With Six Months to go, California Hustles to get Recreational Marijuana Framework in Place

The San Diego Union Tribune/June 27, 2017/ Rob Nikolewski

Eight months ago, California voters approved Proposition 64, making the recreational use of marijuana by those 21 and older legal. In barely more than six months, state officials have to make sure Prop 64 becomes a reality by putting a legal and regulatory framework in place.

Regulations for production and sale of adult-use cannabis are due at the beginning of 2018, and the scope of the rollout is huge — including cultivation, manufacturing, testing, distribution and sales.

“The clock is ticking,” said Lori Ajax, the chief of the state’s Bureau of Medical Cannabis Regulation for California, who in charge of coordinating California’s efforts to oversee a cannabis industry that some estimate may soon be worth between $4 billion to $7 billion. “We all know what we have to get done and failure is not an option for us.”

Other states have legalized recreational marijuana laws but California is by far the largest to do so — both in terms of population and in size of its agricultural base — and principals in every

“I don’t envy them,” said Jack Scatizzi, managing director at Canopy San Diego, a technology accelerator aimed at finding and funding cannabis companies. “There’s a lot of pressure on them but I think this is really the opportunity to get this right, on scale.”

Earlier this month, the state Legislature passed a budget trailer bill that essentially marries the rules for medicinal marijuana with recreational use, which will give the state one set of regulations instead of two.

Gov. Jerry Brown is expected to sign the bill into law.

“I think it streamlines things and hopefully it will be less expensive” for the industry to operate, Ajax said.

State officials plan to have an online licensing system up before Jan. 1, 2018, allowing people to apply ahead of time. The state can then perform background checks and vet applicants, although Ajax said completing the process before the first of the year “is going to be a challenge.”

Licensing fees have not been finalized. The California Food and Agriculture and the Department of Public Health have been releasing proposals and are still drafting environmental impact reports.

“I think we’re right on schedule,” Ajax said.

As per state law, the bureau cannot issue state licenses unless applicants have received the OK from their local governments.

However, the state is allowed to issue temporary licenses to those already in compliance with their local jurisdictions.

“This will get done but I don’t think this will be a situation where come Jan. 1, you can walk in and get into any dispensary and buy,” said Scatizzi. “It will probably be a slow roll out.”

Ajax said the state will take a measured approach.

“If something’s not working, we have to change direction,” she said. “This is a growing industry so we’ve got to be quick, we’ve got to be nimble.”

The rollout may have national implications. Due to California’s sheer size, a smooth transition — or, alternately, a clumsy one — may go a long way toward influencing other states’ attitudes about marijuana, especially considering that U.S. Attorney General Jeff Sessions is a harsh critic of legalizing pot.

“If California can do it right,” Scatizzi said, “and if the amount of taxes they’re predicting comes in, and if it’s able to (reduce) some of our deficits, with no increase in cannabis-related accidents and we don’t see an increases in crimes related to cannabis, it’s going to blow all of the naysayers out of the water.”

In Canada, marijuana for medicinal purposes is already legal in every province and the country’s lawmakers are on the verge of doing the same thing for recreation use, effective July 2018.

Jacob Crow, the CEO of Toronto-based BudTender, said a successful implementation in California depends on coordinating each sector of the industry.

“I think what California can learn from Canada is go as strict as possible and then move off. That’s the way to do it,” Crow said. “If you go too loose, there’s too much of an opportunity for the black market. You see that in Colorado. They’ve killed off the black market significantly but 33 percent of all cannabis is being sold through the black market. You need to root that out from the beginning and then move on from there.”

Christian Valdez is CEO of Traffic Roots, a digital advertising firm aimed at connecting cannabis users to industry producers, wants to make sure the new regulations don’t impede his company, which is just getting launched.

“Government is very good at making loose and broad laws that aren’t really defined enough to make progress,” he said.

Melissa Stapley, who runs MJ Hybrid Solutions, a small business in San Diego that specializes in sales training for cannabis outlets, said the state needs to institute safety and educational guidelines, especially as the market for edible marijuana grows.

Too many potential customers, Stapley said, don’t know what can happen if they take too much too fast.

“It’s not like alcohol,” Stapley said, “Everyone knows that if you buy a six-pack of beer, you can’t go home and drink all six in 15 minutes.”

