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
The California cannabis industry is celebrating Governor Newsom’s decision to veto Assembly Bill 1207 over the weekend. AB 1207 is a controversial bill that would have expanded the types images that are prohibited on cannabis packaging and advertising for being “attractive to children”. Banned images would have included “toys and robots,” “any real or fictional human,” “any fictional animal or creature,” and “fruits or vegetables” (unless portrays accurate ingredient or flavor). The expansive language of AB 1207 would have rendered many brands non-complaint, essentially forcing operators to rebrand. Emerge Law Group’s Delia Rojas believes that “AB 1207 would have been detrimental to small operators and likely would have caused many to close due to the overall high cost and burden to rebrand, repackage, and advertise as a new brand.” Additionally, for many small and legacy operators, this would have meant disconnecting from their history and overall stories, and no longer being able to share that individuality and uniqueness with the cannabis market.
As rigorously expressed by opposers of this bill in hundreds of letters to the Governor, Newsom stated in veto message that “the definition of ‘attractive to children’ used in [the] bill is overly broad. By prohibiting entire categories of images, this bill would sweep commonplace designs….” Newsom further explains that although he appreciates and agrees with the overall intent of the bill, he is not convinced the additional limits will further protect children beyond current laws and regulations. The Governor believes that the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCSA”) includes “robust protections” to shield youth from exposure, and the Department of Cannabis Control furthered the intent by crafting regulations establishing extensive labeling and advertising requirements. In California, the state Legislature can override the Governor’s veto by a two-thirds vote in both houses. This is a very rare occasion and unlikely to happen. A veto has not been challenged in decades. Furthermore, although there was ample support in the Assembly, the bill passed by only 57.5% in the Senate and would be doubtful to gain support.
Other Noteworthy News
MARIJUANA MOMENT – “A cannabis banking bill was revised in several different ways under an amendment adopted by the Senate Banking Committee during Wednesday’s [9/29/23] markup. As the debate started, the committee first approved the amendment from Chairman Sherrod Brown (D-OH), which was described as a mix of technical changes and revisions requested by bipartisan members. It touches on issues related to federal guidance for banks that serve cannabis industry clients, rephrased protections for financial institutions and regulators’ enforcement discretion, among other topics. The Treasury secretary would be given one year, instead of 180 days, to issue updated guidance to financial institutions that work with cannabis businesses that was first released under the Obama administration in 2014. […] The bill was amended with technical changes to language on how marijuana-related transactions should not be considered “proceeds from an unlawful activity. A new section was added stipulating that the director of the Financial Crimes Enforcement Network (FinCEN) must testify to Congress about anti-money laundering efforts within a year of the bill being enacted. Federal home loan banks are now included under a list of financial institutions that would be protected from being penalized by federal regulators simply for working with state-legal cannabis businesses. Language was also revised that relates to a required federal report on ‘availability of access to financial services for minority-owned, veteran-owned, women-owned, Tribal community-owned, and small State-sanctioned marijuana businesses.’…”
GOVERNOR.NY.GOV – “Governor Kathy Hochul today announced the largest expansion of New York State’s legal cannabis market to date, with hundreds of licenses being made available to individuals and businesses interested in legally growing, processing, distributing, and selling cannabis. The application period is open as of today, October 4, and will remain so for two months. The Governor also announced the results of continued aggressive enforcement against the illegal sale of cannabis across the state undertaken by the Office of Cannabis Management and the Department of Taxation and Finance, which to date has yielded the seizure of more than 8,500 pounds of illicit product with an estimated street value of more than $42 million. She also announced new partnerships with localities that will enable them to pursue padlocking orders against businesses illegally selling cannabis from State courts, and a new multi-agency initiative to target illegal operators for labor violations, thus significantly increasing fines and penalties that businesses may face. New York’s legal cannabis market is now poised to be one of the largest in the world; one that will ultimately generate hundreds of millions in revenue annually, as well as create or sustain thousands of jobs across the state, all while prioritizing equity, promoting small business growth, ensuring product quality, and maintaining consumer safety. ‘We know there’s room for improvement as New York works to launch a brand-new cannabis industry and crack down on illicit operators, and I’m committed to working with all stakeholders to get the job done right,’ Governor Hochul said. ‘My Administration is laser-focused on shutting down illegal storefronts, protecting the health and safety of children, and helping small businesses thrive. We will continue working to build the most equitable adult-use cannabis industry in the nation that invests in communities and rights the wrongs of the past.’”
CANNABIS BUSINESS TIMES – “The Florida Supreme Court issued an order Oct. 3 for oral arguments to determine if an adult-use cannabis measure is fit to appear on the state’s November 2024 ballot. The arguments for the case are scheduled for 9 a.m. Nov. 8, 2023, with a maximum of 20 minutes to each side allowed, but “counsel is expected to use only so much of that time as is necessary,” according to the order. No continuances will be granted by the court, except upon showing of “extreme hardship,” the order states. […] Moody, the state’s chief legal officer, originally submitted a 49-page brief June 26, urging the court’s justices to rule the legalization proposal unfit for the ballot in a four-part argument. She outlined why she believes the proposal does not live up to state standards requiring clear and unambiguous language in order to appear on the ballot. […] Specifically, the ballot summary includes provisions to: 1.) Allow adults 21 years and older to purchase, possess and use cannabis; 2.) Allow MMTCs and other licensed entities to operate in the program; and 3.) Establish possession limits for personal use….”
EIN PRESSWIRE- “Bennabis Health and CannaCoverage are now working together to provide an alternative benefit program to support employees with conditions such as chronic pain, cancer, or mental health issues where medical cannabis may provide relief. Currently, traditional prescription medicine is the only option available through employer benefits. With the recent recommendation of HHS to reschedule cannabis, these two organizations anticipate legalization will occur in the near future. Schedule III will help normalize cannabis as medicine and the future of health care will include this new benefit option. Bennabis Health delivers the first solution for individual members, as well as health plan coverage to reduce out-of-pocket cost for medical cannabis. The program guides patients with their medical cannabis use to alleviate symptoms and side effects of many conditions. This in turn can help increase quality of life and reduce the skyrocketing cost of healthcare. Bennabis Health is not a plant touching entity, but rather contracts a network of participating medical dispensaries that also prioritize the importance of supporting patients in their cannabis journey….”
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