Tag: distribution

Iowa AG Tells Agency to Halt Portion of Medical Marijuana Law

DES MOINES, Iowa (AP) — An unusual attempt by Iowa to work with another state to transport medical marijuana oil across state lines is on hold amid legal concerns it could invite scrutiny from the federal government.

The Iowa Attorney General’s office advised the Iowa Department of Public Health this month that it should not implement a small section in Iowa’s new medical marijuana law that requires the state, before the end of the year, to license up to two “out-of-state” dispensaries from a bordering state. Those entities would have been expected to bring cannabis oil into Iowa in order to sell it.

That’s considered illegal under federal law, which categorizes marijuana as a type of controlled substance that is prohibited from being moved across state lines. But during the final hours of the legislative session in April, some Republicans in the GOP-controlled Legislature suggested adding the language to open the door for a partnership with a neighboring state like Minnesota.

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The development is not expected to impact other provisions in the law that call for establishing an in-state production system for cannabis oil by the end of 2018. Still, some GOP lawmakers expressed frustration with the news because the provision was also aimed at creating more immediate access to cannabis oil. Currently, Iowans have no way of getting the product within the state.

“If that provision doesn’t work out, then people will have to wait another year, and that’s disappointing.”

House Speaker Linda Upmeyer

House Speaker Linda Upmeyer, R-Clear Lake, noted in a statement that no matter what the Legislature had decided, the state still would have been in violation of federal law.

“As I’ve said before, the federal government needs to act on this issue or let the states do their work,” she said, adding, “The out-of-state distributors are the quickest way to supply sick Iowans with a product that doctors say could be beneficial. If that provision doesn’t work out, then people will have to wait another year, and that’s disappointing.”

At least 29 states, the District of Columbia, Guam and Puerto Rico now allow for comprehensive public medical marijuana and cannabis programs, according to the National Conference of State Legislatures.

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Possessing, manufacturing and selling marijuana remains illegal under federal law. In 2013, the Department of Justice issued a memorandum offering assurance that states could proceed with medical marijuana programs without fear of federal prosecution, in part by avoiding agreements that would move marijuana from one state to another.

“This is just another example of lawmakers overcomplicating something for the sake of overcomplicating it.”

Justin Strekal, NORML political director

Geoff Greenwood, a spokesman for the attorney general’s office, said in an email that if a state program authorizes or encourages diversion from one state to another, “it is possible that state’s program may come under increased scrutiny from the federal government.” He said the halt on implementation should remain “until the federal government provides further guidance regarding state medical marijuana programs.”

Justin Strekal, political director for the pro-marijuana group National Organization for the Reform of Marijuana Laws, known as NORML, said few states have attempted what Iowa tried to do, though data is limited.

“This is just another example of lawmakers overcomplicating something for the sake of overcomplicating it, rather than implementing a system that actually serves their constituents,” he said.

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It’s unclear how President Donald Trump’s administration will deal with medical marijuana. Attorney General Jeff Sessions has warned marijuana is a dangerous drug and said he’d reconsider existing marijuana policies.

Sally Gaer, of West Des Moines, has lobbied for years for Iowa to allow more access to medical marijuana. Gaer, whose adult daughter uses cannabis oil, said lawmakers could have put Iowa’s medical marijuana program in jeopardy by adding the language.

“I’m so frustrated with this,” she said.

The out-of-state dispensaries provision is tucked into the second-to-last page of a 20-page law, and is separate from requirements that Iowa license up to two cannabis oil manufacturers in Iowa and up to five dispensaries to sell it in-state. The oil would be supplied in Iowa by the end of 2018. Smoking marijuana remains prohibited.

If state attorneys had decided out-of-state dispensaries must be licensed, it could have worsened an already tight timeline for launching the overall program. A new medical marijuana board met last week to help with requirements that Iowa license its manufacturers by December. The dispensaries must be licensed by April.

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Rep. Jarad Klein, who was floor manager for the medical marijuana legislation that became law, was surprised to learn the provision on the out-of-state dispensaries wasn’t moving forward. He said he would seek guidance from Gov. Kim Reynolds, who was lieutenant governor when the law was passed.

Klein, a Keota Republican, emphasized Upmeyer’s point that the setup was aimed at ensuring that while the in-state production system gets up and running, people could access cannabis oil.

“Between now and us having that, sick people need their medicine,” he said.

