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Cannabis Market Crash Fallout – Cities and Towns Brace for Plunging Tax Revenue from Weed Sales

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The anticipated decline in tax revenues from cannabis sales in cities like San Diego is causing concern among city officials, who are bracing for a substantial drop in their budget. With California’s regulated marijuana market facing numerous challenges, including illegal delivery services, San Diego predicts a significant revenue shortfall.

 

Precisely, officials forecast a 23% decrease in cannabis tax revenue for the current fiscal year, resulting in $19.8 million instead of the expected $25.7 million. The decline in sales is primarily due to the thriving black market, which is believed to comprise roughly 50% of the local cannabis industry.

 

According to Phil Rath, who serves as the executive director for the United Medical Marijuana Coalition, the legal marijuana industry is currently grappling with fierce competition from its illicit counterpart. As a trade group representing a multitude of marijuana dispensaries, Rath asserts that delivery services present an ongoing and persistent obstacle for the city. The San Diego Union Tribune echoes this sentiment, highlighting the difficulties faced by local authorities in enforcing regulations and curbing the influence of black market operators.

 

Moreover, the declining tax revenues in San Diego indicate a more significant issue pervading the state of California. After nearly seven years since its legalization, the legal cannabis market has faltered, resulting in significant setbacks for the industry.

 

As per a report by Politico in November, the tax revenues generated from state-sanctioned and regulated marijuana markets have taken a severe hit, plummeting by almost $100 million during the third quarter compared to the same period in the previous year. The licensed retailers operating within the state are trailing far behind the massive underground market, estimated to be worth an enormous sum of up to $8 billion. Despite the significant decline in tax revenues, it has been projected that the sales of medical and recreational marijuana in California will increase by 2021. However, the sales have been consistently declining, dropping from a high of over $1.5 billion in Q2 2020.

 

The data released by California tax and The Office of Fees Administration in July, August, and September showed that the state residents had bought licensed cannabis products amounting to $1.27 billion, leading to $128 million in sales tax revenue. Although this was still substantial, it marked a decrease of $18 million from the preceding quarter and a drop of $52 million from the record-high figure.

 

California’s black market deals a massive blow to its legal cannabis industry.

As per a separate report by Politico during the same month, California’s black market has dealt a significant blow to its legal cannabis industry, with the unregulated sales overshadowing the legal counterpart. Despite six years since the vote to legalize recreational marijuana, the state has been unable to bring illegal sales under control. The overwhelming demand for marijuana products has resulted in many legal businesses closing their stores.

 

The success of the legal cannabis industry in the most densely populated state in the country has been hindered by a combination of factors, including high taxes, local government opposition, and cut-throat competition from the underground market. Politico highlights that the exorbitant taxes on cannabis products have led to inflated prices, making them unaffordable for many consumers. Additionally, the reluctance of several local authorities to allow the opening of legal dispensaries has further hampered the industry’s growth.

 

To revive the faltering legal cannabis industry, lawmakers and officials in California have been exploring various measures.

 

Recently, Democratic legislators in the state put forth a bill enabling licensed cannabis consumption lounges to serve food and beverages, potentially providing a much-needed boost to small-scale cannabis businesses grappling with multiple challenges. According to Rep. Matt Haney, who is backing the proposed bill, the small cannabis businesses in California are facing significant struggles due to various issues, including excessive taxes, saturation in the market, and the thriving black market.

 

These factors have severely affected the legal operators that adhere to the authorities’ rules and regulations. The bill’s introduction could offer a viable solution to these problems, potentially helping to level the playing field for the licensed cannabis industry.

 

San Diego officials have not only downgraded their projections for the current fiscal year’s cannabis tax revenue, but they have also revised their long-term forecasts. The revenue generated from cannabis taxes is meant to fund dispensary enforcement and a novel cannabis equities program to assist people of color in establishing a foothold in the industry.

 

According to the Union Tribune, the officials acknowledged that the cannabis industry has been severely impacted by the war on drugs. The earlier long-term estimates for cannabis tax revenue, projected just over a year ago, stood at $31.5 million in fiscal 2025, $33.3 million in fiscal 2026, and $33.8 million in fiscal 2027. However, the revised estimates in November 2022 were much lower, with projected revenues of $26 million in fiscal 2025, $28.4 million in fiscal 2026, and $28.9 million in fiscal 2027. The officials expressed their need for more confidence in the revised forecasts.

 

Five states saw cannabis tax revenue decline in 2022

A new report from the Urban Institute & Brookings Institution reveals that in 2022, the five states with the longest history of legalizing and taxing marijuana sales experienced decreased tax revenue from the sale of cannabis products.

