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Revolutionary Clinics Drops Lawsuit Against Cambridge, Mass.

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Author note: Julie A. Werner-Simon is a law professor adjunct at Drexel University School of Law and teaches Marijuana Law: History, the Constitution & Best Business Practices.

The November 2020 presidential election broke records. More votes were cast for president (some 165 million) than ever before in our history. 

We have not surpassed this percentage of voters in a presidential election (approximately 67%) in 120 years, that is, since the election of William McKinley and his Vice president Theodore Roosevelt in 1900 at 73.7%. 

However, this uptick of participation in the political process has revealed entrenched partisanship. This, when coupled with what we witnessed on the steps of the capitol, shows that we are a nation riven by polarization. Reminiscent of 1860, as the nation splintered over slavery, we appear hopelessly divided by what the framers called “faction,” or as it is known today “political tribalism.”

Our politics (riffing on James Madison’s Federalist Papers Number 10) has devolved into jersey-wearing domestic factions with “citizens united and actuated in some common impulse . . . adverse to the rights of other citizens.” Social scientists have confirmed that 21st-century politics is less about principles and more like allegiances to home-town sports teams with many voters, quoting a University of Kansas study, “caring more about . . . winning . . . than they do [about] ideology or issues.”  

But partisan-Mason Dixon divisions have not infused every political issue. There is one that trumps the jersey, and has done so from the mountains to the prairies: it is cannabis legalization. Blue, red, and purple states voted green this past November.

Five states from diverse regions of the country had cannabis on the ballot in November, specifically: Arizona, Mississippi, Montana, New Jersey, and South Dakota. And as Rolling Stone magazine “vernacularly” noted, “[e]very single weed initiative passed on election day.”

Unlike the nail-biting, five-day water torture before the networks called the presidential election for Joe Biden, the residents of the five states with cannabis initiatives knew the results when they awoke on November 4th. Cannabis won decisively. 

Cannabis Political Momentum

There are multiple indications that this cannabis-momentum will continue. The January 2021 Georgia run-off resulted in the installation of two new senators (Jon Ossoff and Reverend Raphael Warnock) who both campaigned on federal cannabis legalization platforms. 

Vice-president Kamala Harris who, as U.S. Senator, was a co-sponsor of a 2019 bill to federally legalize cannabis, and who during the October 2020 vice-presidential debate touted cannabis reform as one of the new administration’s goals, has made clear that systemic change is in the offing. 

So too, even though with enthusiasm expressed to a lesser degree, has been the gradual (decades-long) transformation of President Biden. He has gone from a 1990’s tough-on-crime-through-increased-drug-penalties warrior to someone now, at a minimum, who is accepting of state legalization programs, decriminalization, expungement of cannabis convictions, and medical-cannabis programs. Further, the Biden campaign acknowledged and promised to address the teeming racial disparities in America’s criminal justice system. 

With this soil tilled, there are three ways in which cannabis could be legalized federally during Biden’s presidency. All three are on the table.

The first way is with action by Congress. (Article I, section 1 of U.S. Constitution). The constitution vests “all legislative powers” (the ability to pass laws) in Congress. The 117th Congress (which was seated on the first Tuesday of our new year, in accordance with section 1 of the 20th Amendment) during its term of two years (that is, before the seating of the next congress after the 2022 midterm elections) can pass legislation to remove marijuana from Schedule I of the 1970 Controlled Substances Act (“CSA”) schedule.

Although it was the 91st Congress, during the presidency of Richard Nixon, which said that it was only “temporarily” placing cannabis in the most restrictive classification category for drug substances (deeming cannabis—referred to as marijuana and often spelled with an “h”—to have “no currently accepted medical use,”) it is still there. 

Political winds have kept cannabis on Schedule I for this long, right next to other fellow illegal drugs (such as heroin and LSD), which are all classified as being so dangerous and addicting that they can never be prescribed by a doctor and have no “accepted medical use.” That medical-cannabis states and severely-limited-access states (this category includes states in which cannabis can be used by a limited number of universities or research institutions or for limited medical purposes by a significantly restricted patient population comprised primarily of those with incurable diseases, seizure disorders, and epilepsy), are home to some 323 million people and permit, under state law, degrees of medical-use of cannabis, has never persuaded Congress or the courts to take reparative action, at least not yet.

With the Senate reconstituted by the Georgia run-offs without Senate majority leader Mitch McConnell, who has consistently blocked any cannabis legislation, it is expected that the new Congress will pass cannabis-related legislation during the first two years of the Biden term.

The second way that marijuana could be rescheduled or removed (descheduled) from the Controlled Substances Act (CSA) drug classification schedule is through executive branch action. Under Article II of the Constitution (section 2) the president (the country’s chief executive) is authorized to create “executive departments” and appoint “principal officers” (commonly referred to as “secretaries” which in 1787 meant “leaders of departments”). The president decides who he wants as principal officers to lead the executive branch departments and these nominations must be confirmed (approved) by the Senate.

The procedure by which the executive branch (the president and specifically designated “principal officers”) can take action with respect to a drug classification or removal is recited in the CSA. 

The Controlled Substances Act, 21 United States Code section 811, provides that the Attorney General of the United States (the Senate-confirmed leader of the executive branch’s Department of Justice) asks the Secretary of Health and Human Services (HHS) (that is, of the executive department which in 1970, when the Act was passed was called “the Department of Health, Education and Welfare”) for a written scientific and medical evaluation to downgrade or remove marijuana (aka cannabis) from the federal 1970 drug classification schedule. The Act also permits the HHS Secretary, (without being asked by the Attorney General) to generate its own scheduling recommendation report.

This means that much is in the hands of the president’s picks for those two cabinet positions, the U.S. Attorney General and the Health and Human Services Secretary. If the president’s picks for both are confirmed by the Senate, likely now with the 50/50 Senate split, then Attorney General Merrick Garland would ask Health and Human Services Secretary Xavier Becerra for a rescheduling evaluation and report or Becerra, whose own agency supervises and oversees the Food and Drug Administration (the FDA, which evaluates drug safety and efficacy, among other things) can issue a written rescheduling evaluation on his own. The CSA requires the Attorney General to follow the recommendations of the HHS Secretary.

The future HHS Secretary Becerra, the current Attorney General of California, has been vocal about his pro-legalization stance. He hails from the Golden State, which was the first state, back in 1996, to legalize medical cannabis. The Attorney General nominee Garland, a long-time judge on the D.C. Circuit Court of Appeals who was nominated during the Obama administration for the U.S. Supreme Court but never was afforded a confirmation hearing by Senate Majority Leader McConnell, has not publicly taken any position. However, in an October 2012 oral argument during a declassification case appeal, Americans for Safe Access v. Drug Enforcement Admin., 706 F.3d 438 (D.C. Cir. 2013), the judge made a statement about how courts should defer to government agency scientists for decisions about a substance’s efficacy and safety, because “… [w]e’re not scientists. They are …“ (Listen to an audio clip of Judge Garland during the 2012 oral argument here.)

And even though the federal appellate court ruled against those seeking to challenge the government’s refusal to reschedule cannabis, it was a narrow decision based on deference to executive branch decisions. The court held that the government’s actions comported with the CSA’s procedure which leaves it to the government officials to decide whether “adequate and well-controlled studies proving efficacy” of a particular drug exist. 

Should HHS Secretary Becerra on his own instigation or at the direction of the Attorney General present to Attorney General Garland a written report based on adequate and well-controlled studies proving the safety and efficacy of cannabis, the Attorney General, dependent on the findings in Becerra’s report, could be required to remove marijuana or move marijuana to a lower classification schedule. The pertinent part of the relevant statute, 21 United States Code section 811 (b), states, “[T]he recommendations of the [HHS] Secretary to the Attorney General shall be binding on the Attorney General as to such scientific and medical matters, and if the Secretary recommends that a drug … not be controlled, the Attorney General shall not control the drug …”

As a result of the legalization successes in the states, and the composition of the new cabinet, this vehicle for removal or reclassification seems much more likely than it has at any point since the passage of the CSA.

The third way cannabis could be legalized is by “citizen-petition” through an administrative process involving the Attorney General and one of the agencies the Attorney General oversees, specifically the DEA (Drug Enforcement Administration). This process is more precisely called “citizen-petitions for the government to engage in administrative rulemaking.”

Under the CSA, any citizen can petition (that is, present or file a document to) the Attorney General requesting that any drug be moved to a different category in the schedule (rescheduling) or removing it from the schedule entirely (descheduling). The Attorney General has “delegated” the DEA to “receive” the citizen-petitions in accordance with 28 Code of Federal Regulations, § 0.100.1. If the government denies the rescheduling or descheduling petition, or issues any other adverse order, the citizen-petitioner can appeal directly to a federal appellate court (21 United States Code section 811(a)).

That’s the type of an appeal playing out now before the Ninth Circuit Court of Appeals in Sisley, et al. v. U.S. Drug Enforcement Administration, et al., (Case No. 20-71433). Dr. Suzanne Sisley, (an Arizona-based physician and cannabis researcher), the Scottsdale Research Institute (an Arizona cannabis clinical trials site conducting the only federally-authorized study of cannabis usage to treat PTSD in Veterans), as well as a group of veterans, in May 2020, filed an appeal in the Ninth Circuit Court of Appeals. 

Dr. Sisley et al, is appealing an April 2020 denial by the DEA of a marijuana-rescheduling citizen-petition filed by other third-parties in January 2020. The DEA, as a matter of course, (and as it has done in other citizen-petition appeals), filed a motion to dismiss the case. Such dismissal motions are often granted by the appellate courts as the courts give “deference” to the judgment and discretion of the federal government. But this did not happen in Dr. Sisley’s current case in the Ninth Circuit. Instead, the appellate court denied the DEA’s dismissal motion last August and ordered briefing by both sides. 

The DEA, in its most recently filed brief (dated Nov. 30, 2020) in Sisley, et al. v. DEA, continued to argue that the case should be dismissed and that Dr. Sisley’s complaints were merely “generalized grievances.” The agency vociferously declined to give any credence to the proliferation of states which have robust medical-cannabis programs that successfully treat a host of medical conditions. The DEA argued that merely because “[i]ndividual states … pass laws that decriminalize marijuana under state law and provide for its use as a medical treatment. … those laws, standing by themselves, do not demonstrate that marijuana has an accepted medical use such that it can be rescheduled from Schedule I.”

