Vol. 6, No. 53 -- Sept. 6, 2019 -- Edited by Dr. Lloyd Covens, DBA
"GO SLOW" ON CBD BILL, SAYS CALIF GOVERNOR --- With hope for a possible early 2020 bill, the California bill which would have approved CBD in foods, drinks and cosmetics has been "frozen" by the State Senate appropriations committee, and will get special attention by staff of Gov. Gavin Newsom, above. (See story below)
Calif Halts CBD Bill Amid FDA & Dispensary Sales Concerns
Last summer the California Dept. of Health cast a long shadow on hemp-derived CBD making a legal entry into the state's food and drink ecosystem, saying in a memo that no change should be considered ahead of FDA approval for CBD. With thousands of non-authorized CBD-based drinks and foods for sale in California, State Assemblywoman Cecilia Aguiar-Curry introduced AB-226 to clearly state that CBD would "not be adulterated" and therefore could legally be added to products served to consumers.-- but that bill is not on hold, atleast until several issues changes are addressed Not one negative vote was case against her AB-226 bill for six months--until last week when the Senate Appropriations put a "hold" of the measure. Supporters remain hopeful that a four month push to clean up concerns will allow the bill to get potential signature of Gov. Gavin Newsom by early 2020.
“This position by the California Department of Public Health has put our state in an Alice-in-Wonderland world, where adult consumers can walk into a licensed marijuana dispensary and purchase all manner of recreational cannabis products, but they cannot legally purchase non-psychoactive hemp products that they believe can bring them calm or reduce their pain" said Aguiar, in a post-bill hold statement. Among the CDPH concerns were pushing the bill ahead of expected federal FDA guidance on CBD safety, dosing and testing -- which is expected by mid fall. Other law enforcement agencies want greater clarity on how dispensaries will keep legal hemp separate from their also allowed sales of RMJ/MMJ products. Another potential concern will be the possible impact on California's huge cannabis-derived CBD market, estimated to sell over $400Mil annually.
Nonetheless, the industry was disappointed by the hold-up in a bill that many saw as heading to passage by mid-September. Writing on behalf of the California Hemp Council, general counsel (and Hoban Law associate) Patrick Groggin agreed for the need for working with the governor's office. "We understand that the issue is complex, particularly when hemp products are also being proposed to enter the cannabis retail market. We are confident, however, that the Governor will lead on this issue and honor his office’s commitment to enact legislation in this area by the end of next January. We must protect consumers while allowing California businesses to fully engage in all aspects of the multi-million dollar hemp industry," said Groggin.
But Aguiar said the delay in bill implementation would just place California further back in developing a strong CBD consumer offering. Aguiar stated “consumers can currently order dozens of unregulated hemp oil and hemp CBD products from online and out-of-state retailers, including Amazon. Without AB 228, we do not have any California standards or consumer protection measures in place to regulate this market. This leaves our state at a competitive disadvantage, and our consumers with limited options."
Last year, the state's Bureau of Cannabis Control said it did not want CBD sales inside regulated RMJ stores. But with CBD available to consumers at every turn, the prospect for ensuring testing and reliability has pushed lawmakers into supporting allowing more access through licensed retailers. On the growing said, more than half of all California counties have instituted some kind of ban on local hemp growing during the 2019 season, with some concern about keeping pollen from intermixing between hemp areas and cannabis grows.. And some reports suggest cash-strapped cities are continuing to consider some type of sales tax on the sales of hemp-derived CBD.
“We have been asked by the Governor to work with his staff during the interim on the complex issues of food safety related to CBD, as well as the complicated rules associated with selling products in state marijuana dispensaries. Regardless of the action in Senate Appropriations today, I am confident that we will have a bill ready for the Governor to sign at the beginning of next year, so that our California hemp farmers and producers of hemp-CBD can take advantage of this new multi-billion dollar opportunity,” offered Aguiar.
For California-based industry firms, the Hemp Roundtable has set up an automated Assembly-member access line at https://mail.google.com/mail/u/1/#inbox/WhctKJVZmRsqXdnWKFlBhMvGpkqKTknHxKgJhbFlZFQPmMsGnThzlWglwKVHWNcgkPxcWmlHemp Roundtable also hopes California businesses will "contact the Governor to urge him to instruct the California Department of Public Health to cease and desist on any enforcement actions while the legislature deliberates. We cannot allow them to continue to cast a pall on this thriving industry."
