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The Illegal Cannabis ‘Whack-A-Mole’ Problem Finally Solved?

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Lynn C. Schulman, a councilman for New York City, filed a measure in April 2023 that would make it illegal for landlords to lease to business tenants who are engaged in the unauthorised sale of cannabis. On Thursday, June 22, the bill was sent to and passed by the entire Council after being authorised by the Committee on Public Safety. The bill will now be delivered to Mayor Eric Adams’ desk, having been given 30 days to sign it into law or veto it.

 

If passed, the bill would dispatch city inspectors to the thousands of alleged unlicensed cannabis outlets. The landlord might be fined between $5,000 and $10,000 if the inspector discovers that illegal cannabis is being sold on the property. The penalty can be avoided if the landlord can show evidence that eviction proceedings have started since the initial inspection. A second inspection would then happen. The measure would permit the mayor to select any state agency to inspect for such offences in addition to the state agencies already allowed to do so. Even though the imposition of fines on landlords may significantly lower the number of unauthorised cannabis outlets, several provisions of the bill may allow for these illegal stores to take advantage of a loophole.

 

Since Governor Kathy Hochul gave the Office of Cannabis Management (OCM) authority to enforce recently authorised by the state’s FY 2024 Budget, actions against the illegal enterprises themselves have already started in earnest. The Governor’s report that roughly $11 million worth of illegal cannabis goods have been seized so far around the state, and the passage of the bill comes at the same time. It’s been suggested for a long time that the extra step of imposing penalties on landlords who intentionally rent to unregistered operators should serve as a disincentive to the black market.

 

The Coexistence Challenge: Legal and Illegal Cannabis Markets

The Marijuana Regulation and Taxation Act (MRTA) established the legal cannabis industry in New York in March 2021, and the strict regulatory framework of the OCM constrains it. In contrast, the illegal cannabis industry is much larger, older, and unconstrained by the limitations placed on valid license holders, such as the payment of taxes and public safety restrictions on operating in areas of concern or selling to underaged children.

 

It was obvious that the two industries could not really coexist before the first state-licensed dispensaries opened their doors. Since the MRTA legalised cannabis throughout the state, the unlicensed market (also known as the legacy market, the grey market, or the black market) has opportunistically exploded. It has continued to spread at an alarming pace in contrast to the legal market, whose rollout has sputtered along under the weight of bureaucracy. Even California, which has one of the oldest adult-use (recreational) cannabis programs in the country, sees up to $8 billion in illegal sales annually, bringing in a lot more money than the legal industry does.

 

In response to the issue, politicians at different levels of state government have proposed measures to hold landlords accountable for leasing unlicensed cannabis businesses. The aim is to discourage landlords from entering into such leases or to impose penalties if they do. By doing so, operators would struggle to find suitable space or face eviction if they have already signed a lease. This would force illicit operators to either go completely underground, cease their operations, or consider entering the legal marketplace by obtaining a dispensary license. However, many existing operators may find this option unfeasible.

 

New York took the lead by prioritising justice-involved license applicants through its Conditional Adult-Use Retail Dispensary (CAURD) program. Despite this, after over two years since the passage of the Marijuana Regulation and Taxation Act (MRTA) and the submission of thousands of adult-use cannabis applications, only a limited number of legally compliant dispensaries are operational in New York. Landlords who lease to unlicensed operators cannot claim ignorance to evade fines. The proposed bill poses a significant risk of enforcement action against such landlords, especially after receiving warning letters from city agencies that undermine any claims of ignorance. Falcon Rappaport & Berkman can assist landlords in drafting leases with stronger use restrictions to discourage unlicensed cannabis sales and simplify eviction procedures in case of any illicit activities.

 

Challenges and Considerations

 

Imposing fines on commercial landlords and encouraging them to evict illicit cannabis tenants is a crucial step in the implementation of New York’s legal cannabis market. Without these measures, legitimate license holders would remain at a disadvantage, and both consumers and the general public would miss out on the advantages of a well-regulated marketplace.

