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The Problem With Puerto Rico’s Medical Cannabis

By Dr. Ginette M. Collazo
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Recently Puerto Rico approved the law that regulates the production, manufacturing, dispensing and consumption of medical cannabis. Although medical cannabis was already “legal” through an executive order and was “supervised” by local regulation, there was no law to back up the industry and protect investors.

The creation and approval of laws resides in the hands of elected individuals. Expecting absolute knowledge is unrealistic, especially when we refer to cannabis as a medicine. Sadly, the lack of knowledge is affecting the patients, and an emerging industry that can be the solution to the Island’s current economic crisis.

I am in no way insinuating that Puerto Rico is the only example. I have seen this type of faulty thinking in many places, but cannabis is the perfect manifestation of this human defect. Check some of your laws, and you will find a few that nearly qualify for the same characterization.

As we can see, lack of knowledge can be dangerous. Objective, factual information needs to be shared, and our leaders need a formal education program. Patients need them to have a formal education program to better understand and regulate the drug.

The approval of this law is a significant step for the Island. Still, many Puerto Ricans are not happy with the result. The lack of legitimate information coupled with conservative views made the process an excruciating one. It took many hearings, lots of discussions and created tensions between the government and population, not because of the law, but for the reasons behind the proposed controls. Yes, it was finally approved, but with onerous restrictions that only serve as a detriment to the patient’s health, proving the need for an education program designed specifically to provide data as well as an in-depth scientific analysis of the information, then, you address the issue at hand.

Let’s take a look at some of the controls implemented and the justification for each one as stated by some members of the government.

  1. Patients are not allowed to smoke the flower in its natural state unless it is a terminal patient, or a state-designated committee approves it. Why? Because the flower is not intended for medical use (just for recreational) and the risks associated with lung cancer are too high. Vaporize it.
  2. It was proposed to ban edibles because the packaging makes it attractive for children. Edibles made it, but with the condition that the packaging is monochromatic (the use of one color), yes, insert rolling eyes here.
  3. It only allows licensed pharmacists to dispense medical cannabis at the dispensary (bud tending). The rationale? Academic Background.
  4. The new law requires a bona fide relationship between the doctor and the patient to be able to recommend medical cannabis, even if the doctor is qualified by the state and is a legitimate physician. This is contrary to their policy with other controlled substances, where a record is not required.

When there are different beliefs on a particular topic like it is with medical cannabis, you are not only dealing with the technical details of the subject; there is an emotional side to it too. Paradigms, stigma, stereotypes, beliefs and feelings affect the way we think. We let our judgment get in the way of common sense. When emotions, morals and previous knowledge are hurting objectivity, then we have to rely on scientific data and facts to issue resolution. However, when the conflict comes from opinions, we rely on common sense, and this one is scarce.

Now education: what can education do with beliefs, morals and emotional responses?

David Burns in his book Feeling Good: The New Mood Therapy discusses ten thinking errors that could explain, to those like me that want to believe this is a legitimate mistake, that there are cognitive distortions that affect the result of ours thoughts.

Now let’s analyze …

  1. There are many things wrong with this prohibition. First, the flower is natural and organic. It is the easiest to produce and the cheapest alternative for patients; there are more than 500 compounds all interdependent to make sick people feel better. There are seas of data, anecdotal information, serious studies collecting information for decades and opinions of highly educated individuals that support the consumption of flower in its natural state for medical purposes. The benefits are discarded, and personal opinions take the lead. Based on Burns’s work this is a textbook case of Disqualifying the Positive: dismissing or ignoring any positive facts. Moreover, let’s not forget the benefit for illegal growers and distributors.
  2. Keep out of reach of children, does it ring a bell? For years and years, we have consumed controlled substances, have manipulated detergent pods, bleach and so many other products that can be fatal. The warning is enough, just like is done with other hazardous Here we can notice how we can fall into the Fortune Teller Error, which believes that they know what will happen, without evidence.
  3. Not even the largest drug stores in the USA have this requirement. There is one pharmacist per shift, and a licensed pharmacist supervises pharmacy technicians. Medical cannabis is not even mentioned in current Pharmacy’s BA curricula. Most pharmacists take external courses in training institutes. On the other hand, bud tenders go through a very comprehensive certification process that covers from customer service to cash management and safety and of course all technical knowledge. If anything, a botanist (plant scientist) makes more sense. What a splendid example of magnification (make small things much larger than they deserve). This is an unnecessary requirement.
  4. The relationship between a certified doctor and patient has to be bona fide (real, honest). In practical terms, the doctor has to treat the patient for some time (sometimes six months) and have a history of the patient. Even though this sounds logical, not all doctors are certified to recommend cannabis, but all can diagnose. Are we penalizing the doctor or the patient? The only thing that you need to qualify as a patient is the condition. Besides, I had prescriptions filled for controlled medications at the drug store with no history. Why are we overgeneralizing Do we think that all doctors are frauds?