Cannabis & Hemp News Briefs... Opening a quarter-million square foot center for hemp, Paragon Processing says it wants to partner with regional farmers to offer greater flexibility in biomass storage and "split-contracts" with growers. Paragon co-founder Matt Evans told West420 that his goal was to offer hemp storage times of up to one year, and the technology to process interim or finished goods for hemp growers wanting to take advantage of "fair market pricing." The southern Colorado facility was previously a national distribution center for Columbia House records, and now will offer a climate controlled facility with lab/testing support, and the ability for farmers to chose when --and what amounts of their biomass-- they release hemp to contract sales. "We're not just trying to capture their processing," said Evans, echoing a plan to perfect new genetics for higher-growing CBG hemp plants, and to begin utilizing a patent-pending ethanol-based extraction method which will target THC remediation without lowering potency for other allowed cannabinoids. The company is Native American backed, with Paragon backers formerly active in a 300,000 acre project to cultivate RMJ/MMJ from Huerfano county. The massive facility (shown below) hopes to employ over 200 by the end of 2019.
Cannabis sales in Nevada hit $639 million in its latest fiscal year, a 20% jump over sales of $530 million for the same period a year ago, signaling the continued succeess of the country's most closely-regulated market. Nevada taxation officials reported nearly $100Mil raised in the June-ending year, most of which will be directed to Nevada's K-12 public school funding. About 80% of the sales in the fiscal year ended June 30 are in Clark County, home to Las Vegas, according to Nevada Department of Taxation figures. Riana Durrett, executive director of the Nevada Dispensary Association, said the 20 percent jump showed residents and tourists are “becoming more comfortable purchasing cannabis.”
Utah governor Gary Herbert is bringing a special session to legislators to deal with modifications of the state's medical marijuana implementation, Sept. 16. Last years' agreement to pass a MMJ law left several loose ends, including not allowing private dispensaries in the state. “My administration is dedicated to ensuring that quality, medical grade cannabis products are accessible to patients by March of 2020,” said Herbert. “Removing the requirement for a state central fill pharmacy will provide efficient and timely distribution of this substance for those who need it.”
Bad cannabis vaping outcomes are among hundreds reported to the Center for Disease Control over the past months. With both nicotine and THC-based contaminated vape cartridges reported from over 300 cases in 29 states, health authorities are alarmed about the increase in acute lung injury. Of particular concern are counterfeit and black-market cartridges which are suddenly showing more suspicious solvents, versus the safer vape carts which are offered by "brand names" and other providers who have stood behind safety in their delivery products. "A large number of confirmed cases seem to involve THC oils purchased from 'pop-up shops'", said one Boston health expert, interviewed by the Washington Post. Health officials have also begun to suspect some tie-in with the problem vaping carts, and the inclusion of certain vitamin E formulations. Another concern is the unauthorized tampering of certain nicotine vaping products being modified to deliver cannabis oils, with a fear over the types of mixing agents(solvents) being added for easy inhalation.
Medicine Man Technologies, Inc. (MDCL) has continued its quest to collect certain C0lorado cannabis assets acquiring five dispensaries operating under the Starbuds brand for $31Mil. in Colorado, of which $10Mil will be public shares. MDCL co-Founder Andy Williams has been a major backer of the expanded access to investment flexibility brought with passage of HB-1090. Management expects the dispensaries to generate over $19 million in revenue in 2019 and in excess of $5.6M in EBITDA. Last month, Colorado's MJ Enforcement division approved ten percent set-asides for out-of-state transactions ahead of the Nov. 1st opening window.
With its $3.5Bil investment in Canopy Growth, Constellation Brands holds the biggest equity chunk in cannabis -- including record losses surpassing $100Mil over the past two quarters. At a Barclay's Consumer Staples conference, Constellation CFO David Klein said he had seen a growth in alcohol use by millennials. Klein cited Constellation’s research on millennials to back up his broader thesis: The company found that in 2013, millennials consumed about 24 alcoholic drinks per month. By this year, that number has climbed to about 29 per month – with about 77% of all millennials in the U.S. consuming alcohol, according to Klein. When you said the millennials are drinking more, I’m like: That’s because they have kids,” said moderator Lauren Lieberman. “What we don’t know though is will we see that same thing with Gen Z as they age, will they — will life get more stressful for them and they drink a little more? But it’s too early to tell, but we definitely have seen that with millennials,” Klein said.
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