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The Cannabis Industry’s ‘Essential’ Upside From COVID-19

The designation of the cannabis business as essential caught some states and some state officials off guard. 

It was a classic watershed moment when 20 of the 33 states across the U.S. that allowed some form of sale and consumption of marijuana had those businesses designated as essential businesses in March during the early days of the coronavirus outbreak. 

And while that designation of what is “essential” was just an advisory from the Department of Homeland Security, and not a federal directive or standard, meaning that it’s open to wide interpretation by various jurisdictions, cannabis advocates jumped on the opportunity in March to remind state governors about the importance of the cannabis industry. 

A letter from the Marijuana Policy Project states that governors and legislative leaders played up the significance of access to medical cannabis in times of a pandemic: “As leaders of states with medical cannabis or cannabidiol (CBD) laws, we write to urge you to ensure patients can safely access their treatment option in a way that is consistent with public health. Cannabis is a crucial part of the treatment regimens of hundreds of thousands of individuals, including many who have vulnerable immune systems because of their advanced age or a serious medical condition.” 

The designation of the cannabis business as essential caught some states and some state officials off guard. 

4 things you need to know before visiting a marijuana dispensary
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Mike Pence Comes Out Against Marijuana Banking Bill That Would Actually Save Taxpayers Money

Vice President Mike Pence took to Lou Dobbs Tonight on Fox News earlier this week to gripe that Democrats were attempting to include legislation related to marijuana and banking in the latest coronavirus relief bill.

"I heard the other day the bill mentions marijuana more than it mentions jobs," Pence said to Dobbs. "The American people don't want some pork-barrel bill coming out of the Congress when we've got real needs for working-class families."

Maybe he's trying to remind everybody that Joe Biden isn't the only vice president who's still resisting marijuana legalization?

There are two ironies here. First, the bill Pence is complaining about makes it possible for cannabis businesses to safely engage in banking in states where cannabis is legal, which helps those "working-class families" who rely on the cannabis industry. Second, the bill he's referring to will actually save taxpayers money, unlike much of the rest of this relief legislation.

The "Secure and Fair Enforcement Act of 2019," a.k.a. the "SAFE Banking Act," would allow legally operating cannabis businesses to have the same legal access to banks, loans, and deposit protections as other legal businesses. Because the sale and possession of marijuana are still forbidden by federal law, banks are reluctant to have any dealings with dispensaries and growers, even when they're legally operating within their home states.

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Cannabis Legalization Does Not Depend On The Presidential Election

It would appear that changing over the Senate is even more important than who is President on this particular issue.

Many in the cannabis industry have, understandably, backed Joe Biden and Kamala Harris for President and VP, presumably for a variety of reasons which include a belief that they are more likely to support legalizing cannabis at the federal level. Many are not as aware that President Donald Trump has stated that he is, in his words, “100%” in favor of legalizing medical marijuana, and that he believes recreational or adult use should be decided by the states, although early in his 2016 campaign he said he opposed legalizing adult use.

The truth is, as many have discovered, the Biden campaign has almost the same view as Mr. Trump. The former VP will support the legalization of cannabis for medical purposes, leave decisions regarding legalization for recreational use up to the states, and reschedule cannabis as a Schedule II drug. If Trump supports legalization essentially in this manner, then why has it not been enacted since his inauguration? There are primarily three barriers to this, and their names are Republican Sens. Mitch McConnell, Mike Crapo and Lindsey Graham. But let’s step back.

In January 2018, then-Attorney General Jeff Sessions rescinded the Obama-era Cole Memo in the Justice Department which deemphasized federal prosecution of state legal cannabis enterprises. In response to this, Sen. Cory Gardner (R-CO) told the President he would hold up all his judicial nominees until he addressed the issue. A few months later he was able to talk to Trump, who assured him that if a bill came to his desk legalizing medical marijuana and leaving adult use to the states, he would sign it. Gardner then backed off his resistance to Trump’s judges.

Shortly thereafter, Gardner, along with Sen. Elizabeth Warren (D-MA), introduced the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, then reintroduced it a year later. A companion bill was also introduced in the House. The bill would take the steps Trump said he would accept in legalizing medical marijuana and allowing states to legalize adult use.

