Recreational marijuana officially lit in Michigan

On Dec. 1, Michigan became the first state in the Midwest to allow recreational marijuana sales.

On the first day of sales, the state’s three licensed retail marijuana shops generated more than $200,000 in cannabis sales and an estimated $36,000 in tax revenue.

“The consumer demand was off the charts,” said Rick Thompson, who serves on the Michigan NORML board. “Each of the provisioning centers had lines out the door and around the block. Most had police officers on hand to ensure people were safe from traffic.”

Michigan voters approved Proposal 1 to legalize adult-use marijuana in 2018. Sales were originally slated to begin Jan. 1, 2020, but the state moved up the date in an effort to reduce black market sales.

1,400 of Michigan’s 1,800 cities and townships do not allow marijuana sales. Detroit has delayed recreational sales until Jan. 31.

Adults 21 and older can purchase up to 2.5 ounces of flower, including up to 15 grams of concentrate.

Marijuana Industry Daily projected that marijuana sales in Michigan are expected to reach $1.4 billion to $1.7 billion per year when the market reaches maturity.

 

Illinois to ring in the new year with legal adult-use cannabis

Jan. 1, 2020, will mark the beginning of more than just a new decade in Illinois as the state’s first recreational marijuana dispensaries are set to open on New Year’s Day.

Illinois was the first state to legalize recreational marijuana through the state legislature rather than through a voter-approved ballot initiative.

“As the first state in the nation to fully legalize adult-use cannabis through the legislative process, Illinois exemplifies the best of democracy—a bipartisan and deep commitment to better the lives of all of our people,” Pritzker said. “Legalization of adult-use cannabis brings an important and overdue change to our state, and it’s the right thing to do.”

In June, Gov. J.B. Pritzker (D) signed a bill that allows adults 21 and older to possess and purchase cannabis. In addition to legalizing adult-use cannabis, the new law includes provisions to expunging prior marijuana convictions and the creation of social equity programs.

Recreational marijuana will have a graduated tax rate according to the THC content:

“The most historic aspect of this is not just that it legalizes cannabis for adults but rather the extraordinary efforts it takes to reduce the harm caused by the failed war on marijuana and the communities it hurt the most,” said state Sen. Toi Hutchinson (D).

Illinois is the eleventh state to legalize recreational cannabis.

 

Massachusetts sells $400 million in marijuana during first year of recreational sales

During its first year of legal recreational marijuana, Massachusetts raked in nearly $400 million in sales despite having only 36 licensed retail shops.

For comparison, during the first year of its recreational marijuana market, sales in Colorado amounted to $300 million with 306 licensed retailers.

Data released from the Massachusetts Cannabis Control Commission (CCC) shows that daily sales regularly exceed $1 million, and often exceed $2 million. At its current pace, adult-use sales could exceed $1 billion by 2021.

The lack of marijuana dispensaries in the state is something CCC Chairman Steven Hoffman says the Commission is planning to address.

“I have no expectation there will be a retail store on every corner, but we have a lot more geographic expansion to do,” Hoffman said. “That’s the biggest part of our job.”

The CCC has approved an additional 53 provisional licenses for cannabis retailers, with another 166 applications pending.

Cannabis use among teens has declined in states with legal recreational marijuana, according to a new paper published in the medical journal JAMA Pediatrics. Researchers found that in states with legal adult-use cannabis, there was an 8% drop in the number of youths who said they used marijuana within the last 30 days and a 9% drop in the number of high-schoolers who said that they had used at least 10 times in the past 30 days.

The research was led by D. Mark Anderson, an economist at Montana State University, along with colleagues from the University of Colorado, the University of Oregon, and San Diego University. Researchers analyzed data that spanned 25 years, from 1993 to 2017, that included data from about 1.4 million high school students. The data was collected by the US Centers for Disease Control and Prevention’s annual Youth Risk Behavior Surveys, which are administered to students every two years.

Researchers did not find a significant decrease in teen marijuana use in states with legal medical cannabis.

“Consistent with the results of previous researchers, there was no evidence that the legalization of medical marijuana encourages marijuana use among youth. Moreover, the estimates reported [by the Youth Risk Behavior Surveys] showed that marijuana use among youth may actually decline after legalization for recreational purposes.”