Dr. Sisley’s lawyers have been adamant that the DEA’s position is unjustified by the law and the facts. Dr. Sisley’s lawyers, in their most recent court filing dated Dec. 21, 2020, wrote (among other things), that “the DEA’s unlawful actions have … impeded” Dr. Sisley’s “efforts to conduct clinical research with dispensary-quality marijuana—the very research that DEA has long-insisted must be done before it will reconsider marijuana’s Schedule I classification.”

The case is fully briefed. The next step is either (i) a public oral argument (between Dr. Sisley’s lawyers and the DEA’s Justice Department lawyers) before a three-judge appellate panel followed by a written decision of the court or (ii) the issuance by the court of a written decision with no in-court (or no Zoom court) hearing. The latter would be a judicial decision based exclusively on the paper-record of documents and pleadings filed to date.

Dr. Sisley’s lawyers are hoping that the appellate court, after reviewing all the filings, will schedule an oral argument. They want to be heard in open court. On January 8, 2021, the Ninth Circuit Court of Appeals issued an order proposing the scheduling of an oral argument in Seattle as early as May 2021.

But they may not need their day in court. The new Attorney General could change its position on the issue and in this specific case. It’s unlikely that the court will make any substantive decision in this case before the Senate confirmation hearings of the Attorney General and the Secretary of Health and Human Services. If the court waits, it may have a lot less work to do.

Calls for Unity Answered?

It is with the most profound relief that we turn the page on this past last year. As we in America and in the greater world struggle with the escalation of COVID deaths and self-searchingly contemplate the causes of the American carnage exhibited at the Capitol, many of us are seeking, in fact, craving evidence of unity or ties that kindly bind.

The November 2020 election offers up a sprig of spring. Red, blue and purple have come together in a unified color palette of green. This perhaps portends greater days ahead.

Home Cultivation Bill Stalls in North Dakota Senate

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Giving Tree Dispensary, the only female majority-owned dispensary in Arizona, received its license to sell adult-use cannabis Jan. 22, and the dispensary is getting ready for sales to begin.

Giving Tree opened and began selling medical cannabis in 2013. Since then, it has become one of the longest-standing cannabis companies in Arizona.

Last week, the Arizona Department of Health Services (ADHS) began accepting applications for its newly passed adult-use cannabis law. Lilach Mazor Power, Giving Tree Dispensary founder and managing director, says she submitted Giving Tree’s application the first day they opened.

Courtesy of Giving Tree Dispensary

Power

“The applications were all online through our business account with the health department,” Power said. “From the last eight years, the health department already has a lot of information about us. So, what we had to do is fill out a one-sheet application about our facilities, upload it at the station for each board member and show a level one clearance card, and then pay $25,000 online. It took me about 10 minutes.”

A few days after Power applied, it was approved.

“Any current license holder that is already operating in the medical program and is in good standing with the health department should be approved,” she said. “Good standing means that department came and did their inspection, you passed it and fixed any corrections that they asked you to fix so that your policies and procedures are now matching the medical and adult-use market.”

Power said that the adult-use market and medical cannabis market are relatively the same, with the only key difference being quantity and dosing. 

Although Giving Tree has received its license to sell adult-use cannabis, Power said that sales may not start until early February, as the dispensary moved to a new retail location Jan. 25 and is working to get everything in place.

When sales start, she said that the primary challenge would be getting accustomed to serving three to four times the amount of people, especially amid the ongoing pandemic. She wants to ensure people keep their distance, be safe, and not wait longer than an hour to receive products.

With the expansion of the new retail store, Power and her team will overcome those challenges and serve customers accordingly. 

“We went for a different concept,” Power said. “It’s an open floor plan with lots of windows, so like a real retail store. The whole space has many places to hang out, like bar tables and chairs all around, so people can walk around, ask questions and take their time to learn about everything we have. It can be overwhelming for a new person coming into the cannabis world, so we want to create a space where they are comfortable.”

RELATED: Arizona Cannabis Retailers Reflect on First Week of Adult-Use Sales

There will also be consultants on the floor with iPads, walking around with customers, and answering any questions. The consultant will also place their order, package it and check them out as needed, she said.

Customers can also place an order using their phone or one of the touch screens the dispensary provides for seamless and quick purchasing, she said.

Additionally, Giving Tree’s extraction and manufacturing facility is tripling in size. Power plans to order automated machines and hire several employees across all locations to keep up with the supply and demand.

“I am looking forward to being able to serve a lot more people and to talk about cannabis,” she said. “Now we are going to be able to be part of so many people’s journeys. For the current location, I am looking forward to automating some of the processes because my team has to work overtime to be able to keep up with the demand.”

Another Arizona dispensary that is getting ready for adult-use sales is Hana Meds, a vertically integrated cannabis company.

Delano Phillips, general counsel and head of business development at Hana Meds, said the dispensary plans to submit its application soon; they just had to complete some administrative tasks to ensure everything is in place.

“Going back to 2016, we felt that there’s a good chance of Prop 207 passing this year, which it did, and then we hurtled on the December/January time frame for applications to open,” Phillips said. 

Phillips expressed that Hana Meds would likely have a “go-live” date as one sees in other states like Illinois, where people line up around the block and stores quickly run out of inventory.

As Hana Meds starts to prepare for sales, some things the dispensary is doing to prepare include making sure the check-in process goes smoothly for adult-use customers and medical patients, as well as adjusting product pricing.

Courtesy of Hana Meds

Phillips

“The transition should be pretty seamless, and it should be the same flow that we normally do,” he said. “Just taking the extra step and precautions to make sure that we know who rec is, who is medical and that the pricing and information is correct.”

Like Giving Tree, Hana Meds has also hired employees for both its locations to help keep up with the expected demand. The dispensary also is working on expanding to a third location.

“We are somewhat in talks about possibly acquiring a dispensary location in Phoenix, in the Metro areas,” he said. “So that’s a big project that we have going on. So, we are looking to have a presence here in the larger projects in Maricopa County, which is about a population of 4 million, so that’s going to be exciting.”

Eventually, Hana Meds wants to build out and expand its current locations in Green Valley and Kingman, but he is unsure when that process will take place.

The dispensary also plans to expand one of its two cultivation facilities to keep up with the demand. 

“We are in the process of expanding our outdoor one,” Phillips said. “We have two greenhouses right now that are 20,000 square feet, but we have an additional 10,000-square-feet one coming in March and 30,000-square-feet one coming in June, and then we have a phase two that will bring us to about 110,000 square feet by 2022.”

Phillips said that Hana Meds is overall excited that the state went in the direction of allowing people to buy and possess recreational cannabis legally, and he expects recreational sales to make a significant impact on Hana Meds.

The dispensary expects recreational sales to start in-store on Feb. 8 once its application is approved.

 

Pennsylvania Governor Calls for Adult-Use Cannabis Legalization in 2021 Agenda

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Giving Tree Dispensary, the only female majority-owned dispensary in Arizona, received its license to sell adult-use cannabis Jan. 22, and the dispensary is getting ready for sales to begin.

Giving Tree opened and began selling medical cannabis in 2013. Since then, it has become one of the longest-standing cannabis companies in Arizona.

Last week, the Arizona Department of Health Services (ADHS) began accepting applications for its newly passed adult-use cannabis law. Lilach Mazor Power, Giving Tree Dispensary founder and managing director, says she submitted Giving Tree’s application the first day they opened.

Courtesy of Giving Tree Dispensary

Power

“The applications were all online through our business account with the health department,” Power said. “From the last eight years, the health department already has a lot of information about us. So, what we had to do is fill out a one-sheet application about our facilities, upload it at the station for each board member and show a level one clearance card, and then pay $25,000 online. It took me about 10 minutes.”

A few days after Power applied, it was approved.

“Any current license holder that is already operating in the medical program and is in good standing with the health department should be approved,” she said. “Good standing means that department came and did their inspection, you passed it and fixed any corrections that they asked you to fix so that your policies and procedures are now matching the medical and adult-use market.”

Power said that the adult-use market and medical cannabis market are relatively the same, with the only key difference being quantity and dosing. 

Although Giving Tree has received its license to sell adult-use cannabis, Power said that sales may not start until early February, as the dispensary moved to a new retail location Jan. 25 and is working to get everything in place.

When sales start, she said that the primary challenge would be getting accustomed to serving three to four times the amount of people, especially amid the ongoing pandemic. She wants to ensure people keep their distance, be safe, and not wait longer than an hour to receive products.

With the expansion of the new retail store, Power and her team will overcome those challenges and serve customers accordingly. 

“We went for a different concept,” Power said. “It’s an open floor plan with lots of windows, so like a real retail store. The whole space has many places to hang out, like bar tables and chairs all around, so people can walk around, ask questions and take their time to learn about everything we have. It can be overwhelming for a new person coming into the cannabis world, so we want to create a space where they are comfortable.”

RELATED: Arizona Cannabis Retailers Reflect on First Week of Adult-Use Sales

There will also be consultants on the floor with iPads, walking around with customers, and answering any questions. The consultant will also place their order, package it and check them out as needed, she said.

Customers can also place an order using their phone or one of the touch screens the dispensary provides for seamless and quick purchasing, she said.

Additionally, Giving Tree’s extraction and manufacturing facility is tripling in size. Power plans to order automated machines and hire several employees across all locations to keep up with the supply and demand.

“I am looking forward to being able to serve a lot more people and to talk about cannabis,” she said. “Now we are going to be able to be part of so many people’s journeys. For the current location, I am looking forward to automating some of the processes because my team has to work overtime to be able to keep up with the demand.”

Another Arizona dispensary that is getting ready for adult-use sales is Hana Meds, a vertically integrated cannabis company.

Delano Phillips, general counsel and head of business development at Hana Meds, said the dispensary plans to submit its application soon; they just had to complete some administrative tasks to ensure everything is in place.

“Going back to 2016, we felt that there’s a good chance of Prop 207 passing this year, which it did, and then we hurtled on the December/January time frame for applications to open,” Phillips said. 

Phillips expressed that Hana Meds would likely have a “go-live” date as one sees in other states like Illinois, where people line up around the block and stores quickly run out of inventory.

