Husch Blackwell employment law attorney Chris Ottele was featured in the November 7, 2018 issue of the Kansas City Business Journal. Chris speaks about potential employer issues posed by medical marijuana as Missouri voters have signed off on legalizing medical marijuana. Read the full article here.
The state’s marijuana shops raked in $1.51 billion sales of medical and recreational flower, edibles and concentrate products during 2017, according to Colorado Department of Revenue data released last Friday. Adult-use sales topped $1.09 billion in 2017, with the remaining $416.52 million coming from medical marijuana. Cannabis sales in the state were up 15.3 percent in 2017 compared to sales growth of 31 percent in 2016.
What does this mean?
Colorado continues to have solid growth in state-legal marijuana sales but have slowed down considerably compared to 2016. Clearly the market is moving towards a plateau or possibly even a regression in 2018 due to new adult-use markets like California and Nevada recently coming online. Operators in Colorado need to be prepared for market consolidation, tighter margins and increased competition.
Over the last few weeks, we have tried to glean what the direction of state and federal policy on marijuana may be. On May 5, Trump used a signing statement to signal his disagreement with provision 537, which prohibits federal funds from being used to prevent states from implementing their own laws that authorize the use, distribution, possession or cultivation of medical marijuana. This provision lists 44 states that have some form of medical marijuana legalization at the state level. (Indiana and North Dakota were not on the list but have enacted medical marijuana programs).
As these statements spur discussions, it seems people are relatively unaware of the current landscape of state marijuana policies. Numbers can fluctuate depending on how you classify marijuana and legalization, (some states only allow cannabidiol or CBD oil, others have laws allowing medical marijuana but it is inaccessible because the states lack infrastructure for the purchase, sale, and manufacturing). The below summary is done as a waterfall, so once it is in one category it will not appear in a subsequent category. (For instance, a state that allows recreational marijuana also allows medical or a state allowing medical marijuana may also decriminalize the possession of recreational marijuana). Below is a summary of state policies as of May 12, 2017.
Cannabis is illegal at the Federal level. Under the Controlled Substances Act, Marihuana is classified as a level 1 drug, the same schedule as heroin. The DEA confirmed as recently as December, the level 1 classification covers all cannabiniods from marihuana and cannabis. This is vastly inconsistent with the majority of Americans’ views and state law definitions of marijuana. In fact, there is not a single state that penalizes an individual in the same manor for marijuana and heroin possession.
Some key points on the analysis – the analysis covers all 50 states and the District of Columbia. The population numbers used are from the U.S. Census bureau estimates on July 1, 2016, where the total U.S. population was 323,127,513.
There are currently eight states and the District of Columbia that have passed legislation for legal adult-use (recreational/retail) marijuana. The states that currently offer licenses and have established legal frameworks are Alaska, Colorado, Oregon, and Washington. In November 2017, four more states approved adult-use marijuana and are developing a legal framework for licensing – California, Maine, Massachusetts, and Nevada. The District of Columbia allows you to possess and home grow marijuana but has not developed any legal structure for purchase, sale or manufacturing. That is 68.7 million people, or 21% of Americans live in a state (or district) that allows recreational marijuana. Continue Reading The States of Marijuana
Yesterday, Sean Spicer attempted to call out a difference between medical and recreational marijuana at the federal level. He clearly does not understand that ALL marijuana is federally illegal. Further, he made a poor and factually incorrect analogy by comparing the current opioid abuse crisis to marijuana use. Spicer ended his comments on recreational marijuana by stating that the DOJ will step up enforcement actions.
What does this mean?
As we all know, Trump is a wild card, and Spicer’s comments do little to clarify the administration’s position. Previous statements on the issue indicate some degree of support for the cannabis industry, or at a minimum, support for states to determine their own regulations. “In terms of marijuana and legalization, I think that should be a state issue, state-by-state,” Trump told The Washington Post. “… Marijuana is such a big thing. I think medical should happen — right? Don’t we agree? I think so. And then I really believe we should leave it up to the states.”
Further, the recent FY2016 omnibus appropriations bill contains the Rohrabacher-Farr Amendment which prohibits the Department of Justice from interfering with state medical cannabis laws was also widely supported by a GOP controlled Congress (passed in the House by a vote of 242-186, and the Senate Appropriations Committee approved it 21-9). A recent Gallup Poll found nationwide support for legalization at 60%, the highest it likely has ever been. Florida also passed its medical-cannabis initiative with 71% approval – Florida also voted for President Trump. It is clear from Trump’s statements and Spicer’s comments that medical marijuana should remain a non-enforcement priority.
So based on Spicer’s comments regarding recreational marijuana – does Attorney General Sessions unwind years of hands-off federal policy towards state-legal recreational marijuana? We’ll just have to wait and see. I am hopeful that Spicer’s comments are just that, off-the-cuff comments with little substance or thought. However, the recreational marijuana industry is now on notice. I think we are in for a bumpy 2017.