The researchers acknowledged that while there’s an association between legal adult-use marijuana, there isn’t a causal connection.

“Because many recreational marijuana laws have been passed so recently, we do observe limited post-treatment data for some of these states,” Anderson said. “In a few years, it would make sense to update our estimates as more data become available.”

One possible reason for the decline in teen pot use is that a regulation cannabis market reduces the availability of black market marijuana. In states where recreational marijuana is legal, “it is more difficult for teenagers to obtain marijuana as drug dealers are replaced by licensed dispensaries that require proof of age.”

Nationally, teen cannabis use has increased from 0.6% in 1991 to 6.3% in 2017, according to a study published in the American Journal of Public Health.

Since recreational marijuana sales began in Colorado in 2014, the state has collected $1.02 billion in tax revenue, according to the latest numbers released by the Colorado Department of Revenue. Adult-use cannabis sales in the last five years have exceeded $6.56 billion. Legal cannabis has created jobs for 41,076 people who work in the industry, and there are currently 2,917 licensed marijuana businesses in the state.

“Today’s report continues to show that Colorado’s cannabis industry is thriving, but we can’t rest on our laurels. We can and we must do better in the face of increased national competition. We want Colorado to be the best state for investment, innovation and development for this growing economic sector,” said Governor Jared Polis (D) in a press release. “This industry is helping grow our economy by creating jobs and generating valuable revenue that is going towards preventing youth consumption, protecting public health and safety and investing in public school construction.”

Colorado and Washington state were the first states to legalize adult-use marijuana in 2012 (with the first recreational dispensaries opening in 2014), but since then 11 other states have fully legalized cannabis as well. That means increased competition from states with larger populations and fewer regulations. Cannabis sales in Colorado have begun to level out, in part due to a decline in medical marijuana sales. In 2018, recreational marijuana sales were up 11%, but medical cannabis sales were down 20%.

Governor Polis told CNBC being the first state to sell recreational cannabis has been an advantage for Colorado, something that he hopes to leverage in the coming years.

“We are always going to be relatively small potatoes on the actual sales. … We are just not going to be as big as states like California or New Jersey. … We want to make sure that 10 years from now, point-of-sales systems, chemistry, genetics — all those pieces — are housed here in Colorado with successful companies that power a multibillion national industry.”

 

Cannabis, not Opioids

A bill that would allow doctors to prescribe medical marijuana in place of opioids is one step closer to becoming law in Colorado. In its third hearing, Senate Bill 13 passed the House on Tuesday. The Senate passed the bill in February.

Many of the conditions covered by Colorado’s medical marijuana program are chronic, meaning that they can last months or years, but for acute conditions, physicians often prescribe opioids. SB 13 would give physicians an alternative to highly addictive opioids, allowing them to prescribe medical marijuana for acute pain and other temporary medical conditions.

Rep. Kim Ransom (R), one of the bill’s sponsors, said, “[The opioid epidemic] affects all ages, all income levels, all areas of the state. We were trying to give doctors an additional option.”

The bill is heading back to the Senate for approval of changes made by the House. After that, the bill heads to Governor Jared Polis to be signed into law.

Cannabis consumption in “hospitality” establishments

While a social-use bill failed to get enough votes in Denver City Council, there’s still hope that Colorado will soon have more places to toke. House Bill 1230 would allow legal cannabis hospitality spaces in which marijuana could be sold and consumed. This would allow the creation of a new kind of space – likely next to or within a dispensary (or legal licensed cannabis business) to have a specific space dedicated to public consumption. The bill would make an exception to the Colorado Clean Air Act, which prohibits indoor smoking.

“The intent, really, is to solve a problem that we’ve had since Amendment 64 passed,” Rep. Jonathan Singer (D) said during a hearing for the bill. “Don’t consume it in the dispensary, don’t consume it in a street or in a park, don’t consume it in a hotel or a restaurant — and, by the way, if you’re a tourist, make sure you dispose of it before you leave the state.

The state licensing authority would be responsible for hammering out the final rules for cannabis “hospitality” establishments.

The bill passed the House on April 18 and is now headed to the Senate.