As Hana Meds starts to prepare for sales, some things the dispensary is doing to prepare include making sure the check-in process goes smoothly for adult-use customers and medical patients, as well as adjusting product pricing.

Courtesy of Hana Meds

Phillips

“The transition should be pretty seamless, and it should be the same flow that we normally do,” he said. “Just taking the extra step and precautions to make sure that we know who rec is, who is medical and that the pricing and information is correct.”

Like Giving Tree, Hana Meds has also hired employees for both its locations to help keep up with the expected demand. The dispensary also is working on expanding to a third location.

“We are somewhat in talks about possibly acquiring a dispensary location in Phoenix, in the Metro areas,” he said. “So that’s a big project that we have going on. So, we are looking to have a presence here in the larger projects in Maricopa County, which is about a population of 4 million, so that’s going to be exciting.”

Eventually, Hana Meds wants to build out and expand its current locations in Green Valley and Kingman, but he is unsure when that process will take place.

The dispensary also plans to expand one of its two cultivation facilities to keep up with the demand. 

“We are in the process of expanding our outdoor one,” Phillips said. “We have two greenhouses right now that are 20,000 square feet, but we have an additional 10,000-square-feet one coming in March and 30,000-square-feet one coming in June, and then we have a phase two that will bring us to about 110,000 square feet by 2022.”

Phillips said that Hana Meds is overall excited that the state went in the direction of allowing people to buy and possess recreational cannabis legally, and he expects recreational sales to make a significant impact on Hana Meds.

The dispensary expects recreational sales to start in-store on Feb. 8 once its application is approved.

 

Gage Cannabis Announces Final Closing of Oversubscribed Regulation A+ Equity Financing

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Author note: Julie A. Werner-Simon is a law professor adjunct at Drexel University School of Law and teaches Marijuana Law: History, the Constitution & Best Business Practices.

The November 2020 presidential election broke records. More votes were cast for president (some 165 million) than ever before in our history. 

We have not surpassed this percentage of voters in a presidential election (approximately 67%) in 120 years, that is, since the election of William McKinley and his Vice president Theodore Roosevelt in 1900 at 73.7%. 

However, this uptick of participation in the political process has revealed entrenched partisanship. This, when coupled with what we witnessed on the steps of the capitol, shows that we are a nation riven by polarization. Reminiscent of 1860, as the nation splintered over slavery, we appear hopelessly divided by what the framers called “faction,” or as it is known today “political tribalism.”

Our politics (riffing on James Madison’s Federalist Papers Number 10) has devolved into jersey-wearing domestic factions with “citizens united and actuated in some common impulse . . . adverse to the rights of other citizens.” Social scientists have confirmed that 21st-century politics is less about principles and more like allegiances to home-town sports teams with many voters, quoting a University of Kansas study, “caring more about . . . winning . . . than they do [about] ideology or issues.”  

But partisan-Mason Dixon divisions have not infused every political issue. There is one that trumps the jersey, and has done so from the mountains to the prairies: it is cannabis legalization. Blue, red, and purple states voted green this past November.

Five states from diverse regions of the country had cannabis on the ballot in November, specifically: Arizona, Mississippi, Montana, New Jersey, and South Dakota. And as Rolling Stone magazine “vernacularly” noted, “[e]very single weed initiative passed on election day.”

Unlike the nail-biting, five-day water torture before the networks called the presidential election for Joe Biden, the residents of the five states with cannabis initiatives knew the results when they awoke on November 4th. Cannabis won decisively. 

Cannabis Political Momentum

There are multiple indications that this cannabis-momentum will continue. The January 2021 Georgia run-off resulted in the installation of two new senators (Jon Ossoff and Reverend Raphael Warnock) who both campaigned on federal cannabis legalization platforms. 

Vice-president Kamala Harris who, as U.S. Senator, was a co-sponsor of a 2019 bill to federally legalize cannabis, and who during the October 2020 vice-presidential debate touted cannabis reform as one of the new administration’s goals, has made clear that systemic change is in the offing. 

So too, even though with enthusiasm expressed to a lesser degree, has been the gradual (decades-long) transformation of President Biden. He has gone from a 1990’s tough-on-crime-through-increased-drug-penalties warrior to someone now, at a minimum, who is accepting of state legalization programs, decriminalization, expungement of cannabis convictions, and medical-cannabis programs. Further, the Biden campaign acknowledged and promised to address the teeming racial disparities in America’s criminal justice system. 

With this soil tilled, there are three ways in which cannabis could be legalized federally during Biden’s presidency. All three are on the table.

The first way is with action by Congress. (Article I, section 1 of U.S. Constitution). The constitution vests “all legislative powers” (the ability to pass laws) in Congress. The 117th Congress (which was seated on the first Tuesday of our new year, in accordance with section 1 of the 20th Amendment) during its term of two years (that is, before the seating of the next congress after the 2022 midterm elections) can pass legislation to remove marijuana from Schedule I of the 1970 Controlled Substances Act (“CSA”) schedule.

Although it was the 91st Congress, during the presidency of Richard Nixon, which said that it was only “temporarily” placing cannabis in the most restrictive classification category for drug substances (deeming cannabis—referred to as marijuana and often spelled with an “h”—to have “no currently accepted medical use,”) it is still there. 

Political winds have kept cannabis on Schedule I for this long, right next to other fellow illegal drugs (such as heroin and LSD), which are all classified as being so dangerous and addicting that they can never be prescribed by a doctor and have no “accepted medical use.” That medical-cannabis states and severely-limited-access states (this category includes states in which cannabis can be used by a limited number of universities or research institutions or for limited medical purposes by a significantly restricted patient population comprised primarily of those with incurable diseases, seizure disorders, and epilepsy), are home to some 323 million people and permit, under state law, degrees of medical-use of cannabis, has never persuaded Congress or the courts to take reparative action, at least not yet.

With the Senate reconstituted by the Georgia run-offs without Senate majority leader Mitch McConnell, who has consistently blocked any cannabis legislation, it is expected that the new Congress will pass cannabis-related legislation during the first two years of the Biden term.

The second way that marijuana could be rescheduled or removed (descheduled) from the Controlled Substances Act (CSA) drug classification schedule is through executive branch action. Under Article II of the Constitution (section 2) the president (the country’s chief executive) is authorized to create “executive departments” and appoint “principal officers” (commonly referred to as “secretaries” which in 1787 meant “leaders of departments”). The president decides who he wants as principal officers to lead the executive branch departments and these nominations must be confirmed (approved) by the Senate.

The procedure by which the executive branch (the president and specifically designated “principal officers”) can take action with respect to a drug classification or removal is recited in the CSA. 

The Controlled Substances Act, 21 United States Code section 811, provides that the Attorney General of the United States (the Senate-confirmed leader of the executive branch’s Department of Justice) asks the Secretary of Health and Human Services (HHS) (that is, of the executive department which in 1970, when the Act was passed was called “the Department of Health, Education and Welfare”) for a written scientific and medical evaluation to downgrade or remove marijuana (aka cannabis) from the federal 1970 drug classification schedule. The Act also permits the HHS Secretary, (without being asked by the Attorney General) to generate its own scheduling recommendation report.

This means that much is in the hands of the president’s picks for those two cabinet positions, the U.S. Attorney General and the Health and Human Services Secretary. If the president’s picks for both are confirmed by the Senate, likely now with the 50/50 Senate split, then Attorney General Merrick Garland would ask Health and Human Services Secretary Xavier Becerra for a rescheduling evaluation and report or Becerra, whose own agency supervises and oversees the Food and Drug Administration (the FDA, which evaluates drug safety and efficacy, among other things) can issue a written rescheduling evaluation on his own. The CSA requires the Attorney General to follow the recommendations of the HHS Secretary.

The future HHS Secretary Becerra, the current Attorney General of California, has been vocal about his pro-legalization stance. He hails from the Golden State, which was the first state, back in 1996, to legalize medical cannabis. The Attorney General nominee Garland, a long-time judge on the D.C. Circuit Court of Appeals who was nominated during the Obama administration for the U.S. Supreme Court but never was afforded a confirmation hearing by Senate Majority Leader McConnell, has not publicly taken any position. However, in an October 2012 oral argument during a declassification case appeal, Americans for Safe Access v. Drug Enforcement Admin., 706 F.3d 438 (D.C. Cir. 2013), the judge made a statement about how courts should defer to government agency scientists for decisions about a substance’s efficacy and safety, because “… [w]e’re not scientists. They are …“ (Listen to an audio clip of Judge Garland during the 2012 oral argument here.)

And even though the federal appellate court ruled against those seeking to challenge the government’s refusal to reschedule cannabis, it was a narrow decision based on deference to executive branch decisions. The court held that the government’s actions comported with the CSA’s procedure which leaves it to the government officials to decide whether “adequate and well-controlled studies proving efficacy” of a particular drug exist. 

Should HHS Secretary Becerra on his own instigation or at the direction of the Attorney General present to Attorney General Garland a written report based on adequate and well-controlled studies proving the safety and efficacy of cannabis, the Attorney General, dependent on the findings in Becerra’s report, could be required to remove marijuana or move marijuana to a lower classification schedule. The pertinent part of the relevant statute, 21 United States Code section 811 (b), states, “[T]he recommendations of the [HHS] Secretary to the Attorney General shall be binding on the Attorney General as to such scientific and medical matters, and if the Secretary recommends that a drug … not be controlled, the Attorney General shall not control the drug …”

As a result of the legalization successes in the states, and the composition of the new cabinet, this vehicle for removal or reclassification seems much more likely than it has at any point since the passage of the CSA.

The third way cannabis could be legalized is by “citizen-petition” through an administrative process involving the Attorney General and one of the agencies the Attorney General oversees, specifically the DEA (Drug Enforcement Administration). This process is more precisely called “citizen-petitions for the government to engage in administrative rulemaking.”

Under the CSA, any citizen can petition (that is, present or file a document to) the Attorney General requesting that any drug be moved to a different category in the schedule (rescheduling) or removing it from the schedule entirely (descheduling). The Attorney General has “delegated” the DEA to “receive” the citizen-petitions in accordance with 28 Code of Federal Regulations, § 0.100.1. If the government denies the rescheduling or descheduling petition, or issues any other adverse order, the citizen-petitioner can appeal directly to a federal appellate court (21 United States Code section 811(a)).

