A marijuana website published a report on Friday with a bombshell claim: CVS Pharmacy is entering the cannabis business, and in a big way.
In fact, according to Cannabis.net, the drug-store giant has applied for more than 300 marijuana-cultivation permits in California—which would make CVS the biggest player in the state’s multibillion-dollar marijuana industry.
The site’s report, titled “Big Pharma Roars – CVS Pharmacy Applies For Almost 300 Cannabis Grow Licenses,” has one major flaw: It’s not true. It is demonstrably fake news.
A quick look at California’s database of cannabis-cultivation permits reveals that CVS Pharmacy does not have any marijuana-growing licenses.
CVS does have “nursery permits,” and they are for growing flowers—although the kind you buy on Valentine’s Day, not the kind you smoke.
Published under the byline of “DanaSmith,” Cannabis.net’s erroneous post appears based on a misinterpretation of California marijuana law.
The California Department of Food and Agriculture (CDFA) does regulate marijuana cultivation, but lists cannabis cultivation permits under a different portal than the one cited by Cannabis.net.
An examination of the CDFA nursery permits cited by Cannabis.net shows them to be licenses for “sales outlets which has no growing grounds except for small areas devoted to the production of plants for local distribution, and those producing less than $1,000.”
Those plants, according to CVS’s actual licenses, are “Decorative plants, foliage, or florists potted plants, including orchids, etc.”
Cannabis.net did not immediately respond to requests for comment sent via its Facebook page and through a contact form on its website.
The website is owned by a Massachusetts-based company called Evergreen Buzz LLC.
Reached via cellphone on Monday while traveling in Maine, Curt Dalton, Evergreen Buzz’s managing director, did not immediately accept fault or share plans to retract or correct the post—and instead pinned blame for any misinformation on a High Times staffer.
Dalton said that he’d been sent a link shared on the LinkedIn page of Ethan Bloomfield, whose bio says he is a senior brand manager for High Times.
Bloomfield did indeed post a video last week, in which an unidentified male scrolls through the CDFA nursery list and discovers the CVS nursery permits.
“Damn, homie,” the voice says. “This is bananas. Hello, big pharma.”
“Big Pharms makes its first move!!!!” Bloomfield writes in his post. “Unbelievable…this video is SHOCKING!”
Dalton sent the link to a Cannabis.net writer, who “vetted” the faulty information and then posted the story, he told Marijuana Moment.
“It wasn’t us who came up with the idea,” Dalton said. “I don’t know more about it.”
When pressed, Dalton seemed to indicate Cannabis.net might change the post if presented with accurate information–but still deflected blame to High Times.
“Oh sure, if the High Times post is not correct and your story is, we would put up a retraction and explain what happened or delete the article,” he said in a text message. “I just dont want to delete it and make it look like we are hiding from a mistake or not taking responsibility.”
Bloomfield and Cannabis.net appear to be not the only marijuana industry players fooled. The video was also liked by a publisher of Sensi magazine and shared by the Stanford University-educated CEO of a Portland-based cannabis brand.
A spokeswoman for CVS Health, CVS Pharmacy’s parent company, did not immediately respond to a request for comment. This post will be updated if a response is received.
At the same time, Cannabis.net’s claim that “Big Pharma” is eyeing the cannabis space is accurate—if old news, and not quite the same as claimed.
British-based drug company GW Pharmaceuticals has patented several marijuana-based medicines—and grows an awful lot of cannabis in central England to make them—and American-based companies are working on cannabinoid-based medicines.
Cannabis.net bills itself as a “lean startup” and “the premier global social networking site for the legalized cannabis industry.”
The website’s main feature appears to be a Google-map based “cannabis dispensaries, doctors, lawyers & businesses”-finder—services that bigger players like Weedmaps and Leafly also provide—but the website also publishes “valuable information, resources and guidance for everything cannabis related,” it claims.
It appears any damage done by the disinformation might be limited. As of Monday, the Facebook post claiming CVS was in the weed game had been shared 50 times. According to a counter on Cannabis.net’s website, the post itself had been viewed roughly 13,000 times.
That’s more engagement than some recent posts, but not quite viral—likely in part because some savvier and less excitable readers already flagged it as fake news.
Feds Warn More CBD Companies Over Health Claims
The Federal Trade Commission (FTC) sent letters on Tuesday ordering three companies to stop making unfounded health claims about their CBD products.
“It is illegal to advertise that a product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support such claims,” FTC said in a press release about the action.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo by Kimzy Nanney.
Colorado Sold Twice As Much Recreational Marijuana As Medical Cannabis Last Year
The share of legal marijuana sales in Colorado that came from the recreational market in 2018 significantly outpaced those from the medical market, according to an annual government report released on Monday.
In fact, there were about two times as many adult-use sales of flower compared to medical cannabis purchases—a new milestone for the state.
Colorado’s Marijuana Enforcement Division (MED) said that 288,292 pounds of bud were sold last year for recreational purposes, while 147,863 pounds were sold to medical marijuana patients. For comparison, in 2017, recreational consumers purchased 238,149 pounds and 172,994 pounds were sold to patients.
That means the recreational-medical gap increased 73 percent in one year.
