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Montana Marijuana Implementation Bill Moves Forward In Senate, With Changes Making It Closer To What Voters Approved

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Lawmakers are restoring funding for conservation programs, allowing home cultivation and making sure legalization will continue even if certain provisions are struck down in court.

By Arren Kimbel-Sannit, Daily Montanan

They may have just missed 4/20, by which point they had hoped to see House Bill 701 hit the floor, but a committee of Senate lawmakers succeeded Wednesday evening in passing a heavily amended version of a bill to implement and tax recreational marijuana in Montana, one of the final priorities of a legislative session nearing its close.

Among the many changes that the Senate Select Committee on Marijuana Laws made to the bill before passing it on a voice vote is to partially restore some funding in the bill for conservation and land easements—allocations that existed in Ballot Initiative 190, a legalization proposal that voters approved last year, but that received pushback from Republicans who argued that only the Legislature has the right to make spending decisions, not the voters. The version of the flagship pot bill that emerged from committee Wednesday also allows for limited home-grow of marijuana, some local taxation and provides a compromise on the sticky issue of a locality’s right to refuse to authorize recreational marijuana.

An amendment that lawmakers on the committee passed Wednesday first directs marijuana revenues—recreational pot will be taxed at 20 percent, as it stands now—to the Department of Revenue, then $6 million to substance abuse prevention program called the HEART Fund, of which a chunk goes to tribal healthcare, with 20 percent of the remaining sum going to Habitat Montana, a program to fund conservation easements. From there, 4 percent each of the remainder goes to parks, trail maintenance and non-game wildlife habitats, with several hundred thousand dollars then going to care for veterans and programs within the Department of Justice, followed, ultimately, by the general fund.

There is at least one caveat: The money wouldn’t become available until 2024, a compromise introduced by Sen. Tom Jacobson, D-Great Falls. In the first year of the program, parks, trail maintenance and non-game wildlife protection accounts would split $2 million, and beginning in 2023, Habitat Montana would receive around $5.4 million. That appropriation would continue in 2024 and beyond, with the conservation easement program receiving 20 percent of post-HEART Fund revenues, or, according to current projections, around $5.4 million. At that point, the parks, trails and non-game wildlife accounts would receive 4 percent of the remaining funds each.

This means that the bill would allocate money out of the current biennium. The Legislature in one session can’t bind the hands of their successors in the next session—so while many of the same lawmakers may still be in Helena in two years, lawmakers next session could always choose a different way to spend marijuana revenues.

The language, part of a large amendment brought by Sen. Jason Ellsworth, R-Hamilton, and developed in concert with Democrats on the committee, finds an uneasy middle ground between I-190, which would have put almost half of marijuana revenues into conservation and park programs, and HB701 as initially introduced, which made only small investments in outdoor recreation and conservation and directed the bulk of pot monies to the general fund. It could mean millions more in funding for programs that environmental and hunting groups have advocated for all session, assuming the changes last through the rest of the process. It would also boost funding for veterans’ care, another proposed allocation in the ballot initiative.

“Trying to stay as true to the initiative as possible has been our priority,” said Jacobson.

“And the fact that we have to have enough votes to get this out of here in some way that makes sense for Montanans,” said Senate Minority Leader Jill Cohenour, D-East Helena, one of the other Democrats on the committee.

Bringing HB701’s funding language closer to I-190 has been the top priority of Democrats during debate on the many marijuana implementation bills this session. Rep. Mike Hopkins, R-Missoula, HB701’s sponsor, said the new language could help bring minority lawmakers into the fold, but that he and other Republicans also acknowledge the need for continued funding in programs like Habitat Montana.

“We obviously have conversations on our ability to be able to fund all of their requests, and we especially have a conversation around being able to fund the maintenance portions for projects within Habitat Montana (in other appropriations bills),” Hopkins said. “And then, also, it allows us to work a little bit more closely with our Democratic friends.”

The amendment from Ellsworth also would ask the Supreme Court to appoint a judge specifically to handle expungement and resentencing of past marijuana provisions, which is allowed for under HB701. And, though some Republicans were itching to impose THC limits and nix the ability for recreational users to grow marijuana at home after a presentation earlier in the process from a drug enforcement officer from Colorado who warned lawmakers of the dangers of smelly basement grow-ops and marijuana-induced psychosis, the committee ultimately left those components largely intact. Recreational marijuana under the bill can have up to two plants per person and four per household.