That’s the type of an appeal playing out now before the Ninth Circuit Court of Appeals in Sisley, et al. v. U.S. Drug Enforcement Administration, et al., (Case No. 20-71433). Dr. Suzanne Sisley, (an Arizona-based physician and cannabis researcher), the Scottsdale Research Institute (an Arizona cannabis clinical trials site conducting the only federally-authorized study of cannabis usage to treat PTSD in Veterans), as well as a group of veterans, in May 2020, filed an appeal in the Ninth Circuit Court of Appeals. 

Dr. Sisley et al, is appealing an April 2020 denial by the DEA of a marijuana-rescheduling citizen-petition filed by other third-parties in January 2020. The DEA, as a matter of course, (and as it has done in other citizen-petition appeals), filed a motion to dismiss the case. Such dismissal motions are often granted by the appellate courts as the courts give “deference” to the judgment and discretion of the federal government. But this did not happen in Dr. Sisley’s current case in the Ninth Circuit. Instead, the appellate court denied the DEA’s dismissal motion last August and ordered briefing by both sides. 

The DEA, in its most recently filed brief (dated Nov. 30, 2020) in Sisley, et al. v. DEA, continued to argue that the case should be dismissed and that Dr. Sisley’s complaints were merely “generalized grievances.” The agency vociferously declined to give any credence to the proliferation of states which have robust medical-cannabis programs that successfully treat a host of medical conditions. The DEA argued that merely because “[i]ndividual states … pass laws that decriminalize marijuana under state law and provide for its use as a medical treatment. … those laws, standing by themselves, do not demonstrate that marijuana has an accepted medical use such that it can be rescheduled from Schedule I.”

Dr. Sisley’s lawyers have been adamant that the DEA’s position is unjustified by the law and the facts. Dr. Sisley’s lawyers, in their most recent court filing dated Dec. 21, 2020, wrote (among other things), that “the DEA’s unlawful actions have … impeded” Dr. Sisley’s “efforts to conduct clinical research with dispensary-quality marijuana—the very research that DEA has long-insisted must be done before it will reconsider marijuana’s Schedule I classification.”

The case is fully briefed. The next step is either (i) a public oral argument (between Dr. Sisley’s lawyers and the DEA’s Justice Department lawyers) before a three-judge appellate panel followed by a written decision of the court or (ii) the issuance by the court of a written decision with no in-court (or no Zoom court) hearing. The latter would be a judicial decision based exclusively on the paper-record of documents and pleadings filed to date.

Dr. Sisley’s lawyers are hoping that the appellate court, after reviewing all the filings, will schedule an oral argument. They want to be heard in open court. On January 8, 2021, the Ninth Circuit Court of Appeals issued an order proposing the scheduling of an oral argument in Seattle as early as May 2021.

But they may not need their day in court. The new Attorney General could change its position on the issue and in this specific case. It’s unlikely that the court will make any substantive decision in this case before the Senate confirmation hearings of the Attorney General and the Secretary of Health and Human Services. If the court waits, it may have a lot less work to do.

Calls for Unity Answered?

It is with the most profound relief that we turn the page on this past last year. As we in America and in the greater world struggle with the escalation of COVID deaths and self-searchingly contemplate the causes of the American carnage exhibited at the Capitol, many of us are seeking, in fact, craving evidence of unity or ties that kindly bind.

The November 2020 election offers up a sprig of spring. Red, blue and purple have come together in a unified color palette of green. This perhaps portends greater days ahead.

Due Diligence for Suppliers & Cannabis Supply Chain Partners

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Between the patchwork quilt of rules and regulations that is the modern cannabis industry, products pass through many hands before being sold to a customer. From sourcing, cultivating, manufacturing, distributing and vending, the relationships between a licensee and their vendors/partners up and down the supply chain is complex and touches many stakeholders along the way.

While the focus on quality packaging, dope labeling, delicious ingredients and consistently potent cannabis is a priority for most companies, what often isn’t thought about is the liability in bringing these components together in terms of compliance.

Compliance responsibility falls on licensees as a direct term and condition of licensure within their state. To operate, licensees must maintain and be able to demonstrate compliance with a plethora of rules and regulations. Compliance is the name of the game in cannabis.

While most operators understand this, what most do not think about is how the compliance or noncompliance of their vendors affects their own liability.

Sharing Noncompliance & Liability

Supply chain partners are automatically segregated by whether or not they are plant touching licensees or not.

Licensees are the only entities in the supply chain that can be fined, administratively held, suspended, revoked or even arrested due to noncompliance. This fundamental nature means that supply chain partners are automatically segregated by whether or not they are plant touching licensees or not.

In the case of mutual licensees such as a manufacturer and dispensary, the liability for compliance falls on both entities. A single manufacturer that makes an error on labeling language or a cultivator using the incorrect containers both pass on their liability to any downstream partners.

iComply has seen regulators quarantine hundreds of products among multiple dispensaries who never checked the compliance of the supplying manufacturer. Surprisingly, most dispensaries don’t think of the liability passed to them amid hundreds of SKUs and multiple manufacturers and cultivators. Confounding the issue further is that everyone in the industry can interpret the same rules in completely different ways.

Assuming your supply chain partners are 100% compliant is a dangerous pitfall.

By not checking noncompliance from supply chain partners, operators accumulate evidence dating back years. Like METRC being off, these issues tend to snowball until they seem overwhelmingly difficult to handle. And it doesn’t just stop at labeling issues. Noncompliance can fall on all supply chain partners and be left in the hands of a licensee in a variety of ways.

Business partners like security contractors can often run afoul of regulations and put their licensed partners at risk.

Even worse, are supply chain partners who don’t have a motive to be compliant as they do not own licenses and often have a poor understanding of cannabis compliance. A packaging provider, marketing company, CBD provider, security company, vending machine providers, waste disposal companies and other commonplace suppliers and partners can often run afoul of regulations and put their licensed partners at risk.

Since regulators can only enforce the licensed entity, many states have made it clear that licensees are ultimately and fully responsible for any actions of noncompliance taken by third parties contracted by the company – regardless if they touch cannabis or not.

Areas of Common Noncompliance in Cannabis

Like a game of “Hot Potato” (worth millions of dollars), we’ve seen common noncompliance liability get passed down the supply chain in the following areas of cannabis operations:

  • Product liability
  • Packaging and labeling
  • Test result manipulation
  • Expired licenses
  • Input or ingredient defects
  • Inventory tracking errors
  • Recordkeeping and manifest errors

Some of these areas of noncompliance rely with non-licensed supply chain partners such as packaging, ingredients or third party printed labels. Often, these folks simply don’t know what they don’t know and make mistakes – not knowing the thousands of dollars they could be costing their licensed partner down the line.

Other areas in which compliance should be expected from licensed partners lies in product liability, test result issues, inventory tracking, manifests and recordkeeping. No one usually wants to be out of compliance and usually these issues arise from licensed partners who are simply confused, mistaken or ignorant to the requirements of ongoing and changing rules.

It’s hard to keep all of one’s suppliers and supply chain partners on the same page over the long run and amid a multitude of changing rules. But what you resist, persists…

Managing Compliance in the Cannabis Supply Chain

Nothing worth it is ever easy; but it is possible to identify common areas of noncompliance in one’s cannabis operation and supply chain partners and to do something about.

To identify problem areas, iComply recommends conducting regular auditing at a macro level; but to also dive deeper into micro level audits of all of one’s books and records (covering vendor files) and packaging and labeling for at least 12 months.

You don’t know what you don’t know, so one must begin by investigating and understanding where liabilities are occurring between themselves and their supply chain partners. Once valid feedback and noncompliance is discovered, it can be remediated.

Like triage, you have to stop the bleeding before you can prevent further injury.

Consistency in quality standards requires meticulous SOPs

It is always more expensive and time consuming to continue reacting to noncompliance and trying to fix issues after the fact. This is how snowball effects happen until the problems seem so overwhelming, operators tend to simply ignore the liability. While it is human nature, it is also extremely dangerous and detrimental when multimillion dollar licenses are on the line.

An ounce of prevention is worth a pound of cure –Benjamin Franklin

By implementing proactive compliance measures, cannabis businesses can avoid costly noncompliance consequences and position themselves as proactive checkpoints of supply chain compliance. We recommend integrating the following procedures, documents, training and tools into one’s operational compliance infrastructure:

  • New vendor checklist
  • Packaging and labeling checklists by product type
  • Virtual review of labels/non-cannabis packaging
  • Calendar expiration dates for licenses and products
  • Compliance auditing of key vendors and strong contracts regarding liability
  • Input product checklists and tracking as per GMP compliance

This snapshot is just the tip of the iceberg when it comes to the depths of liability a cannabis business is exposed to by its supply chain partners. To truly manage compliance, one must be aware of shared risk and implement proactive measures to prevent suppliers and supply chain partners from inadvertently affecting the operational compliance of your cannabis business.

Selecting Supply Chain Partners

There are plenty of fish in the sea and plenty of suppliers vying to do business with you. iComply has seen the good, the bad and the ugly. We’ve been on the front lines of developing markets like California where we warned our clients to steer clear of companies like Kushy Punch long before they finally lost their license for noncompliance.

control the room environment
Preventing contamination can save a business from extremely costly recalls.

We advise our clients on the importance of being selective and conducting due diligence in vetting supply chain partners and vendors. Most fundamentally, how aligned are the values of potential partners? Are they in the business for the same reasons you are? What brought them to the cannabis space? How do they value relationships and what do they know about compliance?

Too often when focused on price or speed, people miss the more important fundamentals of relationships. We serve as vetters for our clients whether they are shopping for a POS provider, a bank or a waste disposal company. Beyond the cultural alignment, the more objective questions begin to take shape in vetting a potential partner. This can differentiate between license holding and non-holding supply chain partners.

For plant-touching licensed partners, we recommend answering the following before entering into business partnerships that affect your supply chain:

  • Copies of licenses, contracts, and a catalogue of products
  • For products being selected, prior to ordering a sample, obtain a copy of the label by email first. Or an EMPTY sample of product packaging and labeling to vet against a packaging and labeling checklist.
  • Search news articles on the company and ask if they have had compliance issues before. Obtain documentation if there have been compliance issues previously.
  • Ask how they manage their compliance and prevent noncompliance down their supply chain. Do they train their staff? Do they conduct regular audits internally? How often do they update SOPs and reconcile inventory?

