Forecasting 2022 Alabama Weed Laws & License Applications

Although Alabama has not yet decriminalized marijuana, changes for Alabama weed laws are on the horizon through the state’s legalization of medical marijuana and medical cannabis program.

In May 2021, Senator Tim Melson’s Compassion Act SB 46 was signed into law, permitting no more than 12 cultivation licenses, four processors, four dispensary licenses (up to three locations in different counties), and five integrated facility licenses for growing, processing, transporting, and dispensing.

This residency requirement is unusually high; most states require closer to five or seven years of residency. While this choice appears to be an effort to keep things local, it also has the potential to severely limit qualified applicants who don’t meet the residency requirement from entering the Alabama market.   Your Best Asset: Business Experience  While Alabama weed laws and requirements for cultivation may be limiting, keep in mind that most of the licenses granted will be for cultivation. That means your chances of winning a cultivation license will be higher than your chances of winning a different license type.   However, the most profit will likely be in retail, since so few retail licenses are being awarded for the first year. Once the state assesses patient counts, more dispensary licenses may be added in the future.  Regardless of the license type you aim for, expertise in business will give you a huge advantage. Even if it’s not specific to cannabis, any kind of business experience — be it running a retail shop, a farm, or anything else — will help bolster the business plan portion of your application.  Your best bet to get into the Alabama market is to stay small and local, meet the residency requirements, and highlight your strong business and cannabis background. If you don’t have cannabis experience, a consulting team like Higher Yields can add the cannabis know-how to your business experience.   Anticipating Challenges  As you prepare your application, keep in mind that we still don’t have the full picture of Alabama weed laws or the state’s final requirements. And what we do know presents some unique challenges you’ll need to navigate:  Excessive residency requirement. The state’s residency requirement will make it difficult for multistate operators and smaller businesses with only a few years of residency to apply — even those with experience and understanding of high-quality products.  Potential for unethical token relationships. Both the residency and minority ownership requirements open the door for larger, out-of-state operators to create agreements with minority locals just to get their foot in the door. Limitations on cultivation. In addition to the above requirements, Alabama weed laws will not allow any raw plant material. Limited real estate availability. Due to the county disbursement requirement for dispensaries and the state’s setback requirements, real estate options may be quite limited.    With all of these limitations and requirements, it will be especially important to take advantage of every resource available to give yourself the best shot at winning a license and building your Alabama cannabusiness.   Get Expert Help Navigating Alabama Weed Laws  Although Alabama weed laws are still in flux, the application period for cannabusiness licenses is quickly approaching. Start preparing now to ensure you meet all the requirements for your prospective license type and business facility.   Get a Green Zone Assessment to ensure your property is both compliant with current Alabama weed laws and conducive to future growth.

Applications for these licenses are set to open up later this year and will likely be very competitive, so the sooner you start preparing, the better. 

Read on to learn more about Alabama weed laws and how to prepare for the upcoming license application period.

 

2022 License Applications

While Alabama weed laws and specifics for the state’s medical marijuana program are still in development, applications are expected to open on September 1, 2022. 

It’s unclear exactly how long the submission window will be, but the state is hoping to grant or deny licenses within 60 days of submission. Additionally, the program will allow applicants 60 days to remediate any deficiencies. 

Based on the number of licenses that will be available, this is likely to be a competitive application process. You’ll need to submit an extremely detailed business plan with a proposed physical location for each business and demonstrate how you will conduct activities.

Finally, there will be a non-refundable $2,500 application fee, as well as background checks for owners holding controlling interest in the applicant’s license.

 

Residency & Ownership Requirements

 

On top of the already limited number of licenses, Alabama weed laws will place even further limitations on who can obtain licenses. 

Depending on the license, one-fourth to one-fifth of the total licenses must go to businesses that are at least 51% minority owned, specifically by individuals of African American, Native American, Asian, or Hispanic descent. 

Similarly, all of the cultivation licenses and three of the integrated licenses must go to businesses with at least 51% ownership held by individuals who have been Alabama residents for at least 15 years.

This residency requirement is unusually high; most states require closer to five or seven years of residency. While this choice appears to be an effort to keep things local, it also has the potential to severely limit qualified applicants who don’t meet the residency requirement from entering the Alabama market.   Your Best Asset: Business Experience  While Alabama weed laws and requirements for cultivation may be limiting, keep in mind that most of the licenses granted will be for cultivation. That means your chances of winning a cultivation license will be higher than your chances of winning a different license type.   However, the most profit will likely be in retail, since so few retail licenses are being awarded for the first year. Once the state assesses patient counts, more dispensary licenses may be added in the future.  Regardless of the license type you aim for, expertise in business will give you a huge advantage. Even if it’s not specific to cannabis, any kind of business experience — be it running a retail shop, a farm, or anything else — will help bolster the business plan portion of your application.  Your best bet to get into the Alabama market is to stay small and local, meet the residency requirements, and highlight your strong business and cannabis background. If you don’t have cannabis experience, a consulting team like Higher Yields can add the cannabis know-how to your business experience.   Anticipating Challenges  As you prepare your application, keep in mind that we still don’t have the full picture of Alabama weed laws or the state’s final requirements. And what we do know presents some unique challenges you’ll need to navigate:  Excessive residency requirement. The state’s residency requirement will make it difficult for multistate operators and smaller businesses with only a few years of residency to apply — even those with experience and understanding of high-quality products.  Potential for unethical token relationships. Both the residency and minority ownership requirements open the door for larger, out-of-state operators to create agreements with minority locals just to get their foot in the door. Limitations on cultivation. In addition to the above requirements, Alabama weed laws will not allow any raw plant material. Limited real estate availability. Due to the county disbursement requirement for dispensaries and the state’s setback requirements, real estate options may be quite limited.    With all of these limitations and requirements, it will be especially important to take advantage of every resource available to give yourself the best shot at winning a license and building your Alabama cannabusiness.   Get Expert Help Navigating Alabama Weed Laws  Although Alabama weed laws are still in flux, the application period for cannabusiness licenses is quickly approaching. Start preparing now to ensure you meet all the requirements for your prospective license type and business facility.   Get a Green Zone Assessment to ensure your property is both compliant with current Alabama weed laws and conducive to future growth.

This residency requirement is unusually high; most states require closer to five or seven years of residency. While this choice appears to be an effort to keep things local, it also has the potential to severely limit qualified applicants who don’t meet the residency requirement from entering the Alabama market. 

 

Your Best Asset: Business Experience

While Alabama weed laws and requirements for cultivation may be limiting, keep in mind that most of the licenses granted will be for cultivation. That means your chances of winning a cultivation license will be higher than your chances of winning a different license type. 

However, the most profit will likely be in retail, since so few retail licenses are being awarded for the first year. Once the state assesses patient counts, more dispensary licenses may be added in the future.

Regardless of the license type you aim for, expertise in business will give you a huge advantage. Even if it’s not specific to cannabis, any kind of business experience — be it running a retail shop, a farm, or anything else — will help bolster the business plan portion of your application.

