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.

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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 free 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 a free initial consultation.

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Cannabis Legalization: Defining the Language of Legalization and Decriminalization

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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.

Learn More About Green Rush Indexed Data

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Government Collaborations for a More Cannabis-Friendly Community

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The government and the cannabis industry have been bitter rivals for decades. Since the days of Woodstock through to the era of CBD-everything, it seems that we’ve encountered increasing instances of opposition, legal strife, and logistical nightmares caused by the tension between these two over time. Now, like Jim and Dwight, the cannabis-friendly town of Edgewater is proving that long-time rivals can become cooperative friends. Hear from the man himself, Kris Teegardin, and pick up his tips for finding harmony in hardship.

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Minorities in Cannabis: Social Equity During a Racial Pandemic

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In any industry, life is more difficult for people of color, women, and other minorities. The cannabis industry is no different. In fact, there’s been an obvious lack of representation of communities of color since the inception of legal cannabis. Here’s everything you need to know about minorities in cannabis fighting for social equity.

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The Effects of COVID-19 on Cannabis Legalization & Legislation

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As the U.S. continues to wrestle with an epic health crisis there is no “business as usual.” COVID-19 has taken the steering wheel and health experts are riding shotgun in an attempt to grab it back as we try to keep the economy alive. Meanwhile, those with an interest in cannabis legislation and legalization are keeping their eyes on the road ahead. We have insights from a seasoned cannabis industry CPA, a marketing strategist, and a cannabis industry archivist/data analyst to help shed some light on the current situation and what the future may hold.

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Emerging Cannabis States: Michigan, Oklahoma, Massachusetts, and Colorado

Emerging Cannabis States: Michigan, Oklahoma, Massachusetts, and Colorado

This month our focus is on Colorado, Massachusetts, Michigan, and Oklahoma. For Colorado and Massachusetts, Social Equity has been a subject of contention. Michigan opened a licensing opportunity in May and Oklahoma has opted to test breathalyzer technology to find tools to better determine whether a driver is impaired.

Oklahoma Cannabis Market

Scott Fegatter, a Republican Oklahoma State representative, has proposed expanding access through full adult-use cannabis legalization in order to generate tax revenue for the state budget, up to $100 million annually. His proposal is just one measure to alleviate the $250 million deficit anticipated for 2021 due to the pandemic. Oklahoma had a ballot initiative effort in the form of a petition prior to March 15, however that was before the shut down when the governor declared a State of Emergency due to COVID-19. There is however, concern that there is not enough support within the state legislature to legalize cannabis.

Something that might aid in decreasing opposition to expanding access to cannabis to full Adult-use is the pilot program for a cannabis breathalyzer which has recently been approved. The bill, approved in May, would require the Department of Public Safety to spend $300,000 on creating a pilot program for testing breathalyzers designed to detect cannabis impairment, the results of the test would not be admissible in court. This could really alleviate some issues with cannabis use and DUI laws for determining impairment. This is one of the first programs to make sure that the breathalyzer system can work to solve the problem of identifying drivers who are actually impaired due to cannabis use as

Michigan Cannabis

In early March 2020 Michigan began phasing out caregivers’ ability to sell cannabis to adult-use cannabis companies and are scrapping the ability to for caregivers to supply the Adult-use market entirely. Medical cannabis dispensaries may still obtain products from licensed caregivers, but the Adult-use market cannot. This opens up opportunities for licensed cultivators and producers to ramp up production and be able to meet demand within the privileged licensee supply chain.

In a move that might prompt employees to vote themselves into a union, an update has been made to Michigan’s cannabis industry regulations to no longer require operators to maintain labor peace agreements. This can be seen as controversial as there are many states that are starting to require labor peace agreements to protect both the industry and its workers. Considering unfolding events in Massachusetts where reactions to the pandemic are prompting employees to vote to go union, it will be interesting to see if the same would happen in Michigan and other states.

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Colorado Cannabis Market

This year Colorado has taken another step towards greater social equity by passing and signing into law HB1424 changing the Accelerator Program to a Social Equity Program by more clearly defining what the state is looking for in terms of social equity applicants. The legislation also allows for a social equity applicant to own a marijuana store or dispensary this is a change from the original Accelerator Program, which only allowed social equity licenses for manufacturing and cultivation. According to the law an Accelerator Endorsed Licensee is a retail marijuana cultivation, production, or store who has, pursuant to the rules, been endorsed to host and offer technical and capital support to a Social Equity Licensee. These Accelerator Endorsed Licensees may qualify for incentives such as reduced application or licensing fees. A Social Equity licensee is considered a natural person who meets criteria is established in section 44-10-308 (4). A Disproportionately Impacted Area will be defined to the extent relevant State of Colorado data exists or is available and is used for the purpose of determining eligibility, which means that depending on the data sets that are available to determine the areas that have been disproportionately affected by the war on drugs, Colorado will set guidelines. There are requirements for social equity licensees for operating in the same licensed premises or on a separate premise possessed by an Accelerator Endorsed Licensee. Accelerator Endorsed Licensees are not required to exercise the privileges of their license on the premises where a social equity license he operates. The implementation deadline has been moved from July 1, 2020 to  July 1, 2021.