Divided Government Is The Reason Marijuana Isn’t Getting A Fair Shake
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Study Finds Consumers Have Positive Views Of Legal Cannabis

A study of consumer attitudes released recently found that residents of states with legal cannabis have a positive view of the regulated marketplace. Results of the research, “Consumer perceptions of ‘legal’ and ‘illegal’ cannabis in US states with legal cannabis sales,” were released online last month ahead of the publication of the study in the journal Addictive Behaviors early next year.

To conduct the study, researchers with the University of Waterloo’s School of Public Health in Canada surveyed adult consumers in states with legal cannabis and asked them about their views of the regulated marketplace. Investigators surveyed 5,530 respondents residing in Alaska, California, Colorado, Nevada, Oregon, and Washington. 

The study examined consumer perceptions of quality, price, convenience, and safety of use and purchasing cannabis from legal versus illegal sources in U.S. states with legal retail sales. The study also attempted to examine associations between cannabis use, length of time since legal sales began, and perceptions of legal cannabis.

Well over half (59.2%) of the survey participants reported that, compared to an illicit supplier, cannabis was more convenient to obtain from a licensed source and 56.1% said it was a safer way to purchase cannabis. Additionally, 37.6% of consumers said that they believed the quality of the cannabis offered at licensed businesses was superior to what can be purchased from unlicensed sellers, although more than 30% of respondents said that legal cannabis is more expensive. Less than 15% of respondents in any state reported that legal cannabis was less expensive than that purchased from unlicensed sources. The study also found that 40.3% of those surveyed felt that cannabis purchased from legal sources was safer to use than unregulated products.

Better Over Time

Researchers also found that consumer perceptions varied according to the length of time since legal cannabis sales began. Respondents living in more mature legal markets that had legalized marijuana earlier were more likely to perceive legal cannabis as being of higher quality. The survey also found that consumers in mature markets were less likely to say that legal pot was more expensive.

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Montana Cannabis Legalization Initiatives Qualify For November Ballot

Two separate cannabis initiatives have qualified for the general election ballot in Montana, making it the sixth state in the nation that will be voting on a legalization measure in November. On Thursday, the office of Montana Secretary of State Corey Stapleton revealed that supporters for Initiative 190 and Constitutional Initiative 118 had collected enough signatures to qualify both measures for the ballot.

Initiative 190 would legalize the possession and sale of small amounts of marijuana for adult use and establish a regulatory system to license cannabis businesses. The measure also levies a tax of 20% on recreational marijuana and reduces the existing tax on medical cannabis from 1% to 2%. The initiative also authorizes the home cultivation of up to four mature cannabis plants and four seedlings.

Revenue from the tax on adult-use cannabis would be allocated to land, water, and wildlife conservation programs, veteran services, substance abuse treatment, long-term health care, and local governments. Proponents of the measure have estimated that it would raise $48 million in tax revenue by 2025.

Constitutional Initiative 118 would amend the Montana Constitution to allow the state legislature to set the legal age to make cannabis purchases at 21. Currently, the constitution grants all of the rights of an adult to all persons age 18 or older, except for the purchase of alcohol.

More Than Enough Signatures Collected

Petitions for both initiatives were circulated by New Approach Montana, which collected more than 130,000 signatures to put the measures on the ballot. To qualify, Initiative 190 needed approximately 25,000 verified signatures, while the constitutional initiative required about 50,000 signatures. The group reports that it spent approximately $2 million on its signature-gathering effort and other expenses related to qualifying the two initiatives for the ballot.

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Schumer Calls On USDA To Delay Hemp Final Rule

U.S. Senator Charles E. Schumer has urged the United States Department of Agriculture (USDA) to hold off on implementing the U.S. Domestic Hemp Production Program final rule until 2022.

Senator Schumer was a supporter of the Hemp Farming Act of 2018 and believed the crop should have the full backing of the federal government without any interference. The Act, which passed as part of the 2018 Farm Bill, requires states and tribes to submit plans to the Secretary of Agriculture for approval.

The 2018 Farm Bill also required USDA to create regulations and guidelines to establish and administer a program. The interim final rule was released in October last year – and it’s those rules (with a couple of exceptions) under which state plans are currently being approved. However, states could also still choose to operate under the provisions of the 2014 Farm Bill, but only until the end of October when the USDA’s final rule is meant to come into full force.

