Ten States Benefiting from a Booming Hemp Market

Ten States Benefiting from a Booming Hemp Market

Hemp production has soared in the past year. The number of licensed producers and acres of cultivation space in the top 10 hemp-growing states grew by 140 percent. The number of licensed hemp producers rose from 609 in 2016 to over 1,200 in 2017. Additionally, the number of acres licensed for hemp cultivation also rose from 16,377 acres in 2016 to almost 40,000 acres in 2017.

States such as Kentucky, Colorado, Minnesota, Nevada, New York, North Carolina, North Dakota, Oregon, Tennessee, and Vermont are the top 10 hemp producing states in the U.S.

 

The Reason for the Spike in Production

Increasing acceptance for hemp and cannabidiol (CBD) oil, in addition to relaxed state level regulations allowed U.S. hemp production to surge in 2017. This increase is only the beginning for the fledgling hemp industry in the United States.

Since full-fledged hemp cultivation is still illegal at the federal level, the plant that produces hemp and CBD oil can only be grown in states that have an established hemp program. There are still lingering questions about the legality of hemp-based extracts, such as CBD oils. Farmers are also still learning the optimal growing processes. It is unclear the demand for products made from hemp grown in the U.S. However, CBD which is derived from hemp is soaring in popularity.

Brightfield Group, a cannabis research firm, estimates that the demand for hemp-based products will increase from $291 million in 2017 to over $1.65 billion by 2021. This increase in demand has prompted U.S. farmers who have grown more traditional crops to look into growing hemp as a replacement for lower-valued crops such as cotton or alfalfa.

Certain states have shown support to the fledgling industry by allowing more growers into their hemp programs and relaxing regulations to acreage limits. States that have shown increases in hemp production are set to cash in on the bull market of the next few years.

 

Colorado

More than half of the United States hemp production occurred in Colorado. Even though Kentucky has more licensed acres, Colorado has more acres in production, farmers who grow the crop, more CBD processors, and more opportunities for selling hemp plants. Colorado was the first state to legalize recreational marijuana and in 2012, farmers began to grow the crop for cultivation.

 

Kentucky

Due to Kentucky’s well-suited growing climate, former tobacco farmers are taking a strong interest in hemp. The state’s willingness to experiment and invest in hemp processing and growing makes Kentucky a leader in the hemp growing industry. Kentucky has the most acres authorized for growing hemp in the nation at 12,800 acres. However, only 3,200 acres were planted in the bluegrass state.

 

Oregon

With a well-established network of hemp processors and growers, along with a new testing regime, Oregon has grown in its position in the hemp industry. With new laws on testing requirements that have been passed in 2017, Oregon hemp products have the same testing regulations as marijuana. This means that all hemp products that come from Oregon will be food-grade quality and pesticide and contaminant tested.

 

North Dakota

As a future leader in hemp, North Dakota has more than 3,000 acres in active production. However, North Dakotas cold climate and recent drought have limited hemp’s potential to thrive. In addition to the natural determents to growing hemp in the state, high production costs and expensive seed costs that are higher than typical row crops, do not help entice farmers to grow hemp.

 

Minnesota

Since 2016, Minnesota has allowed farmers to grow hemp. In fact, there is an abundance of wild hemp from World War II-era crops. With a climate similar to Canada, varieties already grown in the neighbor to the north are a natural fit for the state. Unfortunately, no hemp farmer has reported a profit as of yet. Processing delays, legal confusion, and natural pests make growing hemp difficult for many farmers.

 

New York

Governor Andrew Cuomo helped establish the hemp industry in New York in 2017 when he invited entrepreneurs to compete for development grants in excess of $5 million. These grants were a first in the nation. Most state programs are funded mostly by feeds paid by farmers, but New York’s decision to invest in promoting hemp cultivation and processing has allowed New York to be a frontrunner in the hemp industry.

 

North Carolina

For a state once dominated by textile manufacturing and tobacco farming, officials in North Carolina see hemp as a natural fit for farmers. In 2017, North Carolina finished the growing season with more growers, acres, and processors than any other state in the first year of hemp production.