Cannabis Delivery

Finally, another new bill is ready for Colorado Governor Jared Polis, who hasn’t 100% committed but likely will sign, that would allow licensed cannabis businesses to deliver to local residents. House Bill 1234 passed the Colorado Senate after being approved by the House on April 18.

The bill creates a new licensed to allow for dispensaries and transporters to make legal drops to residents directly to their homes. If signed legal deliveries would begin as soon as 2020 for medical patients and in 2021 for recreational buyers.

While cannabis may the same across the country, not all legal-cannabis states regulate it in the same way. Ironing out the particulars of marijuana laws isn’t always straightforward, with regulations leaving some states struggling to keep pace with demand.

Michigan

Recreational cannabis sales haven’t yet begun in Michigan, but it’s the state’s medical marijuana market that’s been experiencing a serious supply shortage.

In 2016, Michigan passed a law that implemented a five-tiered licensing system to grow, process, test, transport, and sell medical marijuana. The Michigan Medical Marijuana Licensing Board issued licenses to 54 medical marijuana dispensaries but only 31 cannabis growers, leading to a supply shortage. Michigan has 297,515 registered medical marijuana patients.

Before the 2016 change to the medical marijuana program, licensed dispensaries could buy cannabis from more than 40,000 registered caregivers in the state. Under the medical marijuana law approved by voters in 2008, caregivers could grow up to 72 plants and sell the excess to dispensaries. In 2016, lawmakers changed the system, requiring licensed dispensaries to buy cannabis from licensed growers.

Under emergency rules in effect up until late last year, around 215 unlicensed dispensaries were still able to buy medical marijuana from caregivers, putting licensed dispensaries at a disadvantage. As of Dec. 31, 2018, all unlicensed dispensaries were forced to close, and the shortage of product from growers forced even some licensed dispensaries to shut their doors temporarily.

In an effort to solve the cannabis supply problem and the slow licensing process, newly-elected Gov. Gretchen Whitmer (D) issued an executive order to eliminate the state licensing board and create a new Marijuana Regulatory Agency. The executive order will also allow unlicensed cannabis facilities to temporarily reopen and allow them to purchase cannabis from caregivers while new licensing regulations are put in place.

Illinois

Illinois isn’t currently facing a cannabis shortage, but a new study commissioned by state legislators has found that legal recreational marijuana demand could exceed what licensed growers could supply. The report found that demand for recreational cannabis could be as high as 555,000 pounds of marijuana a year.

Under the state’s medical marijuana program, there are 16 licensed cannabis cultivators. The study found that with the current number of marijuana growers, they could only meet 35 to 54 percent of the demand for recreational marijuana. While shortages are a concern, the report notes that oversupply of cannabis is equally important to avoid.

“Systems that either dramatically fall short of demand or that oversupply the market create public policy challenges,” according to the report. “Avoiding both is an important expectation from the public, from producers, and from public health and public safety officials.”

If market demands were met, the report found that Illinois could bring in at least $440 million in tax revenue annually.

State Sen. Heather Steans (D) and state Rep. Kelly Cassidy (D) commissioned the report ahead of introducing a bill to legalize recreational marijuana.

California

Similar to the medical marijuana situation in Michigan, slow-licensing and expiring temporary permits may cause a recreational marijuana shortage in California. Before the state finalized recreational marijuana regulations last year, most cannabis companies were operating under temporary licenses. Nearly 10,000 temporary licenses are set to expire this year, and the backlog of applications means that some dispensaries and cannabis grows may need to close temporarily before they are issued full annual permits.

Last month, state Sen. Mike McGuire (D) introduced Senate Bill 67 in an effort to keep cannabis companies with temporary permits in operation. The bill would allow the state’s three licensing authorities to extend existing temporary licenses while the bottleneck in licensing is addressed.

In a hearing for the bill, Terra Carver, the executive director of the Humboldt County Growers Alliance, told lawmakers, “Without passage of this bill, there will be dire consequences, such as the imminent market collapse of hundreds of businesses.”

However, the soonest the bill could pass in the state legislature and be signed into law by Gov. Gavin Newson (D) won’t be for at least two months.

“Best-case scenario, making it through all policy committees and off the floor of the Senate and Assembly in the next 60-90 days,” McGuire told Marijuana Business Daily. In the meantime, thousands of cannagrows and recreational marijuana dispensaries could be forced to close temporarily.

Voters in Massachusetts legalized adult-use marijuana back in 2016, and two long years later, the state’s first recreational dispensaries opened Tuesday.

Adult-use pot shops opened in Leicester and Northampton, making them the first retail stores on the East Coast to have legalized recreational sales. The first customer at the dispensary in Northampton was Mayor David Narkewicz, who said that he would be displaying his purchase “because it is historically significant.”

“There has been marijuana use going on in the Commonwealth of Massachusetts for a long, long time. What’s changing is it’s now being regulated. It’s now being tested. It’s now being strictly monitored. That’s really the major change that’s happening,” Narkewizc said.

The first customer at Leicester’s recreational marijuana shop was Stephen Mandile, a disabled Iraq War veteran treating PTSD, a traumatic brain injury and chronic pain with cannabis.

“It’s an honor, something amazing. I probably dreamed about it back in high school that this day would happen sometime. I’ll be smoking some history later on today,” Mandile said.

Under Massachusetts law, adults 21 and older can buy up to an ounce of flower or its equivalent in concentrate, or 20 servings of edibles. Edibles can contain no more than 5 milligrams of THC for a single serving, and a package of edibles can contain no more than 20 individual servings.

Recreational marijuana is subject to a 6.25% state sales tax, 10.75% state excise tax, and 3% local tax. Medical marijuana is untaxed in Massachusetts.

The rollout licensed adult-use dispensaries in Massachusetts will continue to be slow. Massachusetts’ Cannabis Control Commission issued licenses to two more dispensaries in Salem and Easthampton, and a third dispensary is expected to open in the near future in the town or Wareham near Cape Cod. More than half the state’s population lives in the greater Boston area, but as of now, there are no retail cannabis shops nearby.

Election Day is finally behind us, and there were big wins for marijuana legalization. Three of the four states that had cannabis on the ballot voted to end cannabis prohibition. Here’s how the votes played out in Michigan, North Dakota, Missouri, and Utah:

Michigan

Michigan is the first state in the Midwest and the 10th in the country to approve recreational marijuana. Voters approved Proposal 1 by a 56-44 percent margin. Michiganders 21-and-older will legally be able to possess 2.5 ounces or less of marijuana or 15 grams of concentrate, grow up to 12 cannabis plants and store up to 10 ounces from those plants. There will be a 10% tax on adult-use marijuana sales, with revenue going towards regulatory and implementation costs, as well as to municipalities, clinical research, schools, and roads.

The measure takes effect ten days after election results are certified, but don’t expect to buy adult-use marijuana at the store until 2019 or 2020.

North Dakota

North Dakota was the only one of four states with cannabis initiatives to on the ballot to vote against marijuana legalization. Measure 3 was unlike other proposed cannabis legislation in that it would not have set limits on how much an adult 21-and-over could grow or possess and did not include language regarding regulation and taxes. Marijuana convictions would have been expunged.

The initiative was rejected by a 41-59 percent margin. Medical marijuana is already legal in North Dakota.

Missouri

In Missouri, voters approved Amendment 2, which will amend the state constitution to allow medical marijuana. Amendment 2 was one of three medical marijuana initiatives on the ballot and passed with 65 percent approval. The other two initiatives, Amendment 3 and Proposition C, did not garner enough votes to pass.

Amendment 2 will allow doctors to prescribe medical cannabis for ten qualifying medical conditions and patients will be able to cultivate up to six plants. Medical marijuana in the state will be taxed at 4%, with tax revenue going toward regulatory costs and healthcare services for veterans.

Utah

Despite the Mormon church’s opposition to passing medical marijuana legislation in Utah, voters in the state approved Proposition 2. The approval of the initiative will allow adults with qualifying medical conditions (including PTSD, cancer, HIV, epilepsy, chronic pain, Crohn’s, Alzheimer’s, and ALS) to consume cannabis. Smoking marijuana will not be permitted, however, and all cannabis consumption must be in the form of edibles, tinctures, oils, or vaporizers.

Proposition 2 passed with a 53-47 percent margin and may have brought more Utahns to the polls. According to a poll released in October, 1 of 5 respondents cited the cannabis initiative as their primary motivation for participating in the election.