 

However, it is essential to carefully consider the approach to fining commercial landlords or implementing other enforcement actions. A specific provision in the proposed bill, section C.1., states that written notices and potential fines apply only to properties exclusively used for selling illicit cannabis and “not occupied for any other licensed or lawful purpose.” While the bill may still result in fines for landlords of unlicensed cannabis stores, this provision means that if the premises are used for another lawful purpose alongside illicit activities, the fines may not apply. This creates a potential loophole where landlords of bodegas and convenience stores selling cannabis products could potentially avoid penalties under this bill.

 

We must recognise the complexity and adaptability of the unregulated market. This bill would certainly hinder significant competitors to licensed adult-use dispensaries if enacted. However, it falls short of addressing the entire unregulated cannabis market in New York. Regular reassessment of enforcement actions and implementing well-crafted policies will be necessary to foster a thriving adult-use cannabis industry in New York.

 

Bottom Line

Approving the measure in New York City to fine landlords and encourage evictions for unlicensed cannabis sales is a crucial step in regulating the legal cannabis market. While it addresses the issue of illicit operators, some potential loopholes and challenges need to be carefully considered. Ongoing evaluation, reassessment of enforcement actions, and well-crafted policies will be necessary to ensure the success of the legal adult-use cannabis industry and effectively curb the unlicensed market in New York.

 

OTHER IDEAS TO STOP ILLEGAL CANNABIS SHOPS, READ ON…

VERIFIED CANNABIS SHOPS

WILL A VERIFIED EMBLEM ON DISPENSARIES PUSH CUSTOMERS TO LEGAL SHOPS?



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Wet Marijuana – How Do You Dry Out Your Wet Stash?

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Whether you bought your cannabis or dried it yourself, there’s a good chance it got wet accidently. This might have happened by mistake or because the cannabis was washed purposely to eliminate contaminants and enhance its flavor. Regardless, it’s disheartening to devote time, money, or effort just to wind up with a useless product. But do not worry—there are solutions.

 

There is a narrow line between slightly moist buds and perfect stickiness, which some people prefer.

 

If your cannabis squishes when lightly squeezed, it’s likely overly damp. Buds should feel somewhat sticky because to the resin (which contains the cannabinoids), but they should bounce back slightly when squeezed rather than crush.

 

Wet cannabis may seem sticky, but it will not adhere to your fingertips. You’re seeking for buds with a honey-coated texture, comparable to baklava. If they feel wet or spongy, you have a problem.

 

Common Issues With Wet Cannabis

 

Difficult to Light 

It’s no surprise that wet cannabis is hard to ignite. If you can’t light it, you can’t smoke it.

 

Mold Risk 

Excess moisture, as explained in *How to Dry and Cure Cannabis*, complicates pot storage and can lead to mold. Smoking moldy cannabis is risky because it contains germs and fungus that can harm your respiratory system and increase your risk of pneumonia.

 

Bad Taste

If you somehow manage to smoke damp weed, it won’t taste great. It’s like smoking uncured cannabis—definitely not pleasant.

 

The Risks Of  Wet Weed

 

While smoking wet pot is not always harmful to your health, the length of time the bud remains wet can make a significant effect. A damp atmosphere is ideal for mould, fungus, and bacteria. So, if you keep your cannabis wet for too long, you may get more than you bargained for. Smoking mouldy cannabis can cause headaches, lung issues, and even pneumonia. As a result, if your weed became wet, it is safer to dry it straight away.

 

Regardless of whatsoever drying method you use, it is critical to examine your marijuana for mold before and after drying. If it has a nasty odor—like leftovers from last week—or if you notice something clearly growing on it, it’s better to toss it away. Now let’s look at what you can do if your marijuana becomes moist.

 

How to Dry Out Wet Cannabis

 

To save your damp weed, dry it out with moisture-absorbing ways. Whether you’re a grower who didn’t properly cure it, it got caught in the rain, you inadvertently spilled something on it, or it’s just unusually humid outdoors, there are several reasons why your cannabis may be storing too much moisture. Fortunately, there are several solutions to the problem.

 

Rice Drying Method

If you’ve ever spilled a drink on your phone, you’re probably familiar with this trick. It turns out uncooked rice isn’t just for saving electronics—it can help with wet weed, too. Place your wet buds in a bowl or bag, then cover them completely with dry rice.

 

The rice will draw out the excess moisture, helping your buds return to their ideal state. Depending on how wet your weed is, leave it in the rice for at least 24 hours. If it’s still damp when you check, give it another day. Just make sure to seal the container, and let the rice do the work!

 

Put a Paper Over the Problem

If your marijuana became wet, don’t worry—you can easily repair it with a paper bag. Simply place your moist buds in a closed paper bag and store them somewhere cool and dry. If you have a dehumidifier, now is an excellent time to utilize it. The paper bag circulates air while protecting your blooms from trichome-damaging light.

 

To increase moisture absorption, wrap your cannabis with paper towels before placing it in the bag. The paper towels will help absorb the extra wetness. Replace the towels and rotate your weed every several hours, checking for mold. This also helps to remove any trapped dampness from the bag.

 

Revive Your Damp Weed

If you’re a grower, you’re no stranger to the challenges of battling moisture and mold. After a successful harvest, properly curing your buds is essential. The same curing tools can also help remove moisture from buds that have become too damp. If your weed is fully soaked, start with the rice method. But if it’s just a bit moist, try placing a humidipak in your airtight container.

 

Avoid Cutting Corners

It’s tempting to use heat to hasten the drying process of damp weed. Ultimately, you most likely want to smoke it as soon as possible. It’s important to avoid shortcuts that utilize heat or light, though.

 

Your weed’s quality can be diminished by using a blow dryer, an oven, or leaving it outside in the sun. Terpenes and cannabinoids are broken down by light and heat, which lessens their taste and efficacy. You might lose strength in the process of gaining time. Furthermore, you run the danger of over-drying your buds, which makes for a harsher, less pleasurable smoke.

 

Moisture Prevention: Proper Weed Storage

 

Wet weed can be unpleasant at best, and downright destructive at worst (hello, mold!). While accidents happen, there are steps you can take to prevent excess moisture from ruining your stash. The key is to keep it in the Goldilocks zone—not too wet, not too dry. Freshness starts with proper storage. Keep your cannabis in an airtight container, stored in a cool, dry, and dark place. Simple, right?

 

Mason jars are a solid option, but for optimal care, consider investing in a specialized container like the CVault. It’s airtight, blocks light, and comes with a humidipak to keep your weed fresh longer. Just avoid plastic baggies—you’re a cannabis enthusiast, and dime bags are a thing of the past.

 

Bottom Line

 

If your cannabis gets wet, it’s crucial to act quickly to dry it out to avoid mold and maintain quality. Use methods like the rice drying technique or paper bag with paper towels to absorb moisture. Avoid using heat sources as they can degrade the weed’s quality. Proper storage in airtight containers and maintaining a cool, dry environment will help prevent future moisture issues. Always check for mold and other contaminants before consuming. By following these steps, you can preserve your cannabis’s flavor and potency.

 

GOT SOME WEED WEED, READ ON…

WET CANNABIS IDEAS

TIPS TO GET YOUR MARIJUANA STASH DRY, WHAT TO DO FIRST!



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What Product Created $8,700,000,000 in Tax Revenue for States in Just 36 Months?

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The legalization of cannabis has transformed the economic landscape of many states across the United States. New federal data reveals that since 2021, states have collectively collected over $8.7 billion in marijuana taxes. This figure not only highlights the financial potential of legalized cannabis but also reflects changing public attitudes toward marijuana use and its regulation. As more states embrace legalization, understanding the implications of this revenue generation becomes crucial for policymakers, businesses, and communities alike.

