Tag: Medical

Canada’s Cannabis Tax Plan: Good for Provinces, Bad for Patients

The new deal between the federal and provincial governments on sharing cannabis tax revenue has been applauded by some stakeholders and criticized by others.

Under the terms of the two-year deal, announced earlier this week, the 13 provinces and territories will get 75% of federal excise tax revenues from the sale of legal cannabis, some of which will be distributed to municipalities. Ottawa will keep the other 25%, up to a maximum of $100 million a year. Any balance above that will go to the provinces and territories.

Recreational and medicinal cannabis will be taxed at the same level—and that has drawn heavy criticism from some politicians, physicians, and patient advocates.

In hopes of keeping prices low enough to draw customers away from the black market, the per-gram price of legal cannabis will be $10 or lower. Each gram of marijuana will have a tax of one dollar on sales as much as $10 and a 10-percent tax on sales above that.

This final deal is sweeter for the provinces than the proposed deal, unveiled in November, which called for a 50-50 split. That plan drew fierce criticism from the provinces and territories, which insisted they should be given a bigger piece of the pie because they will be footing the bill for costs related to distribution, regulation, policing, and public health.

The finance ministers and various stakeholders gave the new deal a thumbs-up.

“It is encouraging to see the federal government move quickly on reaching an arrangement with the provinces, that more equitably reflects the relative contributions provided by each government entity,” Michael Garbuz, legal counsel at the investment firm CannaRoyalty, told Leafly. “As full-adult use legalization approaches rapidly in Canada, it remains imperative for regulators and other stakeholders to continue making decisions that help achieve the core objectives of legalization including driving out the illicit market, harm reduction, public safety, and establishing a safe and responsible supply chain.”

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Nick Dean, CEO of Emblem Corp, an Ontario-based licensed producer, described the deal as “a wise move for the federal government. It’s critical that the provinces are motivated and compensated to build the greatest cannabis customer experience possible including public education, public safety, product awareness, and ultimately controlled distribution,” he told Leafly.

“The government’s proposal to apply excise tax to medical cannabis demonstrates a careless disregard for the health of Canadians.”

Jonathan Zaid, Canadians for Fair Access to Medical Marijuana

Recreational and medicinal cannabis will be taxed at the same level—and that has drawn heavy criticism from some politicians, physicians, and patient advocates.

“The government’s proposal to apply excise tax to medical cannabis demonstrates a careless disregard for the health of Canadians,” Jonathan Zaid, executive director of Canadians for Fair Access to Medical Marijuana, told Leafly. He urged the federal government to “address the concerns voiced by medical cannabis patients and the over 15,000 Canadians who have written their MP via [CFAMM’s] Don’t Tax Medicine campaign. Medical cannabis must be treated like all other prescription medications and be exempt from tax.”

A group of more than 50 physicians joined in the chorus of opposition. Just hours after the deal was announced on Monday, the group released a statement urging Ottawa to withdraw its plan to charge tax on medicinal cannabis “or risk having an adverse effect on patients.” The doctors, who prescribe cannabis for their patients, say a tax would impose a financial barrier for those who rely on cannabis for medical purposes.

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“The new taxes being proposed on medical cannabis [are] discriminatory towards patients,” said Dr. Michael Verbona. “All medications prescribed have zero tax. At a time when we are suffering from an opiate crisis the last thing we should do is introduce financial barriers to patients accessing a safer alternative.”

Alexandre Boulerice, the NDP’s finance critic, echoed those words. He said taxing medical cannabis could end up keeping it out of the hands of those who need it.

“The imposition of sales tax and excise tax on medical marijuana is unfair, it is stupid and potentially dangerous,” Boulerice said. “If the price of medical marijuana goes too high … it will potentially incite people to buy some cheaper drugs like opioids as painkillers.”

Last month, Bill Blair, the federal government’s point man on the legal cannabis program, said recreational and medicinal cannabis would be taxed at the same rate to ensure that recreational users don’t seek medicinal cannabis simply because it’s less expensive.