A Reynolds spokesman referred all questions to the public health department.

Nevada Rejects Alcohol Distributors’ Cannabis Appeal

CARSON CITY, Nev. (AP) — Nevada’s marijuana regulators have rejected an appeal by a group of alcohol distributors who wanted to block the state from licensing cannabis businesses to transport marijuana from growers to retail stores.

The state Tax Commission voted unanimously Tuesday to uphold the Tax Department’s earlier decision to expand the licensing to those other than liquor distributors because they have been unable to keep up with demand.

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The distribution turf battle has been tied up in district court and administrative appeals since legal recreational sales began July 1.

Kevin Benson a lawyer for the Independent Alcohol Distributors of Nevada says they haven’t decided whether to file another lawsuit challenging the state’s position.

Tax Department spokeswoman Stephanie Klapstein says it’s not clear how soon the new distribution licenses could be issued.

Ohio Picks 2 Vendors to Ramp up Medical Marijuana System

COLUMBUS, Ohio (AP) — A pair of vendors has been selected to develop Ohio’s seed-to-sale, medical marijuana tracking system and its online licensing system.

The Ohio Department of Commerce said Tuesday that it competitively selected Metrc, a Franwell company, to develop and build the program’s digital tracking infrastructure. Metrc received a $1.2 million contract to build an integrated system for tracking medical marijuana through cultivation, processing, testing and sale.

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Persistent Systems Inc. won a $574,000 contract to design and build the e-licensing system for tracking the Ohio licenses required of marijuana growers, processors, testing labs and their employees.

Ohio’s law allows people with 21 medical conditions, including cancer, Alzheimer’s disease and epilepsy, to buy and use marijuana after getting a doctor’s recommendation.

The law launching in September 2018 doesn’t allow smoking.

Nevada Judge Clears Way for More Cannabis Licenses

CARSON CITY, Nev. (AP) — A Nevada judge has cleared the way for the state’s marijuana regulators to start issuing cannabis distribution licenses to businesses other than existing alcohol wholesalers.

Carson City District Judge James Russell lifted a temporary restraining order Thursday that had forced the state to adhere to a provision of the ballot measure voters approved in November providing liquor wholesalers exclusive rights to marijuana distribution for 18 months unless they couldn’t keep up with market demand.

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Russell said after an hour-long hearing there’s overwhelming evidence that alcohol wholesalers don’t have the capability to meet the needs of dozens of recreational cannabis dispensaries from Las Vegas to Reno.

He says a group of alcohol distributors that filed suit over the matter is free to appeal their case to the Nevada Tax Commission, as required by law. But he says he has no power to supersede the authority of the state agency that recently determined there’s an insufficient number of alcohol businesses to handle the job.

Nevada’s Taxation Department says the protracted legal fight has created a delivery bottleneck that’s undermining an otherwise robust marijuana industry and the state revenue that comes with it.

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Legal sales started with a bang July 1. But Tax Director Deonne Contine says the tiny distribution network’s inability to keep pace with demand is forcing up prices and sending buyers back to the black market.

She says it’s also jeopardizing worker safety at dispensaries forced to stockpile supplies and huge amounts of cash to accommodate erratic deliveries.

Arkansas Has Received Zero Applications to Grow or Dispense Medical Cannabis

LITTLE ROCK, Ark. (AP) — Demand for permission to use, grow and sell medical marijuana in Arkansas is low as the state reaches the halfway point for the application period.

Arkansas Department of Finance and Administration spokesman Scott Hardin told The Associated Press Friday morning that the agency had received no applications to grow and distribute medical marijuana.

“We are not concerned, as we understand the applications require detailed and specific information that will take time to complete,” Hardin said earlier in the week. “Applicants are likely performing their due diligence to provide quality applications.”

Hardin said officials anticipate applications will start arriving closer to the Sept. 18 deadline.

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There are regulations that limit where greenhouses and distributors can operate. While setting up rules for licensing, legislators said growers must be at least 3,000 feet (900 meters) from churches, schools or daycares, while dispensaries must be 1,500 feet (450 meters) away. Those restrictions will make it difficult for some towns and small cities to have marijuana operations.

Cultivation facility and dispensary license applications will be scored and officials will award the permits based on merit. The department plans to award five cultivation licenses and 32 dispensary licenses.