 

The Landscape of Cannabis Legalization in the U.S.

The journey toward cannabis legalization in the United States has been long and complex. Cannabis was criminalized in the early 20th century, with the Marihuana Tax Act of 1937 effectively prohibiting its use and distribution. However, attitudes began to shift in the late 20th century, with California becoming the first state to legalize medical marijuana in 1996.

 

The momentum continued to build, culminating in Colorado and Washington becoming the first states to legalize recreational marijuana in 2012. Since then, a wave of legalization has swept across the nation, with 21 states and the District of Columbia now allowing recreational use.

 

Current Legal Status of cannabis legalization in the  U.S

 

As of September 2024, a total of 21 states have legalized recreational marijuana, while a dozen more permit medical use. The regulatory frameworks vary significantly from state to state, influencing tax structures, sales practices, and usage regulations. Some states have opted for high taxes on cannabis sales as a means to generate revenue, while others have focused on creating a more accessible market for consumers.

 

Tax Revenue Breakdown

 

 Overview of Revenue Generation

 

According to recent federal data, states have amassed over $8.7 billion in marijuana tax revenue since 2021. This revenue comes from various sources, including excise taxes, sales taxes, and licensing fees imposed on cannabis businesses. The breakdown of this revenue is essential for understanding how different states are capitalizing on legalization.

 

  • Excise Taxes: These are taxes imposed directly on the sale of cannabis products. States like California and Colorado have implemented excise taxes that can range from 15% to 30%, depending on local regulations.

 

 

  • Licensing Fees: States also collect significant revenue through licensing fees charged to cannabis growers, manufacturers, and retailers. These fees can be substantial and contribute to the overall financial picture.

 

State Contributions

 

California: The Leader

 

California remains at the forefront of marijuana tax revenue generation. Since legalizing recreational cannabis in January 2018, the state has collected over $3 billion in taxes alone. The state’s complex tax structure includes a 15% excise tax on retail sales and additional local taxes that can vary widely by municipality.

 

The revenue generated has been earmarked for various public services:

 

 

 

Colorado: A Model for Success

 

Colorado was one of the first states to legalize recreational marijuana and has since become a model for other states looking to implement similar legislation. Since legalization, Colorado has generated over $2 billion in tax revenue from cannabis sales.

 

The state’s tax structure includes a 15% excise tax on wholesale transactions and a 2.9% state sales tax that applies to all retail sales. Local jurisdictions can impose additional taxes as well.

 

Colorado has utilized its cannabis tax revenue for various purposes:

 

 

 

Illinois: Rapid Growth

 

Illinois is another state that has seen rapid growth in marijuana tax revenue since legalizing recreational use in January 2020. In just over three years, Illinois has collected more than $1 billion in cannabis taxes.

 

The state imposes a tiered excise tax based on THC content:

 

 

 

Illinois has directed its cannabis revenue toward social equity programs aimed at addressing historical injustices related to drug enforcement policies.

 

Economic Impact Beyond Tax Revenue

 

 

Legalizing marijuana has led to substantial job growth across various sectors. As of early 2024, nearly 15,000 cannabis dispensaries operate in the U.S., employing an estimated 93,000 workers. This includes roles in cultivation, processing, distribution, and retail. Additionally, the industry stimulates job creation in ancillary sectors like software development, accounting, and construction. The cannabis sector is projected to grow further, potentially increasing legal cannabis jobs by 250% over the next decade.

 

 

The burgeoning cannabis industry presents numerous business opportunities for entrepreneurs. The market has attracted significant investment, leading to the establishment of various businesses ranging from cultivation facilities to dispensaries and ancillary services. In 2022, consumers spent approximately $30 billion on legal marijuana products, surpassing expenditures on chocolate and craft beer. This consumer spending not only benefits cannabis businesses but also generates substantial tax revenue for states.

