Is the U.S. Getting on Board With Marijuana Legalization?

By Alex Carchidi
Source: fool.com

Yes, but expect legalization efforts for recreational use to proceed unevenly from state to state.

IMAGE SOURCE: GETTY IMAGES.

With companies like Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC), and Tilray (NASDAQ:TLRY) catching the attention of investors and consumers alike, it's no surprise that marijuana legalization is a hot issue in the U.S. According to a report by Grandview Research, the U.S. market for cannabis was worth $11.3 billion in 2018, with an expected growth rate of 14.5% per year through 2025 -- but that might be contingent on further loosening of prohibition laws. As of 2018, 21 states have debated legislation that would legalize recreational use of marijuana, and 33 states have already legalized some forms of cannabis for either recreational or medicinal use.

Presently, marijuana is fully legal for recreational use in only 11 of those states. With the exception of Vermont, jurisdictions with legalized recreational cannabis also provision for the commercialization of cannabis products for adults. Fully legalized marijuana remains uncommon in the United States, even if it's significantly more common than it was 10 years ago.

2020 may see pivotal victories for legalization

In 2020, a handful of states will vote on full or partial legalization via referendum, including Arizona, Mississippi, Montana, Nebraska, New Jersey, and South Dakota. It's reasonable to suspect that at least a couple of these political efforts will fall short, but legalization proponents shouldn't despair. Many of the states that eventually legalized recreational cannabis via referendum had to try more than once before succeeding, as is typified by California's failed ballot initiative in 2010. But cannabis investors will be pleased to learn that no state that decriminalized or legalized recreational use has repealed it, despite several different attempts via ballot measures. Thus, the country looks like it's on track for legalization to make progress this election cycle, even if there's still a long way to go.

Even as states move to reform their cannabis laws, federal regulatory bodies like the Food and Drug Administration (FDA) are prohibited by federal law from participating in quality control or consumer safety efforts. This means that as legalization advances, state governments need to build new infrastructure to make sure that their cannabis regulations are locally enforceable, thereby introducing a large amount of overhead to the legalization process. It may also make it harder for international cannabis companies to compete in the U.S. because they'll need to deal with many different sets of regulations rather than just one.

Medicinal use and decriminalization aren't the same as legalization

Full nationwide cannabis legalization is still a distant goal, and there are many cases where progress has been incremental rather than transformational. Sixteen states have decriminalized recreational marijuana use without implementing full legalization for recreational purposes. In these states, cannabis products are only sold for medicinal use, which is strictly controlled. In places like Idaho and Indiana, medicinal use is so tightly regulated that medicinal products from jurisdictions like California might not be legal. This is a concern for cannabis investors because it means businesses would need to make different products for these jurisdictions if they wanted to compete.

Similarly, many states haven't committed to full decriminalization despite allowing for limited medicinal use. In Alabama, non-medical marijuana possession is a misdemeanor for first-time offenders and a felony for subsequent violations, so its "decriminalized" status is a bit of a misnomer. In contrast, Georgia's laws tightly control the THC content of medicinal marijuana while formally forbidding any recreational use, but cities including Atlanta and Savannah have proceeded to decriminalize it anyway, creating precarious pockets of opportunity that businesses are hesitant to exploit.

Finally, there's the issue of the federal government's approach to cannabis policy. Right now, there's no way to reconcile the fact that at the federal level, recreational cannabis is still fully illegal, even if state governments like New Hampshire's claim to have nullified the federal prohibition. State-level initiatives aside, Congress was initially scheduled to vote on a legalization bill called the MORE Act this week, but with an upcoming battle over Supreme Court nominees looming, the vote will likely be delayed until after the 2020 election.

So, while it does look like there is nationwide momentum building behind legalization for recreational use, there's still a long way to go, and there may be difficult legal battles ahead.

