Colorado appears ready to open cannabis markets to outside investors

Colorado’s $1.5 billion-a-year marijuana industry appears on the threshold of opening its recreational and medical markets to a potential rush of outside investors and capital, almost a year after former Gov. John Hickenlooper shot down similar legislation.

Bipartisan legislation that would allow publicly held companies to both invest in and hold marijuana licenses in Colorado is being considered again this legislative session – and this time, odds are good it will pass and become law. A state House panel is scheduled to take up the bill Monday.

Dean Heizer, executive director and chief legal strategist for LivWell Enlightened Health, a Colorado-based marijuana retail operator, said the current law barring outside investment puts the state at a disadvantage versus those that don’t have such restrictions.

“What we’re seeing now is states like California, Florida, Massachusetts bring in capital to get ahead of us in infrastructure, R&D, new-product development,” Heizer said.

“That’s not something the Silicon Valley of cannabis – Colorado – should allow to happen.”

Colorado lawmakers passed a similar bill last year, but it was vetoed by Hickenlooper, who called it “premature,” partly because the industry is still illegal on a federal basis and lacks banking services.

Hickenlooper, a Democrat, also expressed concerns about the potential for criminal enterprises to get a foothold in Colorado’s marijuana market. After Hickenlooper’s veto, local cannabis companies threatened to leave Colorado.

New regime, new promise?

Cannabis entrepreneurs in the state have cheered the fact that new Gov. Jared Polis, a Democrat, has positioned himself as a champion of marijuana issues, and MJ industry officials are confident he will back the investment measure as long as it has strong safeguards.

The current law limits out-of-state owners to 15 people. That not only eliminates the potential for a public stock offering or a merger with a publicly held company, but it also shuts out capital raises from venture capital funds that have more than 15 investors.

“We’ve been hindered in our growth because our laws restricted outside ownership and investment,” said Andy Williams, CEO of Denver-based marijuana grower and retailer Medicine Man.

“This is a little late but allows Colorado companies to compete with the rest of the country and the rest of the world. Without it, Colorado would fall further behind.”

But Chris Woods, owner of Boulder-based dispensary chain Terrapin Care Station, told Colorado Public Radio he opposes the measure.

He said he is concerned that opening the state’s industry to outside investors would lead to more black-market activity.

Several businesses, including Medicine Man and LivWell, were so frustrated with Hickenlooper’s veto last year they threatened to move their headquarters to more business-friendly cannabis states.

Heizer said LivWell has a contingency plan to move all its non-licensed assets to Nevada “unless we get this bill done this year.”

Kristi Kelly, executive director of the Marijuana Industry Group in Denver, which represents more than 500 licensees, said her members have been talking about this need for a number of years.

But “for us, the inflection point” came after Hickenlooper’s veto last year.

Hefty price for Colorado MJ firms

Kelly said the industry experienced a flight of capital.

While it’s impossible to quantify how much Colorado lost, she said she heard from members that had deals fall apart “because investors wanted to go to friendlier states.”

What became very clear, she said, was that this is an issue for both big and small businesses.

“When public and private money gets signals that there are potential challenges in a particular investment,” Kelly said, “they make choices to go to places that are more attractive. Why put money into a market that limits your exit?”

Because of Colorado’s restrictive environment, marijuana businesses have a lower valuation and have “had to give up more to gain the capital” that is permissible in the state, Kelly said.

That has been the price for being a pioneer in recreational marijuana.

“Colorado put its model together first and put in place guardrails specific to ownership that was incredibly restrictive and specific by design,” Kelly noted.

The bill is scheduled to get a hearing Monday in the state House Finance Committee. Some of the language was still being worked on this week.

The latest public version of the bill would:

  • Repeal provisions that limit the number of out-of-state owners to 15 people, stipulations that effectively block publicly traded companies and many venture-capital funds from participating in the market.
  • No longer prohibit publicly traded companies from holding a Colorado marijuana license.
  • Eliminate provisions that require limited passive investors (less than a 10% interest in a business) to go through an initial background check.
  • Create two new kinds of ownership licenses. One would be for those owning at least a 10% stake in a cannabis licensee; the other would be for passive investors owning less than 10%.
  • Require state regulators to issue rules within 60 days once the legislation becomes law.