 

This legislation also has created an exception to the felony restriction for social equity applicants. A marijuana conviction shall not be the sole basis for a license denial. Effective January 1, 2021 a social equity applicant may apply for a license and the qualifications for a social equity licensee are as follows:

  • The applicant must be a Colorado resident
  • They may not be a beneficial owner of a license subject to legal action
  • They must demonstrate the following
    • Residence in Colorado for at least 15 years between 1980 and 2010 in any census tract designated by the office of economic development and international trade as an opportunity zone or designated as a disproportionately impacted area as defined by section 44-10-203 (1)(j).
    • They have a parent, legal guardian, sibling, spouse, child, or minor in their guardianship that was arrested for a marijuana offense or was subject to civil asset forfeiture related to a marijuana investigation.
    • Having a qualifying household income can also be a determining factor
  • Applicant must hold 51% or more of the beneficial ownership of the company applying for a social equity license.

 

State licensing for marijuana Accelerator store licenses is scheduled to begin on January 1, 2021.

Massachusetts Cannabis

Massachusetts Cannabis Market

Massachusetts intends to speed up cannabis license there cannabis licensing process from application applicants having to wait 121 business days down to only 60, that is if COVID-19 hasn’t ruined the chances for that in the budget. The Governor of Massachusetts deemed adult-use dispensaries as non-essential over concerns that adult-use cannabis dispensaries attract clientele from neighboring states and closed them only weeks after the market’s opening, jump-starting a considerable fight over whether or not Adult-use dispensaries should remain closed. A judge ruled in favor of the governor’s position and Adult-use dispensaries were eventually reopened on May 26 along with other businesses.

Whether or not to determine Adult-use cannabis dispensaries as essential hasn’t been the only controversy in Cannabis licensing. Cannabis activists are currently in opposition to Massachusetts changes to Social Equity guidelines. This was due in large part to regulatory change that decreased the percentage of the ownership percentage from 51% down to 10% of minority ownership. There is currently a petition to revise it. The drop down to 10% does directly conflict with many city and town ordinances that require 51% ownership for social equity applicants. Cambridge Massachusetts is also dealing with a social equity issue. The municipality chose to only allow social equity applicants for the first stage of license applications and is being sued by a current medical marijuana licensee That is demanding to have the opportunity to have a co-located adult-use facility. The city appears to have established the special licensing for social equity applicants in an attempt to provide social equity licensees an opportunity to establish market share before non-social equity applicants are able to dominate the market. Massachusetts also began accepting business license applications for cannabis delivery on May 28 though it is unclear as to whether or not an application period is currently open.

In a move to protect employee interests, Massachusetts Mayflower Medicinals employees have voted to join the United Food and Commercial Workers Union Local 1445. The employees chose to join the union due to Coronavirus related issues such as a lack of consistent treatment from management, inadequate

healthcare coverage, and slow responses to the pandemic. They are obviously not the first in Massachusetts to choose a union, however, it is a trend that is worth watching because it’s occurring in multiple states not just Massachusetts

Conclusion

While none of the states in this report have legalization efforts in their legislatures or on the ballot there are developments occurring that have implications for the cannabis industry as a whole. Social Equity programs are becoming more than token efforts to address the cannabis industry’s issue with diversity while the continued efforts of labor unions to unionize the Industry’s labor force showcase a need in some markets to address labor concerns and management practices.

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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.

Learn More About Green Rush Indexed Data

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The Future of Cannabis in the U.S. & Emerging Markets in the Industry

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As the saying goes, you don’t need a weatherman to know which way the wind blows. However, when it comes to the future of cannabis in the U.S., an experienced prognosticator can help predict the next state likely to launch a legal cannabis market or provide insight to help you win an industry license. However, passing a law is just part of the story. We’re here to help you find the facts and identify opportunities.

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Cannabis Legalization and Emerging States – New York, Texas, New Jersey, and Mississippi

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Cannabis Legalization and Emerging States – New York, Texas, New Jersey, and Mississippi

Lawmakers and policy advocates have been facing tremendous obstacles related to the COVID-19 epidemic and the resulting government closures. Facing budget shortfalls in connection to these public health measures many states and municipalities are exploring their options for additional revenue sources, including establishing or expanding existing cannabis markets. This report addresses the emerging cannabis markets in Texas, Mississippi, New Jersey, and New York.

