A marijuana legalization bill backed by top Maryland lawmakers got its first hearing on Thursday, with much of the discussion focused not on whether to end prohibition but how specifically to do it—including ways to merge the legislation with a separate proposal in the state’s House of Delegates.
While the Senate Finance Committee did not vote on the measure—which is cosponsored by Senate President Bill Ferguson (D), Majority Leader Nancy King (D) and key committee chairs—lawmakers used the meeting to discuss provisions of the legislation and gauge the likelihood of its success.
“I wanted to get a little feedback from the committee,” said the bill’s lead sponsor, Sen. Brian Feldman (D), who is also vice chair of the panel that held the hearing. “I didn’t have a good take of where the committee is and where the committee’s concerns are.”
Under Feldman’s bill, SB 708, adults 21 and older would be able to purchase and possess up to four ounces of marijuana or products containing up to 1,500 milligrams of THC. They could also grow up to six cannabis plants at home for personal use.
The bill is largely similar to House Bill 32, introduced late last year by Del. Jazz Lewis (D) and revised last month to better align with the Senate legislation. Though the two bills are now largely similar, important differences remain around business licensing, social equity and other regulatory matters.
Feldman told Senate colleagues he’s been working with Lewis to unify the two measures. “Delegate Lewis drafted his piece of legislation, he had a hearing and he has already amended his bill to make it look more like this bill,” the senator said. “By the same token, I’m working on a package of amendments myself to get this bill a little closer to Delegate Lewis’s.”
Feldman added that he has not yet introduced those amendments because he wanted to incorporate feedback from the committee. “If there is a will to move a bill this session, I commit to working with Delegate Lewis,” he said. “The differences now are actually very narrow, and I’m pretty confident we can come up with one bill.”
Most of the differences between the two bills center on the licensing and regulatory processes. The House bill, however, is the preferred bill among social and racial equity advocates, including Del. Darryl Barnes (D), chair of Maryland’s Legislative Black Caucus.
“Cannabis prohibition has devastated communities and has been a tool of racial oppression,” Barnes, who in past sessions has opposed legalization, said in a statement earlier this week. “I was ready to support the legalization bill after I saw how HB 32 would ensure Black communities that have been devastated by cannabis prohibition would benefit, in the form of community reinvestment, small business ownership, jobs training and good careers, along with expungement.”
Both bills would set up equity funds designed to help address the disproportionate impact of the war on drugs, which has been enforced unfairly against Black, brown and low-income people, along with other marginalized groups.
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“We’re talking reentry programs, scholarship assistance, money for HBCUs, housing assistance, homeownership, small business loans, community-based workforce development—that’s all in this bill,” Feldman said at Thursday’s hearing, claiming the proposal “would provide the strongest set of social equity programs of any state in the nation.”
Under both bills, existing medical marijuana businesses could pay a fee in order to be able to participate in the adult-use market. Those fees—$1 million under the House legislation and $750,000 under the Senate bill—would fund a Social Equity Startup Fund, which would provide application assistance and financing to social equity applicants.
Both bills would also give equity applicants an advantage when scoring license applications, and they would reserve access to certain license categories, such as transportation and delivery, exclusively to equity applicants.
But where they diverge, HB 32 tends to favor more inclusive measures. The bill would funnel more money into the newly created equity funds, for example, and create unlimited so called micro-grow licenses in an effort to expand access to the new industry. The Senate bill, by contrast, would set a hard cap on small grows.
“Capping micro-grow licenses reduces opportunity for small and minority-owned businesses and will prevent social equity producers and retailers from knowing they will be able to secure a cultivation license,” the advocacy group Marijuana Policy Project (MPP) explained in a post comparing the two bills. “This would put these new small businesses at a competitive disadvantage compared to large, vertically-integrated growers they would have to depend on for supply.”
HB 32 also includes a “race to the top” provision that would require marijuana businesses to show community benefits—related to diversity, labor practices, environmental stewardship and equity contributions—in order to expand beyond two locations. SB 708 does not contain that provision.
The House bill also includes language requiring a cannabis businesses to sign a peace agreement with a union after hiring its 10th employee, while the Senate bill does not.