Massachusetts Lawmakers Reach Compromise on Cannabis Bill

By Aaron G. Biros
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On Election Day last year, voters in Massachusetts approved a measure to legalize recreational cannabis. With recreational sales beginning in July of 2018, lawmakers have tried to get a bill through the state legislature to settle on, among other things, a tax rate and regulatory framework.

On Wednesday, multiple news outlets reported that the legislature has reached a compromise on a bill that would change the measure that voters passed to allow for lawmakers to implement higher taxes, a strategy on local bans and a regulatory framework, reports The Boston Globe.

mpp logo
MPP logo for the Regulate Marijuana Like Alcohol Campaign in Massachusetts

In a statement to supporters, Matt Schweich, director of state campaigns at Marijuana Policy Project (MPP), the biggest changes are in local control and taxation. “After weeks of persistent advocacy from Massachusetts residents, the Senate and House have reached a compromise that largely respects the will of the people,” says Schweich. “The legislation adjusts the local control policy, allowing local government officials in towns that voted “no” on the 2016 ballot initiative to ban marijuana businesses until December 2019. For towns that voted “yes” in 2016, any bans must be placed on a local ballot for voters to approve.” Therefore if a town wants to ban cannabis sales, they need to bring it to a vote for the people to decide. 72% of the population voted in favor of the ballot initiative. “The maximum tax rate — which depends on whether towns adopt optional local taxes — will increase from 12% to 20%,” says Schweich. “Under the bill, the state tax will be 17%, and the local option will be 3%.” A major push behind increasing the tax rates concerned lawmakers’ worries that the original 12% tax rate would not cover regulatory costs and government expenditures on the industry.

Boston, MA
Photo: Trenton Kelley, Flickr

The ballot initiative created the Cannabis Control Commission, the regulatory body overseeing the industry, with three board members. That agency will remain in the new bill, just with five board members that will write the rules on things like marketing, safety, fines and penalties and fair business practices.

Schweich says the MPP helped orchestrate over 1,000 calls to legislators, urging them to reject the House’s version of the bill, which some have called draconian. “The bill isn’t perfect, and we preferred the original language of the ballot initiative,” says Schweich. “However, given how problematic the House bill was, we are satisfied with the final compromise.”

The bill is expected to pass votes in both the House and Senate on Thursday and Governor Charlie Baker is expected to sign the bill that same day.

California Releases Draft Medical Cannabis Regulations

By Aaron G. Biros
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Last week, Governor Brown’s Administration released a set of proposed rules for the medical cannabis, attempting to provide some oversight to the once unregulated market. In 2015, the governor signed three bills into law that established a regulatory framework via the Medical Cannabis Regulation and Safety Act. That legislation set up the Bureau of Medical Cannabis Regulation inside the Department of Consumer Affairs as the overseeing regulatory agency.

According to the press release, the proposed regulations for manufacturing and cultivation have also been published. “The proposed licensing regulations for medical cannabis are the result of countless hours of research, stakeholder outreach, informational sessions and pre-regulatory meetings all across the state,” says Lori Ajax, chief of the Bureau of Medical Cannabis Regulation. “And while we have done quite a bit of work and heard from thousands of people, there is still so much more to do. In order to make our program successful we still need your feedback.”

According to their website, the legislation divides responsibility for licensing businesses between three regulatory bodies: The CA Department of Food and Agriculture the CA Department of Public Health and the Bureau of Medical Cannabis Regulation, which will be the leading body in charge of licensing. The proposed regulations are not set in stone, but give us an important glimpse into how the state hopes to regulate the market.

Among the proposed rules are a number of regulatory compliance nuances expected to raise prices, but provide extra measures to protect consumer safety. According to the SF Gate, regulators expect prices could climb $524 per pound. But with that price jump comes a lot of regulations that other states have so far successfully implemented. The laboratory testing and traceability stipulations are presumably designed to safeguard public health, preventing things like black market diversion and off-label pesticide use.

The proposed ‘cannabis product symbol’

In addition to the medical regulations, the proposed manufacturing regulations set some notable requirements. Those rules are set by the Office of Manufactured Cannabis Safety, established in the Center for Environmental Health of the California Department of Public Health (CDPH) after the 2015 legislation was signed into law. Good Manufacturing Practices, food product standards, operational and labeling requirements are included in the provisions, along with a list of licensing tiers, application requirements and fees. They have a handy summary of the proposed regulations for those looking for the key highlights.