For non-plant touching partners, we recommend answering the following:

  • Obtain any certifications for quality assurance or in credentials for services.
  • Ask for references from other customers who have cannabis licenses.
  • Discover how familiar they are with the cannabis industry AND the rules and regulations in your market.
  • Ensure they have an understanding of how they impact your compliance. Discover how they plan on preventing areas of concern together.
  • Make sure they know you are ultimately responsible for noncompliance and understand what they are willing to do to protect you.

Ensuring accountability across the supply chain means selectively choosing partners who share the same values of integrity and professionalism. On more complicated deals, such as licensing IP or your brand to operators in new states or markets, we recommend that you mandate a compliance program that offers third-party validation to ensure the internal integrity of your partners. Too often, brand risk isn’t considered in the fast-paced expansion of the industry and operators must not only be vetted, but held accountable, when representing one’s brand and products.

For all intents and purposes, the wild web of the supply chain in cannabis is the industry. We are a collective of collaborators who all serve the goal of delivering high quality and safe products to cannabis consumers globally. For those committed to minimizing their risk to protect their profits, cannabis compliance is the key to success.

Ensuring accountability across the supply chain means selectively choosing partners who share the same values of integrity and professionalism. In doing so, the industry elevates its legitimacy and more effectively expands in a sustainable manner that protects all stakeholders involved.

Noncompliance affects licensees the most and they must be the most vigilant, but it takes a village to raise an industry. Compliance affects most everyone in the supply chain and the loss of any operator hurts the entire industry.

Elevated Wellness Launches Franchise Concept for CBD Pharmacy-Grade Products

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Accepting applications from candidates for its new franchise opportunity in the growing CBD industry

Austin, TX (January 28, 2021) Elevated Wellness, an Austin-based pharmacy-produced CBD brand that harnesses the power of science and the safety of pharmacy licensing to create potent, chemical-free CBD products, is excited to announce the launch of its franchise opportunity. Consumer research firm Nielsen conservatively projected that the 2020 market for U.S. hemp-based CBD would be a $2.25 billion to $2.75 billion industry. The company further projects that by 2025, the market will generate $6.9 billion, a threefold increase over five years.

“For anyone who has considered getting into the CBD market, now is the time. The CBD market is crowded and in the absence of regulatory requirements, there are a lot of poor quality, counterfeit products out there. Elevated Wellness offers prospective franchises something that no one else can – products rooted in pharmacy science and created and produced within a government-regulated lab,” said Kush Patel, CEO of Elevated Wellness. “We offer a turnkey, affordable business model that allows franchise partners to step in and successfully operate with the backing of our support team.”

The Elevated Wellness franchise package includes an exclusive territory, access to branding tools, marketing tactics, ongoing operational support, and training.

When legislation passed in 2018 that lifted regulations against industry hemp growth, a slew of poorly organized CBD companies began to sprout. Elevated Wellness differentiates itself from competitors with proprietary sourcing and extraction methods, third party testing, and products generated within a licensed pharmacy. “CBD is medicine so it only makes sense that consumers have access to products made using medical-grade equipment in medically-approved facilities,” stated Chris Adlakha, PharmD, COO of Elevated Wellness. “Our customers can trust they are getting the safe and potent products that meet their health and wellness needs.”

Shivam Patel, CFO of Elevated Wellness, added that the marketing support is a huge differentiator. “Our marketing initiatives are designed to help franchisees succeed,” stated Shivam Patel. “Our team has more than a century of combined experience in the healthcare industry so franchisees will have access to our insights and marketing strategies that will help them grow their businesses and build loyal customers.”

Elevated Wellness products contain pure US-grown organic hemp and are always non-GMO, gluten-free, and mostly vegan certified. All labs in which each Elevated Wellness products are formulated are state-of-the-art ISO-5, USP-795, and USP-800 compliant.

ABOUT ELEVATED WELLNESS

Elevated Wellness is a CBD company founded by health care professionals. They have taken it upon themselves to formulate all of their name brand products in facilities regulated by federal agencies, including the FDA, to ensure the absolute highest quality cannabinoid products that people can trust. Elevated Wellness produces superior quality CBD products and accessories. All CBD products are made with US-grown organic hemp and undergo a stringent quality control process. The Elevated Wellness team is customer service focused with the goal of helping people feel better through chemical-free alternatives like CBD. More information on the franchise opportunity and the Elevated Wellness product line can be found at https://elevatedwellness.com.

Media Contact:

Beth Graham

Arizona Dispensaries Prepare to Sell Adult-Use Cannabis

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Author note: Julie A. Werner-Simon is a law professor adjunct at Drexel University School of Law and teaches Marijuana Law: History, the Constitution & Best Business Practices.

The November 2020 presidential election broke records. More votes were cast for president (some 165 million) than ever before in our history. 

We have not surpassed this percentage of voters in a presidential election (approximately 67%) in 120 years, that is, since the election of William McKinley and his Vice president Theodore Roosevelt in 1900 at 73.7%. 

However, this uptick of participation in the political process has revealed entrenched partisanship. This, when coupled with what we witnessed on the steps of the capitol, shows that we are a nation riven by polarization. Reminiscent of 1860, as the nation splintered over slavery, we appear hopelessly divided by what the framers called “faction,” or as it is known today “political tribalism.”

Our politics (riffing on James Madison’s Federalist Papers Number 10) has devolved into jersey-wearing domestic factions with “citizens united and actuated in some common impulse . . . adverse to the rights of other citizens.” Social scientists have confirmed that 21st-century politics is less about principles and more like allegiances to home-town sports teams with many voters, quoting a University of Kansas study, “caring more about . . . winning . . . than they do [about] ideology or issues.”  

But partisan-Mason Dixon divisions have not infused every political issue. There is one that trumps the jersey, and has done so from the mountains to the prairies: it is cannabis legalization. Blue, red, and purple states voted green this past November.

Five states from diverse regions of the country had cannabis on the ballot in November, specifically: Arizona, Mississippi, Montana, New Jersey, and South Dakota. And as Rolling Stone magazine “vernacularly” noted, “[e]very single weed initiative passed on election day.”

Unlike the nail-biting, five-day water torture before the networks called the presidential election for Joe Biden, the residents of the five states with cannabis initiatives knew the results when they awoke on November 4th. Cannabis won decisively. 

Cannabis Political Momentum

There are multiple indications that this cannabis-momentum will continue. The January 2021 Georgia run-off resulted in the installation of two new senators (Jon Ossoff and Reverend Raphael Warnock) who both campaigned on federal cannabis legalization platforms. 

Vice-president Kamala Harris who, as U.S. Senator, was a co-sponsor of a 2019 bill to federally legalize cannabis, and who during the October 2020 vice-presidential debate touted cannabis reform as one of the new administration’s goals, has made clear that systemic change is in the offing. 

So too, even though with enthusiasm expressed to a lesser degree, has been the gradual (decades-long) transformation of President Biden. He has gone from a 1990’s tough-on-crime-through-increased-drug-penalties warrior to someone now, at a minimum, who is accepting of state legalization programs, decriminalization, expungement of cannabis convictions, and medical-cannabis programs. Further, the Biden campaign acknowledged and promised to address the teeming racial disparities in America’s criminal justice system. 

With this soil tilled, there are three ways in which cannabis could be legalized federally during Biden’s presidency. All three are on the table.

The first way is with action by Congress. (Article I, section 1 of U.S. Constitution). The constitution vests “all legislative powers” (the ability to pass laws) in Congress. The 117th Congress (which was seated on the first Tuesday of our new year, in accordance with section 1 of the 20th Amendment) during its term of two years (that is, before the seating of the next congress after the 2022 midterm elections) can pass legislation to remove marijuana from Schedule I of the 1970 Controlled Substances Act (“CSA”) schedule.

Although it was the 91st Congress, during the presidency of Richard Nixon, which said that it was only “temporarily” placing cannabis in the most restrictive classification category for drug substances (deeming cannabis—referred to as marijuana and often spelled with an “h”—to have “no currently accepted medical use,”) it is still there. 

Political winds have kept cannabis on Schedule I for this long, right next to other fellow illegal drugs (such as heroin and LSD), which are all classified as being so dangerous and addicting that they can never be prescribed by a doctor and have no “accepted medical use.” That medical-cannabis states and severely-limited-access states (this category includes states in which cannabis can be used by a limited number of universities or research institutions or for limited medical purposes by a significantly restricted patient population comprised primarily of those with incurable diseases, seizure disorders, and epilepsy), are home to some 323 million people and permit, under state law, degrees of medical-use of cannabis, has never persuaded Congress or the courts to take reparative action, at least not yet.

With the Senate reconstituted by the Georgia run-offs without Senate majority leader Mitch McConnell, who has consistently blocked any cannabis legislation, it is expected that the new Congress will pass cannabis-related legislation during the first two years of the Biden term.

The second way that marijuana could be rescheduled or removed (descheduled) from the Controlled Substances Act (CSA) drug classification schedule is through executive branch action. Under Article II of the Constitution (section 2) the president (the country’s chief executive) is authorized to create “executive departments” and appoint “principal officers” (commonly referred to as “secretaries” which in 1787 meant “leaders of departments”). The president decides who he wants as principal officers to lead the executive branch departments and these nominations must be confirmed (approved) by the Senate.

The procedure by which the executive branch (the president and specifically designated “principal officers”) can take action with respect to a drug classification or removal is recited in the CSA. 

The Controlled Substances Act, 21 United States Code section 811, provides that the Attorney General of the United States (the Senate-confirmed leader of the executive branch’s Department of Justice) asks the Secretary of Health and Human Services (HHS) (that is, of the executive department which in 1970, when the Act was passed was called “the Department of Health, Education and Welfare”) for a written scientific and medical evaluation to downgrade or remove marijuana (aka cannabis) from the federal 1970 drug classification schedule. The Act also permits the HHS Secretary, (without being asked by the Attorney General) to generate its own scheduling recommendation report.

This means that much is in the hands of the president’s picks for those two cabinet positions, the U.S. Attorney General and the Health and Human Services Secretary. If the president’s picks for both are confirmed by the Senate, likely now with the 50/50 Senate split, then Attorney General Merrick Garland would ask Health and Human Services Secretary Xavier Becerra for a rescheduling evaluation and report or Becerra, whose own agency supervises and oversees the Food and Drug Administration (the FDA, which evaluates drug safety and efficacy, among other things) can issue a written rescheduling evaluation on his own. The CSA requires the Attorney General to follow the recommendations of the HHS Secretary.

