November 7, 2018

Independent coverage of a global industry

In short

Last night, the Cannabis Wire team was busy keeping on top of election results across the country that have implications for the future of the cannabis industry. (In case you missed our Twitter thread, you can catch up here.)

Voters decided on four big measures yesterday (read on below for context): 

• Michigan (adult use): Passed ✔️

• Missouri (medical): Passed ✔️

• Utah (medical): Passed ✔️

• North Dakota (adult use): Failed ❌


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Pete Sessions, cannabis' top foe in Congress, is ousted:

The most significant result when it comes to national cannabis legislation is the defeat of Texas Republican Pete Sessions, who earned the ire of cannabis law reformers by blocking cannabis-related amendments in Congress as chairman of the Rules Committee. Sessions’ opponent, Democrat Colin Allred, has said he is in favor of medical cannabis. “Now the real work begins,” Allred tweeted.

ICYMI: Catch up on Cannabis Wire’s coverage of what's on the horizon for cannabis in Texas here and here.

A slew of new legalization-friendly governors:

  • California: Gavin Newsom will be California’s next governor. Newsom has been a longtime supporter of cannabis legalization and the cannabis industry, and helped usher the state toward legalization (which voters passed by ballot box in 2016) when he formed the state's Blue Ribbon Commission on Marijuana Policy in 2013.

  • Colorado: Jared Polis, one of the US House’s most outspoken members on cannabis, will become the next governor of Colorado. Governor John Hickenlooper has since come around to the state’s legal cannabis industry, but was opposed to legalization in 2012 when the state became the first in the US to legalize for adult use.  

    • Also in Colorado: Amendment X, which allows Colorado to decide on its own definition of hemp, passed by a significant margin. As Cannabis Wire reported, the hemp industry worried about a “dire effect” if it failed to pass.

  • Illinois: J.B. Pritzker, who has promised to legalize adult-use cannabis and reinvest in minority communities, beat incumbent Republican Bruce Rauner in Illinois. Pro-cannabis advocates are hopeful the governor-elect will push for legislation in 2019. While cannabis wasn’t a big issue in his campaign to unseat Rauner, Pritzker was unabashed about his views. He put on his campaign website, “JB will work to legalize marijuana, reduce mass incarceration, and reinvest in Illinois communities.”

  • New York: Governor Andrew Cuomo was re-elected. While he has not come out directly in favor of legalization, he has set the wheels in motion for the introduction of a legalization bill in the coming months, as Cannabis Wire has reported.

  • Maine: Democrat Janet Mills will be the next governor of Maine, where voters passed legalization in 2016. Former Governor Paul LePage, though, asserted that he would've liked to veto legalization entirely, and repeatedly vetoed regulations proposed by lawmakers for the state's industry. Mills supports legal cannabis, and it’s likely that efforts to establish a system for legal sales will unfold more smoothly in coming months.

  • Minnesota: Democrat Tim Walz will be Minnesota’s next governor, and has voiced support for legalization.

  • Nevada: Democrat Steve Sisolak will be Nevada’s next governor. While Nevada already has a robust industry in place, Sisolak is a friend to the industry: in fact, large cannabis companies dumped more than $100,000 toward his campaign in recent weeks, which Cannabis Wire reported earlier this week.

  • New Mexico: Democrat Michelle Lujan Grisham will be New Mexico’s next governor, and has voiced support for legalization.

Florida's cannabis industry is on edge:

A few key midterm losses could change the landscape for cannabis in Florida.

•   Republican Representative Carlos Curbelo, a vocal advocate for cannabis businesses, was ousted by Democratic challenger Debbie Mucarsel-Powell. (Mucarsel-Powell, though, supports legal cannabis.) The cannabis industry gave tens of thousands to Curbelo’s re-election campaign through direct donations and political action committees. Earlier this year, Cannabis Wire reported that one PAC in particular, a joint fundraising committee between Curbelo and Colorado Representative Mike Coffman, was funded entirely by the cannabis industry. (Coffman also lost his re-election bid in Colorado to Democrat Jason Crow.) 

•    Democrat Andrew Gillum, who supports the legalization of cannabis to raise tax dollars for public education, lost to Republican Ron DeSantis in the race for governor. DeSantis does not support adult use cannabis, but has vowed to uphold the will of the voters when it comes to medical use.

•    Republican Ashley Moody defeated Democratic challenger Sean Shaw to become the state’s next Attorney General. Shaw supports adult use cannabis and held a press conference at a Surterra Wellness dispensary this year. 

•    Perhaps the most closely watched race with implications for cannabis has yet to be decided: the race between former cannabis lobbyist Nikki Fried and Republican Matt Caldwell is still too close to call, and because the margin of victory could wind up below .5%, a mandatory recount is likely.