The legislation would put in place certain safeguards such as requiring:

  • Publicly traded businesses or controlling investors to receive a finding of “suitability” from the state licensing authority.
  • Those individuals or businesses to disclose owners with at least a 10% stake as well as officers, directors and affiliates. Individuals owning at least a 10% interest in an MJ business, business managers, officers and other employees also would have to pass a fingerprint-based, criminal background check.
  • Publicly traded companies to comply with various disclosure and reporting provisions.

Jeff Smith can be reached at [email protected]

Lawmakers Consider Legalizing Adult Use Cannabis in Connecticut

Adult Use Cannabis in ConnecticutWhen the Connecticut General Assembly convened in January, lawmakers wasted no time introducing several bills to legalize adult use cannabis. While the state currently has a medical cannabis program in place, more reform appears to be on the horizon. If a bill is passed by both House and Senate, it’s likely that Connecticut Governor Ned Lamont would be on board with legalization.

In his first state budget address, Gov. Lamont recognized an adult-use market as potential revenue for the state. Along with other proposals, he called for “legalized recreational marijuana like our neighbors, that will be carefully regulated for a safer market, with tax.” And according to the state’s Office of Fiscal Analysis, Connecticut could potentially see $45.4 million, up to $104.6 million in tax revenue annually.

At this point, the most detailed option is HB 5595 which was co-sponsored by 40 state representatives. Two others, HB 6863 and SB 744 are general calls to expand the medical cannabis program and legalize, regulate and tax “recreational” cannabis sales.

Matt Simon, the New England political director for the Marijuana Policy Project (MPP), had this to say about the early proposals, “Some of them are just shells with no real language… The real question is what path this will end up taking through the legislature.”

What Adult Use Would Look Like Under HB 5595

Though brief, HB 5595 provides the most robust outline for adult use cannabis in Connecticut. The bill includes the following highlights:

  • Retail sales of adult use cannabis will be legal for those 21 years of age and older
  • Adults will also be able to home grow up to 6 plants for personal use only
  • The Department of Consumer Protection will be responsible for program oversight
  • Currently licensed (medical) dispensaries will have first priority for adult use licensing
  • Driving while impaired and public consumption will be prohibited
  • Marketing will be prohibited and packaging must be child-safe and clearly labeled
  • Ensures that medical cannabis will not be subject to adult use sales or excise taxes
  • Expunges records for anyone who has been convicted for cannabis possession

In addition, HB 5595 requires that tax revenue from retail sales will be applied to the following: drug awareness education and substance abuse treatment, cannabis testing, studies focused on the effect of cannabis legalization and consumption, stationing drug-prevention officers at schools, and developing a program to prevent distracted driving and driving under the influence of cannabis.

The next step for the bill that garners the most support will be a legislative committee that will continue to add and adjust the language. With a committee vote in favor of moving it forward, the revised bill will then go to the floor of the Connecticut General Assembly, both House and Senate, for even more debate and eventually voting. The final stop will be Gov. Lamont’s desk.

Will Adult Use Cannabis in Connecticut Become a Reality?

Though there are those who oppose legalizing adult use cannabis, the early bill proposals by lawmakers and support of Gov. Lamont are certainly good signs.

As for public sentiment regarding adult use cannabis in Connecticut, the most recent data from an October 2017 poll conducted by Sacred Heart University shows that 71% of residents either strongly support or somewhat support legalizing and taxing cannabis in the context of the state’s budget crisis.

And according to Matt Simon, “The good news is, the mood is on. They’re really talking about these things, and soon I expect there will be public hearings and public committee action advancing one or more of these bills.”

At Medicine Man Technologies, we’re hoping that the momentum and support will continue to build in the months to come. It’s certainly a positive start, and we’ll be sure to keep you updated on all progress.

If you wish to start your own legal enterprise in the U.S. or anywhere across the globe, please contact us for private consulting, as well as help with licensing, cultivating, dispensary operations and more.

Medical Cannabis in the Philippines Passed by House of Representatives

Medical Cannabis in the Philippines

On January 29, House Bill 6517 was passed by a nearly unanimous vote of 165-5 (3 abstentions) in the lower house of the Philippines Congress. Known as the Philippine Compassionate Medical Cannabis Act, the legislation paves the way for legalizing the use and domestic production of cannabis for patients in need. It will also enable further research into the medical efficacy of cannabis.

