420 with CNW — DOJ Says Federal Government Will Ask Court to Throw Out Case Challenging Prohibition

The U.S. Department of Justice has revealed that it will ask a federal court to dismiss a lawsuit seeking to block the federal government from enforcing cannabis prohibition in state-level cannabis markets. Several industry stakeholders and cannabis businesses teamed up in May 2022 to sue the federal government over what they said were unconstitutional policies harming their operations. The group was represented by two leading law firms, including Boies Schiller Flexner LLP, which has represented clients such as former Vice President Al Gore and the Justice Department.

According to the lawsuit, enforcing cannabis prohibition in state markets is unconstitutional and creates a public risk while preventing licensed cannabis businesses from accessing critical financial services despite paying taxes. The suit was filed by Wiseacre Farm and Canna Provisions from Massachusetts, Treevit CEO Gyasi Sellers, along with multistate marijuana operator Verano Holdings Corp. (CSE: VRNO) OTCQX: VRNOF) in the U.S. District Court for the District of Massachusetts, Western Division.

However, in a document filed earlier this week with the U.S. District Court, the Justice Department noted that Attorney General Merrick Garland will file a “motion to dismiss and supporting memorandum” on the Tuesday deadline. That news comes only one month after the plaintiffs and the DOJ jointly agreed to request a deadline extension for initial brief filing. Both parties submitted a joint filing asking the court to extend the deadline by 28 days and push it to Jan. 26, 2024.

If the federal government does file a motion to dismiss, the plaintiffs will have until March 15, 2024, to submit an opposition response and up to April 5, 2024, to submit any additional replies. The DOJ is also asking for permission to submit a memorandum exceeding the 20-page limit as it will present arguments on “multiple issues of constitutional law.”

According to Ascend Wellness Holdings founder Abner Kurtin, the lawsuit is an “industry-wide effort” seeking to block the federal government from impeding intrastate cannabis trade. The suit argues that interstate cannabis trade prohibitions are “unjustified vestiges’” of long-abandoned prohibitionist policies at the state level.

With dozens of states legalizing medical and recreational cannabis over the past two decades, the suit alleges that interstate commerce prohibitions by the federal government are an “unjustified intrusion of federal power” that harms the cannabis sector and lacks any national purpose.”

The plaintiffs are also challenging tax provision IRC 280E, which prevents cannabis businesses from making tax deductions. American Trade Association of Cannabis and Hemp president Michael Bronstein said he believes that tax provisions, as well as the Controlled Substances Act, are being “misapplied to legal cannabis businesses.”

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — CDC Study Shows Major Drop in Teen Cannabis Use in Washington’s Largest County Post-Legalization

A recent federal study conducted by the Centers for Disease Control and Prevention (CDC) has shown a notable decline in cannabis use among teenagers in King County, Washington State’s largest county, following recreational use legalization in 2012. The study indicates a substantial decrease in both frequent and current cannabis use among 8th, 10th, and 12th-grade students, according to data from 2008 to 2021.

According to researchers, the legalization of marijuana combined with related rules and age restrictions may have made it less available to minors. They do, however, concede that the COVID-19 epidemic may have contributed to more recent drops in use.

Using youth survey data from the state’s health department, researchers found that “current cannabis use,” defined as use within a one-month time frame, decreased significantly from peak levels of 15.5% in 2012 to 9% in 2021 for females and 20.4%in 2010 to 7.7% in 2021 for males.

Although the trend of reduced teen-use rates started soon after the legalization of recreational cannabis, according to the study’s authors, the COVID-19 pandemic, which resulted in the imposition of stay-at-home regulations in March 2020, may have exacerbated the decline in recent years.

Since peak usage in 2012, there has been a steady decline in teen use of cannabis. For instance, the percentage of males who used the substance frequently, meaning more than six days a month, decreased from 7.5% in 2014 to 3.7% in 2021. Though usage among female students declined as well, it did so more gradually, with rates dropping from 15.5% in 2012 to 9% in 2021.

