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The Ohio Cannabis Industry is a Dumpster Fire

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Ohio cannabis legalization dumpster fire

Since lawmakers are attempting to finalize changes to the legislation that voters adopted in November 2023, Ohio’s recent legalization of marijuana for recreational use is in doubt.

 

House Speaker Jason Stephens (R) told reporters lately that the problem is complex.

 

The Coalition to Regulate Cannabis Like Alcohol’s Tom Haren has continuously advocated against the necessity of changing Issue 2.

 

“Issue 2 establishes a comprehensive regulatory framework. There’s no necessity for legislative intervention,” Haren informed the Ohio Capital Journal.

 

Despite this stance, shortly after the November legalization vote, Governor Mike DeWine and Senate President Matt Huffman swiftly announced the introduction of a new bill, which has now led to significant delays.

 

The proposed bill, SB 86, aims to limit home cultivation of cannabis to six plants per household, contrary to Issue 2’s provision for up to 12 plants. Additionally, it proposes increasing the cannabis tax rate from the original 10% to 15%.

 

The Republican-led Senate’s bill has yet to be addressed by the House, where Speaker Stephens, also a Republican, appears unhurried. Notably, Stephens previously advocated for respecting the voter-approved bill without alterations.

 

“We must prioritize what’s essential over what’s immediate,” he emphasized.

 

Governor DeWine is urging the House to pass the Senate bill, asserting that it would help combat the black market.

 

However, House Democrats, including Minority Leader Allison Russo, urge caution, expressing concerns about disregarding the voters’ wishes and advocating for a more measured approach.

 

“There are areas of agreement, but there are still many discussions needed on other aspects,” Russo commented.

 

The next House session is slated for April 10, meaning that even if a bill is passed then, dispensaries won’t be operational until July.

 

Haren expressed disappointment at some members of the General Assembly attempting to hastily alter the voters’ will through House Bill 86. However, he remains optimistic about the House’s more deliberate approach.

 

Political Divide: GOP vs. Democrats

 

The debate surrounding Ohio’s marijuana legalization reflects a stark political division between Republican and Democratic leaders. Republicans, spearheaded by figures like House Speaker Jason Stephens, are pushing for legislative alterations to the voter-endorsed legislation. They argue that modifications, such as those proposed in SB 86, are essential for addressing regulatory gaps and ensuring effective implementation.

 

On the other side, Democrats, led by Minority Leader Allison Russo, advocate for respecting the voters’ decision and proceeding cautiously with any changes. They raise concerns about undermining the democratic process and believe that any amendments should align closely with the original intent of Issue 2.

 

This ideological conflict sheds light on more significant conflicts inside the state legislature, where party divides frequently influence how divisive topics like marijuana legalization are handled. The conclusion of the ongoing discussions will have a substantial impact on Ohio’s political climate and government in addition to the state’s cannabis sector.

 

Impact on Cannabis Industry and Consumers

 

There are significant ramifications for the cannabis business as well as consumers from the proposed modifications to Ohio’s marijuana legalization legislation, especially those contained in SB 86.

 

Changes to the laws pertaining to home growing and taxes may have a substantial effect on the operations of companies in the cannabis sector, including distributors, merchants, and cultivators. SB 86’s proposed ban on home gardening, which would limit each household to six plants, is expected to have an impact on supply and demand in the market. Furthermore, pricing policies and profit margins for companies may change as a result of the 10% to 15% cannabis tax rate hike, which may influence investment choices and market competitiveness.

 

Furthermore, there may be wider effects on customers from these modifications. Reducing the amount of plants that people can cultivate at home may make cannabis less accessible to people who depend on home growing for recreational or medicinal uses. Moreover, a rise in tax rates might result in increased cannabis product costs, which could have an impact on accessibility and affordability for customers from a variety of socioeconomic backgrounds.

 

The effects of the proposed legislation on consumers and the cannabis industry highlight how crucial it is to carefully weigh the implications of policy decisions in order to ensure a well-balanced approach that protects the interests of all parties involved while addressing regulatory concerns.

