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How the Federal Government is Systematically Trying to Kill the Cannabis Industry

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How The Federal Government’s Inability to Legalize Cannabis is killing the industry

 

Over the past decade, the movement to legalize cannabis in the United States has gained significant momentum. With 38 states having legalized medical cannabis and 22 states allowing recreational use, it is clear that public opinion is shifting towards cannabis legalization. However, despite the progress made on a state-by-state basis, the federal government’s continued prohibition of cannabis has created numerous challenges for the industry.

 

In places where cannabis has been legalized, such as Canada and California, we are seeing some problematic issues arise. These issues stem from over-regulation, which can result in oversupply, inflated black markets, high costs of operating a business, and a lack of access to banking services. These issues are hindering the cannabis industry’s growth and stifling the benefits that legalization can provide.

 

While cannabis legalization has been successful at the state level, the federal government’s inaction and political discourse are limiting the industry’s potential. In this article, we will explore the problems facing the cannabis industry in several markets, and what needs to happen for the industry to thrive.

 

 

A recent Fortune article entitled, “Marijuana growers are between a rock and a hard place as they face oversupply and interstate commerce woes: ‘I’m tired of running a failing business’”” addressed the issues mentioned above. If you want to read the full article, you can do it here; however, below I’ll provide a quick summary of what it said.

 

 

The marijuana industry is facing a “failed economics” in legal pot. On the West Coast, which has been the hub for marijuana production in the United States, surplus production is unable to cross state borders due to the federal ban on marijuana.

 

Prices have declined steeply, leading to issues with the viability of the legal marijuana industry. Licensed growers are feeling the pinch of the 37% cannabis tax in Washington state and are left with virtually no profit margin.

 

Marijuana businesses are unable to receive loans or credit due to the banking restrictions, and legalizing the drug for national consumption by businesses will be a political challenge. The cannabis industry is looking at the possibility of President Joe Biden’s administration allowing marijuana trade between the states that have legalized it.

 

This would help the West Coast states to supply the rest of the country, thanks to its favorable climate and cheap, clean hydropower for indoor growing.

 

Although lawmakers in Washington state have approved a “trigger bill” allowing the governor to enter into an interstate cannabis trade agreement if allowed by the federal government, experts don’t believe the policy will go as far as permitting interstate commerce.

 

Contributing to the glut in Oregon and Washington is the fact that the states licensed so many growers. The initial idea was to ensure enough supply for the legal market, bringing down prices to compete with the black market. But Oregon has hundreds more licensed growers than Washington, resulting in oversupply.

 

Prices for marijuana are so cheap that it’s difficult for the industry to remain sustainable, and some growers are resorting to funneling product to the out-of-state black market just to stay afloat.

 

Here’s the most important reasons why the cannabis industry is struggling at the moment & the effects of no regulation and over regulation:

 

  • Licensed growers in some U.S. states have been forced to funnel their product into the black market to stay afloat. (Side Effects of Overregulation)

  • Large cannabis companies such as MedMen and Curaleaf are facing financial difficulties. (Side Effect of Lack of Regulation)

  • The West Coast’s legal pot industry is struggling due to oversupply and failed economics.(Mixture of Over and Under Regulation)

  • Producers are hindered by the federal ban on marijuana and state-level regulations that prevent interstate trade. (Cause)

  • Some licensed growers complain that high cannabis taxes leave virtually no profit margin for producers. (Cause)

  • Lawmakers in some states are seeking approval for interstate cannabis trade agreements. (Action)

  • The oversupply of cannabis in Oregon, Washington, and Colorado is the result of the states licensing too many growers. (Partially True)

  • Prices for cannabis products have plunged due to oversupply, making it difficult for businesses to remain profitable.(Effect)

  • Keeping the industry sustainable is a significant challenge due to cheap prices and oversupply. (True)

 

NOTES:

There are a few observations in the article I don’t necessarily agree with such as the reason for the problem being that the State is oversupplying licenses to grow. While this may be true under the current circumstances, it’s only due to a federal blockade against the interstate commerce that makes it so.