The bill, which was authored and introduced by Representative Rodolfo Albano III, is specifically aimed at providing relief from symptoms associated with a number of medical afflictions such as cancer. It was supported by the former president and now House Speaker Gloria Macapagal Arroyo who suffers pain from multiple cervical spondylosis and has used cannabis patches when visiting countries where it’s legal.

While opponents fear that it would lead to a surge in recreational use, Albono stated, “The bill clearly provides that the use of medical marijuana has to comply with strict regulatory requirements under the Department of Health (DOH). By saying that the medical marijuana will be a gateway to illegal drugs or will encourage addiction, the critics of my bill obviously do not know what they are talking about.”

What Medical Cannabis in the Philippines Will Include

If the legislation becomes law, multiple government agencies will be responsible for establishing as well as overseeing the medical cannabis market. The DOH will take charge of registering and issuing licenses for physicians, patients and caregivers, as well as developing the system’s framework and regulations.

The Food and Drug Administration (FDA) will implement proper testing of medical cannabis products for potency, consistency, and safety – plus compliant packaging and accurate labeling. The Dangerous Drugs Board (DDB) and Philippine Drug Enforcement Agency (PDEA) will oversee the activities of all registered Medical Cannabis Compassionate Centers, including: importation, cultivation, manufacture, storage, distribution, prescription, dispensation and sales.

An Advisory Committee on Medical Use of Cannabis will also be established to counsel these agencies.

While home-growing and smoking cannabis will be prohibited, patients will have access to other forms such as oils, tinctures, capsules and extracts. They will first need to have a “bona fide” relationship with a doctor licensed by the PDEA to prescribe medical cannabis. Patients must then register for and carry an identification card which is valid for a full year. Caregivers can also apply for an ID card but may only provide medical cannabis for one patient.

Qualifying conditions for medical cannabis in the Philippines will include:

  • Cachexia or wasting syndrome
  • Severe and chronic pain
  • Severe nausea
  • Epilepsy, seizures, or severe and persistent muscle spasms
  • Cancer
  • Glaucoma
  • Multiple sclerosis (MS)
  • Damage to spinal cord nervous system, intractable spasticity
  • HIV or AIDS
  • Post-traumatic stress disorder (PTSD)
  • Rheumatoid arthritis or similar chronic disorders
  • Conditions requiring hospice care

Included language also leaves the door open to additional conditions that may later be identified by the Department of Health through recommendations by the Medical Cannabis Advisory Committee.

What’s Required for HB 6517 to Officially Become Law

With House passage, the bill will now be sent to the Senate where a new version may be passed. That language must then be ratified by a bicameral committee and signed by President Rodrigo Duterte. In a move that seems to contradict his notoriously brutal “war on drugs,” Duterte has already expressed his support for the measure which means that medical cannabis in the Philippines could become a reality.

While there is no defined timeline to set up a system and regulations once medical cannabis is legalized in the country, our Medicine Man Technologies team is optimistic that patients will soon have access to the medicine and relief they need. We’ll be sure to keep you updated.

If you wish to start your own legal enterprise in the U.S. or anywhere across the globe, please contact us for private consulting, as well as help with licensing, cultivating, dispensary operations and more.

U.S. Virgin Islands Officially Legalizes Medical Cannabis

Virgin Islands Medicinal Cannabis Patient Care Act

In November 2014, 56.5% of voters in the U.S. Virgin Islands voted in favor of a non-binding referendum indicating their support of legalizing medical cannabis. Four long years later, and after several failed bills were introduced by Senator Positive T.A. Nelson, the Virgin Islands Medicinal Cannabis Patient Care Act was finally signed into law by Governor Albert Bryan Jr. on January 19.

The U.S. territory joins two others, Guam and Puerto Rico, in their endeavors to provide compassionate relief for citizens. In a statement released from Government House, Bryan expressed his support, “I have approved the Virgin Islands Medicinal Cannabis Patient Care Act because it is a step in the right direction toward assisting Virgin Islanders suffering from autoimmune and other debilitating medical conditions.”