SB 708 would prohibits regulators from increasing the number of available business licenses until 2026. Under the House proposal, regulators must consider demand and begin accepting applications for new licenses in February 2024.
Olivia Naugle, a legislative analyst for MPP, said in an email to Marijuana Moment that the group “urges SB 708 to be amended to mirror Delegate Jazz Lewis’ HB 32 and for the legislature to swiftly pass it.”
Supporters of legalization who spoke at the Senate hearing included Hope Wiseman, founder and CEO of Maryland medical marijuana company Mary and Main. Wiseman asked lawmakers to add an amendment clarifying whether cannabis taxes would be structured as a sales tax or an excise tax, however, and urged the panel to consider a flat tax rate, rather than the current plan of increasing taxes over time.
Under the Senate bill, taxes would climb from 10 percent to 20 percent over the first several years of commercial sales. The House measure would go from 15 percent to 25 percent over the same period. Both bills allow local taxes of up to 3 percent. Supporters of the phase-in say the provision is designed to keep the cost of legal cannabis stable while remaining competitive with the illicit market.
Feldman said at the hearing that SB 708 could bring in roughly $300 million per year once the market is up and running.
Among those who testified against the bill, most said they were concerned about the health and social impacts that legalization might bring. Many said they were concerned legalization would lead to increased cannabis use, especially among youth.
“It seems that we may just be willing to forgo those risks and impacts mainly because our government has a spending problem,” said Sen. Stephen Hershey (R), a member of the committee. “It’s no secret that this bill is about generating revenue.”
Sen. Joanne Benson (D), said that she’s skeptical about the bill, noting that some members of the Legislative Black Caucus helped champion medical marijuana in the state but “feel like we were left with crumbs off the table” in terms of racial equity.
“Many of us are not feeling good about passing this bill, because we felt that we got a little stung” with the prior medical cannabis legislation, she said.
Feldman replied that both the House and Senate measure “have the strongest social equity concepts in the country,” adding that more money could be sent to state equity funds if the bill were amended. “If there’s interest in moving the bill,” he said, “we can set it however we want to set it.”
A number of other Maryland legalization supporters have pointed to nearby Virginia, where lawmakers recently sent a legalization bill to the governor.
“I applaud their commitment towards advancing a sensible legalization bill that includes social equity provisions,” Del. Lewis said in a press release. “Now it is the time for Maryland to follow suit by passing HB 32.”
I am thrilled that Maryland has a real opportunity now to pass consequential and equitable cannabis legalization. My legislation, HB 32 is our best chance to give justice to those incarcerated and create a new open cannabis industry.https://t.co/MuGIgfJBax
— Delegate Jazz Lewis (@JazzforMaryland) March 5, 2021
The reform push is also gaining momentum in neighboring Washington, D.C., where Mayor Muriel Bowser (D) and the chairman of the District Council recently introduced competing legal marijuana bills.
Maryland legalized medical marijuana through an act of the legislature in 2012. Two years later, a decriminalization law took effect that replaced criminal penalties for possession of less than 10 grams with a civil fine of $100 to $500. Since then, however, a number of efforts to further marijuana reform have fallen short.
A bill last year to expand the decriminalization possession threshold to an ounce passed the House last year but was never taken up in the Senate.
In May, Gov. Larry Hogan (R) vetoed a bill that would have shielded people with low-level cannabis convictions from having their records publicized on a state database. In a veto statement, he said it was because lawmakers failed to pass a separate, non-cannabis measure aimed at addressing violent crime.
Hogan has hesitated to take a strong stand on marijuana in the past, though he’s more recently signaled openness to the idea. In 2017, he declined to respond to a question about whether voters should be able to decide the issue, but by mid-2018 he had signed a bill to expand the state’s medical marijuana system and said full legalization was worth considering: “At this point, I think it’s worth taking a look at,” he said at the time.
As for Maryland lawmakers, a House committee in 2019 held hearings on two bills that would have legalized marijuana. While those proposals didn’t pass, they encouraged many hesitant lawmakers to begin seriously considering the change.
“There are now 15 states in the United States that have gone full-blown adult-use legalization, plus the District of Columbia,” Feldman said at Thursday’s hearing. “Just like we saw with medical cannabis, opinions are evolving dramatically very quickly.”
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: