DeSantis’ cannabis politics

Plus, a Stiizy lawsuit to watch

Monday, June 10, 2024

Good morning.

Happy Monday, everyone. 

Except the current and former Republican Governors of Florida – who seem to be running against both cannabis legalization and Florida’s electorate. 

Let’s get to it.

-CB & JR

This newsletter is 1,197 words or about an 6.5-minute read. 

💡What’s the big deal?

DeSantis vetoes a hemp bill - but it’s deeper than that

Office of Governor Ron DeSantis

If you’re new here, check out June 3’s Cultivated Daily for more context: DeSantis wants to cut off his nose to spite his face

What happened: Florida’s Republican Governor Ron DeSantis vetoed a bill that would have imposed strict regulations on the sale and production of hemp-derived products, specifically targeting delta-8 and delta-9 THC, reports CBS News

While DeSantis acknowledged the bill’s commendable safety intentions, he cited the bill’s potential to impose excessive regulatory burden on small businesses and disrupt the hemp industry, which could lead to job losses and decreased revenue for Florida. 

He suggested that the Florida Legislature reconsider the issue in the next session to develop standards for quality control, accurate labeling, child-resistant packaging, and appropriate retail practices. You can read his veto message to the Senate. 

Why it matters: DeSantis’ decision is seen as contradictory since he is actively campaigning against November’s Amendment 3, which would legalize and regulate cannabis in Florida, and which economic analysts estimate could generate $195.6 million to $431.3 million in new sales tax revenue annually if passed. 

Reports suggest DeSantis hopes the hemp industry will support his efforts against Amendment 3 in return for his veto – pitting the hemp industry (which wants neither more regulation nor – presumably – cannabis legalization) against the cannabis industry (looking to legalize in November).

Zoom out: DeSantis’ veto of this hemp bill comes in the wake of a Fox News poll which revealed that two-thirds of Florida voters, including a majority of Republicans, support the Amendment 3 initiative on the November ballot. In fact, the measure was more popular (66% voter support) than Gov. Ron DeSantis himself (52% voter support).

The poll also indicates strong support among Florida voters for abortion access (Amendment 4), according to USA Today. The survey showed 69% for the abortion measure, 3% higher than the support for Amendment 3. 

Both measures need to reach the 60% support threshold to pass.

What’s next: Another former Florida Republican Governor and current Florida Republican Senator Rick Scott (R) also plans to vote against Amendment 3 in November. His decision, however, is based on his brother’s history of addiction and substance abuse. 

- CB

💬 Quote of the day

In a story about the challenges facing the Colorado cannabis market, Jordan Wellington of Strategies 64 told Politico: “We’re a victim of our own success…New markets drawing investment away, new markets drawing purchasing away — all of these different things combined into the soup of the challenges [facing] Colorado.”

Changing regulations to reflect sky not falling

Driving the news: Health Canada – the agency that regulates cannabis in Canada – has proposed several rule changes that the industry has been advocating for, including increasing the milligrams of THC per package available in edibles. (Currently, only 10 mg/package are allowed in the Canadian market.)

What it means: The Canadian cannabis market – which went live for adult-use in 2018 – has been dealing with some tough times, including price compression, a tight regulatory environment, significant competition, and high taxation. So, any movement from regulators to ease the burden for producers, brands, and retailers is welcome and needed.

What others can learn: Legalization is often viewed as the end-point for regulators. But more thoughtful regulators monitor the market once it launches and make tweaks and changes as required. Health Canada acknowledged this in their proposed changes, noting: “…the cannabis industry is facing economic difficulties that threaten the objective of legal production of cannabis displacing the illegal cannabis market. A healthy, well-regulated, diverse and competitive legal industry is a key element of the cannabis framework. Reducing the administrative and regulatory burden would improve the economic sustainability of the legal industry and support the objectives of the  [Cannabis] Act…” 

Recently, we’ve seen a rash of changes in New York’s market, including significant personnel moves at the Office of Cannabis Management, increased enforcement of unlicensed cannabis sales, and two new bills that passed the legislature supporting the cannabis industry. (Check out Quick Hits below.)

What they’re saying: Writing about the increase in edible packing limits, Canadian cannabis attorney Trina Fraser noted on X: 

What’s next: If you want to have your say about these proposed updates and changes to Canadian cannabis, Health Canada wants to hear from you. Let them know what you think!


Quick hits

A California high school student sued the marijuana brand Stiiizy of causing a public health crisis among teens by marketing high-potency marijuana vaporizers to youth. The lawsuit claims that Stiiizy's marketing targets teenagers and young adults, resulting in an epidemic of cannabis-induced psychosis among California teens, including the plaintiff. 

Medicinal dispensaries in Ohio can now apply for recreational licenses, with approvals handled by the Ohio Division of Cannabis Control. The division expects a quick turnaround and approved dispensaries will decide when to start recreational sales. However, only existing medical facilities are eligible to apply for recreational or dual-use permits right now.

Two significant cannabis bills passed both houses in New York and await the governor’s signature, wrote Matt Leonardo on LinkedIn. The first would reinstitute the very popular “Growers’ Showcase” event license, and the other would allow those paying the excise tax to pay annually and to pay online. 

The final phase of dispensary licensing in DC opens in July. As noted by our friends at The Outlaw Report, “There were three application periods: first for unlicensed operators, then for social equity applicants, and now for standard retail applicants.” 

Ballots in Slovenia will ask voters whether medical cannabis patients should be allowed to grow for personal use and whether adults, more broadly, should be able to grow and possess cannabis. 

German lawmakers have approved changes to the country’s legalization law, giving states more control over cultivation limits and setting a THC blood limit to address concerns about impaired driving. Read more from Marijuana Moment.

📊 Chart of the day

The Viridian Chart of the Week highlights a 48% increase in U.S. Cultivation & Retail sector capital raises year-to-date from 2023, despite an overall decline in cannabis-related capital raises worldwide. Read more here.

📈 Deals, launches, partnerships

Canopy Growth has filed the regulatory paperwork to issue additional shares in an effort to raise another $250 million.

📰 What we’re reading

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