CannaBusiness Advisory

  • Judging CBD Products by Their CoverAugust 15, 2018

    As the legal cannabis market continues to explode, extract products, in particular, are receiving a lot of attention. Cannabidiol (CBD), for instance, is a cannabis extract widely produced and sold in the U.S., often advertised as having certain medicinal benefits. And while the laws surrounding these extract products can sometimes be cloudy, the regulatory requirements pertaining to their packaging and advertising can create even more confusion.

    CBD is a non-psychotropic cannabinoid that can extracted into edibles, oils, tinctures, capsules, and topical creams. Although neither psychoactive nor addictive, and containing only nominal amounts of THC, the DEA ruled in 2016 that CBD is derived from cannabis and is, therefore, classified as a Schedule I drug under the Controlled Substances Act. While many have argued this ruling, a Ninth Circuit court recently upheld the DEA’s decision, and as a result, CBD remains a Schedule I drug at the federal level.

    Regarding packaging and advertising, the U.S. Food and Drug Administration, which is responsible for the control and supervision of dietary supplements and over-the-counter drugs (among other things), has only provided a handful of opinions about what is and is not permissible. First, the FDA has affirmatively decided that CBD products may … Keep reading

  • Cannabis Deal News: Molson Coors Brewing Company Enters into Joint Venture with Medical Pot DistributorAugust 08, 2018

    Molson Coors Brewing Company is betting big on the cannabis industry by starting a joint venture with Hydropothecary, an “award-winning medical cannabis producer,” to develop non-alcoholic, cannabis-infused beverages for the Canadian market, in a move that Molson Coors believes will give it a leg up as more countries continue efforts toward legalization.

    Last week, Molson Coors said the venture will be a stand-alone startup entity, with its own board (three seats for Molson Coors, two for Hydropothecary) and management team. Molson Coors will hold a 57.5% controlling interest, with Hydropothecary, which now brands itself as HEXO, holding the remaining 42.5%. A chief executive officer is expected to be named in the coming weeks.

    As part of the deal, which is expected to close by month-end September, HEXO will issue warrants giving Molson Coors the right to purchase 11.5 million of its shares, at a strike price of $4.62 a share.

    Recreational marijuana is slated to become legal in Canada on October 17th, but edible products infused with pot — including beverages — will remain illegal until specific government regulations are rolled out in 2019, at the earliest. Independent research firm Euromonitor International estimates that legal marijuana sales in … Keep reading

  • U.S. Attorney Lelling’s Stance on Marijuana Comes into Sharper FocusAugust 01, 2018

    Back in January, on the heels of the Sessions Memo, U.S. Attorney for Massachusetts Andrew Lelling’s affirmation that his “office [would] pursue federal marijuana crimes as part of its overall approach to reducing violent crime [and] stemming the tide of the drug crisis,” coupled with his stated refusal to “provide assurances that certain categories of participants in the state-level marijuana trade [would] be immune from federal prosecution,” led many to wonder what the future of legalized marijuana would look like here in the Bay State. Earlier this month, however, Lelling, Massachusetts’ most powerful federal law enforcement officer, elucidated his position regarding the prosecution of cannabusinesses in the Commonwealth:

    Because I have a constitutional obligation to enforce the laws passed by Congress, I will not effectively immunize the residents of the Commonwealth from federal marijuana enforcement.  My office’s resources, however, are primarily focused on combatting the opioid epidemic that claims thousands of lives in the Commonwealth each year.

    His focus, he went on say, will be three-fold: overproduction, which “creates the risk of illegal, and lucrative, marijuana sales to users in nearby states where recreational marijuana use remains illegal”; targeted sales to minors, as “study after study confirms that regular … Keep reading

  • High Hopes and Torched DreamsJune 27, 2018

    This week’s cannabis news was filled with high hopes for some and torched dreams for others. On the one hand, the Food and Drug Administration made history by approving Epidiolex, a cannabis-derived medication used in the treatment of two rare forms of epilepsy. On the other hand, Massachusetts’ Attorney General, Maura Healey, issued a ruling that permits cities and towns in the Commonwealth to extend the temporary moratorium on retail and other marijuana businesses through June 2019—almost a full year past the date approved by Massachusetts voters when recreational sales were to commence. This marked a reversal by Healey, who previously indicated that local freezes could not extend beyond December 31, 2018, due to constitutional concerns.

    The Epidiolex announcement cuts at the very argument used by many anti-cannabis activists that all too often focus on the lack of research into cannabis as a reason to uphold its prohibition. In a statement, FDA Commissioner Scott Gottlieb said:

    This approval serves as a reminder that advancing sound development programs that properly evaluate active ingredients contained in marijuana can lead to important medical therapies … We’ll continue to support rigorous scientific research on the potential medical uses of marijuana-derived products and

    Keep reading

  • For Savvy Cannabis Entrepreneurs, Opportunity Is Rising in the EastJune 20, 2018

    The West Coast has pioneered the national cannabis industry, with California, Oregon, and Washington leading the way in decriminalization and legalization efforts, and that trailblazing reputation has contributed to the impression that market concentration may be skewed toward the Pacific Ocean. However, it’s companies that have been established in the more restrictive, under-the-radar medical cannabis markets of states like Massachusetts, New York, Pennsylvania, New Hampshire, and Ohio, that may have the best long-term positioning and highest valuations.

    The reason for this might be counter-intuitive: West Coast states have been much more liberal in issuing licenses to operate cannabis businesses, which has created a market saturated with retail, cultivation, and processing licenses, which, in turn, has created more competition for increasingly smaller market shares. States on the East Coast typically have stricter rules, and companies there must jump through a number of hoops before being granted a license to operate. So while markets in these states is, therefore, limited, given the relatively few licenses granted and high barriers to entry, there is also less competition than out west. The more highly competitive application process also creates an environment that has resulted in eastern companies being some of the best capitalized … Keep reading

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