Cultiva Law

Aaron Pelley: California Psychedelics Bill Introduced in Legislature

Published

1 year ago

April 1, 2023

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Aaron Pelley

Over the past few years, since about 2019, several legislative measures on both the state level and within local municipalities have either decriminalized the possession of natural psychedelics or legalized certain plants for medical use such as in the state of Oregon. Due to a combination of reasons from the federally-enacted Controlled Substances List and the lack of overall support from many state legislatures for reformation, the legitimate medical research done on these plants have been limited at best. There are a handful of overseas companies who adhere to different laws that have been allowed to complete small trials and studies on the efficacy of natural psychedelic plants, but nowhere nearly enough for the Food and Drug Administration to consider approval of any of their substances.

However, in an eerily similar way to cannabis legalization, naturally occurring psychedelics may soon be legal on the state level, in the same state that became the first to allow medical cannabis way back in the late 1990’s, California. With Senate Bill 58, certain plants that fall under the psychedelic umbrella may soon become legalized in the Golden State. Introduced by State Senator Scott Wiener, SB 58 has the potential to be historically groundbreaking for the furtherance of naturally occurring plant-based medicines.

“This bill would make lawful the possession, preparation, obtaining, transfer, as specified, or transportation of, specified quantities of psilocybin, psilocyn, dimethyltryptamine (DMT), ibogaine, and mescaline, for personal use,” the bill reads, “or facilitated or supported use, as defined, by and with persons 21 years of age or older. The bill would provide penalties for possession of these substances on school grounds, or possession by, or transferring to, persons under 21 years of age.”

One notable revision added to SB 58 so far by Senator Wiener was that the synthetic psychedelics that are utilized more commonly as party drugs such as MDMA and LSD would not be legalized under the measure. Instead, the latest version of the bill crafted by Wiener would only focus on substances that are classified as fungi or plants.

“Listen, I would love to have them included. I think they should be included,” Wiener told Marijuana Moment. “But we also need to be able to pass a good bill. And, unfortunately, there are a lot of stereotypes about LSD and MDMA, and so we decided, let’s get it passed for non-synthetics—which will still be a major game changer with psilocybin, ibogaine, ayahuasca and others—and then we can come back later to address synthetics.”

Along with personal possession of small amounts of the substances, SB 58 would also legalize “group counseling and community-based healing”, meaning that among many possibilities, the ayahuasca rituals that South America has become known as a popular tourist destination for may soon be legalized in California along with the many other ceremonial ways that these plants are used.

There are some notable exceptions to the language of the bill, however. The first exception being that peyote, often used in rituals for certain Indigenous tribes, is also excluded from the bill due to concerns about over-harvesting the cacti that’s already vulnerable and only used for sacred ceremonies. Also, there won’t be any societal or academic studies completed in regards to the outcome of SB58 and if further reforms are needed because of the many current studies already being done on psychedelics according to State Senator Wiener.

“We don’t need a study to tell us that drug criminalization is a failure and that we should decriminalize psychedelics,” the senator told Marijuana Moment during a previous interview in August.

During the public hearings that have been held regarding SB 58 had a wide variety of people and represented organizations and locations to speak in favor of the legislation. Among the diverse cast of advocates, there were representatives from the the City of West Hollywood, California Public Defenders Association and Heroic Hearts Project. The individual representatives also came from a varied background, such as a harm reduction expert, a clinical psychologist and even a nurse practitioner who is facing deportation over psychedelic possession.

Under SB 58, Californians could legally possess up to 2 grams of “the spirit molecule” DMT, 15 grams of ibogaine, anywhere from 2 grams-4 ounces of “a plant or fungi containing psilocybin” and up to 4 ounces of “a plant or fungi containing psilocyn.” While other local municipalities have passed measures that have decriminalized certain psychedelics at low amounts, California’s bill is the first to fully legalize the plant substances and implement legitimate medical uses is absolutely groundbreaking.

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Cultiva Law

Aaron Pelley: Economic Woes Across Cannabis

Published

1 year ago

April 1, 2023

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Aaron Pelley

BY AARON PELLEY ● MARCH 17, 2023

As the current state of the American economy is one that many of our most esteemed economists would consider to be a “recession”, industries across the United States are being affected. One such industry being drastically impacted by the sunken state of the economy is the American cannabis industry. Even though it’s not fully legal in all 50 states and it’ll likely be several more years before federal cannabis reform passes according to the most optimistic predictions, the soon-to-be 21 states and counting have all been impacted by the recession in their own financial and employment-related ways.