 

 

Cannabis tax revenue often supports local communities by funding essential services. For instance, Colorado has allocated millions from cannabis taxes toward education and homelessness services. This redistribution of wealth enhances community welfare and infrastructure.

 

 

Legalization also reduces the costs associated with enforcing drug laws. States can reallocate funds previously used for law enforcement to other community programs, further amplifying the positive economic impacts.

 

 Long-term Economic Growth

 

As the cannabis industry matures, it is expected to contribute significantly to overall economic growth. Projections indicate that the total economic impact of the cannabis industry could reach nearly $150 billion by 2026, underscoring its potential as a major economic driver in the U.S.

 

Community Benefits

 

Beyond economic metrics, communities are experiencing benefits from legalized marijuana:

 

 

 

 

Challenges Ahead

 

Despite the positive economic impacts associated with marijuana legalization, several challenges remain:

 

  1. Federal Regulations

One significant hurdle is the ongoing federal prohibition of marijuana. While many states have legalized its use, cannabis remains classified as a Schedule I substance under federal law. This creates complications for banking and taxation:

 

 

  1. Social Equity Concerns

 

As states continue to generate substantial revenues from legalized marijuana, there is growing concern about social equity:

 

 

 

 

  1. Market Saturation

 

As more states legalize marijuana and existing markets expand, there is potential for market saturation:

 

 

 

Prospective Developments

As more states legalize recreational marijuana, tax revenues are expected to continue rising. With 37 states and Washington, D.C., having legalized some form of cannabis by 2024, the potential for increased tax revenue is significant. Experts estimate that nationwide legalization could generate up to $8.5 billion annually for all states. This growth will likely be driven by expanding markets and consumer acceptance, as well as the introduction of new products and services within the cannabis industry.

 

States are experimenting with various tax structures to optimize revenue while ensuring competitiveness against the illicit market. The adoption of potency-based taxation—taxing products based on THC content—has emerged as a trend in states like New York, Illinois, and Connecticut. This approach aims to create a more equitable tax system that can adapt to market changes and consumer preferences. However, states must remain cautious about overtaxing, which can drive consumers back to illegal markets.

 

 

The allocation of marijuana tax revenue will continue to be a critical issue. Many states have earmarked funds for essential services such as education, public health initiatives, and infrastructure improvements. For instance, Colorado has directed substantial portions of its cannabis tax revenue toward school construction and behavioral health programs. As revenues grow, states may face pressure to diversify spending or address social equity issues related to past drug enforcement practices.

As the cannabis market matures, prices may stabilize or decline due to increased competition and efficiency in production. This maturation could result in fluctuating tax revenues as consumer behavior adjusts. States that have seen significant price drops—like Colorado, where prices fell by 60% from 2014 to 2023—may experience challenges in maintaining consistent revenue streams. Policymakers will need to adapt their strategies accordingly.

The ongoing conversation about federal legalization could dramatically impact state revenues. If cannabis were legalized at the federal level, it would open up interstate commerce opportunities and allow cannabis businesses access to traditional banking services. This change could lead to an influx of investment and further stimulate job creation within the industry.

 

As states continue to collect substantial tax revenues from marijuana sales, there is growing recognition of the need for social equity initiatives. Many advocates argue that a portion of tax revenue should be directed toward communities disproportionately affected by past drug policies. Future developments may include programs aimed at providing grants for minority-owned businesses within the cannabis sector or funding for substance abuse treatment programs.

 

.

 

 Conclusion

 

The collection of over $8.7 billion in marijuana taxes since 2021 demonstrates not only the financial viability of legalized cannabis but also its potential impact on public services and community development. As more states navigate their paths toward legalization and regulation, it will be crucial for policymakers to address challenges related to equity, access, and federal regulations.