 

THE CAR THAT WAS MADE AND RUN OFF HEMP BY HENRY FORD

By Charlie Beblin
Source: medicalcannabisbrief.com

Yep, you read that right! Back in the 1940’s Henry Ford released a car that was made and run off of the plant material, hemp.

 

Back then, metal was needed for military supplies, so there was little to be used for car production. This slowed the industry. Henry Ford and his team got creative. In a span of 12 years, they had invented the first automobile that was almost entirely made from plants!

“70 percent of cellulose fibers from wheat straw, hemp and sisal plus 30 percent resin binder. The only steel in the car [was] its tubular welded frame.”

– Popular Mechanics Magazine December 1941

The team was able to make strong bioplastics. Some say these plastics are up to 10x stronger than steel!

Photo from: Popular Mechanics Magazine

Hemp Oil to Biodiesel

Okay so now we have a sustainable car, now let’s fill it up! And, this too can be sustainable. Almost 100% of hemp oil can be converted into biodiesel (97% to be exact).

 

Unfortunately, this concept was ahead of its time and there was not a lot of interest. These days we are pushing for more sustainable options in every aspect of living. Perhaps this is a concept worth revisiting?

Fast Forward to 2017…

Photo from: CNBC

Jay Leno featured a little red convertible car that was made out of 100 pounds of hemp on his show Jay Lenos Garage. The owner, Bruce Dietzen, is proud of his strong and durable hemp car. Dietzen and his company, Renew Sports Cars are working to revisit this sustainable concept for automotive vehicles.

It seems Dietzen’s company is picking up where Ford left off—aiming to produce a line of vehicles within the next 10 years that are free of carbon fiber, steel and petroleum-based plastics.

– High Times Magazine 2017

Hemp Cars Making a Return

Bruce Dietzen invested $200,000 (USD) for his hemp car prototype. He is very pleased with the results and is currently taking orders to make more! The price of a hemp car could range anywhere from $40,000 to $197,000 (USD).

 

Imagine… if the world switched to a sustainably made and run car, there would be significantly fewer emissions into our ecosystem. Just to put it into perspective, manufacturing one car emits ~10 tones of CO2. That’s just to make the car! Then on average another 6 tones of CO2 emitted from driving around for a year.

 

By fueling the car with biofuels, it is 3x greener than today’s Electric Vehicles. Biofuels such as biobutanol made from corn stalks, or cellulosic ethanol, which Ford made from hemp.

 

Ultimately, it is nice to see alternatives to everyday items that reduce our biological footprint. Even small changes make a big difference. Bringing your own bags to a grocery store, reusable water bottles, not using plastic straws are small acts that make a difference.

 

These states are voting on cannabis legalization this November

By Alicia Wallace
Source: cnn.com

San Francisco (CNN Business)

In 2016, the US election resulted in a green wave as cannabis legalization measures passed in eight out of nine states.

Now, the industry and its supporters are hoping for another big win in November.

This year, voters in five states will decide whether to adopt either new medical or recreational cannabis laws -- or, perhaps, both in the case of one state.

As it stands now, 33 states have legalized medical cannabis, and of those, 11 states have legalized cannabis for adult recreational use.

If more states join that list, it could serve as a huge opportunity for industry growth as legalization supporters believe successful ballot initiatives could have a domino effect on other states -- especially those looking to address budgetary and social justice issues.

"We've seen public support continue to grow every year," said Karen O'Keefe, director of state policies for the Marijuana Policy Project, the legalization advocacy group backing several of the measures.

Cannabis sales in states that have legalized the plant for medical and recreational purposes totaled about $15 billion in 2019, and are expected to top $30 billion by 2024, according to data from BDS Analytics, which tracks dispensary sales.

Below is a look at the five states voting on legal cannabis this November.

Arizona

Four years ago, residents in the Grand Canyon State narrowly defeated an initiative to legalize recreational cannabis. It failed by fewer than 67,100 votes, with 51.3% of voters saying no.

