LOCAL NEWS PT. 1

POT POTENCY SCANDAL

The massive, multistate operator Curaleaf recently ran afoul of New York Cannabis regulators when the company began displaying “dry weight” THC percentages for its products instead of “wet weight” potencies.

While Curaleaf made the change without alerting retailers or the Office of Cannabis Management (OCM), which oversees the pot industry in the Empire State, consumers quickly realized something was off. That’s because there’s a significant difference between dry and wet weight measurements. For example, as syracuse.com points out, flower that tests at 20 percent THC using the wet weight method can test as high as 37 percent THC when dry.

While dry weight testing is the industry standard in the Northeast’s regulated marijuana markets – used by New Jersey, Connecticut, Maryland and Massachusetts – products sold in New York’s medical Cannabis program only list wet weight measurements.

Clearly, using a testing method that produces higher potency numbers for pot products would give a Cannabis company a significant edge in the market.

However, when customers in New York realized the super potent pot they purchased was pretty much the same as their last batch, they began reporting Curaleaf’s products to retailers. Regulators soon became aware that the MSO was using the alternate testing method.

And while Curaleaf spokesperson Stephanie Cunha explained that dry weight “is considered the most accurate metric for THC content on any type of Cannabis sample,” and that dry weight testing was used in most neighboring adult-use states, the company was still forced to remove tens of thousands of pot products from New York dispensary shelves.

Dry weight is considered by most experts to be the superior method. And as the regulated Cannabis industry grows and efforts are made to standardize

Photo by Jess Loiterton

different aspects of production and retail, it is likely that dry weight testing will be universally adopted by adult-use states. But switching from wet to dry testing in violation of New York regulations is clearly a major misstep from this massive marijuana company.

And while we don’t recommend choosing Cannabis based on THC content alone, there’s no question Curaleaf misled consumers, who thought they were purchasing the most potent pot on the market.

MORE GREEN IN THE GARDEN STATE

New Jersey has sold nearly $80 million of recreational Cannabis in just over two months of adult-use retail sales.

After a lengthy legislative battle that included seemingly endless negotiations and numerous rewrites of a legalization measure, New Jersey governor Phil Murphy signed an adult-use Cannabis bill into law in February 2021.

Over a year later, on April 21, 2022, the Garden State officially launched its retail sales program with 12 hybrid shops that are licensed to provide both medicinal and recreational Cannabis.

According to the Cannabis Regulatory Commission (CRC), which oversees New Jersey’s marijuana industry, the state totaled $79.7 million in adult-use sales from the start of the retail program on April 21 through the end of the fiscal year on June 30.

Gov. Murphy estimated that New Jersey would rake in $4 million in retail sales tax revenue by the end of the fiscal year. That projection was incredibly close to the $4.65 million the Garden State actually generated in that time period. Murphy’s new budget anticipates collecting $19 million in Cannabis sales tax revenue in the new fiscal year.

Nearly $220,000 of the $80 million New Jersey has generated through retail sales thus far is earmarked to aid social equity applicants who have been impacted by the drug war.

“The market is improving … It is performing as we expect with the current number of dispensaries, the spread of locations and the high prices … As more Cannabis businesses come online, consumers won’t have to travel as far to make purchases, and prices will fall with increased competition, the market will do even better,” CRC Executive Director Jeff Brown explained.

While officials hope to launch standalone licensed adult-use retailers by the end of the year, the current market in the Garden State has increased from 12 hybrid dispensaries to 18 locations throughout the state. However, all shops currently licensed to provide recreational Cannabis are owned by eight multistate operators. While this system was necessary to move up the launch of retail sales, it is not indicative of the industry New Jersey envisioned when it passed its adult-use law.

Photo by Sharon McCutcheon

MASSACHUSETTS MOVES FORWARD

Anew bill signed into law by Gov. Charlie Baker will enact much needed regulatory reforms of Massachusetts’s Cannabis industry.

The marijuana industry is booming in the Bay State, as officials recently announced that Massachusetts has sold nearly $3 billion worth of pot since adult-use sales began in 2018.

However, the state’s dirty little secret has long been the host community agreements (HCAs) that Cannabis companies are forced to sign with cities and towns in order to open in their jurisdiction. These agreements – which essentially amount to pay-to-play deals, along with “impact fees” that allow municipalities to charge up to three percent of a Cannabis company’s annual revenue in preemptive fees – were written into the state’s adult-use law with the intention of offsetting any costs to the host community created by pot companies. However, impact fees have frequently been misused and have not been subject to any oversight.

According to a new study by Northeastern University, Cannabis companies in Massachusetts have forked over far more than $50 million in so-called “impact fees” since the state launched retail sales in 2018.

A study by a Boston law firm back in 2019 found that nearly 80 percent of the state’s host community agreements are illegal. And, of course, former Fall River Mayor Jasiel Correia was convicted of extorting cash from Cannabis companies and is currently serving a six-year prison sentence.

Fortunately, Massachusetts lawmakers are attempting to crackdown on the widespread corruption around Cannabis industry licensing. The new bill would give oversight of HCAs to the Cannabis Control Commission (CCC), which oversees the state’s marijuana industry.

The new law also cuts down on the scope of HCAs and impact fees, stipulating that the CCC must review and approve any such agreement between a jurisdiction and a Cannabis company, according to The EagleTribune.

The new law also creates a Social Equity Trust Fund that will receive 15 percent of the cash from the Marijuana Regulation Fund.

Additionally, the new legislation moves the state closer to the eventual licensing of social consumption lounges, where people can consume Cannabis in an indoor public space.

Caroline Pineau, who owns the dispensary Stem in Haverhill and sued the city over HCAs is encouraged by the reform, saying, “This new law addresses the municipal extortion that has hampered small entrepreneurs and it helps social equity applicants move forward. This is a big win for fairness and industry growth.”

INDUSTRY VERMONT’S CANNABIS ermont has begun accepting applications for adult-use retail sales licenses. While regulators originally anticipated opening the application window in September, the date was moved up to August 1 in order to prepare for the state’s self-appointed deadline for the launch of retail sales on October 1, 2022. While the state first legalized Cannabis in 2018, that law only allowed for the possession of pot as the legislation did not include a retail sales component. However, the state revised its legalization law in 2020 to include a tax and regulate program and has been working toward implementing V standalone adult-use retail sales. Vermont is now taking applications for all aspects of the legal Cannabis industry, including retail sales, cultivation, processing and manufacturing, and even testing laboratories. The state’s Cannabis Control Board (CCB), which oversees the industry in Vermont, opened up the application window for cultivation licenses back in April in order to ramp up the necessary supply for the fall 2022 retail sales launch date. The CCB received hundreds of applications from growers at the time and initially selected eight companies for cultivation licenses. All eight of the businesses awarded licenses from the state were social equity applicants – Vermont’s Cannabis law requires that priority be given to social equity applicants in the licensing process. After considering equity applicants, the board must then give priority to outdoor growers. Two testing laboratories, Bia Diagnostics and Steep Hill Labs, were awarded licenses earlier this summer. To date, Vermont regulators have approved over 200 companies for Cannabis industry licenses through their pre-qualification process, approximately 50 of which are retail shops. “We’ve been laser focused on getting applications out the door because you can’t just rely on Cannabis grown out of state to meet demand … We need to build the supply chain in Vermont,” CCB Chair James Pepper said. So far, nearly 70 Vermont municipalities have opted-in to the legal Cannabis industry and will allow retail locations in their jurisdictions.

Photo by Jeff W