Welcome back to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento, where U.S. Attorney General Jeff Sessions visited just eight months ago, wagging his finger at California's leaders. Now Sessions is out and the stock market is suddenly riding a green wave on news of his departure. How times have changed.

This week, we look at what Tuesday's election results mean for the cannabis industry. Plus, third quarter lobbying results are rolling in, and political advocates for regulated markets have been quite busy.

Thanks as always for reading. Are you relieved Jeff Sessions, the marijuana-loathing politician who rescinded the Cole memo, is out of a job? Or do you worry that the next attorney general will be anti-regulation, too? Let me know what you think. Drop me a line at [email protected] or you can call me at 916-448-2935. Follow me on Twitter at @capitalaccounts.

 

 

Weed Wins at the Polls

Election Day results gave legalization advocates plenty to celebrate Tuesday. Voters made Michigan the tenth state—and the biggest state in the Midwest—to authorize recreational marijuana. Residents of red states Missouri and Utah(yes, Utah) OK'd medical use, too.

Among candidates, pro-marijuana Rep. Jared Polis was elected governor of Colorado. Texas Rep. Pete Sessions, who as chair of the House Rules Committee blocked almost every bill supporting state-legal marijuana, lost to former Perkins Coie associate Colin Allred. And in New York, Democrats took control of the state Senate, boosting chances the Empire State will enact recreational marijuana legislation.

>> What do all these changes mean? We asked three industry leaders for their post-election takeaways.

Katy Young, Ad Astra Law Group partner and president of the National Cannabis Bar Association:

“Even in the states where their medical cannabis initiatives didn't pass, the fact that the issue was on the ballot is progress. In California alone, there were ballot measures in some 85 cities regarding some aspect of cannabis regulation. On the road to normalization, just being on the ballot counts.”

“There were some big winners like Michigan and its thumbs-up to the adult use recreational cannabis market. Medical marijuana is coming to Utah and Missouri. Wisconsin and Illinois have better chances than ever to implement some form of regulated cannabis market. These states in middle America change the feel of the movement from an East Coast/West Coast phenomenon to an everywhere phenomenon and make a difference in America's hometowns.”

Matthew Abel, senior partner, Cannabis Counsel, Detroit, Michigan:

“We're pleased that the Democrats will be in control (of the house). Let's see if they can do anything this time. Last time they were in control they had the opportunity to change the scheduling of cannabis and didn't. Let's see if they learned their lesson. Clearly the people are way ahead of the government still …

“I'm cautiously optimistic. We need to move cannabis off Schedule 1. We really need to move it off the schedules entirely. That will solve the tax problem of 280E, the non-deductability of business expenses. And it will also solve the banking problem … I think people are starting to get it. Still, Congress is more conservative than the rest of the country.”

Morgan Fox, spokesman, National Cannabis Industry Association:

“The primary message, one that lawmakers around the country would ignore at their peril, is that U.S. voters are ready for cannabis policy reform. Nearly two thirds of voters support making marijuana legal for adults, and Missouri's medical initiative outperformed the winning GOP Senate candidate.”

“Twelve states elected governors who publicly support legalization, making it easier for lawmakers and regulators to change laws and establish (or maintain) effective systems for legal cannabis markets. Dozens of supportive lawmakers won last night, and obstructionists like Pete Sessions, who has blocked any cannabis policy reform legislation for years, were shown the door.”

>> It wasn't all good news for legalization backers Tuesday night.

North Dakota voters handily defeated a ballot measure to create a regulated recreational market there. And California Rep. Dana Rohrabacher, a Republican and long-time supporter of state-legal marijuana, appeared headed to defeat in his re-election bid.

 

 

Lobbying on Pot: Third Quarter Spotlight

Third quarter lobbying reports have been filed, and Weedmaps, the online dispensary locator, remains one of the biggest political players in Washington, D.C. and California.

Records show that Irvine, Calif.-based Weedmaps spent $105,000 on lobbying in Sacramento between July and September, as regulators continued crafting final rules for marijuana operators in California. The platform employs two Sacramento lobbying shops: California Strategies & Advocacy and Lang Hansen O'Malley & Miller. In Washington, Weedmaps paid two firms, Nelson Mullins Riley & Scarborough and Liberty Government Affairs a combined $65,000 to lobby federal lawmakers.

Eaze, the marijuana delivery platform, was also active on the political scene, paying Holland & Knight $50,000 to work on “educating members of Congress on [the] cannabis marketplace, the STATES Act and related federal legislation and regulation,” federal third-quarter filings show.

Eaze also spent $46,000 on lobbying services in California, where a battle is brewing between regulators and local government agencies over a proposed rule that would allow licensed companies to delivery marijuana anywhere in the state, even in cities and counties that prohibit cannabis shops and grows. Eaze works with two Sacramento lobbying firms, Governmental Advocates and Sacramento Advocates.

You Said It:

“Losing two Sessions, Jeff and Pete, in 24 hours is a major step forward for marijuana reform.”–Oregon Democratic Rep. Earl Blumenauer on Twitter. Blumenauer already has a plan in place for congressional Democrats to enact legalization legislation by the end of 2019.

 

 

In the Weeds

Is the U.S. becoming the empty middle of a North American marijuana sandwich? The Supreme Court of Mexico recently held that an “absolute prohibition” on marijuana consumption is unconstitutional. The court said citizens have no absolute right to pot, either, effectively tasking federal lawmakers and regulators with creating rules on its use. The administration of President-elect Andrew Manuel Lopez Obrador has said legalization is under consideration. [Reuters]

CBD-infused food and drinks may be the new craze, but California regulators aren't feeling the hype. Police recently told a Sacramento restaurateur to pull his $10 “kronic aid” cocktail from the menu. The libation included pineapple, vodka, hop flowers and hemp-derived CBD oil. But California says that until the U.S. Food and Drug Administration or state regulators declare that CBD additives are safe for consumption, they're banned from food and drinks. [The Sacramento Bee]

Oregon's top federal prosecutor will lead a new advisory group on marijuana. U.S. Attorney Billy Williams will chair the attorney general's marijuana working group, which will offer policy guidance on the issue. Williams has been critical of what he says is a marijuana “oversupply” program in Oregon and has called for stronger regulations. [KTVZ.com]

Massachusetts' first recreational marijuana shops should open later this month, regulators say. Really. They mean it this time. Recreational sales were supposed to start on July 1 but delays in getting testing labs licensed and running in the Bay State gummed up the supply chain. This week two labs were told they can start testing. [MassLive]

California is looking for a marijuana messenger. The state is seeking proposals for a two-year “public awareness and education campaign” aimed at telling the cannabis industry and the public about the benefits of marijuana licensings and the dangers of the black market. Proposals are due by Nov. 20. [Bureau of Cannabis Control]

 

 

Stuff for Your Calendar – What's Next

Nov. 14-16: MJBizCon runs for three days in Las Vegas. Attorneys from Frantz Ward; Brand & Branch; Hoban Law Group and H New Media Laware scheduled to speak at the event.

Nov. 18: Seattle University School of Law hosts the sixth annual Northwest Marijuana Law Conference. Topics include updates on marijuana law in Washington, the impact of changes in tax law and cannabis IP.

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