disagree on whether or not Damon Laetzsch is an upstanding member of the community. However, reasonable people cannot disagree that Laetzsch came home from the Army, got locked up for a personal amount of cannabis, and had his life derailed from that point on by the criminal justice system like so many others for something that 38 of 50 states have since legalized in some form or another. Cannabis aside, psychedelics like the ones Laetzsch was caught with are already being touted as miracle drugs by major pharmaceutical companies. Is it reasonable to say that maybe we should just cut the guy a break at this point in time? This humble journalist says fuck yes, please leave him alone and thank him for his service on your way out.

Those sympathetic to this case who wish to advocate on behalf of Laetzsch can send letters to:

Alcock & Associates PC Attn: Vernon Lorenz
2. N Central Ave
26th Floor
Pheonix, AZ 85004

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Leafly Buzz: 13 fire cannabis strains of May 2023

Including Fish Scale, Blue Lobster, and Maui Wowie.

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Oregon Cannabis: How Many Retailers Will Close Due to Gov. Kotek’s New Tax Compliance Missive?

As reported by Sophie Peel of the Willamette Week, on May 16, Governor Kotek issued a directive to the OLCC to make state tax compliance a requirement for the agency to issue or renew cannabis retail licenses. This new tax policy is a direct result of the political fallout from the La Mota scandal, which led to the resignation of the Secretary of State, Shemia Fagan. This tax policy may have a huge impact on the Oregon marijuana industry and the changes are coming fast! As early as June 15, 2023 – for a temporary rule and a permanent rule by this fall.

How does the marijuana sales tax work?

Oregon is somewhat unique in that it only taxes marijuana at the point of sale to a retail customer. So producers, wholesalers, and processors don’t collect or pay sales tax. Instead, dispensaries collect up to a twenty percent sales tax (17 percent state + 3 percent local) for each marijuana item sold. The sales tax is typically, if not always, included in the advertised price and not added on at the register. It is invisible to the customer for all intents and purposes.

Here’s an easy example: A dispensary that has $1 million in sales owes $200,000 in sales taxes. When a dispensary collects the sales tax it holds the money in trust for the state. And later remits the collected sales tax to the Oregon Department of Revenue (“ODR”). The best practice is to silo the sales tax proceeds from other revenue. In practice, however, we see many retailers commingle their sales tax proceeds and fail to remit the appropriate amounts to the ODR. Sometimes we see dispensaries and their owners simply pocket the tax proceeds and fall into enormous arrears.  (This may be exactly what La Mota was doing – they owe at least $592,000 in unpaid taxes going back to 2016).

Thus far the OLCC has taken little or no action against dispensaries who fall into arrears on their sales tax remittances.

What is the new tax compliance policy?

The basic directive from Gov. Kotek is that dispensaries who aren’t paying their taxes can’t get their license renewed. No license = close up shop. Exactly how her directive will work in practice is unknown. What Gov. Kotek has done is tell the OLCC to get busy rulemaking. And busy they are. On May 16, the same day Gove. Kotek issued her directive, the Executive Director of the OLCC, Craig Prins, announced plans “to have draft language to the commission for a temporary rule by June 15 and to adopt a permanent rule by August or September.” Here’s a link to an FAQ that describes some of what the industry may see.

Why is the new tax compliance rule a big deal?

The ODR reports that about 9% of cannabis retailers haven’t fully paid their taxes. That may not seem like much, but we suspect this new tax compliance policy may have significant ramifications and lead to the closure of many dispensaries. According to sources at the OLCC, retailers will have to pay ALL state taxes – personal, employment, transit, point-of-sale, or be in payment plan in order to quality for a license renewal.

Does this mean investors/owners must prove they have paid all “personal” taxes? We don’t know. This seems drastic. And why would keeping current on employment and transit taxes be required for retail stores but not processors or producers or wholesalers? Or, for that matter, liquor stores and bars?

How will this tax compliance rule work across the variety of business structures found in the cannabis industry? We don’t know.

What happens if I can’t pay all of my taxes by my renewal date? We don’t know for sure, but the ODR FAQ (linked above) indicates that if a payment plan is in place at the time of renewal date then the business is compliant for purposes of renewal.