Despite the lack of submissions for licenses, there has been interest in using medical marijuana though that number is low.

There have been 404 applications completed and approved from people seeking to use medical marijuana as of Tuesday, according to Department of Health spokeswoman Katie White.

Director of Health Communications Marisha DiCarlo told the AP that the agency had projected around 30,000 people would apply for medical marijuana cards.

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“This number was based on population, types of qualifying conditions, and trends in other states,” DiCarlo said. “At this time, it is too early in the process to know if that number will be reached, since usable, legally obtained Arkansas marijuana is not yet available in the state.”

DiCarlo also said there are several documents applicants have to gather to complete their applications.

People who want to obtain an ID card must have a physician fill out a form certifying that they have a qualifying condition for medical marijuana use. There are 18 qualifying conditions, including intractable pain, cancer, severe nausea, seizures and post-traumatic stress disorder.

The ID cards, which cost $50 and must be renewed yearly, will be issued about 30 days before medical marijuana is available for legal purchase in the state.

Heavy Interest in North Dakota Medical Marijuana Network

BISMARCK, N.D. (AP) — Nearly 100 groups and businesses in North Dakota have shown interest in producing or dispensing medical marijuana, pleasing state officials who are establishing a network for making the drug available to qualified patients.

“I’m pretty sure we’re going to have the ability to have a dispensary in each part of the state.”

Kenan Bullinger, director, Health Department’s MMJ divison

The Health Department in June asked those interested in being a part of the system to notify the agency by the end of the month so it could gauge interest. The request drew 97 nonbinding letters of intent, exceeding expectations, according to Kenan Bullinger, director of the department’s medical marijuana division.

“I’m pretty sure we’re going to have the ability to have a dispensary in each part of the state,” he said.

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North Dakota voters last November approved medical cannabis, and the Legislature earlier this year crafted regulations that Gov. Doug Burgum approved in April. The North Dakota Compassionate Care Act allows the use of medical marijuana to treat 17 medical conditions, along with terminal illnesses. The Health Department will register two “compassion centers” to grow and process the drug and eight more to dispense it.

The Health Department is finishing the process of drafting administrative rules that will cover such things as lab testing, security requirements and transportation regulations. Once that’s complete, the agency will accept formal applications from potential processors and distributers — likely starting later this month and running through mid-October. Unlike the letter-of-intent process, those who apply will have to pay a non-refundable $5,000 application fee.

A committee will be set up to review proposals. It likely will include people with medical, legal, regulatory and laboratory testing expertise.

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“It will be a good cross section of backgrounds, both government and non-government people,” Bullinger said.

The Health Department is crafting a scoring and ranking system for applications, fine-tuning information gleaned from other states’ experiences.

“The beauty in all of this, we’ve had a number of other states that have done this in the past,” Bullinger said. “We’ve looked at a number of states’ scoring systems, and how they ranked (applications).”

The Health Department hopes to make final selections by the end of November. That likely would mean medical cannabis would be available by late spring or early summer of 2018.

Some Nevada Cannabis Retailers ‘Running on Fumes’

RENO, Nev. (AP) — Most of Nevada’s recreational marijuana retailers are optimistic an emergency regulation that state officials are expected to approve will help keep them from running out of cannabis products, but some are “running on fumes,” an industry official said Tuesday.

The State Tax Commission is scheduled to vote Thursday on an emergency measure Gov. Brian Sandoval endorsed late last week in an effort to allow the state to issue cannabis distribution licenses currently banned by a court order.

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Nevada Tax Department spokeswoman Stephanie Klapstein said some of the 47 licensed retailers have reported twice as much business as they anticipated since recreational sales began July 1, and many fear their shelves soon will be empty.

Nevada Dispensary Association President Andrew Jolley said Tuesday most stores are “still doing OK in terms of supply.”

“But there are some that are obviously concerned given that we are 10 days into retail sales without being resupplied,” Jolley said. “I have heard of some dispensaries running on fumes, if you will.”

A legal battle over distribution of cannabis for recreational use threatens to jeopardize the flow of supplies from growers and manufacturers to retailers in the coming weeks.

The ballot measure voters approved in November legalizing the sales dictates that licensed alcohol wholesalers have the exclusive rights to cannabis distribution licenses for 18 months. But no alcohol wholesalers have completed the licensing process.

