Dispensary

By Joe Reedy, The Associated Press

TALLAHASSEE, Fla. — Floridians eligible to receive medical marijuana would have to visit a doctor only once every seven months while the number of treatment centers would more than double under a bill passed by the House of Representatives on Tuesday.

Rep. Ray Rodrigues’ bill (HB 1397) — approved 105-9 — would increase patient access to cannabis but supporters of Amendment 2, which legalized medical marijuana last year, say that even more needs to be done. The amendment, which was enacted on Jan. 3, must be implemented by October, with rules in place by July.

“We have a responsibility to see the amendment is implemented, but we have to do it in such a way that it complies to the guidance we’ve been given by the federal government,” Rodrigues said.

Currently, low-THC and non-smoked cannabis can be used by patients suffering from cancer, epilepsy, chronic seizures and chronic muscle spasms. The law was expanded last year to include patients with terminal conditions and allowed them to use higher strains.

Sen. Rob Bradley said that the House bill reflects what is in the Senate’s version but that some differences remain. The Senate will start considering the bill on Wednesday.

“We’re really close. The House has spoken but now it is time for us to weigh in and have our dialogue,” Bradley said.

The House’s legislation allows for patients to receive a prescription of three 70-day supplies during a doctor’s visit instead of one for 90 days. Dispensaries would be allowed to expand sales to edibles and vaping products but smoking would still be banned.

It also allows patients with chronic pain to receive pot, but only if it is linked to one of the 10 conditions listed in the amendment.

“The only thing that matters is patient access. We’ve come a long way and it is very close to something that can be reconciled between the House and Senate,” said Stephani Scruggs Bowen of Pensacola, whose husband has epilepsy.

More doctors and caregivers could be certified. Doctors would be certified after completing a two-hour course (it was previously eight) while caregivers would not have to take an exam to receive certification.

After not allowing for any new medical marijuana treatment centers until there were 150,000 patients, the House’s bill now would have 17 centers by July 1, 2018 — seven current plus 10 new ones — along with four additional licenses for every 100,000 patients registered.

Taylor Patrick Biehl of the Medical Marijuana Business Association of Florida said Rodrigues’ bill has improved dramatically but hopes that it includes a diversity plan for minority and veteran participation that is in the Senate bill.

Ben Pollara, the executive director of Florida for Care, says the number of dispensaries isn’t enough and that the bill puts profits over patient access.

“Prices will be high, quality will be low, and choices will be few. The Senate should make significant amendments before sending what is currently a fatally flawed bill back to the House,” he said.

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By John Frank and Alicia Wallace, The Denver Post

In last-minute negotiations between Colorado lawmakers on a major spending bill, a dubious budget fixer has emerged: marijuana taxes.

The tentative legislation unveiled this week seeks to extract additional money from Colorado’s burgeoning cannabis industry by raising the recreational marijuana special sales tax from 10 percent to the maximum 15 percent rate.

The new dollars are earmarked for rural schools and a tax break for business owners on personal property — two purposes that diverge from the original intent of voters who in 2013 approved Proposition AA imposing taxes on recreational marijuana.

The little-noticed but significant shift in how Colorado spends marijuana tax dollars is tucked inside a far-reaching measure to eliminate budget cuts for hospitals and generate $1.8 billion for road construction with the sale of state buildings.

The move is generating concern in the marijuana industry as it raises questions about increasing illegal sales and links core state expenses to a uniquely volatile industry.

“You would think if they are going to go jack up the marijuana taxes it would be for some marijuana-related purpose and not because there’s no leadership at the Capitol to talk about any other revenue source other than sin taxes and pot taxes — they are spineless,” said former state Sen. Pat Steadman, a longtime Democrat budget writer.

But House Majority Leader KC Becker, a Boulder Democrat and bill sponsor, defended how the state would spend the new pot tax revenues.

“I think that a lot of people think that marijuana taxes are just a budget solver for the entire state of Colorado,” she said. “I think a lot of people in Colorado who are involved in small businesses think that the business personal property tax is cumbersome and confusing. So I think this is a good marriage between meeting a lot of needs and expectations.”

The current tax rates for recreational marijuana at dispensaries in Colorado are the second highest in the nation among those with a legalized industry, according to a 2016 Tax Foundation study.

The state’s cannabis consumers pay the standard 2.9 percent state sales tax plus a special 10 percent marijuana sales tax. A 15 percent excise tax applied on wholesale transfers is baked into the cost of sale.

