Delaware marijuana activists are mounting a boycott against four medical cannabis operators in the state after representatives of those companies testified in opposition to an adult-use legalization bill last month.
While the Health and Human Development Committee advanced the legislation, advocates say they were “stunned” to hear opposing voices from four of the state’s six medical marijuana companies. Those are: Columbia Care, Fresh Delaware, CannTech and EZY Venture.
The businesses argued that enacting recreational legalization as delineated in the bill would oversaturate the market with retailers and create an oversupply of marijuana. Some explicitly talked about how the reform would hurt their bottom line, while others asserted that the costs of cannabis would become prohibitive for patients.
But advocates aren’t buying it. The Delaware Cannabis Policy Coalition said in a press release on Thursday that the companies opposing HB 150 are “simply obstructing the progress of adult-use legislation” and, in response, “some patients are now staging a boycott of the regulated dispensaries.”
“This market belongs to the long-time consumers, patients, and activists,” Zoë Patchell, executive director of Delaware CAN, said. “We create the demand, we’ve been the ones driving the reform efforts, and we pay the prices at dispensaries. Cannabis is more than a market—cannabis is a community.”
“These companies cannot reasonably fathom that we are going to purchase cannabis from any entity that has proven to put profits over patients,” she said. “And now they seem willing to put consumers’ lives and freedom at risk just to hold out for an unfair advantage in the industry.”
During last month’s committee hearing, David White of Fresh Delaware said the legalization bill would “visit violence upon the economic well-being” of the business and would “cause us to lay off our unionized workers.”
EZY Ventures’s Jennifer Stark added that “HB 150 would just crush Delaware’s medical program and our nearly 10,000 patients,” and she said a “possible solution” would be to give existing medical cannabis dispensaries priority licensing, like the bill would provide to microbusinesses and social equity applicants.
Watch representatives of Delaware medical cannabis companies express concerns about the marijuana legalization bill at the following timestamps below… Sharice Ward of Columbia Care at 2:10:51, David White of Fresh Delaware at 2:15:37, Jennifer Stark of Ezy Venture at 2:46:19, Ed Miller of Fresh Cannabis at 3:10:40 and Aaron Epstein of CannTech at 3:14:56:
Sharice Ward of Columbia Care similarly said that the legislation “will deal a crushing blow to Delaware’s medical marijuana program if enacted as proposed.”
“Multiple factors such as costs, administrative burden for card holders as well as the potential for oversupply will turn Delaware’s focus to the rapid increase of adult use-only clientele,” she said. “This will have obvious negative impacts on nearly the 10,000 patients that put their trust in the medical program.”
That’s simply not how advocates see it, and they argue that enacting the reform will expand access and prevent the ongoing criminalization of people over cannabis.
“It’s despicable that these companies, which already profit from patients and our advocacy, would fight against our all-volunteer efforts to fully legalize cannabis—especially while so many patients continue to suffer, and arrests for simple cannabis possession actually continue in the state,” Laura Sharer, executive director of Delaware NORML, said.
In a joint statement issued to Marijuana Moment through a PR firm, all four of the companies said that they “would like to further clarify that we strongly support legalizing cannabis for adult use but do have some concerns with the proposed legislation in its current form.”
“As providers of medical cannabis for the state’s registered patients, we stand with advocates who want to ensure that any new program will help eliminate criminal justice disparities, usher in a new and diverse group of cannabis entrepreneurs, bring economic growth and much-needed tax revenue to our communities, and help strengthen the state’s medical cannabis program,” they said.
Their primary concerns with the legislation are related to the proposed licensing structure, the companies reiterated, adding that they will “continue to push for the passage of legalization, while advocating for improvements in the legislation that will strengthen the medical program within the new adult-use framework and accelerate the availability of adult-use cannabis to Delawareans.”
The legalization bill as introduced would establish a regulated commercial cannabis system and tax sales at 15 percent. Home cultivation for personal use, however, would remain illegal.
At issue for the dispensaries are provisions concerning licensing. For the first 16 months of implementation, regulators could approve up to 30 retail business licenses, 30 manufacturing licenses and 60 cultivation licenses, as well as up to five laboratory testing licenses. That would vastly expand the state’s marijuana market.
The new bill would also provide a path for past marijuana convictions to be expunged and would establish a business licensing category for social equity applicants, defined as individuals who live in areas disproportionately impacted by prohibition, have been convicted of a marijuana offense or are the child of someone who faced such a conviction.
The legislation would retain penalties for impaired driving and allow employers to continue to drug test for cannabis and punish workers for being intoxicated on the job.