Interestingly, 2021 was the only year where female users had a slightly higher prevalence of current use. Nonetheless, male users still reported more frequent use compared to their female counterparts.

According to the study, there has been a noticeable decline in the gender gap in recent cannabis use prevalence rates. Although the study hypothesized that changing societal norms surrounding marijuana could be connected to gender variations in marijuana use, the authors urged further research to look at cannabis-use patterns related to gender and norms.

These results are consistent with another study conducted on high school students in Canada, which found that once marijuana was legalized, most felt that it was less accessible. The study authors attributed the outcome to both national legalization and COVID-19 social-distancing measures. Additionally, another CDC analysis also showed a decline in high school students’ marijuana use after legalization in most states.

Such research findings don’t support prohibitionists who argue that ending cannabis prohibition by allowing such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) to operate would result in skyrocketing teen access to the drug.

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420 with CNW — Data Shows Recreational Cannabis Sales Exhibited Mixed Results for Growth in 2023

Last year saw many regulated recreational cannabis markets record significant growth in their sales. While established markets such as Colorado recorded slight declines in sales, states such as Maine and Arizona saw growth in their markets. Below, we examine adult-use sales using data from regulators in different states.

Arizona

Recreational sales started strong last year, with monthly recreational cannabis sales peaking in March at $100 million. The state launched its adult-use cannabis market in 2021.

Washington State

Adult-use cannabis sales in the state have relaxed since the pandemic, with the state selling only $1.14 billion in recreational cannabis through November last year. The figure is a slight decrease from the $1.18 billion recorded in 2022 for the same period.

California

Despite its record-breaking sales during the pandemic, the marijuana market in California has seen sales slip from late 2021. Between 2021 and 2022, year-over-year sales dropped by more than 10%. In 2023, this figure reduced to 8%, which is promising but still doesn’t represent true recovery.

Michigan

The state, which outsells California when it comes to adult-use cannabis, didn’t record any significant decline in its growth last year. Figures show that year-over-year sales dropped to 48% between 2022 and 2023, from 55% in 2021 to 2022. It is expected that recreational sales will be strong in 2024.

Colorado

Decreasing year-over-year marijuana sales over the last two years brought Colorado’s market value to its prepandemic levels. Figures show that between January and October 2023, recreational marijuana sales reached $1.15 billion. This is slightly lower than the figures recorded over the same period in 2019.

Oregon

Last year, the state’s recreational sales totaled $901 million. This is quite a drop, especially when compared to sales in 2020 and 2021, which surpassed $1 billion. It is expected that adult-use sales in Oregon may recover this year.

Connecticut

The state’s first year of adult-use sales brought in almost $131 million, with forecasts expecting it to reach $145 million.

Maryland

Last year, the state’s new recreational marijuana market raked in $331 million. Its location on the East Coast and its population density make it a market to watch this year.

Maine

Despite the state’s recreational marijuana market hitting new highs in sales last year, its growth has begun to slow. While this is expected in new markets, its decline is a bit more extreme.

Rhode Island

In 2023, the state brought in $74 million in total recreational cannabis sales. This figure is significantly higher than its sales projection of $50 million. Rhode Island’s market is expected to continue growing in 2024.

These successes registered at state level could be because consumers are taking to the legally produced cannabis products made by numerous enterprises such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) and other state-legal cannabis businesses.

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420 with CNW — Biden Again Excludes Serving Military Personnel from Latest Cannabis Pardons

The latest round of pardons for American citizens with federal simple possession, attempted possession and use of marijuana by President Joe Biden have excluded serving military personnel again. First issued on Oct. 6, 2022, the presidential proclamation pardoned several federal simple cannabis possession offenses before another proclamation extended the number of pardoned offenses on Dec. 22, 2023.

While the first round of pardons was lauded as a major step toward fixing the damage caused by decades of cannabis prohibition, many advocates noted that the pardons were severely limited in scope and did not provide relief to many drug-war victims. The pardons only covered around several thousand people who had been convicted of federal cannabis possession offenses but left out military service members, noncitizens and people convicted of selling cannabis.

President Biden extended the proclamation last December to include individuals who were charged with cannabis possession offenses on federal properties. In a statement released shortly after the proclamation, Biden said that cannabis use and possession offenses have prevented people from accessing employment, housing and educational opportunities. He acknowledged that the government’s approach to marijuana had failed and said that it was time to “right these wrongs.” However, the president’s pardons excluded service members with simple-possession and marijuana-use offenses on their records.

An official from the White House confirmed that the December 2023 proclamation does not apply to offenses prosecuted under the Uniform Code of Military Justice. This essentially means that military service members who were charged with cannabis offenses in the past would not qualify for Biden’s latest round of pardons.

Although none of the 2022 and 2023 presidential proclamations resulted in any American being freed from federal prison, the removal of a federal cannabis conviction from an individual’s record can eliminate barriers to housing, education and reliable employment.

If the pardons also covered military service members with cannabis-related convictions, they could change their military discharge status and gain access to certain benefits. Unfortunately, while the president does have the unilateral right to change some punishments under the Manual for Courts-Martial, any major changes to the Uniform Code of Military Justice (USMJ) would have to go through Congress.

The UCMJ currently levies a maximum punishment of two years, forfeiture of pay and dishonorable discharge for marijuana possession.

Florida International University associate professor of law and military justice specialist Eric Carpenter says it isn’t surprising that Biden excluded military service members from this round of pardons. He explained that the use of drugs in the military tends to be more serious than recreational drug use by civilians’ because it can compromise good order and discipline.

The entire marijuana industry, including actors like Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF), will be hoping that ways can also be explored to grant serving military personnel the pardons that civilians can access under the evolving regulatory landscape of cannabis.

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420 with CNW — Study Shows State-Level Cannabis Legalization Boosts Recruitment for College Basketball

A recent study conducted by researchers at Kennesaw State University and Georgia College and State University has established a link between cannabis legalization and its impact on recruitment outcomes for college sports teams. Delving into the dynamics of recreational marijuana policies and their influence on talent acquisition, the researchers examined recruiting data spanning from 2003 to 2019.

Their findings, presented in the “Sports Economics Journal,” propose that cannabis legalization plays a major yet intricate role in shaping the landscape of college sports recruitment, particularly in football and basketball, warranting attention from NCAA leagues. The research revealed a positive correlation between cannabis legalization and enhanced recruitment prospects for college basketball teams. Teams situated in states where marijuana is legal experienced an average improvement of 3.7 slots in recruiting rankings. In stark contrast, the outcomes for football teams in legal states were less favorable, with recruitment rankings showing an average decline of 2.9 slots compared to similar institutions in nonlegal states.

Despite the absence of survey data from individual athletes, the authors caution against drawing definitive conclusions from their findings. Nonetheless, they offer speculative hypotheses to shed light on the observed disparities. One theory posits that variations in the recruitment landscape between football and basketball may be attributed to the historical cannabis policies of national leagues, such as the NBA and NFL. The NFL, with its more stringent penalties for marijuana use, could have instilled greater caution among college football players compared to their basketball counterparts.

The study notes the evolving landscape of league policies, citing adjustments made by both the NFL and NBA in 2020. The NBA, for instance, removed cannabis from its banned substances list, allowing players to engage in marijuana-related activities within specified limits. Similarly, the NFL altered its drug-testing policy to eliminate the threat of suspension for positive tests, signaling a more lenient stance.

Notably, the study highlights the broader impact of cannabis policy changes on various professional sports leagues, including the NCAA. In a significant move, the NCAA Committee on Competitive Safeguards and Medical Aspects of Sports recommended the removal of cannabis from the list of banned substances for college athletes. This proposed reform aligns with the NCAA’s prior adjustment of the THC threshold for a positive test, bringing it in line with the WADA standards.

The researchers also explore the possibility that the disparate effects of legalization on football and basketball recruitment may be influenced by cultural differences within these sports communities. The study suggests that the basketball community might be more accepting of cannabis use, potentially empowering college recruits to choose institutions in states where recreational use is permitted.

The researchers acknowledge the need for further research to validate these hypotheses. However, they emphasize the predictive power of their results in anticipating the future dynamics of college athletics. With several states enacting legalization post-2019, the study suggests that colleges in these states may witness improved basketball recruitment and on-court performance but could experience adverse effects on football recruitment and on-field performance in the coming years.

Established cannabis companies such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) likely wouldn’t have thought that the legalization of cannabis could have positive effects on recruitment into college sports teams. More research could reveal yet more benefits associated with ending cannabis prohibition.

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420 with CNW — Marijuana Professionals Foresee Bumpy, Exciting 2024

After the post-pandemic downturn caused many businesses in the cannabis industry to struggle, many marijuana professionals are now predicting a more lucrative 2024. The post-COVID period saw the addition of several more states to America’s nascent marijuana industry, and the country made significant strides in its efforts to legalize marijuana at the federal level. In addition, President Joe Biden issued a mass pardon for marijuana offenders, and his administration has indicated that it is seriously considering rescheduling the controversial plant at the federal level.

Industry professionals are now looking at 2024 with renewed optimism even though the state-legal cannabis industry is likely in for a lot of turbulence. Ed Schmults, CEO of California-based company StateHouse Holdings Inc., says the U.S. Health and Human Services recommendation to the Drug Enforcement Agency (DEA) to move cannabis from Schedule I of the Controlled Substances Act to Schedule III is welcome news, even though it came 10 years late.

Although rescheduling would call for significant levels of legislative effort and time, Schmults is optimistic that the federal government will take the steps needed to move cannabis to Schedule III. He says an implementation timetable of around 12–18 months would be more reasonable than the six-month timeline discussed by some industry players. While descheduling cannabis outright would offer a much better path for the nation’s cannabis industry, Schmultz noted, transferring the drug to Schedule III is a “big step in the right direction.”

David Goubert, president and CEO of multistate marijuana operator AYR Wellness, says that multistate operators will be more focused on their companies’ financial health and will likely prioritize cash-flow generation coupled with lean and efficient operations. He added that if cannabis rescheduling and 280E changes happen as many industry players anticipate, cannabis businesses would start paying fewer annual taxes and would be better equipped to pay down their debt.

The legalization of recreational cannabis in Ohio, Florida and Pennsylvania could also lead to “significant deleveraging” by mid-decade, Goubert says.

Poseidon Asset Management cofounder Morgan Paxhia predicts that next year will be the most exciting and eventful year in the legal cannabis industry’s history. He predicts that while policymakers will reclassify cannabis as a Schedule III substance, “Congressional hijacks” following such a historic legislative development as lawmakers try to take credit could stifle the cannabis industry’s progress and levy a high 14% excise tax on businesses.

However, he notes that the SAFER Banking Act likely won’t make any progress in 2024. Instead, Paxhia expects lawmakers to introduce a ‘=”Garland memo-like protection” alongside rescheduling.

As 2023 draws to a close, many in the cannabis industry, such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF), may be fine-tuning their plans to capitalize on any regulatory changes that could be made at the federal level in the coming year or years.

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420 with CNW — New Poll Says 67% of Voters in Florida Back Recreational Cannabis Legalization

More than 700 residents in the state of Florida were polled by UNF Public Opinion Research Lab in a recent survey. This survey comes after the state’s Supreme Court heard arguments over the resolution to allow an amendment that would restrict purchases to three ounces of cannabis on the 2024 ballot.

From the poll, 67% of registered voters would support a state constitutional amendment that permitted adults to buy and possess cannabis for personal use. Additionally, 28% were against an amendment that would allow recreational marijuana to be legalized without a license while 5% were undecided on the matter.

While the results show strong interest in the decriminalization of marijuana, the support recorded in the latest poll is lower than results from previous surveys. The Public Opinion Research Lab asked voters in the state a similar question two years in a row, with 76% voicing their support for amendment in 2022. The following year, this figure had dropped to 70%.

