Good morning. This will be the last Cultivated Daily until Monday. We are glad you’re here and we have big things planned for this newsletter and for Cultivated Media overall.
But first, enjoy the next few days of turkey, gravy, and packing for MJBizCon.
See you next week in Las Vegas. More on that 👇🏼
Not so fast: Ohio's Senate President, Republican Matt Huffman, is spearheading an initiative to revise the state's newly passed law. Huffman suggests that voters lacked a full understanding of the measure's specifics when voting.
Why it matters: Huffman’s proposed revisions signal a tension between voters’ decision and legislative actions. Specifically, Huffman called into question the “social-equity” considerations of the bill, including giving those with previous cannabis convictions preferential access to the new market.
Huffman’s revisions also aim to address issues like public consumption and tax revenue allocation.
Not just cannabis: It’s also important to note that Ohio voters also passed a measure to codify a woman’s right to choose via a ballot measure at the same time. Huffman also opposed that measure and now he’s trying to upend voter sentiment on this issue too.
What's next?: A swift legislative process is anticipated. Huffman’s proposed amendments will be integrated into an unrelated House-passed bill, bypassing the regular legislative process. This approach is facing logistical challenges due to limited session days in the Senate and House before the legalization law goes into effect on December 7.
WHAT HAPPENS IN VEGAS
Cultivated Live streams from Vegas
What is Cultivated Live?: Starting Wednesday, November 29, the Cultivated team along with our friend Krista Raymer of Vetrina Group, will be hosting Cultivated Live from the world famous Planet 13 dispensary.
When and where? Each morning from 8:30-11:30 am Pacific/11:30-2:30 Eastern, we’ll bring you conversations and insights from some of the best and brightest in the cannabis industry. Be sure to follow us on LinkedIn so you don’t miss a thing.
What’s this about Planet 13? Planet 13 bills itself as “the largest cannabis dispensary on planet Earth” — so what better place to share Cultivated Live’s first stream. You’re welcome to come on down when you’re in Las Vegas.
SO NICE THEY NAMED IT TWICE
NYC cannabis taxes get some love
Driving the news: New York Governor Kathy Hochul signed a tax relief bill for New York City cannabis businesses. The legislation addresses the inability of these businesses to make federal deductions due to IRS code 280E, the enemy of the US cannabis industry.
Sound familiar?: This move follows a prior state-level tax deduction allowance, but New York City's distinct tax laws required this additional step.
The bill enables deductions for business expenses related to adult-use and medical cannabis sales, distribution, or production, aligning city tax policy with state law.
Why it matters: Taxation in the cannabis industry is tough. Like really tough.
The move is a substantial policy shift in supporting cannabis businesses. The legislative change is part of a broader trend, as states like Pennsylvania, Maine, Illinois, Connecticut, and New Jersey have also implemented similar tax relief measures for cannabis businesses, creating a workaround for federal taxation challenges under prohibition.
Impact of descheduling: If cannabis was descheduled to Schedule III from Schedule I, as recommended to the Drug Enforcement Agency by the Department of Health and Human Services, the industry’s hated 280E would largely go away.
What's next? With lowered tax burdens, cannabis businesses might experience increased financial viability, potentially leading to market expansion and more robust economic contributions — just as new licenses are being issued in New York City and beyond. This change also sets a precedent for how other states and cities might approach cannabis taxation, especially as federal reform efforts continue to stall.
DISPATCH FROM PARADISE
Da kine kind in Hawaii
What's happening?: Hawaii's Attorney General Anne Lopez has introduced a detailed plan to legalize adult-use cannabis. This initiative aims to transition from the current medical system, to a broader retail industry. The plan also emphasizes maintaining support for existing medical dispensaries.
Why it matters: Tourism accounts for about 25% of Hawaii’s economy. Adding cannabis to that tourist-dollar spend can yield big revenues. The proposal represents a significant policy shift in Hawaii.
A bit of history: Previously, the Attorney General's office was either opposed to legalization or expressed concerns about public safety and potential impacts on youth.
Lopez's comprehensive plan addresses these issues through measures like taxes, law enforcement enhancement, and health education programs. It also includes a social equity program, modelled after Massachusetts, providing support to illegal growers transitioning to legal operations.
What's next?: The proposal, though extensive, faces hurdles in getting legislative approval, especially with other pressing issues like the Maui wildfire disaster and budget challenges.
If passed, the plan envisions a phased approach, with sales likely to begin 18 months after the law is enacted. Like in many other markets, medical dispensaries would likely be the first to sell retail cannabis.
Making Wall Drug worth the trip
What’s happening?: South Dakota is considering a new ballot initiative for legalization.
The initiative, proposed by Emmett Reistroffer, includes provisions for licensed retail sales to adults and authorizes existing medical dispensaries to begin adult-use sales.
There’s SD history: South Dakota voters have seen it all before. This latest initiative follows a previous one rejected last year and a 2020 version, which passed, but was subsequently invalidated by the State Supreme Court.
What’s next?: The path to the ballot and potential implementation presents challenges.
The initiative requires over 17,500 valid signatures to qualify for the 2024 general election ballot. Given the state's history of fluctuating support and legal challenges to legalization measures, securing enough support and navigating the legislative landscape is critical — and not a guarantee.
WHAT WE’RE READING
🥊 Quick hits
At the beginning of Thursday's meeting of the Massachusetts Cannabis Control Commission, acting chair Ava Callender Concepcio made an announcement that Shawn Collins, the executive director of the commission and the primary overseer of its daily activities, is set to resign.