How a Visionary Cannabis Producer Became This Canadian Town’s Biggest Employer

From Hedge-Fund Lawyer to Cannabis Grower

This thirst for growth is what prompted Gorenstein to leave behind his life as a successful hedge fund lawyer in New York. While the 31-year-old was skilled at coordinating mergers and acquisitions for some of the biggest banks and pharmaceutical companies in the US, he yearned to be an entrepreneur.

After coming home from a 16-hour workday, Gorenstein would stay awake until the early morning, reading about the cannabis industry in Colorado and Washington. He knew it was a sector that had room to grow exponentially. “This was an opportunity we won’t be able to see again,” he says. “I won’t say once in a lifetime but in multiple lifetimes. The fact you could be a part of a rapidly growing industry, where the demand’s already there and it helps people—that’s very rare.”

Michael Gorenstein, President, CEO and Chairman of the Cronos Group (Courtesy of Nathan Cyprys)

When Gorenstein became partner at the New York-based investment management firm Alphabet, he championed the vast potential of the cannabis market. But since the industry was still developing in the US on a state-by-state basis, investors deemed it too risky. It also didn’t help that cannabis is still considered illegal federally.

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“The problem with the US is that because of regulations, you have to spend time dealing with strange problems like handling cash, security, and how to not get arrested,” Gorenstein says. “You’re not focused on how to use your resources to make a better product and helping people that need it. There was big legal risk. I was nervous I’d invest as a company and then the federal government would shut it down.”

“There’s a difference in the US where it’s state legal and federally illegal,” Hsu adds. “At any time the federal government could come in and shut everything down and that’s the risk Mike would worry about when investing other people’s money.”

There was also less room to grow, since not all states are onboard with legalized marijuana. That wasn’t the case in Canada, where medicinal cannabis is legal countrywide, with recreational legalization slated for July 2018.

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“We like the program, we like the regulatory regime in Canada, and we wanted to get our investors to come to Canada and not the US, because there’s less risk,” says Gorenstein. “You can focus on what matters, which is basically building a company and achieving your goal. So whether that’s helping people on the medical side or bringing people together on recreational side, it’s something you can focus on without worrying ‘Will I be able to do this tomorrow?’”

(Courtesy of Nathan Cyprys)

In October 2015, Gorenstein and a few partners at Alphabet invested in PharmaCan, a holding company focused on the Canadian cannabis market. He took a board seat along with the investment. Two things quickly became clear to Gorenstein: This was the industry he wanted to dedicate his life to, and a lot of changes needed to be made at PharmaCan. After discussions with some of the other investors at PharmaCan, Gorenstein became the CEO in May of 2016. He gave up his West Village apartment, moved to Stayner, and committed his life to the cannabis sector. The strategy was to use Canada as a launch point to develop all the know-how, and then spread globally. PharmaCan was rebranded as the Cronos Group.

A Sprawling, Tightly Controlled Environment

David Hsu, Chief Operating Officer of the Cronos Group (Courtesy of Nathan Cyprys)

The Cronos Group claims to be the largest purpose-built in-door cannabis facility in the world. The Stayner property sits on sprawling agricultural-grade farmland that’s halfway to completion. A massive greenhouse is in the process of being built, along with an indoor growing facility the size of 26 hockey rinks. Both are slated to be running by July 2018.

“Every square foot has been thought about in terms of where the plants will go, where the labs will go, where we’re going to harvest and where is propagation going to go,” says Hsu.

Lighting greatly varies between each growing room, and moving between each facility is akin to entering a fun house, as it takes time for your eyes to adjust.

A former bed-and-breakfast that sits on the property now holds the company’s customer service and marketing departments. The two growing facilities that are presently in use, including a retrofitted 100-year-old barn, house an assortment of rooms with product in various manufacturing stages. There are labs to extract oil, packaging and labeling areas, and, of course, tightly controlled growing rooms with plants in various states of maturity.

The buildings where the growing takes place are highly sterilized. At any given time in either facility, you’ll find employees scrubbing tractor-sized canisters or washing down hallways. The smell of rubbing alcohol is persistent throughout the grounds, often mixed with whiffs of manure and cannabis.

These are the steps the company must take in order to produce pharmaceutical-grade product. Anyone entering the buildings must be suited up in disposable coveralls and booties, to prevent outside contamination. “The regulatory environment is so new in other countries,” says Hsu. “They’re looking to Canada for the gold standard.”

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The company also doesn’t mess around when it comes to security. Employees and visitors must use a key fob to enter or exit each building, growing room, or lab, single-file, as a precautionary step to track movement of employees and product. (“I never thought I’d work somewhere where you get a door slammed in your face every day,” Gorenstein says.)

Moving between each facility is akin to entering a fun house, as it takes time for your eyes to adjust. Lighting greatly varies between each growing room, depending on the strain and stage of growth. Some give off a yellow or red glow, while others have rows of tiny, bright white LED that beam dots of red and blue. The range in lightening is intended to produce different effects on the plants, which the company’s scientists continually study for optimal outcome. In total, the company grows 150 different strains.

A Big Part of Town

(Courtesy of Nathan Cyprys)

Stayner, which is part of the Clearview Townships, is about two hours northwest of Toronto. Its primary economy has largely come from construction, manufacturing, and agriculture, so there was plenty of interest when Cronos Group applied for building permits. It’s now the town’s biggest employer, with hundreds of jobs that span an assortment of skills: horticulturalists, farmers, chemists, quality assurance, manufacturing, marketing and design, amongst others.

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Strike up a conversation with nearly any employee, and they’ll tell you how happy they are to be working there. One scientist, who grew up in the region, never imagined he’d be able to find work in his chosen field–chemistry–so close to his tiny hometown.

“I think it’s really important that the people you hire are passionate about something,” says Gorenstein. “That’s what drives you when it’s 10 pm and everyone else is going home. The reason you keep working isn’t a paycheck or bonus, it’s because you’re passionate about it.”

Banking on the Future

(Courtesy of Nathan Cyprys)

Because the medicinal benefits of cannabis are still being uncovered, the Cronos Group believes in the importance of research and development. Psoriasis and multiple sclerosis are two of the conditions they’re currently researching in pre-trial studies. Gorenstein explains that the constant feedback they receive from patients is collected as data, which will eventually be used when put to trial.

“Normally if you’re a pharmaceutical, you have to take millions of dollars and go through all these trials and after five years, you hope that the thing you’ve made may actually work,” he says. “We’re confident going to trials because we have patients who’ve said anecdotally, this is what works, this is what I want.”

“We’re a global cannabis platform that’s unlocking the science behind a plant with very powerful effects and using that to help sick people and to elevate people looking to have a good time or relax.”

Michael Gorenstein, Cronos CEO

Many of the employees at the Cronos Group are passionate about the medicinal aspect of their product, with first-hand stories of family members with opioid addictions or cancer, who couldn’t get relief from traditional medicine. Gorenstein is keen to explore the marketing potential of medicinal marijuana.

“The idea that everything will move to rec means you’ll leave behind a very important benefit and we want to address that,” he says. “You don’t want a kid with a gasmask bong or a rapper giving you your medicine. You want someone in a lab coat who’s much more measured and more compassionate. It’s the caregiver mentality.”

When asked about his biggest challenge, Gorenstein answers without hesitation: “Time.”

“We’re going as we fast as we can but I’d love to freeze time,” he says. “Since we’ve taken over, this place has been transformed. We’ve seen the industry move really fast. It hits midnight and you think, ‘I still have so much to do.’”

He admits that another constant hurdle is defining what the Cronos Group is. While it’s often mistaken as an investment company, Gorenstein is close to perfecting his elevator pitch.

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“We’re a global cannabis platform that’s unlocking the science behind a plant with very powerful effects and using that to help sick people and to elevate people looking to have a good time or relax,” he says.