Omar Figueroa, an attorney with a cannabis law practice in California, says his clients in the industry are preparing to suggest changes to the proposed regulations and possibly legal challenges. “They are looking at this as overregulation by people that are not in the cannabis industry,” says Figueroa. “These are outsiders with a limited knowledge base creating somewhat uninformed regulations.” He says a good example of this is the potency limit on infused products. “They make perfect sense for [the recreational market] but for the medical market it is simply unacceptable. Patients develop a tolerance to THC and would have to increase their caloric intake and buy more infused products if this proposed regulation becomes final.” He says there are a number of regulations that seem kind of arbitrary. “Like prohibiting cannabis-infused caffeine products; there doesn’t seem to be a necessity in the rulemaking for this,” says Figueroa. “A lot of these regulations are going to be susceptible to challenges because California requires regulations to be necessary and alternatives to be considered.”

Although the lab testing regulations won’t be published for another few days, Figueroa expects them to be a huge disruptor for the market. “Most labs in the state are not ISO 17025-accredited, which means many labs might not be able to issue certificates of analysis when the regulations get enforced,” says Figueroa. He says it is safe to say California regulators are looking at other jurisdictions, like Colorado and Oregon for example, in crafting these rules, but we can expect a sea change in these regulations before they get enforced.

Manufacturers will be required to use a cannabis product symbol with a ‘THC!’ marking on their labels. There is also a 100-milligrams-per-package limit for THC in infused products, which is similar to rules we saw Colorado and Oregon roll out during a preliminary period of legal recreational cannabis.

For those looking to get involved in the regulatory process, there is a 45-day comment period on the proposed rules.

Pennsylvania Temporary Rules for Doctors Released

By Aaron G. Biros
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Pennsylvania Department of Health Secretary Dr. Karen Murphy recently released a draft of temporary regulations for physicians, asking for feedback via a survey from the medical community. “The process for a patient to obtain medical marijuana will begin with the physician, so it’s vital to ensure that our regulatory process for those physicians is open and transparent,” says Secretary Murphy. “Our focus remains to implement a patient-focused medical marijuana program that gives help to those who need it, and these temporary regulations mark an important step forward in achieving that goal.” The temporary rules, published on April 11th, outline physician and practitioner registration, patient certifications, physician training and other key regulations.

Steve Schain, Esq. practicing at Hoban law Group

In the temporary rules lie some stipulations for doctors, which seem intended to limit corruption or financial conflicts of interest. According to Steven Schain, Esq., consumer finance litigation, banking law and cannabis law expert practicing with Hoban Law Group, the market’s growth will hinge on doctor participation. “The entire program will rise and fall based on the speed in which we involve doctors,” says Schain. “If the doctors don’t certify for medical conditions and make recommendations, the market won’t go anywhere.” Pennsylvania’s program, under the current language, requires doctors to issue patient certifications, similar to what other states might call a doctor recommendation or prescription.

According to Schain, other states with similarly worded regulations experience a lack of physician participation, and tepid market growth at best. “If you look at New York, New Jersey or Maryland, they run into issues where there just is no incentive for doctors to participate,” says Schain. “If you look at the existing language of the regulations, there is no financial incentive for doctors to get involved, they can’t charge for a recommendation, which is good and bad.”

“The good part is it reinforces that doctors can’t really be a financial backer of a grow operation or a dispensary,” says Schain. Under the current language, physicians can’t solicit, accept or offer any form of compensation from any patient, prospective patient, caregiver or anyone involved in a medical cannabis business if they intend to register with the Department to issue patient certifications for cannabis. “Some doctors thought this would be a cottage industry for them, it’s not.” Doctors are also not allowed to advertise as a practice issuing patient certifications for cannabis. “Another benefit of the language in the proposed regulations is the continuing care of a physician,” says Schain. “They want the people doing the bulk of referring or recommendations to be primary care physicians. Those are the people doing most of the recommendations, as it should be.” 

Those rules contrast starkly with what many are familiar with in California’s regulations where doctors could advertise freely and charge fees without the need for ongoing care. “Looking at previous regulations in a state like California, where there were no requirements for ongoing care, we saw doctors making a business out of writing recommendations for cannabis,” says Schain. “The PA regulations are much stricter, which I think is great.”