The 2016 measure was hotly contested, attracting a combined $13 million from high-profile donors such as soap company Dr. Bronner's, which was in favor of the measure, and opponents such as billionaire casino magnate Sheldon Adelson, tire retailer Discount Tire, and pharmaceutical company Insys.

This time around, the backers of the recreational cannabis initiative include some of the biggest names in the US cannabis business -- an industry that has matured significantly during the past four years. State election finance records show that contributors supporting Proposition 207 include multi-state cannabis producers and retailers such as the Tempe, Arizona-based Harvest Health & Recreation (HRVSF) and firms such as Curaleaf (CURLF) and Cresco Labs (CRLBF), which have cultivation and retail operations in Arizona's medical cannabis industry.

Still in staunch opposition are Governor Doug Ducey, the Arizona Chamber of Commerce and Smart Approaches to Marijuana, a national organization that opposes the legalization and commercialization of cannabis.

Marijuana plants sit in the Harvest grow operation in Camp Verde, Arizona, on Feb. 7, 2018. Harvest is one of the largest cannabis companies in the United States and a large financial contributor of efforts to legalize recreational cannabis in Arizona.

For the most part, Proposition 207 is structured similarly to 2016's measure. It would allow adults 21 years and older to possess, consume or transfer up to 1 ounce of cannabis and create a regulatory system for the products' cultivation and sale. Some key differences with the new measure include the addition of social equity provisions and criminal justice reforms such as record expungement.

According to estimates from industry publication Marijuana Business Daily, recreational sales in Arizona could total $700 million to $760 million by 2024.

New Jersey

When Governor Phil Murphy was elected in 2017, he vowed to deliver on a campaign trail promise to legalize cannabis. At the time, he told the New Jersey Star-Ledger that legalization could be a $300 million boon to state coffers but that the biggest reasons for legalization would be for social justice purposes -- overhauling old drug laws that disproportionately criminalized people of color.

In this Friday, March 22, 2019 photo, Heather Randazzo, a grow employee at Compassionate Care Foundation's medical marijuana dispensary, trims leaves off marijuana plants in the company's grow house in Egg Harbor Township, New Jersey. A ballot initiative to legalize recreational cannabis is going before New Jersey voters this November. (AP Photo/Julio Cortez)

However, legislative efforts to legalize failed to drum up enough support. Lawmakers ultimately decided to go another route and put the measure before voters.

If approved, Public Question No. 1 would legalize cannabis for adults 21 and older. The program will be regulated by the same commission that oversees New Jersey's medical cannabis businesses, and the recreational cannabis products would be subject to the state sales tax (currently 6.625%).

By initial estimates, New Jersey's recreational cannabis market could be hefty. Marijuana Business Daily pegs annual sales between $850 million and $950 million by 2024 -- but a successful initiative carries greater significance outside of New Jersey's borders. The passage of recreational cannabis in New Jersey could accelerate legislative efforts in neighboring New York and Pennsylvania.

South Dakota

Usually states have legal medical cannabis programs in place before adopting recreational cannabis laws.

South Dakota could enact medical and recreational programs in one fell swoop.

Voters in South Dakota will decide on Measure 26, which would establish a medical cannabis program and registration system for people with qualifying conditions, as well as on Amendment A, which would legalize cannabis for all adults and require state legislators to adopt medical cannabis and hemp laws.

The South Dakota Legislative Research Council projected that Amendment A could result in $29.3 million in tax revenue by the state's 2024 fiscal year. Sales estimates were not yet available, according to the Marijuana Policy Project, which is assisting with the South Dakota campaign.

Montana

Montana voters also will see two cannabis initiatives on their ballots.

Ballot issue I-190 would allow adults in the state to possess, buy and use cannabis for recreational use. A separate initiative, CI-118, would establish 21 as the legal age to purchase, possess and consume cannabis.