System Oversight, Regulations and Implementation

While there will still be certain details to work out in the coming months, there are a number of details already spelled out in the act. An Office of Cannabis Regulation (OCR), operating within the Department of Licensing, will manage the system. It will be in charge of licensing cultivators and patients, as well as overseeing testing facilities, manufacturing operations and dispensaries.

In addition, the U.S. Virgin Islands will have a Cannabis Advisory Board with nine members appointed by the governor. It will be comprised of representatives from a variety of areas, the health department to agriculture, disability rights advocacy, finance and more. The board will supervise the OCR and develop new rules and regulations for it to implement.

The language of the Virgin Islands Medicinal Cannabis Patient Care Act already spells out a number of areas in regards to infrastructure:

  • Transfers of cannabis from a manufacturing facility to a dispensary will incur a 10% excise fee.
  • Patients will pay a 5% excise fee on all sales.
  • A $500k loan will be used to launch the program, but it must be self-sustaining within two years.
  • Beyond funding the system, revenue will go towards: drug education/rehabilitation, agricultural programs, infrastructure, medical tourism, as well as funding both sports and arts programs.
  • Application fees for Tier 1 growers (maximum of 100 plants) will not exceed $500, while larger growers (1,000 plants), manufacturers and dispensaries will pay no more than $5,000.
  • A draft of additional rules must be created within 120 days and finalized no more than 60 days later while allowing the public to provide feedback within a 30-day window.
  • Cultivators will not be allowed to also apply for and own dispensaries.
  • The OCR will begin issuing ID cards to patients within 120 days. It must also register all qualified businesses within 90 days of their application submission.

What Patients Who Are Virgin Island Residents Can Expect

Residents must first register with the OCR ($50 fee maximum) and receive an ID card allowing them to purchase, possess up to four ounces and consume medical cannabis. They may also request a card that specifically allows them to grow up to 12 plants in a secure location.

Patients must have written certification of a qualifying condition from their healthcare provider (doctor, homeopath, nurse practitioner, etc.) with whom they have a “bona fide” relationship in regards to their condition. A copy of the submitted application for the registry and the provider’s certification can be used as a temporary ID until the OCR sends a permanent card.

At this point, eligible medical ailments include: cancer, glaucoma, HIV/AIDS, hepatitis C, amyotrophic lateral sclerosis, Crohn’s disease, ulcerative colitis, agitation of Alzheimer’s disease, PTSD, traumatic brain injury, hospice care, Parkinson’s disease, Huntington’s disease, arthritis, diabetes, chronic pain, neuropathic pain, autism, opiate use disorder, or the treatment of these conditions or conditions that cause cachexia or wasting, severe nausea, seizures, or severe and persistent muscle spasms.

Like other programs around the world, the Virgin Islands Medicinal Cannabis Patient Care Act makes it illegal to drive, operate a boat, train or aircraft under the influence. Smoking in public is barred and a landlord is not required to allow a patient to grow on their property. Patients who violate the new laws may have their ID card suspended or revoked, either temporarily or permanently. They may also face criminal charges and penalties. Patients caught selling cannabis will be permanently banned from the program.  

Patients, registered caregivers, program businesses and other involved parties will also be protected from arrest and prosecution for medical cannabis related activities, as long as they’re aligned with all applicable laws. They will also be protected from discrimination in regards to housing, child custody, enrollment in schools, medical care and employment, off-hours only. Employers will still be able to prohibit employees from working under the influence.

The Potential for Medical Cannabis Tourism

The Virgin Islands Medicinal Cannabis Patient Care Act also opens the door to medical cannabis tourism by giving registered patients from areas where it’s legal, access to a non-resident ID card which will allow them to buy and use cannabis when visiting or first moving to the Virgin Islands. Patients who are not registered in their “home jurisdiction” but have an eligible condition can also find a physician, then apply for and receive an ID card. The cost to get a card is currently $50 for five days and $100 for 30 days.

While Medicine Man Technologies has witnessed the legalization of numerous medical cannabis programs, it seems that the Virgin Islands has put a lot of thought into the now passed legislation. Basic structure to allowing patients from other states and countries to support its tourism industry, these inclusions just might reflect the four long years it took to make medical cannabis a reality in this Caribbean archipelago.

