recreational cannabis – Cannabis Industry

December 12, 2024December 12, 2024 by Haley Ferise

Pennsylvania Legislature Weighs Possibility of Adding Recreational Cannabis to the Purview of the Liquor Control Board

Pennsylvania state representatives Dan Frankel (D-Allegheny) and Rick Krajewski (D-Philadelphia) plan to propose a bill in the House of Representatives that would legalize recreational cannabis. Under their proposal, cannabis would be controlled by the state’s Liquor Control Board, the name of which would be changed to the Liquor and Cannabis Control Board. Cannabis would be sold at existing state liquor stores; meanwhile, private businesses would be permitted in the industry in cultivation and consumption sites, similar to bars.

However, there has been debate about the merits of this state-run system for liquor sales, and Republican members of the state legislature have made efforts to privatize liquor sales in the past.

Proponents of the state-run system argue that this system provides stable jobs, including consistent benefits and reliable pensions, for over 5,000 Pennsylvanians, while also returning millions of dollars in profits to the state. Furthermore, this system gives the state more control to prevent underage liquor sales.

Opponents of this system argue that Pennsylvanians should have more freedom over decisions regarding liquor sales. They also hypothesize that privatizing liquor sales would allow more stores to arise and more sales to occur, which would increase tax revenue for the state. For example, less than three years after Washington State privatized liquor sales, the number of liquor stores increased by approximately 327%, and the industry’s revenue collections increased by approximately 18%.

Despite this debate, Pennsylvania’s state-run system for liquor sales has remained in place. However, a state-run system for cannabis dispensaries may run into a separate issue: the potential conflict with federal law. Cannabis remains a controlled substance under Schedule I of the Controlled Substances Act, and Section 280E of the Internal Revenue Code disallows all tax deductions or credits for amounts paid or incurred in carrying on trade or business that consists of “illegally trafficking” a Schedule I controlled substance. As recently as June 2024, the IRS has issued reminders that this section applies to businesses selling marijuana, even if they operate in states which have legalized the sale of cannabis. It remains to be seen whether state-run dispensaries would be subject to this same provision.

Representatives Frankel and Krajewski’s bill would also provide for the possibility of expungement for people charged with cannabis-related crimes, invest revenue into communities impacted by prohibition policies, implement public health protections, and assist minority business owners in entering the industry.

The legislators have not officially proposed the bill but did release a memorandum to all House members seeking co-sponsors on December 2, 2024.

October 24, 2023 by Kathryn R. Brown

Ohio Is Poised To Become The Next State to Legalize Cannabis For Adult Use

On November 7, 2023, Ohio voters will decide the fate of Ballot Issue 2, a citizen-initiated proposed law that would commercialize, regulate, legalize and tax cannabis for adult use. Recent polling data suggests broad support for Issue 2. A majority vote in favor of Issue 2 would make Ohio the 24^th state—and the sixth in the Midwest—to make recreational cannabis legal under state law.

If Issue 2 passes, a new chapter 3780 in the Ohio Revised Code called Adult Use Cannabis Control would take effect December 7, 2023. However, the cannabis industry expects sales in Ohio of adult use cannabis to commence in the summer of 2024. Continue reading “Ohio Is Poised To Become The Next State to Legalize Cannabis For Adult Use”

February 23, 2022 by Michael D. Schwamm

NY Gov. Hochul signs conditional cannabis cultivation bill to speed-up recreational cultivation

New York Gov. Kathy Hochul signed new legislation on Tuesday that will allow hemp farmers in the state to apply for a conditional license to grow cannabis.

