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Google Announces Ban On Marijuana Apps In Android Play Store

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Apps that help connect people with marijuana products are not welcome anymore in the Google Play store, the company announced in a policy update on Wednesday. That includes apps that facilitate cannabis transactions in states where it’s legal.

The updated policy section states that Google Play doesn’t “allow apps that facilitate the sale of marijuana or marijuana products, regardless of legality.” Previously the page didn’t include any specific mention of cannabis.

Via Google.

The revised guidelines go on to list descriptions of “common violations.” Apps can’t allow users “to order marijuana through an in-app shopping cart feature,” help users “in arranging delivery or pick up of marijuana” or facilitate the “sale of products containing THC.”

A google spokesperson explained the change in an email to Marijuana Moment, adding that affected companies can take advantage of a simple workaround.

“These apps simply need to move the shopping cart flow outside of the app itself to be compliant with this new policy,” the spokesperson said. “We’ve been in contact with many of the developers and are working with them to answer any technical questions and help them implement the changes without customer disruption.”

The spokesperson also said that the company recognizes the popularity of cannabis-related apps and hopes they will remain in the Play Store under the amended rules. Google is working directly with developers of affected apps, the spokesperson said.

Another new section of the policies stipulates that apps “that facilitate the sale of tobacco (including e-cigarettes)” are prohibited. Apps that help consumers purchase alcohol are apparently allowed, but not those that “encourage the irresponsible use of alcohol or tobacco.”

The update was first reported by Android Police, which also noted that Apple has previously banned marijuana-related apps such as the social networking platform MassRoots. But Apple lifted that ban in 2015 and has since taken a relatively hands-off approach to the issue.

Some of the best-known cannabis apps—Weedmaps and Eaze—are still available for download on Google Play as of the time of publication. But insiders believe that their essential functions (i.e. the ordering services) will have to be deactivated. Weedmaps alone has been installed more than one million times to date, and more than 50,000 users have downloaded Eaze.

Android Police reported that Google will be working with affected app developers to resolve any compliance issues over the next month.

In a blog post on Wednesday, Google said that it was generally making a series of policy changes to ensure that its app store serves as “a positive, safe environment for children and families.” As TechCrunch pointed out, this comes about five months after Google Play was the subject of an FTC complaint, which alleged that the company wasn’t doing enough to vet apps that appear in the kids section.

The tech industry has had a strained relationship with marijuana businesses, even as a growing number of states have decided to legalize and regulate the sale of cannabis.

Facebook, which recently showed off its artificial intelligence technology that’s capable of identifying images of marijuana, continues to prohibit the commercial advertising of cannabis products, regardless of the legality of the business under state law.

Noncommercial cannabis news sites such as Marijuana Moment and state regulatory bodies like the Massachusetts Cannabis Control Commission have also been caught up in the anti-marijuana policy despite the fact that they do not promote or sell cannabis products. In some cases, it appears these organizations have been hidden from appearing in search results—a practice known as “shadowbanning.”

The online shopping site eBay also gave cannabis consumers some bad news this week, clarifying that CBD products will continue to be banned globally regardless of individual country laws on the compound.

“Eaze connects adults only to licensed, regulated cannabis retailers,” Elizabeth Ashford, senior director of corporate communications for Eaze, said in an email. “Google’s decision is a disappointing development that only helps the illegal market thrive, but we are confident that Google, Apple and Facebook will eventually do the right thing and allow legal cannabis companies to do business on their platforms. We regret any inconvenience this may cause for customers and patients.”

“Prohibition is over,” she added. “Voters across the country have legalized cannabis.”

Marijuana Moment also reached out to Weedmaps for comment but the company has not yet provided a statement reacting to the Google policy change.

On the flip side, at least one major tech company is testing the regulatory waters after hemp and its derivatives were legalized under the 2018 Farm Bill. The payment processing service Square announced last week that has launched a pilot program designed to give businesses that sell hemp-derived CBD products access to credit card processing services as an alternative to traditional financial institutions that remain wary of working with the industry.