 

Tennessee

The climate in Tennessee has created a challenge for hemp farmers. High humidity and a 50-plus inch per year rainfall makes it difficult to grow a plant that thrives in an arid climate. However, Tennessee hemp entrepreneurs are trying to develop strains for a damper climate. The state also has no legal restrictions in selling hemp products. The state also permits CBD extraction which is highly valuable.

 

Vermont

With the nation’s most lenient hemp regulations, Vermont’s latitude makes it easy for hemp cultivars that were developed in northern Europe and Canada. However, hemp producers may be under an entirely new set of guidelines as the state implements regulations for recreational marijuana.

 

Nevada

Nevada hemp farmers are selling their products as quickly as they can produce them. There is a booming demand for flower in CBD production. Prices of up to $350 per pound are being seen for quality, high-CBD varieties. This is almost 10 times what Colorado growers receive for midgrade hemp flower. In addition, Nevada growers are increasing the amount of acreage and processing equipment. Farmers in the state are hoping that they can cash in on the boom before states that have a better water supply and a milder climate overtake the market. Growers in Nevada are also expecting a challenge from California growers, so they are looking for new hemp uses in the industrial markets and animal feed.

Although the market players are still unclear about the future of the hemp industry, industry entrepreneurs and policymakers are forging ahead and hopeful about the industry’s future.

Is Hemp Making a Comeback as a Cash Crop?

Is Hemp Making a Comeback as a Cash Crop?

Hemp.  It is one of the oldest crops known to man, and it is also one of the most misunderstood plants.  Now, New York is expanding its hemp research program.

 

What Is Hemp?

The cannabis plant has many different varieties.  Hemp is often referred to as industrial hemp and contains less than 1% tetrahydrocannabinol (THC), the psychoactive element in marijuana.  Both marijuana and hemp are obtained from the same cannabis species, but hemp is genetically different than marijuana, along with chemical makeup and cultivation methods.

 

What Does Hemp Do?

Hemp is a renewable source for raw materials that is often incorporated into thousands of products.  Health foods, organic body care, and pharmaceutical-grade and standardized nutrients called nutraceuticals.

The stalks and fibers are used for producing hemp clothing, construction materials, biofuel, plastic composites, paper, and even more.  In fact, the Hemp Industries Association (HIA) estimated that hemp products sold last year in the U.S. topped a whopping $620 million in the retail market.  Unfortunately, 100% of the raw hemp materials were imported from other countries.

Farmers have historically used rotation crops to replace CO2 and other nutrients into the soil that regular crops have depleted.  Even Thomas Jefferson recognized the importance of crop rotation.  Hemp breathes in CO2, detoxifies the soil, and prevents soil erosion.  After harvest, the left-over plant material decomposes into the soil and replenishes valuable nutrients.  In addition, hemp does not require much water to grow or pesticides to flourish and is much more environmentally friendly than traditional crops.

 

What Can Be Made from Hemp?

There are a wide variety of items that can be made from the hemp seed, such as:

  • Bread
  • Granola
  • Cereal
  • Milk
  • Dairy products
  • Protein powder
  • Fuel
  • Lubricants
  • Ink
  • Varnish
  • Paint
  • Dressings
  • Margarine
  • Body products
  • Cosmetics
  • Animal food
  • Flour

The hemp stalk can also be used to make items such as:

  • Animal bedding
  • Mulch
  • Chemical absorbent
  • Fiberboard
  • Insulation
  • Concrete
  • Cordage
  • Rope
  • Netting
  • Canvas
  • Carpet
  • Bio-composites
  • Non-wovens
  • Clothes
  • Shoes
  • Bags
  • Biofuel
  • Ethanol
  • Paper products
  • Cardboard
  • Filters

 

What Can Hemp Not Do?

Basically, since hemp varieties contain almost no THC, it cannot get a person high, no matter how much they smoke.  The body processes the miniscule amount of THC faster than a person can smoke it.  Therefore, there is no way to get high from hemp.  Then why is hemp illegal?

 

Why Is Hemp Illegal?

When the Marijuana Tax Act was passed in 1937, cannabis cultivation and sales were strictly regulated.  Several decades later, the Controlled Substances Act of 1970 classified all forms of cannabis as a Schedule I drug.  This included hemp.  Schedule I drugs are illegal to grow in the United States.  Therefore, 100% of hemp used in the U.S. has been imported since 1970.  Due to the almost 50-year prohibition on hemp, most Americans do not understand the differences between marijuana and hemp.