The future HHS Secretary Becerra, the current Attorney General of California, has been vocal about his pro-legalization stance. He hails from the Golden State, which was the first state, back in 1996, to legalize medical cannabis. The Attorney General nominee Garland, a long-time judge on the D.C. Circuit Court of Appeals who was nominated during the Obama administration for the U.S. Supreme Court but never was afforded a confirmation hearing by Senate Majority Leader McConnell, has not publicly taken any position. However, in an October 2012 oral argument during a declassification case appeal, Americans for Safe Access v. Drug Enforcement Admin., 706 F.3d 438 (D.C. Cir. 2013), the judge made a statement about how courts should defer to government agency scientists for decisions about a substance’s efficacy and safety, because “… [w]e’re not scientists. They are …“ (Listen to an audio clip of Judge Garland during the 2012 oral argument here.)

And even though the federal appellate court ruled against those seeking to challenge the government’s refusal to reschedule cannabis, it was a narrow decision based on deference to executive branch decisions. The court held that the government’s actions comported with the CSA’s procedure which leaves it to the government officials to decide whether “adequate and well-controlled studies proving efficacy” of a particular drug exist. 

Should HHS Secretary Becerra on his own instigation or at the direction of the Attorney General present to Attorney General Garland a written report based on adequate and well-controlled studies proving the safety and efficacy of cannabis, the Attorney General, dependent on the findings in Becerra’s report, could be required to remove marijuana or move marijuana to a lower classification schedule. The pertinent part of the relevant statute, 21 United States Code section 811 (b), states, “[T]he recommendations of the [HHS] Secretary to the Attorney General shall be binding on the Attorney General as to such scientific and medical matters, and if the Secretary recommends that a drug … not be controlled, the Attorney General shall not control the drug …”

As a result of the legalization successes in the states, and the composition of the new cabinet, this vehicle for removal or reclassification seems much more likely than it has at any point since the passage of the CSA.

The third way cannabis could be legalized is by “citizen-petition” through an administrative process involving the Attorney General and one of the agencies the Attorney General oversees, specifically the DEA (Drug Enforcement Administration). This process is more precisely called “citizen-petitions for the government to engage in administrative rulemaking.”

Under the CSA, any citizen can petition (that is, present or file a document to) the Attorney General requesting that any drug be moved to a different category in the schedule (rescheduling) or removing it from the schedule entirely (descheduling). The Attorney General has “delegated” the DEA to “receive” the citizen-petitions in accordance with 28 Code of Federal Regulations, § 0.100.1. If the government denies the rescheduling or descheduling petition, or issues any other adverse order, the citizen-petitioner can appeal directly to a federal appellate court (21 United States Code section 811(a)).

That’s the type of an appeal playing out now before the Ninth Circuit Court of Appeals in Sisley, et al. v. U.S. Drug Enforcement Administration, et al., (Case No. 20-71433). Dr. Suzanne Sisley, (an Arizona-based physician and cannabis researcher), the Scottsdale Research Institute (an Arizona cannabis clinical trials site conducting the only federally-authorized study of cannabis usage to treat PTSD in Veterans), as well as a group of veterans, in May 2020, filed an appeal in the Ninth Circuit Court of Appeals. 

Dr. Sisley et al, is appealing an April 2020 denial by the DEA of a marijuana-rescheduling citizen-petition filed by other third-parties in January 2020. The DEA, as a matter of course, (and as it has done in other citizen-petition appeals), filed a motion to dismiss the case. Such dismissal motions are often granted by the appellate courts as the courts give “deference” to the judgment and discretion of the federal government. But this did not happen in Dr. Sisley’s current case in the Ninth Circuit. Instead, the appellate court denied the DEA’s dismissal motion last August and ordered briefing by both sides. 

The DEA, in its most recently filed brief (dated Nov. 30, 2020) in Sisley, et al. v. DEA, continued to argue that the case should be dismissed and that Dr. Sisley’s complaints were merely “generalized grievances.” The agency vociferously declined to give any credence to the proliferation of states which have robust medical-cannabis programs that successfully treat a host of medical conditions. The DEA argued that merely because “[i]ndividual states … pass laws that decriminalize marijuana under state law and provide for its use as a medical treatment. … those laws, standing by themselves, do not demonstrate that marijuana has an accepted medical use such that it can be rescheduled from Schedule I.”

Dr. Sisley’s lawyers have been adamant that the DEA’s position is unjustified by the law and the facts. Dr. Sisley’s lawyers, in their most recent court filing dated Dec. 21, 2020, wrote (among other things), that “the DEA’s unlawful actions have … impeded” Dr. Sisley’s “efforts to conduct clinical research with dispensary-quality marijuana—the very research that DEA has long-insisted must be done before it will reconsider marijuana’s Schedule I classification.”

The case is fully briefed. The next step is either (i) a public oral argument (between Dr. Sisley’s lawyers and the DEA’s Justice Department lawyers) before a three-judge appellate panel followed by a written decision of the court or (ii) the issuance by the court of a written decision with no in-court (or no Zoom court) hearing. The latter would be a judicial decision based exclusively on the paper-record of documents and pleadings filed to date.

Dr. Sisley’s lawyers are hoping that the appellate court, after reviewing all the filings, will schedule an oral argument. They want to be heard in open court. On January 8, 2021, the Ninth Circuit Court of Appeals issued an order proposing the scheduling of an oral argument in Seattle as early as May 2021.

But they may not need their day in court. The new Attorney General could change its position on the issue and in this specific case. It’s unlikely that the court will make any substantive decision in this case before the Senate confirmation hearings of the Attorney General and the Secretary of Health and Human Services. If the court waits, it may have a lot less work to do.

Calls for Unity Answered?

It is with the most profound relief that we turn the page on this past last year. As we in America and in the greater world struggle with the escalation of COVID deaths and self-searchingly contemplate the causes of the American carnage exhibited at the Capitol, many of us are seeking, in fact, craving evidence of unity or ties that kindly bind.

The November 2020 election offers up a sprig of spring. Red, blue and purple have come together in a unified color palette of green. This perhaps portends greater days ahead.

Arizona Cannabis Retailers Reflect on First Week of Adult-Use Sales

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Arizona launched its first adult-use cannabis sales Jan. 22, with the state’s mature medical cannabis industry—which was legalized by a voter-approved initiative in 2010—pivoting quickly to meet the demands of a broader consumer base.

The Mint applied for adult-use licenses at its dispensary locations in Mesa and Tempe when the application became available Jan. 19.

“[Regulators] were saying it wasn’t going to take until March to make a decision, that once you applied and put in all your paperwork for your rec license, as long as you had enough employees to be able to service [the adult-use market] and you had all the requisites, they were going to process [the application] in two to three days,” says Raul Molina, The Mint’s co-founder and chief operating officer.

Photo courtesy of The Mint

The Mint planned to launch adult-use sales at 4:20 p.m. on Jan. 22, but lines had formed around the building by 1 p.m., after the company sent out text and email notifications.

Around midday on Jan. 22, The Mint received word that its adult-use applications had been approved, and it immediately sent text and email notifications to its customer base, announcing that it would launch its first adult-use sales at 4:20 p.m. that same day. As soon as the alerts went out, Molina says people started showing up, and the dispensaries had lines around the building by 1 p.m.

Arizona is currently experiencing a cold snap, Molina says, with rain and temperatures in the 40s, but the bad weather has not deterred customers, who continue to line up at The Mint’s dispensary locations.

“The crowds have been incredible,” Molina says. “It feels like a party atmosphere. There’s music playing. Everybody is getting along and sharing stories of what they’ve tried or what they’re going to try. People are coming out and talking about what they bought.”

RELATED: The Mint’s Cannabis Kitchen Serves Up Infused Meals

Customers have been wearing masks and social distancing to combat the ongoing COVID-19 pandemic, he adds, and The Mint has been working hard to ensure it maintains enough product for its medical patients.

“We don’t want to forget who brought us to the party,” Molina says. “We’ve been medical for 10 years.”

The Mint has two lines—one for medical patients and one for adult-use customers. Generally, there is no wait for medical sales, Molina says, while adult-use customers can expect wait times of up to an hour and a half.

Curaleaf, which has been operating in Arizona’s medical market since 2011, also launched adult-use sales Jan. 22 at its eight dispensary locations across the state, and Steve Cottrell, president of Curaleaf Arizona, says line management has been one of the company’s biggest challenges over the past week.

“We typically don’t see a line every single day, and that’s something that we’re experiencing daily now,” he says. “It’s a big win for us, we’re very excited to have that, but it’s something new.”

Like The Mint, Curaleaf has two lines—one for medical patients and one for adult-use customers—and it has many standard operating procedures in place to help get patients and customers through the store quickly. The wait time at its locations has typically been 20 to 30 minutes, Cottrell says.

“Our teams are very efficient,” he says. “We have several stations, and our budtenders are very quick to respond, so we get people through the line quickly.”

Curaleaf encourages its customers to use online ordering while they wait in line to ensure their order is ready for them when they reach the register. All customers still get one-on-one time with Curaleaf’s budtenders to ask questions and get product recommendations, Cottrell says, even if they have already placed an online order.

“One of the things we’ve encouraged is you place the online order right now,” he says. “You may not know what you want, but you know you want an edible, a concentrate, a vape or a topical—just lock one of those in. Then, they can come in and they can experience the full thing. We know they wanted a flower, or we know they wanted a vape cartridge—great. Here are all of our vape cartridges laid out for you, or here are all of our strains laid out for you. It gives you an opportunity to shop, but it also gives our budtenders a little bit of a heads up of what they’re coming in for on the front end, so they know how to sell better.”

Curaleaf offers discounts to its medical patients, and sent out a text message alert before launching adult-use sales, which encouraged many patients to stock up on products ahead of time to avoid the crowds.

The Mint also offers medical-only specials, including buy one, get one free deals, discounts on certain products and a daily pre-roll promotion where medical patients can stop by for a free pre-roll from 4:20 p.m. to 7:10 p.m. each day.