If passed, I-190 would establish a 20% tax on recreational cannabis, with more than half of the tax collections landing in the state general fund and the rest allocated to programs such as enforcement, substance abuse treatment and veterans' services. The measure also would allow people serving a sentence for certain cannabis-related acts to apply for resentencing or records expungement.

According to a fiscal analysis, the state expects recreational cannabis sales to total nearly $193 million in 2025, generating $38.5 million in tax revenue.

Mississippi

In Mississippi, there are two competing measures to legalize cannabis for medical purposes.

Initiative 65, which resulted from a citizen petition, would allow physicians to recommend medical cannabis for patients with any of 22 qualifying conditions such as cancer, multiple sclerosis and post-traumatic stress disorder. The constitutional amendment would establish a regulatory program for businesses to grow and sell medical cannabis and for the products to be taxed at a 7% rate.

Under Mississippi law, the legislature has the option to amend or draft an alternate measure, and that's what it did here via Initiative 65A. The competing measure requires medical products that are of pharmaceutical quality, limits the smoking of medical cannabis to people who are terminally ill, and leaves the future creation of rules and a regulatory framework up to the legislature.

Officials from Marijuana Business Daily said that if Initiative 65 is passed, medical sales could total between $750 million to $800 million by 2024.

Pakistan plans hemp production with eye on global cannabis market

Source: trtworld.com

The move comes as Prime Minister Imran Khan's government struggles to boost the country's foreign exchange coffers that have been drained by a struggling economy, fiscal deficits and inflation.

Hemp buds for export sit at the CPlant company's farm on the outskirts of Tala, Uruguay, August 13, 2020. (AP)

Pakistan has unveiled plans to allow the industrial production of hemp, spurring hopes farmers and businesses in the country will be able to tap into the lucrative global cannabis market.

The move comes as Prime Minister Imran Khan's government struggles to boost the country's foreign exchange coffers that have been drained by a struggling economy, fiscal deficits and inflation.

"This hemp market could provide Pakistan with some $1 billion in the next three years and we are in a process of making a full-fledged plan for this purpose," science and technology minister Fawad Chaudhry told reporters on Wednesday.

Hemp is a type of cannabis plant containing cannabidiol (CBD) which advocates say has numerous medicinal and relaxing properties.

It does not contain significant quantities of high-inducing tetrahydrocannabinol (THC).

$25 billion globally

Chaudhry said the industrial hemp market was worth some $25 billion globally and several countries were relaxing laws targeting cannabis-based products such as CBD oils.

Initially, the government will control hemp production, Chaudry said, but private businesses and farmers will be allowed to enter the market at a later date.

He added that with cotton production in Pakistan declining due to various factors, hemp provided farmers with a viable alternative.

In Pakistan, the consumption of alcohol is strictly forbidden for Muslims, many people are surprisingly open to using cannabis, with the spongy, black hash made from marijuana grown in the country's tribal belt and neighbouring Afghanistan the preferred variant of the drug.

Across the subcontinent people have been cultivating cannabis and smoking hash for centuries.

The plant predates the arrival of Islam in the region, with reference to cannabis appearing in the sacred Hindu Atharva Veda text describing its medicinal and ritual uses.

Hemp grows almost as a weed in parts of Pakistan, including in great abundance in the capital, where huge bushes can be seen sprouting at traffic roundabouts.

New Bill Would Give Hemp Businesses A Boost And Require Studies Into Alternative Uses For The Crop

By Kyle Jaeger
Source: marijuanamoment.net

A congressman introduced a bill on Friday that would create a variety of programs and grants to help people enter the hemp industry and build their businesses. It would also require a federal study into potential alternative uses for the crop as well as challenges faced by the market.

Rep. Denver Riggleman (R-VA) filed the Hemp Opportunity Zone Act. As the title implies, the main component of the legislation clarifies that farmers who cultivate the crop can receive tax benefits if they operate in an area designated as an “opportunity zone” by the Treasury Department.