The company will continue focusing on uncovering the potential uses and benefits of cannabis, both medicinally and recreationally. It doesn’t hurt that the demand is already there.

“There’s a $200 billion industry where consumers and patients already want the product,” says Gorenstein. “Our entire job is to figure out how to get them that product safely and give them something consistent. We’re in a better position than anyone to do that.”

Sacramento to Consider Greenlighting Jan. 1 Cannabis Sales

If a Sacramento City Council vote goes as expected on Tuesday, California’s capital city will see retail cannabis sales begin Jan. 1, the soonest allowed under state law.

Already a number of California cities, including San Francisco, are expected to miss the Jan. 1 launch as they scramble to finalize local rules. But in Sacramento, the City Council is set to recommend that some existing medical dispensaries be allowed to sell recreational cannabis as soon as the state system is up and running.

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Sacramento may also join the growing number of jurisdictions adopting equity programs designed to address inequities in how cannabis laws are enforced. The council at Tuesday’s meeting will consider a package of legislation aimed at removing barriers for minority business owners seeking to enter the newly legal industry.

If council members approve the plans, Sacramento would cap the number of permitted dispensaries in the city at 30. Licenses would be selected through a lottery system.

Approval, however, isn’t a sure thing. Earlier this month, some council members said they were wary of allowing medical dispensaries to sell recreational cannabis until they fix problems identified in a recent audit, such as under-reporting of tax revenue, on-site consumption of cannabis, and selling more plants than allowed.

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Joe Devlin, Sacramento’s chief of cannabis policy and enforcement, told the Sacramento Bee at the time that some dispensaries had hired a consultant, Matt Haines of Capitol Compliance Management, to help address the audit’s criticisms. Haines told the City Council that his company represents nine dispensaries, with the “goal of making them 100% compliant.”

The proposed cannabis equity program is aimed at making it easier for minority business owners to claim a stake in the city’s cannabis industry. As Sacramento Bee editorial writer Erika D. Smith notes:

One plan would establish a small business support center to offer technical assistance and mentoring to minorities, women and veterans who are interested in running cannabis businesses. It would be a two-year pilot program, run by a city-approved third party, in hopes of creating a viable incubator program for new business owners.

Another plan would get rid of requirements for criminal background checks for all but the most important stakeholders of cannabis-related businesses. The idea is that poor people with less-than-clean records would be more eager to apply for jobs.

Devlin, the city’s cannabis chief, told Capital Public Radio the program is meant in part to help illegal cannabis operators step into the light of a legal market. Other cities, including Oakland and Los Angeles, are pursuing similar plans.

“What we’re proposing is the establishment of a small business kind of support center that will help what are likely existing illegal cannabis businesses, manufacturers, and help them transition into that legal marketplace,” he said.

Proposal Would Make Medical Cannabis Available in Malta

VALLETTA, Malta (AP) — Malta’s government has proposed allowing all doctors in the country to prescribe medical marijuana.

The government published draft legislation on Monday that would loosen an existing regulation with so many restrictions that not a single Maltese had ever been treated legally with marijuana or a cannabis-based product.

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The new law would allow any general practitioner to prescribe medical marijuana, while the current version allows only prescriptions from medical specialists.

Passage is expected in the coming weeks.

The legislation requires approval from the Malta Parliament to become law. Passage is expected in the coming weeks.

Malta’s prime minister suggested last month that recreational use of marijuana might be legalized after the medical marijuana law is passed.

The proposal is the latest evidence of social change in Malta, a European Union member where divorce only was legalized in 2011.

California’s Legal Cannabis Countdown: What’s Coming by Jan. 1

LOS ANGELES (AP) — California has published the rules that will govern its legal marijuana economy in 2018, giving businesses and consumers a glimpse into the future.

But there are important steps before legal recreational sales kick off on Jan. 1, and even more uncertainties about how the marketplace will function. Warning: Don’t count on being able to stroll into your local dispensary on New Year’s Day to celebrate with an infused cookie or a joint.