“We do that a lot because we know there are a lot of patients who would come in and not have the money to buy their medicine for the day, so we just started our program of one free pre-roll per day,” Molina says. “That’s still there for the medical patient, where the rec customer isn’t getting all these extra perks that we’re going to keep around for the medical patient.”

The Mint set aside product for its medical patients to ensure it would have enough supply for that side of the market, but, so far, Molina says product shortages have not been an issue.

“There isn’t quite a shortage of supply just yet,” he says. “Maybe as more [dispensaries] … come online and start selling rec, that might change, but as far as us up here at The Mint, we were planning for it.”

Molina estimates that only about 25 to 30 of Arizona’s roughly 130 medical dispensaries opened for adult-use sales upon receiving final approval Jan. 22.

The Mint, which is vertically integrated with a cultivation operation, also buys cannabis wholesale from other vendors, and Molina says the company stocked up in advance to have what he thought would be enough product for the first two to three months of adult-use sales.

“It looks like it’s going to be closer to a month or a month and a half with the current coverage, but, so far, nobody has told us that it won’t be available,” he says.

Curaleaf has not experienced any supply shortages yet either, due in part to its vertically integrated business model and its partnership with other vendors in the state, which allows the company to purchase products wholesale from other cultivators and manufacturers.

Cottrell says Curaleaf has been preparing for the expanded market since September, even before voters approved Arizona’s adult-use cannabis legalization measure in the November election, to ensure the company has enough supply to meet adult-use demand.

“We saw the writing on the wall,” he says. “We saw the path that we were going with the [Prop.] 207 campaign. We were having a lot of success.”

Curaleaf doubled the size of its Arizona-based cultivation operations over the course of the past year, and renovated four of its dispensary locations to add more registers. The company also implemented a new point-of-sale system just five days before launching adult-use sales.

“Curaleaf is incredibly well-structured, and … being able to do things like this is just second nature for us, so we’ve really been able to … make things happen quickly,” Cottrell says, adding that the company made a similar transition from medical to adult-use sales in Illinois just last year.

Adults 21 and older are allowed to purchase up to an ounce of cannabis per day under Arizona’s current adult-use regulations, but Cottrell says Curaleaf’s customers typically have not been maxing out their daily allotment, instead buying an average of four or five eighths at a time.

Flower is Curaleaf’s best-selling product in the adult-use market, Cottrell says, making up roughly 59% of the company’s sales.

According to Molina, The Mint’s medical cannabis patients typically split their purchases fairly evenly across the dispensary’s product categories, with flower, edibles and concentrates each making up about a third of the company’s sales. The Mint’s adult-use customers, however, seem mostly interested in flower and edibles, with concentrates sales lagging behind the other two categories in the non-medical market.

So far, The Mint has roughly tripled its sales since launching adult-use, and Molina says the company began preparing for the increased sales volume nearly two years ago, when it expanded its flagship location in Tempe from 3,000 to 12,000 square feet, and from 10 to 21 total registers.

The Mint completed a large hiring initiative a little over a month ago, and spent roughly three weeks onboarding and training new retail staff members to interact with patients and adult-use consumers.

“For probably the last few weeks, we’ve had kids tripping on top of each other because we had so many people here and it didn’t really make sense,” Molina says. “Now that we went rec, it makes all the sense in the world. Everybody’s on a register and we’ve done well.”

So far, Molina says The Mint’s biggest setback has been not stocking up on enough water for its employees.

“I bought a pallet of water, and apparently that wasn’t enough to keep everybody hydrated,” he says. “But the problems we have had have been minimal, and not really operational or to the point that they’re affecting the patient or the customer.”

The Mint plans to open a third store by the middle of February, and its focus continues to be the medical patients who helped the company find its early success in the Arizona market.

“The biggest thing is we don’t want to forget who brought us to the party and who we’ve been servicing for the past 10 years that have allowed us to keep our doors open,” Molina says. “That’s the biggest thing—we want to make sure we keep taking care of medical.”

Curaleaf also plans to expand in Arizona, with two more stores expected to open this year.

“We’re very excited about this opportunity to serve the customers in Arizona,” Cottrell says. “As is with all states when adult-use happens, it’s an amazing opportunity for us. We’re doing all we can to make the cannabis industry look first-class, and we’re keeping everybody medicated and giving them the best service possible.”

Concentrates Sales Are Rising Across U.S. Cannabis Markets. Why?

by

Arizona launched its first adult-use cannabis sales Jan. 22, with the state’s mature medical cannabis industry—which was legalized by a voter-approved initiative in 2010—pivoting quickly to meet the demands of a broader consumer base.

The Mint applied for adult-use licenses at its dispensary locations in Mesa and Tempe when the application became available Jan. 19.

“[Regulators] were saying it wasn’t going to take until March to make a decision, that once you applied and put in all your paperwork for your rec license, as long as you had enough employees to be able to service [the adult-use market] and you had all the requisites, they were going to process [the application] in two to three days,” says Raul Molina, The Mint’s co-founder and chief operating officer.

Photo courtesy of The Mint

The Mint planned to launch adult-use sales at 4:20 p.m. on Jan. 22, but lines had formed around the building by 1 p.m., after the company sent out text and email notifications.

Around midday on Jan. 22, The Mint received word that its adult-use applications had been approved, and it immediately sent text and email notifications to its customer base, announcing that it would launch its first adult-use sales at 4:20 p.m. that same day. As soon as the alerts went out, Molina says people started showing up, and the dispensaries had lines around the building by 1 p.m.

Arizona is currently experiencing a cold snap, Molina says, with rain and temperatures in the 40s, but the bad weather has not deterred customers, who continue to line up at The Mint’s dispensary locations.

“The crowds have been incredible,” Molina says. “It feels like a party atmosphere. There’s music playing. Everybody is getting along and sharing stories of what they’ve tried or what they’re going to try. People are coming out and talking about what they bought.”

RELATED: The Mint’s Cannabis Kitchen Serves Up Infused Meals

Customers have been wearing masks and social distancing to combat the ongoing COVID-19 pandemic, he adds, and The Mint has been working hard to ensure it maintains enough product for its medical patients.

“We don’t want to forget who brought us to the party,” Molina says. “We’ve been medical for 10 years.”

The Mint has two lines—one for medical patients and one for adult-use customers. Generally, there is no wait for medical sales, Molina says, while adult-use customers can expect wait times of up to an hour and a half.

Curaleaf, which has been operating in Arizona’s medical market since 2011, also launched adult-use sales Jan. 22 at its eight dispensary locations across the state, and Steve Cottrell, president of Curaleaf Arizona, says line management has been one of the company’s biggest challenges over the past week.

“We typically don’t see a line every single day, and that’s something that we’re experiencing daily now,” he says. “It’s a big win for us, we’re very excited to have that, but it’s something new.”

Like The Mint, Curaleaf has two lines—one for medical patients and one for adult-use customers—and it has many standard operating procedures in place to help get patients and customers through the store quickly. The wait time at its locations has typically been 20 to 30 minutes, Cottrell says.

“Our teams are very efficient,” he says. “We have several stations, and our budtenders are very quick to respond, so we get people through the line quickly.”

Curaleaf encourages its customers to use online ordering while they wait in line to ensure their order is ready for them when they reach the register. All customers still get one-on-one time with Curaleaf’s budtenders to ask questions and get product recommendations, Cottrell says, even if they have already placed an online order.

“One of the things we’ve encouraged is you place the online order right now,” he says. “You may not know what you want, but you know you want an edible, a concentrate, a vape or a topical—just lock one of those in. Then, they can come in and they can experience the full thing. We know they wanted a flower, or we know they wanted a vape cartridge—great. Here are all of our vape cartridges laid out for you, or here are all of our strains laid out for you. It gives you an opportunity to shop, but it also gives our budtenders a little bit of a heads up of what they’re coming in for on the front end, so they know how to sell better.”

Curaleaf offers discounts to its medical patients, and sent out a text message alert before launching adult-use sales, which encouraged many patients to stock up on products ahead of time to avoid the crowds.

The Mint also offers medical-only specials, including buy one, get one free deals, discounts on certain products and a daily pre-roll promotion where medical patients can stop by for a free pre-roll from 4:20 p.m. to 7:10 p.m. each day.

“We do that a lot because we know there are a lot of patients who would come in and not have the money to buy their medicine for the day, so we just started our program of one free pre-roll per day,” Molina says. “That’s still there for the medical patient, where the rec customer isn’t getting all these extra perks that we’re going to keep around for the medical patient.”

The Mint set aside product for its medical patients to ensure it would have enough supply for that side of the market, but, so far, Molina says product shortages have not been an issue.

“There isn’t quite a shortage of supply just yet,” he says. “Maybe as more [dispensaries] … come online and start selling rec, that might change, but as far as us up here at The Mint, we were planning for it.”

Molina estimates that only about 25 to 30 of Arizona’s roughly 130 medical dispensaries opened for adult-use sales upon receiving final approval Jan. 22.

The Mint, which is vertically integrated with a cultivation operation, also buys cannabis wholesale from other vendors, and Molina says the company stocked up in advance to have what he thought would be enough product for the first two to three months of adult-use sales.

“It looks like it’s going to be closer to a month or a month and a half with the current coverage, but, so far, nobody has told us that it won’t be available,” he says.

Curaleaf has not experienced any supply shortages yet either, due in part to its vertically integrated business model and its partnership with other vendors in the state, which allows the company to purchase products wholesale from other cultivators and manufacturers.

Cottrell says Curaleaf has been preparing for the expanded market since September, even before voters approved Arizona’s adult-use cannabis legalization measure in the November election, to ensure the company has enough supply to meet adult-use demand.

“We saw the writing on the wall,” he says. “We saw the path that we were going with the [Prop.] 207 campaign. We were having a lot of success.”

Curaleaf doubled the size of its Arizona-based cultivation operations over the course of the past year, and renovated four of its dispensary locations to add more registers. The company also implemented a new point-of-sale system just five days before launching adult-use sales.

“Curaleaf is incredibly well-structured, and … being able to do things like this is just second nature for us, so we’ve really been able to … make things happen quickly,” Cottrell says, adding that the company made a similar transition from medical to adult-use sales in Illinois just last year.

Adults 21 and older are allowed to purchase up to an ounce of cannabis per day under Arizona’s current adult-use regulations, but Cottrell says Curaleaf’s customers typically have not been maxing out their daily allotment, instead buying an average of four or five eighths at a time.

