Minnesota medical marijuana companies report $11M losses

Published: • Updated:

By Kyle Potter, The Associated Press

ST. PAUL, Minn. — Minnesota’s two licensed medical marijuana manufacturers have lost a combined $11 million in just two years of sales, according to financial documents obtained by The Associated Press, continuing losses that hint at systemic problems with the state’s tightly regulated program despite a recent expansion that allowed thousands more patients to buy the medication.

Minnesota Medical Solutions posted a $1.2 million loss in 2016, a year after losing more than $3 million. But LeafLine Labs’ losses worsened: The company said it lost $4.7 million last year, after losing $2.2 million loss in 2015.

Those figures come from annual financial statements the private companies provided the state that were obtained through an open records request. Minnesota Medical Solutions chief executive Kyle Kingsley painted his company’s decreasing losses as a positive, and said he hopes to break even in 2017 as the company continues retooling its business to reduce costs. But the key, he said, was awareness.

“We need to continue working together to ensure than providers and patients are aware of this program,” Kingsley said in an emailed statement.

A LeafLine representative was not immediately available. The state’s Office of Medical Cannabis also did not respond to a request for comment.

The losses add to concerns with Minnesota’s medical marijuana program.

State lawmakers are moving to crack down on Minnesota Medical Solutions, or MinnMed, after its former executives were charged with illegally shipping $500,000 of marijuana oils to a New York subsidiary company — a case still moving through court. The financial constraints on the program led state regulators to seek extra funding to help cover the costs of its patient database and inspections of manufacturers.

Both companies have repeatedly professed little hope in turning a large profit. They each raised tens of millions of dollars, according to filings with the Securities and Exchange Commission, to help weather a difficult launch period and lackluster sales when medical marijuana sales began in July 2015, more than a year after the Legislature passed its law.

The continued losses are driven largely by Minnesota’s program being among the most restrictive of 30 states that allow medical marijuana. Using the plant form is banned, and the state limits the availability of marijuana pills and oils to patients with 10 severe conditions. Each manufacturer is required to perform several rounds of testing on their medication and must run four dispensaries across the state.

Even the decision last summer to allow medical marijuana for people suffering chronic pain — which added thousands more patients — did little to stem the losses, as some lawmakers and advocates expected. Though each manufacturer more than quadrupled revenues, they still posted heavy losses.

A top Republican lawmaker involved in medical marijuana issues said the companies may need a full year with that expanded patient count to right the ship. And if not, Rep. Nick Zerwas said they shouldn’t look to the Legislature for a major fix.

“I don’t think there is going to be any appetite for a … broadening of conditions or delivery forms,” Zerwas said, referencing the ban on smoking or vaporizing the plant material. “It’s not the job of the state government to create conditions in which private companies can be profitable for selling marijuana.”

Follow Kyle Potter on Twitter at https://www.twitter.com/kpottermn1

Florida Health Dept. bans sale of whole-flower vaporizer cup

Published: • Updated:

By Joe Reedy, The Associated Press

TALLAHASSEE, Fla. — Florida’s Department of Health on Monday ordered a Quincy-based dispensary to quit selling a medical cannabis product that could potentially be broken down and made into pot that can be smoked.

Related: Florida dispensary says new flower product doesn’t violate smoking ban

Trulieve began selling its first whole-flower cannabis product meant for vaping last week at five retail dispensaries and through home delivery. The buds in the Entourage Multi Indica vaporizer cup, however, could also be used in joints, pipes or bongs.

The Department of Health authorized Trulieve to sell sealed vaporizer cups containing marijuana. However, Office of Compassionate Use Director Christian Bax said in a cease and desist letter to Trulieve that the mesh caps can be removed with minimal effort and cannot be reattached.

Vaping is allowed under state law, but smoking is prohibited. Trulieve CEO Kim Rivers said the company had issued warnings to patients that the product should only be used for vaping.

The department also found in a tour of one of Trulieve’s retail facilities that a vaporizer it advertises for use with the product is sold only online. Trulieve also was not able to show how to use the product with the vaporizer.

Currently, low-THC 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. It also allowed them to use more potent strains.

The rules from a medical marijuana constitutional amendment passed last November, which will expand the list of conditions for which patients can receive pot, must be in place by July and enacted by October.

New Mexico medical marijuana balloons in just a year, now has 40,000 patients

Published: • Updated:

By The Associated Press

ALBUQUERQUE, N.M. — The medical marijuana industry in New Mexico has grown substantially since being organized in 2007.

