Keep off the grass in NY: The MRTA is dead, but decriminalization expanded

The bill to legalize recreational marijuana in New York– the MRTA –will not pass this session. Democratic lawmakers had been in a race to finalize the agreement before the end of the legislative session last week.

Bill sponsor and State Senator, Liz Krueger, issued a statement Wednesday saying the legislature “came very close to crossing the finish line, but we ran out of time.”

She says it “means countless more New Yorkers will have their lives up-ended by unnecessary and racially disparate enforcement measures before we inevitably legalize.”

What was MRTA, and what was it intended to do?

The MRTA stands for the Marijuana Regulation and Taxation Act. It was intended to legally regulate the use, production, and sale of marijuana. It would’ve established a regulatory structure similar to what currently exists for alcohol in New York State. The bill would’ve also retroactively addressed previously-criminalized offenses and provide opportunities for the resentencing of people previously convicted of a marijuana-related crime.

Why didn’t it pass?

There was a clash over what would happen with the anticipated $300 million in annual tax revenue. The bill’s sponsors wanted to allocate funds to communities that have been hit the hardest by the war on drugs, and Governor Cuomo wanted to create a new state agency to oversee the industry and decide where the money should go.

What does this mean for future legalization efforts?

A more watered-down decriminalization bill, S.6579A, sponsored by Jamaal T. Daily (D), was passed by the Senate on Friday. This bill aims to reduce the penalty for possessing marijuana and would also allow for certain marijuana-related criminal records to be expunged.

So what does the law say now about cannabis in NY?

Contrary to what you might assume based the sights and smells of the city, it’s not legal to smoke marijuana yet (unless you’re one of the 59,000 people with a medical card.)

The new bill will:

  • Decriminalize possession of small amounts of marijuana by reducing the penalty for unlawful possession of marijuana to a violation punishable by a fine.
  • Establish procedures for automatic record expungement both retroactively and for future convictions.
  • Remove criminal penalties (since a violation is not a crime) for possession of any amount of marijuana under two ounce.
  • Reduce the penalty to a $50 fine regardless of criminal history for possession under one ounce, and a $200 fine regardless of criminal history for possession between one and two ounces.
  • Add marijuana to the definition of “smoking” under the Public Health Law so that smoking marijuana will be prohibited in any circumstances where smoking tobacco is prohibited by law

Cannabis: Creating Excitement for Brands in Highly Regulated Industries

Having spent 20 years working in an industry that is highly regulated, Kim Lawton knows how to launch and maintain excitement around national brands within the confines of restrictive state laws.

Now, the team at Enthuse is using its experience in the spirits industry and its knowledge of cannabis to help emerging brands navigate the complexities of marketing CBD, hemp, and marijuana products.

You’re an expert at working with brands that need to adhere to strict and restrictive state laws around marketing. How do those restrictions impact the creative process at Enthuse? 

We do not limit ourselves in the creative process.

Like all marketers, we start with the audience first. We know how to engage them and how to add value for them. Our target consumers are always adults of drinking age, so we have a good foundation.

How does your work in alcohol inform your work in this budding industry? 

We know what it’s like to work in an industry that is highly regulated and has different laws at federal and state levels. Our team can impart that experience and knowledge to newcomers in the category.

In fact, education is the cornerstone of everything we do at Enthuse, both internally and externally, using our top industry experts to create inspiration through education on behalf of the brands we work with.

The restrictions on cannabis marketing are a lot stricter than alcohol—TV, Facebook, and Google advertising are out of the question. How do you see the next few years panning out in the industry until (we assume) it’s legalized at a federal level? 

I expect to see a huge expansion in people engaging with the brands first hand, through pop-up events and private education sessions.

It won’t take long for the cannabis industry to catch up to alcohol. If you recall, spirits ads were also banned from advertising on TV. Once it has some time in the market, people will start to understand the product and the category and more relaxed advertising rules will become inevitable.

What can Enthuse do for an emerging cannabis brand? 

Enthuse can serve as a brand ‘concierge’, delivering value no matter what the life stage you are or what level of service your brand may need—providing insights on how to launch a product, how to find consumers and connect with them, how to sample and educate.