Your best bet to get into the Alabama market is to stay small and local, meet the residency requirements, and highlight your strong business and cannabis background. If you don’t have cannabis experience, a consulting team like Higher Yields can add the cannabis know-how to your business experience. 

 

Anticipating Challenges

As you prepare your application, keep in mind that we still don’t have the full picture of Alabama weed laws or the state’s final requirements. And what we do know presents some unique challenges you’ll need to navigate:

  • Excessive residency requirement. The state’s residency requirement will make it difficult for multistate operators and smaller businesses with only a few years of residency to apply — even those with experience and understanding of high-quality products. 
  • Potential for unethical token relationships. Both the residency and minority ownership requirements open the door for larger, out-of-state operators to create agreements with minority locals just to get their foot in the door.
  • Limitations on cultivation. In addition to the above requirements, Alabama weed laws will not allow any raw plant material.
  • Limited real estate availability. Due to the county disbursement requirement for dispensaries and the state’s setback requirements, real estate options may be quite limited.  

With all of these limitations and requirements, it will be especially important to take advantage of every resource available to give yourself the best shot at winning a license and building your Alabama cannabusiness. 

 

Get Expert Help Navigating Alabama Weed Laws

Although Alabama weed laws are still in flux, the application period for cannabusiness licenses is quickly approaching. Start preparing now to ensure you meet all the requirements for your prospective license type and business facility. 

Get a Green Zone Assessment to ensure your property is both compliant with current Alabama weed laws and conducive to future growth.

 

What to Expect From the Louisiana Marijuana Program & Other Southern States

Higher Yields Consulting What to Expect From the Louisiana Marijuana Program & Other Southern States

The Bible Belt certainly isn’t known for being particularly friendly to cannabis, but opportunities are slowly starting to open up in certain areas. The Louisiana marijuana program is one example of a small but promising start, and a few other Southern states show limited potential, as well. 

While as a whole, the Southern states are often slow to accept cannabis as anything other than a drug, there have been significant shifts. Florida, for instance, was the first to legalize medical marijuana and open up a cannabis program (albeit an extremely limited one). 

Higher Yields Consulting What to Expect From the Louisiana Marijuana Program & Other Southern States

Here’s what you need to know about the state of cannabis in this hold-out region of the U.S., from the bare-minimum Texas CBD allowances to the small-but-promising Louisiana marijuana program. 

Southern States With Little to No Movement

The Florida, Texas, and Mississippi marijuana programs may have had decent starts but have since stalled for the foreseeable future — or at least the next few years. We’re keeping an eye on them for future developments, but we don’t expect much movement at this time.

Florida 

True to the common conception of Florida as a separate entity from the rest of the South, Florida’s marijuana program is very different from what we see in other states.

Initially, Florida’s program issued only five licenses, though it later opened up a few more. However, Florida’s program is not an open application route, so no one is currently able to compete for licenses in the state. 

Although Florida’s legalization measures helped trigger a domino effect to get the other Southern states moving, it’s likely to be a few years before Florida’s own program picks up any further momentum.

Texas 

Texas does have a medical marijuana program, but the state allows only 1% THC in their medical marijuana products. At such a low THC rate, it’s essentially a CBD program. And it’s very minimal — just over 3,000 patients are registered, and there isn’t much movement happening in the state, overall. 

If you want to get into the Texas market, be prepared to work exclusively with CBD and CBD-adjacent products for a while. Cultivation is another option to consider, but the market is saturated. While we don’t recommend starting out in Texas at this time, if you’re so inclined, manufacturing will be your best bet. 

Mississippi 

In early 2021, Mississippi looked like it would follow in Oklahoma’s footsteps in terms of plentiful and accessible license availability. Unfortunately, however, government and legislative issues have put the program on hold for the next two or three years. 

If you want to build a cannabusiness in one of the Southern states, we’d suggest exploring opportunities in the Arkansas, Alabama, and Louisiana marijuana markets instead.

Southern States With Some Opportunities

The Arkansas, Alabama, and Louisiana marijuana programs offer a few more opportunities, especially if you establish the right connections prior to entering the market there. 

Arkansas 

Arkansas is currently legalized for medical cannabis, and the application window is open. However, the state also has a high barrier of entry. You’ll need expensive surety bonds and to meet strict zoning limits. Once a zone fills its allotted number of dispensaries, no more dispensaries will be allowed to open in that zone. 

Higher Yields Consulting What to Expect From the Louisiana Marijuana Program & Other Southern States

While you can certainly apply for a license in the Arkansas medical marijuana program, know that it will be an expensive endeavor and that you may have better luck with the Alabama or Louisiana marijuana markets. 

Alabama 

Alabama’s Compassion Act will likely resemble Florida’s cannabis program. Although there probably won’t be a low THC cap, it does appear as though operators will only be allowed to sell manufactured products — no raw plant, smoking or vaporization products, or baked goods.

The Act also has a large residency requirement — 51% of all license holders must be Alabama residents — as well as huge capital requirements, making the barrier of entry extremely high. 

If you’re looking at entering the Alabama marijuana market, you’ll want to get started as soon as possible finding real estate and establishing yourself as a local team. MSOs are already moving in, but they’re required to work with local teams, and it will take time to build up those connections. 

Louisiana 

The Louisiana marijuana program kicked off in 2018 with a total of nine licenses. But despite being a small program, it was set up well and there are many lobbying efforts to expand cannabis retail.

However, growth within the Louisiana marijuana program is still slow. Louisiana legislation only authorized the Louisiana State University and Southern University agriculture centers to grow medical cannabis, so you’ll have to contact the Board of Pharmacy regarding licensing to dispense any medical cannabis.

As is true of any Southern State, entering the Louisiana marijuana market is all about who you know and how you advocate locally for cannabis. You can’t just show up and submit an application; you have to play an active role in educating the community and helping write ordinances that simply don’t exist yet.

That’s where HYC comes in. We can help you make important local connections and develop the necessary knowledge base to educate your community. There will always be local political challenges, but with the right knowledge and connections — and an early start — you have the opportunity to impact change. 

Get Your Foot in the Door With Louisiana Marijuana

The Louisiana marijuana program offers a fairly typical example of what to expect in Southern states — slow movement, small programs, and the importance of making the right connections. But if you can get your foot in the door early and weather both political and local delays, opportunity is there. 

Working with an experienced cannabis consultant can give you the credibility, connections, and partners you need to be successful. Don’t miss your chance to get into the Louisiana marijuana market early! Get in touch today to schedule a consultation.

Ohio Marijuana: Your Best Option for Cannabis in the Midwest

Higher Yields Consulting Ohio Marijuana: Your Best Option for Cannabis in the Midwest

Marijuana programs in the Midwest aren’t much of an improvement on those in the South. While Illinois and Michigan have both legalized adult use — and the Ohio marijuana program seems poised to follow suit — other Midwestern states remain restrictive. 

Higher Yields Consulting Ohio Marijuana: Your Best Option for Cannabis in the Midwest

The Midwest is split pretty evenly between the restrictive states and the front-runners, but even many of the latter have fallen into disorder recently. With much of the region currently inaccessible, the greatest potential for cannabis success in the Midwest lies in Ohio. 

