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Oregon Marijuana Sales Spike During Pandemic, But Officials Expect Market To ‘Mellow’

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Amid one of the sharpest economic downturns in state history, Oregon marijuana sales continue to roll along at a healthier-than-normal pace. State budget officials say that shelter-in-place policies and economic stimulus programs have kept marijuana sales “quite strong” during the pandemic so far.

Since March 1, the sales of adult-use marijuana products are up 60 percent compared to a year ago, the state Office of Economic Analysis said in its latest quarterly budget forecast published last week.

“These increases are not only related to the stockpiling consumers did after the sheltering in place policies were enacted,” the report says, “but have continued through April and early May.”

Oregon marijuana sales during COVID-19

In April alone, consumers bought $89 million worth of legal cannabis products—a record amount—thanks in part to what officials described as a “4/20 bump.” While the boost in sales figures are due in part to rising prices, state budget analysts said that “underlying demand is up as well.”

“The increase in sales for other marijuana products, like concentrates, edibles and the like, are due to significant gains in consumer demand as prices are flat or down,” analysts reasoned.

The June 2020 budget forecast estimates that the current increase in marijuana sales will yield an extra $9 million in state tax revenue during the 2019-2021 budget period. It’s a rare bright spot in the overall budget report, which state analysts described as “the largest downward revision to the quarterly forecast that our office has ever had to make.”

Oregon marijuana demand

But even the marijuana sector’s boost may be time limited.

“Expectations are that some of these increases are due to temporary factors like the one-time household recovery rebates, expanded unemployment insurance benefits, and the shelter in place style policies,” the report says. “As the impact of these programs fade in the months ahead, and bars and restaurants reopen to a larger degree, marijuana sales are expected to mellow.”

Demand for marijuana is also expected to fall in coming years due to a lower overall economic outlook, which is projected to reduce Oregon’s population and cut average incomes. “A relatively smaller population indicates fewer potential customers,” the report notes, “and lower total personal income than previously assumed indicates less consumer demand.”

Oregon population forecast

The projected slowdown in sales isn’t expected to make an impact until the next budget period, beginning in 2021. At that point, the forecast says, sales will begin trending down by 5 percent relative to the current period “due to the lower economic outlook” associated with COVID-19.

The pandemic has also changed how Oregonians are making marijuana purchases, the report found, though perhaps not as much as one might expect. The share of sales completed by delivery services more than doubled in recent months, but it remained relatively small, making up just 1.4 percent of total sales. As the Office of Economic Analysis observed, “Consumers still prefer to shop in store.”

Oregon is one of a handful of states looking to legal cannabis sales to help buoy tax revenues. A report published last month by cannabis regulators in Michigan, where legal sales to adults began this past December, forecasts annual marijuana sales in that state to top $3 billion as the market matures. That would mean another 13,500 jobs and roughly $500 million per year in taxes to state coffers. Factoring in the effects on peripheral businesses, the state found, the “total economic impact is estimated to be $7.85 billion with a total impact on employment of 23,700.”

Although tax revenue from cannabis sales will help pad budgets in many legal states, the Oregon report doesn’t mince words: The pandemic’s hit to the state’s economy will be drastic. Oregon’s current recession is “the deepest on record with data going back to 1939,” according to state analysts, and it hit with virtually no warning. “The path looks more like what happens to economic activity during a labor strike or in the aftermath of a natural disaster.”

Oregon incomes over time

For its part, Oregon’s Office of Economic Analysis predicts a relatively swift recovery. “While this recession is extremely severe, it is expected to be shorter in duration than the Great Recession,” analysts wrote. “The economy should return to health by mid-decade.”

New Mexico Governor Says Legalizing Marijuana Would’ve Funded Programs Cut Due To Coronavirus

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.

Ben Adlin is a Seattle-based writer and editor. He has covered cannabis as a journalist since 2011, most recently as a senior news editor for Leafly.

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Canopy Growth Says GW Pharma Infringed On CBD Extraction Patent In Federal Lawsuit

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Two of the biggest players in the marijuana space are heading to federal court over a dispute related to an alleged violation of a patent for a cannabis extraction method.

Canopy Growth Corporation, a Canadian-based marijuana company, filed a lawsuit on Tuesday against GW Pharmaceuticals, a UK-based firm that produces the Food and Drug Administration-approved cannabis-derived anti-seizure medication Epidiolex.