One of the states still operating under 2014 Farm Bill regulations is New York, and Senator Schumer wants things to stay that way for another two years. He believes more than 700 registered hemp farmers across the state would be negatively affected by the USDA’s Interim Final Rule on hemp once made final.

“The costs and bureaucracy of implementing the new rules as written create unnecessary financial burdens on farmers and our state agencies,” states the Senator. “We would like to see the pilot program extended until 2022 and the USDA modify the program to let hemp become a widespread agricultural commodity like Congress intended by the passage of the 2018 Farm Bill.”

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Idahoans' support for medical marijuana has grown, but it might not be reflected in the Legislature

Ten years ago, when Bill Esbensen first began working with activists to push for some form of legal marijuana in Idaho, someone threatened to beat him up for it.

He was at a Willie Nelson concert in Boise, trying to collect signatures to get an initiative to legalize marijuana on the ballot. As he remembered it, the man who wanted to attack him for collecting signatures was probably older than 80.

“That was the attitude of people back then,” he said.

Esbensen has worked on multiple attempts to legalize medical marijuana in the decade since. Public opinion on the topic in Idaho has shifted during that time, he said on Aug. 4, citing a poll from the firm FM3 Research that shows 72% of Idahoans are in favor of legalizing marijuana for medical purposes. The poll took place in April 2019 and included 400 Idahoans.

“Now you’re standing in line at Albertsons and the 75-year-old grandmother in front of you is talking about it,” he said.

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WHO cannabis rescheduling and its relevance for the Caribbean

Following its first-ever critical review of cannabis, in January 2019 the World Health Organization (WHO) issued a collection of formal recommendations to reschedule cannabis and cannabis-related substances. 53 member states of the Commission on Narcotic Drugs (CND), two of which are Caribbean states, are set to vote on these recommendations in December 2020.

Among the WHO’s recommendations, two in particular appear to be the most urgent and relevant for Caribbean countries: namely recommendation 5.1 (concerning the acknowledgment of cannabis’ medicinal usefulness) and recommendation 5.4 (concerning the need to remove the term ‘extracts and tinctures of cannabis’ from the 1961 Convention). Supporting these two recommendations presents an opportunity for Caribbean governments and civil society to decolonise drug control approaches in the region, as well as to strengthen the international legal basis for emerging medicinal cannabis programmes in several Caribbean countries. Also, it provides the historical opportunity to gain global recognition for two deeply rooted and unique traditions: the use of cannabis as sacrament in religious Rastafarian practise, and its use as traditional medicine, particularly but not exclusively by the Maroon community. 

In this regard, the recommended principle ‘asks’ for Caribbean advocates and policy makers are to:
Support the most urgent recommendations 5.1 and 5.4.Actively engage with CND members, in particular Jamaica, the only English-speaking Caribbean member of CND, emphasising the urgent nature of recommendations 5.1 and 5.4.Actively engage in relevant meetings and processes at the CND level, as well as emphasising the need for further follow-ups to the critical review.Actively engage and encourage support from other Caribbean governments and other key stakeholders such as CARICOM and OECS, as well relevant civil society organisations, experts, and affected communities.
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Use Algorithms To Expunge Cannabis Convictions

Cannabis prohibition is one of the worst public policies in modern times. Prohibition is often used to trample on citizens’ rights around the world, including and especially citizens of color.

Efforts to dismantle global institutional racism must absolutely include ending cannabis prohibition.

Right now there are only two countries that have legalized cannabis for adult use – Uruguay and Canada. Hopefully more countries will follow suit sooner rather than later.

Countless people have had their lives ruined because of cannabis prohibition, and many continue to have their lives ruined well after they have paid their fine and/or served their sentence.

The ‘Cannabis Scarlet Letter’

Cannabis convictions punish offenders well after they have served their debt to society via showing up on background checks.

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Oklahoma: Cannabis sales through June nearly eclipses all of 2019

Oklahoma cannabis users are on pace to spend twice as much this year compared to 2019.

As of June, Oklahomans spent more than $385 million this year on medical marijuana. That's nearly the entire amount spent during 12 months last year, according to an analysis of data from the Oklahoma Tax Commission.