About 8,000 New Mexico residents have obtained a medical marijuana license since Jan. 1, which brings the statewide total to more than 40,000 patients, the Albuquerque Journal reported. The amount of patients has increased by 84 percent since March 2016.

The number of dispensaries has also increased. The statewide total is at 56 after being at just 36 in January 2016.

In 2015, none of New Mexico’s cannabis producers had total receipts that exceeded $1 million. This year, five growers topped $1 million in sales from January through March, alone.

First-quarter sales this year topped $19 million, up 91 percent throughout the same period in 2016, New Mexico Department of Health data shows.

However, some think the industry’s growth is a cause for concern. State Rep. Bill Rehm thinks the system is being abused.

“I think there are a bunch of people who are obtaining marijuana cards, not for a true medical reason, but for justification for them to smoke marijuana legally,” Rehm said.

But R. Greenleaf & Associates Director Willie Ford says while that might be true, most people are using the system for legitimate medical conditions.

“I have put my full faith in the Department of Health,” Ford said. “They have a good system for determining and confirming a person’s eligibility.”

The health department’s application process requires patients to provide documentation from a physician supporting a medical diagnosis for a qualifying condition.

Information from: Albuquerque Journal

Denver cannabis church leader, neighborhood group clash

Published: • Updated:

By , The Cannabist Staff

Denver’s new International Church of Cannabis is learning it will have to observe some traditional practices.

The church that opened April 20 in a historic building at 400 S. Logan St. claims cannabis as its primary sacrament, eschews divine law and rejects all authoritarian structure.

But church leaders now know there is one authoritarian structure they can’t avoid: the West Washington Park Neighborhood Association, and one aspect that can’t be overlooked is a church’s prominent place within a community.

Founding church member and building owner Steve Berke addressed concerned neighbors for the first time Saturday afternoon at a hastily arranged meeting of the association’s zoning committee that drew a standing-room only crowd to the Washington Street Community Center.

Discussions about the religious beliefs of the self-proclaimed Elevationists who attend the church and marijuana use at the building were off limits, Gertie Grant, the neighborhood association zoning committee chairwoman, told attendees. Likewise, there was no action to be taken by the committee because no permits or permissions were required for the church to continue its operations.

Instead, she explained, the meeting was called to allow church leaders to present their plan for the building and to take questions from neighbors – something that usually occurs well in advance of an enterprise or development opening within the association’s boundaries.

“Things go more smoothly if there is an introductory meeting with the neighbors,” Grant said, “and this did not happen here.”

Neighbors stuck to the ground rules for the most part, peppering Berke with questions that would have been asked of other churches opening in the neighborhood. Parking, traffic, noise and maximum-occupancy concerns dominated the Q&A session. Other issues raised, including odor mitigation and the secrecy with which the facility opened, were unique to the International Church of Cannabis.

Parking a primary concern

Parking and increased traffic were the primary issues raised by the building’s immediate neighbors.

“I refuse to accept that parking is an issue around the church,” Berke said.

He repeatedly told meeting attendees that the church had no plan for parking because more than 1,000 spaces are available within a six-block radius of the church. Furthermore, he said, Elevationists are forbidden from driving to cannabis-consumption events. If parking does become a problem, he reasoned, the church would arrange for valet service or rent an off-site parking lot.

“If we were any other church would you be complaining?” he asked one resident of Pennsylvania Street who had inquired about parking.

“I complained about it with the previous tenants too,” she retorted.

Neighbor and past WWPNA president Charlie Busch said Berke was being overly defensive and she pointed out that parking and traffic issues caused by churches were often addressed by the zoning committee.

The neighborhood association had previously addressed concerns raised about Denver Community Church at 1101 S. Washington St., Busch said. She also recounted the story of how her own church, Epiphany Lutheran at 790 S. Corona St., had to scuttle plans for a preschool because a neighbor objected to the additional traffic a facility for no more than 30 children would bring to the block.

“People may be weirded out because your church is different, but these are zoning issues we talk about all the time with other churches,” she said.

When asked about noise mitigation efforts, Berke said the group had done testing of up to 125 decibels inside the sanctuary without violating city ordinances.

“Sound doesn’t penetrate the historic building’s stone walls,” he said, “and if it does, let me know.”

He also asserted, without evidence, that neighbors had phoned in bogus noise complaints against the church.

