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September 8, 2017
Compromise Bill Affecting Recreational Marijuana in Massachusetts
A compromise bill affecting recreational marijuana in Massachusetts was signed by Governor Charlie Baker in July. While Medicine Man Technologies was excited to see the state pass Question 4 with 56% of the vote during the November 2016 election, a legislative conference committee has now enacted significant changes to the original ballot measure.
In December of last year, recreational marijuana in Massachusetts became legal for adults to possess, use and grow. As predicted at the time, shaping the state’s legal cannabis market became bogged down in bureaucracy, delaying the development of infrastructure and policies. Because of this, the scheduled date to accept license application has been pushed out six months to April 1, 2018 with the earliest date for legal sales to commence targeted for July 1st. And that’s just the start.
Let’s take a look at some of the most noteworthy changes included in HB 3818 and what that means for recreational marijuana in Massachusetts going forward.
Sales May Not Be Available Everywhere
The new compromise bill sets up a system that allows communities to opt-out, more specifically the 91 municipalities that voted against Question 4. Until December 31, 2019, the decision to ban or limit recreational marijuana businesses in these areas is solely up to the city council or board of selectmen.
For those communities where Question 4 passed, a ban would be far more complicated, requiring the development of an ordinance or bylaw that would first have to be passed by the city council or board of selectmen. Then, with the mayor’s approval, it would go to the voters via regular or special election. As of January 2020, this will be the standard process for any cities or towns that seek to implement a ban.
Excise Taxes on Marijuana Sales Go Up
When the original ballot measure for recreational marijuana in Massachusetts passed last November, voters approved the following tax structure: 6.25% state tax, plus a 3.75% marijuana excise tax, and an optional local tax of up to 2% for a total of 12% maximum.
While legislators originally wanted to more than double that total amount, the compromise landed on the figure of 20%. The marijuana excise tax is now 10.75% and the local option is capped at 3%. While this number is not what voters approved, it’s not the highest in the nation.
Market Regulatory Structure Expands
Control of both medical and recreational marijuana in Massachusetts will be consolidated under the same regulatory authority, the Cannabis Control Commission and Cannabis Advisory Board. The CCC, which has direct regulatory control (including licensing) will expand from 3 members to 5, while the advisory board, which will provide input and recommendations, will now consist of 25 members.
So far, the CAB includes a wide range of members, including John Carmichael, the police chief from the town of Walpole and a staunch opponent of cannabis use, as well as Kim Napoli, a labor lawyer and co-founder of a Boston hemp products store. It also includes state business leaders, entrepreneurs and an adolescent substance abuse professional.
As for the Cannabis Control Commission, there has been quite a bit of controversy since 4 out of the 5 appointed members voted against Question 4. Leading the group is chairman, Steven Hoffman, a former business executive who voted “no” on recreational marijuana in Massachusetts. When questioned by the media, Hoffman clarified that he’s not opposed to legalization and that his vote reflected concerns regarding the short implementation timeline the ballot measure proposed.
Ahead of the CCC implementing new regulations, the compromise bill already states the following:
- Licensees can have no more than 3 marijuana retailer licenses, 3 medical marijuana treatment center licenses, 3 marijuana product manufacturer licenses, or 3 marijuana cultivator
- Penalties for adults 18-21 possessing under two ounces (formerly one) will be reclassified as civil offenses, and criminal offenses for home cultivation by those under 21 have been eliminated.
- Individuals with prior convictions for marijuana possession can have those records sealed.
We’ll see in the coming months if the CCC adheres to the new timeline and the market for recreational marijuana in Massachusetts finally gets off the ground.
While the election was a big step forward and the bureaucracy a step back, our team at Medicine Man Technologies is hopeful that adult use marijuana is finally on track for Massachusetts. If you are looking to enter the state’s market, our consultants can help you clear any further hurdles and establish a highly successful enterprise when July 2018 finally arrives.
September 1, 2017
Michigan Recreational Marijuana May Face Bigger Hurdles
Two ballot initiatives are now underway for the 2018 election, but it appears that Michigan recreational marijuana may face bigger hurdles than being passed by voters. Medicine Man Technologies has seen it firsthand, the often cavernous gap between legalization and full implementation of both medical and adult-use recreational marijuana. In Michigan, it’s no different – in fact, it might be more complex.
