A major California labor union that’s been an influential player in legalizing marijuana is opposing a change in state law that would allow for increased access to legal, regulated cannabis—and, subsequently, is now drawing criticism for the stance from its own members.
The United Food and Commercial Workers (UFCW) has supported marijuana legalization in California since 2010, when the union endorsed the ultimately unsuccessful statewide initiative Prop. 19.
Cannabis has been seen as a potential growth opportunity for organized labor, membership of which is on the wane in the United States. At the same time, much work in cannabis is high-turnover and low-wage, where workers could benefit from organization.
UFCW’s Western States Council is also a power player at the state Capitol in Sacramento, where it has helped shape and guide statewide marijuana regulations.
But the group is now opposing a proposed change in the state’s marijuana regulations that is supported by many other pro-legalization players.
Under a rule proposed by the Bureau of Cannabis Control (BCC), licensed dispensaries and delivery services would be able to deliver cannabis to areas that have banned brick-and-mortar retail dispensaries.
According to the BCC, the rule change clarifies existing law that allows licensed deliveries to “any jurisdiction within the state.”
Supporters of this change point out that the vast majority of California cities and counties have banned marijuana retail sales, forcing cannabis consumers to patronize the unregulated, criminal market—and contradicting the spirit and intent of the state’s 2016 legalization initiative, which was approved with a solid margin by voters.
Joining UFCW in opposing this change are the League of California Cities, which has for years lobbied to allow localities to ban commercial marijuana activity, and the California Police Chiefs Association, which opposed 2016’s Prop. 64.
Just before the Labor Day weekend, thee three entities launched a website called “Stop Wandering Weed.”
The website features a marijuana-delivery vehicle parked outside of a school and enjoins visitors to sign an online petition to oppose the BCC’s changes.
“Protect our children and schools,” the website declares.
The BCC’s changes “will wipe out safety controls allowing marijuana to be delivered anywhere in California – even to your doorstep,” it continues. “Will your children be home?”
Recreational marijuana is legal in California for anyone 21 and up. Legalization repealed most criminal penalties—but significant penalties remain for anyone providing cannabis to a minor. Licensed retailers who broke the law in such fashion would also face loss of their license.
Meanwhile, in areas that are poorly served by brick-and-mortar dispensaries, illegal market activity continues to flourish.
Jim Araby, the executive director of UFCW’s Western States Council, told Marijuana Moment it was clear that the original intent of Prop. 64 was to allow cities to decide for themselves whether or not they would allow commercial cannabis activity.
Increasing California’s retail capacity by convincing more local governments to overturn bans and allow commercial marijuana activity is also in the union’s interest, but in the meantime, governments “should not be forced into something they’re not ready for,” he said.
Observers say that UFCW’s turn towards more restrictions is meant to protect existing retail outlets—particularly in Southern California, where the union represents three dispensaries.
There are also dispensaries organized with UFCW in Oakland, San Francisco and Sacramento.
“It’s a bit weird to see them laying down with the lion, don’t you think?” asked Sean Donahoe, an Oakland-based consultant and co-founder of the California Cannabis Business Association.
According to Donahoe, at a marijuana-industry conference last year, UFCW’s Araby “committed to me that he would work” to move forward with local licensing.
“A year ago those promises were made, and since then, we’ve seen very little effort,” Donahoe added. “And now we have this—throwing obstacles in front of what the Bureau would like to do.”
And at least one union dispensary operator is baffled by the UFCW’s move, and says that not only does it hurt her operation’s bottom line, but the union’s move happened without her knowledge or input.
“It’s kinda working against our goals,” said Debby Goldsberry, a longtime marijuana activist who is executive director of Magnolia Oakland, a licensed dispensary near the Oakland waterfront.
“At the very, very, very least, brick and mortar dispensaries should be allowed to deliver everywhere,” she told Marijuana Moment. “How else will we compete?”
Trump Treasury Official Wants Congress To Fix Marijuana Businesses’ Banking Issues
Congress needs to come up with a solution for banking access by the marijuana industry, a top federal Treasury Department official said on Wednesday. And he hopes that will happen by 2020, if not sooner.
Joseph Otting, the comptroller of the currency, told reporters that lawmakers “have to act at the national level to legalize marijuana if they want those entities involved in that business to utilize the U.S. banking system,” according to PoliticoPro.
— POLITICO Pro (@POLITICOPro) January 16, 2019
Cannabis businesses acting in compliance with state law face uncertainty when dealing with federally regulated financial institutions. And banks potentially risk being penalized for servicing those businesses, leading many to avoid the industry altogether.
That said, a steadily growing number of banks are operating accounts for cannabis companies anyway, federal data shows.
“If I’m a betting person, I’m like 25-30 percent maybe next year, but I would hope by 2020 we can get this issue resolved,” said Otting, who was also recently assigned to double duty as acting director of the Federal Housing Finance Agency.
He previously called the existing situation “generally not healthy,” echoing comments made by Federal Reserve Chairman Jerome Powell, who said “it would be great if [the banking issue] could be clarified.”