The Denver Department of Environmental Health appears to be taking neighbor noise complaints seriously, however. In an April 25 letter obtained by The Cannabist, the agency warned the church that multiple noise complaints had been received over the course of its three-day opening event starting April 20. The letter advises the church that if additional complaints are received, the agency or police may conduct monitoring.

“If a violation is documented enforcement action will be taken,” the letter concludes.

“Sky is the limit” for church membership

In answering other questions, Berke revealed the four-week-old church had just over 1,000 members, approximately 350 of whom reside in city council District 7 that is home to the church. Membership is free to adults who register on the church’s website, he said.

The 13,000-square-foot facility’s maximum occupancy is 530, he told the assembly, with a maximum of 280 people allowed in the sanctuary, the only room in which cannabis consumption is permitted. Berke said because the church planned to broadcast its events and services on the internet it had already begun to attract an international membership.

“The sky is the limit,” he said of potential membership numbers.

Cannabis-consumption events are limited to invitation-only private and restricted events, he told the meeting attendees. Currently, the only consumption events scheduled are weekly services held Friday from 6-10 p.m. Services held on the first two Fridays in May were attended by 30 to 35 people.

Berke was also asked how the church intended to mitigate the odor of marijuana and whether or not it intended to abide by the Colorado Clean Indoor Air Act forbidding smoking.

The church has installed “thousands of dollars” worth of air filters in the sanctuary, he said. Likewise, the church is exempt from the state statute forbidding indoor smoking because it employs no more than three people. The church will maintain its exemption by relying on volunteers to organize and run events and maintain the facility, he said.

Where’s the community involvement?

Among the most pressing questions from neighbors and zoning chair Grant, was why the church had failed to reach out to the community prior to its April 20 opening.

Berke blamed unforeseen media attention, and told the meeting that the church had to speed up its opening by six weeks because The Denver Post and its marijuana-focused website The Cannabist were preparing a story about the church in early April.

“It wasn’t kept a secret, but we weren’t broadcasting our opening either,” he said.

The Cannabist first contacted Berke about the church on April 5. At that time, The International Church of Cannabis appeared in a Google search of the property’s address. Likewise, at that time Berke’s Twitter account showed he was actively reaching out to comedians to perform at the opening of the church on April 20, the unofficial annual marijuana holiday. Berke’s publicly traded company, Bang Digital Media, also issued a press release on March 22 touting a $250,000 marketing contract with an undisclosed “Colorado-based cannabis company” slated to launch in April 2017. Subsequent reporting by The Cannabist showed that undisclosed entity to be Elevation Ministries, the religious nonprofit running The International Church of Cannabis.

The following week, The Cannabist was granted access to the church and an interview with Berke; the story published online April 12.

If the meeting’s intent was to smooth out the relationship between the church and the West Washington Park neighborhood, tensions remained.

Neighbors left the hall grousing that their primary concerns had hardly been addressed.

“This isn’t about religious freedoms; our concern is quality of life on our block,” said neighbor John Conti after the meeting. “The devil is in the details – and we didn’t get any today.”

Berke asserted his church was under attack and wrapped the meeting with the threat of lawsuits.

“If this were a Baptist or Methodist church, or a synagogue, I wouldn’t be standing here,” Berke said. “I’m standing here because our church has cannabis in its name.”

If anybody questions the validity of the Elevationists’ religion, the International Church of Cannabis would sue for defamation, libel or slander, he said.

“We have a First Amendment right to practice our religion within our church and our walls,” he said. “If you question that, we reserve the right to take you to court.”

Photo gallery:

DENVER, CO – APRIL 11: This is a photo of the interior of the International Church of Cannabis at 400 south Logan street on April 11, 2017 in Denver, Colorado. The interior painting was done by artist Okuda San Miguel. The members of this new church call themselves Elevationists and say that the use of cannabis helps elevate people to a higher form of themselves. They plan to open their doors to the public on April 20th and have a weekend of events planned for the neighborhood to introduce people to this new and unique concept for a church. (Photo by Helen H. Richardson/The Denver Post)

Alex joined The Cannabist as Editor in April 2017. He started his journalism career in Colorado as a reporter at community newspapers and national ski magazines before heading to New York to work as an editor at Condé Nast Traveler and digital…

Inside story on prominent national DA group’s pot policy paper

Published: • Updated:

By , The Cannabist Staff

A coalition of the nation’s prosecutors recently proclaimed that marijuana enforcement policies should be consistent across America.