Here’s what you need to know about the state of cannabis regulations in the Midwest states and why the Ohio marijuana program might be your best option in this region. 

Restrictive States

The Wisconsin, Iowa, and Minnesota marijuana programs are not very promising at this time. However, they are worth keeping in mind should things change in the future. 

Wisconsin & Iowa 

Both Wisconsin’s and Iowa’s medical marijuana programs are extremely restrictive. For instance, Iowa’s program isn’t even fully medical; rather, they call it a medical cannabidiol program, and it only allows a patient 4.5 grams of THC every 90 days. 

Unfortunately, these programs, especially in Iowa, are also very racially disproportionate. According to the American Civil Liberties Union, Black individuals are 3.73 times more likely to be arrested for cannabis-related crimes than white individuals. 

Minnesota 

Minnesota has been a medical-only state since its first medical marijuana sale in 2015. Since then, there had been little to no movement on adult use until May of this year, when the Minnesota House of Representatives voted to legalize cannabis

However, the regular session was adjourned only two days later, stalling the senate bill in a committee. It’s unlikely that legislation will pick the bill back up until at least the second half of 2022, but Minnesota is taking steps to improve its restrictive medical marijuana program by increasing its nine qualifying conditions to 17

If you want to get into Minnesota’s market, the best thing you can do is to join local advocacy groups in their efforts to lobby for more reform. In the meantime, it may be well worth considering the less-restrictive Illinois, Michigan, and Ohio marijuana markets.

Front-Runner States 

The Illinois, Michigan, and Ohio marijuana programs were front-runners for legalization in the Midwest. While some problems and delays have since cropped up, opportunity remains — especially in Ohio. 

Illinois

In Illinois, adult use sales began in January of 2020, shortly after legalizing adult use. But what seemed a promising start turned into an absolute nightmare with delays, lawsuits, and scandals. 

Higher Yields Consulting Ohio Marijuana: Your Best Option for Cannabis in the Midwest

We’d advise staying out of Illinois until the state can get itself sorted out and instead focusing on the Michigan and Ohio marijuana markets.

Michigan 

Michigan is legalized for both medical and adult use. While overall, the state itself is not terribly competitive, that can depend on the region. Detroit, for example, took years to get their adult-use program off the ground but is now a highly competitive market. 

Michigan is a generally accessible state but leaves much of the regulating and restricting up to the municipalities. While the state has set certain limits on the total allotted number of cultivations or dispensaries, local levels set their own limits within their municipalities. 

If you’re looking to get started in Michigan, first ensure you meet the municipality requirements, as those will be harder to meet than state requirements. It’s best to start with a list of areas you don’t want to operate in, and then see which of the remaining counties have municipality requirements you can viably meet. 

Your facility must be ready for inspection within 60 days of submitting your second application, so you’ll need to be strategic in figuring out real estate and municipality limits ahead of time. Also, be open to considering areas in Michigan that might not seem ideal, because they may have more licenses available to you. 

Ohio

The Ohio marijuana program is currently medical only, but they did recently open up another round for dispensaries and will be awarding 130 licenses based on a lottery system. Licenses will be extremely difficult to win, and if you don’t already have everything prepared, you won’t likely have enough time to get into this round. 

However, it’s possible Ohio may legalize adult use in 2022. Legislators have been pushing for it, and they’ve been cleared to collect signatures and potentially get a bill passed. 

Two major fears keeping people from joining Ohio’s medical marijuana program may help push adult-use legalization through because these concerns would then become irrelevant:

  • Taking medical marijuana — even for legitimate reasons — could cause some people to forfeit access to their other medications.
  • In Ohio, it’s illegal to own both a gun and a medical marijuana card

If you’re interested in getting into the Ohio marijuana market, be sure to follow updates on the signature collection and get involved by helping collect signatures yourself.

Ohio Marijuana Programs: The Midwest’s Point of Access

Despite some promising starts, the Midwest as a whole is pretty inaccessible, with potential Ohio marijuana programs as the only glimmer of hope. But if the other states can get their acts together, the Midwest could be a huge market for cannabusinesses. 

If you’re interested in breaking into the Ohio marijuana market or other Midwest states, contact HYC for a feasibility study to explore your best options.

Marijuana Decriminalization & Legalization Trends for 2022

Higher Yields Consulting Marijuana Decriminalization & Legalization Trends for 2022

The COVID-19 pandemic has thrown the cannabis industry — and the world as a whole — into much uncertainty. With federal marijuana decriminalization put on hold, you may have been tempted to wait and let some of the uncertainty settle before trying to expand or start your cannabusiness.

Now that things seem to be moving forward again, there are a number of state and national developments to keep your eye on in the coming year or two. You’ll want to be prepared to take action as quickly as possible to set yourself up for your best chance at success.

Higher Yields Consulting Marijuana Decriminalization & Legalization Trends for 2022
Cannabis bud and leaf with handcuffs depicting legal, law and decriminalization concepts

Here are some upcoming state and national marijuana decriminalization and legalization trends to help you decide what actions to take on your cannabusiness in 2022. 

Delaware

Currently, Delaware is legalized for medical-use only. However, their adult-use bill, HB150, is set to be voted on in 2022. According to Marijuana Policy Project, the majority of Delawareans support both marijuana decriminalization and legalization, so it seems very likely this bill will pass. 

Bill HB150 was actually set to pass in 2021, but Delaware legislators appear to still be working on its amendment. Instead, it has been pushed to the next session in January of 2022. 

If HB150 does pass, it will move pretty quickly. Just 19 months after the effective date of passage, the state will already be issuing licenses to 30 retailers (15 for social equity), 60 cultivators (20 for social equity), and 30 product manufacturers (10 for social equity and 10 for microbusinesses). 

The process is going to be highly competitive, applications will be scored, and the application window will likely be short, so start your application as soon as possible.

North Carolina

Revisions to North Carolina’s medical marijuana bill, SB711, were approved in August of this year by the Senate Judiciary Committee. However, the bill still needs another full vote, and then it will need to clear the health care and operations committees to reach the Senate floor for a final vote. 

Regulations will include a large physician’s role, and applicants will have to have been state residents for at least two years. For the regulatory authority, North Carolina will likely follow Alabama’s example and create a nine-member cannabis production commission. 

Most people in North Carolina seem to support cannabis for medical only, not marijuana decriminalization and legalization for adult-use. Although the bill is slow moving, for a southern state and a new medical program, SB711 isn’t as restrictive as some areas are in terms of qualifying conditions. 

Currently, no southern states have any type of adult-use program, and none are likely to in the next few years, except potentially Florida

Wyoming

If Wyoming gets enough signatures by its February 14 deadline, residents will have the chance to vote on a medical cannabis bill to support marijuana decriminalization in 2022. But it will still likely be a slow rollout for the medical program, and there isn’t a lot of information yet on what the program would look like. 

Higher Yields Consulting Marijuana Decriminalization & Legalization Trends for 2022

Keep your eye on Wyoming throughout the beginning of next year for further developments. 

Other States to Watch for Future Developments

If one year seems like too short a timeline, and you’d rather have a little longer to get your feet under you, here are some states to keep an eye on for marijuana decriminalization and legalization developments in late 2022 or 2023. 