In addition to those preventative measures, the temporary rules require physicians to actively use the Prescription Drug Monitoring Program. This means doctors must consider a patient’s history of controlled substance prescriptions to see if that might impact their medical cannabis use. Doctors have to take this into account before issuing or modifying a patient certification. The rules also provide for a 4-hour training course, required for all physicians seeking to register as a practitioner who can certify patients for medical cannabis use. The Department of Health expects the program will be fully implemented by 2018.

marijuana buds drying in racks biotrackthc

BioTrackTHC Uses Amazon Web Service’s Government Cloud for Traceability System

By Aaron G. Biros
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marijuana buds drying in racks biotrackthc

BioTrackTHC, partnering with the Hawaii Department of Health, is deploying the first live seed-to-sale traceability system for cannabis in a FedRAMP-authorized environment, according to a press release. The Federal Risk and Authorization Management Program (FedRAMP) is a government-wide risk management platform that provides standards for security assessment, authorization and continuous monitoring for cloud products and services. “BioTrackTHC, utilizing Amazon Web Service’s Government Cloud (AWS GovCloud), has met all necessary requirements to host its live government cannabis seed-to-sale Traceability Systems in one of the most secure cloud platforms in the world,” states the press release.

“The BioTrackTHC team invested an incredible amount of time and effort into this high priority project, and we are excited to see it transform from last year’s concept to clean execution,” says Patrick Vo, president and chief executive officer of BioTrackTHC. “We are grateful for the Hawaii Department of Health’s trust in us to get it right the first time.” Hawaii working with BioTrackTHC and AWS GovCloud essentially affords them an ultra-high level of data security in their state traceability program.

“We’re pleased to know that our state’s seed-to-sale Traceability System is now housed in the most secure cloud server available,” says Keith Ridley, chief of the Hawaii DOH Office of Health Care Assurance. “This ensures safety and comfort for our licensees, business operators, and our patients, who can all be confident in knowing their business data and protected patient information is being stored in the most secure traceability system in the world.” The FedRAMP decision-making body is comprised of the Chief Information Officers (CIOs) from the Department of Defense, Department of Homeland Security, and the General Services Administration, with additional collaboration from the National Institute of Standards and Technology, National Security Agency, Office of Management and Budget, and the Federal CIO Council.

The FedRAMP standards include “400 security measures and allows government agencies to use these and only these cloud environments for high-impact data where the loss of data confidentiality, integrity, or availability could be expected to have a severe or catastrophic effect on organizational operations, assets, or individuals,” according to the press release. Essentially this means that they meet the highest security requirements of the program.

 

Opening a Dispensary on an Island: Overcoming a Barrier to Business

By Aaron G. Biros
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Martha’s Vineyard is renowned for its beautiful beaches, quaint whaling towns and picturesque rolling countryside. The island is well known as a popular vacation spot for the rich and famous, including the Obamas, the Clintons and Larry David. The movie Jaws was filmed there and the infamous Ted Kennedy-Chappaquiddick incident took place there in 1969. Its summer population of 115,000 drops to about 17,000 as the island slows down for the winter. It is also home to roughly 120 registered medical cannabis patients and a dispensary that will have to deal with the complexities of operating on an island.

In 2012, Massachusetts became the eighteenth state to legalize medical cannabis and in 2016, the state legalized adult use of cannabis. Geoff Rose, co-founder of Our Island Club, a local organization that offers discounts to full-time residents, saw a great need for a medical cannabis dispensary. Rose was granted a provisional license to both cultivate and dispense, as required by the state, on the island. Rose’s nonprofit that received the licenses, Patient Centric of Martha’s Vineyard, plans to operate in West Tisbury, a small town located in the center of the island.

Travel to and from the island is restricted to either boat or plane with the vast majority of traffic occurring on ferries operated by the Steamship Authority. But Rose cannot transport any cannabis on the ferries or even a smaller, non-commercial vessel because the waters are under the jurisdiction of the Coast Guard, a federal agency tasked with enforcing The Controlled Substances Act. The same goes for aircraft under FAA jurisdiction. Transporting cannabis products on the ferries, or any vessel for that matter, would be a felony.

Coast Guard vessel conducting training exercises off the Vineyard

Martha’s Vineyard is not just a physical island, but also a jurisdictional island where all cannabis growing, lab testing and dispensing must occur on the island. Currently, those 120 medical cannabis patients living on the island have no legal method of obtaining medical cannabis, unless they grow it themselves. Rose and his nonprofit, Patient Centric, hope to change that. We sat down with Geoff Rose to learn more about his mission to bring medical cannabis to the Vineyard and some of the legal implications associated with running a cannabis business on an island.

Cannabis Industry Journal: How did you get started with the idea to open a dispensary on the island?

Geoff Rose: Well I moved here almost sixteen years ago and as I have often said, when you move here you have three options: you can contribute to the community, you can hide and stay reclusive or you can leave. It is a very unique community and I chose to contribute. We started Our Island Club, which is a service program for year-round residents that helps them save on essential products and services as a means to cope with the high cost of living here. Clearly there is a need as there are 7,000 year round residents participating in that program. We have donated over a half-million dollars to 175 or more charitable organizations on the island. In addition to that, because of the membership fee, anyone who can’t afford it can still receive the membership.