But while a working group for the National District Attorneys Association decreed the U.S. Constitution’s Supremacy Clause should reign supreme in a time of rapidly shifting state marijuana laws, it stopped short of stating explicitly what those enforcement policies should be.

NDAA on April 20 released a white paper, “Marijuana Policy: The State and Local Prosecutors’ Perspective,” after months of meetings and discussions by a 27-member group that consisted of attorneys from locales where marijuana is legal in various forms and from states that prohibit cannabis use, possession, cultivation and distribution.

While NDAA did not take a firm position on enforcement approaches, the working group did find agreement that impaired driving and children’s access to marijuana are pressing concerns. NDAA also supported calls for research.

Federal drug enforcement policy regarding the manufacture, importation, possession, use and distribution of marijuana should be applied consistently across the nation to maintain respect for the rule of law. The National District Attorneys Association (NDAA) supports ongoing research into medicinal uses of marijuana and its derivatives, carried out consistent with any other research regulated by the Food and Drug Administration (FDA). NDAA also supports research regarding the impact of marijuana use on driving, regulated by appropriate agencies.

As the NDAA working group dug in, The Cannabist interviewed two members of that committee: Eric Zahnd, group co-chair and prosecuting attorney for Platte County, Missouri, in metropolitan Kansas City; and Stan Garnett, the district attorney for Boulder County, Colorado.

Following the white paper’s publication, The Cannabist caught up with Zahnd and Garnett to talk about the committee’s position, what didn’t make it into the report and why certain stances were and were not taken.

Agreement on impaired driving and children’s access to marijuana

“I think we were successful at developing a strong consensus around a number of rapidly evolving issues around marijuana use,” Zahnd said.

Eric Zahnd is the Platte County, Missouri Prosecuting AttorneyEric Zahnd is the Platte County, Missouri Prosecuting Attorney. (Facebook)

The NDAA noted two specific concerns: impaired driving and children’s access to marijuana.

The paper cites statistics from a 2013-2014 National Highway Transportation Safety Administration roadside survey of weekend nighttime drivers that showed 12.6 percent tested positive for THC, an increase of 48 percent from 2007.

How those positive readings translate to impairment is another matter.

“We need more research on both what constitutes impairment and how we are going to measure impairment,” Zahnd said.

Ideally, those measurements would be applied to law in the same way blood-alcohol content levels are used for determining alcohol intoxication, he said. However, there’s not yet a reasonable assessment for marijuana, given that it is absorbed differently and cannabinoids can remain in the body longer than alcohol, he added.

“We’re not there yet with marijuana, and we need work to help get us there,” he said.

On children’s use, the committee warned against the potential of marijuana serving as a gateway drug as well as ill effects on brain development, citing a several data points and statements from anti-legalization group Smart Approaches to Marijuana.

“Legalization of marijuana for purported medicinal and recreational purposes has increased access by children,” NDAA committee members wrote. “For all of these reasons, it is vitally important to do all we can to prevent access to marijuana by youth in America. Their health, safety and welfare demand no less.”

Cole Memo concerns

Marijuana advocacy group National Organization for the Reform of Marijuana Laws railed against NDAA’s paper, claiming that the group was calling for the Cole Memo to be scrapped and for an increase in federal enforcement.

“A state may undoubtedly choose not to criminalize or regulate marijuana,” NDAA officials wrote. “But a state law that affirmatively authorizes the production, distribution and use of marijuana stands as an obstacle to the comprehensive federal framework and is subject to preemption.”

Zahnd told The Cannabist that NDAA did not say what enforcement policies should be or what should happen to the Cole Memo, the Obama administration hold-over providing guidance to prosecutors and law enforcement on where to focus marijuana enforcement efforts.

“We have not taken a position on that, and purposefully did not take a position,” he said. “This report was never an attempt to address every controversial topic regarding marijuana use, but we wanted to address some of the important topics. Others, we left for another day or another policy-maker.”

Zahnd said member Tom Raynes, executive director of the Colorado District Attorneys Council, provided an accurate portrayal of NDAA’s positions to the Colorado Politics blog, which first reported on the NDAA paper.

More questions than answers

NDAA’s conclusions aren’t earth-shattering, said Sam Kamin, the Vicente Sederberg Professor of Marijuana Law and Policy at University of Denver’s Sturm College of Law.