In part, the trend can be attributed to the ongoing expansion of Colorado’s adult-use cannabis market since the state’s first recreational shops opened in 2014. Medical cannabis sales were notably higher than recreational sales in that first year of implementation, with just 38,660 pounds coming from the adult-use market and 109,578 pounds being sold to medical patients.
Medical and adult-use sales were roughly even in 2016. But by 2017, recreational sales accounted for 58 percent of the market. And last year, they represented 66 percent of the market.
MED also found that licenses for recreational marijuana facilities increased by three percent (47 licenses) while medical business licenses declined by eight percent (77 licenses).
“Data collection continues to be a priority at the MED,” Jim Burack, director of the program, said in a press release. “This ongoing analysis and compilation of industry information helps inform the public and contributes to our outreach efforts to stakeholders.”
The report also showed that the adult-use market is the primary destination for individuals purchasing edibles. Eighty-six percent of edible sales came from recreational consumers. And from July-December 2018, 75 percent of cannabis plants were cultivated for adult use.
The market shift isn’t unique to Colorado. An Associated Press analysis from June detailed how states across the country that have established recreational marijuana programs are seeing the number of medical patients decline as more consumers transition to the adult-use market.
That may be partially explained by individuals who sought out medical cannabis recommendations choosing not to renew their registration after recreational marijuana shops became available. To that point, a recent study found that many customers at recreational dispensaries are consuming cannabis for the same reasons that registered patients do, such as to alleviate pain and sleep issues.
The concern for some advocates, however, is that adult-use legalization could drive up prices for patients, or leave them with fewer product options tailored to therapeutic use as demand for high-THC products increases.
“When states pass adult-use legalization we are seeing many patients leave the strict controls of the medical programs,” David Mangone, director of government affairs at Americans for Safe Access, told Marijuana Moment. “Patients must already pay out of pocket for cannabis, and any added cost like a registration fee for a medical card or renewal can make the process of obtaining medicine extremely burdensome and costly.”
“States like Colorado must continue to provide adequate benefits to patients to ensure the medical program remains robust,” he said.
Mangone added that “as states pass adult-use programs it is important that they continue to understand and appreciate the needs of patients.”
“A common frustration for many is not what happens in terms of access to cannabis, but rather what happens in terms of access to specific products. Products and flower with a high-THC content have a wider market appeal, but may not necessarily benefit the existing medical market.”
That said, one interesting finding from this latest MED report is that medical and recreational consumers alike seem increasingly interested in concentrates, with the units of such products sold to both nearly doubling from 2017 to 2018. Concentrates are sold at a much higher rate in the adult-use market, but the potent products evidently have growing appeal across the board.
Gov. Jared Polis (D) recently celebrated tax earnings from marijuana sales, touting the fact that the state has amassed more than $1 billion in cannabis revenue that has been allocated to various social programs.
And the marijuana market is continuing to evolve in state. Polis signed legislation in May allowing for home deliveries of cannabis products as well as social consumption sites.
The governor said last month at a conference with governors from around the country that the new delivery law could help mitigate impaired driving.
Photo courtesy of Kimberly Lawson.
Credit Unions Won’t Be Punished For Working With Marijuana Businesses, Federal Regulator Says
Regulators won’t punish credit unions simply for working with marijuana businesses that are operating in compliance with state laws, the head of the federal agency that oversees the financial services providers said in a new interview.
National Credit Union Administration (NCUA) Chairman Rodney Hood also suggested that Congress could entirely resolve banking issues in the cannabis industry by federally descheduling marijuana.
“It’s a business decision for the credit unions if they want to take the deposits,” Hood told Credit Union Times, adding that the financial institutions must follow existing federal guidance and ensure that the businesses they choose to service are not violating anti-money laundering laws or other rules.
“We don’t get involved with micro-managing credit unions,” he said.
While the comments don’t signify a new shift in policy, and don’t take into account the fact that the Justice Department still maintains authority to potentially prosecute credit unions that allegedly violate the law by banking marijuana proceeds, they are the latest indication of a growing consensus that federal action is needed to clarify the situation.
Uncertainty around banking in the state-legal marijuana market has been a hot topic in the 116th Congress.
Legislation that would shield banks and credit unions that take on cannabis clients from being penalized by federal regulators was approved by the House Financial Services Committee in March, and the Senate Banking Committee held a hearing on the bill last month. That panel’s chair, Sen. Mike Crapo (R-ID), said last week that he agrees a solution for the industry is necessary.
Though the NCUA head didn’t endorse specific legislation to give credit unions peace of mind when dealing with cannabis businesses, he did float the idea of descheduling marijuana as one way to provide unambiguous clarity for financial institutions.
“Hood said that Congress could remove all ambiguity if it enacted legislation to declassify marijuana,” the trade publication reported after its interview with the official.
Separately, the independent federal agency recently took one proactive step toward reforming policy partly in response to state-level legalization efforts. In a notice published in the Federal Register last week, NCUA proposed changing its rules so that individuals with prior low-level drug convictions would be allowed to work at credit unions.
Though bank and credit union representatives are calling for enhanced clarity when it comes to cannabis banking, more financial institutions do seem willing to take the risk anyway, with federal data showing a notable uptick in the number of marijuana-servicing banks in the last quarter.