Virginia

It’s a good idea to start preparing in 2022 for Virginia’s adult-use program, even though applications aren’t going to be accepted until sometime in 2023. When those applications do open, Virginia will allow as many as 400 retailer licenses for under 50 cultivations and 16 manufacturers. 

Marijuana decriminalization and legalization in Virginia will likely lead to increased competition and a shorter application window, so start getting everything in order now. That way, when the state does start accepting applications, you’ll be prepared. 

Oregon

Oregon’s moratorium on cultivation licenses is set to end on January 2, 2022, but that doesn’t necessarily mean they will open an application window. 

The Oregon Liquor Control Commission will have the final say on whether they want to add more cultivations and accept cultivation licenses, as well as how many they will accept and what that would look like. 

If the state does open applications, it will likely be similar to what Denver has done with their social equity applicants in limiting it to people who have lived in the state for 15 years. 

Alabama

Alabama’s application window is set to open September 1, 2022. The market is going to be very competitive and connection-based, so now is the time to start building relationships with the right people. 

Connect with the community and local representatives by attending city council meetings to gauge the level of interest and acceptance of marijuana decriminalization and legalization. Also, talk to other local business owners and express your interest in opening up a cannabusiness there.

As you form these connections, look into whether you qualify for social equity and who can be on your team for social equity. Much of preparing to open in Alabama will rely on convincing the people of your municipality that your business will be an asset to the community, so these connections are crucial. 

Federal Marijuana Decriminalization

While the economic side of federal marijuana decriminalization would be beneficial, there are other priorities at the moment. Democrats seem to be playing the next four years very safe, and President Biden likely doesn’t want to be the president to legalize — or even decriminalize — cannabis. 

Too much is uncertain right now, especially with COVID-19, so marijuana decriminalization at the federal level has been pushed to the backburner. Still, many legislators continue to propose bills and lobby to get them passed. And although lobbying took a dip due to the pandemic, it’s beginning to pick back up. 

If you’re looking into opening up a cannabusiness and are waiting on federal marijuana decriminalization before you do so — don’t. It’s better to start doing your research, find a state, and get in now, because there’s no way of knowing how long you’d be waiting for decriminalization to happen. 

In the cannabis industry, it’s all about proper planning and solid connections. Get in touch with HYC to make sure you’re giving yourself the best chance of success in this highly competitive market. 

Cannabis Regulations in Latin America: New Developments

Higher Yields Consulting Cannabis Regulations in Latin America: New Developments

Latin America is seeing a lot of movement in cannabis regulations and legislation. Brazil — which is sort of the Oklahoma of the international cannabis scene — is a fairly progressive area with the largest market and over 1,100 new import authorizations. But the challenge is getting the product out and into other areas.

Higher Yields Consulting Cannabis Regulations in Latin America: New Developments

Despite an estimated $9.75 billion market value for cannabis, there’s no clear leadership. New cannabis lounges and on-site consumption facilities are emerging, but no one particular group appears to be spearheading cannabis regulations and movement in the region. It’s an ever-changing environment with a lot of potential. 

 

If you’re considering getting into Latin America’s cannabis market, there are four hot places to watch: Colombia, Buenos Aires, Uruguay, and Mexico. Read on to learn about cannabis regulations in these four parts of Latin American, and how you can best prepare to enter the market.

Colombia

Colombia’s cannabis regulations are laser-focused on cultivation licenses. There are no provisions for extractions or other segments; rather, they focus on this one area because of their strong agricultural background.

 

Both personal cultivation and consumption have been decriminalized in Colombia. But within the commercial cannabis industry, it’s permitted strictly for medicinal use and strictly from an agricultural standpoint. 

 

There are, however, whispers of change. With Colombia and Panama in such close proximity, there’s a lot of tension and positioning to watch. 

Buenos Aires

Argentina as a whole has great IT resources but poor economic solutions. There’s an interesting element of technology and the cannabis industry meeting, as certain groups are developing apps to connect the community of personal growers. 

 

Right now, cannabis regulations surrounding growing for medical use in Buenos Aires are limited to individuals and certain networks. But with all this technological innovation and creativity, we expect the growing model to increase and expand.

 

Anytime a market or an industry grabs a foothold in a particular area and applies technology to it, you can anticipate those sectors growing at a pretty rapid rate. Keep an eye on Buenos Aires for new developments of technology and creativity in dealing with cannabis regulations. 

Uruguay

Uruguay got their foothold in the cannabis industry through hemp, which they were able to sell all over the world. Then, in 2012, Uruguay became the first country in the world to legalize commercially produced adult-use cannabis. Even tourists are allowed to purchase marijuana.

Higher Yields Consulting Cannabis Regulations in Latin America: New Developments

Because of this, Uruguay seems to be decreasing emphasis on hemp and increasing their focus on cannabis. These two industries have great potential to work together and improve the country’s economy overall, but that doesn’t appear to be their intention right now. 

Mexico

Currently, Mexico is a difficult place to get started in the cannabis industry. We at HYC had the opportunity to help write the cannabis regulations in Mexico a few years ago, and those regulations were recently put in place. However, it’s nearly impossible for anyone to enter the program. 

According to current cannabis regulations in Mexico, it’s legal to sell cannabis — but not to obtain it. You can’t grow, acquire, or import it. The country is basically hamstringing themselves for cannabis sales.

We are seeing an increase of interest in the Mexican market, however, and receiving a lot of inquiries. Be sure to keep an eye on future developments for the cannabis industry in Mexico to finally get off the ground. 

The Future of Cannabis Regulations in Latin America

There’s a lot of potential for cannabusinesses in Latin America. Low operational costs and prime growing conditions make for a lucrative opportunity. However, there are also plenty of barriers, so it’s important to find the right country to operate in and the right partners to work with. 

The cannabis industry is seeing plenty of movement in Latin America. Even though it’s a slow movement, it’s still important to get started sooner rather than later so you can prepare for the specific level of competition, politics, and cannabis regulations of the environment you’ll be entering.

Start making connections as early as you can so you’ll be fully aware of government requirements and limitations in the country you choose. HYC can help. Schedule a consultation for help entering the Latin American cannabis market and understanding its cannabis regulations. 

Hot States With Legal Cannabis for Adult Use

Higher Yields Consulting Hot States With Legal Cannabis for Adult Use

States with legal cannabis for adult use are at the highest stage of legalization before the federal level. Upon full legalization, states can be categorized into three layers of adult use: up-and-coming, in-progress, and established.

Adult-use — our preferred term for recreational — cannabis speaks to an individual’s choice to make for themself, as an adult. And while adult-use cannabis is currently legal in 17 states and the District of Columbia, President Biden’s 2022 budget continues to uphold several bans on adult-use sales.

Higher Yields Consulting Hot States With Legal Cannabis for Adult Use

Read on to find out which states with legal cannabis for adult use are hot to enter in each of the three layers of full legalization.