 

Is Hemp Making a Comeback?

In 2014, the US Farm Bill passed for that year allowed states that already have industrial hemp legislation in their state to grow industrial hemp for research and development purposes.  States such as Kentucky, Colorado, and Oregon are conducting hemp pilot products.

Now, New York’s hemp research program is almost doubling from 2,000 acres to more than 3,500 acres.  The state has earmarked $650,000 in their budget for a hemp processing plant in addition to $2 million for a state-run hemp seed certification program.

Governor Andrew Cuomo announced that, under the state’s Industrial Hemp Agricultural Research Pilot program, more than 60 new businesses and farms have already received hemp research permits, with another 18 companies registered to process the hemp crops.

The governor released a press release stating, “There is renewed interest in industrial hemp production and processing throughout the country, and with our strong grower community and innovative researchers, New York is in a great position to lead.”

New York’s state Department of Agriculture and Markets Division of Plant Industry is currently accepting applications for proposed hemp research in fiber and food on a continuous basis.  Gov. Cuomo announced last year a $5 million Industrial Hemp Processors Grant Fund.  He is in favor of providing farmers an alternative crop.

“By providing an alternative crop for our farmers, industrial hemp has the potential to change the landscape of our agricultural economy, create jobs, and drive growth across the Southern Tier and throughout New York,” Cuomo stated. 

In 2017, two thousand acres of hemp were cultivated under New York’s state program.  Consumer, industrial, and medical products made from hemp accounted for around $600 million in sales yearly in the Empire state.

With a push to legalize cannabis on the federal level and with many states already legalizing medical and recreational cannabis, it is just a matter of time before hemp makes a strong comeback as a viable crop for farmers to grow.

 

Hemp Research in the United States

Industrial hemp research has been underway in a number of foreign countries for over a decade.  The U.S. is far behind in its efforts.  The National Hemp Association is partnering with public and private research institutions in the U.S. to help get out their findings as soon as they are published.  Currently, hemp research includes uses of hemp for:

  • Battery development
  • Construction materials
  • Paper products
  • Body products
  • Intensive research into nutraceuticals

The National Hemp Association represents:

  • Hemp farmers
  • Hemp processors
  • Hemp manufacturers
  • Start-up businesses in the hemp industry
  • Entrepreneurial endeavors
  • Retailers
  • National and international industries who recognize the benefits of hemp as an ecologically-friendly and versatile material

 

New York’s Industrial Hemp Pilot Program

For New York residents interested in becoming a research partner with the New York State Department of Agriculture and Markets to conduct studies in the food and fiber areas, visit their website at https://www.agriculture.ny.gov/PI/PIHome.html

They are currently accepting applications for:

  • The Industrial Hemp Program Application
  • The Industrial Hemp Processor Registration
  • The Industrial Hemp Affiliated Research Grower Registration

Currently, the NYS Department of Agriculture is not accepting new applications for cannabinol-related research proposals.

With so many states coming on board to conduct research, hemp may become the new cash crop for farmers across the country.

What Effect Did This Controversial Memo Have on Cannabis Stocks?

What Effect Did This Controversial Memo Have on Cannabis Stocks?

Thanks to the U.S. Attorney General Jeff Sessions, cannabis stocks dropped significantly after rising 40% in November leaving many investors with losses instead of gains.  Earlier this month, A.G. Sessions rescinded the Cole Memorandum with a “return to the rule of law” announcement. 

 

What the Sessions Memo Says

In Sessions’ memo sent to all U.S. attorneys, Sessions reminded readers that when deciding which marijuana activities to prosecute with the finite resources given to the Justice Department, there are “well-established principles that govern all federal prosecutions.”

He went on to say that those principles were established in 1980 by Attorney General Benjamin Civiletti.  Over time, these principles have been refined and require federal prosecutors to decide which cases to prosecute on four main considerations:

  • Federal law enforcement priorities
  • Seriousness of the crime
  • Deterrent effect of criminal prosecution
  • Cumulative impact of particular crimes on the community

He finished by saying that specific guidance to marijuana enforcement is unnecessary and therefore rescinded. 