Professor Michael Binder, the lab’s faculty director, attributed the drop to how the question was presented to voters. In a statement, Binder explained that while prior surveys simply asked voters if they were opposed or supported the legalization of recreational cannabis, the latest survey went into details of the proposed amendment. Additional details about the amendment shared in the latest poll include that it would permit entities licensed by the state to grow and sell cannabis products and accessories. It also stipulated that the new rules wouldn’t change federal law and would only apply to state law.

Despite the slight drop, a majority of respondents in every category that was polled had a positive stance on ending prohibition. This included 77% of Democrats, 58% of independent voters and 53% of GOP members. With regard to gender, 68% and 55% of women and men respectively supported the change.

When researchers used education as a metric, they determined that 64% of respondents with college degrees and 61% of those without were also in favor of the amendment. By race, 65% of Black and White respondents were in favor of cannabis being legalized. This is quite high, especially when compared to 52% of Hispanics who were of the same opinion.

Based on age, the poll determined that 77% of respondents aged 18 to 24 years of age backed marijuana legalization, with those aged 55 to 64 years old making up 71% of those in favor of recreational legalization. Voters aged 65 years and older who supported legalization of recreational cannabis made up 56% of Floridians surveyed.

The eventual legalization of recreational cannabis in Florida will be welcomed by not only companies intending to set up shop within the state but also other industry actors such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) that would like to see prohibition ended in all jurisdictions around the country.

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420 with CNW — German Lawmakers to Vote on Revised Cannabis Legalization Measure Next Week

Legislators in Germany have decided to revise a bill to legalize cannabis in the country, a week before they cast their final vote on it in parliament. The bill to legalize marijuana is being championed by Health Minister Karl Lauterbach, who first discussed details concerning the revised legalization measure in April 2022. In May of the same year, he presented the legislative text to cabinet officials.

When responding to early criticism of the measure from law enforcement and medical groups, Lauterbach emphasized that marijuana reform would be implemented together with a campaign to educate the public on the risks of using marijuana. Last week, Kirsten Kappert-Gonther of the Green Party stated that the resolution would be revised in ways that would make it better.

The amendments would relax some provisions that were challenged by advocates and supporters in the Bundestag. After the resolution is amended, individuals found possessing between 25–30 grams of marijuana won’t automatically be treated as criminal offenders but as administrative violators. The possession limit for home-grown cannabis will also be increased to 30 grams from 25 grams.

With regard to public consumption of marijuana, individuals will not be allowed to use marijuana within 100 meters distance of a school. Prior to the amendment, this figure stood at 200 meters. Legislators also agreed that social clubs that could distribute cannabis to members may begin launching in July 2024 while home cultivation and possession of marijuana legal for adults would begin in April of next year.

Kristine Lütke, a member of the Free Democratic Party in the Bundestag, added that these revisions could bring relief to consumers and make the bill even better. In addition, legislators plan to introduce a complementary resolution that would create pilot programs for commercial sales in different cities across Germany.

Currently, it is expected that once the Bundestag approves the legalization bill, the measure may be advanced to the Bundesrat. In September of this year, members of the Bundesrat had tried and failed to block the proposed measure.

While the Federal Cabinet approved the measure’s initial framework last year, the government thought it best to receive approval from the European Union before enacting it, so they were sure they wouldn’t be violating any global obligations.

In other news, government officials from some countries, including America, met in Germany this previous week to discuss global cannabis policy issues. Last year, Narcotics Drugs Commissioner Burkhard Blienert and a group of German legislators visited the United States and toured marijuana businesses in California to help inform their approach to legalization.

When the German cannabis market finally opens, there will be a chance for local companies grow to the levels seen by enterprises such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) that are operating in mature marijuana markets.

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420 with CNW — Regulators in New York Reach Settlement Regarding Marijuana Business Licensing

Cannabis regulators in the state of New York have reached a settlement with veterans who had filed a suit over the licensing process in the state. The settlement’s completion will allow an injunction that was effected from August to be lifted. The temporary injunction, which was enacted by the state’s Supreme Court, has prevented hundreds of holders of conditional adult-use retail dispensary licenses from launching their businesses.