 

Not all States in the US would be optimal for growing cannabis. Some states with have a geographical advantage, meaning that under a federally legalized scenario – oregon having a surplus of cannabis is a win. The mere fact that legal growers are forced to sell illegally to stay afloat should be more than enough evidence of this fundamental truth.

 

Furthermore, to place a cap on licenses is to place a cap on entrepreneurship and growth. Eventually, a few groups will take over all of the licenses and you’d be capped at the innovation of these set groups.

 

 

The cannabis industry in the United States is facing significant challenges, and the government is to blame for most of them.

 

One of the major issues is that interstate commerce of cannabis is illegal, which means that states cannot trade with each other. This has led to oversupply and shortages in some areas, creating instability in the market.

 

Although Canada and Mexico have both legalized cannabis, the federal government has been hesitant to follow suit, hindering progress.

 

It is frustrating for those in the industry who are trying to make a living and provide safe, quality products to consumers. The government’s reluctance to legalize cannabis is making it difficult for businesses to operate, stifling growth opportunities. This is particularly concerning as the industry has the potential to create jobs and generate revenue for the economy, especially in a time of such high inflation.

 

The reasons for the government’s opposition to legalizing cannabis are not entirely clear, but it may be due to their monetary allegiances to powerful lobbies such as the pharmaceutical industry, the prison industrial complex, and law enforcement.

 

The pharmaceutical industry, in particular, has a lot to lose if cannabis becomes a mainstream alternative to prescription drugs. The government’s inability to legalize cannabis may be a result of their desire to protect the profits of this industry, even if it means denying patients access to alternative treatments. And since the pandemic, I think most people can agree that these industries have politicians by the balls.

 

Similarly, the prison industrial complex and law enforcement both benefit from the criminalization of cannabis. Many individuals have been incarcerated for non-violent drug offenses, disproportionately affecting minorities and low-income communities. These incarceration numbers back their reports, which secure their funding. If you were to remove cannabis from their list of crimes, they would have to actually stop crime – which would be too difficult and would affect their bottom line.

 

Some politicians are proposing policy changes that favor big industry, exacerbating oversupply issues and creating an uneven playing field. For example, a federal tax on cannabis would make it more expensive for consumers and hinder the growth of small businesses. Imagine having to pay 50% more for your weed in taxes. Where do you think you’d buy your weed from? The dispensary or the dude down the street that’s got some killer weed?

 

Some regulations favor large corporations over small businesses, further compounding the problem of oversupply. These include limited licensing schemes, over taxation and regulation.

 

This can only make us conclude that the government is responsible for most of the challenges facing the cannabis industry in the United State today. And while we’re trying to debate on how to fix the complex relationship between federal and state law, regulations, etc, we have to ask ourselves whether we need to “fix all of this”. Perhaps, simply reducing it to the simplest, most effective means possible is the right way?

 

The illegal interstate commerce of cannabis limits growth opportunities and creates instability in the market. This is definitely only true because there are gatekeepers with fully automatic rifles and an army willing to jail you if you break the rules.

 

The fact of the matter is that the solve is easy. We need swift action on federal legalization. We need to stop thinking about Equity and make it accessible. Over supply of licensing will work itself out in an open marketplace.

 

Make it easy for people to grow and sell and place the regulations and control on interstate and international commerce. That way, you give growers a chance to establish themselves, the market will create the opportunities for both small and big commerce. However, only if the government stops meddling with it

 

THE FEDERAL BOSS ON WEED, READ ON…

BIDEN STATEMENT ON WEED

WHAT IS BIDEN’S TROJAN HORSE FOR CANNABIS LEGALIZATION?



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Maintaining The Highest Level of Quality and Freshness for THCa Products

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When looking for food, the freshness and quality of the product are essential to the customer. Care must be taken with every product to keep its original qualities. This makes sure that customers have the best experience possible with every buy. Brands ensure their products stay potent and fresh, so to maintain they put them in airtight containers. This gives customers a premium experience that stands out in the market even if they are bought from thca flower clearance. This is especially important when it comes to cannabis goods. Keeping THC-rich flowers fresh ensures every person has a good experience that meets their needs.