It is a well-known secret that Sessions has hated marijuana and the Cole Memorandum.  However, with his inaction his first year with the Trump administration, many were lulled into believing that he would not change any current guidance.  Instead, he responded to conservatives by rescinding the Cole Memo.  Or did he?

 

What U.S. Citizens Believe

Several surveys taken around the country show that a majority of people believe that marijuana should be legalized for medical and recreational use.  Even Sessions’ home state of Alabama showed overwhelming support for cannabis legalization.  According to the Pew Research Center, the percentages are actually astounding.

In 2016, a survey showed that 57% of adults in the U.S. favored legal marijuana compared to only 37% who said it should remain illegal.

  • Millennials, ages 18 to 35, are the largest supporters with 71% in favor of legalizing marijuana.
  • Generation X, ages 36-51, showed support in line with the general public at 57%.
  • Even the Baby Boomers, ages 52-70, show favor with 56% supporting legalization.

In 2017, over 1,200 adults in the U.S. were asked about marijuana legalization based on political party. 

  • Democrats favored legalization of marijuana with 66% in favor and 30% not in favor.
  • Surprisingly, 63% of Republicans who identify as moderate or liberal Republicans favor legalizing marijuana.
  • Conservative Republicans are the only political group surveyed that opposed legalizing marijuana use, with 62% against.

Pew Research Center surveys have also found that blacks and whites are identically in favor of legal marijuana at 59% each, while Hispanics are less supportive at 46%.

 

Good News for Those Who Are Concerned

Even though Sessions rescinded the Cole Memo, the situation is not necessarily changed for the cannabis industry.  With his memo, he left room for each state attorney general to decide whether to act or not.  Xavier Becerra, California’s state attorney general, supports the laws passed by California voters and therefore will probably not act. 

Congress also has the ability to keep the reigns tightened on Sessions.  The Rohrabacher-Blumenauer amendment was created to keep funds away from the Justice Department to enforce the laws.  It has been renewed every year and 2017 was no exception.  On December 22, the Rohrabacher-Blumenauer amendment was included in legislation to fund the government for two weeks.  The intention of the amendment was to protect medical marijuana, but a limited Justice Department budget will affect all areas of the cannabis industry. 

 

The Effect on Marijuana Stocks

Leading up to California’s legalization of adult use marijuana, cannabis stocks had been bullish.  In November, stocks rose 40% with anticipated strong sales of adult-use recreational marijuana.  Up until January 4th, the date when Sessions released his memo in regards to the Cole Amendment, stocks were continually rising.  However, as soon as word got out of the Sessions memo, stocks began to drop. 

For example, companies such as MassRoots (MSRT) and Insys Therapeutics (INSY) dropped a staggering 26%, while Innovative Industrial Properties (IIPR) drop 18%.  One company that seemed to fare best was GW Pharmaceuticals (GWPH) with a decline of only 0.36%.

 

Canada Is Also Affected

The AG’s letter to federal prosecutors allows individual prosecutors to decide whether or not to prosecute.  This uncertain environment creates a problem for cannabis companies.  Jonathan Sherman, an attorney at Cassels Brock, a Canadian law firm that specializes in cannabis legalization, stated, “If the Cole Memo no longer applies, the CSA (Canadian Securities Administrators) policy, with respect to U.S. cannabis operations, may be reversed as the Cole Memo was part of the reason why the CSA was comfortable to allow cannabis companies with U.S. operations to be listed.”

He went on to say that since the implications of the changing federal government’s approach are uncertain, there still will be a “significant concern to Canadian cannabis companies with U.S. operations.”

American cannabis companies now seem to be a risky investment for Canadian investors, whereas only a month ago, these same companies seemed like a good investment.  The Toronto Stock Exchange (TSE) warned investors in October about American cannabis companies.  The TSE did not want the Canadian companies listed to engage in activity with U.S. cannabis companies because of federal marijuana laws. 

However, the Canadian Stock Exchange was more lenient.  The Canadian companies that were cash heavy from money raised in the public markets, have been aggressively acquiring stock in U.S. cannabis companies.  After the release of Sessions’ memo, Canadian company Horizons Marijuana Life Sciences ETF closed down 8.7% the same day.