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Before recreational sales began July 1, most dispensaries selling medical marijuana were authorized to serve as their own middleman and the bulk of them started stockpiling supplies months ago in an anticipation of high demand.

“Everybody that I know tried to augment their inventory as much as possible in the days and weeks leading up to July 1, but I’m not sure to what extent they were able to do that,” Jolley said Tuesday.

About a week before sales began, Sandoval’s chief of staff Michael Willden said state officials had been informed the dispensaries may have up to a 60-day supply of cannabis products.

“We are now informed that many have only days or weeks of product to be sold,” he said last week when the governor announced his endorsement of the emergency regulations to facilitate the issuing of distribution licenses to existing retailers.

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The head of a company that owns hemp and cannabis operations in southern Nevada said the regulatory move can’t come soon enough.

“I don’t think anyone anticipated this strong of an initial demand, and by all accounts it’s a very real possibility that the state could literally be out of sellable products in August,” Friday Night Inc. CEO Brayden Sutton said Tuesday.

“Current production in Clark County was set up for a snoozey medical market, not the 10-time increase in sales that retailers experience once they can sell to anyone 21 and up,” he said.

On Monday, the Sparks City Council became the latest local jurisdiction to approve an ordinance allowing for recreational cannabis sales. Currently, there are four licensed retailers in Reno, one in Pahrump, one in Mesquite, one in Laughlin, four in North Las Vegas and 36 in Las Vegas.

Nevada Officials to Consider Emergency Rule on Cannabis Distribution

LAS VEGAS (AP) — Nevada Gov. Brian Sandoval last week authorized state regulators to consider an emergency regulation that would allow officials to determine whether the state has enough marijuana distributors to keep its retail shops supplied.

Sandoval’s approval came this past Thursday, after dispensaries across the state reported higher than expected demand for marijuana since recreational sales of the drug became legal in Nevada on Saturday. The Nevada Tax Commission is expected to take up the regulations Thursday of this week.

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The measure voters approved in November legalizing the sales dictates that licensed alcohol wholesalers have the exclusive rights to cannabis distribution licenses for 18 months. But no alcohol wholesalers have completed the licensing process.

“We are now informed that many have only days or weeks of product to be sold.”

Michael Willden, Gov. Sandoval’s chief of staff

A judge’s order in an ongoing court fight between the state and the alcohol distributors does not allow cannabis dispensaries to transport marijuana from a cultivation facility to the store. Before recreational sales began last weekend, most dispensaries selling medical marijuana were authorized to serve as their own middleman.

About a week before sales began, Sandoval’s office had indicated he wouldn’t go for an emergency regulation for distribution. He reversed his stance after sales exceeded expectations.

“We previously were informed the dispensaries may have up to 60 day supplies of product,” Michael Willden, Sandoval’s chief of staff, said in an email. “We are now informed that many have only days or weeks of product to be sold.”

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Those 21 and older with a valid ID can now buy up to an ounce of cannabis. The Nevada Department of Taxation has licensed 47 dispensaries to sell recreational marijuana.

The department on Thursday said the shops have recorded well over 40,000 retail transactions, and some of them sold more than double of what they had expected.

Carson City District Judge James Wilson last month ruled the regulation the commission adopted in May that could have opened distribution up to others was invalid.

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Wilson said the Tax Commission engaged in “ad-hoc rulemaking” outside the legal process when it made a preliminary determination earlier this year that the liquor industry didn’t have enough interest in entering the cannaibs business to ensure enough distributors would seek applications to meet the anticipated high demand.

“The department has not determined whether exclusively licensing liquor wholesalers as temporary marijuana distributors will result in an insufficient number of licenses,” Wilson wrote.

Nevada Cannabis Ruling May Delay July 1 Start Date

Recreational cannabis sales in Nevada may have to wait, after all.

“Now we need to sit down and hammer out a deal.”

Sen. Tick Segerblom

On Tuesday, First Judicial District Judge James Wilson in the Silver State’s capital Carson City granted a preliminary injunction requested by liquor distributors, all but assuring that Nevada’s new adult-use cannabis program won’t be ready to begin “early start” sales on July 1. 

“The plaintiff’s members will very likely be shut out of the marijuana distribution business entirely if the Department issues distribution license to non-alcohol distributors,” Wilson wrote in the 11-page ruling, which followed an eight-hour hearing on Monday during which representatives from the Independent Alcohol Distributors of Nevada (IADON) and the state tax department gave testimony.

