Cannabis Client Alert – January 2021 # 3 | Dentons

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In this week’s issue:

  • USDA issues final hemp production rule
  • The US Census Bureau announces plans to collect data on states’ cannabis tax revenues
  • California Adopts Emergency Rules For Cannabis Company Access To Financial Institutions
  • Governors in two states expressly support the legalization of cannabis
  • Mexico publishes regulations on the use of medical cannabis

Federal

DEA conducts first interview for approval to grow cannabis Less than a month after completing regulations that would increase the number of federally licensed cultivators for medical cannabis research, the Drug Enforcement Administration (DEA) conducted its first interview with client Bright Green Corp. from Dentons. Currently, the University of Mississippi is the only facility with a federal license to manufacture cannabis; The DEA is expected to approve another 3 to 15 permits in the first half of 2021. Bright Green Corp., which filed its application in September 2020, is one of more than 50 companies that have applied for approval.

US Census Bureau to Collect State Data on Cannabis Tax Income – In a notice posted on the Federal Register, the Census Bureau announced plans to begin collecting data on cannabis tax income from states across the country. The data is collected quarterly using an existing data collection form that requires states to split tax revenue into different categories such as alcohol, tobacco and utilities. Proponents believe this will help fuel federal legalization efforts, legitimize the cannabis industry, and highlight the economic potential of cannabis. According to a representative for the National Cannabis Industry Association, this data collection “is a sign that the federal government is preparing for eventual interstate trade, federal regulations, and international market activity.”

Colorado federal court dismisses unlawful relief – citing the defendants’ argument that a court cannot grant relief that would compel a party to violate federal law, a federal court in Colorado dismissed a majority of an investor’s case against the owners from Clover Top Holdings, Inc. Ab., a means of investing in cannabis companies in Colorado. According to the court, the investor’s complaint failed to “explain how facilities can be designed in a way that does not advocate or require illegal activity”, as provided by the Controlled Substances Act. But because “[c]The law shows flexibility when relief can be granted in ways that federal marijuana laws do not imply. “The court dismissed the claims with permission to amend the complaint.

Status

AZ – The Arizona Department of Health issued new rules for adult cannabis after voters approved Proposition 207 in November 2020. The regulations, which came into force on January 15, lay down rules for the licensing of representatives of cannabis establishments, as well as for the use and operation of requirements for cannabis establishments.

CA – California regulators have issued emergency rules to enforce provisions of the Cannabis Act for Medicines and Adult Use and the Safety Act for Cannabis Company Access to Banking Services. The regulations allow licensees to request and permit licensing authorities to share financial information with their financial institutions and, conversely, allow financial institutions to request and allow license information to be shared from licensees to facilitate the provision of financial services.

CO – cannabis sales in Colorado were over $ 2 billion in 2020. This was the highest annual revenue since the state legalized cannabis use in 2014. The state received over $ 387 million in taxes and fees last year used for local governments and the state’s education and transportation were and cannabis cash tax funds.

CO – In response to the COVID-19 public health emergency, Colorado has established emergency rules that allow cannabis retailers to take orders from customers over the phone or online, and to allow collection outside of licensed premises. The emergency rules apply for 120 days or until the applicable implementing regulation is repealed, withdrawn or expired.

Efforts by IL-Illinois lawmakers to diversify the state’s cannabis industry have again failed after the state House of Representatives passed a bill that would have created 75 additional pharmacy licenses. In order to dispel criticism and controversy in connection with the first round of dispenser licenses, the draft law would have allowed applicants from the first round to re-apply for the new licenses and would have lowered the criteria for qualifying for a second lottery for dispenser licenses.

MD – Maryland cannabis workers can receive COVID-19 vaccine in the first wave of vaccination, under a state Department of Health policy that registered workers in medical cannabis dispensaries, laboratories, cultivation and processing facilities are “Registered Healthcare Providers”.

MO – The new head of the Missouri House of Representatives Special Committee on Government Oversight said he was open to continuing an investigation into the state’s medical cannabis program, which has been the subject of a series of legal disputes aimed at the license evaluation process and potential conflicts of interest.