The legal action came on the same day that the U.S. Patent and Trademark Office issued a new patent to Canopy that gives it broad and exclusive rights to a process of extracting cannabinoids from plant material in the U.S. That issuance is giving Canopy more leverage to pursue litigation and potentially receive damages from GW if the suit plays out in its favor.

Canopy’s original patent—which was issued in 2014 (and initially filed as an international patent application in 2001)—was more narrow and gave companies like GW leeway to adopt their own extraction practices that fall outside the scope of the patent.

That’s not the case anymore, and if the U.S. District Court for the Western District of Texas sides with the plaintiffs, it could have far-reaching implications for the marijuana industry.

Canopy is claiming that GW’s infringement of a patented extraction method “has been and continues to be willful and deliberate.” Because of this infringement, “Canopy has suffered and continues to suffer damages and irreparable harm,” the suit says.

The looming issue for the industry is that, unless GW is able to prove that the patent is invalid, that could mean Canopy would have exclusive rights to an extraction process that is widely used across the market—leaving any company that relies on this method at risk of litigation.

Canopy’s exclusive rights won’t last indefinitely, of course. The newly issued patent that is the basis of its latest iteration is set to expire in a little under a year and a half. But even in that timeframe, Canopy could profit immensely from exclusivity and it could have a chilling effect on competitors in the interim.

“It really could be a major threat to the extraction industry. Once they know about [the patent], companies might be considered to be willfully infringing the patent, which can potentially triple damages if they are sued,” Larry Sandell, a patent attorney and litigator with Mei & Mark LLP, told Marijuana Moment. “Although there are steps that can be taken to reduce infringement liability risks, CO2 extractors may essentially have this anvil hanging over their head as the business continues on—at least until the patent expires or someone succeeds in knocking it out.”

It remains to be seen whether Canopy will pursue litigation against other companies that use the extraction process. GW is one of the biggest players, as the pharmaceutical firm that earned the first U.S. federal approval for a cannabis-derived medication.

“The lawsuit asserts that GW manufactures CBD—the active pharmaceutical ingredient in Epidiolex, GW’s leading cannabinoid product—using Canopy Growth’s patented CO2-based extraction process,” Phil Shaer, chief legal officer at Canopy Growth, told Marijuana Moment. “We have no interest in restricting access to Epidiolex, but the company should be fairly compensated for GW’s use of our intellectual property.“

A spokesperson for GW told Marijuana Moment that the company “is aware of the patent infringement lawsuit filed by Canopy Growth.”

“As a policy, we do not comment on any pending litigation except to say that based on our preliminary review of the complaint, we are confident in our position and will vigorously defend against this lawsuit,” they said.

One possibility would be for Canopy to license out its extraction method to other businesses that produce cannabis products.

But that’s not likely to sit well with others in the burgeoning industry. And it could be the case that GW or other companies will challenge the legitimacy of the very patent in question in court.

On a symbolic level, all of this speaks to the growing pains of a corporatizing industry—a fear expressed by some advocates as the market has expanded. And how it shakes out in this case could, at least in the short-term, be of significant consequence to cannabis businesses throughout the country.

Read Canopy’s new patent and suit against GW over a cannabis extraction process below: 

Canopy vs. GW CBD Extractio… by Marijuana Moment

Mitch McConnell Cheers Lack Of Marijuana Banking Protections In New COVID Bill

Photo by Kimzy Nanney.

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State Of Montana Launches Online Hemp Marketplace To Connect Buyers And Sellers

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Say you’re a Montana farmer who has planted acres of industrial hemp. As harvest nears, you’re looking to offload it. Where do you go to find a buyer?

Montana’s Department of Agriculture says it has the answer.

The state this week announced the launch of an online “Hemp Marketplace,” unveiling an online portal meant to connect the hemp farmers with buyers in search of seeds, fiber and derivatives such as cannabidiol, or CBD.

“The Hemp Marketplace concept originated from the same idea as the department’s Hay Hotline,” the Agriculture Department says on its website, “only instead of hay and pasture, the online tool connects buyers and sellers of hemp and hemp derivatives.”

Listings are free of charge.