High Hopes Ride on Marijuana Painkillers Amid Opioid Crisis

Reuters/June 26, 2017

A handful of drugmakers are taking their first steps toward developing marijuana-based painkillers, alternatives to opioids that have led to widespread abuse and caused the U.S. health regulator to ask for a withdrawal of a popular drug this month.

The cannabis plant has been used for decades to manage pain and there are increasingly sophisticated marijuana products available across 29 U.S. states, as well as in the District of Columbia, where medical marijuana is legal.

There are no U.S. Food and Drug Administration (FDA)-approved painkillers derived from marijuana, but companies such as Axim Biotechnologies Inc, Nemus Bioscience Inc and Intec Pharma Ltd have drugs in various stages of development.

The companies are targeting the more than 100 million Americans who suffer from chronic pain, and are dependent on opioid painkillers such as Vicodin, or addicted to street opiates including heroin.

Opioid overdose, which claimed celebrities including Prince and Heath Ledger as victims, contributed to more than 33,000 deaths in 2015, according to the Centers for Disease Control and Prevention.

Earlier this month, the FDA asked Endo International Plc to withdraw its Opana ER painkiller from the market, the first time the agency has called for the removal of an opioid painkiller for public health reasons. The FDA concluded that the drug’s benefits no longer outweighed its risks.

FIGHTING THE EPIDEMIC

Multiple studies have shown that pro-medical marijuana states have reported fewer opiate deaths and there are no deaths related to marijuana overdose on record.(http://reut.rs/2r74Sbe)

But marijuana-derived drugs could take longer than usual to hit the market as the federal government considers marijuana a “schedule 1” substance – a dangerous drug with no medicinal value – making added approvals necessary. Any drug typically takes at least a decade from discovery to approval.

It could be worth the wait.

An FDA-approved marijuana-based painkiller would ensure consistent dosing and potency, and availability across the country, analysts and experts said.

“Doctors like to be able to write a prescription and know that whatever they wrote is pure and from a blinded, placebo-controlled trial,” California-based Nemus’s CEO Brian Murphy told Reuters.

Nemus is testing its product – a synthetic version of the non-psychoactive CBD compound found in cannabis – on rats with chronic pain and expects to report data later this year.

Rival Axim, whose North American headquarters is in New York, is conducting preclinical studies on a chewing gum containing synthetic CBD and THC, a psychoactive compound found in marijuana. The company expects to submit an FDA application to start a trial on opioid-dependent patients this year.

Leading the pack is Israel-based Intec, which recently announced the start of an early-stage study testing its painkiller made of natural CBD and THC extracts.

OTHER OPTIONS

Independent scientists are also looking to find natural, non-pharmaceutical alternatives to opioids, but many have said it is difficult to access government-approved marijuana to conduct research due to supply restrictions.

“It’s taken me seven years to get the DEA license,” said Dr Sue Sisley, who is planning to conduct an FDA-regulated study evaluating whether marijuana can help opioid-dependent patients.

There could soon be other alternatives as well. Pfizer Inc and Biogen Inc are among a clutch of drugmakers developing non-opioid painkillers that are in advanced clinical studies.

Still, opioid painkillers are here to stay and will continue to be widely prescribed, especially for patients with acute and post-surgical pain.

The Republican healthcare bill unveiled on Thursday has proposed a drastic cut to the Medicaid budget and could gut, what advocates say, is essential coverage for drug addiction treatment, potentially hampering the fight against opioid abuse.

California Passes Bill to Regulate Medical and Adult-Use Markets

Cannabis Business Times/June 19, 2017/Melissa Schiller

After the California State Senate passed SB 94, the cannabis budget trailer bill, on Thursday, the legislation is out of the state legislature and is fast-tracked to become state law.

The bill passed in the Senate with 31 in favor and three opposed.

According to an email letter to constituents from Hezekiah Allen, executive director of the California Growers Association, California’s new legislation, the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) will govern both medical and adult-use marijuana and become the foundation for regulated cannabis activity in the state. Previous regulations for the medical market were laid out in the Medical Cannabis Regulation and Safety Act (MCRSA) of 2015, which has been repealed and replaced with MAUCRSA.

As noted by Allen, the bill to regulate the adult-use market is “the culmination of nearly three years of focused work that brought together stakeholders with a broad spectrum of perspectives and required the investment of tens of thousands of hours.” In April, California Governor Jerry Brown proposed that MCRSA and Proposition 64, the Adult Use of Marijuana Act (AUMA), merge into one regulatory system that has now become MAUCRSA.