Up & Coming States: New Jersey & New York

Up-and-coming states with legal cannabis, like New Jersey and New York, are fully legalized but have not yet begun adult-use sales. New Jersey has a slight lead over New York, as they’ve spent a lot of time on their social equity program and have already appointed their commission. 

Adult use in New Jersey was officially legalized on February 22, 2021, when Governor Phil Murphy signed three adult-use cannabis reform bills. As a result, New Jersey will have six license types

  1. Grower
  2. Processor
  3. Wholesaler
  4. Distributor
  5. Retailer
  6. Delivery service

So far, grower licenses are the only ones that have been capped in the entire state, at 37. It’s unclear whether the state will leave capping the other licenses up to the discretion of each municipality or the state will do so at a later date.

New York City, on the other hand, can thank its population of nearly 8.4 million (compared, for example, to the state of Colorado’s 5.7 million) for making it a hot state! Legalizing adult-use cannabis is a game changer for the East Coast since the region’s other adult-use states (Maine and Massachusetts) are much smaller.

In-Progress States: Massachusetts & California

An in-progress state has adult-use sales, but the state itself is still finding its footing in the industry. Massachusetts, for example, is hot because it’s still viable — the market is not oversaturated, has no cap on licenses, and isn’t volatile — due to the work of regulatory agencies.

In 2018, the state rolled out METRC inventory tracking in a very hands-on approach. Typically, states with legal cannabis leave things like METRC compliance and inventory tracking to the licensees to figure out on their own, but Massachusetts helped them every step of the way, even offering additional training and resources.

Higher Yields Consulting Hot States With Legal Cannabis for Adult Use

California, on the other hand, left its licensees floundering. Local jurisdictions have the power to make their own rules, creating disparities in operations across the state. The Emerald Triangle, for example, recently decided to ban cannabis altogether, forcing both medical and adult-use licensees to shut down after years of operating.

Despite its issues and thriving black market, California is an expensive market to enter (it’ll cost you roughly $6 million to open a dispensary). That said, it’s a great opportunity for someone who already has connections in their local municipality to make a lot of money, especially on the distribution and retail sides.

If you’re having trouble entering the California cannabis market, though, you might instead consider pivoting to Massachusetts, which has no residency requirement.

Established States: Colorado

Established states with legal cannabis have well-established regulations and operations. Take Colorado, for example. While it’s a fair and common assumption that Colorado is too saturated to enter, there are still pockets of opportunity available — if you know what you’re doing.

Denver is finally opening up a social equity program, with 72 licenses until 2024, which is a big deal as its licenses had been paused for a while. If you qualify for social equity in Denver, and have the experience and knowledge to set yourself apart from other licensees, now might be your chance to get into Colorado’s hottest market.

Experienced multi-state operators who have the capital and are looking to expand are great candidates, too, as long as they maintain the integrity of local mom-and-pop shops.

Other States With Legal Cannabis to Watch

The following states aren’t quite hot states with legal cannabis, but they are in the process of becoming fully legal and have the potential to become hotspots for cannabis businesses in the future.

Illinois

Illinois is currently delayed in their legalization process. Their few operators were originally medical-only, which meant they got the first crack at early application approval for adult-use. 

Unfortunately, this process has turned into a monopoly where those few operators are making a ton of money, which in turn has skyrocketed prices, caused product shortages, and lowered quality. On top of that, litigation issues on later application rounds for adult use have brought the state’s legalization process to a standstill.

However, there is great promise for the future. With record-breaking sales in the first year, Illinois will be a state to watch once all of the litigation and licensing issues are resolved.

New Mexico

As the most recent state to legalize adult use, New Mexico is on its way to becoming a hot state for adult-use cannabis. Although we don’t know exactly what the future has in store here, New Mexico is certainly worth keeping an eye on for future developments.

Knowing what states with legal cannabis are most suitable to enter — and when — can be crucial for the success of your medical marijuana dispensary. Contact Higher Yields Cannabis Consulting to determine which state is the best fit for you and how you can get in with the strongest application.

Hot States – Is Your State Hot or Not?: Cannabis Legalization Is Moving Forward in These Ballot States

Higher Yields Consulting Hot States: Cannabis Legalization Is Moving Forward in These Ballot States

Unlike lagging states, ballot states have either just passed cannabis legalization or have the ability to do so. These budding markets are a bit like pre-teens: They’re inexperienced and have little idea what they’re doing as they awkwardly navigate their space (in this case, the cannabis industry).

Higher Yields Consulting Hot States: Cannabis Legalization Is Moving Forward in These Ballot States

Many ballot states want to portray patience as they take time to determine the best way to address issues like social equity and regulatory structures. However, the true motivation behind such delays is often political in nature, despite the benefits of a legal marijuana market.

Here’s everything you need to know about states in which cannabis markets are coming to fruition. 

Cannabis Legalization Is on the Ballot

For voters across the country, marijuana legalization is on the ballot. Though being “on the ballot” doesn’t mean the same thing in each state. In particular, this refers to either a ballot initiative or a referendum. Although both ballot initiatives and referendums seek the opinion of the entire electorate, they aren’t the same. 

A ballot initiative is a process by which citizens can propose a statute or constitutional amendment to be voted on. Conversely, a referendum occurs when the legislature passes a law and then chooses to refer it to the voters to decide whether or not to uphold said piece of legislation.

In New Mexico, lawmakers continue to debate specific points of the state’s cannabis legalization bill before it heads to a final vote. Unfortunately, New Mexico cannot permit recreational use through a ballot initiative, so it must instead be done through the legislature.

Similarly, lawmakers in Kentucky and Alabama have introduced 420-friendly legislation. These bills seek to create new medical cannabis markets in previously THC-free states.

States With Recently Passed Legislation

Even in the face of a pandemic, some states have found ways to legalize cannabis. Many of these states have even recognized how a healthy market — and the associated taxes and fees — can help rehabilitate an economy crippled by COVID-19.

As a historically conservative Southern state, Georgia is a prime example. With 69% of Georgians in support of cannabis legalization, the state has begun reviewing license candidates for its medical marijuana program. Meanwhile, cities like Atlanta and Savannah have opted to decriminalize possession of certain amounts of cannabis.

The passage and implementation of a medical cannabis program in Georgia came as the result of heavy influence from industry leaders. Lobbyists and cannabis operators worked diligently to ensure the success of this bill, and it worked. Such pressure may be effective in other states as well.

Unfortunately, other states have put their rollouts on pause due to the pandemic. Although these programs have been guaranteed, it’ll take some time to get them up and running.

The Bright Future of Cannabis Legalization

The future of cannabis in the United States looks bright — but only if the push for legalization continues. In states looking to pass cannabis-friendly legislation, would-be operators shouldn’t sit idly by. 

Instead, connect with lobbyists and advocacy groups — such as NORML — to support proposed legislation. Doing so will give cannabis legalization a fighting chance when it comes to a vote.

If you’re in a state that’s legalized but hasn’t rolled out a program, make the most out of this time. Work with experts who can predict what your needs will be and help you prepare to meet them. Additionally, familiarize yourself with the statute and any known regulations. You’ll then have ample time to become and stay compliant.

