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Massachusetts Bill To Give State Coronavirus Relief To Marijuana Businesses Gets Hearing

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A Massachusetts legislative committee held a virtual hearing on Tuesday to get input from members and stakeholders about a bill that would establish a state-level coronavirus relief program for marijuana businesses and other companies that are left out of federal aid.

The proposal, which was discussed by the Joint Committee on Community Development and Small Businesses, would address that unique problem that the cannabis industry in particular is facing during the pandemic. These businesses—as well as those that work indirectly with the marijuana market—are specifically prevented from receiving congressionally authorized aid due to ongoing prohibition.

The problem is especially pronounced in Massachusetts, where medical cannabis dispensaries are allowed to operate as essential services but recreational shops have been temporarily shuttered. Witnesses from the industry testified that the state could help their businesses stay afloat and prevent layoffs if they approve the bill, which would establish a state-level Paycheck Protection Program (PPP).

The legislation is being sponsored by the committee’s chair, Sen. Diana DiZoglio (D).

Watch the hearing below: 

Mitzi Hollenbeck, a partner at Citrin Cooperman who founded the firm’s cannabis advisory services practice, told the committee that the cannabis market already faces a “huge economic burden” because of ongoing federal prohibition, which prevents these businesses from taking tax deductions that are available to other industries, for example.

“We’ve seen lots of the issues at the federal level that I think Massachusetts has a great opportunity to get correct in this version of the bill,” she said.

“The creation of a Massachusetts PPP loan for cannabis businesses like mine would be a momentous step in the right direction to remedy the inequity that legal, tax-paying cannabis-related businesses like mine are facing during the COVID-19 crisis,” Beth Waterfall, executive director of the cannabis events company ELEVATE Northeast, said in written testimony.

Angela Brown, CEO of the Massachusetts-based recreational marijuana company T. Bear Inc., told lawmakers that her business was forced to shut down one day before it was set to launch its first sales.

“We were forced to furlough our entire team, lock the building and walk away. All I can do now is wait with no income and no revenue,” she said. “And while I wait, I still pay my rent, my lenders, my utilities and my health insurance for my furloughed employees.”

“All small business owners are dealing with these issues. The bills and debt continue to mount as the shutdown prolongs,” she added. “But the difference is that cannabis companies don’t even have access to this economic relief.”

Brian Moran, an executive at the cannabis retailer Garden Remedies, said the company “not only lost the vast majority of our revenues when the state-mandated essential services order was enacted in late March but the lifeline extended to help small businesses across our country survive during this pandemic has not been extended to us.”

“This has resulted in a perfect storm for our industry that has caused massive problems,” he said.

“Massachusetts’s cannabis industry is intentionally organized by law to promote equity. Massachusetts was the first state to pass explicit equity measures in the adult-use cannabis industry for farmers, veterans, women, minorities and those disproportionately harmed by drug laws,” Shaleen Title, who serves as a member of the Massachusetts Cannabis Control Commission, said in written testimony.

“The lack of federal PPP support puts the fragile progress we have made over the past three years at risk,” she continued. “The harm is likely to fall more sharply on the very small businesses, workers, families, and communities that our state’s cannabis equity measures are intended to protect.”

Title later told Marijuana Moment that based on the hearing, “it was clear that there are many small businesses, including cannabis businesses, that are not eligible for federal aid even though they pay taxes and employ people and are trying to survive just like the businesses that are receiving loans and grants.”

“They didn’t cause this crisis; their businesses have been shut down through no fault of theirs. We shouldn’t be picking winners and losers,” she said. “Standing up for those being left behind is exactly what public officials should be doing right now. I commend Senator DiZoglio and the other sponsors of the bill for looking out for them.”

A vote on the proposal hasn’t yet been scheduled, but the chairwoman said at the close of the hearing that the matter will be taken up again “in the near future.” 