Under the legislative proposal, the increase to the 15 percent special sales tax rate is paired with the elimination of the 2.9 percent regular sales tax. So the move amounts to a 2.1 percentage-point tax hike for consumers. The shift moves all recreational marijuana tax collections outside the Taxpayer’s Bill of Rights revenue calculations.

Each percentage point increase in marijuana taxes equates to about a $10 million increase in tax revenue for the state, said Chris Stiffler, an economist at the Colorado Fiscal Institute. For the consumer, this type of increase would result in a $20 pack of edibles costing $21, he added.

What did voters intend?

How the state spends marijuana tax dollars has evolved since lawmakers asked voters to bless Proposition AA. The ballot question told voters the money would cover the expense of regulating the new marijuana industry and pay other associated costs, such as programs for youth education and drug treatment.

“There was a lot of discussion in the first few years about what were the voters’ expectations, what voters wanted us to be doing,” recalled Steadman, who helped craft the law. “That scope of purposes has grown in time … as what the voters intended in 2013 matters less and less.”

The money for rural schools — estimated at $10 million a year for three years — probably fits under the current allowable uses, thanks to the leeway built into the law that allows for spending related to “adolescents and school-aged children in school settings.”

But the business tax break represents an entirely new direction.

Senate President Pro Tem Jerry Sonnenberg, the Republican bill sponsor, said the proposed legislation includes an exception to carve out the money for the business tax break.

Mason Tvert, a Marijuana Policy Project spokesman and supporter of Amendment 64, which legalized recreational marijuana, and Proposition AA, questioned the proposed use of tax money.

“Marijuana businesses are already generating hundreds of millions of dollars (in sales),” he said. “It seems unfair to increase taxes on marijuana consumers to cover a tax break for unrelated businesses.”

The black market and volatility

The other concern is the black market. Colorado lawmakers approved a measure in 2016 to lower the special sales tax rate on recreational pot to 8 percent starting July 1, in part citing concerns about illegal sales.

This year, lawmakers are reversing course and moving a bill to keep it at 10 percent but spending more to crack down on illegal sales.

A tax increase probably won’t deter consumers, but it also may not sit well with others, said Paul Seaborn, assistant professor of management at the University of Denver’s Daniels College of Business and instructor of the college’s “Business of Marijuana” course.

“It seems ironic that our state government is counseling consumers to use marijuana responsibly and yet they seem to be moving toward developing some sort of financial dependence,” he said.

On the other hand, the tax measure shows the industry’s maturation.

“It’s probably not fair to the industry, but it goes to show how attractive it is … and our state government now has a particular stake in whether the industry is growing or not,” Seaborn added.

Over the long term, analysis suggests that price volatility and competition from other legal recreational marijuana states could eat away at that revenue stream.

Last year, wholesale marijuana prices tanked as several large-scale cultivation centers expanded and new, less-expensive outdoor grows came online, said Adam Koh, editorial director at Cannabis Benchmarks, which tracks marijuana prices. On the retail level, prices slid but increasing sales and tax collections masked the issue for now.

“I think the fact that prices are going to fall,” Steadman said, “is probably more of a risk to everyone’s grand plans that they are scheming right now.”

This story was first published on DenverPost.com

By Marisa Kendall, Bay Area News Group

Silicon Valley investors are known for pouring money into risky bets like flying cars and asteroid mining. Now, a handful are diving into one of the few industries that makes most of their peers squeamish — pot.

As the marijuana industry soars, with New Frontier Data predicting legal pot sales will balloon to more than $24 billion by 2025, a handful of venture capitalists are climbing on board — albeit cautiously. Those putting money into the industry say it’s a rare chance to stake an early claim in a lucrative market with little competition from other investors. But they’re keeping one eye on President Donald Trump’s administration, watching for signs of a federal crackdown that could derail the burgeoning industry.

“It’s a completely untapped market with huge opportunity,” said Tusk Ventures Founder and CEO Bradley Tusk, an investor in San Francisco-based marijuana delivery darling Eaze.

For Tusk Ventures, a VC firm that specializes in helping startups like Uber and FanDuel navigate complex regulatory landscapes, the controversial marijuana industry seemed like a natural fit. The firm is considering a second investment in the space.

And it’s not alone. DCM Ventures, a 21-year-old VC firm with an office on Sand Hill Road, also invested in Eaze, as did Fresh VC and the Winklevoss twins — the brothers who made headlines by claiming they came up with the idea for Facebook. Other investors dabbling in pot companies include prestigious Mountain View-based startup accelerator Y Combinator, Peter Thiel’s Founders Fund and New York City-based Lerer Hippeau Ventures — which also backs big names like Soylent, which makes meal-replacement drinks and bars popular among Silicon Valley techies, and Venmo, a mobile payments platform.