The Bureau of Cannabis Control will oversee all cannabis businesses in the state once Gov. Brown signs the bill into law.

Nicole Howell Neubert, attorney at California-based cannabis industry law firm Clark Neubert LLP, believes the trailer bill clarifies issues that have been vexing the firm’s clients since Proposition 64 was passed, such as how the laws will work together, what will happen to the medical market, which licenses are able to be held and how to structure businesses.

“It is incredibly encouraging to see the state and the industry work so quickly and well together to accomplish the goal of getting one set of rules in place before next year,” Howell Neubert said. “Having this detailed framework finally allows us to advise our clients clearly and confidential about initial state licensing.”

Although she acknowledges that this is only the beginning of a constantly evolving set of laws and regulations, Neubert is happy to see the legislation pass so that progress can be made under one set of regulations.

According to a blog post written by Alison Malsbury on Harris Bricken Canna Law Group’s Canna Law Blog, MAUCRSA creates the Bureau of Cannabis Control as the governing bureau. The types of licenses available for commercial adult-use and commercial medicinal cannabis activity will be the same, but producing dispensary and transporter licenses are not available. “The licenses available under both the MCRSA and the AUMA will continue to be available for both kinds of activity, and for specialty cottage cultivation licenses and microbusiness licenses, and, commencing on January 1, 2023, licenses for large outdoor, indoor, and mixed-light cultivation will also be available for both medicinal and adult-use cannabis activity,” wrote Malsbury.

MCRSA limited the combinations of medicinal cannabis licenses an individual could hold until Jan. 1, 2026, but MAUCRSA will not apply these limits, except that testing laboratory licensees cannot obtain licenses to engage in any other commercial cannabis activity. Harris Bricken’s blog also points out that those applying for cultivation licenses will need to identify the source of water supply under the new legislation.

In a previous interview with Cannabis Business Times, Neubert said key to developing regulations is ensuring that as many operators as possible can get licensed, and with California home to 50,000 to 60,000 farms, other states are looking to see how the state deals with this market regulation, as well as important environmental issues.

Neubert and her law firm are most excited about regulations in the bill that help small businesses compete in California’s market.

“We are especially heartened to see the specific authorization of non-storefront dispensaries and the creation of the Cannabis Cooperative Associations, both of which were important for small businesses to compete,” she said. “It’s encouraging to see these priorities supported by our lawmakers, and we hope it is a good sign that we are creating a California industry that has room for everyone, regardless of size and pocketbook.”

According to Harris Bricken, other regulations stipulate quality assurance, inspection and testing requirements of cannabis and cannabis products; a cannabis excise tax that will be measured by the average market price of retail sale and additional advertising requirements. In addition, the Bureau of Cannabis Control will lose the authority to regulate and control industrial hemp.

Neubert hopes that as the legislation surrounding the state’s medical and adult-use markets develops, other issues and challenges are taken into consideration, such as banking.

“Obviously banking remains a serious challenge for our clients and the industry. So it is important that the State Treasurer is looking closely at this issue in addition to the related regulatory efforts of the Legislature and Governor’s Office that is clear from the bill,” she said.

In California, Many Growers Will Stay Underground

Leafly/June 19, 2017/Paul Roberts

Here’s an unhappy fact about California’s newly legalized cannabis market that reform advocates don’t talk much about: Most of the state’s existing cannabis farmers probably won’t be going legal.

There are an estimated 50,000 growers in California. Not all will go legal.

In some cases that decision will be an act of rebellion. After decades defying prohibition and dodging arrest, some long-time growers have no interest in submitting to a world of regulations, testing, and taxes.

But for other farmers, skipping the legal market will be more an act of desperation: these farmers will try to make the transition to licensed production—either by scaling up, going the craft route, or joining a co-op—only to be thwarted by the tough new realities of farming in a time of rising regulation and ever-thinner margins.

Whatever the cause, with the arrival of a state-licensed medical and adult use market in 2018, these frustrated farmers will likely to do one of two things.

Many will probably retire from farming, or perhaps shift to other, non-farming roles in the new legal cannabis sector. But a not-insignificant number of them will probably keep growing for the illegal market. And while some of that off-the-books weed may stay in California, most will enter the national black market.

Just how many of the state’s current population of farmers, estimated at between 50,000 to 80,000  by the California Department of Food and Agriculture, will opt for the black market is impossible to know. But anecdotal accounts, by law enforcement officials, industry consultants and many farmers themselves, suggest that the number could be quite high.

