top of page
headerbg1500.png

Mon Jun 28 2021 09:53:00 GMT+0000 (Coordinated Universal Time)

High demand for Pennsylvania marijuana businesses — Lack of regulations plague Delta-8 market — House rejects GOP cannabis amendments

7 minutes

Originally Published By:

POLITICO

POLITICO PRO 

Morning Cannabis


BY NATALIE FERTIG, MONA ZHANG AND PAUL DEMKO


QUICK FIX


— Pennsylvania's medical marijuana market is red hot, thanks to its limited licenses and potential for adult-use legalization.


— Lab testing for Delta-8 THC products revealed rampant mislabeling, according to a Michigan cannabis lab. The state is moving to regulate Delta-8 products like marijuana.


— The House rejected two GOP-backed cannabis appropriations amendments to crack down on illicit grows and remove protections for universities that research cannabis.


THE STATE OF MARIJUANA


PENNSYLVANIA M&A ACTIVITY HITS NEW HIGHS — Multi-state operators have spent nearly $700 million so far this year to acquire Pennsylvania medical marijuana operations. And Verano is leading the pack, scooping up multiple dispensary chains, processing and cultivation facilities for hundreds of millions of dollars.


“We wanted to position ourselves ahead of [adult-use legalization]” said Aaron Miles, chief investment officer for Verano. “A lot of the MSOs have seen the writing on the wall. You’re going to see more consolidation in this space.”


Why it’s attractive: The state’s cannabis market is especially enticing for investors because it is home to a flourishing medical marijuana program with license caps, and the potential for adult-use legalization. Other multi-state operators like Trulieve and Jushi Holdings are expanding in the state.


Easier said than done: But despite both Democratic Gov. Tom Wolf and Lt. Gov. John Fetterman ’s vocal support for adult-use legalization, prospects for it being passed are slim to none in the short term because the Republican-dominated Legislature isn’t on board.


Republican Sen. Dan Laughlin breathed new life into the legalization debate when he partnered up with Democratic Sen. Sharif Street on a bipartisan marijuana legalization bill — a first for the state.


But he’ll have a tough time convincing other Republicans, who don’t want to hand Democrats a win — especially when Fetterman is running to fill GOP Sen. Pat Toomey’s seat next November.


Marijuana advocates like Chris Goldstein, a regional organizer for NORML, believe Laughlin’s support for the issue is a ploy for support for a possible gubernatorial campaign.


“I’m sure that’s part of his strategy to run for governor. He sees how popular this issue is,” Goldstein said.


BY THE NUMBERS


DISPENSARY SALES IN PENNSYLVANIA UP MORE THAN 80 PERCENT 


Pennsylvania’s medical market has grown rapidly since sales began in 2018. That’s part of what’s enticing so many multi-state operators, even though the prospects for full legalization look remote in the immediate future. Here’s a look at the latest figures from the Keystone State:


$352.5 million — Dispensary sales in the second quarter of this year. 


$192.4 million — Dispensary sales for the same period in 2020. Sales

increased 83.1 percent year over year.


$1.9 billion — Cumulative dispensary revenues since sales begin in 2018.


343,634 — The number of patient’s enrolled in the medical marijuana program as of May 18.


297,317 — The number of patients at the same point in 2020. Enrollments increased 15.6 percent year over year.


128 — The number of dispensaries statewide.

25 — The number of dispensaries that have opened this year.


DELTA-8 PRODUCTS ‘ALL OVER THE BOARD’ — 

Before Michigan passed a law to regulate Delta-8 THC products , the burgeoning market for the hemp-derived intoxicant was not regulated. PSI Labs, a cannabis testing facility in Ann Arbor, Mich., was curious about what was in these products and purchased some Delta-8 products from liquor stores and smoke shops to find out. PSI staffers weren’t the only ones wondering about the trendy cannabinoid — the lab also got some samples from curious individuals who wanted their own Delta-8 products tested.


The results: “All over the board,” said Ben Rosman, co-founder of PSI Labs. “The majority were over the federal legal limit of 0.3 percent [Delta-9] THC.” They weren’t even close to the dose of Delta-8 THC being advertised on the labels, Rosman said. And that’s not even testing for contaminants like microbials, heavy metals or residual solvents.