“Our small businesses are in crisis, as you well know. They not only face a one-size-fits-all attempt at relief by the federal government, which doesn’t take into account the unique commercial makeup and different recovery timelines of individual states,” DiZoglio said. “It’s up to the Commonwealth to close the gaps for all of our small businesses and to provide equitable relief in the absence of that relief from the federal government.”

“We must be realistic and we must adapt as our states faces significant financial constraints in the foreseeable future,” she said.

Under the proposal, a public agency would be tasked with developing regulations for the state service within 30 days of the bill’s enactment. Cannabis businesses aren’t explicitly mentioned in the text of the legislation, but they are a standout example of an industry that is specifically excluded from federal relief and would qualify for benefits through the proposed Massachusetts program.

The federal Small Business Administration (SBA) confirmed last month that the marijuana industry isn’t eligible for its relief program, prompting advocates, lawmakers and stakeholders to press for reforming eligibility requirements as part of future stimulus packages.

While a bill was introduced to that end in Congress—and members of both the House and Senate have sent letters urging leadership to include such language in COVID-19 legislation—it remains to be seen whether the proposed policy change will be enacted.

To that end, a coalition of industry associations sent a letter to state officials last month, imploring them to set up independent relief programs like the one currently being considered in Massachusetts.

Beside passing legislation to extend benefits at the federal level, or providing relief through a state-level system, there is another option identified by a group of cannabis associations and credit unions last week. The coalition is asking Congress to issue pandemic relief block grants to states so they can decide on their own how to allocate the funds.

North Dakota Marijuana Legalization Campaign Reassesses 2020 Ballot Strategy But Concedes 2022 Is More Likely

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AOC Wants To Work With Republicans To Legalize Marijuana And End War On Drugs

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Democrats and Republicans might be divided on a number of major policy issues, but Rep. Alexandria Ocasio-Cortez (D-NY) said on Thursday that ending the drug war and legalizing marijuana are increasingly standing out as exceptions to hyper-partisanship in Congress.

The congresswoman made the point during a virtual town hall alongside cannabis reform ally Rep. Earl Blumenauer (D-OR), stating that since she took office, it’s been encouraging to see members on both sides of the aisle come together on issues concerning “civil rights policy and civil liberties,” including ending “drug prohibition laws.”

“We’ve been able to propose solutions on a wide spectrum towards decriminalization, towards legalization, and that is increasingly becoming a position that more Republicans are amenable to,” she said.

For example, her spending bill amendment to divert $5 million in funding from the Drug Enforcement Administration to an opioid treatment program was approved without opposition in the House last year, Ocasio-Cortez said.

“That’s defund before defund became a widespread demand that we heard this year—and Republicans supported it,” she said, referencing progressive calls to defund law enforcement amid protests over police killings of black Americans. “So there are some areas where you can find common ground.”

Blumenauer also said at the event that “part of why we are fighting so hard to eliminate the failed prohibition on cannabis is because that’s been a tool that’s been used against people of color in particular that has horrific consequences and helps fuel that prison pipeline that has wreaked such havoc on our communities.”

To that end, Ocasio-Cortez said that, beyond federally legalizing cannabis, it’s important for lawmakers to ensure that any regulated markets that emerge are structured in a way that encourages participation by communities most hurt under prohibition.

“There are different ways that we can go about legalizing cannabis in the United States, and you can go about it in a way that concentrates power in a [Big Agriculture] way that concentrates power in big banks and that cuts out small mom and pops,” she said. “And then there’s another path towards legalization where everyday people and especially the black and brown communities that have been disproportionately impacted by the war on drugs can be at the front of the line of enjoying the economic benefits of legalization.”

“I think we’re just so past due to make sure that we’re legalizing cannabis in the United States and that we’re expunging people’s records from the absolutely unjust war on drugs,” the congresswoman said. “It is an incredible priority.”