“I’m afraid it’s not good,” Karen Goldstein, Executive Director of NORML of Florida, told Cannabis Wire regarding the results. Goldstein is also the Vice Chairman of Regulate Florida, a group seeking to amend the Florida constitution to regulate cannabis for adult use.

Regulate Florida partnered with medical cannabis businesses Trulieve, Surterra and Liberty Health Sciences in an attempt to garner enough signatures to get a legalization measure on the midterm ballot. “Regulate Florida is going to have to keep pushing forward, because it looks like the legislature that’s going to be coming in is not going to be on our side.”

— Isaac Fornarola

Legalization failed in North Dakota:

North Dakotans voted against a measure that would legalize cannabis for adult use and automatically expunge cannabis-related criminal records. The initiative, Measure 3, was sponsored by Legalize ND. The committee was spearheaded by David Owen, who according to the Grand Forks Herald is a biology student at the University of North Dakota.

Two opposition groups, North Dakotans Against the Legalization of Recreational Marijuana, and Healthy and Productive North Dakota, a regional chapter of Smart Approaches to Marijuana (SAM), spent hundreds of thousands to combat the measure, and were thrilled with the results.

“This is a great day not only for North Dakota but also the rest of America. We have stopped Big Marijuana from using our state as it has others in its constant attempts to become the next Big Tobacco,” Kristie Spooner, president of Healthy and Productive North Dakota, said in a press release to reporters. “We are indebted to our volunteers for showing voters why allowing marijuana in would have forever changed what we have built.”

“I am pleased that measure 3 failed,” Bob Wefald, former North Dakota Attorney General and the Chair of North Dakotans Against the Legalization of Recreational Marijuana, told Cannabis Wire. “I think it was poorly drafted, it was an extreme overreach by the people who support recreational marijuana, and I think it would’ve been a disaster for the state had it passed.” Wefald added that he supports the decriminalization of small amounts of cannabis.

ICYMI: Catch up on Cannabis Wire’s coverage of North Dakota’s effort to legalize.

— Isaac Fornarola

Michigan voters legalize cannabis for adult use:

Michigan cannabis legalization came with compromise  

Late voting results indicated a sweeping victory for legalization in Michigan, with a healthy 57% margin of support.

Josh Hovey, the coalition spokesman, told Cannabis Wire that the group ran a disciplined campaign and were able to overcome opposition with “facts over fear.”

He also said that including provisions that ensured local governments could decide whether to “opt-in” for cannabis businesses, protected the right of an employer to drug test, and carved out room for “micro” or smaller businesses helped Proposition 1 gain mass appeal in a moderate state that often votes for conservative candidates statewide.

“No one in Michigan is being forced to have this in their communities if they don't want to,” Hovey told Cannabis Wire of local control, which he said was key to winning over moderates. He also said of ensuring employers’ right to drug test: “It might not be popular with activists, but in order to get legislation passed in a somewhat moderate state like Michigan you need to have those types of protections.” 

Both the pro-legalization and opposition campaigns were well-financed, as Smart Approaches to Marijuana (SAM) primarily financed the anti-cannabis campaign and the Marijuana Policy Project and New Approach PAC primarily funded the coalition ballot initiative.

Hovey said he sees the initiative’s victory in a broader context, one that can be used as a "model initiative" for other states and Congress. “The fact that we are going to be the first state in the Midwest will demonstrate this isn’t a big deal and the sky doesn’t fall and businesses continue to operate, people continue to go to work and go to school. This is one more step and one more domino to fall.”

SAM President Kevin Sabet cryptically tweeted, “We're not going anywhere in MI folks; exploring all legal, policy, and legislative options going forward.”

The adult-use cannabis industry will have an ally in Gov.-elect Gretchen Whitmer, who defeated Republican Bill Schuette, the state’s attorney general. “I’ll work with everyone who wants to ensure we tax and regulate marijuana responsibly," Whitmer told Cannabis Wire.

— Jeremy Borden

Missouri voters pass medical cannabis:

Missouri could’ve legalized medical cannabis through three different ballot initiatives, but they chose just one: Amendment 2, the initiative sponsored by New Approach Missouri. The other measures, Brad Bradshaw’s Amendment 3 and Missourians For Patient Care’s Proposition C, were both voted down.

“In becoming the 31st state to allow doctors to recommend medical marijuana to patients with serious and debilitating illnesses, Missourians showed that increasing health care treatment options for patients and supporting veterans are bipartisan Missouri values,” wrote New Approach spokesperson Jack Cardetti in a press release to reporters.