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Why Are the Regulations Important?

They form the framework of the new cannabis economy, estimated to be worth $7 billion. Can you make animal-shaped edibles? No. Transport products in a drone? No. But retailers can be open from 6 a.m. to 10 p.m. It’s a dense stack of rules that includes fees for licensing (nearly $80,000 annually for a large grower), how cannabis will be traced from seed to sale and testing requirements to ensure customers get what they pay for.

Can I Buy Legal, Adult-Use Cannabis on Jan. 1?

For most people, probably not. It will vary place to place, but many cities are not prepared. Even though the state regulations went out Thursday, the Bureau of Cannabis Control is still developing an online system for businesses to apply for operating licenses. California is working out technical bugs and hopes it will be ready in early December.

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“There certainly will be licenses issued on Jan. 1,” said Alex Traverso of the Bureau of Cannabis Control.

“The state dropped the ball big time. This should have been done by June, July.”

Donnie Anderson, Los Angeles grower and retailer

But there’s a snag: To apply for a state license, a grower or seller first needs a local permit, and many cities are struggling to establish those rules, including Los Angeles and San Francisco, two of the biggest markets.

“I think the state dropped the ball big time. This should have been done by June, July,” said Los Angeles grower and retailer Donnie Anderson. “I don’t think this is going to be ready.”

Other places, like Kern County, have banned commercial cannabis activity. At the same time, San Diego is among the cities that have local rules in place and are ready for legal sales. Palm Springs is planning for cannabis lounges, where recreational marijuana can be smoked on site.

A Gradual Start

For six months, the state is allowing businesses to bend the rules a bit, recognizing it will take time for the new system to take hold. During that period, businesses can sell products that do not meet new packaging requirements. Retailers can sell inventory that does not meet new rules for ingredients or appearance.

At an industry conference in September, California’s top marijuana regulator sought to ease concerns that the state would move quickly on enforcement against operations without licenses. If authorities are aware a business has applied for a license “I don’t want you to have anxiety that we’re out there and we’re going to be enforcing everything right away,” said Lori Ajax, who heads the state cannabis bureau.

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Everything Is Temporary

Even if you get a license, it will be temporary — good for 120 days. In some cases, there can be a 90-day extension on top of that. During that time, the state will review a business’ credentials and information submitted in the license application, such as financial records and investors in the business.

The regulations issued by the state this week are temporary, too.

Many Challenges Remain

Key pieces of the legal cannabis system are still in the works. A massive tracking system that will follow plants from seed to sale is in development, but officials say it will be ready at the start of the new year. It’s not clear if enough distributors will be available to move cannabis from fields to testing labs and eventually to retail shops, possibly creating a bottleneck between growers and store shelves.

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The Looming Illicit Market

No one knows how many operators will apply for licenses. While medical marijuana has been legal in California for over two decades, most growing and selling occurs in the black market. Come Jan. 1, officials hope those growers and sellers will join the legal pot economy.

But there are concerns many might continue business as usual to avoid new taxes, which could hit 45 percent in the recreational market in some cases, according to a recent study by Fitch Ratings.

“The existing black market for cannabis may prove a formidable competitor” if taxes send legal retail prices soaring, the report said.

Maryland Companies to Study Medical Marijuana Vaping

ANNAPOLIS, Md. (AP) — With Maryland set to make medical marijuana available within weeks, two companies have formed a partnership to study how well vapor-inhalation devices work for patients.

Curio Wellness, of Lutherville, and Wellness Institute of Maryland, of Frederick, will conduct a research-and-development study of cannabis oil-filled vapor inhalation devices, the state health department announced Friday. The devices, also known as vape pens, can be used to vaporize marijuana, or heat it without burning it.

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The amount of medical marijuana products are expected to be low at first, the health department said, compared to inventories of products in other state’s that allow it. It could take licensed growers and dispensaries several months to reach full inventory, after becoming operational.