Montana online Hemp Marketplace screenshot

Montana Department of Agriculture

Montana farmers have embraced industrial hemp since the state legalized its production under a federal pilot program. The first legal crop was planted in 2017, and in recent years the state has led the country in terms of space dedicated to the plant. In 2018, for example, licensed farmers in Montana grew more acreage of hemp than any other U.S. state. While other states have since eclipsed the state’s hemp production—the crop became broadly federally legal through the 2018 Farm Bill—Montana remains an industry leader.

But to make revenue, farmers have to be able to sell their crop. That’s where the new hemp marketplace comes in. The online portal is essentially a sophisticated bulletin board for buyers and sellers, split into “Hemp for Sale” and “Hemp to Buy” categories.

“With hemp being a relatively new crop grown in Montana, the department recognizes that these markets are still developing,” Department of Agriculture Director Ben Thomas said in a statement. “The Hemp Marketplace was designed to help facilitate connections between buyers and sellers. I’m looking forward to seeing how the marketplace will continue to advance the industry.”

Listings include what type of products are on offer (or being sought), whether a given crop is organic and even whether laboratory testing data is available. The portal also organizes products into one of four varieties based on whether the hemp seeds have been certified by regulators. None of the products may contain more than 0.3 percent THC—the upper limit for what qualifies as hemp under both state and federal law.

Meanwhile, Montana voters are set to decide on Tuesday whether the state will legalize hemp’s more infamous cousin, high-THC marijuana. According to a poll released this week, passage looks likely: The survey, conducted by Montana State University at Billings, found that 54 percent of likely voters plan to support legal cannabis on the ballot. Another 38 percent said they were opposed, while 7 percent remained undecided.

At the federal level, officials at the Drug Enforcement Administration are still working to revise rules around marijuana and hemp to reflect Congress’s move to legalize hemp broadly in 2018. While the public comment on the proposals closed earlier this month, nine members of Congress cautioned the agency against adopting its proposed changes, warning some could put hemp producers at risk of criminal liability. Already a number of arrests and seizures have been made by law enforcement officers confused whether products were legal hemp or illicit marijuana.

The U.S. Department of Agriculture (USDA), meanwhile, has faced separate criticism over its own proposed hemp rules, though it has been more proactive in addressing them. Following significant pushback from the industry over certain regulations it views as excessively restrictive, the agency reopened a public comment period, which closed again this month.

USDA is also planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the market.

Montana Marijuana Legalization Ballot Measure Has Solid Lead In New Poll

Photo courtesy of Brendan Cleak

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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Missouri Launches Medical Marijuana Sales At State’s First Dispensaries

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Less than two years after Missouri voters approved a ballot measure to legalize medical marijuana, dispensaries made the state’s first cannabis sales to patients on Saturday.

N’Bliss Cannabis opened the doors of two separate St. Louis County locations, in Ellisville and Manchester.

“Missouri patients have always been our north star as we work to implement the state’s medical marijuana program,” Dr. Randall Williams, director of the Missouri Department of Health and Senior Services, said in a press release. “We greatly appreciate how hard everyone has worked so that patients can begin accessing a safe and well-regulated program.”

Officials have touted the speed with which they have gotten the voter-approved cannabis program off the ground, saying it is “one of the fastest implementations of a medical marijuana program in the United States.”

Via Missouri Department of Health and Senior Services.

“A tremendous amount of work has occurred by the licensed facilities and our team to get us to this point, and we continue to hear from more facilities that they are ready or almost ready for their commencement inspection,” Lyndall Fraker, director of the Section for Medical Marijuana Regulation, said in a press release. “We look forward to seeing these facilities open their doors to serve patients and caregivers.”

The impending launch of sales on Saturday was first announced by the Missouri Medical Cannabis Trade Association on Friday and reported by The Springfield News-Leader.

The state, which has so far licensed 192 dispensaries and expects most of them to open their doors by the end of the year, posted an interactive map that tracks the status of approved medical marijuana businesses.

For months, regulators have been caught up in lawsuits and appeals challenging their licensing decisions, with revenues that would otherwise go to supporting veteran services instead being allocated to covering legal costs.

Missouri isn’t the only state to see medical cannabis sales launch this weekend. Virginia’s first medical marijuana dispensary also held its grand opening on Saturday.

Meanwhile, recreational sales of marijuana rolled out in Maine last week—four years after voters there approved a legalization ballot measure.

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

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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