 

Colorado saw the most significant decline of 13.9 percent in tax revenue, resulting in a loss of $56.9 million in revenue. The other states that experienced declines were California, Nevada, Oregon, and Washington, with more modest declines ranging from 3.5 percent to 6.8 percent. The report analyzed cannabis tax policies across the country to arrive at its conclusions.

 

The authors of the study noted that tax revenue in Colorado and Washington had been rising steadily since 2015, and the cause of the decline last year was unclear. Still, they speculated it could be related to the pandemic. The COVID-19 pandemic and the federal government’s response to it affected all aspects of state and local finance in fiscal years 2021 and 2022. The authors suggest that the spike in cannabis tax revenue in 2021 may have been due to consumers having disposable income from stimulus checks, reduced spending options, and the desire to substitute marijuana purchases for more public activities like going to a bar or restaurant. The decline in cannabis tax revenue in 2022 could represent a return to more normal consumption patterns.

 

The report also highlighted that in some states, the sale price of marijuana decreased during the same period, impacting tax revenue and indicating a healthy market. This suggests that states with recently implemented cannabis taxes could experience comparable fluctuations in their yearly cannabis tax collections as the market progresses, the report added.

 

Conclusion

The decline in tax revenue from cannabis product sales in several states, as highlighted by the recent report from the Urban Institute & Brookings Institution, is cause for concern. However, lawmakers and officials across the country are exploring solutions to strengthen the legal cannabis market, including the introduction of bills to allow licensed consumption lounges to serve food and beverages and the implementation of programs aimed at supporting small cannabis businesses and promoting equity in the industry. As the market continues to evolve, it remains to be seen how these efforts will impact the industry in the coming years.

 

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Australia Cannabis: Recreational Use Legislation Update

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Australia is said to have one of the highest cannabis prevalence rates in the world and public attitudes to its use are shifting. North American, European and other cannabis companies looking for investment opportunities would do well to follow these shifts.

Growing cannabis for medicinal and scientific purposes was legalized under federal law in 2016. Low-THC hemp foods were then legalized federally in 2017. Recreational use, though, remains prohibited under federal law. Similarly, at the state and territory level it is mostly illegal to use, possess, grow, and sell cannabis. Despite these continuing prohibitions, there are legislative trends toward legalization.

If passed, the Legalising Cannabis Bill 2023 would change the federal landscape. It would legalize cannabis for adult recreational use in Australia. The Bill would establish the Cannabis Australia National Agency as a statutory agency to register cannabis strains and regulate cannabis activities. These activities include growing and possessing plants, manufacturing and selling cannabis products, operating cannabis cafes, and importing and exporting cannabis products.

The Senate Legal and Constitutional Affairs Committee is presently conducting an inquiry into the Bill. Submissions have now closed and public hearings have opened. The Committee’s reporting date is May 31, 2024. The Bill is expected to be debated in federal parliament later this year. At the same time, cannabis legalization bills are now being debated in several Australian states.

Despite shifting public attitudes, federal legalization may still be a way off. While the federal Bill has been promoted by a minority party, it does not enjoy the support of the ruling party or the major opposition party. It also lacks the support of the Australian Medical Association.

Stay tuned for updates on Legalising Cannabis Bill 2023 and all thing Australian cannabis. And please reach out to us if you are interested in doing business in Australia.



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Why Is Everyone Suddenly Eating Magic Mushrooms and Having Wild Sex?

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New Study Reveals That Magic Mushroom Consumers Have Better Sex Lives


Magic mushrooms have been on a heyday, thanks to the numerous health and therapeutic benefits it has been proven to offer. These include, but are not limited to: treating anxiety and depression, PTSD, OC, suicidal thoughts, and other mental illnesses.

However, we’re only starting to discover the myriad of benefits that the humble magic mushroom has. Now, there’s even new science suggesting that psilocybin can help improve sex lives.

 

In what is believed to be the first-ever study to delve deeper into the connections between sex and arousal with magic mushrooms, researchers have discovered fascinating findings. Investigators at the Imperial College London surveyed almost 300 individuals before and after taking magic mushrooms. They focused on two subject groups: individuals who consumed psychedelics for recreation or wellness, and those who were consuming it for clinical study purposes to analyze its impacts on depression. Thanks to the data, they were able to pull incredible insight into the link between sex and psychedelic experiences.


The data shows that on average, there are improvements on several areas pertaining to sexual function for as long as 6 months after psychedelic experiences. Psychedelic consumption has been shown to positively impact arousal, sexual satisfaction, enjoyment, self-esteem, connection, communication, and attraction to one’s partner – all of which contribute to better sex lives. For the group who were taking magic mushrooms as part of a clinical trial for depression, nearly half experienced improvements when it came to interest in sex, satisfaction, and arousal. In contrast, individuals who are treated with popular pharmaceutical antidepressants usually say that their sex lives are negatively impacted.