Photo: Michelle Wyrich

I have come to launch the dispensary in the same manner. There is a need. [Legal medical cannabis] has now been law since November of 2012. Over four years later and still no dispensary on the island- I have continued to persevere because I know that there is a need.

CIJ: It is a pretty tight-knit community; did you meet any local opposition?

Geoff: Dukes County (the Vineyard) voted in favor of medical marijuana by a wide margin and 82% of West Tisbury voted in favor of medical marijuana, one of the highest in the state. Well I am currently waiting on my special permit application that I am required to apply for in West Tisbury. It has been sent to the Martha’s Vineyard Commission (MVC) for review.

There have been concerns, including from the local school. But state law requires that a dispensary be located beyond 500 feet from a school. The current location that I am asking for approval is over seven times that distance. There is a perceived concern about that. The first round of applications in 2013 included a score-based application process and while there were four competitors, none of us met the minimum score. In the second round, it moved to a compliance-based application process, and I was the only one who kept the effort alive and was awarded the license.

CIJ: There is a bit of an opioid problem on the vineyard, and multiple scientific studies have suggested a causal relationship between cannabis legalization and a reduction in opioid overdose-related deaths; do you see this as part of the solution?

 Geoff: I have seen studies, particularly one by Johns Hopkins that does show a correlation between medical cannabis and the reduction of the use of opioids. I think it is a byproduct of opening the dispensary, so yes. I shared these findings with the Superintendent of Schools. I think education is the key to really develop awareness. The state has mandated that schools are required to develop a drug education program, it’s part of the school curriculum, and I see that as a critical component in our outreach effort to the community. We have a responsibility to the community in many ways, whether it’s law enforcement or education.

Geoff Rose, founder of Patient Centric

I recently announced that we would allocate a percentage of our net profits for grant money to programs involved in drug education. Community outreach and education are very important. There also needs to be some positive education. There is a clear understanding that children need to be educated about the misuse of cannabis, which is true. But they also need to be educated about the medical value of cannabis. For example, many in the medical community will acknowledge the benefits of cannabis as it relates to cancer patients, whether it is helping nausea, appetite, pain management or being used as a sleep aid. This is an important message that needs to be disseminated to children. How does it help your family member, friend or neighbor who is suffering from the effects of cancer? That is one of the messages that would be helpful for children to receive. We can address the impact of all drugs including cannabis on the developing brain; I understand and agree, and publicly support that in an educational context. I want to be part of the solution.

CIJ: What problems do you run into trying to open a cannabis business on the island?

Geoff: I received my provisional cultivation license in September of last year. Part of the issue is the fact that cultivation has to occur on the island. The Coast Guard regulates everything surrounding the island including all the ferries, or any watercraft.

As part of my provisional license, I am required to have an independent cannabis-testing laboratory on the island that will perform the requisite testing mandated by the state. I am currently in conversations with Ph.D. chemists consulting for the laboratory. I have had numerous conversations with lab directors in other parts of the state, including Proverde Labs and MCR Labs. The Coast Guard has stated that cannabis is a Schedule One substance and therefore any transport is illegal. Unfortunately the law is very specific and not exactly written with Martha’s Vineyard in mind.


Editor’s Note: If you have further questions relating to Patient Centric of Martha’s Vineyard, you can reach Geoff Rose at geoff@patientcentricmv.org

Members of Congress Form Cannabis Caucus

By Aaron G. Biros
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congressional cannabis caucus
Rep. Rohrabacher speaks at the announcement, Photo via Earl Blumenauer/YouTube

Members of Congress last week announced the formation of a ‘Congressional Cannabis Caucus’ in order to organize and affect cannabis policy at the federal level. Representatives Earl Blumenauer (D-OR), Dana Rohrabacher (R-CA), Jared Polis (D-CO) and Don Young (R-AK) announced the creation of the caucus on February 16th. Cannabis advocacy and drug policy groups were quick to commend the formation of the organization.

In a joint statement issued on Friday, the National Cannabis Industry Association, the Marijuana Policy Project, the Drug Policy Alliance, NORML, Americans for Safe Access, Students for Sensible Drug Policy, Law Enforcement Action Partnership, Doctors for Cannabis Regulation, and Clergy for a New Drug Policy expressed commendation and excitement for the new group. “We commend Representatives Blumenauer, Rohrabacher, Polis, and Young for their leadership on the issue of cannabis policy,” reads the statement. “The establishment of a Cannabis Caucus will allow members from both parties, who represent diverse constituencies from around the country, to join together for the purpose of advancing sensible cannabis policy reform. It will also facilitate efforts to ease the tension between federal prohibition laws and state laws that regulate cannabis for medical and adult use.”