 

With continued advocacy for reform at both state and federal levels, along with innovative approaches to taxation and regulation, the future looks promising for both consumers and businesses within this burgeoning industry. As society continues adapting its views on cannabis use, understanding these dynamics will be essential for maximizing benefits while minimizing challenges associated with this rapidly evolving sector.

 

MARIJAUNA TAXES HIT $20 MILLION IN ONE CITY BUDGET, READ ON…

WHAT DO MARIJUANA TAXES PAY FOR

WHAT CITY HIT $20 MILLION IN MARIJUANA TAXES COLLECTED?



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Federal Cannabis Roundup: Nixon, DEA, Tobacco-Hemp . . . and the DOOBIE Act (*sigh*)

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Last week, I wrote a round-up post on Oregon cannabis. This week, I thought I’d drop a line on the federal happenings. Which are quite a few.

The Nixon tapes

This was a fun piece of news, unearthed by Minnesota cannabis lobbyist Kurtis Hanna. Ernesto Londoño then broke the story on September 14th for the New York Times, which you can read here. In short, Nixon conceded that marijuana “is not particularly dangerous,” despite calling the plant “public enemy No. 1” only two years prior. And he opined that punishments ought not be so serious for possession of the plant.

I say this news is “fun” because it’s more interesting than surprising and I doubt it will have much impact. Nixon was a mean old liar, and one with an animus toward certain groups of people. I also don’t think this revelation will persuade the vocal, diminishing minority of prohibitionists to change their minds. I like it anyway, especially as cannabis history nerd. We were right!

DEA embraces two-step review for marijuana rescheduling

This one is important, in my opinion. It relates to the method of analysis DEA must undertake when determining whether a drug, including marijuana (and psilocybin, and any other verboten substance), has a “currently accepted medical use.” In April, the Department of Justice’s Office of Legal Counsel (OLC) put DEA in a box on this one, explaining that the old, five-part test was “impermissibly narrow.” OLC thus endorsed the two-part test. On September 17th, DEA assented to the test for Schedule I review.

The two-part test bodes well for DEA’s rulemaking, now underway, to move marijuana from Schedule I to Schedule III of the federal Controlled Substances Act. How do we know? Well, the Schedule I stans don’t like it, for starters. This is because, under two-part review, a drug can have currently accepted medical use: a) even if that drug hasn’t been approved by FDA, and b) even if the drug wouldn’t pass DEA’s scrapped five-part test. So, more runway.

DOOBIE Act on the way?

I’m embarrassed even having to type that. But yes, some Congressperson named a federal cannabis bill the “DOOBIE Act,” unfortunately. With a press release and everything.

This proposal would prohibit federal agencies from denying security clearance and employment to people simply because they have used marijuana. In my reading of the actual bill, these agencies could still ding an applicant for past marijuana use, but they couldn’t “base a suitability determination . . . solely on the past use of marijuana by the individual.” The word “solely” needs to go.

Because this bill applies only to “Executive agencies” under 5 U.S. Code § 105, it also wouldn’t have prohibited, say, Joe Biden from doing his “doobie” staffers dirty, which he definitely did.

FDA gets the nod on tobacco-hemp

I like the Congressional Research Service (CRS) and often send people thataway. On September 16th, CRS published a new report titled “Legal Effect of Marijuana Rescheduling on FDA’s Regulation of Cannabis.” Here are my extremely condensed takeaways:

  1. FDA can authorize tobacco products containing hemp-derived cannabinoids (although it hasn’t yet). This is because hemp is not a controlled substance.
  2. Marijuana, even at Schedule III, would still be banned as a tobacco additive (and probably always will be). This is because FDA would need to approve specific cannabis medicines first, and it never does that for botanical drugs.

Here we have one of those cognitively dissonant outcomes often seen with the cannabis plant. As a reading of law it makes sense, but as to policy it’s nonsense. You can thank Richard Nixon and other cannabis heels for that.



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