Higher Yields Consulting Hot States: Cannabis Legalization Is Moving Forward in These Ballot States

Cannabis legalization has a promising future in ballot states. Whether laws have recently been passed or are being debated on floors of state senates, many states will soon see new and emerging markets.

Are you eagerly awaiting the rollout of your state’s cannabis program? Contact our team of experts so we can help you through the pre-application process and give your business the best chance of winning a license!

Not in a ballot state? Check out the other articles in our Hot States series to see where your state falls.

Hot States – Is Your State Hot or Not?: Marijuana Legalization Is Falling Behind in These Lagging States

Higher Yields Consulting Hot States: Marijuana Legalization Is Falling Behind in These Lagging States

On the long road to marijuana legalization, there are often bumps. For lagging states, these bumps may be substantial. As a result, the passage and implementation of 420-friendly legislation can be impeded.Higher Yields Consulting Hot States: Marijuana Legalization Is Falling Behind in These Lagging States

In a few states, it seems that all hope is lost. Lawmakers introduce bill after bill, with each seemingly destined for failure. Other states, however, show great promise. These hopeful states just need a gentle push to cross the finish line.

Here’s what we expect to see from these lagging states in the future.

Hope Remains for Marijuana Legalization 

There are states in which cannabis is still fully illegal. However, some of these states show promise due to their hemp and CBD markets. 

Wyoming, for example, doesn’t have a medical or recreational market, but the state does allow hemp products. Although Wyoming has yet to pass formal marijuana legalization legislation, the openness afforded to hemp and CBD products is a glimmer of hope.

Similarly, the state of Kansas has no laws in place to facilitate the use of medical cannabis. Fortunately, hope still exists. Lawmakers in the Sunflower State have begun pushing to introduce medical cannabis legislation. The fact that the issue has drawn bipartisan support suggests a 420-friendly 2021.

What Will It Take to Get These States Moving?

Kansas and Wyoming are just two examples of states where marijuana legalization is probable. But what will it take to turn these lagging states into ballot states?

In order to legalize cannabis, it first needs to win in the court of public opinion. Here at Higher Yields Cannabis Consulting, we understand this, and we’re taking action to increase public support and awareness.

In many states where cannabis remains outlawed, government officials and the public alike share misconceptions about marijuana legalization. Our efforts focus on correcting those false beliefs. By educating and collaborating with legislators, it’s possible to build communities that will welcome a medical — or even recreational — market.

States Without Hope

Unfortunately, some states show less promise and have simply lost all hope. Idaho, for instance, has recently struck a blow against marijuana legalization by advancing a proposed constitutional amendment that would prohibit legalization. 

Although Idaho is totally surrounded by medical and recreational states, lawmakers are determined to bar cannabis legalization. If the amendment passes the Idaho House and Senate, it would be up to the voters in November 2022 to make the final decision.

Not all no-hope states have failed to legalize any form of cannabis. In fact, Texas is technically a medical marijuana state. We still classify it as a no-hope state because its low-THC medical cannabis program — the Texas Compassionate Use Act — is really just a glorified CBD program. 

The Lone Star State requires that CBD products contain no more than 0.3% THC. With a medical cannabis card, patients are allowed to use products that contain — get ready for this — a whopping 0.5% THC.

According to the experts, these lagging states have no hope… for now. We’ll keep track of what’s going on in these states, and if something changes, you’ll be the first to know.

Marijuana Legalization Going Forward

Although hope may be lost in some of these lagging states, the same can’t be said for would-be operators that live there. Fortunately, there are plenty of out-of-state options to be explored.

When it comes to operating in another state, one of the biggest obstacles is the residency requirement. Some states don’t have such a requirement, so you can easily set up shop there. For states that do have a residency requirement, you can find a partner living in that state and go into business together.

Higher Yields Consulting Hot States: Marijuana Legalization Is Falling Behind in These Lagging States

In spite of these lagging states, medical or recreational programs have still become popular across the majority of the country. To see where your state falls, stay tuned for the rest of our Hot States series.

Does your cannabusiness need help to develop a winning strategy for future success? Contact us today and work with our national and international cannabis experts!

Bermuda Prepares for Legalized Cannabis

Bermuda Prepares for Legalized Cannabis

Crystal blue waters and pink sands may be the key to Bermuda’s charm, but thanks to a new proposal from the island’s government, Bermuda looks to be moving towards legalizing cannabis. On June 3, 2020, Attorney General and Minister of Legal Affairs Kathy Lynn Simmons announced the Bermudian government’s intention to fully legalize and regulate cannabis for adult use by the end of the year.

Higher Yields Consulting: From Pink Sands to a Green Rush: Bermuda Prepares for Legalized Cannabis

Simmons has released a draft of the Cannabis (Licensing and Regulation) Act 2020 for public comment. For anyone paying attention, this comes as no surprise. Change has come incrementally to Bermuda, first with a decriminalization bill in 2017, and then with a move to legalize hemp in 2019.

With full adult-use legalization on the horizon, a new world of opportunity is emerging in Bermuda. Here’s what you need to know.

Bermuda & Cannabis: How We Got Here

Though Bermuda’s government has taken swift and decisive steps to legalize cannabis in 2020, regulation is hardly a new topic of discussion. In 2018, the possibility of expanding patient access to cannabis-based treatment was being explored. However, when the proposal was brought forward for public consultation, it was met with unexpected criticism — and not in the way one would assume. The overwhelming consensus was that the government’s aspirations, impressively proactive though they were, didn’t go far enough.

Full legalization was demanded. Bermudians wanted a simplified framework that would allow all citizens to participate, no matter their economic standing. They also wanted help to bring a semblance of social equity, which was especially important because of the stark economic disparities that have long been a part of island life.

Bermuda’s population is basically made up of rich and poor with no prevalent middle class to speak of. As an island nation, Bermuda relies on imports for many everyday staples, which pushes up the cost of living and further widens the divide between the haves and the have-nots.

The COVID-19 pandemic has further exacerbated these circumstances. With international travel ground nearly to a halt, Bermuda’s tourism-based economy has taken a catastrophic hit, leaving an overwhelming number of Bermudians with no way to make ends meet.

It’s no coincidence that the Bermudian government has now decided to accelerate the cannabis legalization process. In fact, the pandemic’s economic impact has been directly cited in documents for public consultation on the topic. As of July 3, 2020, the window for submission of public comments officially closed, setting the stage for the bill’s final adjustments ahead of becoming law.

Setting Up the System

Public documents released thus far have cited the regulatory frameworks of Canada and neighboring Caribbean nations as Bermuda’s inspiration. However, U.S. industry operatives will also find similarities to the framework of Colorado.

Higher Yields Consulting: From Pink Sands to a Green Rush: Bermuda Prepares for Legalized Cannabis

Regulations will be overseen by a five-member board — the Cannabis Advisory Authority — selected from the “disciplines of health, scientific research, business, planning, and agriculture.” The Authority will be responsible for advising on policy matters, the distribution of educational materials, the execution of training programs, and the receipt and submission of licensing applications. The Authority will also give recommendations on approvals and refusals. Let’s take a quick look at the broad strokes of the proposal:

  • Adults age 21 years and older will be permitted to carry up to seven grams on their person.
  • Personal cultivation will be allowed but will require an annual license of $750.
  • Individuals with prior cannabis convictions will NOT be automatically barred from participating in the new industry.
  • Retail cannabis outlets will be required to submit to an inspection by the Commissioner of Police a minimum of once every six months.
  • Retail cannabis outlets will be permitted to allow consumption on their premises with the proper licensing.
  • Licensing will be required for every level of the vertical, including cultivation, importing, exporting, manufacturing, retail, transportation, and research.

