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NH Governor Sununu has some cannabis ideas

Plus, MN is cracking down on hemp flower

Good morning.

Loads of attention has been on the federal level lately, with the President Biden’s State of the Union last week and the long wait for the DEA’s decision. But today, we’re heading to the state level with some updates from New Hampshire and Minnesota. 

And don’t forget to join us at 10 am for the latest installment of United States of Cannabis, a weekly conversation at the intersection of cannabis and politics co-hosted by Brad Spirrison from Grown In streaming on LinkedIn.

- JR

💡What’s the big deal?

The Governor’s desired - but reluctant - path forward

Driving the news: New Hampshire’s Republic Governor has reiterated what it will take to get his signature on a legalization bill currently being considered in New Hampshire. The Governor would like to see a state-run franchise model, according to Marijuana Moment.  

Some background: New Hampshire is the lone New England state that does not have legal cannabis. The “Live Free or Die” state has been considering a legalization bill in the State House of Representatives that mirrors the private-retail model of other, neighboring states. The Governor has suggested that he’d like to see tighter state control over retail sales, something akin to what is in place for alcohol sales in New Hampshire. 

Why it matters: The State-run alcohol sales model that exists in New Hampshire probably won’t work for cannabis. Last week, the New Hampshire Cannabis Association’s Daryl Eames described to Cultivated the two main reasons why:

  • Franchise Law: The model being proposed by the Governor would be a franchise model, whereby the state would be the franchisor and operators would be the franchisees. This would put the model under Federal Trade Commission franchise rules and regulations - meaning federal regulation of a non-yet-legal, Schedule 1 drug franchise. So there’s a conflict between the state and the feds that appears untenable, according to Eames. 

  • Plant-Touching State: Following the state’s approach to alcohol would make New Hampshire the actual retailer of cannabis - again, putting the state in a position of being a plant-touching business of a Schedule 1 drug. States generally don’t like being in a position of being in direct contravention of federal law, which is why you have the state as regulator in every other state rather than the actual retailer or wholesaler. Again, Eames believes this path forward is untenable for the state.

If you’ve followed all of that, then you can begin to understand the challenges the state is facing trying to get a uniquely-New Hampshire legal market off the ground. 

What’s next? There is a bill already under consideration in the State House of Representatives. The bill’s co-sponsor Anita Burroughs joined Cultivated Live and noted, “We’re seeing a conga line of cars going over the border everyday to get product… In this bill, 65% of the money that we raise is going to go towards education, which we really need to fill those coffers…” There’s a House hearing tomorrow on the bill and if passed, it still needs to head to a reluctant New Hampshire State Senate. 

So, New Hampshire’s cannabis conga line could continue for some time.

👊 Quick hits

Taking a page from President Biden’s playbook, Massachusetts Gov. Maura Healey is making cannabis waves this week. She’s expected to announce a blanket pardon for those convicted of simple possession.

Last week, Michigan’s Cannabis Regulatory Agency notified 62 social equity licensees that they were eligible for a share of the $1 million available through the Social Equity Grant Program. Each of the grantees will receive an equal share of $16,129.

MN hemp shops under the gun for selling flower

What’s happening: Minnesota regulators have been given the authority to crack down on hemp shops that sell “hemp flower” that is deemed to contain above the legal limit of THC. 

Why it matters: Minnesota is well on their way to having a legal cannabis market, but they are missing the crucial last step of creating legal places to buy cannabis. Retail dispensaries are meant to open at some point in 2025, but in the interim, hemp shops have been selling “hemp flower” - which fit into a neat regulatory loophole. Now, regulators are attempting to close that loophole.

What they’re saying: Kooka is one company that produces hemp flower sold in hemp shops in Minnesota. It’s one of the products that appears to test above the legal limit for THC. The owner of Kooka told Marijuana Moment that if the state determines that his products are illegal, he will stop selling it, but: “If they’d rather it be sold on the street where people are putting fentanyl in it, does that make sense? I’ve talked to a lot of police and they say they’d rather you sell it in stores than it being sold out of the street.”

He continued: “But I’m here to work with the state. I told them the day they want us to stop selling what we’re selling, all they have to do is pick up the phone and say we don’t want you to sell it. That would be the last day it would be sold.”

What’s next? Well, the phone is ringing on hemp flower. It seems the Office of Cannabis Management (OCM) in Minnesota is cracking down by calling registered hemp shops and letting them know enforcement on hemp flower is coming.

You can read the full memo outline the crackdown game plan from the OCM to Registered Hemp Derived Cannabinoid Businesses.

🎒 What we’re reading

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