Incorporated cities would be allowed to ban cannabis businesses, while counties would have authority to set zoning restrictions. Marijuana could not be not be sold in the state on Christmas, Thanksgiving or Easter.
Applicants would be selected based on a scoring system that would also take into account factors such as whether the business will pay workers a living wage, provide health insurance and ensure a diverse workforce.
The bill’s 15 percent sales tax, described as a “marijuana control enforcement fee” would be be imposed at the point of sale for cannabis products. Revenue would first be appropriated to cover administrative costs, and then it would be up to the legislature to apportion any additional tax dollars.
An analysis from State Auditor Kathy McGuiness (D) released in January found that Delaware could generate upwards of $43 million annually in revenue from regulating marijuana and imposing a 20 percent excise tax. The legal market could also create more than 1,000 new jobs over five years if the policy is enacted, according to the report.
A legalization bill previously received majority support on the House floor in 2018, but procedural rules required a supermajority for it to pass and it didn’t meet that threshold.
A spokesperson for the governor’s office said Carney “supported decriminalization and an expansion of Delaware’s medical marijuana program” but added that “he still has concerns about legalizing recreational marijuana.”
Despite his wariness, Carney did sign two pieces of marijuana expungement legislation in recent years. In 2017 and 2018, a state task force met to discuss issues related to legalization, and the governor hosted a series of roundtable meetings about cannabis.
Carney’s predecessor approved a measure to decriminalize simple possession of cannabis in 2015.
This story has been updated to include comment from the medical cannabis companies that testified against the legalization proposal as drafted.
Photo courtesy of Mike Latimer.
Illinois Will ‘Blow Past’ $1 Billion In Legal Marijuana Sales In 2021, Chamber Of Commerce President Says
“Are we going to get to a billion dollars? I think we’re going to blow past the billion dollars based on the experience in smaller states,” the Chamber leader said.
By Elyse Kelly, The Center Square
Illinois’s cannabis industry is growing up fast, with adult-use recreational cannabis sales expected to hit $1 billion by year-end.
In March alone, Illinoisans spent $110 million on recreational marijuana.
Todd Maisch, president and CEO of the Illinois Chamber of Commerce, said one factor contributing to Illinois’ explosive growth is that most neighboring states haven’t legalized marijuana yet.
“What we saw early on in states like Washington and Colorado is they did have demand come in from surrounding states, which frankly benefits our industry and benefits the taxes collected,” Maisch said.
Cannabis sales have already surpassed alcohol’s tax revenues for the state, and Maisch said he thinks $1 billion estimates are conservative.
“Are we going to get to a billion dollars? I think we’re going to blow past the billion dollars based on the experience in smaller states,” Maisch said.
There are only a couple of things that could stop Illinois’ explosive cannabis market growth, Maisch said. He said that policymakers could ruin things by pushing taxes too high as evidenced by the tobacco market.
“As taxes have gone up and up and up, they’ve pushed people all the way into the black market or they’ve created this grey market in which people are ostensibly paying some of the taxes, but they’re still getting sources of tobacco products that avoid much of the tax,” Maisch said.
The other thing that could head off continued growth is other states opening up recreational-use markets.
“So if you start to see surrounding states go to recreational, that’s definitely going to flatten the curve because we’re not going to be pulling in demand from other states,” Maisch said.
Maisch points out some concerns that accompany the explosion of Illinois’s recreational cannabis market including workforce preparedness.
“All of those individuals who are deciding to go ahead and consume this product are really taking themselves out of a lot of job opportunities that they would otherwise be qualified, so there’s a real upside and a downside,” Maisch said.
While it’s easy to track the revenues this industry brings into state coffers, he points out, it will be harder to track the lack of productivity and qualified individuals to operate heavy machinery and other jobs that require employees to pass a drug test.
DEA Finally Ready To End Federal Marijuana Research Monopoly, Agency Notifies Grower Applicants
The Drug Enforcement Administration (DEA) on Friday notified several companies that it is moving toward approving their applications to become federally authorized marijuana manufacturers for research purposes.
This is a significant development—and one of the first cannabis-related moves to come out of the Biden administration. There is currently a monopoly on federal cannabis cultivation, with the University of Mississippi having operated the only approved facility for the past half-century.
It was almost five years ago that DEA under President Barack Obama first announced that it was accepting applications for additional manufacturers. No approvals were made during the Trump administration. And the delay in getting acceptances has led to frustration—and in some cases, lawsuits—among applicants.