And if that’s the case, it could create serious headaches for everyone from law enforcement officials to, especially, advocates for national legalization efforts, for whom California was supposed to be a shining example of legalization success. If the state’s cannabis goes “all over the country,” warns Hezekiah Allen, a cannabis farmer-turned-lobbyist for the California Growers Association, “the DEA and Jeff Sessions will rightfully start putting the pieces together.”

California Grows More Than It Consumes

Seat of Power: The California State Capitol in Sacramento, where lawmakers will set the regulations that shape the legal cannabis industry. (James Tensuan for Leafly)

In some respects, the export scenario was inevitable, given that California has always produced more cannabis than state residents can legally consume. For every pound of cannabis that California growers produce and sell legally, another four pounds are produced for the black market, according a February analysis by the University of California Agricultural Issues Center for the California Bureau of Marijuana Control. Much of that surplus currently goes out of state.

One-fifth of existing cannabis farms could meet the entire state’s market demand.

And, paradoxically, legalization will only worsen that over-supply dynamic. As those California farmers who now export try to go legal and sell their product at home, the state’s already well-supplied legal market will become even more saturated. That will drive wholesale prices even further below the break-even point for small farmers, and lead even more of them to consider staying in the black market.

Of course, there are factors that could disrupt this self-feeding death spiral. Legalization will spur more consumer demand, which will absorb some of that oversupply. But judging by the experience from other adult-use states, that post-legalization demand growth simply won’t be sufficient to absorb all the cannabis that will be coming from older farms as well as the new mega-scale factory farms.

The implications are significant. Allen, the California Growers Association lobbyist, estimates that when legalization has been fully implemented in California, the state’s legal market could be supplied by perhaps 8,000 smallish farms. That’s perhaps one-fifth of the number thought to be operating today. “Best case, seventy percent of my community goes out of business,” says Allen.

The ramifications of that kind of reduction haven’t gone unnoticed by California’s political establishment. Lawmakers and regulators are deeply worried by the prospect of massive unemployment. Small-scale cannabis farmers employ as many as 250,000 full- and part-time workers, according to the California Growers Association. An investigation by Leafly News earlier this year estimated that California’s current medical cannabis industry (which does not include the illicit market) supports more than 43,000 full-time equivalent jobs.

But, again, the real downside may be how California’s continued exports tilt the legalization debate in other states and at the federal level. As Lauren Michaels, a cannabis policy expert with California Police Chiefs Association, puts it, “when you have other states, and a nation as a whole, that are still skeptical of legal cannabis,” a huge amount of oversupply from California doesn’t create the “best optics” for national reform.

Coaxing Growers to Go Legal

Hezekiah Allen’s lapel pin hints at his cause: Growing a legal industry with room for legacy growers. (James Tensuan for Leafly)

So, that’s the bad news about the fourth pathway for California’s existing cannabis farmers. The good news is that this dire scenario has led lawmakers in Sacramento to consider measures to help small farmers go legal—or at least slow the process of attrition so that existing farmers can make less problematic exits.

Last fall, for example, the state created a “cottage farm” license for smaller growers. The license is cheaper and easier to get. Because it caps production at 2,500 square feet of greenhouse space or 25 mature plants (half the scale of the next-biggest license type), the cottage license may help allay the anxieties that many local governments have about larger cannabis farms—anxieties that have delayed licenses and frustrated small farmers.

The cottage law “sent a signal to local governments,” says Max Mikalonis, a former legislative staffer who helped draft the state’s medical cannabis law for California Assemblyman Tom Bonta. (Mikalonis now lobbies for cannabis firms at K Street Consulting in Sacramento.) “A county that might not be comfortable with having, say 50 plants on a one-acre lot, might be more comfortable with 25 plants or less.”

Another bit of state help: A so-called appellation law will protect the brand value of geographic locations by prohibiting cannabis producers from using place names in their marketing unless the products actually come from those locations.

These sorts of regulatory moves can help ensure that the regulated marketplace provides opportunities for existent growers. But ultimately, says Allen, state lawmakers must embrace the idea that California’s legal cannabis market has room for producers of all scales and business models. Such a marketplace, he says, will provide more jobs and offer more diverse and higher-quality products.

But to make that happen, Allen says, lawmakers, regulators and other stakeholders can’t get carried away by the idea that scaling-up is the only path to survival. “There is no reason why a price crash is inevitable,” Allen says. “These well-capitalized [cannabis producers] have every incentive to pretend it’s inevitable, but that’s actually just [a reflection] of their agenda.”