Do you think it’s important for brands operating in this space to have an advocacy or policy message around cannabis?

Without a doubt, yes.

With the opportunities associated with the ‘green rush’, there will be a lot of bad-faith actors bringing low-grade products to market to try and make quick money. It’s going to be really important for the brands who are committed to quality to have the right voice and support.

Last week in weed

Illinois legalizes cannabis

Last Friday, the state that invented Twinkies aptly became the 11th state in the country to pass a bill legalizing the recreational use of marijuana. The so-called second city will have dispensaries up-and-running as early as January next year. Your move, New York!

The bill in Illinois is unique because it was passed by state legislature, not through a ballot initiative. Rather than giving the public a straight up-or-down vote, senators were able to have more nuanced conversations around what it means to legalize cannabis in communities that have been harmed by prohibition. According to the Washington Post, Senator Toi Hutchinson (D), was cynical about legalizing the substance without addressing the issue of criminal justice reform. “You can’t take a thing that has done so much damage and so much harm, and then allow folks to make millions of dollars on it without handling that. No. No, absolutely not.” These discussions resulted in a more progressive bill that will allow residents convicted of cannabis-related non-violent offenses to apply have their records expunged. People in high-poverty, high-conviction areas will also be given preference when the state processes vendor applications.

When can I start growing marijuana in Illinois?

Initially, only the 20 existing medical marijuana cultivation facilities will be licensed to grow marijuana. In July 2020, interested craft growers can apply for one of 40 licenses to cultivate up to 5,000 square feet.

How can I start selling marijuana in Illinois?

According to Marijuana Business Daily, existing medical marijuana license-holders will get a head start and could open their stores by January 2020. In the first licensing round, the state will award permits for up to 75 other stores in May next year, and an additional 110 stores in the second wave in December 2021. There are plenty of services online that will walk you through the application process, like Dispensary Permits Consulting.

What should I know as an investor? 

No entity or individual can hold an interest in more than three cultivation centers or 10 stores. The state will do a market study, until which time only one grower will be allowed per entity.

Enthuse - Image

The FDA on CBD

After the legalization of hemp in the 2018 Farm Bill, an explosion of hemp-based products have been made available. The most popular is CBD oil, which is said to have a suite of wellness benefits, including the treatment of inflammation, anxiety, and pain. The non-intoxicating cannabinoid has since made its way into a range of products like bath bombs, dog treats, and sodas.

Business analysts project that the industry could grow to be worth as much as $22 billion in the next five years.

However, the market has thus far been unfettered by regulation, and the US Food and Drug Administration (FDA) has expressed concerns about CBD side effects and the lack of scientific evidence for the claims made by manufacturers.

On Friday, the FDA listened to testimony from over 100 speakers, including researchers, health professionals, advocates, manufacturers, and opponents at a hearing led by Acting Commissioner, Ned Sharpless, to help the agency design policies around labeling and quality control.

The testimony painted a picture of a chaotic industry which lacks accountability and research and a lot of confusion among people who claim to be in-the-know.

What does this do to the market?

Stocks fell across the whole marijuana market after the hearings concluded on Friday. Aurora Cannabis (ACB), Tilray (TLRY), Cronos Group (CRON) Canopy Growth (CGC) took a tumble earlier this week.

Can I still start my CBD business? 

Yes, but know that FDA regulation is coming, and it’s likely to arrive as quickly as a stringent evidence-based scientific body can write it. It will mostly affect the people filling the market with mislabeled rubbish–one of the most compelling pieces of testimony was lab data showing that bottles of “300 mg CBD oil” actually contained 22 mg or none at all.

The FDA views CBD as a drug, so ordinarily wouldn’t allow it to be added to food or beverages or marketed as a dietary supplement. However, according to Market Watch, it has said, “given the strong public interest in CBD as a wellness aid, it will seek to help provide pathways to regulatory approval.”

If you’d like to know more about the hearing, Leafly live-blogged the whole thing.

Given the strong public interest in CBD as a wellness aid, the FDA will seek to help provide pathways to regulatory approval.