CBD OIL

Tennessee Bill Would Decriminalize the Possession of Less Than One Ounce of Cannabis

January 28, 2021 by CBD OIL

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 21^st-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 117^th Congress (which was seated on the first Tuesday of our new year, in accordance with section 1 of the 20^th 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 91^st 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.

OPINION: November’s Election Turned Red and Blue States into Green

January 28, 2021 by CBD OIL

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 21^st-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 117^th Congress (which was seated on the first Tuesday of our new year, in accordance with section 1 of the 20^th 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 91^st 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.

TGOD Launches Stillwater Brands' RIPPLE Gummies in Canada

January 28, 2021 by CBD OIL

<![CDATA[

TORONTO, Jan. 28, 2021 /CNW/ – PRESS RELEASE – The Green Organic Dutchman Holdings Ltd. (TGOD), a producer of premium certified organically grown cannabis, has announced the launch of RIPPLE Gummies by TGOD, Canada’s first cannabis-infused confectionary product to offer a scientifically validated 15-minute onset. They will initially be available in Alberta, British Columbia, and Manitoba, with plans to expand distribution across the country once provincial listings are received.

RIPPLE Gummies are made using certified organically grown cannabis, real fruit juice and all-natural flavors and colors. Each pack contains two precisely dosed 5mg THC gummies for a total of 10mg, the maximum allowed under Canada’s Cannabis Act.

RIPPLE Gummies leverage the same fast-acting proprietary technology used in quick-dissolving RIPPLE powder, which rapidly became one of the top-selling SKUs within the cannabis beverage category due to its scientifically validated 15-minute onset, a first in Canada.

"Canadian cannabis consumers love our quick-dissolving RIPPLE powder for its proven dose-controlled delivery mechanism; it offers a faster-acting, more standardized, and discreet alternative to most products currently on the market. With RIPPLE Gummies, we are bringing to market another proven product which has been a top seller where sold in the United States," commented Sean Bovingdon, TGOD’s chief financial officer and interim chief executive officer. "RIPPLE Gummies offer another convenient option for Canadians to consume their desired dose of cannabinoids with a unique, predictable onset of action."

As part of its licensing agreement with Stillwater, TGOD plans to further expand its RIPPLE offering with additional flavors, Honey Infusion CBD and Mango Balance, scheduled to launch in the second quarter of 2021.

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North Dakota Lawmakers Consider Legislation to Update Medical Cannabis Program

January 28, 2021 by CBD OIL

In Nassim Nicholas Taleb’s fantastic book titled Antifragile: Things That Gain from Disorder, he explains the concept of gains made through volatility (negative events). For example, he describes airplane crashes as making the airline industry stronger. Each crash is studied (via its fragility) and lessons are learned and incorporated into the industry as a whole. These lessons have led to dramatic drops in airplane crashes (antifragile) over the past 50 years.

Taleb also addresses the economy head-on by showing that our political leaders consistently make decisions to smooth out every bump in the economic road, creating complacency with risk taking that allows fragility to build up in the system (think the 2008-2009 financial crash). Complacency and 100% stability can be a killer.

How can we apply this antifragile concept to cannabis given that the cannabis industry is hyper-volatile? The intention is to create a situation where the very nature of the fragility within the cannabis industry can benefit your firm when big, negative events occur. Looking to other industries can give us valuable insights into how companies can benefit from negative events.

Here are some negative events that can affect your cannabis business:

The price of cannabis flower crashes due to overproduction.

The regulatory scheme in a particular state becomes more rigorous and/or expensive.

A product category crisis. (The vape crisis is a good example.)

An economic crisis that results in the drying up of investment capital.

A key counter-party or relationship goes kaput. For example, the wholesaler you’ve been relying on is suddenly out of business as a result of financial mismanagement, poor execution or, as recently happened to some farms in Oregon, a fire burning your business to the ground.

These examples are enough to illustrate the potential for negative events and to use in setting up a framework to thrive from the resulting chaos. Some of this may seem counterintuitive, but stick with it and know that this article is meant to jumpstart your thinking as it relates to upping your game in cannabis business risk management.

As French philosophers like to say, knowledge is historically contingent and based on power relations at any specific time. If this is so, then your knowledge of how to be successful in cannabis is also historically contingent and may just be historically out-of-date or just plain historically irrelevant. And needless to say there is always a firm more powerful than yours trying to set the agenda.

Let’s start with the idea of two cannabis companies: Both are two years old, both are growers, but one is 10 times larger than the other. To keep things simple, let’s just say that both have an equal capacity to grow and sell at the same rate in relation to the market. Meaning, if at any time the market is growing at 10%, then each of these firms can grow at 10%. Suddenly, a downward movement in cannabis prices cuts the wholesale price level by 50%. Which grower is at higher risk of going out of business quickly? We would argue it is the larger firm.