NM – New Mexico Governor Michelle Lujan Grisham (D) announced that legalizing cannabis is a legislative priority for her administration in 2021. The legalization is part of the governor’s broader plan to boost the economy and increase the state’s revenue after a challenging year. While there have been several failed attempts at legalization in the past, lawmakers are hoping this will be the case this year due to increased public support and pressure from legalization efforts in neighboring states.

VA – Virginia Governor Ralph Northam (D) announced an adult cannabis legalization plan that should allow sales to begin in 2023. The proposal, which is expected to gain broad support from lawmakers, would impose a 21 percent excise tax, some of which would provide licensing preferences for people and organizations harmed by the war on drugs. Like many other states, Virginia is pursuing cannabis legalization to help offset economic losses from the coronavirus pandemic.

Hemp / CBD

U.S. Department of Agriculture Admits Final Domestic Hemp Production Rule – The USDA has released a Final Domestic Hemp Production Rule that includes changes to the 2019 preliminary final rule based on nearly 6,000 public comments and lessons learned from the 2020 growing season. Overall, the final regulation, which addresses licenses, records, testing procedures, disposal requirements, compliance provisions, and procedures for handling violations, is more beneficial to the hemp industry than the preliminary final regulation.

US Department of Agriculture – The USDA has announced grant funding under the Complementary and Alternative Crops Grant Program to support the “Breeding, Testing and Development” of hemp strains with “superior performance”. The program, which also supports research into the cultivation of rapeseed for oil, aims to “adapt these multi-purpose crops to different growing areas. . . This means that domestic rapeseed oil and industrial hemp production can be significantly increased and made profitable nationwide. “

US Food and Drug Administration – In a recent statement, FDA leadership warned that despite the increasing interest and availability of CBD products, “we still have a limited understanding of the safety profile of CBD and many other cannabis-derived compounds including potential safety hazards for humans and animals. “The FDA noted that more data on side effects and the risks of long-term use are needed from longitudinal studies in order for health authorities to make informed decisions. While some industry experts see the statement as “resetting expectations about the regulation of CBD by the FDA”, others criticize it as “nothing more than clearing administration at the end of administration by an FDA that has failed to implement this crucial policy . ” Area.”

US Postal Service – The USPS has reminded postal workers that “Customers may post certain hemp-based products if all applicable laws are followed.” Mailers must comply with all laws relating to hemp production, processing, distribution, and sale, and must keep records in accordance with those laws. Postal workers are not responsible for ensuring compliance by the mailer.

International

Mexico – The Mexican Ministry of Health has published rules governing the use of medicinal cannabis. The regulations allow pharmaceutical companies to begin medical research on cannabis products and also to engage in the cultivation and harvesting of cannabis for medicinal purposes. While companies in Mexico can now legally grow cannabis, the export of cannabis grown in Mexico is still prohibited. The legalization of recreational use is expected to be completed in the next Congress period.

United Kingdom – More than 20 years after GW Pharmaceuticals granted GW Pharmaceuticals its first license to grow medical grade cannabis, the UK has granted Northern Leaf its second license. Jersey’s Northern Leaf will supply THC-rich cannabis to drug manufacturers in the UK, Germany, Denmark, Spain and Portugal by the end of 2021.

business

UFC Changes Anti-Doping Policy – The UFC, the world’s largest mixed martial arts promotion, will no longer penalize fighters who test positive for cannabis unless it believes the fighter used cannabis intentionally for the purpose Improve performance. While this policy change will not affect the rules of other state sports commissions and international governing bodies, the Las Vegas-based UFC hopes to start a broader discussion and create wider tolerance for cannabis use among various commissions.

Dentons speaks

Eric Berlin, co-chair of Dentons’s US Cannabis Group, was quoted in a Benzinga article dealing with confusion among cannabis special purpose vehicles.

Eric Berlin will take part in a panel discussion on the “Cannabis Industry Outlook 2021” sponsored by Expert Webcast on January 21st. You can find the registration for the panel here.