Marijuana might be banned from Google’s app market, but just last year it seemed the company’s executives were pretty bullish about loosening cannabis laws. Google co-founder Sergey Brin joked about supplying employees with joints at a post-election meeting in September.

“I was asking if we could serve joints outside on the patio, but apparently these things take a little while to take effect,” Brin said, referring to the implementation of California’s cannabis legalization measure. “It was a huge, huge disappointment. I’ve been bemoaning that all week, I’ll be honest with you.”

Disclosure: Weedmaps and Eaze are Marijuana Moment advertisers/sponsors.

This story was updated to include comment from Google and Eaze.

Google Execs Told Marijuana Jokes To Lighten The Mood After Trump’s Election, Leaked Video Shows

Photo courtesy of Rick Proctor.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

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Number Of Banks Reporting Cannabis Business Clients Dips After Hemp Rules Change

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The number of accounts that banks and credit unions informed federal regulators they are maintaining for cannabis businesses dipped slightly at the end of the last quarter, according to new data. But that seems to be primarily related to revised reporting requirements for financial institutions servicing hemp-specific businesses following that crop’s federal legalization, rather than a decline in the number of marijuana companies with bank accounts.

Under guidance issued by the Obama administration in 2014 that remains in effect, banks and credit unions are required to submit suspicious activity reports, or SARs, if they elect to provide financial services to marijuana businesses. As more states have legalized marijuana, the number of cannabis-related SARs filed has consistently increased, though it began to level off late last year, a federal report released this week shows.

The Financial Crimes Enforcement Network (FinCEN) reported that SARs for marijuana businesses declined from 747 as of November 2019 to 739 by the end of the following month.

Via FinCEN.

While the overall number is higher than was reported in the previously quarterly data (723), the recent dip appears to coincide with updated guidance to financial institutions that FinCEN and other federal regulators issued at the beginning of December.

Those memos clarified that because the 2018 Farm Bill removed hemp from the Controlled Substances Act, banks are no longer required to automatically submit SARs for businesses that produce, process or sell the crop and products derived from it.

Some in the industry expected to see a sizable spike in the number of banks that work with marijuana firms after the House of Representatives passed a bill last year that would protect financial institutions from being penalized for doing so by federal regulators. Even though the legislation has stalled in the Senate and has not yet been enacted into law, the bipartisan margin of support it got in the House has ben seen as a signal that formal federal changes are likely on the way.

While the new data doesn’t show that expected big increase, that could be partially explained by the change in hemp’s legal status.

Of the 739 depository institutions servicing marijuana businesses, 203 “indicated that they were providing banking services to hemp-related businesses,” the agency said. Based on the language of the SARs, FinCEN said it was likely that 61 financial institutions provide services to companies that exclusively market hemp and not marijuana.

Via FinCEN.

As more banks and credit unions become aware of the updated guidance on hemp reporting standards, it’s possible that fewer institutions will issue SARs for what FinCEN defines as a “marijuana-related business.”

The agency also said that short-term declines in overall numbers “may be explained by filers exceeding the 90 day follow-on Suspicious Activity Report (SAR) filing requirement.”

All that said, if Congress passes the Secure and Fair Enforcement (SAFE) Banking Act, the number of financial institutions working with marijuana firms will likely increase substantially, as banks would then have the security of a codified law to protect them against adverse actions.

“Hemp-related reductions in filings aside, I think these latest FinCEN numbers continue to show that most banks are extremely hesitant to work with cannabis businesses in the absence of clarifying legislation,” Morgan Fox, media relations director for the National Cannabis Industry Association, told Marijuana Moment. “I would imagine that this problem still exists for hemp producers given the relatively small drop in banks filings SARS that is attributed to changes in filing requirements for hemp-related activity.”

“This level of banking access does not come close to fulfilling the needs of regulated cannabis businesses or their employees, and ensures that issues we are seeing with public safety and lack of access to capital for small businesses will continue,” he said. “The Senate must act now to remedy these problems, and it can start by holding a markup on the House-approved version of the SAFE Banking Act in the Senate Banking Committee as soon as possible.”