But on Friday, organizations including the Biopharmaceutical Research Company (BRC), Scottsdale Research Institute (SRI) and Groff NA Hemplex LLC were notified by the agency that their requests were conditionally accepted.
“DEA is nearing the end of its review of certain marijuana grower applications, thereby allowing it to soon register additional entities authorized to produce marijuana for research purposes,” DEA said. “Pending final approval, DEA has determined, based on currently available information, that a number of manufacturers’ applications to cultivate marijuana for research needs in the United States appears to be consistent with applicable legal standards and relevant laws. DEA has, therefore, provided a Memorandum of Agreement (MOA) to these manufacturers as the next step in the approval process.”
The Wall Street Journal first reported on the move, and it’s unclear just how many organizations have received a DEA communication so far.
Matt Zorn, who has represented SRI in a suit against DEA over the processing delays, told Marijuana Moment that the agency explained that it is “moving forward” with the facility’s application and that it appears to be “consistent with public interest” to give the institute the ability to grow marijuana for study purposes.
SRI’s Dr. Sue Sisley is in a process of completing a memorandum of agreement that DEA requested “so that it can be executed and official,” according to a press release.
BRC CEO George Hodgin said in another press release that after being finalized, “this federal license will forever change the trajectory of our business and the medicinal cannabis industry.”
“The DEA’s leadership will set off a nationwide wave of innovative cannabis-derived treatments, unlock valuable intellectual property and create high quality American jobs,” he said. “The BRC team is already familiar with DEA compliance procedures based on our extensive history of controlled substances activity, and our world class staff is ready to hit the ground running on this new business arm that the DEA has authorized.”
DEA said it has presented applicants that appear to meet legal requirements “with an MOA outlining the means by which the applicant and DEA will work together to facilitate the production, storage, packaging, and distribution of marijuana under the new regulations as well as other applicable legal standards and relevant laws.”
“To the extent these MOAs are finalized, DEA anticipates issuing DEA registrations to these manufacturers,” the agency said. “Each applicant will then be authorized to cultivate marijuana—up to its allotted quota—in support of the more than 575 DEA-licensed researchers across the nation.”
DEA said it “will continue to prioritize efforts to evaluate the remaining applications for registration and expects additional approvals in the future” and will publicly post information about approvals as they are finalized.
Following a 2019 suit against DEA by SRI, a court mandated that the agency take steps to process the cultivation license applications, and that legal challenge was dropped after DEA provided a status update.
That suit argued that the marijuana grown at the University of Mississippi is of poor quality, does not reflect the diversity of products available on the commercial market and is therefore inadequate for clinical studies.
That’s also a point that several policymakers have made, and it’s bolstered by research demonstrating that the federal government’s cannabis is genetically closer to hemp than marijuana that consumers can obtain in state-legal markets.
Last year, DEA finally unveiled a revised rule change proposal that it said was necessary to move forward with licensing approvals due to the high volume of applicants and to address potential complications related to international treaties to which the U.S. is a party.
SRI filed another suit against DEA in March, claiming that the agency used a “secret” document to justify its delay of approving manufacturer applications. And that was born out when the Justice Department Office of Legal Counsel document was released last year as part of a settlement in the case, revealing, among other things, that the agency feels that its current licensing structure for cannabis cultivation has been in violation of international treaties for decades.
Photo by Aphiwat chuangchoem.
Mississippi Supreme Court Overturns Medical Marijuana Legalization Ballot That Voters Approved
A voter-approved initiative to legalize medical marijuana in Mississippi has been overturned by the state Supreme Court.
On Friday, the court ruled in favor of a Mississippi mayor who filed a legal challenge against the 2020 measure, nullifying its certification by the Secretary of State. The lawsuit was unrelated to the merits of the reform proposal itself, but plaintiffs argued that the constitutional amendment violated procedural rules for placing measures on the ballot.
While the court acknowledged that a “strong, if not overwhelming, majority of voters of Mississippi approved Initiative 65” to legalize medical cannabis in the state, Madison Mayor Mary Hawkins Butler’s (R) petition was valid for statutory reasons.
Madison’s challenge cites a state law stipulating that “signatures of the qualified electors from any congressional district shall not exceed one-fifth (1/5) of the total number of signatures required to qualify an initiative petition for placement upon the ballot.” But that policy went into effect when Mississippi had five congressional districts, and that’s since been reduced to four, making it mathematically impossible to adhere to.