 

What This Means for U.S. Investors

While the Sessions’ memo sent a slight shockwave through the cannabis stock market, this has not kept many investors from continuing to buy stocks in a range of companies in the marijuana industry.  For the savvy investor, research into all companies is advised.  The investor who does his or her homework can reap the benefits of future legislation as more and more states legalize medical and adult-use recreational marijuana. 

Congressman Earl Blumenauer said it best.  “Congress must act to put an end to the cycle of uncertainty and permanently protect state medical marijuana programs—and adult use—from federal interference. The American people have spoken. It’s past time that Congress catch up.”

Why is the Cannabis Industry Struggling for Clarification of Laws?

Why is the Cannabis Industry Struggling for Clarification of Laws?

Massachusetts cannabis growers, distributors, and consumers are not receiving any assurances at the state level concerning immunity from federal prosecution.  After Attorney General Jeff Sessions released a memo last week stating that he was rescinding all federal protections outlined by the Cole Memo of 2013, the cannabis industry of Massachusetts was left wondering what this means for their industry going forward.  Andrew E. Lelling, the U.S. Attorney in Massachusetts stated that he cannot, “provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.”

 

Why Is the Cole Memo So Important?

The Cole Memo was created in 2013 when states began legalizing recreational marijuana.  In it, then Deputy Attorney General James M. Cole, gave guidance regarding marijuana enforcement at the federal level.  He advised federal law enforcement officials to focus on certain priorities, such as preventing:

  • The distribution of marijuana to minors
  • Criminal enterprises, gangs, and cartels from receiving revenue from the sale of marijuana
  • States that do have legal recreational marijuana laws from diverting to states that do not
  • Any state-authorized marijuana activity from being used as a pretext or cover for illegal drug activity or trafficking
  • The use of firearms or any other type of violence in the cultivation or distribution of marijuana
  • Any type of drugged driving or other public health consequences associated with marijuana use
  • Marijuana from being grown on public lands
  • The possession or use of marijuana on any federal property

He also advised federal law enforcement officials to focus on these priorities, rather than on those who possessed small amounts of marijuana and allow the states to police themselves.  Part of the reason for this guidance was due to limited federal funds.

 

Why Should Congress Share the Blame?

Since Congress passed unambiguous federal law in the cultivation, distribution, and/or possession of marijuana, many in the Massachusetts marijuana industry have turned to Lelling for clarification and guidance.  Lelling has made it clear that he has taken a “sworn responsibility to enforce that law,” but also stated that he would proceed on a case-by-case basis.  He also alluded to the fact that there were limited federal resources to pursue any federal charges.

Lelling’s memo came less than a week after Attorney General Sessions’ announcement of the rescinding of the Cole Memo.  Apparently certain people and groups sought additional guidance and clarification as regulators in Massachusetts are moving forward with adult-use recreational marijuana programs.

 

Why Some Wonder If Sessions Actions Are a Threat or Bluster

Eight states and Washington D.C. have implemented the legalization of recreational marijuana and other states are considering legalization.  However, Congress has yet to discuss any laws that would make marijuana legal at the federal level.  Since the cultivation, distribution, and possession of marijuana is still illegal at the federal level, federal prosecutors have been directed to approach it as such. 

Many officials in states with legal marijuana, including U.S. attorneys, have indicated that they will not change their approach when enforcing marijuana laws, even after Sessions’ directive.  This leaves many residents of Massachusetts wondering if Lelling will take the same stance.

In a statement last week, Lelling seemed to side with Sessions when he said that marijuana was a “dangerous drug,” and that he would “aggressively investigate and prosecute bulk cultivation and trafficking cases, and those who use the federal banking system illegally.”  He also could not give assurances that any participants in the state-level marijuana industry would be “immune from federal prosecution.”

However, he went on to say that he would “proceed on a case-by-case basis,” leaving some to wonder if Massachusetts’ plans to distribute recreational marijuana in July would remain intact without fear of prosecution.  He gave additional hope by stating that federal resources were limited.  However, he would not explicitly state whether a certain group, such as state distributors, would be safe from federal prosecution.

Ultimately, it is up to Congress to provide the guidance and clarification that marijuana advocates are seeking.  Congress could simply pass a federal law ending prohibition on marijuana.  However, since Senator Cory Booker’s proposed bill to end marijuana prohibition has only one other co-sponsor and a Republican majority controlling Congress, a vote in the immediate future seems unlikely.