Regulators in the state launched the recreational retail-dispensary program to afford those who were disproportionately affected by the drug war before marijuana became legal an opportunity to enter the legal marijuana industry. The program’s objective was to create a cannabis industry that was centered on social equity.

When filing their lawsuit, the veterans claimed that the regulators acted ultra vires and violated marijuana law by giving preference in the application process, instead of opening it to the general public as stipulated by the law. The veterans also asserted that the award system breached the state’s constitution, citing that under the law, disabled veterans could qualify as economic and social applicants, which entitled them to certain licensing benefits and priorities.

The agreement between the veterans and regulators in the state has happened at a time when there’s considerable change in how regulators in the state approach the rollout of marijuana licensing. Earlier in September, regulators expanded their licensing program to allow for more diversity between applicants. This decision allowed multistate operators to enter the market, which was at the time dominated mainly by a restricted number of entrepreneurs and unlicensed dispensaries.

This lawsuit isn’t the only legal challenge marijuana regulators in the state of New York face either. In March, medical cannabis operators in the state filed a complaint against the regulators. Their objective was to secure license issuance for all applicants of retail dispensary licenses. The operators asserted that the agencies hadn’t fulfilled their duties as stipulated by the law and that their actions had endangered the safety and health of the people of New York.

Last year, Variscite, a company based in Michigan, also filed a lawsuit against the regulators. The aim was to obtain a preliminary injunction against licenses awarded in specific regions of the state. The company argued that the preference for in-state operators by the licensing program prevented interstate commerce, and in turn, violated the dormant commerce clause. The case was resolved earlier in May, with the Cannabis Control Board approving a settlement.

The cannabis industry is always engaged in efforts to improve one policy or the other due to how stringently prohibition was enforced, and the progress made in New York is likely to be welcomed by industry actors elsewhere, such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF).

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420 with CNW — Report from Illinois Highlights Significant Diversity Improvements in Cannabis Industry

Recent cannabis data from Illinois has revealed a sharp increase in diversity since the state launched recreational cannabis sales in January 2020. The Illinois Cannabis Regulation Oversight Officer (CROO) states that cannabis businesses in the early days of adult-use sales were 100% majority owned with only one majority woman-owned cannabis enterprise in the entire state.

However, a survey report published last week shows that efforts to promote diversity in the Illinois recreational cannabis industry have yielded great success. The surveys found that the number of Black-owned businesses in the sector increased from 0 27% from 2020 to 2023. Hispanic or Latino-owned businesses went up from 0 to 5%, and Asian-owned enterprises climbed from 0 to 3%. Furthermore, women-owned companies now account for 16% of all licensed cannabis companies in Illinois.

These findings came from two CROO surveys. The first was a mandatory survey sent to all the 277 licensed cannabis businesses in May while the other was a voluntary poll for their employees.

Approximately 224 licensees (132 companies) and 2,307 employees responded to the poll, providing CROO with a decent enough sample size to work with. They found that the number of individual cannabis business owners in the Black community increased to 26% from only 1% in 2020 while Hispanic and Latino owners now account for 7% of the market.

On the employee side, 11% of the survey participants were Hispanic or Latino, a 6% increase from 5% in 2020. However, even though the number of Black employees in the state’s cannabis sector dropped from 10% to 9% in 2023, Black workers were better represented in higher-level positions in 2023 compared to 2020, registering an increase to 19% from a paltry 1% of Black employees in the C-suite. The number of Black people on the boards of directors of cannabis companies also increased from 6% in 2020 to 20% in 2023, the report said.

CROO notes that the findings may not be fully representative of Illinois’ cannabis industry because not every licensed cannabis retailer responded to the poll. The office also added that responses from licensed cannabis companies “were not verified but accepted as accurate.” Even so, CROO says their findings represent the most accurate and available information on the subject matter to date.

Social equity has been a key component of cannabis legalization efforts in many states because it allows communities that were disproportionately harmed by cannabis prohibition to benefit from cannabis legalization.

This report shows the extent to which companies such as Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) are creating opportunities for a diverse set of Illinois residents to participate in this rapidly growing industry.

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