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CannaBeat – August 25, 2023

by Brittney Nelson

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 

New York Judge Blocks Retail Licensing: A Major Setback to State’s Fledgling Program

Launching a cannabis market has not been easy for any state, and New York is no exception. On August 18, 2023, New York Justice Bryant issued a Decision & Order granting in part a motion for a preliminary injunction to halt the Conditional Adult Use Retail Dispensary (“CAURD”) program. The CAURD program is available only to people with past New York marijuana convictions; and since opening in August of 2022, it has been under legal attack with three separate lawsuits.  The plaintiffs of the current case argue they have been improperly excluded from the state’s CAURD program and that the Office of Cannabis Management (“OCM”) should have opened the initial round of licenses to a broader scope of social equity applicants.

Although the order requires the OCM to stop processing most accepted applications, the Judge took into consideration the hardship that the licensees have endured and struck a small compromise. CAURD license holders that have completed all post-award application requirements (including final site plan approval) prior to August 7, 2023, are exempt from the injunction. The OCM provided a list of 30 licensees meeting this standard to the Judge on August 22nd. The plaintiffs objected to every licensee on that list in a filing on August 24th, with a hearing set for Friday the 25th to resolve the objections. The last little bit of hope the Judge gave was to allow any licensee not included on the list the opportunity to show that they too should be exempt by having the OCM file a motion on their behalf, which would be determined by the court on a case-by-case basis. Emerge Law Group’s New York attorney Duncan Delano believes that “This lawsuit is another bump in an already rocky road as the OCM tries to hold this CAURD program together.  Unfortunately, this one seems to be sticking, so unless you are one of the CAURD licensees who has progressed all the way to the point of opening, you’re probably stuck under this injunction until October.” The OCM is set to open the applications for all license types to all types of applicants in the beginning of October. The final comment period for the proposed Adult Use Cannabis Regulations closed on July 31, 2023, meaning the final regulations should be released in the coming days or weeks.

Other Noteworthy News

Allowing Interstate Cannabis Commerce Would Not Risk Federal Enforcement, Local Government Groups Tell California AG
“The California attorney general’s office has been soliciting input from local government and cannabis industry groups as it works to finalize an opinion on the potential legal risks of authorizing interstate marijuana commerce under ongoing federal prohibition, documents obtained by Marijuana Moment show. At least three organizations representing local governments have so far answered the attorney general’s call, saying that they do not expect California would be at “significant risk” of facing federal enforcement action if officials were to authorize the import and export of cannabis with other consenting legal states. California, Oregon and Washington State have all passed laws allowing officials to enter into cross-border cannabis trade agreements with other states, although Oregon’s and Washington’s laws both require some form of federal reform or guidance to proceed. California’s law, by contrast, contains a provision empowering Gov. Gavin Newsom (D) to craft interstate agreements if the state’s attorney general determines that doing so would not put the state in legal jeopardy. The review now underway in the California AG’s Opinions Unit was initiated following a request from the state Department of Cannabis Control (DCC) in January. […] DCC’s January request asked whether ‘state law authorization, under an agreement pursuant to Chapter 25 of Division 10 of the Business and Professional Code, for medicinal or adult-use commercial cannabis activity, or both, between out-of-state licensees and California licensees, will result in significant legal risk to the State of California under the federal Controlled Substances Act.’…”
Cheeba Chews Spoofs Big Pharma in Ad for Cannabis Edibles
“Veteran edibles brand Cheeba Chews paired up with established creative agency Piggyback to create a spoof ad that takes a satirical approach to compliant cannabis advertising. Cheeba Chews successfully lists fake ailments in the style of pharmaceutical commercials in this very real ad for their infused taffy candies. The commercial follows swishy tracksuit-clad Randy Falcon as he explains that Cheeba Chews offer “joint relief,” which in the commercial world is a relief from smoking joints. The ad successfully skirts stringent rules against making health claims in advertising. Falcon cites that Cheeba Chews can help relieve faux conditions like air guitar back and bicycle seat butt. The cannabis edibles commercial is a parodic puzzle that elegantly colors within the legal lines. ‘We have a ton of restrictions on how we can position cannabis in regulated markets,’ Eric Leslie, CMO of Cheeba Chews, told Adweek. ‘So with this product, we had to get real creative to make sure consumers understood the benefits without making explicit claims.’”
Unlicensed Edibles Are Now on the New York City’s Radar
“The New York City Sheriff's Office is taking action against unlicensed edibles, not just black-market marijuana. They have partnered with the city's health department to conduct inspections on businesses baking with cannabis and other ingredients. Sheriff Anthony Miranda spoke about this collaboration during a public safety briefing at City Hall. The Department of Health has the necessary authority to inspect these locations thoroughly. The Department of Health has been receiving valuable information from the community to help identify and take action against illegal marijuana sellers. Working together, they conduct inspections and remove these dangerous products from the streets. Addressing the health risks associated with underground edibles is important as they are unregulated and can contain unknown substances. The officials have taken immediate action by imposing fines, shutting down locations, making arrests, and confiscating tainted treats […] In just the month of July, city officials issued a staggering $4.5 million in civil penalties for $2 million worth of illegal cannabis products, including edibles. Throughout the year, the total penalties have reached $22 million for $12 million in goods….”
USDA Teaches Hemp Farmers How to Use Ghostbuster-Like Device to Collect Cannabis Pollen
“The U.S. Department of Agriculture (USDA) is encouraging hemp growers to construct a Ghostbusters-like backpack vacuum that will allow them to collect up to 10 grams of cannabis pollen in less than a minute. It’s part of an effort to gather and distribute the pollen to an international group of researchers and breeders. In an instructional video the agency recently posted, an official with USDA’s Agricultural Research Service (ARS) first walks viewers through the process of building and setting up the device, which was invented by a former department employee and a hemp cultivator to streamline the pollen collection process. The setup involves attaching a 100-micron mesh filter to a wearable vacuum nozzle with an affixed glass vial. The user then turns on the vacuum and gently runs the nozzle along the stem and leaves of male hemp plants. Because pollen is about 25 microns, it gets through the filter into the vial while raw plant material is kept out….”

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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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