Just weeks after Senators Elizabeth Warren (D-Mass) and Cory Gardner (R-Colo) introduced bi-partisan legislation to make marijuana lawful under a state’s marijuana laws also lawful under the Controlled Substances Act (CSA), Senate Minority Leader Chuck Schumer (D-NY) introduced legislation removing marijuana from the CSA altogether on Wednesday, June 27. Schumer’s bill also comes just one day after Oklahoman’s passed legislation legalizing medical marijuana in their traditionally red state, and one day before the U.S. Senate passed legislation legalizing hemp for all purposes, including extracts from hemp, such as cannabidiol.
By removing from the purview of the CSA, state-legal cannabis and proceeds derived therefrom, the Warren/Gardner legislation, if passed, would likely have the effect of nationwide legalization, but state operators and consumers would still need to be concerned about marijuana’s Schedule 1 status under the CSA, whereas the Schumer bill, if passed, would eliminate those concerns by removing marijuana from the CSA.
With the election of Phil Murphy as New Jersey Governor in 2017, the possibility of New Jersey becoming one of the next states to pass recreational marijuana legislation became very real, as this was among the issues key to Murphy’s campaign.
On Tuesday, January 9, 2018, less than one week after AG Sessions issued guidance to all US Attorneys rescinding Obama-era policies deprioritizing the federal prosecution of state-lawful cannabis-related activities, that possibility became more of a likelihood, as New Jersey Sen. Nicholas Scutari introduced Senate Bill 830, which would allow for the cultivation, sale and use of marijuana for recreational purposes in New Jersey by those 21 and older.
The legislation proposes adults would be permitted to possess up to 1 ounce of marijuana, 16 ounces of marijuana-infused products in solids, 72 ounces in liquid form, 7 grams of concentrate and up to six immature plants, and establishes a sales tax on marijuana that would rise incrementally from 7 percent to 25 percent over five years.
With New Jersey’s large population, and proximity to Manhattan and Philadelphia, the recreational cannabis market in New Jersey will likely dwarf most other states that have legalized adult-use.
On January 1, 2018, hundreds of California residents lined up outside just licensed cannabis retail dispensaries to purchase newly legal recreational marijuana. The founder of Buddy’s dispensary in San Jose, which holds one of California’s first recreational marijuana licenses, described it as the busiest day in the dispensary’s history. The California cannabis industry is projected to reach profits of $3.7 billion dollars in 2018 alone. Projections indicate there could be up to 4 million consumers of recreational marijuana in California. This huge opportunity has many new entrepreneurs, including celebrities like Mike Tyson, pursuing the cannabis business.
Under the new law, Californians over the age of 21 can now possess up to an ounce of marijuana, eight grams of marijuana concentrate, and grow up to six plants at home for their personal use. While public consumption is still banned, the new framework gives recreational users new flexibility. Those on the business side of recreational cannabis, however, still have a lot to consider before diving into this new market.
This is especially true given the news today that Attorney General Jeff Sessions is rescinding an Obama-era directive discouraging enforcement of federal marijuana laws in states where cannabis is legal. We will know more about how this decision will impact the California market after the announcement is officially made by AG Sessions later today. For now, we will provide an update on the first week of recreational cannabis sales in California.
Articles appearing this week in the LA Times and the Philadelphia Inquirer, among other recent articles, highlight the horrors of the opioid crisis and the need for research into cannabis as a possible solution. While the federal government warns about the spiraling toll of the opioid epidemic, it refuses to grant the applications of world-renowned scientists at major universities and research centers seeking to explore the ways in which the well-documented therapeutic properties of cannabis can alleviate the pain and suffering – physical, emotional and financial – being caused by opioid abuse. There is no shortage of deep pockets willing to fund the research, and US-based scientists are ready, willing and able to get to work, yet the federal government refuses to depart from its antiquated “reefer madness” established in the early 20th Century. 2018 should be the year the federal government stops blocking cannabis research so that scientists can determine if and how cannabis can stem the opioid crisis. Fingers crossed!
On November 16, 2017, the California Bureau of Cannabis Control published emergency regulations governing both the medical and the adult-use cannabis industries in California. Below are the highlights of the emergency regulations and how they may impact distributors of cannabis products.
San Francisco Adopts New Rules for Recreational Cannabis
After months of debate and consideration, the San Francisco Board of Supervisors approved new regulations for recreational cannabis activity yesterday. The legislation will come back to the Board next week for a final vote and then will go to San Francisco Mayor Ed Lee to sign it into law. Highlights of the new regulations are outlined below.
Existing Medical Dispensaries Allowed to Sell Recreational Cannabis
Beginning on January 5, 2018, existing medical dispensaries and delivery services currently operating in San Francisco will be allowed to sell recreational cannabis. The existing cannabis dispensaries must obtain a temporary 120-day license in order to participate in recreational cannabis sales.
Eight months after Massachusetts voters approved legal adult use of cannabis,on July 28, 2017, reluctant Republican Gov. Charlie Barker signed legislation to start a year long phase-in of permitting adults to buy and use cannabis. The expectation is that the first stores will be open by next July.
The legislation imposes a 20% tax on adult use cannabis, of which 3% will go to local municipalities. Also, in a unique feature, local governments will have the option to prohibit cannabis stores in their area, unless voters approved the measure in their municipality, in which case voter approval would be required to ban stores. Estimates are that as much as $300 million in taxes might be collected in the state just in the first two years after implementation.
A Cannabis Control Commission has to be appointed by August 1 and the commission will issue regulations by March. As the most populous Eastern state to approve adult use, will Boston and other Massachusetts destinations such as Martha’s Vineyard and Cape Cod see a surge in “cannabis tourism” as Colorado has? Only time will tell.