As you gird yourself for the inevitable negative events, you should be focusing on which additions to your company can be made that will make the negative event a non-event and help you consolidate market share/power.

As an analogy, think of two owners of different apartment buildings. Owner A has an eight-unit building, and owner B has a 100-unit building. If for some reason the market vacancy for apartments jumps to 25%, owner A will have two vacancies. Owner B will have 25 vacancies. Owner A can probably reduce the rent a bit and easily fill two units. For owner B, reducing the asking rent across the 25 vacant units will have a materially negative impact on the property’s value—probably so much so that the outstanding loan on the property will be more than the building’s value. Also, renting two units versus renting 25 units is a much quicker process. Now substitute building units with crop yields, and the idea comes into focus.

The smaller cannabis grower will more likely be able to ratchet down volume a bit and wait out the storm. A large firm, with higher fixed costs, is probably toast in a matter of a few months because of its lack of agility. When cannabis companies built their grow operations, it really was analogous to a genetic mutation. The bigger firm is a bigger mutation than the smaller firm. A bedrock of biological evolution is that big mutations almost always reduce survival rates.

To build antifragility into the respective growers’ situations, the smaller firm would be wise to add a small dispensary business to its portfolio, even if this means having a smaller grow than desired. In a worst-case scenario, the smaller firm will only need to sell a few pounds of flower a week through its own dispensary, even at a reduced cost, in order to survive an industry-wide glut. For the larger firm to have a similar backstop, it would need to own 10 times the dispensary capacity compared to the smaller firm. This is arguably much harder for the larger grower to execute on and much more costly.

The takeaway is that in order to build antifragility into your company, you need to include antifragility in your plan when developing your business in a vertical manner; the ratio of the parts to each other should be consistently grown in tandem. A grow should have a certain level of dispensary capacity. As the grow gets bigger, the dispensary capacity should grow in tandem. Let’s call this the vertical integration ratio model, VIRM. Not to do this causes enterprises to be too weighted toward one vertical and face extinction risk in response to a negative event.

Now, let’s say the regulatory scheme becomes much more restrictive.

This was the case in June 2018 when the state of Oregon put a de facto cap on licenses by stopping the acceptance of new license applications in June of that year. Oregon had been an unlicensed cap state; if you qualified, you got a license. Then it became a capped state with a huge pipeline of applications. What to do?

Well, if you are nimble in your thinking, you see this as a huge opportunity. Even though the licenses have been capped, plenty of firms were looking forward to becoming vertically integrated. Such firms are now left with only two choices: merge or buy a firm in another vertical. Sticking to VIRM, you need to look around for an appropriate partner to buy or merge with that pushes your plan of vertical integration one step further. The target company, being in the same boat as you, will see the wisdom of such a merger. Before there was the United States, there were 13 colonies. Same concept.

The vaping crisis caught everybody in the industry flatfooted. Anecdotally, however, if you were a grower whose business was almost entirely or entirely focused on flower production, you tended to perform well in late 2019, early 2020, because consumers and patients on a broad level temporarily shifted to flower. If you were an extraction company, you could attempt to sell your oil and distillate to other derivative product makers—gummies, brownies, chocolate, all of which are substitute products. In High Desert Flower’s case, the team bought a distillation machine from a California extraction company that was hit so hard they changed their business model.

The overall point is that as you gird yourself for the inevitable negative events, you should be focusing on which additions to your company can be made that will make the negative event a non-event and help you consolidate market share/power.

The Bigger ‘Black Swan’

An economic crisis, whether specific to your industry or macro in nature, is a much harder “black swan” (another Taleb meme) event to deal with. The old saying that “If your neighbor is out of a job it is a recession, and if you are out of a job it is a depression” is apropos to cannabis.

The goal is never to have your cannabis business in a depression. Obviously, the first goal in an economic crisis is survival, but assuming you have designed your firm for such an event, then your radar should be on the lookout for depression-level asset opportunities in your vertical or a vertical you recently moved into or are planning to annex (see VIRM above). Equipment, machinery, real estate, and other tangible goods always come on the market when the kief hits the fan. Be on the lookout for people and licenses in the unwind process.

This is very analogous to how the mortgage banking industry operates. Mortgage banks are those private firms that constantly advertise for your mortgage business (think Quicken Loans). When the industry hits a slump, existing firms absorb other firms and increase their economies of scale. Adding capacity with the concurrent decrease in back office expense throws dollars to the bottom line.