The practice of storing things in air-tight containers is very helpful for maintaining their quality. These containers help keep out air, light, and wetness, which can all make the product fresh and effective over time. For people who use cannabis, how fresh the product is can have a big effect on how strong and how long the benefits last. When THC flowers are stored properly, users can expect a better experience that keeps all of the product’s benefits.

The chemicals that give weed its unique tastes and smells, don’t break down when it is stored in an airtight container. Terpenes are very important for improving the taste and making each type unique. The natural qualities of these terpenes can be kept safe by storing them in the right way. This way, every user can enjoy the full range of tastes and smells that the product has to offer.

Why airtight containers are important

Containers that don’t let air in are not only useful, they are necessary for storing things. Over the time, oxygen can break down the product’s cannabinoids and oils. When you use airtight cases, the product stays protected from the outside world. This keeps its chemical structure and makes sure it stays strong.

The users will trust the products only if they feel good about quality. Whether they are used for fun or medical reasons, THC flowers if not stored correctly may have less effect, giving a bad experience for users. To keep the level of quality, it is important to spend money on good storage methods like using airtight containers.

Make sure you have a great time

When a product has been carefully stored in the best possible ways, the experience is more powerful. Whether you are buying flowers to help you feel better or just for fun, they should always be live. With this care, users can get a product that works well like they bought the day it was packaged.

Freshness is at the heart of this process. By making sure that goods are kept in containers that keep air out, businesses can keep up the quality of the goods and make sure that customers can get the best items. Customers are happier and more likely to trust the brand to always provide better goods.

In the end, keeping the product fresh and high-quality isn’t just about keeping it safe, it is also about giving the customer a regular, good experience. Making sure that a product stays fresh and effective from the time it is packed until it gets to the customer is very important. One easy and very effective way to reach this goal is to store things in containers that keep air out. Looking at good storage methods will continue to be important for keeping the quality of THC products even as the cannabis business grows. Customers can be sure that this way of keeping things fresh and effective will make their experience better, whether they are looking for new types or taking advantage of thca flower clearance deals.



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Cannabis Code Enforcement Fines Must be Remedial, Not Punitive, Federal Court of Appeal Holds

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The Ninth Circuit Court of Appeal has reinstated a civil rights lawsuit against Humboldt County, California, that challenges the county’s practices in imposing punitive daily fines. It is the first time a federal appellate court has weighed in on local government’s enforcement of code violations involving cannabis farms.

The Court of Appeal decision

The decision, in Thomas v. County of Humboldt, comes after years of complaints by cannabis cultivators that local governments impose unfair fines for technical violations at licensed farms. That counties and municipalities have adopted and are enforcing large fines involving licensed properties is one of many reasons why increasing numbers of farms have given up their licenses and shut down completely or returned to the illicit market. This is hurting state efforts to bolster the legal market and suppress the illicit market for cannabis.

Lessons for industry and regulators

A takeaway from the decision is that local governments need to keep the goal of remediation in mind in establishing penalties, must be more reasonable in allowing cultivators to fix violations, and more flexible in decisions to impose fines and settling disputes. The decision should motivate county and city attorneys, and cannabis licensees and applicants, seek assistance from a mediator with expertise in the cannabis market and regulation. The courthouse might not now be as friendly a venue for local government as it has been in the past.

Most cannabis businesses that run afoul of local codes pay the penalties, no matter how unfair they might seem, because they can’t afford a long legal battle and the administrative and court processes are tilted against the property owner. Administrative hearing officers routinely uphold notices of violations and the penalties imposed by code enforcement officers. Writs of mandate brought against local government in state court, particularly in smaller counties, are extremely difficult to win.

Background on the Thomas case

What has made the Thomas case viable is that several plaintiffs banded together in a civil rights class action in federal court under 42 U.S.C. § 1983, alleging that Humboldt County’s penalties for cannabis abatement violate the Eighth Amendment’s Excessive Fines Clause.