“It’s not that surprising that DAs are saying that we should enforce the law,” he said.

However, Kamin questioned NDAA’s calls for consistent enforcement.

“I don’t know what that means; they are applying (enforcement and the Cole Memo) consistently,” he said.

What the report does show is there remains a great need for objective evidence and information about the performance and outcomes of state-based legalization experiments, he said. For example, statistics may show higher incidences of drivers testing positive for marijuana, but it’s not often mentioned that Colorado is putting a greater emphasis on roadside testing and tracking of marijuana impairment, Kamin said.

“Everything has to be read with a little bit of caution and context,” he said.

Zahnd declined to address specific follow-up questions about enforcement, Kamin’s arguments and NORML’s claims. Instead, he reiterated the following statement:

“NDAA’s report does not take a position on what the Federal drug enforcement policy regarding marijuana should be. However, we believe that it should be enforced consistently across the nation to maintain respect for the rule of law.

I’m sorry I can’t be more specific, but the working group simply did not get into that level of minutia in our final report. We did not intend to answer every question regarding marijuana, but we arrived at a consensus report that addresses some of the very important issues surrounding marijuana policy.”

Principled opposition

Garnett, a self-proclaimed “thorn in the side” of the majority of the working group, was one of two prosecutors to vote against the final version of the policy statement.

Boulder County District Attorney Stan GarnettBoulder County District Attorney Stan Garnett. (Andy Cross, Denver Post file)

“I think what this [white paper] reflects is this was a product of a committee within a pretty conservative group: NDAA is not at the forefront of creative social thought,” Garnett said. “This reflects the view of many prosecutors across the United States.

“I worked very hard to moderate a lot of the language; it came out a lot better than a lot of the earlier versions.”

Earlier iterations had a summary position arguing for legalized states to bring their laws into compliance with the Controlled Substances Act, he said.

Several committee members held certain perceptions of Colorado, that legalization led to a “marijuana-fueled Sodom and Gomorrah” with “everybody smoking and civilization collapsing,” Garnett said. Members also were unaware that Colorado has a Marijuana Enforcement Division and a regulatory scheme in place to manage and closely track the industry’s development, he said.

“We spent a lot of time on the committee trying to make sure they had an accurate understanding of what was happening in Colorado,” Garnett said. “It was pretty clear they didn’t.”

Garnett criticized the April 20 release date of the report, equating it to issuing a report “urging the banning of corned beef and cabbage and green beer on March 17.”

Next steps

Garnett said the working group exposed philosophical schisms within the NDAA.

“Some of us are talking about forming a progressive caucus within NDAA,” he said.

Zahnd said being a part of the marijuana policy working group provided insight for how he views the topic.

“I continue to worry about some of the dangers of marijuana, but it’s really helpful for me to hear from others as far as how they’ve dealt with it,” he said.

NDAA officials provided the report to members of Congress as well as officials in the Department of Justice, Zahnd said.

As of Monday, NDAA has not received much substantive feedback other than the topic is a timely issue and that NDAA’s paper was appreciated, said Nelson O. Bunn Jr., NDAA’s director of policy and government affairs.

The committee’s work is done, for now, on its marijuana policy position, Zahnd said. It’s possible that another working group may be formed in the future, if necessary.

“But for now we’ve come up with a position that represents the entire association,” he said.

Topics: , , , , , , , , , , ,

Alicia Wallace joined The Cannabist in July 2016, covering national marijuana policy and business. She contributes to the Denver Post’s beer industry coverage. In her 14 years as a business news reporter, her coverage has spanned topics such as the…

N.J. legislator planting seeds for recreational marijuana legalization post-Christie

Published: • Updated:

By The Associated Press

TRENTON, N.J. — Marijuana could be grown, sold and used in New Jersey under new legislation introduced in the state Senate.

Democratic Sen. Nicholas Scutari unveiled the proposal at a statehouse news conference on Monday.

The bill has little chance of being enacted under Republican Gov. Chris Christie, who opposes legalization efforts. But Scutari says he’s introducing the measure now as a way to lay the groundwork for it to be enacted by the next governor.

Democratic gubernatorial front-runner Phil Murphy has said he would support legalization and decriminalization efforts. The GOP front-runner, Lt. Gov. Kim Guadagno, said last week that Republican U.S. Attorney General Jeff Sessions likely wouldn’t accept expansion of legalization.

The legislation would permit possession of up to an ounce of marijuana but would prohibit home cultivation.