All posts by Justin M. L. Stern

Cannabis Vapor Sales Fall in Midst of Health Scare, Though CDC Revises Scope of Inquiry

Over the last few weeks, numerous media reports have focused on the alleged though unverified link between vaping products and certain health-related issues, including what have been described as “lung illnesses.”

While reactions have surfaced quickly (among them President Trump’s statement this week that his Administration will move to restrict the sale of certain e-cigarettes), the blowback can also be seen in the market, too. According to a new report by Marijuana Business Daily, “since the first vape-related death was reported in late August,” there has been a significant drop-off in purchases of vaping-related cannabis products among consumers in the adult-use cannabis space.

According to the report, based on a study conducted by Seattle-based Headset, the percentage of vaping-related cannabis products in the adult-use (or recreational) cannabis market fell in California from 32.8% (just before the first vape-related death) to 28.9% (as of September 11)–amounting to about a 12% drop in market share. In Colorado, the drop was from 19.5% to 15.4%–a slide of more than 20%. The two other states covered in the study were Nevada, whose drop-off was from 22.3% to 19.2% and Washington, whose drop-off was from 17.8% to 14.6%.

It’s worth noting that the fall of sales in the vaping category appears to have been matched with an increase in sales of other cannabis-related merchandise, including flower and pre-roll products. Further, as the chart contained in the report shows, while the sale of vape-related cannabis products as a percentage of sales does fluctuate from week to week, the recent drop-off reflects a significant departure from the normal ebb and flow.

Finally, all of this comes amidst the CDC’s recent announcement narrowing the parameters of its vape-related health inquiries. Whereas reports last week indicated that the CDC was reviewing 450 possible cases of vaping-related health issues, the CDC’s announcement on Thursday clarified that “[t]here are 380 cases of lung illness reported” and acknowledged that the CDC does “not yet know the specific cause of these illnesses” nor has the inquiry “identified any specific e-cigarette or vaping product (devices, liquids, refill pods, and/or cartridges) or substance that is linked to all cases.”

 

 

Ohio Governor Signs Sweeping Hemp and CBD Legislation

On July 30, 2019, Ohio Gov. Mike DeWine signed into law S.B. 57, legislation that overhauls Ohio’s laws concerning hemp. Significantly, the bill also contains an emergency provision, meaning that the bill, some critical aspects of which are discussed below, takes effect immediately.

One of the most important aspects of the emergency bill is its amendment of the definition of the word “marihuana” under the state’s Controlled Substances Act to expressly exclude hemp and hemp products. The bill defines “hemp products” broadly, providing that the term includes “cosmetics, personal care products, dietary supplements or food intended for … human consumption” as well as any other product containing hemp-derived cannabinoids (such as CBD), provided the product contains a THC concentration of no more than 0.3%. Moreover, the bill clarifies that the addition of hemp or a hemp product to any other product does not render the other product “adulterated.”

Further, the bill provides that the state shall issue licenses for the cultivation and processing of hemp in the state. However, because the process of license application and issuance has not yet been established, and further because the regulations implementing the new law have yet to be promulgated, Ohio farmers are unable to start growing hemp for the time being. That said, the Ohio Department of Agriculture stated that its “goal is to have farmers licensed and able to plant the crop by spring of 2020.”

In any event, the delay to be experienced by farmers is not likely to apply to retailers—according to the ODA, “[i]t is now legal to sell properly inspected CBD products in Ohio. The Ohio Department of Agriculture will be testing all CBD products for safety and accurate labeling to protect Ohio consumers.”

Could a Recent Florida Court Ruling Disrupt the State’s Marijuana Industry?

A contested ruling from one of Florida’s appellate courts could mean the end of both (1) required vertical integration and (2) caps on the number of registered medical marijuana treatment centers (MMTCs) in Florida.

To understand the issue, a quick primer on the nature of Florida’s (exclusively medical) marijuana program is in order. First, unlike many states, Florida requires “vertical integration,” meaning that, if registered by the state as a MMTC, the entity must “cultivate, process, transport and dispense” medical marijuana. Fla Stat. § 381.986(8)(e) (emphasis added). Second, Florida also caps the number of registered MMTCs, with the number of allowed MMTCs slated to increase as the number of registered qualified patients grows.

In a lawsuit initiated by a rejected MMTC applicant, the First District Court of Appeal (one of Florida’s five appellate courts) struck a number of significant blows to the existing medical marijuana framework in Florida, delighting prospective applicants and spooking existing license holders

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