Humboldt County established a schedule of daily fines for illegal cannabis cultivation of up to $10,000, with a minimum of $6,000. Upon receiving a notice of violation from the county, the party has 10 days to abate all violations, subject to an appeals process, during which penalties continue to accrue. Violations included not just the illegal cultivation of cannabis itself, but also any other violation that facilitates illegal cultivation of cannabis. The Thomas plaintiffs contended that the county issues violation notices with hefty fines based on imprecise data (such as satellite and drone photos) and for code violations that originated with previous property owners.

The lower District Court dismissed the lawsuit on the basis that the plaintiffs lack legal standing, because they had not, at the time of suit, paid any penalties. But the Ninth Circuit held that the plaintiffs had concrete injuries, providing standing, because they suffered emotional distress and had incurred expenses with engineers and attorneys as they attempted to abate the alleged violations and defended themselves in hearings.

Getting to the merits of the lawsuit, the Ninth Circuit held that the plaintiffs had plausible claims under the Excessive Fines Clause because the penalties were punitive, not remedial. The Ninth Circuit agreed with the plaintiffs that the fines were unconstitutionally excessive because (1) the notices were vague, often inaccurate, or involved violations that pre-dated the plaintiffs’ occupation of their properties; (2) lesser penalties could accomplish the same health and safety goals; and (3) the alleged offenses caused no harm beyond a technical lack of compliance with the county’s permitting regulations.

Humboldt provides for an administrative appeal before a hearing officer who determines whether a violation has occurred or continues to exist. The hearing officer can only reduce the penalty for a violation in limited circumstances and cannot reduce it to less than $6,000 per day. Although the Ninth Circuit did not explicitly address it in the Thomas decision, a property owner in most circumstances also can be forced to pay the county or municipality’s abatement costs and legal expenses — including those incurred in a subsequent writ of mandate proceeding in state court. The Ninth Circuit agreed that the Thomas plaintiffs had come under:

“immense pressure to settle due to the County’s issuance of ruinous fines, . . . its undue delay in providing hearings, its denial of permits while abatements are pending, and the cost the County imposes to prove one’s innocence.”

The Ninth Circuit found that Humboldt County’s fines were “clearly punitive, not remedial as argued by the County.” The fines could reach millions of dollars, and, in the case of one plaintiff, the fines dwarfed the value of her property. The appellate court was untroubled by the involvement of cannabis, which remains unlawful under the federal Controlled Substances Act:

“[I]t seems clear to us that lesser penalties could accomplish the same health and safety goals,” and “the offenses here have caused no harm beyond a technical lack of compliance with the County’s cannabis permitting regulations.”

The Thomas plaintiffs’ strategy pays off

The Thomas plaintiffs’ strategy of going to federal court was fraught, because the court could have just as easily declined to hear the matter under the illegality doctrine, but it paid off here; the Ninth Circuit not only considered the case but also disregarded the problem of whether the plaintiffs were entitled to any remedy under federal law.

The Ninth Circuit concluded by acknowledging that local government is “often at the forefront of addressing difficult and complex issues,” but it should use “flexibility” in decision making and “cannot overstep its authority and impose fines on its citizens without paying heed to the limits posed by the Eighth Amendment.”

Note: This post was first published January 6, 2025 on the Alger ADR Blog



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Are Americans Shifting to Cannabis and Saying Goodbye to Cigarettes for Good?

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Are Americans Shifting To Weed And Saying Goodbye To Cigarettes?

 

We live in a time when people are more health-conscious than ever.

 

For the first time in history, we’re seeing a downward trend in the consumption of cigarettes, especially among young adults and adolescents. Just a few decades ago, cigarettes were considered ‘cool’. The link between cancer and cigarettes were established by the 1950’s, though accepting that cigarette smoking was “bad” for you didn’t take root socially until around the late 1990’s.  

 

Now, we know that cigarette smoking is a dangerous, often fatal habit that leads to cancer, respiratory illnesses, and heart disease. According to the World Health Organization (WHO), over 8 million people die prematurely from tobacco use yearly.