Brian Kelly, former assist U.S. attorney believes that “it’s mostly blunder.”

With a $40 billion market and a limited budget, it is not feasible to enforce cannabis laws.  But, the U.S. Attorney’s office may have already made an impact without any arrests being made.  Just this week, ten out of the seventeen medical marijuana dispensaries in Massachusetts had to revert to a cash-only system.  A key payment processing company called Lelling’s statement “too risky to continue,” and pulled out of the market.

 

Massachusetts Lawmakers Are Backing the Voters

Many elected officials in Massachusetts, both Democrat and Republican, have had strong reactions to Lelling’s statement.  Governor Charlie Baker, a Republican, suggested that Lelling focus his “limited resources” on battling the opioid crisis in the region rather than recreational pot users.  He stated that there is a public health crisis with opioid addiction and street drugs.  He did not include marijuana as an immediate concern to the public welfare.

In addition, the governor reminded Lelling that the voters of Massachusetts decided to create a “legal, regulated, recreational marijuana market,” in the commonwealth of Massachusetts.  Even though Baker opposed the 2016 marijuana ballot initiative, he stands up for the new state law.

It appears that Attorney General Maura Healey, who also opposed the 2016 marijuana ballot initiative, also supports the people.  Her department encourages the U.S. Attorney to provide guidance and clarification to “Massachusetts municipalities, residents, and businesses.”

Senator Elizabeth Warren is currently working on legislation to allows states to “enforce their own marijuana policies.”  She called the Justice Department “reckless” for their actions that have created uncertainty in Massachusetts and other states.  She posted on Facebook Tuesday that the state’s efforts to protect people’s health and safety by legalizing marijuana should be respected by the federal government.

 

The Massachusetts Marijuana Commission

The statements from Sessions and Lelling have not slowed down the state’s Cannabis Control Commission.  They have continued to work in finalizing the rules and regulations of the recreational marijuana industry in Massachusetts.

The five-member panel is currently making decisions in relation to the soon-to-open markets with issues ranging from promoting diversity and advertising to whether to allow marijuana in particular bars, theaters, and yoga studios.  Commission chairman Steven Hoffman stated, “We have a job to do and we’re going to continue to do the job.”   

So, until there is some action taken by the federal government, if there ever is, it appears that the marijuana industry in Massachusetts will proceed with the plans approved by the people of Massachusetts.

Will Cannabis Soon Become Legal in Your State?

Will Cannabis Soon Become Legal in Your State?

Many states have already passed recreational marijuana laws and many more are considering passing legislation this year.  For example, fifty-seven percent of Michigan voters are in favor of legalizing recreational marijuana. 

 

Michigan Voters in Favor of Legalization

TV station WDIV Local 4 and the Detroit News conducted a survey that asked Michigan voters whether they were supportive of a proposal to legalize marijuana in their state.

The poll found that 56.6% of voters supported the proposal, 36.7% opposed it, and 6.7% were undecided.  With the voters who supported and opposed legalization, there were subgroups within the supporters and detractors with regards to their level of support.

  • Almost thirty-eight percent strongly supported the proposal
  • Twenty-nine percent strongly opposed the proposal

Party lines have some influence on how voters believe:

  • Those who identify as strong Democrats support legalization overwhelmingly with 71.5% in favor of legalization
  • Those who lean toward Democratic beliefs support legalization by 675
  • A little over half of Independents (51.1%) support legalization
  • Voters who lean toward GOP support legalization with 44.7%
  • Even strong GOP voters still support legalization with 43.5%

Surprisingly, the greatest indicator on a voters’ position is not party affiliation, but rather on past behavior.  Forty-seven percent of voters polled stated they have smoked marijuana while forty-nine percent said they have not.

  • For voters who have tried marijuana in the past, 72.7% were in favor of legalization
  • For voters who have never tried marijuana, only 40.6% were in favor of legalization

However, with fifty-seven percent of Michigan voters admitting that they were in favor of some measure to legalize recreational marijuana, it seems that Michigan is heading toward a vote sometime this year.  The Michigan Regulation and Taxation of Marihuana Act is likely to come to Michigan voters in November.