Much of that boost came during the early days of the coronavirus pandemic, when collections of the 7% tax on medical marijuana rose dramatically. Sales have leveled off, however, and dipped slightly in June to an estimated $74.8 million.

Oklahoma's cannabis market attracted the attention of outsiders hoping to cash in on the state's love of legal marijuana and regulations that are less strict than other states. Peter Barsoom, founder of Colorado-based 1906, recently inked a deal with local businesses to unveil his line of edibles manufactured in pill form.

Barsoom didn't seek out Oklahoma. Stash House, a distribution company, and 24k Labs reached out to 1906 early this year during a trip to Denver, he said. Barsoom called Oklahoma one of the most exciting markets in the country, partly because of its regulatory structure.

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AHA Wants Marijuana Removed From Schedule I

The American Heart Association says marijuana should be removed from the USA’s Schedule I controlled substance category – but not to encourage wider use.

Not all cannabis is equal in the eyes of the law in the USA. Hemp and marijuana are both cannabis, but are treated very differently.

The 2018 Farm Bill removed hemp’s Drug Enforcement Administration Schedule I controlled substance designation. Hemp is defined as any part or derivative of the Cannabis sativa L. plant containing less than 0.3 percent tetrahydrocannabinol (THC) by weight. Anything above that is considered marijuana at a federal level, and is still a Schedule I controlled substance (listed as “marihuana”).

Schedule I indicates a substance has no accepted medical use and a high potential for abuse – so it needs changing just based on the medical use aspect. The American Heart Association suggests it also needs to change to enable further research.

“Our understanding of the safety and efficacy of cannabis has been limited by decades of worldwide illegality and continues to be limited in the United States by the ongoing classification of cannabis as a Schedule 1 controlled substance,” said the AHA in a scientific statement published in the journal Circulation.

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Only 265 of estimated 500K possession charges cleared in 1st year of government program

One year after the Canadian government created a program to quickly and affordably clear cannabis possession charges from people’s criminal records, just 265 records have been cleared. 

Applicants can have small cannabis possession charges suspended from their criminal record so a background check for a job or housing comes up clean. 

The Liberal Party estimated 10,000 people would be eligible for the program while advocacy group Cannabis Amnesty calculate 500,000 Canadians are eligible.

But as of Aug. 7, 2020, barely a fraction of the anticipated applicants have completed the process.

According to numbers from the Parole Board of Canada, 467 people have applied to the program: 265 were approved; 196 were denied due to ineligibility or incomplete applications; four are being processed; and two were discontinued. 

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COVID-19 has caused legal weed to ‘cannibalize’ the illicit market

By the end of 2020, the legal cannabis industry is expected to surpass US$15 billion. But the money that weed generates on the illicit market far exceeds that amount.

Tracking exact figures is tricky because anonymous dealers and criminal networks aren’t exactly sharing sales data with the media. But estimates approximate the illicit market is more than four times the size of its legal market.

More specifically, New Frontier Data values the U.S. illicit

South Dakota submits industrial hemp plan to USDA for final approval

South Dakota has submitted its industrial hemp plan to the U.S. Department of Agriculture for approval. 

The plan lays out how the state will regulate industrial hemp, and South Dakota farmers will be able to begin growing industrial hemp once the USDA gives final approval. 

The South Dakota Department of Agriculture will continue to develop its program while it waits for that approval, and processors and growers will be able to find more information about applying for a hemp license in the near future, according to Derek Schiefelbein, industrial hemp program manager at the SDDA. 

"I am looking forward to working with industrial hemp producers and processors in South Dakota," Sheifelbein said.

The newly formed South Dakota Industrial Hemp Association applauded the SDDA's plan submission. Producers won't be able to grow hemp until the 2021 season, but the submission is an "important step," the association said in a statement.

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Legal Cannabis Market Just Can’t Compare to the Black Market

There’s no rule that says legal markets have to be bigger or smaller than black markets. In life, legal markets and black markets form counterparts that can change and vary in size and growth. In the case of cannabis, the black market wins out easily, and for very good reason.

Legal markets are your above-board markets. Products or services that are registered, that are taxed, that are counted in official inventories, and reported on to local and federal governments. If you want to buy a shirt and you go to Walmart, congratulations, you’ve helped support the legal clothing market. You’ve also helped support sweat shops and slave labor, but that’s beside the point.

