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National News - September 2018

1st Year of Cannabis Sales Higher than Expected

 Nevada- Regulators and industry insiders say the state’s first year of broad marijuana legalization has exceeded even their highest expectations, with sales and tax collections already surpassing year-end projections by 25 percent.

Numbers from June are still outstanding but are expected to push taxable sales past $500 million, netting total tax revenue in the neighborhood of $70 million, with about $25 million devoted to schools.

A legal battle over distribution licenses made for a rocky start last July, but Nevada’s $195 million in sales for the first six months dwarfed the totals in Washington state ($67 million) and Colorado ($114 million) for the first half-year of legal sales in those states in 2014. And so far, there’s no sign legal sales that began in California on Jan. 1 have cut into business in neighboring Nevada, regulators say.
State Sen. Tick Segerblom (D), a Las Vegas who helped lead the legalization effort, added the “biggest surprise has been that there’ve been no surprises.”

But not all the reviews are glowing.

Some medical marijuana patients insist they were better off before Nevada legalized recreational pot. Tourists still have nowhere to legally smoke the drug, at least for now, and opponents remain skeptical of the impact on children.

The 10 percent retail tax levied only on recreational sales goes to the state’s rainy day fund, a total of $26.5 million through May. Money raised from the 15 percent wholesale tax applicable to medical use as well, about $24 million through May, goes to schools, but not until about one-third is used to cover local and state administrative costs.

That means about $25 million in wholesale revenue anticipated for the first full year of sales will be shared by schools in Nevada’s 17 counties based on enrollment, with $17 million likely headed to Las Vegas and surrounding Clark County and $8 million divided among the rest, perhaps $5 million for Washoe County, including Reno and Sparks.

 “People have a huge misconception that we are going to build libraries and roads and all kinds of things with this marijuana money,” Hartman said. “But in reality, these are tiny, tiny numbers.”
Segerblom and others think the figures will grow, especially when local governments start using their authority to license smoking lounges or other public places for marijuana consumption. Currently, the only legal places are private residences in the state that attracts nearly 50 million tourists annually.
The Las Vegas City Council initially backed off such a move, waiting for places like Colorado to test the waters. But it recently resumed accepting public comment on the matter, and Segerblom thinks the city will move that direction following November’s elections.

The biggest criticism has come from the medical marijuana community. Broad legalization has resulted in dispensaries stocking fewer higher-potency products that cannot be sold for recreational use, critics say.

“I know people complain about the medical, that there has been less availability,” Segerblom said. “That is one of those things that is going to have to work its way through the system. With the recreational sales, there should be more money available for all kinds of products.”

Mona Lisa Samuelson, a leading advocate of medicinal marijuana, said legalization of recreational use “may be the very worst thing to happen to our medical marijuana patients.”

“Unfortunately, more money isn’t making the marijuana industry any kinder or more thoughtful,” she said. “Since recreational sales now far outweigh medical marijuana’s profitability, the patients’ concerns carry no political weight.”

Trouble Finding Producers for Cannabis Edibles Market

Ohio- It appears, is having some difficulty scrounging up enough reputable cannabis companies to produce a variety of pot products for the state’s medical marijuana program. The Ohio Department of Commerce recently issued its first round of processor licenses, approving only 7 out of 104 applicants. The state says the majority of the businesses interested in producing marijuana–infused oils and treats did not meet the minimum requirements. So now, it’s back to drawing board.

This means there are still several opportunities for stand-up cannabis operations to get in on the ground floor of the Buckeye bud scene. The state is permitted to grant 40 processor licenses during the initial round. The approved processors will be responsible for manufacturing and distributing cannabis-infused brownies, creams, patches and other non smoke-able forms of the herb to local dispensaries.

This licensing snag is just another in a cluster of missed opportunities. Ohio’s medical marijuana program has been struggling to get off the ground since voters slapped it with their seal of approval in November 2016.

Just two months ago, state officials confirmed that the medical marijuana program would not be launched at the beginning of September like it was supposed to be. Incidentally, this is the cutoff for when the law mandates the program be “fully operational.”

Still, there is no word yet on how much the Commerce Department’s latest licensing debacle will set the program back. The seven approved cannabis processors -- Ohio Grown Therapies, LLC; Fire Rock Processing Ltd; Ohio Green Grow LLC; Greenleaf Therapeutics, LLC; Grow Ohio Pharmaceuticals, LLC; Standard Farms Ohio LLC; and Corsa Verde LLC -- have all been issued provisional licenses.

They now have six months to build their facilities and pass the state’s health and safety standards before they can be cleared for an operating license. This means while it is possible that medical marijuana patients might be able to get their hands on plant forms of the medicine for vaping purposes by fall, it could be early 2019 before they are able to purchase edibles and topicals.

It is easy to see why the Ohio cannabis industry is so frustrated with the state’s lag and drag. The application fee for both standalone and vertically integrated operations is $10,000 plus an extra $90,000 operation fee. These licenses must be renewed every year at a rate of $100,000.

The state stands to rake in an estimated $23 million in taxes. Ohio has yet to publish a new launch date for the program.


Ban on Smoking Medical Marijuana

 Florida- Pointing in part to smoking-related health effects, Florida Attorney General Pam Bondi’s office on Friday filed a 57-page brief arguing that an appeals court should uphold a decision by the Legislature to ban smoking medical marijuana.

The brief, filed at the 1st District Court of Appeal, came as the state challenges a May ruling by Leon County Circuit Judge Karen Gievers, who said the smoking ban violates a 2016 constitutional amendment that broadly legalized medical marijuana.

The Legislature in 2017 passed a law to carry out the constitutional amendment and included the smoking ban. Prominent Orlando lawyer John Morgan, who heavily bankrolled the constitutional amendment, filed a lawsuit last year challenging the smoking ban. Bondi’s office Friday filed an initial brief in its attempt to overturn Gievers’ ruling. The brief raised a series of issues, including arguing that the Legislature “considered important health and safety factors” when deciding to ban smoking.

“Notably, the Legislature considered evidence of the health hazards of smoking and concluded that smoking marijuana constitutes a harmful delivery method,” the brief said.

“Time and again during debate, elected members of Florida’s Legislature emphasized that the amendment is exclusively about medicine and that smoking is antithetical to good medicine. In considering these health-related factors, the Legislature reasonably determined that the harms caused by smoking — including harms to patients and those exposed to secondhand smoke — were ample reason to exclude smoking from the statutory definition of ‘medical use.’ The Legislature, therefore, acted under its general authority to regulate public health, safety, and welfare when it drew a reasonable line between the smoking of medical marijuana and other delivery methods.”

But in her May ruling, Gievers found that language in the amendment “recognizes there is no right to smoke in public places, thereby implicitly recognizing the appropriateness of using smokable medical marijuana in private places consistent with the amendment.”

The “ability to smoke medical marijuana was implied” in the constitutional language “and is, therefore, a protected right,” Gievers wrote.

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