The agenda of the state and the public, Allen argues, is very different: a diverse, unconsolidated cannabis marketplace with room for all scales and production models. “Commoditization, quantity over quality—it is not an inevitability, nor is it a desired outcome,” Allen says. “Except for the people who stand to benefit from that kind of consolidation.”

Legalized Marijuana is making it Harder for Police to Search your Car

The Washington Post/June 26, 2017/Christopher Ingraham

Drug policy experts often say that the health risks of marijuana use are relatively minor compared to the steep costs of marijuana enforcement: expensive policing, disrupted lives, violence and even death.

Law enforcement agencies, however, have often been at the forefront of opposition to marijuana legalization. One reason is that the drug, with its pungent, long-lasting aroma, is relatively easy to detect in the course of a traffic stop or other routine interaction. It’s an ideal pretext for initiating a search that otherwise wouldn’t be justified — even if that search only turns up evidence of marijuana use and nothing more.

New data on traffic stops in Colorado and Washington underscore this point: After the states legalized pot, traffic searches declined sharply across the board. That’s according to the Open Policing Project at Stanford University, which has been analyzing public data of over 100 million traffic stops and searches since 2015.

Top of Form

Bottom of Form

“After marijuana use was legalized, Colorado and Washington saw dramatic drops in search rates,” the study’s authors explain. “That’s because many searches are drug-related. Take away marijuana as a crime and searches go down.”

In Colorado and Washington, traffic searches of black, Hispanic and white drivers fell significantly after legalization, according to the Open Policing Project’s analysis. That pattern didn’t hold for states where marijuana use remained illegal.

The Project’s data encompasses traffic searches initiated for any reason but excludes searches following an arrest. This makes the data a good barometer of searches initiated at an officer’s discretion. The numbers changed dramatically after legalization, as we see in the above chart, suggesting, as the researches do, that suspected marijuana use is often a factor in these searches.

As the chart also shows, legalization didn’t eliminate racial disparities in the searches. Black and Hispanic motorists are still searched at considerably higher rates than white motorists. But following legalization, they are searched less often than they were before.

In 2014 a Washington Post investigation detailed how highway police often use suspicion of marijuana as justification to search drivers’ vehicles and ultimately seize cash and property from them, regardless of whether any drugs are ultimately found. From 2002 to 2012, the federal government seized roughly $1 billion in cash and other assets related to marijuana cases, according to the Wall Street Journal.

That figure doesn’t include seizures made by state and local law enforcement authorities who handle most of the nation’s drug enforcement.

If legalization leads to fewer searches, that means fewer seizures of cash and property, which could have a significant negative impact on the finances of police departments that have come to rely on those seizures to pad their budgets.

California Could Become a Sanctuary State for Marijuana Users

LA Weekly/June 5, 2017/Dennis Romero

There are far greater worries than marijuana policy these days. The Trump administration withdrew from the Paris climate accord, which sought to slow global warming. The White House is under scrutiny for its connections to a Russia that U.S. intelligence concludes attempted to throw the 2016 election in Trump’s favor. And, around these parts, people are being deported under an apparent zero-tolerance immigration policy. Many L.A. immigrants are afraid of the day when their loved ones simply don’t come home.

Cannabis isn’t a top issue, but California still has marijuana on its mind. A proposal that would turn California into a “marijuana sanctuary state” passed a major hurdle recently when it was approved by the state Assembly. AB 1578 by Assemblyman Reggie Jones-Sawyer of Los Angeles would essentially prevent local cops from joining in federal raids against people otherwise abiding by Golden State law, which allows recreational and medical marijuana possession. The bill guts funding for such law enforcement action and parallels the policies of some local police departments, which have decided not to participate in federal deportations.

The law still needs to get through the Senate and its Public Safety Committee before Gov. Jerry Brown can sign it into law. The legislation appears to have drawn a lot of enthusiasm, even from Trump supporters.

“The Department of Justice has more important things to worry about than whether responsible adults are consuming marijuana, especially in a state that had the sense to legalize and regulate it,” former police commander Diane Goldstein, an executive board member of the decriminalization group Law Enforcement Action Partnership (LEAP), said via email. “A majority of Americans — including folks who voted for President Trump — do not want the federal government to interfere with states’ marijuana laws.”