“It’s also worth noting that, for this study, only the Wellness Institute of Maryland dispensary will be providing products to patients who were pre-selected by the companies,” said Brian Lopez, chairman of Maryland’s medical marijuana commission. “But all licensed and operational dispensaries are expected to have products available by early December.”

So far, 14 marijuana growers and 12 processors have been licensed in Maryland. Six dispensaries also have been licensed.

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Medical marijuana will be available in the state for any condition that is severe in which other medical treatments have been ineffective, and if the symptoms “reasonably can be expected to be relieved” by marijuana. Patients with a chronic or debilitating medical condition that causes severe appetite loss, severe or chronic pain, severe nausea, seizures or severe muscle spasms also can have access, as well as people with glaucoma or post-traumatic stress disorder.

Maryland will allow not only physicians but nurse practitioners, dentists, podiatrists and nurse midwives to certify patients as eligible to receive marijuana.

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Maryland’s medical marijuana program has been delayed by setbacks. The state first approved it in 2013, but the effort stalled because it required academic medical centers to run the programs, and none stepped forward. The law was changed in 2014 to allow doctors certified by a state commission to recommend marijuana for patients with debilitating, chronic or severe illnesses.

California Releases Emergency Cannabis Regulations

California is racing toward the launch of a state-regulated cannabis market, with sales set to begin Jan. 1 despite a number of unanswered questions.

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On Thursday, with less than a month and a half before the program is slated to be up and running, state regulators unveiled a long-awaited package of emergency rules that will guide the industry through the transition ahead. We’re poring over those documents and will update this page with key takeaways from the newly released guidelines.

Have questions? Let us know in the comment section.

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Emergency Medicinal and Adult-Use Cannabis Regulations

The Bureau of Cannabis Control released the following package of documents on its website:

This story will be updated.

Charges Reinstated in Michigan Medical Marijuana Case

KIMBALL TOWNSHIP, Mich. (AP) — The Michigan appeals court again has reversed a decision and reinstated charges against a man who was accused of running illegal medical marijuana dispensaries in the state’s Thumb region.

The court says James Amsdill knew the legality of marijuana sales was unclear and was also aware that state police didn’t view his Blue Water Compassion Center as legal. The court says, “Prosecution is more than fair under the circumstances.”

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A judge in St. Clair County twice dismissed the case, the last time on grounds of entrapment. The case was filed in 2013, long before Michigan lawmakers created a system to allow certain marijuana dispensaries to operate legally.

Licenses could be issued by spring.

Boston Man Says Offensive Comments Misconstrued

BOSTON (AP) — A Boston man who said veterans with post-traumatic stress disorder should “get over it,” and described breast cancer patients as “cadaverous” in apparent opposition to a medical marijuana dispensary in the city’s swankiest shopping district says his comments were misconstrued.

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Oliver Curme at a Tuesday zoning board hearing said the dispensary would draw “undesirable elements” who would end up “scaring off the clientele” of Newbury Street’s high-end shops and restaurants.

The comments shocked both opponents and supporters of the dispensary.

Curme said he was so over the top he thought people would understand

Curme told New England Cable News he used satire to mock dispensary opponents, and said he actually supports it.

Curme, who lives around the corner from the site, said he was so over the top he thought people would understand, and apologized if anyone misinterpreted him.

The dispensary was approved.

Karl-Anthony Towns: Time for NBA to Allow Medical Cannabis

MINNEAPOLIS (AP) — Minnesota Timberwolves star Karl-Anthony Towns believes the NBA should permit the use of medicinal marijuana.

In an interview with ESPN published Wednesday, the 22-year-old Towns said he agrees with former NBA Commissioner David Stern’s stance that the drug should be removed from the league’s banned substance list. Towns raised the issue when asked by an ESPN reporter what change he would make if he were in NBA Commissioner Adam Silver’s place.

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Towns told reporters in Minnesota before the game Wednesday against San Antonio that his experiences working with autistic children and his research into the medicinal benefits of cannabis have helped shape his belief. He said he hoped to help erase the “bad stigma” about the drug, which he said he has never used.