With this legislation, New York is creating a new Conditional Adult-use Cannabis Cultivator license, allowing hemp farmers to grow cannabis in the 2022 growing season to “position New York’s farmers to be the first to grow cannabis and jumpstart the safe, equitable and inclusive new industry we are building”. Conditionally licensed cannabis farmers must hit certain requirements under this law. Continue reading “NY Gov. Hochul signs conditional cannabis cultivation bill to speed-up recreational cultivation”

February 25, 2021 by Seth A. Goldberg

Bipartisan Adult-Use Bill To Be Introduced in Pennsylvania

Senators Dan Laughlin (R) and Sharif Street (D) are introducing legislation that would legalize marijuana for adult recreational use in Pennsylvania. This is the first time a republican senator has backed such a bill. The proposed legislation will attempt to generate revenue for the commonwealth and to promote social equity by way of increasing the number of licenses to operate, imposing a 6% sales tax, and imposing a 10% excise tax that would go toward a Cannabis Business Development Fund to provide aid, grants, and technical assistance to businesses and individuals in areas that have been disproportionately impacted by criminal prosecution for cannabis violations. Expungement of cannabis crimes would also be available.

Laughlin’s pragmatic views may encourage his republican colleagues in PA’s legislature to join him. As Laughlin stated during a press conference: “Our proposal prioritizes safety and social equity. And furthermore, it will let Pennsylvania’s robust agricultural industry participate in marijuana cultivation.” And both Laughlin and Street encouraged PA legislators to keep pace with lawmakers in New Jersey and New York, stating in their co-sponsorship memo: “This year our neighbors in New Jersey have signed adult use marijuana into law and our neighbors in New York are likely to legalize. It is our duty to taxpayers to seize the initiative and legalize marijuana concurrently with bordering states. Failure to do so risks permanently ceding hundreds of millions of dollars of new tax revenue as well as thousands of jobs at a time when taxpayers can least afford it.”

February 23, 2021 by Matthew Caminiti

New Jersey’s Legal Cannabis Framework Creates Economic Opportunity with an Eye to Social Justice

On February 22, 2021, Governor Murphy signed into law The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, regulating cannabis use and possession for adults 21 years and older. The ratification of the bill follows a protracted legislative logjam since Election Day, when New Jersey voters overwhelmingly approved a mandate to provide the infrastructure for the legalization of cannabis in the state. The legalization immediately decriminalizes certain amounts of marijuana and hashish statewide. Meanwhile, the recreational production and sale remains subject to regulatory schemes not yet enacted.

Continue reading “New Jersey’s Legal Cannabis Framework Creates Economic Opportunity with an Eye to Social Justice”

December 4, 2020December 4, 2020 by Deanna J. Lucci

House Passes Bill To Legalize Marijuana at the Federal Level

Today, the House of Representatives passed the groundbreaking MORE Act – legalizing marijuana at the federal level. The bill passed by a vote of 228 to 164.

As we previously discussed in our November 10th and September 4th blog posts, the MORE Act (Marijuana Opportunity Reinvestment and Expungement Act of 2019 – H.R. 3884) legalizes marijuana and cannabis at the federal level, by removing them from the Controlled Substances Act and eliminates some cannabis criminal records.

While the bill represents a first step toward legalizing cannabis, states would need to adopt similar measures to fully decriminalize its use – currently, 15 states and the District of Columbia have legalized (or recently voted to legalize) cannabis for adult recreational use, and 35 states and the District of Columbia have legalized medical cannabis.

The bill also makes other changes, including:

Replaces statutory references to marijuana and marihuana with cannabis,
Requires the Bureau of Labor Statistics to regularly publish demographic data on cannabis business owners and employees,
Establishes a trust fund to support various programs and services for individuals and businesses in communities impacted by the war on drugs,
Imposes a 5% tax on cannabis products and requires revenues to be deposited into the trust fund,
Makes Small Business Administration loans and services available to entities that are cannabis-related legitimate businesses or service providers,
Prohibits the denial of federal public benefits to a person on the basis of certain cannabis-related conduct or convictions,
Prohibits the denial of benefits and protections under immigration laws on the basis of a cannabis-related event (e.g., conduct or a conviction), and
Establishes a process to expunge convictions and conduct sentencing review hearings related to federal cannabis offenses.