New York – An Emerging Cannabis Market

New York lawmakers were set to consider expanding access to Adult-use cannabis in the Governor’s budget bill 1617-C early on in 2020 until COVID-19 necessitated the closure of government offices and a stay at home order that effectively ended the legislative session early. However, legalization of cannabis for Adult-use in 2020 is not entirely off the table. As the state is now facing a revenue shortfall it may see lawmakers return for a special session to address budgetary shortfalls and the means to address them. As cannabis business licenses and businesses provide additional revenue for the state it is possible to see the legalization issue pop up in these discussions. 1617-C goes into great detail about the framework and requirements for establishing an Adult-use market in the state and whether it is picked up in an emergency session or in the next legislative session, the bill showcases the priorities for the framework for an adult-use market.

Assuming New York keeps most of the language of the bill that deals with cannabis, New York will be establishing the Cannabis Control Board and Compliance Council.

The following cannabis license types would be available if the legislation passes:

  • Cultivation, Processor, Dispensary, Distribution (designed for existing Medical Cannabis Dispensaries)
  • Cultivator Processor
  • Small Business Adult-use Cooperative Adult-use Distributor
  • Adult-use Retail Dispensary Microbusiness
  • Delivery Nursery
  • Adult-use On-site Consumption

Priorities for Processing Privileged License Applications:

  • Is the applicant a social equity applicant?
  • Will the applicant be able to maintain effective control against illegal diversion of cannabis?
  • Will the applicant be able to comply with applicable state laws and regulations?
  • Will the applicant be ready, willing, and able to properly carry on the activities for which the license is sought (including with help from the social and economic equity and incubator program)?
  • The applicant possesses or has the right to use sufficient land, buildings, and equipment to properly carry on the activity the license is for or has a plan to do so if applying as a social or economic equity applicant
  • The applicant qualifies as a social and economic equity applicant or sets out a plan for benefitting communities and people disproportionately impacted by enforcement of cannabis laws
  • Good moral character
  • Labor peace agreement (25 or more employees)
  • Contribute to communities disproportionately harmed by enforcement of cannabis laws
  • Environmental and energy impact of the facility Follows all other regulations drafted by the Board
  • Is a registered organization with the state of New York?

An examination of the language of the proposed bill clearly outlines the importance New York is placing on social and economic equity in its cannabis market.

Texas – Growing Support to Legalize Cannabis

Texas lawmakers are seeing increasing pressure to consider cannabis legalization from groups like Texans for Responsible Marijuana Policy. Texas officials, now facing budget shortfalls, are gradually considering options for decriminalization and potential legalization. That is not to say that 2020 holds much promise for significant movement toward legalization beyond greater potential interest. Current CBD retailers still face raids from officials even with CBD being a legal product.

New Jersey – Looking to Legalize Adult-Use Cannabis in 2020

New Jersey lawmakers placed SCR 183, a ballot initiative to amend the state’s constitution to legalize adult-use cannabis. If passed it requires the state to establish a Cannabis Regulatory Commission and would mandate that the tax on retail sales of cannabis not exceed the state’s standard sales tax of 6.625% with municipalities being afforded the option of imposing a 1-2% sales tax. In a healthy economy, the state could potentially see tax revenue of $95 million per year according to projections from Bridge West CPAs, who also note that if the state were to follow in the footsteps of states that expanded access to adult-use before and imposed an additional 10 % excise tax the tax revenues in a healthy economy could potentially be as high as $143.6 million per year.

Mississippi – 2 Deceptively Similar Medical Marijuana Initiatives On the 2020 Ballot

Policy advocates successfully collected enough signatures to get Initiative 65 onto the ballot which would legalize medical cannabis in Mississippi. State lawmakers voted to include Initiate 65A on the ballot which would also legalize cannabis for medical use for significantly fewer qualifying conditions than Initiative 65 while affording the state greater control over the potential medical cannabis industry market the Initiative would establish. Concerns have been raised that Initiative 65A has been added to the ballot to potentially split the vote and defeat both measures by confusing voters, which it has the potential to do. If Initiative 65 passes it is likely to establish a medical cannabis market similar to its predecessors with an opportunity of social equity applicants.

Conclusion – Emerging Cannabis States and Markets in 2020 and 2021

Though 2020 has been a rough year for cannabis legalization efforts it has none-the-less shown that even states that have previously been reluctant to consider legalization are now entertaining the idea. Mississippi could signal a positive shift in the legalization movement and provide opportunities for established multi-state operators to expand if Initiative 65 is successful. New York, though somewhat of a long shot at this point, does indicate with the language of 1617-C that this progressive state is making a concerted effort toward social and economic equity at a time when the call for it has never been louder.

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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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