If one of my entities falls behind on taxes, can my other entities renew? We don’t know. Owners of multiple dispensaries typically set up different entities for each location (e.g. La Mota). If one commonly owned business is not compliant, will the OLCC refuse to renew every commonly-owned business? Wait and see.

What happens if I sell my business and prior to licensure let the buyer manage the business but they don’t pay the taxes? We have seen this many times in the past. Typically the ODR goes after the current owners and/or directors and/or officers, regardless of any services or management agreement or other contract that makes the buyer liable for tax remittances. I would not expect any changes here.

We can envision a lot of dispensaries running into trouble and potentially closing. Much depends on how the OLCC drafts and implements this rule and, possibly, the political developments in the meantime. Stay tuned for updates.

The post Oregon Cannabis: How Many Retailers Will Close Due to Gov. Kotek’s New Tax Compliance Missive? appeared first on Harris Bricken Sliwoski LLP.

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University of Kentucky’s Cannabis Research Center Announces Inaugural Grants

A newly launched center dedicated to cannabis research at the University of Kentucky announced its inaugural grant recipients on Wednesday.

The University of Kentucky Cannabis Center said that its “first set of faculty pilot grants to support innovative and collaborative cannabis research” had been awarded to four researchers at the university’s the College of Nursing, College of Public Health, College of Pharmacy and the Martin School of Public Policy and Administration.

The grants range in the amounts of $75,000-$100,000, and will subsidize research for 14 months.

“We are excited for this opportunity to expand and accelerate cannabis science at UK and conduct studies focused on the public health impacts of cannabis that can directly affect the lives of Kentuckians,” said Shanna Babalonis, the director of the UK Cannabis Center. “We have talented and dedicated researchers across a range of disciplines right here on campus who can contribute meaningful science to the center from multiple perspectives.”

The Cannabis Center was launched in September thanks to a bill that was passed by Kentucky legislators and signed into law by Democratic Gov. Andy Beshear last year. In the announcement at the time, Bablonis said that the “legislature is interested in having us explore the conditions for which medical cannabis might be useful, as well as the most effective dosing and route of administration for each condition.”

According to a press release on Wednesday from the university, the legislation granted $2 million for the center until June 2024.

“The primary objective of the research conducted at the UK Cannabis Center is to provide valuable insights to medical professionals, lawmakers, and the general public regarding the risks and benefits associated with cannabis and cannabinoids. This knowledge will be particularly crucial as Kentucky proceeds with the implementation of new medical marijuana legislation. The center’s research focuses on various aspects, including the health effects of cannabis and its potential for treating specific medical conditions,” the press release said.

The four grant recipients announced by the university on Wednesday are Kristin Ashford, an associate dean of Undergraduate Program and Policy, Good Samaritan Endowed Chair for Community Nursing, and director of the Perinatal Research and Wellness Center, who “will examine cannabis use during pregnancy”; Jay Christian, Ph.D., an associate professor in the Department of Epidemiology and Environmental Health, who “will explore cannabis use among Kentucky cancer patients and survivors”; Jayani Jayawardhana, Ph.D., an associate professor in the Department of Health Management and Policy, who will examine the impact of “Cannabis Laws on Opioid and Benzodiazepine Prescriptions and Associated Health Outcomes in Older Adults”; and Caroline Weber, Ph.D., an associate professor in the Martin School, who “will study the changes in cannabis use by examining traffic fatality records.”

Ashford’s study on cannabis use during pregnancy will examine “the perceptions of safety and acceptability for cannabis use among women who are currently pregnant as well as current use patterns and trends over the last five years in Central Kentucky among pregnant persons,” according to Wednesday’s press release.

“We want to know what pregnant women think, feel and do when it comes to using cannabis, in order to give our legislators, health care providers and expectant mothers a better understanding of how to improve the health of women and children in Kentucky,” said Ashford.

Christian’s study on cannabis use among cancer patients will be conducted through a survey that will help him “better understand the prevalence of cannabis use, which methods patients are using (smoking, vaping, eating), and how they are obtaining it.”

“Cannabis laws around the country, including in Kentucky, are changing rapidly. To determine the effect of legal medical cannabis, it’s important to know how people have been using it both before and after the law changes,” said Christian. “This study is a first step in helping us to assess the effects of Kentucky’s new medical cannabis law on cancer patients and survivors.”

The post University of Kentucky’s Cannabis Research Center Announces Inaugural Grants appeared first on High Times.

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