While Sen. Kamala D. Harris (D-CA), the Vice President-Elect, introduced a counterpart bill (S.2227) in the U.S. Senate, its passage in the chamber is unlikely this Congress as Senate Majority Leader Mitch McConnell (R-KY) has declined to endorse the bill.

While this legislation is unlikely to pass the Senate this Congress, proponents of cannabis legalization have hailed the House vote as historic, and an important first step toward generating the momentum and support needed to favorably position the measure for future congressional consideration. And whether the measure would be approved by the next Congress likely depends on the outcome of the two Georgia Senate runoff elections scheduled for January 5, 2021. If both Democratic Senate candidates, Jon Ossoff and Rev. Raphael Warnock, win the runoffs, then the Democrats will control both the House and Senate, with Vice President-Elect Kamala Harris casting the tie-breaking vote.

However, it is unclear if President-Elect Joe Biden would sign the bill since he has proposed rescheduling cannabis as a schedule II drug so researchers can study its positive and negative impacts as opposed to removing it entirely from the list of scheduled substances. While Biden has expressed support for decriminalization of marijuana, expungement of prior cannabis use convictions, and legalizing cannabis use for medical purposes – he has said he wants to leave decisions regarding adult recreational use to the individual states. Nonetheless, marijuana legalization advocates believe this symbolic vote on the legislation could send a strong signal to the Biden administration that this is a Democratic priority.

Even though federal legalization may not be on the immediate horizon, the passage of the MORE Act in the House, and the legalization of adult-use and/or medical marijuana in five more states on November 3, 2020, could influence a Biden-appointed attorney general’s views on enforcement of marijuana related activities. While AG Sessions attempted to reverse the liberal Obama administration marijuana policies set forth in the Cole Memorandum, and AG Barr has reluctantly acknowledged that the Cole priorities have been relied on and should thus be followed, an AG appointed by Biden, given the current pro-legalization wave, Biden’s favoring of state’s rights on this issue, and Kamala Harris’s favoring of decriminalization, might endorse an approach consistent with, if not even more liberal than, the Cole priorities. Thus, while the appointment of AG Sessions sent shockwaves through the cannabis industry, market participants and those who have been standing on the sidelines eager to get on the field seem to have a lot to look forward to.

November 4, 2020November 4, 2020 by Seth A. Goldberg

State-Legal Marijuana a Clear Winner in 2020 Voting

Voters in the five states where the legalization of marijuana was on the ballot voted in favor.

In the populous states of New Jersey and Arizona, voters legalized marijuana for recreational use by adults over the age of 21. Given New Jersey’s proximity to New York and Pennsylvania, where medical marijuana programs have been popular, legalization in New Jersey could have a domino effect in the northeast, especially considering the tax revenue that will be gained by New Jersey from New York and Pennsylvania residents who travel there every day for work, the Jersey shore and casinos, and other reasons.

Voters in South Dakota and Montana also voted to legalize marijuana for recreational purposes, South Dakota voters also approved medical marijuana, and voters in Mississippi voted to legalize marijuana for medical purposes to treat 22 qualifying health conditions.

Seth Goldberg is a Team Lead of the Cannabis Industry Practice at Duane Morris.

March 18, 2019 by Brad A. Molotsky

NJ Adult Use Bill – Two Steps Closer to a March 25th Vote – Brad A. Molotsky, Esq.

According to late night reporting from NJ Biz – Dan Munoz, who has been all over this topic, committees in both the NJ Assembly & Senate approved a measure that would legalize adult-use recreational marijuana, setting the proposals for a showdown full-floor vote in 7 days from now on March 25.

Senate Bill 2703 passed by a 6-4 vote with one abstention in the Senate Judiciary Committee Monday evening while its counterpart, Assembly Bill 4497, passed by a 6-1 vote with two abstentions at the Assembly Appropriations Committee.

Both measures would allow for anyone over 21 years of age to possess up to an ounce of marijuana.

The product would be taxed at $42 an ounce and the industry would be regulated by a five-person Cannabis Regulatory Commission, which will function similarly to how the Casino Control Commission operated following the legalization of gambling in the 1970s.