 

The Michigan Regulation and Taxation of Marihuana Act

The ballot measure proposes establishment of a statewide commercial marijuana production and sale licensing program.  Adults 21 years old and older may possess up to 2.5 ounces of marijuana for personal use.  They would also be able to grow up to 12 marijuana plants at home.

In addition to growing plants for personal use, there would be state-approved dispensaries.  A 10 percent excise tax and 6 percent sales tax would accompany any sales from these dispensaries with the proceeds going to K-12 public schools, road construction, and local governments.  Each local government would be given the option to allow marijuana businesses in their communities.

In addition to marijuana, hemp is part of the discussion for legalization.  Hemp, a low tetrahydrocannabinol (THC) cannabis plant used for cultivation, is used to make textiles, food, clothing, and cannabidiol (CBD) hemp oil.  Legal in all 50 states, CBD oil is already used by many people. 

In order to secure a spot on the upcoming general election ballot, 252,523 signatures were needed.  Last November, 363,000 signatures were submitted by the Coalition to Regulate Marijuana Like Alcohol.  However, Michigan’s secretary of state has not yet approved the measure formally.

The Coalition to Regulate Marijuana Like Alcohol gains support from both national and local advocacy organizations such as:

  • The Marijuana Policy Project
  • The National Cannabis Industry Association
  • The ACLU of Michigan
  • The Drug Policy Alliance
  • Michigan NORML
  • The National Patients’ Rights Association
  • MI Legalize

If passed in November, Michigan would be the tenth U.S. state to legalize recreational marijuana.  As one of the 29 states to already have legalized medical marijuana, Michigan seems to be in step the with direction of U.S. voters.

 

Other States Considering Marijuana Legalization This Year

Michigan is not alone in putting forth marijuana legislation in 2018.  Other states include:

  • Vermont – In early 2018, Vermont lawmakers moved to approve recreational marijuana.  Governor Phil Scott signed the law into effect January 22 of this year.
  • New Jersey – Governor-elect Phil Murphy has pledge to sign legislation for adult use marijuana within his first 100 days in office.  Although, this depends on a Democrat-led Legislature sending the new governor a bill to sign.
  • Delaware – A 25-member panel called the Adult Use Cannabis Task Force is expected to release a report in February evaluating the impact of legal cannabis in the state.
  • Rhode Island – As neighboring states Main and Massachusetts have implemented their own policies, Rhode Island lawmakers are hoping to have some type of legislation passed on recreational marijuana before July 2018.
  • Connecticut – In 2017, the Hartford City Council approved legalizing recreational marijuana.  Although this was a symbolic move, it was hoped to spur conversation in the statehouse of legalization. 
  • Ohio – Responsible Ohio, a group campaigning to legalize recreational marijuana, is currently collecting signatures for a ballot proposal for 2018.
  • Oklahoma – Depending on Governor Mary Fallin’s decision, Oklahoma voters will get to decide whether to legalize medical marijuana in June or November. 
  • Kentucky – Secretary of State Alison Grimes is pushing legislation aimed at legalizing medical marijuana in her state.  She created a task force to draft the bill that aids veterans and patients who suffer from severe illnesses.
  • South Dakota – Currently, the secretary of state in South Dakota is reviewing collected signatures for a ballot imitative for limited medical marijuana legalization.  Results are expected in March allowing voters to decide whether medical marijuana would be legalized in their state.
  • Utah – Currently, activists in Utah are gathering signatures of a 2018 ballot initiative to approve medical marijuana.  By April 2018, organizers need 113,000 in order to get the initiative on the ballot.
  • Missouri – New Approach Missouri currently has 100,000 of the 170,000 signatures needed for a ballot initiative to legalize medical marijuana.  There are two other initiatives backed by former state lawmakers that are also in the works.

With so many states changing their laws pertaining to recreational adult use and medical marijuana, the face of the United States is changing from red and blue to green.  Democrats, Independents, Republicans, men, and women are in support of change in their state.  Is your state included?

How Is Maryland Bringing Diversity to the Cannabis Industry?

How Is Maryland Bringing Diversity to the Cannabis Industry?

At the beginning of the legislative session, Maryland lawmakers introduced House Bill 2 (HB 2) which mandates certain changes to the current state medical marijuana commission’s operations and structure.  The bill also includes several different provisions to encourage an increase in the number of minority owned businesses in the industry.

