Cannabis news briefs: Illinois gov. introduces recreational-use proposal, North Dakota decriminalizes, AGs goad Congress on banking bill, and much more
If all falls into place, Illinois will enter June as the 11th U.S. recreational-use state. That is the vision of new democratic governor, J.B. Pritzker, who, along with two other key Chicago area legislators (Sen. Heather Steans and Rep. Kelly Cassidy, both Democrats) deliberately held-off debate on RMJ until the end of the Illinois session, slated for May 31.
So far only a handful of House members have expressed opposition to the bill. Pulling from the best ideas of many bills across the U.S., the Steans-Cassidy measure will allow legal possession of 30 grams of flower and 5 grams of concentrates (or 500 mg of THC-infused products).
The bill proposes a 10 percent tax for products under 35 percent THC, with a 25 percent tax on products exceeding 36 percent. Growers will pay a 7 percent gross receipts tax.
Projecting $170 million in licensing fees the first year, tax proceeds are earmarked for substance abuse and mental health programs, law enforcement, and the state's general fund.
Current MMJ licensees will have first priority on applications, and local cities can opt out of the program altogether.
Interestingly, the proposal would preclude large-scale commercial growers and instead focus on small “craft” growers. The move is designed to create thousands of new entrepreneurs in the state, with an emphasis on minorities and communities hardest hit by prohibition and the so-called War On Drugs.
The proposal would create a new position for a cannabis regulation oversight officer who will be responsible for ongoing development of rules, as well as coordinating the efforts of the departments of agriculture, revenue, financial, and professional regulation, state police, public health, commerce and economic opportunity, and human services as they pertain to legal marijuana.
Recreational sales could begin on January 1, 2020.
AGs goad Congress on banking legislation
Attorney Generals from 33 states wrote a letter to Congress to urge passage of the cannabis banking legislation, The SAFE Banking Act, which is pending a U.S. House floor vote.
The letter argued that over $8 billion in legal, annual cash is unsafely being driven around by operators, inviting crime, and cutting back on adequate oversight against possible money laundering.
Along with California, states signing the letter included attorneys general from Alaska, Arizona, Arkansas, Connecticut, Colorado, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
North Dakota 25th U.S. state to decriminalize cannabis
North Dakota Gov. Doug Burgum has signed a bill into law making his state the 25th in the nation to eliminate the threat of jail time for possession of small amounts of marijuana.
HB 1050 reclassifies possession of up to a half ounce of marijuana by adults 21 and older as an infraction punishable by no jail time and a maximum fine of $1,000. Previously, it was a misdemeanor punishable by up to 30 days in jail.
The bill instructs the Legislative Assembly to “consider studying the implications of the potential adoption of adult use for North Dakota.”
A ballot issue for RMJ passage failed in a Nov. 2016 vote. North Dakota also expanded its MMJ program this month and approved CBD processing from state-grown hemp.
GW Pharmaceuticals reports sales of $39.4 million
GW Pharmaceuticals has reported sales of $39.2 million in the first quarter — a six-fold increase over its prior quarter which reported sales of $6 million.
GW's Epidiolex drug helped the company lower its operating losses for the quarter to $59 million, down from the prior $72 million, suffered at the end of 2018.
Analysts were bullish that GW would not suffer the volatility visited upon many pharma companies. "This is a marijuana company that does pharmaceuticals, not the other way around. Therefore, these shares don’t have the same catalysts" as pharma, wrote analysts Investor Place.
Acreage Holdings investors announce plans to vote against Canopy deal
San Francisco-based investment manager Marcato Capital Management LP penned an open letter to the Canopy Growth board on Monday deriding a potential merger pending U.S. legalization. In the letter, Marcato called the deal “a value-destructive transaction and not in the best interests of shareholders,” and says his company plans to vote against the deal.
The firm owns 575,000 shares of Acreage, or just about 2.7 percent of the outstanding subordinate voting shares. According to the statement, the $3.4 billion price tag is far lower than what Marcato believes Acreage could command based on the present value of their future cash flows alone.
PotNetwork’s Brandon Dorfman has more on this story.
HerbForce releases cannabis jobs report
Cannabis industry recruiters HerbForce have put together a report on salaries and benefits packages in the industry. The report explores how the cannabis industry is approaching talent acquisition and retention strategies with benefits and compensation packages.
Some key takeaways from the report:
Cannabis offered the highest average raise percentage in 2018 at a staggering 14 percent — more than quadruple the national raise average.
More time for leave than any other CPG sector (nearly double the amount offered by the wine and spirits industry)
Across all departments, VP compensation shows a low of $175,000 a year and a high of $250,000.
Chief marketing officers are paid from $250,000 to $300,000 per year.
Plant/retail operations managers show compensation of $75,000 to $120,000.
HiGrade develops uncanny AI weed analyzer
The team at HiGrade has developed an AI application that is being called the “Shazam of weed” for its uncanny ability to tell the potency of your marijuana just by a picture. Read the full story here.
New Zealand’s Referendum on the legalization of recreational cannabis use
New Zealand is joining the list of nations moving towards the end of prohibition for marijuana. On May 7, Justice Minister Andrew Little announced details on plans to legalize and regulate marijuana in New Zealand. The minority government coalition has agreed to the foundational elements of a referendum which would allow New Zealander adults 20 years and older to use, own, sell, and cultivate cannabis.
The referendum will appear on New Zealand’s 2020 ballot.
PotNetwork’s Meg Ellis has more on this story.
Quote of the week
After raising more than $400 million to grow their vape-category, leading products, PAX CEO Bharat Vasan threw some shade on CBD.
“The space feels overhyped right now because it’s the only federal form,” said Vasan, speaking at a San Francisco seminar last week. Vasan joined Pax Labs nearly a year ago after Juul (the e-cigarette branch of Pax Labs) was spun out from the parent company. Vasan added, "I think one of the open questions with hemp-based CBD is what’s the promise? For those who say that maybe this will get rolled back, it’s hard to put the genie back in the bottle at this point.”
Link of the Week
Still have hope for IRS-280E relief? Well, then take a valuable hour and tune into the new webinar from Bridge West expert Jim Marty. "How to Improve After-Tax Profits for a Cannabis Business," is sponsored by DC law firm Offit Kurman and host attorney Jason Klein. Register for the free webinar, taking place May 21 at Noon Eastern by visiting https://register.gotowebinar.com/register/7204430492248034315