The market itself, however unsavory, is legal. I point out the unsavoriness for a reason though. In all the talk about the negative aspects of black markets, it should always be remembered that legal markets can be just as dirty, dangerous, and detrimental to those involved.

Black markets (and I’ll include gray markets here) encompass the large blurry underbody. It’s like the big hulking iceberg underneath the tiny Titanic-tearing tip. It’s every sale that no government knows about. Every untaxed product and service. Every unregistered item that will never be counted in official inventories or reported to government bodies.

So if you’re buying knock off sunglasses from a guy on a street corner, or getting an 1/8 of really great skunk from your friendly neighborhood pot dealer, or giving in to the super cute kids on the street selling lemonade from a stand, you, my friend, have participated in a black market purchase. To be fair to those cute little kids, there aren’t many government bodies that are going to bust up their lemonade selling operation, but if the same kids continue that same operation into adulthood, they could be arrested for tax evasion.

The cannabis markets

The first things to know about the cannabis market is that it’s old, it’s huge, and it’s pretty stable. For as long as humanity has understood what the cannabis plant is, it’s been using it in different formulations ranging from medical applications to relaxing and feeling good.

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Delay of U.S. hemp rules could ease sector’s financial challenges

A U.S. senator has asked the Department of Agriculture to delay issuing final hemp rules under the 2018 Farm Bill until 2022, to delay costs associated with the new U.S. Domestic Hemp Production Program.

New York Sen. Charles Schumer called for the delay in a letter to the USDA last week. If implementation of the new rules is postponed, hemp growers and producers could continue to operate under the 2014 Farm Bill‘s pilot program. That would let them avoid what USDA estimates as $17,000 (€14,500) in compliance costs associated with the new rules.

Effect on other states

While Schumer is advocating for CBD interests in his home state, a federal delay could also give some financial relief to stakeholders in other states that currently operate under the 2014 Farm Bill.

“These costs do not just impact businesses across the United States but also state budgets that must alter their pilot programs to meet the demands of the Interim Final Rules,” Schumer wrote. “With bandwidth completely consumed by COVID concerns, the state regulatory agencies cannot focus on implementation of the Interim Final Rules. At this point, only 19 states have approved plans in place and enforcement efforts will deal a significant economic blow to the industry.”

Two industry organizations, the National Industrial Hemp Council and the National Association of State Departments of Agriculture also have written to Congress asking for a delay in implementing the new hemp rules.

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Cannabis Doing It's Best To Make a Terrible Year Just A Little Better

One clear outcome of the coronavirus pandemic is explosive growth in cannabis sales in every major market around the country. Even in places like Illinois, which just started legal adult-use sales about two months before the coronavirus hit the United States, sales continue to make records.

If 2020 is one of the worst years in recent history, people apparently are turning to cannabis for a degree of comfort and solace - even NBA players

The proof is in the sales figures. Florida and Arizona have established new records in medical marijuana sales. Colorado hit $192 million in recreational and medical marijuana sales in May, a record for the state that was the first to allow adult-use sales. Oregon sales reached $100 million for the first time since 2015.

Even the New York Times has taken note, writing about the increase in edibles sales as the coronavirus has spread across the country. The Times chalked it up to unease across the nation, writing: “Anxious times (say, a global pandemic) call for palliatives, like meditation, exercise or, in some cases, weed.”

But it may be more than anxiety fueling the cannabis boom.

While tied to the pandemic, experts expected an increase in 2020 cannabis sales before social distancing and mask-wearing became commonplace. But certainly, the pandemic drove sales higher, faster.

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The Laws And Regulations On Hemp CBD In All 50 States

Some states have aligned themselves with the FDA’s position. Others have taken a more permissive approach. Many states have provided little to no guidance on the subject of Hemp CBD.

The 2018 Farm Bill removed hemp from the Controlled Substances Act did not affect or modify the Federal Food, Drug, and Cosmetic Act (“FDCA”) or the Food and Drug Administration’s (“FDA”) ability to promulgate regulations and guidelines that relate to hemp under. The FDA regulates a wide variety of medical and consumer products sold in the United States including food, drugs, dietary supplements, medical devices, cosmetics, and tobacco products.