 

Public Reaction and Stakeholder Perspectives

 

The prolonged legislative impasse surrounding Ohio’s marijuana legalization has elicited frustration and discontent among the public and various stakeholders.

 

The delays in enacting the law that the electorate passed in November 2023 are causing citizens who supported legalizing to become more and more irate. A lot of people voice their worries about the legislative process’s sluggish pace and seeming disrespect for democracy. People who expected quick access to legal cannabis are feeling let down since dispensaries are still closed and regulations are still unclear.

 

Stakeholders in the cannabis market, including consumers, advocates, and company owners, are keeping a close eye on developments and offering their opinions. There are many who contend that the suggested modifications, which include limiting home cultivation and raising tax rates, are superfluous and would hinder the expansion of the sector. Some, on the other hand, agree that thorough rules are necessary, but they also emphasize how crucial it is to make sure that any changes are in line with the wishes of the voters and give firms’ and customers’ interests top priority.

 

As tensions mount and the legislative process continues, the voices of the public and stakeholders will play a crucial role in shaping the future of marijuana legalization in Ohio. It remains to be seen whether lawmakers can find common ground and navigate the complexities to enact legislation that satisfies all parties involved.

 

Bottom Line

 

Ohio’s recent legalization of marijuana for recreational use faces considerable uncertainty as lawmakers grapple with finalizing changes to the voter-approved legislation amidst political divisions. Despite House Speaker Jason Stephens acknowledging the complexity of the issue, GOP efforts to amend the legislation, particularly through SB 86, are met with resistance from Democrats led by Minority Leader Allison Russo, who advocate for upholding the voters’ decision. These proposed changes, including limitations on home cultivation and tax rate increases, raise significant concerns among stakeholders within the cannabis industry and consumers alike, prompting debates over market dynamics, accessibility, and regulatory oversight. With public frustration mounting and stakeholder perspectives diverging, the legislative impasse underscores the need for a balanced approach that prioritizes both regulatory efficacy and democratic principles to navigate the path forward for marijuana legalization in Ohio.

 

OHIO VOTED ON WEED AND ABORTION IN ONE NIGHT, READ ON…

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VOTE ON MARIJUANA AND ABORTION IN ONE NIGHT, OHIO!



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Foreign Investment in U.S. Cannabis: Five Key Considerations

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Cannabis investments are difficult enough when the investor is a U.S.-based person or entity. But things can get immensely more complicated when foreign investment is on the table. Today I want to highlight some of the top considerations for foreign investors and U.S. cannabis companies alike.

1. Legality could cause serious headaches

To this day, cannabis remains federally illegal. State legality has zero effect on federal law. Even the possible rescheduling to schedule III of the Controlled Substances Act (CSA) will not make cannabis federally legal. Things are clearly a mess.

In our cannabis team’s experience, a huge number of foreign investors do not appreciate the nuances between state and federal law and how it could effect them. For example, federal tax laws are unforgiving and don’t allow standard deductions for marijuana businesses. Additionally, federal illegality means that businesses will be siloed without interstate commerce, can’t get access to banking, can’t get access to basically anything for market rate, and so on.

All of these things mean that investments are simply unlikely to net big returns. Sadly to say, lots of investors end up writing off their investments. While federal legality alone isn’t the only reason that businesses, and by extension foreign investments, fail, it’s certainly a big one.

2. Cannabis investment may not be compatible with home country laws

This is actually probably more important than point 1. Cannabis is still illegal in most places in the world. There are still places where possession of cannabis can lead to the death penalty. While possession in a such a country is different from investing into the U.S., the governments in those countries may not see eye to eye, and such investments could lead to a host of different penalties. I’ve spoken with attorneys and business people from other countries who have said that foreign investment directly into a cannabis company is simply not possible.

What this can often lead to is investment into adjacent or ancillary companies in overly complicated deals. And when something is ancillary to the industry and/or a deal is overly complicated, netting a healthy return on investment is even more unlikely.

3. The cannabis industry and immigration law do not mix

Probably the first issue that comes up when looking at foreign investment is immigration and visa status. Immigration law is the province of the federal government. That means that it does not mix well with cannabis. If you’ve been in this space long enough, you’ll have heard of things like denial of naturalization petitions, denial of visas, arrests, and even lifetime bans on entry into the states. So for foreign investors who plan on relocating to the U.S. or even visiting to see the company they are investing in, there are huge risks.

4. Disclosure will likely be required

All states with legal cannabis markets require disclosure of certain people affiliated with a cannabis business. In many states, this includes investors, lenders, or people with other financial interests. Sometimes, the disclosures can be relatively benign, and in other cases much more aggressive.

For reasons expressed in points 2 and 3 above, a lot of foreign investors aren’t exactly thrilled to learn that they have to give personal data (and maybe undergo background checks) over to a state agency. This is yet another reason why foreign investments are often made into ancillary companies — to avoid disclosures. But even that isn’t always likely to fix the issue, and again, overly complicated investments into ancillary companies aren’t necessarily great.

5. Investment targets may get things wrong

Foreign investors often make a critical mistake in assuming that their targets know what they are doing. I’m not talking about operational issues — though a lot of companies clearly need help there — but about legal structures. It’s not unheard of for an investor to want to invest into a company that promises something it legally cannot do — like sell stock to a foreign investor in a state with a residency requirement. Yet things like this do happen from time to time, and once a foreign investor gives money over, it’s a lot harder to get it back.

Foreign investors who know what they are doing usually work with lawyers or other professionals experienced in their target jurisdiction, not only to diligence the target’s operations, finances, etc., but also to make sure that the fundamental aspects of the investment won’t trigger massive legal liabilities.

For some of our older posts on foreign investment in the U.S. cannabis industry, see below:



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America Can’t Defend Its Border Because Border Patrol Agents Are Smoking Too Much Weed?

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border patrol marijuana policy

A Republican senator is pushing back against a recent policy change by U.S. Customs and Border Protection (CBP) that reduced the term of ineligibility for work due to past marijuana use from two years to three months. The senator doubts the trustworthiness of recruits who have used cannabis and believes that this move jeopardizes the safety and integrity of Border Patrol agents.

 

Senator James Lankford (R-OK) wrote to CBP Acting Commissioner Troy Miller, expressing severe concerns about the effects of this shift. He stated that the amendment blatantly contradicts the Border Patrol’s principal mission of safeguarding the country from illicit drugs.

 

Ironically, no one in the Senator’s office seemed worried about the US and Canadian border where cannabis has been recreationally legal for 7 years now.  Many Canadians have been stopped and banned for cannabis use, yet the security issue does not seem relevant at the Northern border, just the Southern.

 

While the exact timing of the CBP’s policy revision remains unclear, Senator Lankford disclosed that his office became aware of it during a briefing last month.

 

The senator alleges that CBP officers told his staff that ambiguity generated by disparities between state and federal marijuana regulations in places where cannabis has been legalized had a role in the policy shift. Senator Lankford did, however, emphasize that CBP, as a federal agency, is responsible for ensuring that federal rules governing the use of illegal substances are obeyed.

 

Additionally, the senator asserted that individuals who admit to past marijuana use often disclose involvement in other criminal activities, which he deemed unsurprising. He attributed this to the fact that irrespective of state laws, users frequently obtain marijuana from unlicensed vendors in the “gray market” due to its lower cost.

 

Furthermore, Senator Lankford alleged that licensed cannabis establishments frequently encounter corruption issues, citing reports of malpractices within his state’s medical marijuana program. He claimed that undocumented immigrants are exploited for labor and subjected to adverse conditions in these facilities.

 

Addressing worries about the health repercussions of cannabis usage, the senator cited a putative relationship between marijuana intake and diseases including schizophrenia and psychosis. Despite contradicting study findings on the subject, Senator Lankford emphasized the need for federal government screening for psychiatric disorders and illegal drug use during background checks for federal jobs.

 

In conclusion, Senator Lankford cautioned that regular marijuana use, particularly in states where it is legalized, could significantly affect the trustworthiness of Border Patrol recruits, especially considering the incidence of psychosis among heavy cannabis users.

 

Concerns Over Border Patrol Recruits’ Ties to Transnational Criminal Organizations Due to Altered Marijuana Use Review Period

 

Lankford expressed concern that shortening the period for reviewing marijuana use history raises the risk of Border Patrol recruits having financially supported transnational criminal organizations for marijuana cultivated by illegal immigrant labor. This scenario directly contradicts the Border Patrol’s mission and could lead to significant security and integrity issues among agents.

 

In his capacity as the Ranking Member of the Subcommittee on Governmental Operations and Border Management, Lankford emphasized his Subcommittee’s authority over Federal hiring and border management. He strongly objected to the policy change, fearing it would undermine the security and integrity of the Border Patrol workforce. Consequently, he urged CBP to revoke the policy and reinstate the two-year review period for marijuana use among Border Patrol recruits.

 

The senator presented eleven questions to CBP, seeking clarification by May 7 on various aspects, including the rationale behind the cannabis policy alteration, its impact on polygraph passage rates, and any other modifications to employment standards related to past marijuana use.

 

In essence, Lankford’s stance is clear: despite acknowledging CBP’s ongoing recruitment challenges and advocating for legalization to bolster border security and increase the agency’s personnel, he believes that hiring individuals who may have used cannabis three months prior, as opposed to two years ago, poses an unacceptable risk.

 

Meanwhile, CBP advised its employees and their families against using even federally legal CBD products last year. The federal legalization of hemp and its derivatives has complicated CBP’s enforcement efforts, prompting officials to seek portable marijuana analyzers to swiftly identify cannabinoid profiles and differentiate between marijuana and hemp.

 

Lankford’s opposition to the policy change is unsurprising, given his longstanding reputation as a fervent prohibitionist. For instance, last September, he spearheaded a separate letter urging the head of the Drug Enforcement Administration (DEA) to reject a recommendation to reschedule cannabis.

 

Potential Impact on Border Security and Drug Interdiction Efforts

 

Senator Lankford is concerned about more than just the short-term effects of shorter qualifying periods for recruits to the Border Patrol. He predicts a chain reaction that may make border security and drug interdiction efforts less successful. Lankford contends that CBP runs the danger of admitting people who may have engaged in criminal activity in the past, especially those connected to transnational criminal organizations (TCOs), by loosening the scrutiny on prior marijuana usage. Because TCOs frequently take advantage of gaps in border control to move narcotics, weapons, and people across international borders, such links directly endanger national security.

 

Furthermore, Lankford questions the reliability of background checks and polygraph tests in identifying individuals with ties to criminal organizations, particularly given the evolving nature of drug-related crimes. The shortened review period may not provide sufficient time to uncover deeper associations or patterns of behavior indicative of criminal involvement. This, in turn, could lead to the infiltration of Border Patrol ranks by individuals sympathetic to or actively engaged in illicit activities, compromising the integrity of the agency and its mission to safeguard the nation’s borders.

 

Lankford’s worries about the wider social effects of permissive marijuana laws among law enforcement agencies go beyond the direct security ramifications. He argues that CBP’s decision may undermine attempts to curb drug misuse and related criminal activity by sending a message of tolerance toward drug use. It also calls into doubt the coherence of federal drug enforcement initiatives, particularly given disparate state legalization policies for marijuana. Lankford highlights the necessity of a unified strategy for border security and drug control, one that respects federal authority while taking into account the intricacies of changing state laws.

 

Bottom Line

 

Senator James Lankford’s staunch opposition to the recent policy change by U.S. Customs and Border Protection, which shortened the term of ineligibility for Border Patrol recruits due to past marijuana use, underscores concerns about potential risks to national security and the integrity of law enforcement agencies. His apprehensions regarding the infiltration of criminal elements into the Border Patrol workforce, coupled with doubts about the efficacy of screening procedures, highlight the broader implications of drug policy shifts within federal agencies. Lankford’s stance emphasizes the importance of maintaining stringent standards in border security efforts while navigating the complex landscape of state and federal marijuana regulations.

 

US BORDERS AND CANNABIS, READ ON…

BORDER PATROL ON WEED

BORDER  PATROL ON CANNABIS USEAGE, DON’T ASK, DON’T TELL!



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Can Florida Pull 60% of the Votes Needed on Election Night to Pass Legal Weed?

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florida votes on recreational cannabis and abortion

In a blow to Gov. Ron DeSantis and other Florida conservatives opposed to the measure, the state’s Supreme Court on Monday approved a recreational marijuana constitutional amendment for the November 2024 statewide ballot.

 

The proposal, known as Amendment 3, will legalize the “non-medical personal use of marijuana products and marijuana accessories by an adult” 21 or older if approved by 60% or more of statewide voters. It would take effect six months after the election.

 

The cannabis industry may have a secret “ace card” up their sleeve if Ohio is any indication off liberal voter turnout.  You may remember that Ohio voted on cannabis legalization and abortion rights on the same ballot and voting night last year.  This dual liberal ballot caused a swell or women and liberals to hit the voting booths, passing both measures in the same night.  Florida finds itself in the same situation this November, with abortion rights on the same ballot.  A “two birds, one stone” voting night may happen again as more liberals and women come out to vote.

 

In 2021, the court rejected two proposed constitutional amendments for recreational marijuana. But this time five justices ruled favorably on the measure with only two opposing.

 

The amendment was the subject of a multi-million-dollar campaign, spearheaded by Smart & Safe Florida, a group that’s collected more than $40 million in recent years. Two dozen states have already legalized recreational weed.

 

The Florida amendment would allow non-medical marijuana possession of up to 3 ounces, with no more than 5 grams in concentrated form.

 

To get a measure on the Florida ballot, supporters must first get 891,523 signatures from residents. The Supreme Court then must decide whether the amendment language sticks to a single subject and isn’t misleading, which can be a difficult threshold to overcome.

 

But, for the majority of justices, it met that bar.

 

In light of those limited considerations, we approve the proposed amendment for placement on the ballot,” Justice Jamie Grosshans, appointed by Gov. Ron DeSantis, in the majority opinion.

 

The state Supreme Court Monday also effectively upheld a six-week abortion ban but also OK’d a ballot measure that would guarantee access to abortion, even further raising the stakes of an already pivotal presidential election.

 

Florida’s Attorney General Against Legalization of Recreational Cannabis

 

Ashley Moody, the attorney general of Florida, expressed her disapproval of the recreational marijuana ballot issue, claiming it was deceptive and did not satisfy the required requirements.

 

Additionally, Moody’s chastised the proposal for supposedly benefiting Trulieve, the biggest medicinal marijuana provider in the state and the main source of money for Smart & Safe Florida. Kim Rivers, the CEO of Trulieve, praised the court’s ruling and said she was looking forward to helping the campaign move closer to the autumn ballot.

 

The legalization of medical marijuana in Florida stemmed from a 2016 ballot measure approved by over 71% of voters. Previous polls have indicated broad support among Floridians for the 2024 recreational marijuana measure.

 

While Governor DeSantis, who has appointed five of the court’s seven justices, had anticipated the court’s approval of the recreational marijuana measure, he recently expressed concerns about its potential impact. Specifically, he mentioned worries about the odor and the lack of restrictions on where and when marijuana could be consumed, including near schools. He criticized the broad language of the amendment, stating it was the most extensive he had encountered.

 

Justice Meredith Sasso, appointed by DeSantis and one of the dissenting voices, believed the amendment misled voters, citing its language regarding the “allowance” of recreational marijuana.

 

Moody argued in court filings that describing the amendment as “allowing” marijuana use is misleading, as marijuana remains illegal federally, despite its legality in over 20 other states. However, Justice Grosshans, writing for the majority, found the amendment’s summary not misleading, noting the court’s prior rulings on medical marijuana and its jurisdiction over state, not federal, law.

 

Potential Implications for Florida’s Cannabis Industry

 

There has been much conjecture on the significant consequences that Amendment 3’s passage by the Florida Supreme Court may have for the state’s rapidly expanding cannabis sector. Leading companies in the field, including Florida’s well-known medical marijuana supplier Trulieve, are positioned to profit from the growing market as recreational marijuana use gets closer to approval. With the potential to solidify its position as a leading participant in the medical and recreational cannabis sectors, Trulieve’s significant financial support of Smart & Safe Florida’s campaign highlights the company’s strategic interest in the amendment’s successful passage.

 

However, alongside established players like Trulieve, the legalization of recreational marijuana is expected to spur increased competition within Florida’s cannabis market. As the state opens its doors to non-medical cannabis use, new entrants are likely to emerge, seeking to seize a slice of the lucrative market pie. This influx of competition could lead to innovations in product offerings, retail experiences, and branding strategies as companies vie for consumer attention and loyalty in an increasingly crowded marketplace.

 

Furthermore, Amendment 3’s adoption is likely to change Florida’s cannabis laws about retail, wholesale, and growing. The elements of the amendment, such as possession limitations and regulatory frameworks, will be crucial in determining the operational parameters that enterprises in the state’s cannabis market must adhere to. Stakeholders in the sector are keeping a close eye on changes as politicians and regulatory bodies strive to create rules for compliance and enforcement. This is so they can efficiently manage the constantly changing regulatory landscape.

 

Political Ramifications and Public Opinion on Recreational Marijuana

 

The approval of Amendment 3 by the Florida Supreme Court not only carries significant implications for the state’s cannabis industry but also holds substantial political ramifications. Governor Ron DeSantis, who has appointed the majority of the justices on the court, had previously expressed mixed sentiments regarding the legalization of recreational marijuana. While anticipating the court’s approval, DeSantis recently voiced concerns about potential societal impacts, including odor concerns and the absence of stringent consumption restrictions, especially in proximity to educational institutions.

 

In addition to DeSantis’s stance, the passage of Amendment 3 amplifies the ongoing discourse surrounding recreational marijuana at both the state and national levels. Florida’s Attorney General, Ashley Moody, echoed concerns about the amendment’s language and its potential to mislead voters. The debate surrounding the amendment reflects broader discussions on the legalization of cannabis across the United States, with advocates emphasizing social equity, criminal justice reform, and economic opportunities, while opponents highlight public health and safety concerns.

 

The public’s perception of marijuana use for recreational purposes in Florida seems to be changing despite differing opinions. Voters overwhelmingly supported the legalization of medical marijuana in 2016, demonstrating the increasing acceptability of cannabis use for therapeutic purposes. Recent polling indicates a similar trend in support of legalizing cannabis for recreational use, reflecting Floridians’ changing views on the drug. The result of the Amendment 3 vote will not only influence Florida’s cannabis industry but also act as a gauge for larger social views toward marijuana legalization in the US as the state prepares for the November 2024 election.

 

Bottom Line

 

The approval of Amendment 3 by the Florida Supreme Court marks a significant milestone in the state’s journey towards the potential legalization of recreational marijuana. Despite opposition from Governor Ron DeSantis and other conservatives, the amendment’s passage signals a shift in public opinion and could have far-reaching consequences for Florida’s cannabis industry, political landscape, and societal norms. As stakeholders navigate the evolving regulatory environment and prepare for the upcoming ballot in November 2024, all eyes will be on the outcome of the vote and its impact on the future of marijuana policy in the Sunshine State.

 

ABORTION AND WEED TOGETHER, READ ON…

VOTE ON MARIJUANA ABORTION

OHIO HAD ABORTION AND WEED ON THE SAME BALLOT?



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