As the 2024 Minnesota Legislative Session came to a chaotic close on May 20, numerous changes to Minnesota Statutes Chapter 342 were sent to the Governor’s desk to build on the already existing cannabis regulatory structure. On May 24, Governor Tim Walz signed the amendments to Chapter 342, which address social equity provisions, preapproval process for social equity applicants, the larger application and licensing process, and consumer safety.
On May 16, the Drug Enforcement Administration (“DEA“) published its 92-page notice of proposed rulemaking (“NPRM“) to move marijuana from schedule 1 on the Controlled Substances Act (“CSA”) to schedule 3 (ironically, the proposed rule itself only takes up a couple of paragraphs on the last two pages of the NPRM). On the same day, the DEA released an opinion from the Office of Legal Counsel (within the Department of Justice (“DOJ”), which prepares legal opinions of the U.S. Attorney General “and provides its own written opinions and other advice in response to requests from the Counsel to the President, the various agencies of the Executive Branch, and other components of the Department of Justice”) in response to questions from the U.S. Attorney General’s office about schedule 3 marijuana (the “Opinion”). While the NPRM represents the proposed DEA rule that moves marijuana from schedule 1 to schedule 3, the Opinion is essentially the OLC’s roadmap for fending off legal and administrative challenges to this historic move.
The biggest legal shift in the cannabis industry in decades just occurred on the heels of the Drug Enforcement Administration’s (DEA) proposal today for cannabis rescheduling. Specifically, as many anticipated, the DEA will exercise its authority to reschedule cannabis from a schedule I controlled substance to a schedule III controlled substance on the Controlled Substances Act (CSA). This cannabis rescheduling comes in part from the recommendation of the Department of Health and Human Services to reschedule cannabis from a I to a III on the CSA. The DEA’s proposal must now go before the White House Office of Management and Budget (OMB) for review and approval. The OMB’s primary functions relate to budget formulation and execution, legislative coordination and clearance, executive orders and proclamations, information and regulatory affairs, and mission-support areas and management initiatives. OMB will very likely review this DEA proposal for budget impact, regulatory impact, and legislative coordination.
Hemp Production and Prices Increase
Earlier this year, hemp was included in the USDA’s Census of Agriculture. When hemp was first legalized in 2018, there was a boom in production under the fervor of new opportunities, spearheaded by the demand for CBD products. This resulted in over production and over supply. The CBD market was over-saturated within a growing season and hemp biomass prices plummeted, along with hemp production. More recently, however, hemp production has leveled out and is even increasing as reported by the USDA on April 17, 2024. As an example, prices for hemp outdoor-grown flower are up 35% and hemp clone and transplant prices are up 61%.
In November of last year, we wrote about how Total Wine & More jumped into the cannabis drinks arena in Minnesota. Since then (and probably before that), there’s been an influx of “THC Beverages” hitting the marketplace, and I don’t mean the state-licensed cannabis marketplace either. At this point, you can buy these drinks online or in person at a number of retail outlets and locations that don’t have any kind of state cannabis licensing at all (here’s one in Alabama, for example). How, you may be asking, is this legally possible and why are these libations picking up great speed with consumers?
On October 6, 2022, President Biden made a statement in which he asked the Secretary of Health and Human Services (HHS) and the Attorney General to review how marijuana is scheduled under federal law. In his statement, the President appeared to express disappointment that marijuana is listed in the same schedule as “drugs that are driving our overdose epidemic” (Id.). It was highly anticipated that this review would lead to the rescheduling, or even de-scheduling, of marijuana. On August 29, 2023, HHS submitted its recommendation to the Drug Enforcement Administration (DEA) that marijuana be rescheduled from Schedule I to Schedule III.
As the cannabis industry continues to navigate choppy economic and legal waters into 2024, some cannabis companies are pivoting to the smokable herbs market. And I do not mean to those hemp-derived intoxicating cannabinoids (HDIC) either (which are part of a legally precarious loophole anyway depending on who you ask). The smokable herbs to which cannabis companies and entrepreneurs are turning to are things like wormwood, valerian, tarragon, and mugwort (among others). Of course, these smokable herbs face a different set of legal and compliance issues altogether than hemp and/or cannabis do.
Mastercard sent cease and desist letters to payment processors and banks last week. These letters demanded certain financial service providers to stop allowing marijuana transactions on MasterCard debit cards.
What does this mean?
This is clearly just another body blow to a struggling industry. Obviously cannabis operators will likely deal with more cash but
In January of 2022, a worker in a Massachusetts cannabis cultivation facility died because of “the hazards of ground cannabis dust,” according to a report issued by the Occupational Health and Safety Administration (OSHA).
A split First Circuit panel affirmed yesterday that the US Constitution’s dormant commerce clause applies to the federally illegal medical marijuana industry and that a Maine law mandating local ownership of cannabis businesses was struck down.
What does this mean?
Since Colorado became the first state to regulate medical cannabis, there has always been a