Rep. Earl Blumenauer (D-OR), Photo: Michael Campbell, Flickr
Rep. Earl Blumenauer (D-OR), Photo: Michael Campbell, Flickr

The members of Congress that formed the caucus all represent constituents in states where cannabis is legal for medical and adult use. “The formation of this caucus is a testament to how far our country has come on the issue of cannabis policy,” says the joint statement by the drug policy reform groups. “We look forward to working with caucus members to translate this growing public sentiment into sound public policy.” According to their statement, 44 states so far have adopted laws effecting cannabis prohibition on the state level, representing 95% of the U.S. House of Representatives and 88% of the Senate.

Rep. Dana Rohrabacher (R-CA), Photo: Gage Skidmore, Flickr
Rep. Dana Rohrabacher (R-CA), Photo: Gage Skidmore, Flickr

Representatives Blumenauer and Rohrabacher have been prominent cannabis policy reform advocates in the past. Blumenauer supported the bill to legalize adult use cannabis in Oregon back in 2014 and Rohrabacher introduced the Rohrabacher–Farr amendment to Congress, which prohibits the Justice Department from spending money on interfering with state medical cannabis laws.

According to an article on Roll Call, Blumenauer says the caucus will focus on more medical research and the tax and banking regulations hurting cannabis businesses.

Florida On Path to Implement Medical Cannabis Legalization

By Aaron G. Biros
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Voters in Florida passed Amendment 2 last year with an overwhelming majority of over 70%. The constitutional amendment went into effect on January 3rd this year and regulators have until July 3rd to promulgate the rules.

The Florida Department of Health set up the Office of Compassionate Use (OCU) in July of 2014 after the passing of the so-called Charlotte’s Web measure (HB 843). That bill allows use of low THC/high CBD cannabis for treating seizures. The OCU is charged with the task of writing and implementing medical cannabis rules. Ongoing public hearings and workshops at the Department of Health (DOH) are meant to give stakeholders the opportunity to chime in on the proposed rules.

Florida State Capitol, Talahasse Stuart Seeger, Flickr
Florida State Capitol, Talahasse
Stuart Seeger, Flickr

On January 17th, the DOH published proposed rules and announced public hearings, seeking input from the public on the matter. The OCU is required to implement rules consistent with Amendment 2, but they would defer to the legislature if a bill were passed, promulgating rules consistent with Amendment 2 and the bill.

After the passing of Amendment 2, Sen. Jeff Brandes (R-St. Petersburg) filed SB614, a bill that establishes four license categories instead of the currently required vertically integrated business model. Notably, Sen. Brandes’ bill requires laboratory batch testing, whereas other proposed rules do not include such a measure. Sen. Brandes sees the DOH’s proposed rules as more of the same from the current medical program, according to a quote from FloridaPolitics.com. “Any proposal which seeks to mold the spirit of Amendment 2 into the narrow and flawed law on the books today should be rejected, and a more comprehensive strategy must take priority,” says Sen. Brandes. “I will support no bill, nor any rule, that maintains the established state sanctioned cartel system we have today, and I urge my colleagues to join me in proposing a free market solution for Florida.” He is referring to the seven licensed nurseries from the low THC/high CBD medical program, all of which are vertically integrated.

Matthew Ginder, senior counsel of the cannabis practice at Greenspoon Marder
Matthew Ginder, senior counsel in the cannabis practice at Greenspoon Marder

According to Matthew Ginder, senior counsel in the cannabis law practice at Greenspoon Marder, the biggest question for the legislature is how many licenses will they issue and what kind of structures are required for the licensees. Another big issue is the process by which patients access medical cannabis through their physicians. “The current program requires physicians to register as the orderer of medical cannabis, specify dosing and order medical devices, which is highly uncommon in other state programs,” says Ginder. “Sen. Brandes’ bill removes these requirements and is more consistent with other states by requiring a physician’s recommendation.” He says that bill would create four licenses: cultivation, processing transportation and retail.

Sen. Robert Bradley (R-5th District) also filed legislation (SB 406) to implement Amendment 2, but this bill is very different from Sen. Brandes’ bill. “Bradley’s bill is built upon the statutory framework that is already in place,” says Ginder. “Bradley’s is keeping vertical integration intact, seeking to also limit the amount of vertically integrated license based on a patient ratio of about 20,000 registered patients per license issued.” Bradley’s bill does not provide for independent lab testing requirements. Some might characterize Bradley’s bill as more of the same, allowing for the consolidation of existing monopolies.