Sen. Cory Gardner (R-CO), a lead sponsor of the bill, said last week that he expects the Senate to take it up within months and revealed that lawmakers are “close” to reaching a compromise with Banking Committee Chairman Mike Crapo (R-ID), who has proposed several restrictive changes to the House-passed legislation.

Deal On Marijuana Banking Bill Is ‘Close,’ GOP Senator Says

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USDA Touts Hemp Industry’s Growth But Says Challenges Remain

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Hemp production in the U.S. has scaled up rapidly since lawmakers lifted federal prohibition of the crop, with more acres of hemp grown in the country today than at any point since the 1940s. But the fledgling industry is still very much in flux, and reporting practices that vary wildly from state to state have hampered efforts to fully understand it.

Those are the top-level takeaways of a report released Wednesday by the U.S. Department of Agriculture (USDA) that explores the economic viability of the American hemp industry as the country transitions to a legal era.

After decades of prohibition due to hemp’s close relationship to its high-THC cannabis cousin marijuana, Congress in 2014 approved state-level pilot programs, allowing growers in certain states to produce and sell hemp as part of limited research initiatives. In 2018, lawmakers went further, ending federal hemp prohibition entirely. Since then, the sector has exploded.

Approved US producer hemp licenses 2014-2018

“Under the pilot programs, United States industrial hemp acreage reported by States increased from zero in 2013 to over 90,000 acres in 2018, the largest U.S. hemp acreage since the 146,200 acres planted in 1943,” the USDA study found. “By December 2019, hemp could be grown legally in every State except Idaho, Mississippi, and South Dakota.”

As of last year, more than 146,065 acres of planted hemp were reported to the agency.

The 83-page report, “Economic Viability of Industrial Hemp in the United States: A Review of State Pilot Programs,” attempts to draw conclusions about the legal, logistical and economic challenges that might arise as US farmers return to a crop that hasn’t been grown in the country for generations.

One of the biggest obstacles, the study shows, is keeping everyone on the same page.

“There is no systematic comprehensive data source regarding the emerging United States hemp industry or requirement to report a consistent set of data for the pilot programs,” noted the authors, who said they drew on annual reports, website information, internal USDA data, unstructured discussions with state agencies and other third-party information to compile the document.

“States collected data at various times and levels of aggregation,” the study says. “For example, some States report hemp data by intended end use (i.e., grain, fiber, cannabidiol (CBD) or other extracts) while others do not report data.”

US hemp acreage and greenhouses

Inconsistency between state requirements was one of the main obstacles highlighted by the report. USDA found that state-level hemp programs ran into a handful of common problems, starting with the difficulty of passing state-level legislation to regulate the new programs. Other problems arose in obtaining “critical production inputs,” such as seeds and insecticides, or in trying to easily distinguish industrial hemp from high-THC marijuana, which remains federally illegal.

A fundamental problem, the USDA report found, was “lack of basic data and information for decision-making”—something that should come as no surprise to anyone who’s watched a legislative hearing on cannabis.

Getting stakeholders involved early seemed to help smooth some wrinkles, the study found. In some states, authors wrote, “hemp legislation failed repeatedly, typically because of law enforcement concerns or lack of public support.”

“Colorado and Kentucky are two examples of States that included law enforcement stakeholders early when establishing their pilot programs,” the report notes. “This allowed an early basis for dialogue and shared knowledge.”

Data from state pilot programs also led analysts to conclude that while industrial hemp is a burgeoning industry in the U.S., it likely won’t emerge as a strong economic player in every state.

“As with other crops, it is not likely that hemp will be economically viable in every State,” the study concludes. “States that moved quickly to establish pilot programs were not leading producers of competing major field crops,” it found, and “growers are not likely to plant or process hemp if more profitable options exist.