Drug Policy Alliance described the law this way: “Absent a court order, local and state agencies, including regulators and law enforcement, shall not assist in any federal enforcement against state-authorized medical cannabis or commercial or noncommercial marijuana activity.”

The nonprofit says it’s a necessary bill in a state with more dispensaries and cultivated acreage than any other. Early on, pot proponents said the Trump administration’s intentions weren’t entirely transparent. President Trump had expressed some support for medical marijuana in the past, for example.

But now they’re saying it’s increasingly clear that the administration intends to crack down on pot in states that have legalized it in various forms. Trump’s signing statement for the Consolidated Appropriations Act declared that the federal government would indeed crack down in medical marijuana states. And Attorney General Jeff Sessions has essentially relaunched a war on drugs that the Obama administration had started to abandon.

“Trump and Sessions’ threat to California is real,” DPA state director Lynne Lyman said in a statement. “It threatens to ensnare law-abiding residents in costly — financially and personally — legal battles and possible incarceration or deportation. It is dangerous and it is expensive, which means passing Assembly Bill 1578 is urgent.”

Pharmaceutical Industry Lessons for Cannabis

CBE/June 5, 2017/Rebecca Cicarelli and Matt Gifford

When it comes to developing and implementing an appropriately comprehensive security plan, the pharmaceutical industry knows what it is doing.  You might say that this is not their first rodeo.

That is not, however, the case with many cannabis businesses newly charged with mapping out security for the purposes of licensing and daily operations.

The pharmaceutical industry and a comprehensive approach to security

Pharmaceutical companies must be compliant with Drug Enforcement Administration (DEA) regulations in order to remain operational.  But their accountability does not end there. Ultimately, companies that deal with controlled substances and other drugs are held responsible for the welfare of the American public. As such, both large and small scale pharmaceutical entities manage their security plans as a long-term proposition.

Whether they are laboratories, manufacturers or distributors, those that operate within the pharma space evaluate the here and now, but also project future facility and product needs when mapping out security. They go to great lengths to ensure full compliance with all federal, state and industry regulations; often exceeding them.  And while their “toolbox” certainly includes security equipment, it is also comprised of three other critical elements: policy, procedure and people.

It all begins with culture

The cannabis business would be wise to mimic pharma efforts to establish a clear and consistent company culture. Culture does, in fact, define the character and personality of the organization. Want employees to be honest and trustworthy? It helps to begin by saying so, and emphasizing your zero tolerance culture. Ultimately, clear cultural communication helps the cannabis business owner find and keep the kind of people it seeks to employ.  Of course, it is critical to back that up with…

Policy and procedures

Policy and procedures is another area where cannabis can follow the pharma lead. Upon hire, employees should be apprised of all company policy via written agreements and handbooks. And reinforcement will be critical to ensure compliance – via internal signage, written reminders and in-person communication as needed. Of course, change should be anticipated. Policy must be reassessed regularly to gauge and prevent new threats, and communicated as such.

All good policy is supported by detailed procedure. This begins with hiring and training. Employment must be contingent on background/reference checks, credit checks and drug screening in an effort to hinder diversion risk. Once hired, all employees should be required to participate in diversion training programs to prepare them for detection and appropriate response. And those with access to security equipment must be properly trained in operation, trouble-shooting and response. Failure to do so can be catastrophic.

Standard operating procedures should identify and then address any area that might expose a company to internal or external threats. This must, at the very least, include public access protocol, visitor procedures, internal monitoring, alarm testing and response and perimeter controls.

Equipment mandates

The last piece of the security puzzle for pharmaceutical companies and cannabis is equipment. The Code of Federal Regulations, 21 CFR 1301.72 specifically dictates storage in a precisely defined vault/safe for controlled substances or DEA Schedule I-II. Subsequently, the vault or safe is indeed the cornerstone of physical security for many pharmaceutical companies and all cannabis operations.

This is complemented by other physical security elements including safes, mantraps, safe entry portals and bullet resistance. And, prompted by regulatory requirements, electronic security components include video surveillance, access control and alarm.  All equipment ultimately works together to support optimal compliance and business success.

Changes Forthcoming for DOJ on Marijuana, Deputy AG Rosenstein Hints

The Washington Times/June 13, 2017/Andrea Noble

Deputy Attorney General Rod Rosenstein hinted Tuesday there are changes on the horizon as to how the Justice Department handles marijuana enforcement in states that have legalized use of the drug in some form.

