America COMPETES ACT
The America COMPETES Act also known as the United States Innovation and Competition Act of 2021 (H.R. 4521) is the latest congressional bill to include Representative Earl Blumenauer’s (D-OR) Secure and Fair Enforcement (SAFE) Banking Act. Blumenauer is a conferee on the America COMPETES Act and reported that there is a concerted effort to make sure that the SAFE Banking Act, passed by the House of Representatives in April, is attached to the America COMPETES Act for final signature by the president. Earlier this month a bipartisan group of senators wrote a letter to Congress stating that passing the SAFE Banking Act would help cannabis-related businesses, support innovation, create jobs and strengthen public safety in our communities. To date, there is no word on whether the final draft for review and signature by President Biden will contain the SAFE Banking Act, but this would be the next and final phase of this bill. Similarly, in late 2021, the SAFE Banking Act was attached to the National Defense Authorization Act (NDAA) of 2022 but was removed prior to the NDAA becoming law.
On Wednesday, May 24th, Rhode Island became the 38th state to legalize marijuana (19th state to do so recreationally). As reported in an official press release, Gov. Dan McKee signed the Rhode Island Cannabis Act after a House vote of 55 yeses and 16 nos as well as a Senate vote of 32 yeses and 6 nos. The passing of this Act goes in tandem with Gov. McKee’s Budget Proposal for Fiscal Year 2022 that his office released last year in which he proposed legalizing adult use marijuana and included compliance, social equity and safety measurements. The Rhode Island Cannabis Act allows:
- Adults 21 and older can purchase up to 1 ounce of cannabis and grow up to 6 plants at home.
- The expungement of all marijuana convictions no later than July 1, 2024.
- A sales tax of 7%, 10% excise tax and a local 3% excise tax for municipalities that opt to do so.
- An initial rollout of 33 marijuana retailers, 24 of which will be standalone adult use dispensaries. A quarter of these licenses will go to social equity applicants.
- Investors to allot capital into multiple marijuana businesses but business entities may only possess 1 license.
- Hybrid grow and manufacture licenses already in production for medical marijuana use in the state will be allowed to grow for adult use no later than August 1, 2022.
- Adult-use retailers to open no sooner than December 1, 2022.
The Garden State’s first month of adult use sales (April 21st to May 21st) has proved to be extremely profitable. In a meeting held on Tuesday, May 24th, the New Jersey Cannabis Regulatory Commission Reported that over $24 million had been sold in New Jersey’s newly legalized adult-use marijuana market that opened on April 21st. Although during this time period only 11 alternative treatment centers (dispensaries) were approved to sell adult-use marijuana throughout the state, the total sales amount for the first month is impressive for a state with roughly 9 million residents. In comparison, Arizona’s (population 7 million) 73 dispensaries reported $32 million in sales for its first month and New Mexico (population 2 million) with 100 stores similarly reported $40 million in sales.
In the same meeting, the NJ CRC approved an additional 22 cultivation licenses, 13 manufacturing licenses, 11 recreational licenses and 4 testing labs. Currently, the total number of awarded licenses in the state is 92 cultivation licenses, 45 manufacturing licenses, 11 retail licenses and 4 testing labs.
A campaign to decriminalize marijuana in the Lone Star State’s capital was approved earlier this month. Ground Game Texas, a statewide community organization that exists to mobilize voters, spearheaded a campaign in Austin to decriminalize cannabis within the city. Called The Austin Freedom Act, the measure halts arrests and citations for misdemeanor marijuana possession and prevents police from issuing citations for any residue or paraphernalia related to marijuana use. This comes as Texas, a state with a small medical marijuana program that allows for only low-THC, sees more movement related to marijuana decriminalization and the possible expansion of the state’s current program.
On Monday, May 16th, the State of Ohio Board of Pharmacy issued 70 provisional dispensary licenses for dispensary operations throughout the state. This comes after the Board of Pharmacy released a proposal (p.183) in 2021 to expand the state’s medical marijuana program. The expansion was deemed necessary after it was found that the population of the state was roughly 12 million with only 52 dispensaries whereas neighboring states such as Michigan and Pennsylvania each had respectively 10 million residents and 364 dispensaries, and 12 million residents with 109 dispensaries. The Board of Pharmacy also took into consideration the increase in number of active medical marijuana patients in addition to travel time to dispensaries. Ohio plans to increase the number of dispensaries in the state to roughly 130. Licensees that were awarded the provisional licenses have up to a year to show to Ohio regulators that their facilities meet all requirements set forth by the Board of Pharmacy prior to receiving a Certificate of Operation. So far this year the state has collected $180,426,019 in total sales from its medical marijuana program.
Earlier this month Connecticut Innovations (CI), the state of Connecticut’s strategic venture capital arm and the leading source of financing and ongoing support for Connecticut’s innovative and growing companies, completed a 7-figure investment in a cannabis edibles company called 1906. CI’s investment stemmed from recognizing the critical role that the cannabis industry plays in Connecticut’s newly legalized adult-use market, most importantly its positive economic and social impact on the state. This is a major milestone for the cannabis industry as it shows that major investors, including those operated by states, do not need to wait for federal legislation to be passed in order to participate in and develop the cannabis industry.
A recent study issued by the Journal of Safety Research shows that California retailers are 100% compliant with ID requirements and making sure that those under the age of 21 (for adult use) and 18 (for medical) are prevented from entering their shops and purchasing cannabis. For the study, people who looked underage were sent to some 50 retail shops throughout the state to purchase marijuana. In each scenario, the retailers were stopped and asked for identification which is the typical procedure for every state cannabis program. This debunks the myth that underage youth are purchasing cannabis from licensed retailers and also provides confidence that financial institutions can safely bank these businesses since they’re 100% compliant with state authorities.
Per California regulations, penalties for providing marijuana to those underage include up to 6 months in jail and a first offense fine of up to $500. Retailers may lose their license among other penalties.