The most interesting cataclysmic event in the aforementioned list is when a key counterparty goes kaput. We have faced this multiple times but have not been able to take advantage of it, as of yet, for our firm’s growth. The most successful version we’ve seen of this is when a friend of ours, who owns a fairly large mortgage company, was tied into a technology platform when the software company’s CEO called him and said he had a week to find another vendor because the software company was going out of business and the software was going to shut down. My friend offered him $25,000 for the software source code as long as the lead engineer also became an employee of his mortgage firm. The CEO took the deal. Masterstroke of brilliance.

We believe there are instances where this strategy can work in cannabis. If you do pull off this strategy we’d love to hear from you.

The big overall lesson here is not to be stuck in a linear thought process that blinds you to unorthodox growth opportunities in the midst of calamity. Look at streaming services (Netflix, Amazon), food delivery services (Uber, DoorDash), and video conferencing (Zoom) for inspiration. Granted, some were lucky, but others were heading in the right direction and the COVID-19 crisis compressed time for them.

Loren Picard is CEO of Oregon-based High Desert Flower Inc. Alex Lee is vice president of High Desert Flower Inc. and co-founder of Oregon-based Engineered Extracts, LLC. You can reach Loren at loren@highdesertflower.com or Alex at alex.lee@engineeredextracts.com.

Updates in Employment Law: CA, WA & CO

January 28, 2021 by CBD OIL

A number of laws have gone into effect in 2021 which may have a major impact on cannabis industry employers; clearly understanding the changing legal landscape is essential to avoid and limit potential liability in the new year and beyond. Below is a brief summary of some relevant new employment laws in cannabis friendly states:

California:

Expansion of family and medical leave: California has long required employers to provide job protected medical and family leave if an employee worked at a jobsite with 50 or more employees within a 75-mile radius.

Senate Bill 1383 now requires all employers with five or more employees to provide up to twelve weeks of unpaid, job-protected leave for employees to bond with a new child or to care for themselves or a family member suffering from a serious health condition. To be eligible for the leave, an employee must have at least 12 months of service with the employer and have performed at least 1,250 hours of work in the previous 12-month period. While on leave, employees are entitled to continue to participate in an employer’s health insurance plan and to return to their job or a comparable position at the conclusion of their job-protected leave. Previously exempt small employers should be aware of these obligations moving forward.

Employer Pay Reporting Requirements: Under Senate Bill 973, employers with 100 or more employees that are required to file an annual Employer Information Report, colloquially known as the EEO-1 report, must submit annual information on its employees’ pay data to the state’s Department of Fair Employment and Housing (DFEH). The report must include the number of the employer’s employees by race, ethnicity and sex in specific job categories and pay ranges and their associated work hours and earnings.

The first report is due on March 31, 2021, and the DFEH has prepared an online portal to assist employers in submitting this information. These reports can be complex and address highly sensitive information, so employers are strongly advised to contact counsel for assistance in preparing and submitting their first report.

Washington

Increased pay requirements: Washington’s inflation-based minimum wage system has increased the minimum wage to $13.69 per hour in 2021. Employers with 50 or fewer employees must also pay salaried employees at least $827 per week (or $43,004 per year) and employers with more than 50 employees must pay at least $965 per week (or $50,180 per year) starting January 1st.

Colorado

Equal Pay for Equal Work Act: Beginning in 2021, all employers with at least one employee must: (1) provide formal notice to Colorado employees of promotional opportunities; and (2) disclose pay rates or ranges in job postings that could be performed in Colorado (this includes virtual or remote work positions).

The Equal Pay for Equal Work Act generally requires employers to take reasonable efforts to promptly announce, post, or otherwise communicate all opportunities to all current employees prior to making a promotion decision. An employer must communicate promotional opportunities when it has or anticipates a vacancy or a new position that could be considered a promotion for current employees in light of pay, benefits, status, duties or further potential promotions.

Under the law, job postings must also include: (1) the rate of pay or pay range for the position; (2) a general description of bonuses, commissions or other forms of compensation offered with the job; and (3) a description of the employment benefits associated with the position.

Cannabis industry employers face a range of new laws, even absent the continued legal burden of managing employees during the COVID 19 pandemic. Employers should consider carefully reviewing all applicable laws and seeking guidance from counsel when needed.

CBD OIL

Cannabis Political Momentum

Calls for Unity Answered?

Cannabis Political Momentum

Calls for Unity Answered?

As you gird yourself for the inevitable negative events, you should be focusing on which additions to your company can be made that will make the negative event a non-event and help you consolidate market share/power.

California:

Washington

Colorado

As you gird yourself for the inevitable negative events, you should be focusing on which additions to your company can be made that will make the negative event a non-event and help you consolidate market share/power.

As you gird yourself for the inevitable negative events, you should be focusing on which additions to your company can be made that will make the negative event a non-event and help you consolidate market share/power.

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