Almost there, everyone. Today, we’ve got a look at what’s happening Cultivated News’ spiritual homeland of Ontario, why border dispensaries continue to rake it in, and much more.
A 6-minute read from JB and JR
ONTARIO GOES BIG
Ontario wants cannabis companies to get…bigger
What happened: Unlike other jurisdictions, Ontario is doing something different with its cannabis policy: It wants companies to be able to grow more, and get bigger.
On January 1, the Ontario government doubled the number of stores individual operators could run, from 75 to 150. And, grocery giant Loblaws is pushing Ontario’s government to let them open cannabis retail within their already-existing grocery stores, Global News reports.
Why it matters: Retailers in Ontario’s competitive cannabis industry have struggled to turn a profit since Canada legalized it in 2018.
What else is happening: Canadian cannabis producers have destroyed nearly 1,700 tons of weed since legalization began, The Toronto Star reports.
California’s Unified Cannabis Enforcement Taskforce has seized over $312 million in illicit cannabis in its first year of operation.
BORDER BOOM TOWN
Dispensaries on the border rake it in
What happened: In a return to a Cultivated team favorite topic, dispensaries on the borders of states without legal pot continue to rake it in.
Dispensaries in Sunland Park, New Mexico, which is right on the border of El Paso, Texas, drove over $4 million in cannabis sales in December, according to The El Paso Times.
Why it matters: Cannabis is one of the few industries that’s legal in New Mexico, but can carry criminal penalties in Texas. That leaves Texans to drive across the border for their pot. First, that’s a waste of police resources, and second, that’s a lot of tax revenue, and job creation, going uncaptured by Texas.
Back up: Texas has strict medicinal cannabis laws on the books, but recreational use remains a misdemeanor. That’s left Texas hemp companies in the lurch, The Dallas Observer reports.
Moving cannabis to Schedule III won’t bring states into compliance
In other words, moving cannabis to Schedule III wouldn’t suddenly flip a switch for cannabis companies. They’ll still be violating federal law.
It’ll be up to the Justice Department to create a rule that would let cannabis companies sell pot in states where it’s allowed without prescriptions. That would look something like the Cole Memo, which directs the DOJ to keep their hands off of state-legal cannabis.
What would change: Moving cannabis to Schedule III would reduce criminal penalties associated with the production and sale of cannabis, but wouldn’t remove them entirely.
And, the CRS says that the Schedule III change would get rid of the industry’s hated 280E tax, which would reduce tax burdens and help a lot of smaller businesses stay afloat.
Our take: The move to Schedule III, coupled with that memo from the DOJ, plus some sort of congressional action on banking issues whether passing the SAFER Banking Act or similar legislation, could look like a form of quasi-legalization that’s far from perfect, as we’ve written.