The Bermudian government is implementing rigorous protocols to ensure that the system can’t be scammed. Still, excessive regulations are being adamantly avoided so as not to unduly burden aspiring participants.

Pushback

Despite the overwhelming popularity of legalization among Bermudians, not everyone is happy with all of the details of the proposal. According to an article in the Royal Gazette, Social Justice Bermuda — an activist organization — has taken issue with the $750 licensing fee for home cultivation. The group argues it will disproportionately exclude Black citizens from taking part in the legal growing scheme. Moreover, Social Justice Bermuda argues that such an exclusion would only further encourage illegal activity.

While there has been no direct response to this objection as of yet, the statements that have been released do bode considerably well for Social Justice Bermuda’s agenda. In her update on the public consultation,  Attorney General Simmons stated emphatically that all comments submitted by the public were being considered. The update also noted that license fees were being re-evaluated in hopes of finding a balance between the costs of all available licenses and “to achieve the best participation for under-represented or marginalized groups.”

The Island Way

Throughout all of this—the language of the bill, the process by which they created it, and the consultations by which they refined it, one thing is abundantly clear: This piece of legislation is for the people.

bermuda cannabis consulting

There’s no buying or selling of licenses allowed, meaning it won’t become a game of Monopoly for the rich. Bermudian citizenship is also required for participation. Most importantly, the Bermudian government has made it clear that their goal is to tip the scales in favor of the underclass. They’ve doubled down on that assertion through a rare attentiveness to the populace and a dynamic response to their concerns.

Still, even the most reasonable of regulations can prove to be an arduous regimen for the average entrepreneur to tackle. Having a green thumb or a silver tongue doesn’t typically correlate with a propensity for bureaucratic details. Those are the Devil’s domain, according to the old cliché.

As the Bermudian government takes the final few steps to make the dream of legalization a reality, an entirely new territory of opportunity will be opening. If you’re a Bermudian approaching this new opportunity with a plan and a passion, make sure you’re equipped to stake your claim.

If you’re not sure where to start, we here at Higher Yields Consulting can help. Since 2008, we’ve been putting our diverse skillset to work for the cannabis industry — both in the U.S. and abroad — and have consistently garnered stunning results for our clients.

Reach out to us today to schedule a consultation.

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Higher Yields Cannabis Consulting

Higher Yields Cannabis Consulting

Higher Yields Consulting is a Marijuana Consulting Group comprised of industry experts with decades of combined experience in the legal industry. Whether you are looking to get into the business or already have a license we can help your business succeed. Call (844) HI-YIELD to schedule an initial consultation.

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Cannabis Legalization: Defining the Language of Legalization and Decriminalization

cannabis legalization

Cannabis Legalization: Defining the Language of Legalization and Decriminalization

Why Define Cannabis Legalization Terms?

So what is the difference between cannabis legalization and decriminalization? What is rescheduling, is it similar to de-scheduling cannabis? Read on to learn more about framing cannabis legalization initiatives and what these terms actually mean.

All too often discussions inevitably occur with individuals who are not as familiar with terms and jargon that become an understood language within an industry or occupation. The goal of this report defines terms important to the cannabis legalization movement and the markets its successes have created. This report is designed to serve as a tool to illustrate how these terms impact state and federal laws, consumers, and stakeholders in the Cannabis Industry. Each of the terms defined has an impact on our understanding of the goals and progress of the cannabis legalization movement, those who support it, and those who benefit from it.

While this will not be a comprehensive list of terms it explores the terms that most impact legal access to cannabis. The following will be discussed in this report: Decriminalization, Rescheduling & De-scheduling, Compassionate Care and Medical Cannabis laws, Adult-Use Legalization, and Amended Scheduling.

What is Cannabis Legalization?

So what is cannabis legalization? Cannabis legalization or what is often referred to as adult-use cannabis legalization refers to states that have expanded access to adults 21 years of age and older. Possession within states’ legal limits is not subject to a criminal or civil penalty. Many of these laws were passed via ballot initiatives that promoted regulating cannabis similarly to alcohol, taxing sales at a higher rate than medical cannabis, and utilizing tax revenue to help fund state budgetary items like education. Possession limits for Adult-Use, or recreational cannabis as it is also known, are typically set lower than for medical patients. Products in adult-use markets also tend to have caps on the amount of THC that can be present in infused products such as edibles or concentrated products like vape pens or concentrates.

There are currently 11 states with Adult-Use markets with evolving regulations and requirements to address concerns including social equity and 4 with initiatives on the ballot for legalization in 2020. Now that we’ve covered what cannabis legalization is let’s move onto decriminalization.

Cannabis Decriminalization

The simplest definition of cannabis decriminalization is a law that reduces or removes the criminal penalties related to low-level cannabis possession. It is widely understood to mean that criminal penalties are not applied to possession of cannabis in amounts defined by law to fall within possession for personal use. In reality, the possession limits defined in these laws can vary from less than 10 grams to as much as 3.5 ounces. Additionally, possession that goes beyond these limits may still be subject to criminal prosecution.

Decriminalization laws at the state level are a big step forward for consumers in possession of small amounts of cannabis because criminal prosecution for this type of possession becomes a low priority for the state criminal justice system. This does not affect federal prosecution as there are no federal decriminalization laws with respect to cannabis at this time.

Federal cannabis decriminalization, were it happen anytime soon, would protect consumers but it would not protect state-legal cannabis markets unless specifically stated in the legislation. At this point any federal legislation that decriminalizes cannabis possession, but does not address the state legal markets that currently exist, would keep
the compliant stakeholders that operate within these markets in a legal grey area that is still at risk for criminal prosecution. Without expressed permission to banking institutions among other traditional business services, services to these stakeholders would continue to pose a risk to their continued operations.

Similarly, such a narrow view of decriminalization would not change the enforcement of tax codes like IRS 280E which impacts cannabis companies significantly by excluding many business expenses that are standard operating deductions for most companies, limiting cannabis company tax deductions to cost of goods sold (COGS). At this time there are currently 14 states with decriminalization provisions in their laws.

Rescheduling and De-scheduling Cannabis

Rescheduling and De-scheduling cannabis refer to the Controlled Substances Act of 1970 which contains five schedules under which a substance can be placed depending on its medical use, the potential for abuse, and safety or dependence. Cannabis is currently placed under Schedule I, which is reserved for substances with no known medical value that has a high potential for abuse and dependence. This scheduling limits opportunities for research on a substance, though it is becoming clearer that cannabis should not be placed at the schedule it currently resides under.

