CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.
Emerge’s Hot Take
NBA Will Let Players Invest In Marijuana Industry And Promote Cannabis Brands Under New Union Deal, According to Report
In the new draft of the seven-year collective bargaining agreement (“CBA”), the National Basketball Association (NBA) is planning to remove cannabis from its banned substances list, and to let players promote and invest in cannabis companies. The CBA is also expected to officially remove mandatory drug testing requirements for cannabis and only subject players to tests if they show signs of problematic dependency. While the deal must still be ratified, it is expected to be approved. The move to cannabis acceptance has been a long time coming. Mandatory drug testing has been temporarily suspended for a couple years already, which demonstrates the leaders’ commitment to the overall movement. One aspect that separates it from other sports is allowing its players to promote and invest in the cannabis industry. As other sports have lowered the restrictions on use and testing, other leagues do not allow players to actively promote cannabis and related brands. This provides additional opportunities for NBA players and cannabis operators alike. At this point most of the notable sponsors for cannabis have been musicians by partnering with operators to create their own brands.
Other Noteworthy News
Cannabis Companies Aren’t Federally Legal – But Can Still Team Up with National Brands
While cannabis legalization isn’t the law of the land yet, some American cannabis companies are already partnering with national brands. Kiva Confections, a maker of cannabis edibles in six states, is partnering with burger chain, Fatburger this month to sell a limited-edition Kiva x Fatburger THC-infused ketchup. Sackville & Co. is partnering with Playboy to make smoking accessories. Green Thumb, a dispensary and consumer product company, is partnering with Circle K. The aim is to get cannabis into the conversation, and a fun, attention-grabbing product like cannabis ketchup fits the bill, said Kiva's co-Founder Kristi Palmer. The condiment packet will feature 10mg of THC - one dose of cannabis, and cost $5. Kiva’s edibles (infused chocolates, gummies, etc.) are available in California, Arizona, Nevada, Illinois, Hawaii and Michigan, but the ketchup will only be available in two Los Angeles retail chains, Artist Tree and Sweet Flower. Current law prohibits cannabis in any form from crossing state lines, so the company would have to produce and package the ketchup in each state separately to expand the promotion geographically.
Paychex ceasing direct deposits, other services to cannabis firms
U.S. cannabis operators are scrambling to find a new payroll provider after receiving a memo from Paychex advising that the company will no longer process direct deposits or offer other services for marijuana-related businesses. A March 29 memo obtained by MJBizDaily warns that, effective May 1, New York-based Paychex will no longer process direct deposit payments. “Cannabis-related businesses (CRBs) continue to face significant banking obstacles because major banks will not allow electronic fund transfers from CRBs over their networks – typically because of differing state and federal regulations around cannabis,” according to the memo from Paychex, which provides payroll and human resource products and services. “Paychex has worked diligently to provide as many of our services as we can within the parameters established by our banking partners. Unfortunately, we can no longer provide you with some of the services you are currently receiving from Paychex.” ……
“Cannabis in Germany will Be a Success Story:” Europe’s biggest Economy Moves Closer to Weed Legalization
Germany could be weeks away from introducing a bill to legalize cannabis under sweeping reforms that would greenlight the consumption and sale of the drug in Europe’s largest economy. Germany’s Health Minister Karl Lauterbach last week said that the plans had received “very good feedback” from the European Commission, the EU’s executive arm, adding that the bill could be announced by the end of March or in early April. “We will soon present a proposal that works, that is, that conforms to European law,” Lauterbach said, following months of talks with Brussels. The government published draft proposals for the legalization of adult-use cannabis in October, which it said aimed to improve public health. Lauterbach insisted that they would only progress to the Bundestag — Germany’s federal parliament — if the initiatives are compatible with EU law.
The Number of Legal Cannabis Farms in Calif. Is in Freefall
California’s legal pot market has lost hundreds of pot farms a month as farmers opt to quit the legal market. And signs indicate the industry is only continuing to shrink. The state has lost 1,766 cultivation licenses since the beginning of last year, according to data reported by the California Department of Cannabis Control and the Cannabis Business Times. Low wholesale prices and high taxes have made it almost impossible for operators to run a profitable small business, pot industry insiders say. The fleeing farms are reducing the total amount of space licensed to produce cannabis in California. The state has lost 23% of its total legal canopy — the combined size of all legal cannabis grows — since the beginning of 2022, according to Aaron Edelheit, a cannabis investor who analyzes California’s market. That’s over 19 million square feet of cannabis farming that has disappeared over the past year…
Raphael Mechoulam, the “Father of Cannabis Research” who Discovered THC, has Died
Raphael Mechoulam, the Israeli researcher whose work helped to broaden the scientific understanding of cannabis and the compounds that cause the drug's distinctive high, has died. Mechoulam, who was 92, died in Jerusalem early this month, according to American Friends of the Hebrew University. Among Mechoulam's contributions to the field of marijuana studies was the first isolation of the psychoactive compound of the cannabis plant — tetrahydrocannabinol, or THC. His work earned him the nickname "father of cannabis research." He was a "sharp-minded and charismatic pioneer," said Asher Cohen, the president of the Hebrew University of Jerusalem, where Mechoulam had long served on the faculty.
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CannaBeat by Emerge Law Group
CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.
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