“It is a great night for Missouri voters, patients, veterans, and families,” wrote Travis Brown, spokesperson for Missourians For Patient Care, in an email to Cannabis Wire. Brown is the CEO of Pelopidas LLC, a lobbying firm tied to multi-millionaire investor Rex Sinquefield. As Cannabis Wire reported, the Sinquefield family also has ties to New Approach.

Marcus Leach, Treasurer of Find The Cures, said a statement about the results would be posted to social media, though they have not posted since the results were finalized.

— Isaac Fornarola

Utah voters pass medical cannabis after turbulence:

Utah voters passed Proposition 2 and legalized medical cannabis with 53% support.

Polling showed showed that support for the ballot measure, which once sat comfortably with more than 70% support, had been in rapid decline. A recent poll showed only 51% of likely voters still favored Prop 2 about a week out from Election Day. 

Some proponents tied the downward slide to two things: Opposition to Prop 2 by Utah’s predominant Church of Jesus Christ of Latter-day Saints and the October emergence of a secretly drafted compromise bill.

The church, which typically works behind closed doors on Utah’s Capitol Hill, voiced its public opposition to the initiative in August alongside legislators, the Utah Medical Association, state and federal law enforcement and several prominent community leaders. 

The LDS Church released a statement to its members on Tuesday. "Following the Savior Jesus Christ, relieving human pain and suffering, while protecting children, truly is at the heart of our interest in this matter," the statement said. "The legislative alternative is better public policy and has broad support among Utahns."

Given the circumstances — weeks of wrangling with Utah political and religious power brokers and a downward slide in the polls over the past few weeks — proponents of the measure were more than pleased with Tuesday’s results.

“Given the political theatrics we have endured this entire campaign, the disinformation, the propaganda, the lies and deceit from the opposition, I think we’ve done an amazing job,” Christine Stenquist, director of the advocacy group TRUCE told Cannabis Wire. “For a conservative red state that is so heavily dominated by a faith-based organization, we did really really well and I’m proud of us.”

The work of course, is not over, Stenquist said, as the negotiations over details in the coming bill and rule-making haven't yet begun.

ICYMI: Catch up on Cannabis Wire's coverage of what's been going on with cannabis in Utah here and here.


— Jennifer Dobner

In non-midterm news out of Mexico:

A senator announces her plans for legalization in Mexico 

On Tuesday, Senator Olga Sánchez Cordero, who will serve as Mexico’s Interior Secretary come December, proposed a robust cannabis law that encompasses medical and adult use.

One of the initiative’s defining features is its call for the creation of a Mexican Institute for the Regulation and Control of Cannabis (IMRCC), which would be entrusted with the regulation of cannabis for commercial, medical, and research purposes.

Under the General Law for the Regulation and Control of Cannabis, which was published in the Senate’s Parliamentary Gazette yesterday, adults who are at least 18 years-old would be allowed to consume cannabis for medical and adult use. The proposed law also allows adults to grow up to 20 plants for personal use and lays down the foundation for the creation of cannabis cooperatives comprised of two to 150 members. The National Regeneration Movement (MORENA) party’s initiative would also allow consumers to smoke in public spaces, with the exception of areas that are 100% free of tobacco smoke.

The industry, moreover, would be barred from employing anyone under 18, and anyone under the effects of THC would not be allowed to drive or operate heavy machinery. Those who violate the guidelines would be subject to economic and administrative sanctions, including community service. Revenues from cannabis sales would be allocated to the protection of public health, with an emphasis on children and adolescents.

In an interview with MVS Noticias, Ricardo Monreal, who coordinates MORENA party senators, said that the initiative will be not be presented until next Thursday, as they are still determining whether to incorporate some proposals from civil society. Two other Mexican political parties, including the Institutional Revolutionary Party (PRI), which held uninterrupted power for 71 years, plan to present their own separate proposals.

— Julia Barajas

Industry moves:

• Terra Tech Corp is planning to merge with Golden Leaf Holdings, which would give the newly formed company a significant presence in California, Nevada, and Oregon, and will place Terra Tech shares on the Canadian Securities Exchange. For now, the two companies have only signed a non-binding letter of intent.

+    Terra Tech has been pretty active recently in campaign giving in California and Nevada: Terra Tech gave $58,000 to Gavin Newsom’s primary run for California governor, and Terra Tech’s president Michael Nahass gave $10,000 to Nevada Democrat Steve Sisolak.

• C21 Investments says the company will send CBD to Ukraine. The company has received the first-ever license to import CBD from the State Service of Ukraine on Medicines and Drugs Control, and to distribute CBD products across Europe.

+     Earlier this year, C21 raised $33.5 million and listed on the Canadian Securities Exchange. The company also announced agreements to acquire cannabis companies in Oregon (Phantom Farms, Pure Green Dispensary, and Swell Companies Limited) and Nevada (Silver State Relief).

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