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
Former FDA Regulator Predicts Cannabis Rescheduling This Year
As Congress and stakeholders continue to debate and negotiate the language of the SAFE Banking Act (See Article HERE), the Biden Administration is working to understand the cannabis plant and industry a bit more (See October 6, 2022 Announcement HERE). Since the October 2022 request by the Administration, numerous states have submitted information about their cannabis market, including Illinois, Maryland, Massachusetts, Minnesota and Utah. (See Article HERE). The Drug Enforcement Agency (“DEA”) recently requested a timeline from the U.S. Department of Health and Human Services about the ongoing scheduling review (See Article HERE). Based on all of this movement, former longtime attorney at the U.S. Food and Drug Administration (“FDA”), Howard Sklemberg, has come out publicly stating that he believes that the recent and ongoing review of cannabis as a schedule 1 drug will result in a rescheduling of cannabis within the next “calendar year.” While Congress requires political action to reschedule, FDA follows the science to make their determinations, so Sklamberg is “almost certain” the overall review of the scheduling of cannabis will lead to rescheduling.
The next question is whether rescheduling is enough (at least for now). Sklamberg says yes. Rescheduling is a step in the right direction which can ultimately lead to full legalization. Although many believe that rescheduling opens the door for additional issues (including Big Pharma), it can, for one, push for something positive such as “political prioritization for the limited FDA resources.” Additionally, if cannabis is rescheduled to 2 or 3, according to Sklamberg, most of the business consequences would be beneficial to the industry. He does “not understand [the] argument” that Big Pharma will take over if cannabis remains a controlled substance. Sklamberg emphasizes that “if FDA wanted the industry to be in the arms of Big Pharma it would have the power to do that now. And it’s not.” Furthermore, if cannabis becomes schedule 3, then IRC 280E would not longer apply to cannabis which would likely boast the income of the industry. Emerge Law Group’s Delia Rojas believes that “if cannabis is rescheduled in any manner new doors would be available to operators, and the cannabis industry could start to feel a little relief and hope for the future.”
Rescheduling could be the first step forward in the path to not only legalization, but to scientific research and industry stability.
Other Noteworthy News
Colorado Law Allowing Online Marijuana Sales Officially Takes Effect
“Colorado online marijuana sales are officially allowed as of Monday, giving consumers a new method of ordering cannabis more than a decade after the state enacted legalization. This comes two months after Gov. Jared Polis (D) signed the online sales legislation from Reps. William Lindstedt (D), Said Sharbini (D) and Robert Rodriguez (D) into law. The measure strikes language from state statute that explicitly prohibited cannabis from being sold on the internet, while adding regulations to provide for online commerce. Adults 21 and older will still need to physically pick up the marijuana products from the retailer, but they can browse and electronically purchase cannabis online ahead of visiting the store. The new law says that retailers will be required to verify the name and age of the customer at the time of the online purchase, and that information will have to match identification that they provide when they come to pick up the products. Further, the retailer will have to provide shoppers with ‘digital versions of all warning or educational materials that the retail marijuana store is required to post and provide on its licensed premises.’ The customer will have to ‘acknowledge receipt’ of those materials before finishing their purchase….”
Temporary Order Bars New York Cannabis Licenses Under CAURD Program
“The crux of a lawsuit filed last week in state Supreme Court claims the Office of Cannabis Management usurped the rulemaking authority of the state Legislature. Legal analyst Matt Morey said the Marihuana Regulation and Taxation Act established service-disabled veterans as a sub-group of so-called social and economic equity applicants supposed to be prioritized for licenses. ‘The statute specifically included those individuals as individuals that would be prioritized with respect to applying for and gaining approval of an adult use retail license,’ the attorney and partner at Lipsitz Green Scime Cambria said. However, during the regulatory process, a lawsuit filed by four veterans claims the Office of Cannabis Management and Cannabis Control Board unconstitutionally established a process that made a prior marijuana-related conviction an initial eligibility requirement. ‘The regulations that were then adopted, well not necessarily prohibiting any disabled service veteran from applying, they would have to then satisfy the other various CAURD (conditional adult-use retail dispensary) requirements, which is that they were convicted of a marijuana-related offense prior to March 31 of 2021,’ Morey said. A judge will hear arguments Friday in Kingston before deciding if the current iteration of the state's cannabis program is constitutional. On Monday, he issued a temporary injunction stopping the state from issuing any new licenses or approving any new dispensaries to open…..”
Anheuser-Busch Sells 8 Brands Including Shock Top to Cannabis Company
“Anheuser-Busch is selling off eight of its brands to a cannabis company that is already prominent in the craft beer market. Tilray Brands announced in a press release Tuesday they have reached an agreement with the St. Louis-based brewer to acquire Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy. Popular brand Shock Top, once a subsidiary of Michelob, is also part of the deal. Tilray, a pro-cannabis company, already had ownership of SweetWater Brewing Company, Montauk Brewing Company, Alpine Beer Company and Green Flash Brewing Company along with Breckenridge Distillery. The acquisition of the Anheuser-Busch products will put Tilray as fifth largest craft brewer in the business — a jump from its previous ninth spot…”
Recreational Marijuana Is Now Legal in Minnesota, But the State Is Still Working on Retail Sales
“Minnesota’s legalization of recreational marijuana went into effect Tuesday, allowing people 21 and older to legally possess and grow their own marijuana for recreational purposes, subject to limits as the state establishes a legal cannabis industry in the coming months and years. The midwestern state is the 23rd in the country to legalize recreational marijuana. Surrounding states — including Wisconsin, Iowa, Nebraska, South Dakota and North Dakota — have not yet legalized it. At least two tribal nations in northwestern Minnesota are expected to open dispensaries for recreational marijuana this month. The Red Lake Nation and the White Earth Nation are using their tribal sovereignty to allow sales. But most other businesses aren’t expected to sell legal recreational marijuana until early 2025, as the state sets up a licensing and regulatory system for the new industry. Dennis Buchanan, who owns The THC Joint in Minneapolis and two other cannabis-related businesses in the state, said he’s not expecting to sell marijuana until 2025. However, he is expecting to sell more marijuana-related accessories to meet demand now that legalization has taken effect….”
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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.