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The Ballot Question Was Clear

The injunction prolongs a restraining order preventing the Nevada Department of Taxation from issuing distribution licenses to anyone but alcohol distributors, including current marijuana distributors in Nevada’s medical industry. Ballot Question 2, passed in November, legalized recreational marijuana. The measure provided exclusive adult-use cannabis distribution rights to state alcohol distributors unless the tax department determined that “an insufficient number of marijuana distributors would result from this limitation.”

The Department of Taxation said in March that the limitation did in fact result in an insufficient number of distributors for the new industry. But in its final regulations in May, the wording was revised to say that determination would be made after all applications were processed on May 31.

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Only five of 93 applications for adult-use distribution licenses through the state’s deadline came from alcohol distributors, said Nevada Department of Taxation spokeswoman Stephanie Klapstein.

Alcohol Distributors Were Ignored

Judge Wilson cited testimony from Nevada liquor distributors Kurt Brown and Allan Nassau, both of whom applied in December of last year. Brown and Nassau claimed they were ignored by the tax department when they inquired about the status of their applications.

IADON attorneys Kevin Benson and Michael Hagemeyer did not immediately respond to requests for comment.

Representatives of Nevada’s marijuana industry expressed frustration with the ruling, saying it’d be “a disaster” if the program didn’t begin as scheduled on July 1.

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“Now we need to sit down and hammer out a deal,” said Nevada State Sen. Tick Segerblom, who sponsored and helped passed several laws during the state’s recent legislative session to help kick start the new industry. “We still have several options.”

“We just have to roll with the punches,” said Nevada Dispensary Association Andrew Jolley. “Distributors are an integral part of the recreational program.”

If sales start as planned on July 1, Nevada would be the first of four states to legalize recreational cannabis use in last year’s election to begin sales of the plant.

Massachusetts Tobacco Wholesalers Want a Piece of the Cannabis Pie

The tobacco industry in Massachusetts is trying to get a piece of what’s expected to be a lucrative state  cannabis market, with cigarette wholesalers now lobbying state officials to get in on the action.

The tobacco wholesalers want to transfer to the cannabis industry a system they already use to track, deliver, and tax all cigarettes sold in Massachusetts. They’re reportedly asking state officials to require that cannabis producers to sell all their products through them—much like how alcohol goes through a wholesaler on its way to bars and retail stores.

“Rather than reinvent the wheel, let’s use the most successful, proven encrypted tax stamp program we have: the one assigned to cigarettes,” Paul Caron, a former state legislator who now serves as executive director of tobacco trade group the Northeast Association of Wholesale Distributors, told the Boston Globe.

“My members are willing to collect all the taxes on behalf of the state and stamp any marijuana product being distributed for sale,” he said.

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This idea has drawn criticism, however, including from some cannabis legalization advocates. Jim Borghesani, the communications director for the Yes on 4 coalition that led the adult-use cannabis ballot effort, worries the structure could end up raising the retail price of cannabis.“The last thing this state needs is another three-tiered commerce system that gouges consumers and enriches middlemen,” Borghesani said.

Borghesani added that marijuana-specific distribution systems in other states work effectively enough that Massachusetts lacks a good reason to grant a monopoly to a group of tobacco wholesalers.

Other opponents have accused tobacco wholesalers of trying to replicate the alcohol industry’s fairly controversial distribution scheme, which locks retailers into long-term business relationships with wholesalers.

The group of tobacco wholesalers, the Globe reports, made its pitch to both Massachusetts legislators and state Treasurer Deborah Goldberg, who will oversee the new Cannabis Control Commission under the current set of laws.

It’s certainly not the first time companies in other so-called vice industries have taken a stance on the cannabis market. During election season last year, the company behind Sam Adams beer stated in an SEC filing that cannabis legalization in Massachusetts could cause alcohol sales to slide.

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In Nevada, no stranger vice industries, cannabis was initially required to be distributed by alcohol wholesalers when voters passed a legalization measure in November. When the Nevada Tax Commission adopted temporary rules allowing other entities to become licensed distributors, alcohol wholesalers sued. Late last month, a state judge granted their request to freeze the rollout of adult-use cannabis—a move that could delay the state’s planned July 1 launch of its adult-use cannabis market.

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