 

“We believe this is the first scientific study to explore the effects of psychedelics on sexual functioning. Our findings suggest potential implications for conditions that negatively affect sexual health, including clinical depression and anxiety,” said Tomasso Barba, the study’s first author, and a PhD candidate at the Centre for Psychedelic Research.

 

“This is particularly significant given that sexual dysfunction, often induced by antidepressants, frequently results in people stopping these medications and subsequently relapsing,” they added.  


In addition, it’s nothing short of fascinating that the results showed that the improvements in sexual function were observed for up to 6 months among some participants. However, it’s important to note they didn’t study performance while high on the drug, which is how many people on psychedelics experiment with sex: while on magic mushrooms.

 

“It’s important to stress our work does not focus on what happens to sexual functioning while people are on psychedelics, and we are not talking about perceived ‘sexual performance’,   they emphasized.

 

They do call for more studies on the subject. “While the findings are indeed interesting, we are still far from a clear clinical application, because psychedelics are yet to be integrated into the medical system. In future, we may be able to see a clinical application, but more research is needed,” said Dr. David Erritzoe.

 

Can Psychedelics Unlock The Key To Better, More Satisfying Sex?

As millions of us are plagued by mental health disorders, ranging from everyday anxiety to more severe depression, our sex lives will naturally suffer.


It is known that for many of us, especially women, mental health is critical to sexual satisfaction and pleasure. Sure, it’s an integral part of being human – experiencing sexual joy and arousal, but when we’re suffering from hard-to-treat mental conditions, it can be difficult to enjoy sex. Perhaps that’s where the potential of psychedelics, such as magic mushrooms, come in.

 

When one is struggling with family conditioning, previous traumas, depression, and self-acceptance, pleasure can be shameful and even painful to even address. But psychedelics can help open us up mentally, and challenge past thoughts that have to do with social conditioning, receiving love and pleasure. All in all, psychedelics can help create new mental pathways that make it easier for us to receive pleasure.

 

These days, it’s no longer uncommon for couples to medicate with psychedelics together. And we don’t just mean magic mushrooms: MDMA, LSD, and ayahuasca are other forms of healing psychedelics that can help couples work through their own traumas and issues together, and as a result, enjoy better sex.

 

In another study from 2021, researchers utilized interviews to conduct a qualitative study to understand the impact of microdosing MDMA on male and female couples whose ages ranged from 20 to 35 years old. The interview questions were focused on how microdosing psychedelics affected their sexuality, confidence, relationship satisfaction, inhibition, and openness.

The participants reported that microdosing did indeed have a positive effect on sexual well-being as well as other aspects, most especially because of its ability to reduce anxiety and stress. As a result, they experienced heightened sexual pleasure, desire, and communication. Overall, they reported better sex and they attributed it to microdosing.

 

Conclusion

 

Aside from these studies, psychedelics are already an accepted tool for young people all around the world to help them improve many aspects of their lives, including sex. It is becoming clear that the ability of psychedelics to help where pharmaceutical medications fail in treating everyday mental illnesses and stress that hinder sex lives, can transform how we relate, show up, and communicate in our intimate relationships. We hope to see more studies on the subject so we can learn more about the specifics involved, and the magic that psychedelics brings into human lives.

 

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How Can Cops Tell the Difference Between Hemp and Marijuana?

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Researchers funded by the federal government have unveiled novel techniques for distinguishing between marijuana and hemp by precisely measuring the THC levels in both flowers and edibles.

 

The National Institute of Justice (NIJ), a branch of the Justice Department, is championing the findings from two research endeavors it sponsored, focusing on refining cannabis lab testing. These findings are being disseminated to specific law enforcement agencies.

 

The primary goal of these projects was to streamline testing procedures to address the increasing backlog in crime labs, exacerbated by the federal legalization of hemp with THC levels of up to 0.3 percent under the 2018 Farm Bill. This legalization has complicated cannabis-related cases.

 

According to a recent update by NIJ, existing testing methods fall short of accurately quantifying THC levels in samples. However, the researchers supported by NIJ have made a breakthrough by utilizing two distinct forms of mass spectrometry—gas chromatography-mass spectrometry (GC-MS) and direct analysis in real time-high-resolution mass spectrometry (DART-HRMS)—to isolate THC content, along with other cannabinoids.

 

Pioneering Techniques

 

The GC-MS methodology was pioneered by a team at the National Institute of Standards and Technology (NIST), enabling them to extract THC from samples and conduct precise cannabinoid content analysis. The Department of Justice (DOJ) initially disclosed in 2020 its allocation of $350,000 in funding to NIST for this research endeavor.

 

Conversely, the DART-HRMS approach presents a solution to another complexity in cannabis testing encountered in forensic laboratories. This method facilitated the determination of THC levels in various products such as baked goods, candies, beverages, and plant materials with minimal pre-treatment requirements.