“We follow the law and the science. From a legal and scientific perspective, marijuana it is an unlawful drug,” Mr. Rosenstein said Tuesday during an appearance before a Senate appropriations committee.

But he said there may be future changes to the Obama-era guidance issued by the Justice Department — known as the Cole memo — that limited federal enforcement of marijuana laws in states that had opted to legalize medical or recreational use.

“Jim Cole tried to deal with it in that memorandum. At the moment that memo is still in effort,” Mr. Rosenstein said of the policy. “Maybe there will be changes to it in the future but we are still operating under that policy which is an effort to balance the conflicting interests with regard to marijuana.”

Describing the hurdles legal marijuana businesses face, Sen. Lisa Murkowski, Alaska Republican, had asked the deputy attorney general to describe where DOJ is headed with regard to marijuana.

Alaska is one of eight states where residents voted to legalize adult recreational use of marijuana.

Uncertainly has lingered over what could happen to recreational or medical marijuana markets since Attorney General Jeff Sessions took the helm at the DOJ.

News broke Monday night that Mr. Sessions is asking congressional leaders not renew a federal law that afforded some protections to state medical marijuana laws. In a letter first obtained by Tom Angell of MassRoots, Mr. Sessions wrote to leaders last month asking that they not renew a law that restricts the DOJ from spending money to interfere with state medical marijuana laws.

“I believe it would be unwise for Congress to restrict the discretion of the Department to fund particular prosecutions, particularly in the midst of an historic drug epidemic and potentially long-term uptick in violent crime,” Mr. Sessions wrote in a letter sent to the Republican and Democratic leaders in the House and Senate. “The Department must be in a position to use all laws available to combat the transnational drug organizations and dangerous drug traffickers who threaten American lives.”

 

L.A. County Extends Ban on Marijuana in Unincorporated Areas, Sets Limits on Personal Cultivation

City News Service/June 13, 2017

The County Board of Supervisors voted unanimously Tuesday to ban all commercial cannabis activities — medical and non-medical — in unincorporated areas and took a first pass at regulating personal cultivation.

The move extends a ban on medical marijuana dispensaries in unincorporated areas that has been in place since 2010 and broadens the prohibition to include the cultivation, manufacture, testing and distribution of the drug for other than personal use.

The new ordinance is designed to give the county more time to develop a comprehensive set of regulations given statewide legalization. It limits residents to growing six plants, with most single-family homeowners allowed to plant inside or outdoors, while apartment dwellers are restricted to indoor cultivation.

“It’s been a very thoughtful process,” Supervisor Kathryn Barger said, before proposing an amendment that would also prohibit growing marijuana within 600 feet of any school or day care center.

The amendment was approved and residents on single-family lots must also comply with rules about setbacks and fencing.

“Some of my residents have already begun to be a little nervous about hillside areas” where plants can be seen by neighbors, Supervisor Janice Hahn said.

Under the ordinance, plants may not be visible from a public right-of- way or above a fence, though the county can’t regulate what can be seen from a neighbor’s window, for example, a county regional planner told the board.

Both those in support of and opposed to the ban acknowledged that the ordinance is simply an interim step. Advocates of the ban, including representatives from Rethinking Access to Marijuana, urged the board to work on regulation that limits access by youth — including controls on packaging and labeling that appeals to kids — and to continue to shut down illegal dispensaries.

Opponents lobbied the board to consider the needs of patients who use medical marijuana to manage pain and other symptoms and may not be in a position to grow their own plants. County workers have raised concerns about enforcing laws on cultivation and worries that they might encounter growers willing to use weapons to defend their crops, according to Hahn.

Supervisor Mark Ridley-Thomas said, “There’s a lot of work yet to be done with respect to this brave new world that we’re about to enter.”

State permits for cannabis businesses will not be available until January 2018. Local governments are entitled under state law to ban such businesses and prohibit outdoor personal cultivation. Use of marijuana remains illegal under federal law.

Medical Marijuana Bill Passes in Florida Legislature

Sun Sentinel/June 13, 2017/Dan Sweeney

The medical marijuana industry officially has its guidelines with the passage of a bill out of the Florida Legislature on the last day of a three-day special session.

The votes were 29-6 in the Senate and 103-9 in the House. The few no votes were mostly Democrats who wanted fewer restrictions in the bill, but also a few Republicans who remain against the idea of medical marijuana on principle.

