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
With Cannabis Cultivator Cap Lifted, Growers Face New Jersey’s Challenges
After a short and fast 2-year state license cap, there is no longer any limit on the number of cultivation licenses in New Jersey. As the industry continues to expand, New Jersey cannabis operators face the same hurdles as operators in other states. First, and what seems to be a problem across many states, a majority of municipalities have “opted out” of permitting cannabis businesses. This fuels the next issue: real estate. With few jurisdictions permitting operators, there are very limited spaces to set up their operations and sell product. Lastly, one of the original and biggest hurdles: raising capital. Many investors have seen the roller coaster of the cannabis industry in other states and can be hesitant to invest in this new market. Unfortunately, it looks like deja vu. California, for example, faces very similar issues; a majority of jurisdictions have banned commercial activity, the market is limited, and capital is hard to come by. After 27 years since the first legalization of medical cannabis, operators are fighting harder than ever to stay afloat. Emerge shareholder Duncan Delano of New Jersey opines: “Challenges are inevitable. But I continue to be impressed by the tenacity and resourcefulness of our clients in New Jersey and New York, as their options open up. The industry here is developing at light speed.”
Other Noteworthy News
Treasury Secretary Says Regulators Are “Looking For Solutions” to Marijuana Banking Problem As Schumer Recommits To Addressing the Issue
As Senate Majority Leader Chuck Schumer (D-NY) renews his commitment to tackling marijuana banking reform this year, the head of the U.S. Treasury Department says that regulators are also exploring options to address the issue. During a hearing before the Senate Finance Committee on Thursday, Sen. Michael Bennet (D-CO) pressed Treasury Secretary Janet Yellen about the fact that the cannabis industry lacks access to traditional financial services under prohibition. The senator argued that marijuana as a commodity is more “stable” than cryptocurrency, yet banking regulations have allowed for large investments in the latter that ultimately contributed to the collapse of at least one bank this month. Yellen replied by saying that, “as you pointed out, in the case of marijuana, it is against federal law, and that’s a barrier, unfortunately, to appropriate banking services for the industry.” “It’s something the regulators have been looking for solutions to,” she said…….
Coalition Sues NY Marijuana Regulations To Open Licensing Process
A coalition of medical marijuana license holders and recreational market hopefuls have filed a lawsuit in state Supreme Court seeking to force New York’s Office of Cannabis Management to open the retail licensing process “for all applicants immediately.”
The slow rollout of licensing for entrepreneurs beyond those with a documented marijuana conviction in their family has angered small business owners who thought they would have an earlier shot at one of the state’s first retail sales licenses, including those defined under the law as “social equity” applicants. It has also frustrated large companies that entered the market early but are still permitted to sell only to certified medical patients. The challengers argue that equal access to the first recreational licensing process should have been available to them under the state’s 2021 cannabis law, which specifies that “the initial adult-use cannabis retail dispensary license application period shall be opened for all applicants at the same time.” The lawsuit, filed in Albany, claims that by creating limited, “conditional” licensing categories that opened prior to the general process, regulators have “overstepped their rule-making authority” and subverted legislators’ intent. The agency’s “arbitrary and capricious foray into legislative policymaking has harmed those individuals the (cannabis law) was designed to benefit ... and diverted (regulators’) attention from the enforcement tasks” that the law requires, according to the court petition…….
Kentucky Senate Passes Bill to Legalize Medical Marijuana
The Kentucky Senate voted Thursday to legalize medical marijuana in the state, delivering a breakthrough endorsement after years of resisting access to cannabis for people suffering from a series of debilitating illnesses. The measure was passed by the Senate on a 26-11 vote, sending it the House, which has supported medical cannabis measures in the past. Republicans have supermajorities in both chambers. “This is one of those issues where you take out the ledger and you list the pros and cons,” said Republican Sen. Stephen West, the bill's lead sponsor. "And it’s a long list on both sides. But for me personally, the pros outweigh the cons.” Republican Sen. Gary Boswell opposed the bill, referring to cannabis as “a drug, not a medicine.” He said the qualifying medical categories listed in the measure are “too broad.” The dramatic vote came before lawmakers started an extended break to give Gov. Andy Beshear time to consider signing or vetoing the stacks of bills sent to him. The House can take up the medical marijuana proposal in late March, when lawmakers will reconvene for the final two days of this year's legislative session…..
Las Vegas Unveils Unusual First Cannabis Residency
Adult freedom and indulging in multiple pleasures have been Las Vegas themes ever since gambling was legalized again in Nevada on March 19, 1931. Gambling had been outlawed in 1910 after being a legal activity, but Sin City has enjoyed 92 years of living on the edge since gaming became legal again. Las Vegas Convention and Visitors Authority in 2020 adopted a new variation of its former catchphrase "What Happens Here, Stays Here," which Sin City began promoting in one of marketing's most successful advertising campaigns in 2003. The new slogan for tourism adopted in January 2020 is: "What Happens Here, Only Happens Here." The catchphrase might suggest anything goes in Sin City, but among the vices remaining illegal on Las Vegas Strip are prostitution, though sex-for-hire is legal in some parts of Nevada, and smoking pot. You can't legally smoke pot in public in Las Vegas, though you can possess cannabis and legally smoke it in a private residence.
Cannabis Brands Products Steeped In Nostalgia Aim To Attract Generational Consumers
Products Steeped In Nostalgia Aim To Attract Generational Consumers
Cannabis companies nationwide are infusing a heavy dose of nostalgia in their products and building brands based on fond memories, good times and the soundtracks of some of our formative years. Resurrecting defunct record labels, rock-band encores and cult-classic throwbacks are all part of the remix. Other forms of entertainment are finding wild success and new audiences with blasts from the past, evident at the box office and streaming services. “Top Gun: Maverick,” a near carbon copy of the original, was nominated for five Academy Awards, including Best Picture after grossing nearly $1.5 billion. Metallica’s 1986 masterpiece, “Master of Puppets,” the title track of the band’s third album, climbed into Spotify’s Top 10 most-played songs last year after playing a key element in the popular Netflix series “Stranger Things,” which introduced throngs of younger listeners to the metal icons. The comedy duo Steve Martin and Martin Short, who first paired up in the 1986 movie “Three Amigos!” have hit streaming gold on Hulu’s “Only Murders in the Building,” joining other contemporaries of that era finding new life in the digital era, including another comeback story for the Karate Kid in Netflix’s “Cobra Kai.” Nostalgia not only evokes positive memories, belonging and coming of age, research has shown it affects consumer behavior and increases purchases……
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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.