Medical Marijuana’s Rocky Road Since 2008
In November of 2008, Michigan voters overwhelmingly approved the compassionate use of medical marijuana by a vote of 63%. Known as the Michigan Medical Marihuana Program (MMMP), it allowed qualified and registered patients to cultivate up to 12 plants in an enclosed and locked area at their home, as well as possess up to 2.5 ounces of usable marijuana. It also allowed caregivers to grow 12 plants per patient, up to 5 patients.
While the initial passing of the law was a step in the right direction, MMMP was meant to be further expanded by lawmakers tasked with establishing industry regulations and framework for cultivation, dispensaries, production, transport and more. This infrastructure never materialized. Now, Michigan’s patient population has grown to over 200,000 and the medical marijuana industry has developed in a more organic and less regulated way, with caregivers creating co-ops and hundreds of dispensaries not licensed or protected by the state, but allowed by local governments.
Finally, in September of 2016, three bills were passed and signed by Governor Rick Snyder to regulate the program. Let’s take a quick look at some of the new rules that were passed:
- Michigan’s Department of Licensing and Regulatory Affairs (LARA) will continue to oversee the program, and a new Medical Marihuana Licensing Board will review and approve licenses.
- As of December 15, 2017 (tentatively), applications will be accepted to operate as a grower, processor, transporter, provisioning center (dispensary), or safety compliance facility (testing). There will be restrictions on overlapping interests.
- License applicants must not have been convicted of or released from incarceration for any felony, including drug-related convictions, in any state for the past 10 years.
- Along with the application fee, there will also be an annual fee of $5,000 assessed, deposited into the Marihuana Regulatory Fund and used by the state to operate the program.
- Licenses for growers include three cultivation limits: Class A – 500 plants, Class B – 1,000 plants and Class C – 1,500 plants.
- Transporters will not take ownership of any medical cannabis or arrange contracts among other businesses. Transport will require 2 people, one remaining with the vehicle at all times.
- At dispensaries, patients will pay the state’s sales tax as well as an added 3% tax at the register. They will also be able to purchase marihuana infused products such as topicals and edibles.
While these regulations were welcomed by some, it remains to be seen whether existing dispensaries will be shut down and their operators forced to start over from scratch. This could leave thousands of patients without access to medication. Here at Medicine Man Technologies, we truly hope that the state will find a way to make the transition as seamless as possible for patients.
What Does This All Mean for Recreational?
With so much turmoil and an unstable medical marijuana program, it looks like Michigan recreational marijuana may face bigger hurdles than similar programs in other states. Will the new medical regulations be applied to the adult use recreational market, or will it be another 8 years before lawmakers fully implement a program? For now, proponents of two potential ballot measures are focused on 2018.
Currently, the most viable campaign for recreational marijuana is the Michigan Regulation and Taxation of Marihuana Act which is spearheaded by the Coalition to Regulate Marijuana Like Alcohol. On August 15th, the group stated that they are close to securing 200,000 signatures and on track to achieve their goal of 366,000 signatures. At that point, 252,523 will need to be validated to get on the ballot in 2018.
This ballot measure would allow adults who are 21 years of age or older to possess up to 2.5 ounces on their person outside of their home, 10 ounces inside, plus whatever they have growing legally from up to 12 total marijuana plants in a single residence (locked and out of sight). All use in public and driving under the influence will remain illegal.
It will also require the formation of a state-regulated system to license, manage and tax the cultivation, testing, processing, transport and retail sales of marijuana and marijuana-infused products for adult use. While the proposal does outline certain regulations, such as additional taxes, more work will be needed for the program to launch – and as we’ve seen, it could take time.
Another initiative, Abrogate Prohibition Michigan, seeks to amend Michigan’s constitution to end "all prohibitions on the use of cannabis in any form by any person" as well as abolish regulations, including the imposition of taxes, fines and penalties for marijuana use. Because its sponsor, Timothy Locke, seeks to amend the state’s constitution, a total of 315,654 validated signatures will need to be collected. At this time, the initiative appears to lack the support needed, financial and logistical, to make the ballot.
There’s no doubt that Michigan will experience numerous changes through the end of this year and the coming election year. With the state’s new medical marijuana laws going into effect, it will likely indicate whether or not Michigan recreational marijuana may face bigger hurdles than winning over voters.