Another New Jersey Poll Shows Marijuana Legalization Passing By A Huge Margin

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New York Will Legalize Marijuana By April And Regulate CBD-Infused Drinks, Governor’s Advisor Says

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The top marijuana advisor to New York Gov. Andrew Cuomo (D) says cannabis legalization legislation will again be introduced through the state budget in January, with the goal being to enact the reform by April. He also previewed state regulations for hemp-derived CBD products, including allowing infused drinks and food items.

During an interview with Canopy Growth Corp.’s David Culver on the company’s recently launched video series, “Under The Canopy,” Assistant Counsel Axel Bernabe talked about how efforts to legalize marijuana in surrounding states underscore the need for reform in New York. And he said the legislation the governor will be introducing will serve as a “model” for other states, prioritizing social equity and economic development.

But he also recognized that neighboring New Jersey may beat the Empire State to the punch, as voters are positioned to approve a legalization referendum next month.

“We’re watching New Jersey closely. We’ve always been confident that we get to this before New Jersey, so if they pass the referendum they still have to have agreement between the governor the Senate over there,” he said, referring to necessary implementing legislation that will need to be approved if voters pass the ballot question. “We’re working on this. We’re going to reintroduce this in our budget in January. We think we can get it done by April 1.”

That said, a top New Jersey senator recently indicated that lawmakers in the Garden State could pass the enacting bill as soon as the first week of November.

Over in New York, Cuomo has included legalization in his budget proposal for the last two years, but negotiations have consistently stalled out in the legislature, with sticking points such as how cannabis tax revenue will be allocated preventing a deal from being reached.

“If Jersey can beat us to it, then they’ll get the gold star—but I still think we’re going to set the model here.”

Bernabe said he’s especially excited about the public safety and economic development components of the administration’s forthcoming legalization proposal. And he spoke about the need to ensure social equity for communities historically targeted by the war on drugs, adding that there will be some changes from this year’s version in light of other states’ experiences.

“I would say equity pervades the entirety of the bill. It pervades it on the licensing front, it’s on the revenue side and the use of funds and providing capital and loans,” he said.

Also in the interview, Bernabe talked about pending regulations for hemp-derived cannabinoids. While those who grow the crop for fiber, seeds and other agricultural purposes are covered under existing rules, he said the administration is “literally putting the final tweaks” on policies for consumer CBD products that will take effect at the beginning of 2021.

“We’re excited because we’ve taken the bull by the horns so to speak. I think people recognize that there are a lot of sectors or product lines that haven’t really had some thorough regulation attached to them,” he said. “You can pick a number of them but probably the most high-profile or obvious ones are something like vapes—so CBD or other cannabinoid extract vapes. Flower, even some tinctures, and foods and beverages.”

“How do you regulate that? What are the parameters around it? What’s permissible? What’s not?” he said. “We dug deep. I don’t know that we’ll get everything right. We had to make some calls.”

The administration official offered an example of a regulation they’re likely to pursue that other states have avoided: creating rules for cannabinoid-infused drinks and food items.

“We think of this in terms of consumer protection. Those products are already out there. There’s no sense in trying to pretend they’re not,” he said, adding that one way they’re planning to ensure those protections is to set a maximum 25 milligram CBD dose per serving.

“We’re really doing it across the board on this,” Bernabe said. “We’re really looking at every product class and trying to strike a balance between consumer protection and letting people have what they’re obviously using extensively for health and wellness.”

As the administration finalizes those rules, the state’s hemp industry also recently got some news about broader regulations. Since a congressional continuing rider signed by the president last month extends the 2014 Farm Bill pilot program for the crop until next September, the New York Agriculture Department said it will similarly allow hemp businesses to continue to operate under the existing program until September 30, 2021.

“With so much uncertainty right now, we applaud [the department’s] move to extend these rules,” Allan Gandelman, president of the New York Cannabis Growers and Processors Association, said in a press release on Wednesday.

Another New Jersey Poll Shows Marijuana Legalization Passing By A Huge Margin

Photo courtesy of Mike Latimer.