The approval of both measures followed hours of closed-door meetings as lawmakers hammered out last-minute changes to the legislation, including a dramatically increased expungement process for people with marijuana-related convictions.

Stay tuned for a detailed analysis as the final bill is published. – Brad

March 13, 2019 by Brad A. Molotsky

NJ Adult Use Cannabis Bill Fast Tracked for March 25th Vote

Gov. Phil Murphy and legislative leaders reached agreement on key provisions to legalize marijuana for adult recreational use, including how to tax and regulate it, and expunging past low-level marijuana offenses for certain users as a step toward social reform per reporting from Dan Munoz.

Per a press release issued by key Assembly Senate and the Governor’s office, we should expect to see the introduction of a cannabis bill within days.
Under the terms of the agreement:

• Adult-use marijuana would be subject to an excise tax of $42 per ounce, which will be imposed when marijuana is cultivated.

• Municipalities that are home to a cultivator or manufacturer would receive the revenue from a 2 percent tax on the product within their jurisdiction.

• Municipalities that are home to a wholesaler would receive the revenue from a 1 percent tax on the product within their jurisdiction.

• Municipalities that are home to a retailer would receive the revenue from a 3 percent tax on the product within their jurisdiction.

To start to address social equity concerns, the revised legislation will likely provide an expedited expungement process for individuals convicted of low-level marijuana offenses, and a separate expungement process that would automatically prevent certain marijuana offenses from being taken into account in particular areas such as education, housing and occupational licensing.

Additionally, there are a number of provisions that aim to ensure broad-based participation for women owned and minority owned businesses, low and middle-income individuals, and disadvantaged communities.

Under the proposed legislation, adult-use marijuana would be governed by a Cannabis Regulatory Commission, composed of 5 members—three appointed directly by the Governor to serve terms of at least 4 years, and 2 appointed by the Governor upon the recommendations of the speaker and Senate president.

The commission would be tasked with promulgating all regulations to govern the industry and overseeing applications for licensing of adult-use marijuana dispensaries.

-Brad A. Molotsky, Esq.

March 8, 2019 by Brad A. Molotsky

Is March the 4:20 for Adult Use Marijuana in NJ?

Is March the 4:20 for NJ recreational, adult use marijuana? Brad A. Molotsky

According to Senate President Stephen Sweeney, with budget hearings and discussions beginning to ramp up in Trenton, March 2019 is likely the last best time to act on a New Jersey marijuana-legalization bill.
In order for the Bill to move forward, Senator Sweeney confirmed his view that a vote needs to be held this month (i.e., March) in order to hold an election on a measure legalizing, regulating and taxing marijuana for adult-use.

Why March – According to the Senator, April would be a difficult month because of budget hearings and religious holidays. Then May is the actual budget discussion and focus on passage of the budget.

That in and of itself is problematic, according to Dan Munoz at NJBiz, given that lawmakers might view negotiations on the budget and marijuana-legalization through a tit-for-tat, transactional lens.

As for whether we could see a vote this summer or during a lame duck session of the Legislature, Senator Sweeney said he “doesn’t want to wait that long.” And whether lawmakers might put the questions before voters as a ballot referendum has essentially been a non-starter according to Munoz.

A tentative agreement between the Governor and the legislative leaders calls for a $42 an ounce tax on marijuana and for a 5-member Cannabis Regulatory Commission to oversee the new industry. Per the momentary agreement, Governor Murphy would be able to select 3 of the 5 Commission members.

Per Munoz, Governor Murphy was initially pushing for legalization within his first 100 days of office. The proposed 2020 budget, unveiled Tuesday by Governor Murphy, includes $60 million of tax revenue under the assumption that marijuana is made legal by January 2020.

The 2020 budget also anticipates spending $21 Million to create the necessary regulatory apparatus for legalized cannabis and thereafter has a placeholder for a $12 Million a year spend for cannabis operations and enforcement.

Could be an interesting March in Trenton – stay tuned!