My esteemed colleague and frequent medical marijuana commentator, Fred Miles, was quoted in the NY Times article “When Retirement Comes With a Daily Dose of Cannabis“. Check this article out for a great read about the increasing number of older Americans living in assisted living communities and nursing homes using cannabis for relief from aches and pains as an alternative to prescription pain medicine.
The United States Patent and Trademark Office (“USPTO”) is at odds with the ever-growing marijuana industry. While marijuana legalization was a big winner in November’s elections, with seven states legalizing either medical or adult recreational use of the drug, the burgeoning industry may run into some problems obtaining trademarks for marijuana products and related devices. The lack of trademark protection could slow down or inhibit the growth of the industry as the lack of trademark protection limits entrepreneurs’ ability to stop infringement and protect their rights. Continue Reading No Federal Trademark Protection for the Growing Marijuana Industry
California, Massachusetts, Nevada and Maine approved adult-use marijuana initiatives last night. Florida, North Dakota and Arkansas also approved medical marijuana initiatives. Unfortunately, Arizona failed to garner enough support to pass adult-use. Clearly, these votes are a watershed moment for cannabis reform in the United States. As I have stated before, California passing adult-use marijuana will likely signal the true beginning to the end of federal prohibition of marijuana. However, Donald Trump also pulled off a monumental victory for the GOP and won the White House which has created uncertainty for the industry.
What does this mean?
With the approval of adult-use marijuana in the states, the percentage of Americans living in states where marijuana use is legal for adults rose above 20 percent, from 5 percent. A recent Gallup Poll found nationwide support for legalization at 60%, the highest it likely has ever been. Florida passed its’ initiative by a 71% – Florida also voted for Trump.
As we all know, Trump is a wild card but he has not publicly taken any prohibitionist stance on cannabis. Trump recently was quoted as: “In terms of marijuana and legalization, I think that should be a state issue, state-by-state,” Trump told The Washington Post. “… Marijuana is such a big thing. I think medical should happen — right? Don’t we agree? I think so. And then I really believe we should leave it up to the states.” Continue Reading Marijuana Wins! But so does Trump…
President Obama approved the 2016 federal budget and it contained a prohibition that none of the funds made available to the Department of Justice may be used, with respect to any of the States that have state-legal medical marijuana programs, to prevent any of them from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.
In addition, the 2016 federal budget also prohibits the use of any funds made available to any agency that might be used in contravention of the Agricultural Act of 2014 or prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated in accordance with the Agricultural Act of 2014, within or outside the state in which industrial hemp is grown or cultivated.
What does this mean to you?
Medical Marijuana – Similar to the 2015 Federal Budget, this prohibition only covers “medical marijuana” and not “recreational marijuana.” As I have stated before, this does not prevent the Department of Justice from using funds to prevent recreational marijuana programs from implementing laws. While this is a continued step in the right direction, the prohibition does not extend to state-legal recreational marijuana.
Industrial Hemp – This is also a positive step for the industrial hemp industry for those operating under the Agricultural Act of 2014. This will allow the continued cultivation of industrial hemp for purposes of research conducted under an agricultural pilot program or other agricultural or academic research. However, this does not allow industrial hemp to be sold for commercial purposes. For a State like Colorado, that allows the commercialization of industrial hemp. You should contact your legal counsel to discuss the implications prior to selling any products.
This ruling is a definitive win for medical marijuana business that are operating consistent with state regulations. The Rohrabacher-Farr amendment to last year’s spending bill lists the states that have medical marijuana laws, and mandates that the DOJ is barred from using federal funds to “prevent such State from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”
“The DEA, however, didn’t see it that way. In a leaked memo, the Justice Department contended that the amendment only prevents actions against actual states — not against the individuals or businesses or business that actually carry out marijuana laws. In their interpretation, the bill still allowed them to pursue criminal and civil actions against medical marijuana businesses and the patients who patronized them.”
“The ruling could discourage the Department of Justice from creative interpretations of the Rohrabacher-Farr amendment going forward, which should let medical marijuana businesses and their patients in 23 states breathe a sigh of relief.”
The Washington Post
What does this mean for you?
California has had laws on its books since 1996 allowing marijuana use for medical reasons, however, it has failed to adopt any regulations for the state and local licensing of marijuana cultivations and dispensaries. After seeing states like Colorado and Washington reap millions in taxes, California has finally developed new regulations. Today, California law makers reached an agreement with Gov. Jerry Brown to issue licenses for medical cannabis dispensaries and cultivators. California will create a new Bureau of Medical Marijuana Regulation (BMMR) within the state Department of Consumer Affairs that would oversee a multiagency licensing and regulatory effort.
This is an essential step for California to take if advocates in the industry hope to end prohibition statewide in the next presidential election by legalizing adult-use as Colorado, Washington, Oregon and Alaska have already done.