Finally, the bill still officially bans the outdoor growing of cannabis, a provision requested by the hemp industry, but the amendment allows for the grandfathering of existing outdoor operations.

The bill first came to the Senate in early April, and has undergone a series of protracted deliberations alongside other proposals for legalizing marijuana that the Senate panel has gradually picked off. At each stage, concepts have been shuffled around or amended to address concerns from an expanse of stakeholders and an existing medical marijuana industry sensitive to change. It seemed for most of the process that Republicans would be unwilling to restore environmental funding, despite repeated pleas from advocates to follow the language of the initiative. Exactly what changed isn’t entirely clear, and Ellsworth, who led the Senate’s marijuana committee, declined to comment on the deliberations that led to the language approved Wednesday.

Other changes that the Senate committee approved includes a compromise on the issue of local excise taxes, which were allowed in the first draft of HB701 but removed in the House. After Wednesday’s amendments, municipalities can levy a separate excise tax of up to 3 percent on marijuana if approved by the voters.

The bill will also strike a balance on the county option. At first, HB701 would require every county to opt-in to adult-use marijuana, which some in the industry feared could lead to local governments deciding to shutter existing medical marijuana businesses. But Republicans in the Senate including Ellsworth worried that this would constitute a takings by the government, so an amendment that failed in the House was revived and added to the bill. Now, the half of Montana counties that supported I-190 will have adult-use unless voters decide to opt out, while counties that voted against I-190 will still have to pass local initiatives opting in if they want recreational marijuana.

The amendment also fixes a technical issue that arrangement created: At first, tribes, which as federal entities cannot license dispensaries on their land, would only be able to operate dispensaries within a 25-mile radius. But that would mean many tribes could only operate dispensaries in counties that did not support I-190 and presumably would not opt-in to the program; so, the amendment Wednesday expanded that boundary to 150 miles.

The final piece to fall into place was how to handle the problem of a legal challenge to either the bill or the underlying initiative. When Ellsworth’s amendment debuted early Wednesday, it contained language that would void all of HB701 if any part of I-190 was found unconstitutional, which some fear could be a possibility given the ballot language allocating funding. I-190—and HB701—also contain provisions restricting the ability to own dispensaries to Montana residents, language that in other states the court has challenged as illegal protectionism. Some members of the marijuana industry feared that language amounted to a poison pill that could tank recreational marijuana if the program is challenged.

But by the time the ink dried on the amendment, the language was updated to explicitly protect the overall legalization effort if the funding provisions of I-190 are declared void or the court overturns any other sections of the initiative, so long as those sections aren’t integral to the function of the program.

The committee’s work Wednesday addressed most of the concerns that J.D. “Pepper” Petersen, a dispensary owner and Montana Cannabis Guild President who wrote I-190, had on that front, he told the Daily Montanan.

From here, lawmakers will need to rush the bill through the Senate and then send it back to the House so lawmakers there can vote to concur with the Senate amendments. They’ll have to walk a tight-rope, and possibly suspend rules, in order to make it happen, but Cohenour said she’s quite sure that her counterparts in the House can offer their votes.

“The biggest thing is trying to stay true to the people of Montana,” Jacobson said. “Given the circumstances, we did as good a job as we could, and I think we met that expectation. Like anything, this isn’t over. We’re gonna see what loopholes, what bugs we can fix. But I think we’ve got a pretty solid start.”

This story was first published by Daily Montanan.

Virginia Governor Signs Marijuana Legalization Bill In Ceremonial Event—Even Though It’s Already Enacted

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Illinois Will ‘Blow Past’ $1 Billion In Legal Marijuana Sales In 2021, Chamber Of Commerce President Says

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“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.

This story was first published by The Center Square.

DEA Finally Ready To End Federal Marijuana Research Monopoly, Agency Notifies Grower Applicants

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DEA Finally Ready To End Federal Marijuana Research Monopoly, Agency Notifies Grower Applicants

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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.

Mississippi Supreme Court Overturns Medical Marijuana Legalization Ballot That Voters Approved

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Mississippi Supreme Court Overturns Medical Marijuana Legalization Ballot That Voters Approved

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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.

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: 

Mississippi Supreme Court m… by Marijuana Moment

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