In general, a recession on scale with what the US is currently experiencing is entirely new territory to the American cannabis industry. The last large recession, which became colloquially known as The Great Recession, happened in 2008 which was a full four years before Washington and Colorado voted to legalize. As the recreational cannabis industry had yet to exist in 2008, this recession is the first of its kind for the American cannabis industry to bear witness to.

For states on the West Coast and Pacific Northwest, the states that turned cannabis into the power crop that it is today, there are a variety of recession-caused economic issues that are impacting cannabis businesses across those regions.

In the very first state that legalized cannabis, Washington has seen a tremendous drop in their total retail sales. This past December, Channel 5 in Seattle reported that in just Pierce County alone, total cannabis sales had seen a 12 percent drop in 2022 compared to sales the previous year, when much of the country was still dealing with the immediate aftermath of a global pandemic. Across the entire Evergreen State, cannabis sales have dropped an approximate total of eight percent, equaling about $120 million in retail sales. Due to the scale and complexity of the American economy, there’s many economic factors that result in a recession and the ensuing drop in the employment rate.

However when speaking of the current state of the Washington cannabis industry and the sharp decrease in retail sales, one must consider the extremely high tax rate for cannabis sales in Washington. While Nevada for instance has a tax rate of 25 percent on retail cannabis, Washington’s tax rate is at an astonishing 37 percent. This tax rate alone would likely keep financially strapped cannabis consumers from being able to afford purchases at licensed dispensaries and may have to procure their cannabis from sources that aren’t taxed.

With Washington’s southern neighbor, Oregon is facing a very similar situation in terms of their economic situation in regards to the cannabis industry. Not only are sales similarly down in the state when compared to Washington, the price per gram of cannabis is also exponentially lower than that of the neighboring states, at only $4 according to the Oregon Liquor and Cannabis Commission. This oversupply status of cannabis products and lack of demand in Oregon cannabis has resulted in almost impossibly low prices yet not enough customers to buy all the products. In a legislative report from the OLCC in 2022, the regulators summarized the current state of affairs for Oregon cannabis as being caused by “declining wholesale and retail prices for usable marijuana are due to large stocks of usable marijuana inventory leftover from previous years, which is likely to continue to put downward pressure on prices.”

Even in the arguable mecca of cannabis, California hasn’t been safe from the economic downturn that is gravely impacting the American cannabis industry across the Legal States. For the first year since adult-use cannabis sales started in 2018, cannabis sales in The Golden State have dropped by nearly eight percent. As the size of the Californian cannabis economy is massive with $5.7 billion being sold in 2021, this eight percent drop resulted in a sales drop of an astronomical $473 million. Because sales are down such a considerable percentage and there’s significant competition from illegal markets and delivery services, this will result in an approximate drop of 23 percent in California tax revenue from cannabis.

Even strangely enough, cannabis-ancillary companies located on the West Coast that work primarily with cannabis cultivators and retailers yet don’t directly handle any product themselves are even being impacted by the current recession. The cannabis-based technology firm Dutchie implemented two different rounds of widespread layoffs in 2022. One round resulted in eight percent of the Dutchie workforce losing their jobs while a second wave of layoffs occurred in November.

WM Technology, the company that runs the wildly popular cannabis news and shopping site WeedMaps, has experienced significant layoffs of their own at even higher rates than their competitors. The Irvine, California-based company laid off a whole quarter of their workforce in November which amounted to about 175 employees in total. Although serving as WeedMaps’ unofficial direct competitor, Seattle-based Leafly laid off about 21 percent of its workforce in October, an almost similar percentage to WM Technology. Even companies as distantly ancillary-related to the cannabis industry as the Denver-based compliance software company Akerna experienced their own wave of layoffs, as they cut nearly 60 jobs last year.

In severe cases, some of American cannabis’ most established multi-state operators are going beyond only laying off dozens of employees in waves and instead shutting down entire cultivation facilities. Such as Curaleaf Holdings, who not only laid off a total of 270 jobs but also closed their Sacramento cultivation facility.

There may be possible remedies to these economic downfalls in the future, such as Nevada and Colorado opening cannabis consumption lounges and several of the Legal States implementing social equity programs which will hopefully result in revenue and employment opportunities. However, for an industry still very much in its infancy and one that won’t be federally legal for quite a few more years, the economic roadblocks and stagnations will continue to occur until large-scale reforms are enacted to address and remedy these issues.

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(206) 480-1600

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