To assist with the complexities and changes, Medicine Man Technologies is available to all enterprises and individuals that want to enter the Michigan marketplace, either medical or adult-use recreational. We offer a variety of options, from seminars to private consulting and much more. We’ve assisted legal cannabis operations from coast to coast, and we’re here to support you, too.
August 8, 2017
Canada Looks to Legalize Recreational Marijuana
At Medicine Man Technologies, we’re keeping a close eye on our northern neighbors as Canada looks to legalize recreational marijuana for adult-use by July 2018. In April of this year, a plan was announced by the Canadian government and Prime Minister Justin Trudeau. If passed, the law would make them the second nation in the world to make such a move. Uruguay was the first.
The plan includes developing a system for Canada’s federal government to regulate marijuana cultivation, distribution and sales, as well as manage licensing, taxes and all associated fees. Provinces would then have the ability to pass further laws regarding sales and distribution, as well as increasing the minimum legal age of 18. In addition to retail purchasing, adults would be able to possess up to 30 grams of marijuana and grow up to four plants per household.
Like many legal, adult-use recreational marijuana laws here in the states, Canada would prohibit driving while impaired and implement strict laws regarding taking marijuana over its borders.
On his website, Prime Minister Trudeau stated, “Canada’s current system of marijuana prohibition does not work. It does not prevent young people from using marijuana and too many Canadians end up with criminal records for possessing small amounts of the drug.”
Three Major Hurdles
While the bill is yet to receive Parliament’s official approval and may face some changes before becoming law, its outlook is good. Canada’s House of Commons is controlled by the Liberals and an even more liberal faction, the New Democratic Party, is also on board with legalization. As for Conservatives, they are a small minority and don’t pose any substantial threat to the bill.
One wild card is Canada’s Senate which typically does not veto or delay legislation passed by the House. However, they have recently begun to assert more authority, so interference should not be completely ruled out. Beyond adult-use recreational marijuana passing Parliament, there are three major hurdles that will also need to be addressed. Let’s take a closer look at those.
- Withdrawal from International Treaties
Since 1961, Canada has signed three UN drug treaties pledging to ban marijuana. Leaving these treaties requires a notice period. However, in order to keep the promise of legalizing marijuana by July 1, 2018, Canada would have needed to give the UN notice by Canada Day which has now passed. There are still ways to legalize marijuana without violating the treaties, including a delay of the legalization date, constitutional amendment (not likely), or on the grounds of performing scientific research. This final option would require some legal creativity to achieve. How Canada plans to accomplish this still remains to be seen.
- Efforts to Change the Advertising Rules
In accordance with federal task force recommendations, adult-use recreational marijuana businesses would only be allowed to distribute basic details, much like rules for the tobacco industry, such as price, strain, and company name. Now, Canadian marijuana businesses have joined forces with Advertising Standards Canada to draft guidelines and lobby the government to be able to advertise and brand their products. Their goal is to be able to better differentiate their products from each other and those sold on the black market.
- Canada’s Premiers Want More Time
Because Canada has empowered each territory to decide its own regulations for taxation, as well as determine who is allowed to sell, consume, and purchase adult-use recreational marijuana, Canadian premiers have indicated that they need more time to develop these rules. They’ve met with push back from Prime Minister Justin Trudeau who has insisted that the country will meet the July 1, 2018 date. The government has stated that it has a backup plan for those provinces that fail to establish regulations, though details are not yet known.
Here at Medicine Man Technologies, we are hopeful that the bill will be passed and everything will be in place as Canada looks to legalize recreational marijuana for adult-use by July 2018. If you are planning to enter Canada’s adult-use recreational marijuana market next year, please reach out to our team for assistance. We offer consultations on all aspects of the business, ensuring you’re in compliance and on the right track for success.
August 1, 2017
California Senate Has Replaced MCRSA with SB 94
At Medicine Man Technologies, we’ve been keeping a close eye on the west coast and were pleased to hear that the California Senate has replaced MCRSA with SB 94. The latest and greatest evolution of the state’s laws, SB 94 essentially repeals the existing Medical Cannabis Regulation and Safety Act (MCRSA) while incorporating certain policies into the licensing provisions set forth by the Adult Use of Marijuana Act (AUMA), also known as Proposition 64, which was passed by voters in November of last year.