Ginder says these are just two bills from the Senate, the House still has not proposed any bills. “We will most likely see more bills,” says Ginder. “We still don’t know what iteration of the bill or what language might be adopted and you can expect them to change as it moves through the committees.” With the legislative session beginning on March 7th, we can expect to see these bills debated on the floor and likely the filing of other legislation.

gm-horizontal-bw_nolaw (4)On February 1st, Greenspoon Marder announced the launch of their Organization for Safe Cannabis Regulation (OSCR) in Florida. By hiring lobbyists and making contributions to certain political candidates, the OSCR aims to advocate for a broad and fair marketplace, specifically “advocating for laws that create independently “registered” entities that perform specific functions along the production and distribution chain.”

Soapbox

Labeling Cannabis Products is a Booming Market

By Marsha Frydrychowski
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Legal marijuana sales are expected to hit $6.7 billion in 2016, with the market expected to climb to $21.8 billion in sales by 2020. As legal cannabis sales rise, cannabis labels are quickly becoming one of the fastest growing markets for label manufacturers.

An Industry Gaining Legitimacy

Since California first legalized medical cannabis in 1996, the cannabis industry has grown considerably. Voters in four states legalized recreational cannabis last week on Election Day, including California, which is currently the world’s 6th largest economy. Voters in another four states legalized medical cannabis as well, bringing the total to 28 states with some form of legalization measure.

The market is moving ahead and will not be limited to small businesses and dispensaries either. Already, more than 50 publicly traded companies have blitzed the market, including pharmaceuticals, medical growers and even major tech companies.

An example of a cannabis flower label in Oregon with all of the required information.
An example of a cannabis flower label in Oregon with all of the required information.

What’s more, public support for full cannabis legalization is at an all-time high 61 percent, according to a recent survey from the AP-NORC Center for Public Affairs Research. The market is here to stay.

Cannabis flower labels

Legal cannabis has primarily consisted of dispensaries selling cannabis flower or leaves (ready-to-smoke marijuana) in pouches or childproof containers. Regulations have essentially required two cannabis labels for the pouches: a branded label on the front and a regulatory label on the back. Many dispensaries also use pre-printed pouches.

Similar to the way alcohol labels must contain information for alcohol content, the informational labels that sit on the backs of pouches are legally required to provide certain accurate information, including:

The universal symbol required on all cannabis products in Colorado
The universal symbol required on all cannabis products in Colorado
  • THC %
  • CBD %
  • Net weight in grams
  • Lab name and test number confirmation
  • Batch number
  • Date tested
  • Strain name
  • Warning Label

And cannabis flower labels are just the beginning. Many smoke-free product categories are emerging with similar labeling requirements. These often allow for increased branding opportunities that will afford better profit margins for label suppliers. Some of the many products in this young category include:

  • Edibles — such as dark chocolates, baked goods, snack crackers and teas infused with cannabis.
  • Topicals — such as pain-relieving lotions and creams.
  • Tinctures — cannabis-infused oils that are applied in drops to the tongue.

Bottom line: For label and packaging suppliers, cannabis represents one of the fastest growing market opportunities today and the opportunities extend way beyond labeling for the flower itself.

Managing Compliance

As more and more states move toward legalization and regulation, uneven laws in different states are increasingly governing the market. Businesses must respond to ever-changing requirements, including labeling standards. While many dispensaries have gotten away with minimalist labels, states are increasingly demanding dispensaries meet more stringent legal requirements. For example, Oregon passed new labeling requirements this year and products that failed to meet them by October 1, 2016 were not allowed on store shelves.

Label suppliers entering the market must keep abreast of the changing regulations and be able to help brands navigate them. They need to work to understand the intricacies of this new market, rather than simply looking to redirect the capabilities they already possess. See the original post here.

 

Exploring Opportunities in Emerging Markets

By Aaron G. Biros
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This November 8th, voters in five states will head to the polls to decide on legalizing recreational cannabis and another three states have ballot initiatives that would legalize medical cannabis. If any of those five states pass a measure for recreational legalization, including Massachusetts, Maine, Nevada, Arizona and California, (which are all leading in the polls) they could potentially create massive new market opportunities for cannabis brands that have their eye on expansion.

Nancy Whiteman, co-owner of Wana Brands and chair of the Cannabis Business Alliance Infused Product Committee, sees great potential in capitalizing on those markets early. Whiteman has been working with Wana Brands since 2010 in Colorado, starting out in the young medical market there.