Hemp-producing states could also run into competition internationally, the report says, acknowledging that the U.S. is one of many hemp-producing regions globally. “While the reintroduction of hemp production in the United States is relatively recent,” it says, “hemp production has already been legal in other parts of the world,” including Canada, Europe and China.

Canada hemp production

Under a recent trade deal with the U.S., China agreed to import more American-grown hemp and other agricultural products over the next two years.

For now, the rising tide of interest in hemp-derived CBD appears to be lifting all boats. “Global production was small and relatively stable until the recent worldwide interest in CBD oil,” the USDA study found. “There is some demand for hemp as a sustainable natural fiber, hemp seeds and protein as a food ingredient, and hemp extracts for cosmetics and food, but CBD oil has been the primary source of demand growth.”

Earlier this month, USDA officials said they won’t be able to comply with a request by farmers and some state lawmakers to increase the federal THC limit on industrial hemp, which is currently defined as cannabis that contains no more than 0.3 percent THC. Advocates had asked for that limit to be increased to 1 percent, but the agency said that’s a job for Congress.

They did, however, say that a new public comment period will be opened before hemp rules are finalized.

China Must Import More Hemp From U.S. Under New Trade Deal

Photo courtesy of Brendan Cleak.

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Businesses Are More Profitable And Innovative In States With Legal Marijuana, Study Finds

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States have been experimenting with various forms of marijuana legalization for years and, according to new research, business is better where cannabis is legal.

To investigate the impact legalization has on the economy, researchers at the University of Iowa analyzed 9,810 corporations between 1991 and 2017, finding “a multitude of positive effects” after a state enacts medical marijuana laws.

“Firms headquartered in marijuana-legalizing states receive higher market valuations, earn higher abnormal stock returns, improve employee productivity, and increase innovation,” the authors said.

The study, which was reviewed by Marijuana Moment but has yet to be published, found that having cannabis laws on the books can unleash the previously untapped potential of employees and helps companies attract new talent.

Corporations “become more productive and hire more productive human capital from out of state after the passage of the law,” the authors wrote.

They also report that “firms earn higher net income per employee” after a medical cannabis law is passed, and “the positive impact is sustained over the next two years.”

Additionally, the study found a 4.2 percent increase in company value, which translates into an average increase of the market-value of corporations by $166 million after a medical marijuana law is enacted.

“Firms experience an increase in profitability likely due to the positive shock to the human capital post-legalization,” the study finds.

“State-level medical marijuana laws have a considerable positive impact on firms in the state, likely by having a positive impact on the human capital of firms.”

Higher profits and more productivity aren’t the only benefits a company sees after marijuana is legalized. When it comes to stock prices, companies located in states with medical cannabis fare better than those in jurisdictions where the plant is prohibited.

Additionally, the stock value of corporations in medical marijuana states increased by 4.56 percent. An “equal-weighted portfolio” composed of similar stocks located in states without a medical marijuana program showed a loss of about two percent annually.

Returns on stocks were also 4.44 percent higher per year for companies in states that have legalized.

What’s the source of such financial benefits? The authors suggested that companies will ramp up innovation after marijuana laws are passed, making the company more profitable over time, compared to their counterparts in areas that don’t permit cannabis at all.

“Our results imply that after marijuana legalization, firms not only apply for more patents and receive more citations on those patents, but also are more productive and efficient in generation innovation output from labor and [research and development] input,” the study determined.

“We also find an increase in both entrepreneurial activity and venture capital funding in states that legalize marijuana.”

Finally, the study measures the “innovation productivity” of those working, living and moving to the state, following the passage of a medical marijuana law.

“The inventors that are in the state both before and after legalization become more creative” post-legalization, the authors found.

And when it comes to attracting new talent from other states, “more inventors relocate to states after medical marijuana legalization than before passage of the law.”

The benefit is two-fold for such corporations. In addition to being “able to attract more productive inventors” in states with medical marijuana “relative to states that do not legalize,” existing employees also see an uptick in innovation after a cannabis law is passed, the study concluded.

House Lawmakers Caution Key Senate Chairman Not To Overhaul Marijuana Banking Bill

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