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Montana Marijuana Legalization Initiative Faces Last-Minute Legal Challenge In State Supreme Court

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A campaign to legalize marijuana in Montana is facing a last-minute legal challenge, even as residents are already participating in early in-person voting and submitting mail-in ballots that feature a pair of cannabis reform initiatives.

Prohibitionists have retained a law firm that’s preparing a lawsuit to be filed before the state Supreme Court against the statutory adult-use legalization measure, arguing that it violates state law by including provisions that would appropriate funds to specific programs. But New Approach Montana, the group behind the initiative, says their opponents “are simply trying to cause confusion.”

The proposal in question would establish a legal cannabis market for adults in the state, while a separate constitutional amendment that’s also on the ballot would stipulate that only those 21 and older could enter the market.

“We have prepared this lawsuit and we are in the process of filing it,” Steve Zabawa of Wrong for Montana said during a press call, KGVO reported. “Brian Thompson at BKBH is our attorney, and we’re going to ask that the Supreme Court of Montana remove this thing because it is a flawed initiative.”

He cited Article III, Section IV of the state constitution, which says citizens “may enact laws by initiative on all matters except appropriations of money and local or special laws.”

Under the legalization initiative, half of the public revenue generated from marijuana sales would go toward environmental conservation programs—a provision that earned the campaign key endorsements last month.

For what it’s worth, a 2018 ballot measure that made it on the ballot but was rejected by voters would have increased tobacco taxes and used revenue to fund health programs. But after opponents sent a letter to the secretary of state arguing that it was unconstitutional based on the same appropriations statute, the official said he would not be removing it. The issue did not reach the courts, however.

“I hope next week that the Montana Supreme Court sets a date to hear it and gets it out to their seven justices and then they come to they read through it and then do their research and then throw the initiative off the ballot,” Zabawa told the radio station. “That’s best case for us.”

Of course, the initiative is already on the ballot and voting has started, so presumably if the court sided with the plaintiffs, the votes simply wouldn’t be counted or implementation would be prevented. It is also possible that the court could rule that monies raised by legal cannabis sales under the initiative would simply into the state’s general fund instead of toward the specific programs delineated in its current text.

In addition to the cannabis revenue earmarked for land, water and wildlife conservation programs, the proposal aims to send funds toward veteran services, substance misuse treatment, health care and local governments, with the rest already being pegged to the general fund.

Zabawa, of Wrong for Montana, also recently filed a complaint with state regulators asking that a nonprofit organization that contributed to the legalization campaign be forced to disclose its donors.

Pepper Peterson of New Approach Montana told Marijuana Moment that the “people of Montana will see right through [the lawsuit], as they continue to vote Yes on CI-118 and I-190.”

“They know that legalizing marijuana for adults 21 and over will generate $236 million in new revenue over the next six years, expand access to medical marijuana for patients including veterans, and stop wasting law enforcement time and resources arresting Montanans for marijuana possession,” he said. “These initiatives, which were filed in January, have already been vetted and approved by the Montana attorney general. They are well written and closely follow existing Montana law.”

“The opposition campaign has been spreading misinformation across Montana for weeks, and this lawsuit announcement is just the latest chapter,” he said.

Thompson, the attorney representing the plaintiffs, told Marijuana Moment in a brief phone interview that the complaint would be filed “in the near future,” though he declined to give an exact timeline or share a copy of the draft filing.

If the challenge goes through and the legalization initiative is invalidated, that would mark the second time this election cycle that citizen-led reform efforts have been killed by the courts.

The Nebraska Supreme Court ruled last month that a measure to legalize medical cannabis that had qualified for the November ballot could not proceed because it violated the state’s single-subject rule for ballot initiatives.

Should the Montana campaign prevail against the legal challenge, however, recent polling indicates that voters are positioned to approve it. Forty-nine percent of respondents in a survey released this week said they support the policy change, with 39 percent opposed and 10 percent remaining undecided.

Another New Jersey Poll Shows Marijuana Legalization Passing By A Huge Margin

Photo elements courtesy of rawpixel and Philip Steffan.

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.
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