Similarly, Treasury Secretary Steven Mnuchin has described the banking conflict as untenable. He said last year that his department was “reviewing the existing guidance,” referring to a 2014 Obama-era policy memo meant to provide direction for banks on how to service marijuana businesses.
“We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe,” he said.
Sen. Chuck Schumer Welcomes Major Cannabis Company To New York’s Hemp Industry
Canadian marijuana giant Canopy Growth Corporation will enter the nascent U.S. hemp industry by building a massive farming and production center in southern New York, U.S. Senate Minority Leader Chuck Schumer (D-NY) announced on Monday.
Canopy has yet to finalize its plans for an exact location—a contract could be signed as soon as Monday, Schumer said—but the company could eventually support “up to 400 jobs” in hemp cultivation, processing and product manufacturing at what would be a “first of its kind” center for the just-legalized U.S. hemp industry, the senator said.
Once a key American crop—George Washington famously grew hemp at Mount Vernon, and there was a stand of hemp plants in northern Virginia where the Pentagon now stands—the U.S. now lags far behind other countries in hemp production, a result of the country’s broad outlawing of cannabis decades ago.
Eventually, Canopy plans to invest “between $100-$150 million” into a New York State-based industrial hemp farm, Schumer said, with other companies potentially drawn to the sector by such a prominent anchor business.
“Hemp is a very valuable product and a burgeoning crop here” in southern New York, said Schumer, offering a very brief remedial education in the plant for those present at a press conference he convened. “I’m not kidding when I say this, but hemp is everywhere.”
“This is going to be a major shot in the arm” for the area, he added.
“Hemp” is more of a legal than a botanical distinction. Under U.S. law, cannabis sativa with 0.3 percent or more THC is considered “marijuana” and falls under federal drug-control laws. Cannabis with less than 0.3 percent THC is considered industrial hemp.
Hemp has been legal to import and process, but until very recently, hemp cultivation was mostly illegal in the U.S.
That prohibition that ended when President Donald Trump signed the 2018 Farm Bill into law last month. The previous 2014 version of the Farm Bill created a pilot program for states that wished to legalize small-scale hemp cultivation as part of research programs.
Based on that success and on growing support for an end to cannabis prohibition nationwide, the 2018 Farm Bill legalized cultivation of hemp outright. Almost immediately, politicians began touting the crop’s potential as a miracle product and an economic boon with enthusiasm once reserved only for acolytes of hemp evangelist Jack Herer.
Senate Majority Leader Mitch McConnell, who championed the hemp legalization provisions, signed off on the final version of the Farm Bill with a hemp pen—but for now, Schumer, his Democratic counterpart, may have stolen the top Republican’s fire.
“I’ve always believed that states should be the laboratories of democracy,” he said. “I’ve been very eager to have the hemp industry grow in New York and the Southern Tier.”
Photo courtesy of Senate Democrats.
Alcohol Sales Aren’t Impacted By Marijuana Legalization, Trade Association Finds
Marijuana legalization hasn’t hurt alcohol sales in the years since legal markets were established in Colorado, Washington State and Oregon, according to a new study from an alcohol trade association.
The Distilled Spirits Council looked at alcohol tax and shipment data before and after legalization to determine whether cannabis reform impacted sales of spirits, beer or wine in legal states.
“Simply put, the data show there has been no impact on spirits sales from recreational marijuana legalization,” the council’s chief economist, David Ozgo, said in a press release on Thursday.
“We now have four years of retail recreational marijuana sales history in Colorado and Washington state, and three years in Oregon, and each of these markets remain robust for spirits sales,” he said. “We did this study because there is a lot of misinformation circulating about the impact of recreational marijuana legalization on distilled spirits and the wider alcohol market.”
Per capita spirits sales actually increased slightly in post-legalization years, which was consistent with national trends. Sales were up 7.6 percent in Colorado, 5.4 percent in Washington and 3.6 percent in Oregon.
The trade association also analyzed beer and wine sales during the same period. For beer, sales were down marginally, with drops of 3.6 percent in Colorado, 2.3 percent in Washington and 3.6 in Oregon. But again, that’s consistent with national trends, according to the study.
Wine sales were mixed across the three states: Up 3.2 percent in Colorado, down 3.1 percent in Washington and up .7 percent in Oregon.
The Distilled Spirits Council also used their analysis as an opportunity to plug their policy recommendations to lawmakers in states considering marijuana legalization. While the association has declined to take a position on whether to legalize, it shared a list of recommendations ranging from equitable taxes on cannabis and alcohol to THC content disclosure requirements.
There is at least one major alcohol group that is willing to support states’ right to legalize, though. The Wine & Spirits Wholesalers of America (WSWA) called for the end of federal marijuana prohibition last year and, in December, went so far as to host a briefing on cannabis policy for lawmakers and congressional staffers.
Reform advocates have questioned whether legal access to marijuana would adversely impact alcohol sales, with more people opting to consume cannabis over booze. There is some research that indicates the alcohol industry is being interrupted in medical marijuana states, but more data is needed.
Photo courtesy of Pixabay.