 

In the results of a Gallup poll from early 2024, they found that more Americans are more likely to smoke weed than cigarettes, while young people are more than 5 times more likely to choose weed over tobacco. The poll found that 17% of Americans smoke weed, while 12% admitted to smoking cigarettes in the previous week. The more dramatic difference was observed among the 18-34 age range, where 26% admitted to consuming weed while only 5% of them still smoke cigarettes.

 

For the same poll, they also found that the older adults aged 55 and up were more likely to still smoke cigarettes compared to marijuana. “Americans’ reported marijuana smoking has more than doubled since 2013, when Gallup first added the question in its annual Consumption Habits survey,” explained Gallup. “That year, seven percent said they did,” they reported.

 

Improved Public Perceptions Leads To Healthier Choices

 

One can’t deny that there has been a massive shift in the increasing awareness of marijuana’s health benefits, as well as the dangers of cigarette smoking. This leads to changing public perceptions, better and more scientific research as well as clinical studies, and an improvement in the law.


The law, specifically, has been instrumental in mitigating the spread of cigarette use. For example, many governments worldwide have established strict no-smoking policies and placed a massive tax on cigarettes. Tobacco manufacturers are no longer allowed to freely advertise their product. All these have led to a downward trend in cigarette smoking habits and purchasing.

 

The proliferation of legal cannabis throughout North America, not just for medical use but also for recreational use has also contributed to a widespread cultural acceptance of cannabis, which has also improved the public perception of the drug. As we speak, it’s already become a part of society not just in North America but also in countries such as Thailand, several European nations, Uruguay, and Mexico to name a few.

 

In addition, people are also becoming more educated about the use of alcohol. While it may still be the most widely used intoxicant, its days me be numbered: there is a small yet growing number of people who are choosing to replace alcohol with weed, because of the sheer number of studies proving the dangerous link between fatal illnesses and alcohol. Not to mention that alcohol is linked to drunk driving and road fatalities, multiple different types of cancers, horrible hangovers, and so much more.

 

Even Gallup polls from as far back as 2022 revealed that people in the United States have already begun to smoke more weed than cigarettes. Gallup conducted the survey from July 5 through 26 of 2022. The results reveal that 11% of the population smoke cigarettes, while back in the mid-1950’s, 45% of Americans smoked them. Meanwhile, 16% of Americans reported that they smoke weed, and 48% tried it in the past. Back in 1969, just 4% of Americans smoked weed!

 

It’s clear that societal and cultural perceptions around both have changed dramatically. “Smoking cigarettes is on the decline and is most likely to become even more of a rarity in the years ahead,” explains Gallup Senior Scientist Dr. Frank Newport. “This reflects both public awareness of its negative effects and continuing government efforts at all levels to curtail its use,” he said.

 

Unfortunately, the Gallup poll also found that alcohol remains a popular substance for Americans. Despite the increasing studies being published right now that alcohol is a proven carcinogen, one can’t blame the population: it’s legal, easily accessible, and affordable for many.

 

Overall, it seems that the demand for wellness is slowly taking over. Wellness is no longer just a buzzword or a trend; it’s a real pursuit that more, especially young people, are seeking. And cannabis fits very well into that picture: whether CBD or THC, the components of marijuana have proven beneficial for the mental and physical health of people, across a wide age group. From pediatric CBD applications to therapeutic uses for the elderly, cannabis can be beneficial for many people.

It’s so easy to see why thousands of young adults commonly include cannabis as part of their everyday wellness regimen – the same generation that have shunned cigarette smoking for good.

 

Conclusion

 

If you really must have a smoking habit, choose weed over cigarettes. Even then, any type of weed is much healthier than tobacco. Marijuana is so much healthier for your mind and body, and it can function as a medicine and supplement as well.

 

For individuals who are struggling to quit smoking cigarettes, you might even want to consider using cannabis as a cessation aid. Many have found success using cannabis to quit cigarettes, with longer-lasting success rates.

 

CAN CANNABIS HELP YOU QUIT CIGARETTES? READ BELOW…

CAN WEED HELP YOU QUIT CIGARETTES

CAN WEED HELP YOU QUIT CIGARETTES? WE ASKED THE PROS!



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