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Interstate cannabis sales put California at risk of federal enforcement, AG says

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A letter from California Attorney General Rob Bonta to state regulators all but ended marijuana industry hopes of interstate cannabis commerce.

In a 36-page letter sent Dec. 19 to the Department of Cannabis Control (DCC), the state’s chief cannabis regulator, Bonta wrote that marijuana activity between legal out-of-state businesses and California licensees could result in “significant legal risk to the State of California under the federal Controlled Substances Act.”

The warning – first reported by Marijuana Moment – is not a surprise, considering federal prohibition of the plant, which cast long odds a state law allowing such sales would be put to the test.

California hopes for interstate cannabis sales rose in September 2022, when Gov. Gavin Newsom signed Senate Bill 1326 to create interstate commerce pacts, overriding a longstanding prohibition on the transportation and distribution of marijuana products across state lines.

Enactment of the law, however, was contingent on several triggers, including federal legalization, approvals from the Department of Justice and other major U.S. marijuana policy shifts.

SB 1326 went into effect on Jan. 1 2023, and shortly thereafter, the DCC asked Bonta, a longtime industry advocate as an Assembly member, to provide some guidance on interstate sales.

In a statement sent to MJBizDaily and other news outlets, the DCC said that “we appreciate the attorney general’s conclusion that the arguments supporting interstate agreements are strong. Unfortunately, even strong arguments cannot put novel questions beyond all debate.”

Bonta’s response also made a passing reference to protecting state employees who might be open to legal risks by greenlighting interstate cannabis commerce.

“Courts have disagreed about the scope of federal preemption in the cannabis context, and no court has ever considered a preemption challenge to a state law authorizing interstate cannabis sales,” the letter noted.

“The law is also unsettled as to whether state officials could be federally prosecuted for implementing state law in this area.”

In May, Washington became the third state to create an interstate cannabis commerce law, thought the statute also was contingent on the U.S. government legalizing marijuana or allowing such transactions between states.

Oregon became the first state with an interstate marijuana commerce provision in June 2019 when its governor signed such activity into law.



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Cannabis MSO MedMen is exiting Arizona and Nevada

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Marijuana multistate operator MedMen Enterprises is exiting Arizona and Nevada by selling its assets in those states to privately held MSO Mint Cannabis.

The sales are the result of a strategic review by MedMen, according to a news release, and consist of the Los Angeles-based company’s wholly owned operating subsidiary in Arizona and two operational stores in Clark County, Nevada.

The value of the transaction was not disclosed.

Mint Cannabis has operations in its home state of Arizona as well as Michigan and Missouri.

MedMen warned investors in February that the company was running out of cash and later in the month said it was evaluating divesting properties in Arizona, Illinois and Nevada.

In November, MedMen advised that its annual results for the 2023 fiscal year ended July 1 would be late.

“MedMen is pleased with the outcome of our strategic review and has made good progress in our restructuring efforts,” MedMen CEO Ellen Deutsch Harrison said in a statement.

“These transactions will bolster liquidity in the short term, reduce liabilities, and enable the Company to focus on operating efficiencies and executing our long-term asset-light growth strategy in our core markets.”



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New PA law could increase medical marijuana dispensary permits by 20%

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(This story has been updated to clarify the changes in Pennsylvania law.)

Up to 30 new medical marijuana dispensaries could open in Pennsylvania under a bill signed into law by the state’s Democratic governor, a potential expansion of 20%.

Under Senate Bill 773 – which Gov. Josh Shapiro signed into law Dec. 14, as promised – as many as 10 independent MMJ growers now qualify to apply for a dispensary license.

Until now, Pennsylvania law capped the number of dispensary license holders at 50.

That arrangement led to a market controlled by out of state big cannabis company that resembled a near monopoly, according to critics.

The new law:

  • Could mean an expansion of up to 20% in the number of dispensaries allowed in the state if all 10 that receive approvals apply.
  • Also allows up to four dispensaries previously barred from cultivating cannabis to begin growing operations.

The changes could help expand product offerings available to MMJ patients in the state, some of whom might be lured to nearby Ohio once adult-use sales begin there as anticipated in 2024.

There’s also new language that would require MMJ license holders to report any change in ownership affecting a stake of 20% or more.



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MJBizDaily is on limited publishing schedule for holidays

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MJBizDaily is on a limited publishing schedule during the holiday season. Full coverage of the cannabis industry will resume Jan. 2.

MJBizDaily is on limited publishing schedule for holidays is a post from: MJBizDaily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs



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