 

Legislators React

Governor Larry Hogan ordered a disparity study in January.  This study determined that minorities and women lack representation in the medical marijuana industry.  As of now, there is only one cannabis processing company owned by minorities that is licensed in Maryland.

Maryland lawmakers were hopeful that a certain portion of the medical marijuana licenses issued by the state would be set aside for minority ownership.  However, Attorney General Brian Frosh advised that such a plan would open the state up for lawsuits and violate the state’s constitution.

Governor Hogan also added that reserving licenses for minorities leaves the state exposed to litigation from white businesses owners who be denied permits. 

The governor told local media, “You can’t throw those guys out or the state will be subject to lawsuits from all of them, but if they can find a way to broaden it and be more inclusive, we are all for it.”

The Legislative Black Caucus’ chairperson, Baltimore City Delegate Cheryl Glenn stated, “We have a litany of people who are ready to apply for those licenses, who have the money to get these businesses up and running.”

Currently, Glenn suffers from arthritis and uses medical marijuana to treat her condition.  She believes that the long road, with its many obstacles, is worth it in order to diversity the industry.

“I think we are going to finish the session with a product I’m going to be satisfied with,” Glenn stated.

 

House Bill 2

HB 2 directs changes to the structure and operations of the state medical marijuana commission, and also includes numerous provisions to encourage minority involvement in the marijuana industry.  This will be accomplished by increasing the number of commissioners to eight.  In addition, the racial and ethnic diversity of the state should be reflected in the board’s membership.  Finally, members of the commission are forbidden from having a financial interest in the marijuana industry.

Outreach programs will also be crafted under the new regulations that require the newly diversified commission to perform outreach to current minority-owned businesses.  They will inform these businesses who to participate in the cannabis industry. 

Training programs for cannabis industry jobs will also be created to assist minorities in breaking through to obtain jobs in the cannabis industry.  The state’s Department of Labor division will identify job opportunities for minorities and ex-offenders.  With these measures in place, legislators hope that more minorities will be represented in the cannabis industry.

The bill also contains a Compassionate Use Fund for increased access to medical marijuana for patients.  Administered by the commission, the fund would provide discounted or free cannabis to patients in need.  They must first prove eligibility in order to receive the funds.

 

HB 2 Passes Maryland’s General Assembly

After many amendments were made to HB 2, legislators in the Maryland House of Delegates passed HB 2.  The bill was then sent to the Senate where it was debated and more amendments to the bill were added.

Lawmakers worked late into the evening on the last day of the legislative session in order to receive final approval by the General Assembly.  The medical marijuana measure increased the number of licenses approved for growers from 15 to as many as 22.  In addition, two companies that sued the state over the licensing process were issued licenses with four additional licenses up for grabs.  The bill also increased the number of marijuana processor licenses from 15 up to 28.

The bill is an aim to help minority-owned companies take steps to obtain these licenses.  Earlier this year, Governor Hogan ordered a study to look at obstacles faced by minorities entering similar industries in the past.  After the study concluded, state consultants determined that there is enough proof to conclude that minorities are at a disadvantage in Maryland’s fledgling medical marijuana industry. 

Before the study, the state had issued 15 growers licenses, but none of them were to minority-owned businesses.  To increase the number of minority licenses issued, the General Assembly is considering a bill that would require the commission to take an applicant’s race into consideration before issuing five new licenses.

The governor’s office released the consultant’s findings on Wednesday.  The April study and its findings are a key step toward allowing officials to weigh race when awarding any new licenses.

Sharesse Churchill, spokesperson for the governor’s office, stated, “Today’s findings are clear and unequivocal evidence that there is a disparity in the medical cannabis industry.  This study is an important part of the process to allow for increased minority participation in our state.”

Del. Cheryl D. Glenn, chairperson of the Legislative Black Caucus, believes that this is a step in the right direction towards having diversity in a growing multibillion-dollar industry.

Civil rights advocates found the lack of licenses awarded to any black-owned businesses galling due to the disproportionately number of African-Americans who have faced consequences from the criminalization of marijuana.

Since medical marijuana was legalized in December, growers have struggled to meet the demand of some 19,000 registered patients.