Industry insiders say there’s been a slow uptick in interest. Investors have poured nearly $30 million into marijuana-tech startups — companies that sell marijuana-related technology or use tech to sell cannabis products — so far this year, according to PitchBook Data. That means 2017 is on track to beat last year’s total of $49 million. But much of that money is coming from niche firms created exclusively to fund cannabis-related businesses, such as Phyto Partners and Poseidon Asset Management.

Despite the marijuana industry’s massive potential, interest from Sand Hill Road has amounted to more of a trickle than a flood. Though California voters approved recreational marijuana use last November, and lawmakers are working on crafting regulations to allow sales to start next year, the plant remains illegal on the federal level. That leaves most VCs unwilling to venture into the industry. Many venture capital firms are forbidden from entering the space by agreements with their limited partners — the pension funds and other institutions that supply the VCs’ investment capital.

“This is a no-go area for traditional venture funds, at least for now,” said Venky Ganesan, chairman of the board of the National Venture Capital Association and managing director of Menlo Ventures.

While mainstream VCs hesitate, a crop of investment firms specializing in marijuana have sprung up to fill the void. Groups like Los Angeles-based Casa Verde Capital, backed by rapper Snoop Dogg; and Gateway, an Oakland-based incubator for cannabis startups, can take much of the credit for keeping the marijuana tech industry afloat.

Pranav Sood, whose Oakland-based startup Trellis sells inventory management software to cannabis growers and distributors, recently turned to the industry’s niche investors after striking out with mainstream VCs.

“It quickly became apparent that more traditional VCs are not really getting into this space,” he said. “That’s when we kind of shifted focus as well. It was a pretty quick lesson learned.”

Trellis is closing its first round of funding, which will bring in $2 million from a group of investors led by Casa Verde. Sood said investor sentiment toward the marijuana industry has been volatile — spiking as support grew for legalized recreational marijuana, dropping with Trump’s arrival in office, and picking back up recently.

“Honestly, it’s been a little bit of a roller coaster,” he said. “On any given day, you don’t know how an investor’s going to feel.”

Brian Sheng, a partner at Fresh VC, said his firm was drawn to Eaze partly because the startup never actually touches marijuana — Eaze only provides the online platform that connects dispensaries with customers. That cuts down on the risk, Sheng said.

Private equity also is expanding into marijuana. MedMen, a Los Angeles-based firm that manages companies in the cannabis space, launched its first marijuana-focused private equity fund last summer, which now controls almost $100 million in assets. The firm also held its first investment conference last month, drawing more than 300 people interested in putting their money into the marijuana industry. So far the cash going into these types of funds has mostly been from wealthy individuals and families, MedMen Co-Chairman Chris Leavy said, but pension funds, endowments, foundations and other institutional investors are starting to show interest.

“Access to capital for this industry is slowly improving,” Leavy said. “Wherever you look, you can see signs that the investor interest is broadening.”

This story was first published on TheCannifornian.com

By The Associated Press

MONTPELIER, Vt. — Vermont lawmakers have approved a modest expansion to the state’s medical marijuana program, giving people access to the drug for a wider range of diseases and allowing more dispensary locations.

The House gave the bill preliminary approval on a voice vote Monday. The Senate has already approved the bill.

Vermont has four licensed dispensaries. The approved measure would allow each existing dispensary to open two more locations.

People suffering from Crohn’s disease, Parkinson’s disease and post-traumatic stress disorder will also be able to access marijuana under the measure, and patients will be able to grow marijuana and purchase it if they wish. In the previous version of the bill, patients had to choose between growing it themselves or buying it from a dispensary.

By Matt Steiner, Colorado Springs Gazette

SEDGWICK — Residents of this sleepy little town in far northeast Colorado smile optimistically when talking about the turn their municipality has taken over the past few years.

Town officials, business owners and residents paint a picture of a community on the brink of death in the early 2000s. Town officials even started discussions in 2010 about unincorporating their little town less than 10 miles from the Nebraska state line.

Instead, the town passed an ordinance to allow a medical marijuana dispensary to open in 2012. When state voters approved Colorado Amendment 64, making it legal to possess and grow pot for recreational use, the town allowed Sedgwick Alternative Relief to expand into the recreational trade.

What happened next gave Sedgwick hope.

Read the full story on Gazette.com.

This story was first published on gazette.com