Under the new bill, this consolidation of provisions into a hybrid program is known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). The outcome is a regulatory structure that’s intended to be more operator-friendly. The California Growers Association remarked that the bill was “a thoughtful and robust foundation for a well-regulated cannabis marketplace in California.”
What SB 94 Means for California Cannabis
The new MAUCRSA structure would generally impose the same requirements on both commercial medicinal and commercial adult-use cannabis activity, with specific exceptions. Highlights of the changes include the following:
- The Bureau of Cannabis Control is now the governing regulatory agency. Control of industrial hemp fibers will be transferred to the Department of Food and Agriculture.
- The currently available licenses remain the same. “M-licenses” for medicinal operators and “A-licenses” for commercial adult-use operators. A single holder of both types of licenses are required to keep premises separate and distinct, however, this might only require a physical barrier versus a completely separate location.
- Micro-business licenses, specialty cottage cultivation licenses, and indoor, outdoor, and mixed-light cultivation licenses will be offered for both recreational and medicinal marijuana operators and made available on or by January 1, 2023.
- Vertical integration prohibitions that were part of MCRSA have been removed while the ban on large-scale cultivators remains. Other cultivators can now apply and be approved for multiple licenses in different categories, including acting as their own distributor.
- Transporter and producing dispensary licenses are not available under MAUCRSA.
- Retailers are now allowed to have a brick-and-mortar store that is not open to the public and only sells cannabis through delivery.
- With MAUCRSA, applicants may show prior compliance with local laws prior to obtaining state licenses. The city or county now is responsible for alerting the state within 60 days if the applicant is not in compliance with local laws.
- Changes to testing, inspection, and quality assurance are also part of SB 94. Distributors must store cannabis on their premises during testing and will be responsible for quality assurance reviews for labeling and packaging compliance.
- The residency requirement has now been removed. This means that foreign and out-of-state companies are now allowed to sell both medicinal and recreational marijuana. This will not stop some cities counties from creating their own residency requirements.
- Advertising requirements which regulate online advertisements and create a universal edible cannabis symbol have been added.
- The cannabis excise tax will be measured by the average market price (as defined) of the retail sale, instead of by the gross receipts of the retail sale.
There are a number of additional changes as well. Overall, the team here at Medicine Man Technologies sees this bill as a positive and comprehensive step towards creating a sensible framework for California’s expanding cannabis market.
What’s Next for AUMA in California
Now that the California Senate has replaced MCRSA with SB 94 and the bill was signed by Governor Jerry Brown at the end of June, the state can more easily move forward in establishing a system for adult-use, recreational cannabis. Several license types should be made available in January of 2018 at which point retail sales may commence. For now, adults who are 21 years of age and over can consume and possess up to an ounce of flowers or eight grams of concentrate. They can also grow up to six plants in an enclosed area hidden from view or in their homes.
If you are considering entering California’s cannabis industry, our experts at Medicine Man Technologies can help you understand and navigate the new rules implemented by SB 94. We’ve helped clients from coast to coast with everything from applications and licensing to the deployment
of world-class cultivation and dispensary operations. Our consultants will ensure you’re able to set up a compliant and successful venture.
July 7, 2017
Arkansas Medical Marijuana, Now Taking Applications
At Medicine Man Technologies, we’re excited to see that the Arkansas Medical Marijuana Amendment is moving to its next phase of implementation. As of June 30, 2017, the state’s Department of Health is taking applications for medical marijuana registry identification cards, and if you would like to operate a cultivation facility or dispensary, the Arkansas Medical Marijuana Commission will now take your application.
We’re very aware of how complicated all of these processes can be and our Medicine Man Technologies team has helped numerous clients in several states with their applications and licenses. Let’s take a look at what you need to know about applying in Arkansas.
Applying for a Dispensary License
The MMC will certify up to 32 dispensaries to operate across the state, 4 in each of the 8 geographic zones. Applications must be hand delivered by September 18, 2107 and include the $7,500 fee (half is refunded if a license is not rewarded). While selection was previously lottery-based, it was changed in April to be a merit-based system. Here’s more:
- Individual applicants must be current Arkansas residents who have resided in the state for at least 7 consecutive years prior to the application date.
- For enterprises, at least 60% of the equity of applicants must be owned by Arkansas residents.
