Newsworthy Highlights

California Shuts Down Illegal Cannabis Operation in Monterey County. Recently, officers with the California Department of Fish and Wildlife (CDFW) shut down an illegal cannabis and hemp operation where growers were violating state laws meant to protect native plants, fish and wildlife.

To execute the seizure, the CDFW coordinated with various agencies, including the Monterey County District Attorney’s Office, California Department of Cannabis Control (DCC) and a state environmental scientist. In fact, the DCC stated that it expects to seize over $1 billion in illegal cannabis products through its coordinated multi-agency enforcement tactics.

Here, a records check on a property in Monterey County uncovered an expired hemp registration for the property, but the records check revealed that no county permit or state license for cannabis cultivation had ever been issued. This led authorities to serve and execute a search warrant, during which the CDFW discovered on the property plants with THC content above the legal 0.3 percent hemp threshold.

Upon investigation and to avoid violating state law, the person subleasing the property told the CDFW that the cannabis was in fact hemp and that the property was a legal hemp facility. Because of the similarities in appearance between cannabis and hemp, illegal cannabis operators often use this tactic to avoid detection. In spite of this, the CDFW completed the seizure, confiscating more than 6,800 cannabis plants and destroying more than 6,000 pounds of cannabis flower.

In addition to state law violations regarding the illegal cultivation of cannabis, the CDFW uncovered multiple environmental violations, including the placement of debris and waste, liquid fertilizer and petroleum products created by cannabis cultivation near streams of water. Several individuals present during the seizure were detained and later released pending charges from the District Attorney’s Office.

In response to the seizure, the DCC Director said, “Collaborating on enforcement actions allows us to more effectively take down operations that harm our environment and present unfair competition to our legal businesses.” To protect the state’s natural resources and legitimate businesses, Californians are encouraged to submit complaints against illegally operating cannabis businesses and legally operating cannabis businesses that are violating state laws.

Oregon May Stop Cannabis License Violators From Selling Their Businesses. During its July 21, 2022, regular meeting, the Oregon Liquor and Cannabis Commission (OLCC) signaled that it is planning to tighten the change-of-ownership option in cases of cannabis license violation. Oregon cannabis operators may sell their business through a change of ownership.

This option is available even to licensees facing criminal charges for diverting cannabis into the illegal market or knowingly selling cannabis to children. In Oregon, the sale of a business and the change of ownership go hand in hand, and the value of the cannabis business is based on the ability of the new owner to receive a license through a change of ownership.

The OLCC believes that misbehaving licensees not only avoid their punishment for violation but also obtain financial benefits by selling the business. To prevent this practice, the OLCC directed the Administrative Hearing Division to consider the limited “no change ownership” approach in license violation cases going forward.

Arkansas Board of Elections Denies Ballot Initiative on Technicality. Arkansas Board of Elections commissioners denied an amendment to the Arkansas Constitution that would authorize a legal adult-use and medical marijuana program in Arkansas, even though the proposed amendment had collected the requisite number of signatures.

The commissioners considered the title of the amendment — “an amendment to authorize the possession, personal use, and consumption of cannabis by adults, to authorize the cultivation and sale of cannabis by licensed commercial facilities, and to provide for the regulation of those facilities” — to be misleading. The amendment had collected the requisite number of signatures, but debate focused mostly around issues with THC levels and the regulatory regime the amendment would set up.

Responsible Growth Arkansas, the main backer of the ballot, filed a lawsuit Aug. 4, 2022, in the Arkansas Supreme Court (CV-22-482) to allow the ballot initiative to go through.

Bill Would Fund Clinical Trials for State-Licensed Medical Cannabis Products. On July 27, 2022, the bipartisan Developing and Nationalizing Key Cannabis Research Act of 2022 was introduced in the House of Representatives. Key provisions of the bill include allowing the director of the National Institutes of Health to designate “institutions of higher education as Centers for Excellence in Cannabis Research for the purposes of interdisciplinary research related to cannabis and other biomedical, behavioral, and social issues related to cannabis.” The research includes clinical investigations assessing “the safety and efficacy of cannabis in providing therapeutic benefits for certain priority diseases or conditions.” This bill seeks to appropriate $50 million for each fiscal year from 2024 to 2028 to distribute to designated research centers.

Currently, under federal law, only federally licensed entities may study cannabis in clinical settings. Scientists have expressed interest in expanding the scope of permissible cannabis research to capture cannabis products that are more representative of products available in state markets where medical use is permitted. This bill would permit the study of state-legal products.

This bill was introduced the same week that the House of Representatives passed the Medical Marijuana and Cannabidiol Research Expansion Act, a bill that would allow the Drug Enforcement Administration to register practitioners interested in conducting marijuana or cannabidiol research and register manufacturers to supply marijuana for the purposes of conducting medical research. A similar bill passed the Senate earlier this year. This newly introduced bill rounds out an active year for congressional bills on cannabis research.

Grassroots Federal/State Legislative Highlights

Michigan Releases Consumer Adverse Reaction Form. Michigan’s Cannabis Regulatory Agency released an adverse reaction reporting form to capture consumer complaints. Consumers who have experienced an adverse reaction from a marijuana product can use this form to provide the agency with details about the reaction. The form requests information about the product that caused the adverse reaction, the applicable marijuana business, and specifics about the adverse reaction.

In the past, the Cannabis Regulatory Agency’s recall notices have directed consumers who experienced an adverse reaction from the recalled product to contact the agency. This new adverse reaction reporting form will help direct the agency’s identification of products requiring investigation.

New York Bans Smoking in Public Parks and on Beaches. On July 15, Gov. Hochul signed into effect S.4142/A.5061, which bans smoking in municipal or state-operated parks. This ban covers beaches, boardwalks, marinas, playgrounds, recreation centers and buildings located on any property controlled by state or local government. Notably, the ban does not apply to sidewalks or parking lots. Adirondack Park and Catskill Park are explicitly exempted from the law’s ban. Violators will be subject to a $50 fine.The state cited concerns about the environmental impact of cigarette butt litter and secondhand smoke.

In an official statement, Hochul noted: “Smoking is a dangerous habit that affects not only the smoker but everyone around them, including families and children enjoying our state's great public places.... I'm proud to sign this legislation that will protect [New Yorkers’] health and help reduce litter in public parks and beaches across the state.”