Nancy Whiteman holding a batch of cannabis gummies
Nancy Whiteman holding a batch of cannabis gummies

After expanding to the recreational market, Wana Brands saw its sales skyrocket. From January to August 2016, Wana had the best-selling candy brand in Colorado with 21% dollar share, according to BDS Analytics. Wana Brands has already expanded to Oregon and will launch in Nevada on November 15th, with agreements signed to expand in other states as well. “The model we are pursuing is a licensing agreement where we partner with existing or new license holders in their state,” says Whiteman. “In many ways they are doing the heavy lifting, but we are providing an enormous lift by licensing our intellectual property to them.” That model for growth is becoming increasingly common in some of the more established brands, like Steep Hill Laboratories, GFarma Labs, Dixie and others. Whiteman says that Wana Brands also has a partner in Illinois, Massachusetts and a number of other states they hope to reach.

Mark Slaugh, CEO of iComply
Mark Slaugh, CEO of iComply

According to Mark Slaugh, executive director of the Cannabis Business Alliance and chief executive officer of iComply, a compliance services provider, brands from Colorado expanding to other states need to ask themselves if their reputation is on the line with these new operators. “If you are licensing to companies that are not compliant, the penalties could be huge and they vary state to state- that could potentially hurt the overall brand image nationally,” says Slaugh. “People doing the licensing that are operating with full compliance really need to look at controlling that risk and mitigating that as much as possible.” With brand trust on the line, there are substantial risks that come with expansion. “We help clients ensure quality is consistent so, for example, an edible product would taste the same in Colorado as it would in Nevada or Arizona. They need to follow the intellectual property consistently but more importantly follow those specific regulations in that state to stay afloat.” Managing ongoing compliance in different states requires monitoring regulatory updates across multiple markets, which can get incredibly complex.

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Processing SOPs vary widely stae to state

“Six years ago, it was much easier to get into the market in Colorado,” says Whiteman. “There were no capital requirements, no limits on the number of licenses, but there was still a lengthy application and vetting process- as long as you met those minimum requirements you could get a license.” Other new states put stringent limits on the number of licenses granted and some have extraordinarily cost-prohibitive capital requirements, up to a million dollars, as is the case for New York. “Anyone who becomes a license holder in Massachusetts has to be prepared to embark on three separate business models, which is a massive undertaking,” says Whiteman. Massachusetts requires license holders to cultivate, process and dispense in a vertically integrated model.

In other states, Wana Brands is working with exclusive partners who will have the capabilities to manufacture and distribute throughout the entire state, but in Massachusetts that won’t be the case. “To cover the state, we need several partnerships; the partner we are working with is a little south of Boston,” says Whiteman. But all that could change if voters in Massachusetts legalize it recreationally, opening a much larger market than the current medical program. “With no legislation drafted yet, the regulatory environment is still up in the air in Massachusetts so there is no way of telling what the recreational market will look like.” In terms of ongoing regulatory compliance, Whiteman believes that Colorado still has some of the most stringent rules. The universal symbol printed on every individual edible product serving is one example. “Every state has different lab testing and licensing requirements, but Colorado looks like the most stringent currently,” says Whiteman. “Colorado requires a full gamut of lab testing including homogeneity, potency, residual solvents, contaminants and soon pesticides too.” According to Mark Slaugh, Nevada’s lab testing regulations are fundamentally different from Colorado’s with regard to sampling procedures, but the broader inconsistencies in lab standards need to be addressed. “The lack of laboratory standardization state to state with regard to methods creates a big challenge to get consistent, proficient lab testing across the board,” says Slaugh.

Wana's edibles come stamped with the universal symbol (THC!)
Wana’s edibles come stamped with the universal symbol (THC!) in Colorado, as required by law.

A big differentiator between Colorado and other states is that it was a first mover. “When Colorado came online there were not any established brands to speak of anywhere in the country- we were all pioneers,” says Whiteman. “Because it is so difficult to get a license in another state, either the organization or investor groups are looking to partner with established brands.” The advantages to this business model are many. Expediting your entry to market gets you the advantage of being a first mover. Working with an established brand also minimizes risks and the learning curve. “Bigger players understand that building a brand from scratch is time consuming and expensive so I think we will see a lot of these partnerships.”

As those new states come online, similarities in their regulations might appear in the form of standard operating procedures (SOPs) or good manufacturing practices (GMPs). “We might start to see a standardization from state to state that models FDA GMPs or USDA GAPs, [good agricultural practices] moving toward a framework that is more consistent with the possibility of federal regulation,” says Slaugh. Another commonality among a number of states is the implementation of a statewide tracking system. According to Slaugh, California has no such mandated system in place yet. “They will probably have one eventually but the market is so localized there- we will see if California will be ready with a statewide compliance system for tracking by 2018,” says Slaugh. “With such a weird patchwork of local governments allowing or not allowing certain operations to exist, it is a tough business to be in and it’s getting tougher every day.”