- You may not have interest in more than 1 Arkansas cultivation and 1 dispensary operation.
- You must provide proof that your proposed dispensary location is at least 1,500 feet from a public or private school, church or daycare – from your main entry to the nearest property line. The MCC recently defined schools as K-12 institutions, excluding colleges and universities.
- Applicants must provide proof of assets or surety bond of $200,000, and at least $100,000 in liquid assets. If the applicant posts a surety bond, it must be maintained until the applicant has withdrawn, been denied, or if selected, paid the licensing fee and submitted to the MMC a performance bond of $100,000.
- If selected, the initial licensing fee for growing and non-growing dispensaries is $15,000 and annual renewals are $22,500.
- All identities on applications (both cultivation and dispensary) will be removed so that the commissioners will not know the personal identity of the applicants.
- With the new merit system, bonus points will be added to the application if the majority of the ownership belongs to veterans or minorities. Whether or not you opt to also grow medical marijuana will not have an effect on merit.
Applying for a Cultivation License
To supply the state’s 32 dispensaries, the MMC will approve 5 cultivation sites. Again, applications must be hand delivered by September 18, 2107 and include a $15,000 fee with half returned if you are not awarded. Licenses will also be granted based on a merit-based system with all residency and ownership requirements listed in the first three bullet points applicable to cultivation operations. Key differences:
- You must provide proof that your proposed cultivation location is at least 3,000 feet from a public or private school, church or daycare – from your main entry to the nearest property line.
- Applicants must provide proof of assets or surety bond of $1,000,000, and at least $500,000 in liquid assets. If the applicant posts a surety bond, it must be maintained until the applicant has withdrawn, been denied, or if selected, paid the licensing fee and submitted to the MMC a performance bond of $500,000.
- Your performance bond must then be maintained until your cultivation facility files its first required sales tax report Arkansas Department of Finance and Administration for the sale of usable marijuana.
- If selected, the initial licensing fee and subsequent annual renewals are $100,000 in certified funds due within 7 days after receiving written notice from the MMC.
Applying for an Arkansas Medical Marijuana Registry ID Card
The state has made it easy for adults (18+) to apply by offering an online option or the ability to print out the form and mail it to the Department of Health. When applying, you’ll need to provide your proof of Arkansas residency (driver’s license or state ID), pay the non-refundable $50 application fee and have a Physician Written Certification (doctors may be contacted to verify) for a qualifying condition:
- Positive status for HIV/AIDS
- Hepatitis C
- Amyotrophic lateral sclerosis
- Tourette’s syndrome
- Crohn’s disease
- Ulcerative colitis
- Post-traumatic stress disorder
- Severe arthritis
- Alzheimer’s disease
- Cachexia or wasting syndrome
- Peripheral neuropathy
- Intractable pain which is pain that has not responded to ordinary medications, treatment or surgical measures for more than six (6) months
- Severe nausea
- Seizures including without limitation those characteristic of epilepsy
- Severe and persistent muscle spasms including without limitation those characteristic of multiple sclerosis
If you suffer from any other medical conditions not listed, you also have the option of petitioning the Department of Health. Within a 120-day window, a hearing will take place and your request will be either approved or denied. The Arkansas Drug Policy Education Group is also working to add more conditions such as: ADD/ADHD, anxiety, depression, autism, severe insomnia, migraines and more.
Here are a few other items you’ll need to know when applying:
- Once received the Department of Health, it will take up to 14 days to process everything and cards will be issued one month before medical marijuana is available at dispensaries.
- Both patient and caregiver applications and renewals require payment of a $50 fee.
- If completed online, a caregiver criminal background check is an added $34. If the caregiver has more than one patient, they must apply and pay for a registry card for each patient.
- Your Arkansas medical marijuana registry ID card is valid for 1 year from the date it was issued or the amount of time chosen by your physician. If your card expires, your legal protection expires and you will not be able to purchase medical marijuana.
- In April of 2017, the state’s legislature passed Act 479 which bans Arkansas National Guard or U.S. military members from being patients or caregivers.
As you can see, there’s quite a bit of information to digest when applying for the Arkansas medical marijuana program, especially in the areas of cultivation and dispensary operations. To help you make sense of all the rules and regulations, Medicine Man Technologies offers private consulting. Our team has the experience to help you navigate your way to success.