The FDA has approved of the use of CBD in the prescription drug Epidiolex. As a result, the FDA has indicated in press releases, enforcement letters, and its website that Hemp CBD cannot be used in foods, beverages, or dietary supplements. This is because under the FDCA, any article that is investigated as a new drug cannot be used in food, beverages, or dietary supplements, unless the article was widely marketed in those products prior to the drug investigation.

In addition, the FDA has taken a hard line against Hemp CBD in unapproved drugs. The FDA determines whether something is a drug based on its intended use, and determines a product’s intended use, in turn, based on how it is marketed. If a manufacturer or distributor makes any type of health claim (“CBD cures cancer” or “CBD may treat inflammation”) or human structure claim (“CBD may increase levels of calcium in bones”) about a product that the FDA has not investigated and approved as a drug, the FDA will consider it a drug. Foods, ingredients in foods, drugs, and dietary supplements are all subject to premarket FDA approval.

The FDA also regulates tobacco and nicotine tightly but does not have clear regulatory authority of smokable hemp products, such as dried flower, e-liquid and vape pens. That’s because generally, these products don’t contain any tobacco or nicotine. To clarify, the FDA likely could have regulatory authority over these products, but it hasn’t established a clear jurisdictional hook.

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Cannabis Legalization Officially Added To Arizona Ballot

Arizona voters will have a chance this year to make their state the latest to end pot prohibition.

A petition spearheaded by a pro-legalization group had its signatures officially certified by Arizona Secretary of State Katie Hobbs on Monday, clearing the way for the proposal to qualify for the state’s ballot this November.

Hobbs, a Democrat, said on Twitter that the “the petition exceeded the minimum requirement with approximately 255,080 valid signatures,” and that the measure will appear on the ballot as Prop. 207.

The petition was circulated by Smart and Safe Arizona, a group that has centered its pitch for legalization around economic opportunity for the state, saying that a marijuana industry would create jobs and opportunities, with revenue providing “additional resources for police training, enforcement and task forces,” as well as more funding for the state’s community colleges. The group said it had submitted more than 420,000 signatures. Smart and Safe Arizona asserts that the new law would generate $3 billion in new revenue in the first decade alone. 

If passed, Prop. 207 would legalize “the sale, possession and consumption of one ounce of marijuana” for adults aged 21 and older. The measure would also include certain safeguards, such as the banning of “smoking marijuana in public places like restaurants and open spaces like sidewalks and parks,” as well as heightened penalties for “for driving under the influence of marijuana and gives police departments funding for enforcement, training, equipment and task forces.” It would also ban “the sale of gummy bears, gummy worms and other products that resemble kids’ candy,” and would limit “the amount of THC (the chemical responsible for the “high” in marijuana) to 10 milligrams per serving of edible product.”

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California Cities Bring Forth Lawsuit Over Home Delivery Rule

Some California communities are upset about the statewide rule that allows home delivery, and are taking the state to court to see if they can ban home delivery in their areas. 

So far, however, the judge has sided temporarily with the state when it comes to whether or not these cities have a leg to stand on in their case. Although the cities have banned recreational sales, they don’t have any specific ordinances in place that would ban delivery, which would need to be the case for them to move forward. 

“The League of California Cities and police chiefs had complained that unrestricted home deliveries would create a chaotic market of largely hidden pot transactions, while undercutting local control guaranteed in the 2016 law that broadly legalized marijuana sales in the state,” stated an article by the Star Tribune. “The dispute between the state and 25 of its local governments raises a foundational question in the legal marijuana economy: Who is in charge, the state bureaucracy that oversees the marketplace, or local governments where pot is grown and sold?”

So far, a group of municipalities have filed a lawsuit as of April 2019 hoping to get home delivery banned from their areas. This includes Beverly Hills, Riverside and Santa Cruz County, and the  cities of Agoura Hills, Angels Camp, Arcadia, Atwater, Ceres, Clovis, Covina, Dixon, Downey, McFarland, Newman, Oakdale, Palmdale, Patterson, Riverbank, San Pablo, Sonora, Tehachapi, Temecula, Tracy, Turlock, and Vacaville.

On the other hand, many have pushed for home delivery in California specifically for the reason that so many areas have banned cannabis sales in localities. Home delivery helps get patients with limited mobility access to medicine they may otherwise not have, and is a huge step towards growing the industry. 

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