PSI has been testing for Delta-8 THC for years, which shows up in trace amounts in cannabis plants. But high-Delta-8 THC products themselves are relatively new to the market. With labs that are already well-versed in testing for different forms of THC, marijuana-legal states like Michigan might find it easier to regulate Delta-8 THC compared to states that lack such infrastructure.


While any lab that tests for Delta-9 THC should in theory be able to test for Delta-8 THC, “you need to know what you’re looking for,” Rosman said. The compounds are so similar that often there is interference and it can take a while to nail down the method.


Michigan moves to regulate: “Michigan actually is progressive in the way that they’re addressing it by regulating it rather than banning Delta-8 THC,” Rosman said.


Businesses have until Oct. 11 of this year to comply with the new Delta- 8 regulations. Cannabis processors can start applying to the state Marijuana Regulatory Agency to start producing Delta-8 THC. And eventually, Delta-8 THC products will be subject to the same testing regulations that marijuana products are.


ON THE HILL


HOUSE NIXES GOP WEED AMENDMENTS — The House rejected two GOP-backed cannabis amendments to the seven bill appropriations minibus on Tuesday. The House rejected an amendment from Rep. Doug LaMalfa (R-Calif.) that would have allocated $25 million to the National Forest System to address illicit marijuana grows. It was voted down as part of a block of amendments introduced by Republicans.


The House also rejected a standalone amendment from Rep. Debbie Lesko (R-Ariz.) that would have removed a provision in the base text

of the budget bill prohibiting the Department of Education from withholding federal funds from universities that study cannabis.


RESEARCH CORNER


UC DAVIS LEADS CANNABIS ANALYSIS WITH INDUSTRY FUNDING — The University of California, Davis is partnering with Biopharmaceutical Research Company to sequence and analyze the DNA of medical cannabis imported from Colombia and Portugal. The study will be funded by cannabis corporation Clever Leaves.


“This new project will provide a glimpse into the genetic variation apparent in contrasting lines of Cannabis sativa,” said professor Gail Taylor, chair of the Department of Plant Sciences at UC Davis. “And [it] is part of a larger program at UC Davis ... to assist the medicinal cannabis industry.”


What’s the background? BRC is one of a handful of companies in the U.S. with a federal license to import cannabis for testing and analysis. The cannabis imported under this license cannot be used for human research, but mapping the genome can help scientists understand the plant better. BRC recently received a provisional license from the DEA to cultivate cannabis for research, but is still awaiting a permanent license.


Clever Leaves set up a fund of $25 million to help researchers study the medical benefits of cannabis grown in Colombia.


HEMP WATCH


MONTANA HEMP FARMERS AWARDED $65 MILLION IN CIVIL CASE — A jury in Montana recently awarded a group of 25 hemp farmers $65 million after a handful of American and Canadian businessmen failed to honor contracts to pay for their hemp. The sum is the second largest civil award in Montana history, Montana Free Press reports.


The background: As hemp production boomed in the state after the 2018 farm bill, a company called USA Biofuels signed contracts with dozens of hemp farmers. The company agreed to give them $100 per acre to plant hemp seeds, and then pay another $400 to $600 per acre come harvest time. The farmers got the initial $100 payment late, and never saw another dime from the company. USA Biofuels also threatened to sue the farmers if they sold the hemp to anyone else.


Many of the farmers are still sitting on hundreds of acres of hemp biomass and are unsure just how much they’ll be able to collect from the jury awarded damages. They got into hemp because it represented an exciting new crop that was supposed to be profitable. Instead, it turned into “a lot of personal anguish,” one hemp farmer told the Montana Free Press.


IDAHO AG OFFICIALS WORKING ON HEMP PLAN — Agriculture officials in Idaho are working on a hemp plan with the goal of submitting it to the USDA for approval by Sept. 1, the Associated Press reports. Before that, Idaho State Police and Republican Gov. Brad Little will also have a chance to weigh in on the plan.


The context : Idaho became the last U.S. state to legalize industrial hemp after the federal government legalized the crop in the 2018 farm bill. The state finally passed a hemp legalization bill in April, which requires the agriculture department to submit a hemp plan to the USDA in preparation for the 2022 growing season.

SUBSCRIBE TO OUR NEWSLETTER

Thanks for Subscribing!

RELATED POSTS

bottom of page