Opportunity zones are census-designated low-income areas that are considered economically distressed. The governor of a state can make the designation, and Treasury then decides whether to certify it. The program is designed to promote investments in communities that might typically be overlooked by allowing investors to defer capital gains taxes if they put money into an opportunity zone business.

“We are reviewing the legislation now, but if it indeed serves to open up investment in hard-hit farming and small business communities, it would be welcome relief for an industry that has been struggling through the COVID pandemic and federal burdens imposed by FDA, USDA and now the DEA,” Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told Marijuana Moment.

Treasury Sec. Steven Mnuchin earlier this year weighed in on eligibility for the opportunity zone program with respect to the marijuana industry and said “it is not the intent of the opportunity zones that if there is this conflict [between state and federal marijuana laws] that has not been cleared that, for now, we should not have those businesses in the opportunity zones.”

In addition to clarifying eligibility for hemp-focused businesses, Riggleman’s new bill would also create a “hemp farmer start-up tax credit” equal to 10 percent of the cash rent paid for land used for production or 15 percent of the “crop share rent so paid by the taxpayer.” To be eligible, farmers would need to have less than $25 million in gross receipts for the last taxable year.

The Hemp Opportunity Zone Act is a huge win for farmers in #VA05. Hemp farming is a new and thriving industry. By providing these tax incentives hemp growers in Virginia and the 5th District are primed to lead based on their historic production of tobacco. https://t.co/LncEw7SQsS

— Congressman Denver Riggleman (@RepRiggleman) August 29, 2020

The legislation would further establish a “small hemp farmer credit” that would enable businesses with less than $250,000 in gross receipts for the previous taxable year to obtain a credit “equal to 30 percent of the basis of hemp farming property placed in service.”

“Hemp farming is a new and thriving industry,” Riggleman, who lost his primary renomination bid this year and only has a few months left in Congress, said. “By providing these tax incentives hemp growers in Virginia and the 5th District are primed to lead based on their historic production of tobacco.”

He said that expanding opportunity zone eligibility to the market “will incentivize investments into long neglected neighborhoods that will spur economic growth and combat poverty.”

Finally, the bill also calls on the Treasury Department to work with the U.S. Department of Agriculture (USDA) on a study of the hemp industry.

The report would look at opportunities to use hemp seeds in animal feed, the potential use of hemp products as protective equipment for medical workers and first responders and the “feasibility” of certain USDA regulations for the market.

Certain questions the study would address concern complaints industry stakeholders have made about USDA’s interim final rule for the crop. Treasury and USDA would have to consider the department’s hemp sampling requirements and its 0.3 THC limit for the crop.

The agencies would also have to explore how the U.S. competes “globally with other countries that have a 1.0 percent THC limitation.” The bill states that the study should additionally consider the potential benefits of including hemp-based food items in “certain public school meal plans” and whether any items used by the federal government or its contractors “can be substituted by a hemp-based product.”

Several of those areas of study were addressed in a bill introduced by Rep. Tulsi Gabbard (D-HI) last year.

Meanwhile, several lawmakers have recently implored USDA to delay the implementation of its proposed hemp rules, citing concerns about certain restrictive policies the agency has put forward in its draft regulations.

Senate Minority Leader Chuck Schumer (D-NY) earlier this month wrote to Agriculture Secretary Sonny Perdue, similarly asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 Farm Bill hemp pilot program in the meantime.

As it stands, the earlier pilot program is set to expire on October 31. The minority leader isn’t alone in requesting an extension, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA this month.

As USDA works to finalize their regulations, which they intend to complete by October 2021, the department has been systematically approving hemp plans proposed by individual states, territories and tribes. The most recent approvals were for Maryland and the Lower Sioux Indian Community.

Six states that submitted hemp regulatory plans to USDA are being asked to make revisions and resubmit before they’re approved.

Read the text of the Hemp Opportunity Zone Act at the following link:

Hemp Opportunity Zone Act