The secretary of state and other officials pushed back against the lawsuit and argued that a plain reading of the state Constitution makes it clear that the intention of the district-based requirement was to ensure that signatures were collected in a geographically dispersed manner—and the result of the campaign met that standard.
But in the court’s 6-3 ruling released on Friday, the justices said that their hands were tied. The legislature or administration might be able to fix the procedural ballot issue, but it had to follow the letter of the law.
“We find ourselves presented with the question squarely before us and nowhere to turn but to its answer,” the decision states. “Remaining mindful of both the November 3, 2020 election results and the clear language in section 273 seeking to preserve the right of the people to enact changes to their Constitution, we nonetheless must hold that the text of section 273 fails to account for the possibility that has become reality in Mississippi.”
In sum, a Census-driven change in the number of congressional districts in Mississippi “did, indeed, break section 273 so that, absent amendment, it no longer functions,” meaning there’s no legal way to pass a constitutional ballot initiative in the state.
“Whether with intent, by oversight, or for some other reason, the drafters of section 273(3) wrote a ballot-initiative process that cannot work in a world where Mississippi has fewer than five representatives in Congress. To work in today’s reality, it will need amending—something that lies beyond the power of the Supreme Court.”
“We grant the petition, reverse the Secretary of State’s certification of Initiative 65, and hold that any subsequent proceedings on it are void,” the court ruled.
One justice who dissented said that the district-based requirement is arbitrary as it concerns Mississippi elections. While the federal government defines the state as having four congressional districts, the state Constitution “lays out the five districts,” and “there have been zero changes to the five districts” as far as the state’s laws are concerned.
In any case, this marks a major defeat for cannabis reform activists in the state who collected more than 214,000 signatures for their initiative. Sixty-eight percent of voters approved a general ballot question on whether to allow medical cannabis, and 74 percent signed off on advocates’ specific measure in a separate question.
“The Mississippi Supreme Court just overturned the will of the people of Mississippi,” Ken Newburger, executive director for the Mississippi Medical Marijuana Association, said in a press release. “Patients will now continue the suffering that so many Mississippians voted to end. The Court ignored existing case law and prior decisions. Their reasoning ignores the intent of the constitution and takes away people’s constitutional right.”
“It’s a sad day for Mississippi when the Supreme Court communicates to a vast majority of the voters that their vote doesn’t matter,” he said.
Today the MS Supreme Court ruled against the state’s ballot initiative process, killing the medical marijuana program 74% of Mississippians voted to pass. This is devastating for not only patients, but voters as a whole. Below is our statement: https://t.co/jrDoJM3K16 pic.twitter.com/AR3xuId3xR
— Mississippi Medical Marijuana Association (@medmarijuanams) May 14, 2021
Under the voter-approved initiative, patients with debilitating medical issues would have been allowed to legally obtain marijuana after getting a doctor’s recommendation. The proposal included 22 qualifying conditions such as cancer, chronic pain and post-traumatic stress disorder, and patients would have been able to possess up to 2.5 ounces of marijuana per 14-day period.
There was an attempt in the legislature to pass a bill to legalize medical marijuana in the event that the court overruled the voter-approved initiative, but it failed to be enacted by the session’s end.
The Mississippi State Department of Health told WJTV that it will cease work on developing medical cannabis regulations in light of the court ruling.
“However, the agency has certainly learned a lot in the process of putting together a successful medical marijuana program, and we stand ready to help the legislature if it creates a statutory program,” Liz Sharlot, director of the Office of Communications for the department, said.
This is the latest state Supreme Court setback to affect cannabis reform efforts.
Last month, the Florida Supreme Court dealt a critical blow to marijuana activists working to legalize marijuana in the state—killing an initiative that hundreds of thousands of voters have already signed and forcing them to start all over again if they want to make the 2022 ballot.
While a Nebraska campaign collected enough signatures to qualify a reform initiative in 2020, the state Supreme Court shut it down following a legal challenge. It determined that the measure violated the state’s single-subject rule, much to the disappointment of advocates.
In South Dakota, the fate of an adult-use legalization initiative that voters approved last November is also in the hands of the state’s Supreme Court, where a sheriff is challenging its constitutionality based on a single subject rule as well.
Opponents to a Montana marijuana legalization measure that was approved by voters have also filed lawsuits contesting the voter-approved initiative for procedural reasons, arguing that its allocation of revenue violates the state Constitution. While the state Supreme Court declined to hear the case last year, it did not rule on the merits and left the door open to pursuing the case in district and appeals court, which plaintiffs then pursued.
Read the Mississippi Supreme Court ruling on the medical cannabis initiative below: