WeedWeek edition / May 13, 2019
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This week on the podcast
Hemp, Hemp Hooray with Joy Beckerman
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1 33 STATE AG’S SUPPORT BANKING ACCESS, WALL ST. DOESN’T

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Attorneys General from 33 states and Washington D.C. signed a letter in support of the Safe Banking Act, which would normalize relations between cannabis businesses and banks. It would not end industry-hated tax rule 280(E).
AP

California AG Xavier Becerra(D):

"This is simple: not incorporating an $8.3B industry into our banking system is hurting our public safety and economy...[The bill] would reward taxpayers and small and local licensed businesses who play by the rules."

The bill, however, does not have support from big Wall Street banksWSJ reports. If the bill passes, the banks fear they would still be subject to federal money-laundering laws which would only end with federal legalization.

The legislation (H.R.1595), introduced by Rep. Ed Perlmutter (D-Colo.) is due before the House Rules Committee this month.
Denver Post

Senate Majority Leader Chuck Schumer (D-N.Y.) and Rep. Hakeem Jeffries (D-N.Y.) said they would re-introduce legislation to legalize REC federally but no one expects it to pass the GOP controlled Senate.
HuffPost

Elsewhere in bankingBusiness Insider learned that Elavon, a payment processor subsidiary of US Bank, dropped its CBD-business clients after aggressively recruiting them through a company called PaymentCloud.

Quick Hit

  1. State by state legalization is a mess, Amanda Chicago Lewis writes in Rolling Stone.

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2 CALIFORNIA GETS EVEN MESSIER

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Only nine of California's 627 licensed dispensaries are entering data into the state's $60M track and trace system. And of the 1,000+ licensed manufacturing companies, only 93 are actively participating.

The state's Metrc system, produced by Florida-based Franwell, has been operational since January 2018. The delays are due largely to problems with licensing and training.

Instead of entering data electronically, businesses are turning in paper records enforced by an honor system, says Patrick Vo, CEO of Franwell competitor BioTrackTHC.

State regulators have received more than 50,000 paper manifests and say they are unaware of any enforcement cases triggered by fraudulent or altered paper records.

More California headaches:

But, everyone seemed to have fun at the Hall of Flowers B2B show in Santa Rosa.
Cannabis Now

Quick Hits

3 MED COMPANY VIREO SUED BY FORMER PARTNER

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Via VireoHealth.com

In a case highlighting tensions between small businesses and multi-state operators (MSOs), A Maryland physician and MED entrepreneur is suing Minnesota-based MED company Vireo Health.

Dr. Mark Schneyer started MaryMed in 2015 with Vireo as a majority partner. Schneyer's company obtained a state MED license; Now he claims Vireo improperly stripped him of his ownership stake. Maryland regulators are investigating the deal.

Vireo CEO Dr. Kyle Kingsley declined to answer the Baltimore Sun's questions. The company accused Schneyer of trying to disrupt its stock sale.

Vireo operates in 10 states. Two former Vireo executives face criminal charges for allegedly smuggling $500,000 of MED oil from Minnesota to New York in an armored vehicle in 2015.
LoHud.com

Also in Maryland: A consultant is suing cannabis-private equity firm Privateer Holdings for shortchanging her on promised compensation. Privateer said it was not familiar with the allegations and expects to be removed from the complaint.
Cannabis Wire

Quick Hits

  1. MSOs Surterra and Curaleaf are accusing Florida of giving unfair preference to Trulieve, the state's largest dispensary player. Together the three companies dominate Florida's MED market.
    Orlando Sentinel, MJBiz
  2. Hedge fund Marcato, which holds 2.7% of multi-state operator Acreage Holdings, opposes its proposed $3.4B acquisition by Canopy Growth. Marcato says the company agreed hastily to a deal for too little money. Canopy CEO Bruce Linton guaranteed the deal would go through. 🍁WW Canada has more.
    Reuters, Business Inside
    r
  3. Ozy profiles Dan Ahrens, who's behind AdvisorShares' pure cannabis exchange-traded fund, (ticker:YOLO.) He's got "an $80B Wall Street weed plan."
  4. Former MedMen CFO James Parker added more allegations to his lawsuit against the company. MedMen has called the suit baseless.
    MJBiz Daily
  5. New Cannabis Ventures' Alan Brochstein explains why some pot stocks flop.
  6. Caliva chairwoman and former Yahoo CEO Carol Bartz compared the green rush to the tech boom.
    MJBiz
  7. Macro-microbrewery The Boston Beer Co., (parent of Sam Adams), is acquiring competitor Dogfish Head Brewery in a cash and stock deal valued around $300M.

4 ILLINOIS RELEASES REC BILL

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Illinois Gov. J.B. Pritzker (D) released his proposal to legalize REC. He said the state would have "the most equity-centric law in the nation." The proposal could expunge an estimated 800,000 low-level convictions.
Chicago Tribune

However, the bill has encountered headwinds:

In Wisconsin, GOP lawmakers oppose MED legalization.
AP

Quick Hits

  1. Oklahoma MED sales notched their seventh straight month of growth.
    AP
  2. Cannabis companies see green in "opportunity zones," a federal program designed to encourage business in depressed areas.
    Cannabis Wire
  3. REC legalization continues to be a hard fight in New Jersey.
    NJBiz

5 DENVER DECRIMINALIZES MAGIC MUSHROOMS

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Denver voters decriminalized hallucinogenic mushrooms, becoming the first U.S. jurisdiction to do so. Oregon and California could follow.

While the active ingredient psilocybin is not a major reason for arrests, the move is a big step towards legitimacy for a drug which has attracted speculation and investment in its potential medical benefits, notably depression.
N.Y. Times

At the Colorado state capitol, Gov. Jared Polis (D) is on the brink of making Colorado a much friendlier state for the cannabis industry. He and "de-felonizing" possession of Schedule I and II controlled substances.
Westword, ABC

Colorado authorities, including Gov. Polis' office, have not responded to my queries about regulation in Colorado.

6 OPEN CANNABIS PROJECT TO CLOSE

The Oregon non-profit Open Cannabis Project is dissolving itself following a controversy involving for-profit partner Phylos. Open Cannabis Project spun off from Phylos as part of an effort to prevent companies from cornering the market on intellectual property related to cannabis genetics.

Since 2014 Phylos has solicited genomic data from growers, who understood it would not be used for breeding programs. In April, Phylos announced a program to breed newer and better strains of cannabis.

Phylos CEO Mowgli Holmes told Willamette Week the data it had collected from growers wouldn't be important to the program. But Cannabis Now found a video from February in which Holmes bragged that the collected data would lead to the "next generation of plants."

Open Cannabis Project director Beth Schechter wrote on Medium:

"Our story has been a key part of shaping [Phylos'] public image as altruistic and science-loving protectors of the cultivation community. We’ve been called a frauda scam and a cover for some kind of secret plot. At first, we thought it was simply a technical misunderstanding of the subject matter. Now we know that there is truth to some of these fears."

 

7 FDA FAST TRACKS SYNTHETIC CBD DRUG

The FDA fast-tracked the application for a synthetic CBD drug intended to treat behavioral symptoms Fragile X syndrome, a rare genetic condition. The drug could also potentially be used to treat autism spectrum disorders. The drug is being developed by Pennsylvania biotech company Zynerba.
Philly.com

Quick Hit

  1. A House Committee called for relaxing barriers to MED and kratom research.
    Marijuana Moment
 

8 WHERE’S JAMAICA’S EQUITY?

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Bill Fairs
Bob Marley in New Zealand, 1979

Jamaicans fear only foreigners will be able capitalize on the country's growing cannabis industry. In 2015, the island nation liberalized its pot laws to allow MED and pot tourism.
Vice

Around the world:

 

9 LONGEST SERVING U.S. POT PRISONER RELEASED

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http://www.facebook.com/freeacubanhero Antonio Bascaro with his family after his release

After 39 years in prison, the longest serving U.S. pot prisoner has been released. Cuban national Antonio Bascaro was a fighter pilot and anti-Castro exile who was arrested in Guatemala in 1980. He refused to testify against others, though it may have shortened his sentence.

Because he's not a citizen, Bascaro could soon be deported from the U.S. In the meantime he's enjoying life with his family.

Bascaro's first meal as a free man was four eggs, double ham, bacon and a guava and cheese pastry.
BBC

Quick Hits

  1. Federal marijuana trafficking cases declined to 2,100 in 2018, down from 7,000 in 2012.
    Marijuana Moment
  2. Philadelphia DA Larry Krasner says he's "very close" to ending felony prosecutions for drug possession.
    Axios
  3. In the last three months, Kim Kardashian West has helped free 17 non-violent drug offenders.
    CNN
  4. NextCity longread by Tana Geneva says the "arc of legal weed bends towards injustice."

10 ANCIENT DRUG TROVE WAS WELL STOCKED

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A trove of 1,000-year old artifacts unearthed in Bolivia contains traces of five psychoactive drugs: cocaine, BZEbufotenine (produced by toads), harmine and DMT, the active ingredient in ayahuasca. It's the most types of drugs ever found at a South American archeological site.

The found materials include "snuffing tablets, a snuffing tube [and] a pair of llama-bone spatulas]" some with ornate carvings. The site may have been used for funerals.
The New Scientist

In more recent lifestyle news, the N.Y. Times has discovered interest in cannabis-inspired interior design and looked into "the stoner as gym rat" theory.

The paper of record also discussed how to come out to your parents about slinging dope.