 

Rabi Musah, the primary researcher on the DART-HRMS team, envisions that the accelerated utilization of DART-HRMS for THC detection in cannabis samples could mitigate testing backlogs, reduce chemical reagent expenses, and streamline analysis protocols, as noted by NIJ.

 

NIST’s GC-MS technique has already catalyzed the development of new standard operating procedures for laboratories, with outcomes integrated into training procedures for law enforcement entities like the Montgomery County Police Department and Maryland State Police.

 

Furthermore, in 2022, U.S. Customs and Border Protection (CBP) issued a call for portable marijuana analyzers to expedite cannabinoid profile identification and aid in differentiating between marijuana and hemp.

 

In a separate initiative, the Drug Enforcement Administration (DEA) announced in 2019 its pursuit of a device capable of distinguishing between hemp and marijuana, particularly since the legalization of the former crop.

 

The ramifications of hemp legalization became evident in Texas, where marijuana possession arrests decreased by nearly 30% from 2018 to 2019 after the state legalized the non-intoxicating cannabis crop. Subsequently, prosecutors in Texas dismissed numerous low-level cannabis cases following hemp legalization. In 2020, officials announced that laboratories would no longer conduct testing in misdemeanor cases, citing capacity limitations within the Department of Public Safety.

 

Meanwhile, stakeholders in the hemp industry and agricultural officials nationwide are urging Congress to increase the THC limit for hemp to one percent by dry weight. A researcher from the Department of Justice recently questioned the rationale behind the current 0.3 percent THC limit, suggesting it was arbitrarily based on a decades-old anecdote.

 

Advancements in Law Enforcement Procedures

 

The integration of novel testing methods heralds a significant shift in law enforcement strategies concerning cannabis-related cases. Crime lab forensic studies have advanced to a new level of paradigm with the use of the DART-HRMS method and the GC-MS technology developed by NIST. Law enforcement officers will be able to distinguish between marijuana and hemp with remarkable accuracy thanks to these state-of-the-art approaches, which promise increased precision and efficiency. By integrating these advanced technologies into routines for standard operating procedures and training, law enforcement organizations are providing their staff with the necessary resources to handle the complex terrain of changing cannabis laws.

 

This revolutionary method improves the ability to conduct investigations and makes it easier to comply with state and federal laws on cannabis. Law enforcement organizations may ensure compliance with the ever-changing legal framework pertaining to cannabis cultivation, distribution, and use while efficiently upholding justice with the use of these cutting-edge tactics. Officers will be better prepared to handle the issues raised by the legalization of cannabis and its effects on law enforcement procedures as they become used to these innovative techniques.

 

Legal and Regulatory Implications of Hemp Legalization

 

The legalization of hemp with THC levels of up to 0.3 percent under the 2018 Farm Bill has sparked significant legal and regulatory ramifications. This legislative shift has not only complicated cannabis-related cases but has also necessitated a reevaluation of existing law enforcement protocols. As prosecutors and law enforcement officials grapple with the distinction between marijuana and hemp, the landscape of criminal justice procedures undergoes notable evolution. The dismissal of numerous low-level cannabis cases in states like Texas following hemp legalization underscores the profound impact of this legislative change on law enforcement practices.

 

Furthermore, the proposal to raise hemp’s THC limitations to 1% of dry weight is indicative of continuing discussions about federal cannabis legislation. The debate over THC restrictions highlights the necessity for a nuanced approach to cannabis regulation as advocates for legislative changes, including agricultural officials and hemp sector players, are in favor of it. In the meanwhile, the Department of Justice’s examination of the present THC restriction of 0.3 percent emphasizes how crucial evidence-based policymaking is to determining how cannabis legislation will develop in the future. Stakeholders from a variety of industries must negotiate the tricky convergence of legal, scientific, and sociological factors surrounding the legalization of hemp as regulatory frameworks continue to change.

 

Bottom Line

 

The integration of novel cannabis testing methods, including DART-HRMS and GC-MS, marks a significant advancement in law enforcement’s ability to differentiate between marijuana and hemp, streamlining investigative procedures and ensuring compliance with evolving legal frameworks. These state-of-the-art technologies promise heightened precision and efficiency, empowering law enforcement agencies to navigate the complexities of cannabis-related cases with unprecedented accuracy. As debates surrounding THC limits and federal cannabis legislation persist, stakeholders must engage in evidence-based policymaking to shape the future of hemp regulation. By staying abreast of legal and regulatory developments, law enforcement agencies can adapt their procedures accordingly, ensuring justice is served while upholding compliance with the law, thus paving the way for more effective practices in the dynamic landscape of cannabis legalization.

 

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