If you wish to start your own legal enterprise in the U.S. or anywhere across the globe, please contact us for private consulting, as well as help with licensing, cultivating, dispensary operations and more.

New Jersey Legislature Fails to Vote on Adult Use Cannabis in 2018

New Jersey Adult Use CannabisDuring Governor Phil Murphy’s campaign for the Garden State’s top office in the 2017 election, he promised to work with the state’s legislature to legalize adult use cannabis in New Jersey during his first year in office. However, the drive fell short despite a major victory in November when two panels in the Senate and Assembly passed three bills that would pave the way to making adult use cannabis a reality.

Further debate and (hopefully) a vote will now be pushed out to 2019.

If and when current points of contention are settled, the primary bill will allow adults (21 years of age and older) to consume, as well as buy and possess up to an ounce of cannabis. In addition:

  • A Cannabis Control Commission will be established and responsible for licensing all cannabis-based businesses.
  • At the state level, cannabis sales will be taxed at 12% and local governments may also apply an additional 2% tax.
  • Dispensaries will be able to create consumption areas upon approval by local government. This would essentially give customers a place to enjoy cannabis outside of their homes.
  • Programs will be set up to support minority-owned, female-owned and small businesses.
  • Local governments will be able to prohibit cannabis-based businesses within their communities.
  • Dispensaries will be able to create a fleet or hire independent contractors to deliver cannabis to customers who might not have transportation or live near a dispensary.

The other bills being considered include one that would expand New Jersey’s existing medical cannabis program, permitting patients to possess up to three ounces of cannabis instead of the current maximum of two, as well as allow edibles and improve the licensing process for businesses.

The final bill called for the development of a system to expedite the expungement of low-level cannabis offenses and reducing the waiting period from ten years to just five.

Sticking Points, Governor Murphy vs. Lawmakers

Despite everyone being on the same page regarding the legalization of adult use cannabis in New Jersey, there are two points of contention that apparently prevented the bill’s passage before the close of 2018.

One area that will require compromise is the tax rate on cannabis sales. While the current bill sets it at 12%, Governor Murphy has suggested an excise tax of 25% which is more in line with other states such as Washington where sales tax is 37% and Colorado where there is a 15% excise tax and 15% sales tax.

The proposal is opposed by both State Senate President Stephen Sweeney and State Assembly Speaker Craig Coughlin. While both lawmakers support legalization, Sweeney has stated that he wants the tax rate to be kept low in order to prevent people from returning to the black market due to high prices.

In addition, both sides have differing opinions on whether or not a Cannabis Regulatory Commission is needed full-time. Governor Murphy is against it, Sweeney is for it, and the bill calls for an assessment three years after implementation to make a determination regarding the necessity of full-time.

If all of these issues can be worked out and the bills passed in 2019, New Jersey will be the first state to launch a legal, adult use cannabis market without a ballot initiative. While Vermont’s legislature made it legal for adults to grow, possess and consume cannabis, it’s yet to establish a fully regulated industry for cultivation, production and sales.

Of course, Medicine Man Technologies will be here to give you the latest updates on adult use cannabis in New Jersey. So, please stay tuned.

If you wish to start your own legal enterprise in the U.S. or anywhere across the globe, please contact us for private consulting, as well as help with licensing, cultivating, dispensary operations and more.


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Forbes Magazine (August 27, 2016) Act 16 legalized Medical Marijuana in PA! How Long Till Patients Have Access?

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CFN Media Group CFN Interview with Andy Williams – CEO of Medicine Man

CNN (January 24, 2015) Colorado’s Booming Marijuana Industry – Medicine Man was featured in this recent CNN story about our Grow Technology.

The Denver Post (January 19, 2014): Family-owned pot shop in Denver seeks to become national player

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TIME Magazine: Pot’s Money Problem

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Denver Business Journal: Colorado’s dispensaries will be its first recreational marijuana sellers as well

Orlando Business Journal: 5 ways to capitalize on medical marijuana

Natural Products Insider: Recreational Marijuana: How One Denver Dispensary Is Soaring to New Highs A Look at Medicine Man, One of Colorado’s Largest Marijuana Dispensaries

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