Marijuana regulators in Washington State will entertain sweeping changes to how marijuana is tested, processed, packaged and sold in one of the U.S.’s oldest recreational marijuana markets, officials announced late Wednesday.
Recreational cannabis has been sold in regulated retail outlets in Washington since 2014. Consumers there pay one of the country’s highest tax burdens, generating nearly $400 million in revenue through the first three years of legalization, as the Stranger reported in late 2017.
But medical marijuana patients have long complained about limited product availability. And a recent string of testing labs suspended for erratic results that allowed unsafe product to reach retail shelves has shaken confidence in product safety.
“Requests from the industry have…been received regarding testing requirements, and changes in testing requirements in other states have prompted further review of WSLCB rules for potential adjustment,” the new notice from the Washington State Liquor and Cannabis Board said. “Additionally, the WSLCB has heard from the medical marijuana patient community that they would like to see additional product types or levels of potency that are not currently supported by the regulatory structure.”
“For these reasons, changes to products, serving amounts in packaging, and other related requirements may be considered,” the regulators announced Wednesday.
Wednesday evening’s notice is the initial notification of potential rulemaking, and “no rule language is offered at this stage of the process.”
Members of the public can submit comments or proposals until October 24. No proposed rules changes are expected to be filed until “on or after October 31,” the notice said.
“Following the comment period, the agency will send out and publish the proposed rules, establish a comment period on the proposed rules, and hold a public hearing before the rules are adopted,” according to the agency.
Until then, the agency “will consider the following topics for potential rulemaking changes,” according to Wednesday’s notice:
- Lot and batch sizes;
- Fields of testing and pass/fail level adjustments;
- Potency testing requirements;
- Pesticide testing requirements for all cannabis products;
- Heavy metals testing requirements;
- Sample deduction requirements;
- General testing rule adjustments;
- Product, THC serving limits, and packaging requirements; and
- “Other related rule changes that may be necessary or advisable,” according to the notice.
Whatever “further adjustments” the agency will propose are meant to “increase efficiencies in testing” and “increase the availability of compliant [cannabis] products,” the notice said.
Anyone interested in submitting comments or proposed rules can contact Joanna Eide, Policy and Rules Coordinator, at [email protected].
Canopy Growth Says GW Pharma Infringed On CBD Extraction Patent In Federal Lawsuit
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:
Photo by Kimzy Nanney.
State Of Montana Launches Online Hemp Marketplace To Connect Buyers And Sellers
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 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.
Photo courtesy of Brendan Cleak
Missouri Launches Medical Marijuana Sales At State’s First Dispensaries
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.
I was honored to watch Larry, a cancer survivor, and his wife Sue, an RN, make the state’s first legal medical cannabis purchase this morning in St Louis. @mocanntrade @NewApproachMO pic.twitter.com/rCudrkdbfI
— Jack Cardetti (@jackcardetti) October 17, 2020
“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.”
“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.”
— Mo Health & Sr Srvcs (@HealthyLivingMo) October 17, 2020
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 wait is finally over! Tomorrow morning at 9am @NBlissCannabis will open the doors to their Ellisville and Manchester locations for the first medical marijuana sales in Missouri! Congrats to the whole N'Bliss team! The #MOMMJ industry is up and running! pic.twitter.com/wyZIcoyLBv
— MoCannTrade (@mocanntrade) October 16, 2020
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.