Flower is Curaleaf’s best-selling product in the adult-use market, Cottrell says, making up roughly 59% of the company’s sales.

According to Molina, The Mint’s medical cannabis patients typically split their purchases fairly evenly across the dispensary’s product categories, with flower, edibles and concentrates each making up about a third of the company’s sales. The Mint’s adult-use customers, however, seem mostly interested in flower and edibles, with concentrates sales lagging behind the other two categories in the non-medical market.

So far, The Mint has roughly tripled its sales since launching adult-use, and Molina says the company began preparing for the increased sales volume nearly two years ago, when it expanded its flagship location in Tempe from 3,000 to 12,000 square feet, and from 10 to 21 total registers.

The Mint completed a large hiring initiative a little over a month ago, and spent roughly three weeks onboarding and training new retail staff members to interact with patients and adult-use consumers.

“For probably the last few weeks, we’ve had kids tripping on top of each other because we had so many people here and it didn’t really make sense,” Molina says. “Now that we went rec, it makes all the sense in the world. Everybody’s on a register and we’ve done well.”

So far, Molina says The Mint’s biggest setback has been not stocking up on enough water for its employees.

“I bought a pallet of water, and apparently that wasn’t enough to keep everybody hydrated,” he says. “But the problems we have had have been minimal, and not really operational or to the point that they’re affecting the patient or the customer.”

The Mint plans to open a third store by the middle of February, and its focus continues to be the medical patients who helped the company find its early success in the Arizona market.

“The biggest thing is we don’t want to forget who brought us to the party and who we’ve been servicing for the past 10 years that have allowed us to keep our doors open,” Molina says. “That’s the biggest thing—we want to make sure we keep taking care of medical.”

Curaleaf also plans to expand in Arizona, with two more stores expected to open this year.

“We’re very excited about this opportunity to serve the customers in Arizona,” Cottrell says. “As is with all states when adult-use happens, it’s an amazing opportunity for us. We’re doing all we can to make the cannabis industry look first-class, and we’re keeping everybody medicated and giving them the best service possible.”

Fluence Hires Jordon Musser as Chief Product Officer

by

Arizona launched its first adult-use cannabis sales Jan. 22, with the state’s mature medical cannabis industry—which was legalized by a voter-approved initiative in 2010—pivoting quickly to meet the demands of a broader consumer base.

The Mint applied for adult-use licenses at its dispensary locations in Mesa and Tempe when the application became available Jan. 19.

“[Regulators] were saying it wasn’t going to take until March to make a decision, that once you applied and put in all your paperwork for your rec license, as long as you had enough employees to be able to service [the adult-use market] and you had all the requisites, they were going to process [the application] in two to three days,” says Raul Molina, The Mint’s co-founder and chief operating officer.

Photo courtesy of The Mint

The Mint planned to launch adult-use sales at 4:20 p.m. on Jan. 22, but lines had formed around the building by 1 p.m., after the company sent out text and email notifications.

Around midday on Jan. 22, The Mint received word that its adult-use applications had been approved, and it immediately sent text and email notifications to its customer base, announcing that it would launch its first adult-use sales at 4:20 p.m. that same day. As soon as the alerts went out, Molina says people started showing up, and the dispensaries had lines around the building by 1 p.m.

Arizona is currently experiencing a cold snap, Molina says, with rain and temperatures in the 40s, but the bad weather has not deterred customers, who continue to line up at The Mint’s dispensary locations.

“The crowds have been incredible,” Molina says. “It feels like a party atmosphere. There’s music playing. Everybody is getting along and sharing stories of what they’ve tried or what they’re going to try. People are coming out and talking about what they bought.”

RELATED: The Mint’s Cannabis Kitchen Serves Up Infused Meals

Customers have been wearing masks and social distancing to combat the ongoing COVID-19 pandemic, he adds, and The Mint has been working hard to ensure it maintains enough product for its medical patients.

“We don’t want to forget who brought us to the party,” Molina says. “We’ve been medical for 10 years.”

The Mint has two lines—one for medical patients and one for adult-use customers. Generally, there is no wait for medical sales, Molina says, while adult-use customers can expect wait times of up to an hour and a half.

Curaleaf, which has been operating in Arizona’s medical market since 2011, also launched adult-use sales Jan. 22 at its eight dispensary locations across the state, and Steve Cottrell, president of Curaleaf Arizona, says line management has been one of the company’s biggest challenges over the past week.

“We typically don’t see a line every single day, and that’s something that we’re experiencing daily now,” he says. “It’s a big win for us, we’re very excited to have that, but it’s something new.”

Like The Mint, Curaleaf has two lines—one for medical patients and one for adult-use customers—and it has many standard operating procedures in place to help get patients and customers through the store quickly. The wait time at its locations has typically been 20 to 30 minutes, Cottrell says.

“Our teams are very efficient,” he says. “We have several stations, and our budtenders are very quick to respond, so we get people through the line quickly.”

Curaleaf encourages its customers to use online ordering while they wait in line to ensure their order is ready for them when they reach the register. All customers still get one-on-one time with Curaleaf’s budtenders to ask questions and get product recommendations, Cottrell says, even if they have already placed an online order.

“One of the things we’ve encouraged is you place the online order right now,” he says. “You may not know what you want, but you know you want an edible, a concentrate, a vape or a topical—just lock one of those in. Then, they can come in and they can experience the full thing. We know they wanted a flower, or we know they wanted a vape cartridge—great. Here are all of our vape cartridges laid out for you, or here are all of our strains laid out for you. It gives you an opportunity to shop, but it also gives our budtenders a little bit of a heads up of what they’re coming in for on the front end, so they know how to sell better.”

Curaleaf offers discounts to its medical patients, and sent out a text message alert before launching adult-use sales, which encouraged many patients to stock up on products ahead of time to avoid the crowds.

The Mint also offers medical-only specials, including buy one, get one free deals, discounts on certain products and a daily pre-roll promotion where medical patients can stop by for a free pre-roll from 4:20 p.m. to 7:10 p.m. each day.

“We do that a lot because we know there are a lot of patients who would come in and not have the money to buy their medicine for the day, so we just started our program of one free pre-roll per day,” Molina says. “That’s still there for the medical patient, where the rec customer isn’t getting all these extra perks that we’re going to keep around for the medical patient.”

The Mint set aside product for its medical patients to ensure it would have enough supply for that side of the market, but, so far, Molina says product shortages have not been an issue.

“There isn’t quite a shortage of supply just yet,” he says. “Maybe as more [dispensaries] … come online and start selling rec, that might change, but as far as us up here at The Mint, we were planning for it.”

Molina estimates that only about 25 to 30 of Arizona’s roughly 130 medical dispensaries opened for adult-use sales upon receiving final approval Jan. 22.

The Mint, which is vertically integrated with a cultivation operation, also buys cannabis wholesale from other vendors, and Molina says the company stocked up in advance to have what he thought would be enough product for the first two to three months of adult-use sales.

“It looks like it’s going to be closer to a month or a month and a half with the current coverage, but, so far, nobody has told us that it won’t be available,” he says.

Curaleaf has not experienced any supply shortages yet either, due in part to its vertically integrated business model and its partnership with other vendors in the state, which allows the company to purchase products wholesale from other cultivators and manufacturers.

Cottrell says Curaleaf has been preparing for the expanded market since September, even before voters approved Arizona’s adult-use cannabis legalization measure in the November election, to ensure the company has enough supply to meet adult-use demand.

“We saw the writing on the wall,” he says. “We saw the path that we were going with the [Prop.] 207 campaign. We were having a lot of success.”

Curaleaf doubled the size of its Arizona-based cultivation operations over the course of the past year, and renovated four of its dispensary locations to add more registers. The company also implemented a new point-of-sale system just five days before launching adult-use sales.

“Curaleaf is incredibly well-structured, and … being able to do things like this is just second nature for us, so we’ve really been able to … make things happen quickly,” Cottrell says, adding that the company made a similar transition from medical to adult-use sales in Illinois just last year.

Adults 21 and older are allowed to purchase up to an ounce of cannabis per day under Arizona’s current adult-use regulations, but Cottrell says Curaleaf’s customers typically have not been maxing out their daily allotment, instead buying an average of four or five eighths at a time.

Flower is Curaleaf’s best-selling product in the adult-use market, Cottrell says, making up roughly 59% of the company’s sales.

According to Molina, The Mint’s medical cannabis patients typically split their purchases fairly evenly across the dispensary’s product categories, with flower, edibles and concentrates each making up about a third of the company’s sales. The Mint’s adult-use customers, however, seem mostly interested in flower and edibles, with concentrates sales lagging behind the other two categories in the non-medical market.

So far, The Mint has roughly tripled its sales since launching adult-use, and Molina says the company began preparing for the increased sales volume nearly two years ago, when it expanded its flagship location in Tempe from 3,000 to 12,000 square feet, and from 10 to 21 total registers.

The Mint completed a large hiring initiative a little over a month ago, and spent roughly three weeks onboarding and training new retail staff members to interact with patients and adult-use consumers.

“For probably the last few weeks, we’ve had kids tripping on top of each other because we had so many people here and it didn’t really make sense,” Molina says. “Now that we went rec, it makes all the sense in the world. Everybody’s on a register and we’ve done well.”

So far, Molina says The Mint’s biggest setback has been not stocking up on enough water for its employees.

“I bought a pallet of water, and apparently that wasn’t enough to keep everybody hydrated,” he says. “But the problems we have had have been minimal, and not really operational or to the point that they’re affecting the patient or the customer.”

The Mint plans to open a third store by the middle of February, and its focus continues to be the medical patients who helped the company find its early success in the Arizona market.

“The biggest thing is we don’t want to forget who brought us to the party and who we’ve been servicing for the past 10 years that have allowed us to keep our doors open,” Molina says. “That’s the biggest thing—we want to make sure we keep taking care of medical.”

Curaleaf also plans to expand in Arizona, with two more stores expected to open this year.

“We’re very excited about this opportunity to serve the customers in Arizona,” Cottrell says. “As is with all states when adult-use happens, it’s an amazing opportunity for us. We’re doing all we can to make the cannabis industry look first-class, and we’re keeping everybody medicated and giving them the best service possible.”