Rescheduling Cannabis means it would be placed under a less restrictive Schedule and potentially become eligible for greater research and medical use, though it could be potentially damaging to the Adult-Use markets as well as create new hurdles that current cannabis business operators may not be equipped for.

De-scheduling would remove cannabis from the CSA list entirely. While this action would remove many of the barriers currently in place for more efficient cannabis business operations, for instance, banking and the 280E hurdles could be eliminated, it would also open the markets up to more traditional businesses that are currently impacted by the legalization of cannabis such as alcohol, tobacco, and the pharmaceutical industries to name a few. This option may present a mixed blessing for consumers as it could radically reshape the cannabis industry as we know it.

marijuana legalization

Compassionate Care and Medical Cannabis Laws

Compassionate Care cannabis legalization refers to states that have very limited medical cannabis/medical marijuana programs where the list of qualifying conditions is very small. Qualifying conditions for these programs could be as limited as only allowing patients who are terminally ill to participate. Compassionate Care legalization can also refer to medical cannabis programs that severely limit the amount of THC products can contain. Sometimes states that have these programs are referred to as Low-High states, these programs tend to favor products that contain low percentages of THC (tetrahydrocannabinol) and high percentages of CBD (cannabidiol) for the perceived higher therapeutic value and lower potential for dependence.

Compassionate Care cannabis legalization refers to states that have very limited medical cannabis/medical marijuana programs where the list of qualifying conditions is very small. Qualifying conditions for these programs could be as limited as only allowing patients who are terminally ill to participate. Compassionate Care legalization can also refer to medical cannabis programs that severely limit the amount of THC products can contain. Sometimes states that have these programs are referred to as Low-High states, these programs tend to favor products which contain low percentages of THC (tetrahydrocannabinol) and high percentages of CBD (cannabidiol) for the perceived higher therapeutic value and lower potential for dependence.

Medical Cannabis or Medical Marijuana programs provide greater patient access through a larger list of qualifying conditions. These lists of conditions can be added to after medical cannabis has been legalized. Possession within a state’s legal limits is not subject to criminal or civil penalty.

Products available in these markets are regulated by state agencies and business licenses are limited to those who can meet ownership requirements. Early markets did not account for social equity, though state laws are evolving on this issue.

There are currently 33 states, 3 U.S. Territories, and Washington D.C. where medical cannabis is legal at every level except federal where municipalities choose to allow it. This does not mean that every city or town in a state that has legalized has to allow cannabis business in their jurisdiction. For example, in California where medical cannabis has been state-legal since 1996 and the Adult-Use market has been state-legal and operational since 2018, many cities and counties still do not allow cannabis businesses to operate within their limits. Currently, every state that now has Adult-Use cannabis laws also has medical cannabis laws. There are currently 3 states with ballot initiatives to legalize cannabis for medical use in 2020.

Amended Scheduling – The STATES Act

Full federal legalization of cannabis has been a hotly debated subject that has been gaining momentum since 2016. The closest the legalization movement has gotten so far in safeguarding state-legal markets has been the Cole Memo which lowered federal enforcement of cannabis law priorities in states with regulated medical cannabis programs and the Rohrabacher-Farr/Rohrabacher-Blumenauer Amendment, which prohibits the Justice Department from spending funds to interfere with state-regulated medical cannabis programs.

These measures limited enforcement but still did not address the lack of available banking, which is both an economic and safety issue for cannabis businesses; or IRS 280E, which as stated above, prevents cannabis businesses from deducting many standard costs associated with running a business beyond the allowed cost of goods sold (COGS) resulting in a much higher tax bill, often greater scrutiny of returns, and a high chance for audits. A 2015 white paper issued by the National Cannabis Industry Association on the topic of 280E reported that some cannabis companies were being taxed at an effective tax rate of 70% or more because of the inability to deduct typical business expenses from their gross income. This issue has not changed much if at all in the years since the white paper was published.

The STATES Act, unlike Decriminalization or legalization at either Medical or full Adult-Use, does not establish possession limits or establish regulations regarding cannabis. It doesn’t Reschedule or De- schedule Cannabis on the CSA, it Amends it. When/if the STATES Act passes it will amend the CSA to state that the provisions of the title on cannabis shall not apply to state-regulated cannabis markets or any person acting in compliance with state cannabis regulations. This exception would also apply to persons acting in compliance with tribal cannabis laws. This not only reinforces a state’s right to legislate the issue of cannabis in accordance with the wishes of its population, it also states that the proceeds from state-legal cannabis transactions shall not be deemed unlawful. This appears to mean that IRS 280E would not apply to compliant state-licensed cannabis businesses.

Cannabis USA

Conclusion:  Opportunities for Bi-Partisan Collaboration

Now, more than any time in American history since the establishment of the CSA, we have an opportunity to collaborate with current representatives and aspiring political leaders to build a framework for cannabis legalization. Doing so presents an unprecedented chance to address issues of social inequality that are a byproduct of the War on Drugs as well as identifying potential revenue streams through legalization that have not been available before.

The goals of each of the terms discussed in this report aim to lessen the social, economic, and criminal ramifications tied to cannabis laws currently in effect. Decriminalization, trading criminal penalties for civil, is an important first step for many states. It is far from perfect and can be unequally enforced, but its a start none-the-less.

The debate over CSA Rescheduling or De-scheduling of cannabis calls into question the decision to place it among substances that have been found to be harmful and highly addictive in the first place. This is especially true as America faces an opioid epidemic impacting citizens from a variety of walks of life.

Legalization, whether for Medical or Adult-Use, is about freedom of choice, developing and evolving industries, and providing safer options than the illicit market while providing much-needed revenue to states. Amended Scheduling places trust in the states to enact laws and regulations that make sense for their citizens while reserving federal authority to enforce existing laws against the illicit market, and potentially providing much-needed relief for heavily taxed cannabis businesses.

The goals of each of the terms discussed in this report aim to lessen the social, economic, and criminal ramifications tied to cannabis laws currently in effect.

  • Decriminalization, trading criminal penalties for civil, is an important first step for many states. It is far from perfect, and can be unequally enforced, but its a start none-the-less.
  • The debate over CSA Rescheduling or De-scheduling of cannabis calls into question the decision to place it among substances that have been found to be harmful and highly addictive in the first place. This is especially true as America faces an opioid epidemic impacting citizens from a variety of walks of life.
  • Legalization, whether for Medical or Adult-Use, is about freedom of choice, developing and evolving industries, and providing safer options than the illicit market while providing much-needed revenue to states.
  • Amended Scheduling places trust in the states to enact laws and regulations that make sense for their citizens while reserving federal authority to enforce existing laws against the illicit market, and potentially providing much-needed relief for heavily taxed cannabis businesses.

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Stephanie Till - Green Rush Indexed Data

Stephanie Till - Green Rush Indexed Data

This article was written by Stephanie Till of Green Rush Indexed Data with data compiled and provided by Bridge West CPAs. Stephanie is a Compliance Expert as well as a Historian who is currently archiving the Green Rush of the cannabis industry. The mission of her company is help clients by providing quality research services, custom tailored cannabis compliance consulting, dynamic training materials and exceptional customer service for those in the young cannabis industry.

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