Gov. Rick Scott said he “absolutely” will sign the bill. That means big changes for patients, caregivers, doctors and growers, compared with the far more limited medical marijuana law passed by the Legislature in 2014, which resulted in seven grower/dispensers in the state.

For patients:

A ban on smoking marijuana remains in the bill, though proposed bans on vaping and edibles that were raised during the regular session are out. The smoking ban was the most serious point of contention for Democrats during the special session. State Rep. Evan Jenne, D-Hollywood, and state Sen. Jeff Clemens, D-Lake Worth, both tried to get the ban removed, but their amendments failed to pass.

The smoking ban is almost certain to result in a lawsuit because the constitutional amendment voters approved in November bans smoking in public. Advocates — and the authors of the amendment — say this is an implicit legalizing of smoking in private.

Patients will be able to obtain a marijuana recommendation for a 70-day supply, with two refills before having to go back to a doctor.

To qualify for medical marijuana, patients must have cancer, epilepsy, glaucoma, HIV/AIDS, PTSD, ALS, Crohn’s disease, Parkinson’s disease, multiple sclerosis or a condition of the “same kind or class,” though what precisely that means is uncertain. Patients also qualify if they have chronic pain related to one of the named diseases or are terminally ill.

Patients can receive a medical marijuana recommendation from a doctor right away — a 90-day waiting period that was in the 2014 law no longer applies.

Purchases of medical marijuana will be sales-tax free.

For doctors:

Before recommending marijuana to patients, doctors have to complete a two-hour course administered by the Florida Medical Association or the Florida Osteopathic Medical Association. That course can cost up to $500.

Doctors who want to recommend marijuana for patients cannot have a financial interest in a grower or testing lab.

To recommend marijuana, doctors have to diagnose a patient with one of the qualifying conditions. That examination has to happen in person — the bill bans telemedicine (remote diagnosis and treatment by such means as phone or email).

Two doctors must recommend medical marijuana for minors to receive it, and the bill bans pregnant women from getting any marijuana except low-THC, noneuphoric varieties.

Doctors are responsible for checking the state medical marijuana registry to make sure their patient is on it, and adding to it the fact that their patient has now been given an order for marijuana.

For caregivers:

Because many of the patients who qualify for medical marijuana are too sick to travel to dispensaries or, in some cases, need help administering marijuana, the constitutional amendment that voters approved allows caregivers to pick up marijuana and give it to a patient.

The bill requires caregivers to be Florida residents age 21 or older who are not doctors. They have to pass a background check and complete a training course that can cost up to $100.

A patient can have only one caregiver, unless the patient is a minor, an adult with a developmental disability, or in hospice. Minors must have a caregiver, as they will not be allowed to purchase marijuana.

Caregivers cannot be paid for their work. The Legislature wanted to prevent a caregiver industry from developing.

For growers:

The 2014 medical marijuana law allowed the creation of seven licensed medical marijuana growers throughout the state. Those growers are responsible for all cultivation, processing, transportation and sale of marijuana.

The bill will add 10 new growers licenses, five by July and another five by October. The rapid turnaround of the first five is possible only because they have already applied and came in just behind the seven current growers in the application process with the Department of Health. The next five will include at least one African-American grower and four others. All of them will have to go through the application process with the Health Department.

Of the four licenses other than the black farmer’s one, the Health Department can give preferential treatment in up to two of them to citrus canning and concentrating operations. This aid to the citrus industry was new for the special session and kicked off intense speculation as to which citrus growers’ lobbyist could have been responsible.

For every 100,000 patients added to the registry, four more licenses will be issued.

Each license holder has to grow, process, transport and sell the marijuana and can open up to 25 dispensaries across the state. They’ll get an additional five dispensaries for every 100,000 patients added to the registry. Plus, if one license holder doesn’t open up its maximum amount of dispensaries, it can sell the extra numbers to another license holder. So, it’s possible for a grower to go over the 25 dispensary cap, but only if they buy a slot from another grower. All these caps will sunset in 2020 without further action by the Legislature.

Growers have to track all of their product from seed to sale, and it needs to be tested by an independent laboratory for THC levels and to make sure it’s safe to be taken — for example, no fungal or bacterial infections.

For research:

The bill gives $750,000 to the Moffitt Cancer Center in Tampa to conduct medical marijuana research. It also creates the Coalition for Medicinal Cannabis Research and Education at the cancer center, which will be responsible for research into medical marijuana.

All of these changes in the state medical marijuana industry will go into effect as soon as Gov. Rick Scott signs the bill into law.