Cannabis News April 2020 A brave New World

Cannabis Legal News April 2020: Coping in a Brave New World

Are you coping? We find ourselves in a brave new world, do we not?

To regain some degree of normalcy, we return to cannabis news for April 2020, providing you with some miscellaneous cannabis news tidbits, albeit within the framework of the Covid-19 pandemic.

U.S. Congress CARES Act with no relief for Cannabis businesses

1. No Stimulus Relief for Cannabis?

During the seminal crisis of our time, the US Congress passed the Coronavirus Aid, Relief, and Economic Security Act” (the “CARES Act”) containing an estimated $2 trillion dollar individual and business stimulus.  For small businesses, relief is offered in the form of payroll protection and loans through the Small Business Administration (“SBA”), among other things. 

The industry consensus is that no CARES Act relief will be available to any cannabis business. The CARES Act is a Federal program and that means that the cannabis (non-hemp) sector will again run up against its old nemesis: Schedule 1 of the Controlled Substances Act.   

 As the SBA recently stated:

Because federal law prohibits the sale and distribution of cannabis, the SBA does not provide financial assistance to businesses that are illegal under federal law,” Carol Chastang, SBA public affairs specialist.” 

See Cannabis Business Times at  SBA Says NO!

But be mindful that this is not the final word on the matter. Anything can happen. While industry sources may well be discouraging the simple fact is that it’s too early in the stimulus cycle to know how this program will ultimately play out.  Don’t allow yourself to be so intimidated so as to not apply for relief before formal rulings issue. 

Cannabis sakes experiencing roller coaster sales

2. Roller Coaster Sales for Cannabis Dispensaries

The good news is that most states have deemed dispensaries to be providers of “essential services.”  This has allowed retailers to remain open despite state government shelter-in-place directives. See the New York Times at: Is Marijuana an ‘Essential’        

Where dispensaries remained open, pandemic sales initially skyrocketed but then plummeted, rollercoaster-like. Perhaps, consumers initially hoarded in anticipation of a long shelter-in-place duration.  See an interesting graph published by Marijuana Business Daily about retail sales in the states of California, Washington and Colorado:  Sales Skyrocket and Then Plunge

3. Better Safe than Sorry

Lab testing on mice for use of THC to treat symptoms of Covid-19

It’s hardly a scientific analysis, and the studies concern mice and not humans, and influenza and not Covid-19.  But we note the recent report in the Marijuana Daily Observer which cautions consumers with Covid-19 symptoms against use of THC.  As noted by Aurelius Data CEO Julie Armstrong:

“…in studies where THC was administered to mice with influenza, we saw an increase in viral loads and a decrease in the immune system to fight off the virus. It stands to reason that the same would hold true for Coronavirus and THC consumption…..”  See the Marijuana Daily Observer at: Covid-19 Patients Should Avoid THC;

Folks, it’s far too early for anyone to have meaningful data on THC and Covid-19, but perhaps we can advise our friends with Covid-19 symptoms – as we wish them our heartfelt prayers and wishes for a speedy recovery- to be prudent and avoid THC use for the few weeks until they are free of viral loads.   

On the other hand, we note that the Canadian company, Cannalogue, has applied to Health Canada for approval of a clinical trial to ease Covid-19 symptoms with medical cannabis.  See Benzinga at: Canadian Company To Explore Medical Cannabis For Covid-19 Symptoms ;

We also note that New York’s Roman Catholic Bishops have issued a bill memo re-stating their long-held opposition to New York legalization – but now adding Covid-19 to their arsenal.  They now assert that the virus is a respiratory disease and THC can be consumed by inhalation.  They assert that such inhalation could decrease needed lung efficiency to combat symptoms.  See the Evangelist at:  NY Catholics Bishops Oppose Adult Use

4. New York Legislative Process

New York Legislative Process in Cannabis legal News 2020

In more Cannabis news in April 2020, the cannabis legislative fallout from the Covid-19 pandemic is unclear at this point.  2019 was a huge disappointment for the cannabis sector because many states in the USA failed to move towards adult/recreational use as had previously been anticipated.  Only Illinois made that move.

For 2020, a lot of focus is on New York as the pivot point and the state to reignite state legislative momentum in the Northeast and Mid-Atlantic. But as New York became the national epicenter of the Covid-19 epidemic, has cannabis reform momentum dissipated?

Read more about New York at the center in February Cannabis legal news.

Maybe not.  A revised cannabis bill was introduced as recently as mid-March.  However, State Senator Liz Krueger, the reform bill’s sponsor, believes that the Covid-19 emergency has likely squelched the hope of quick passage as part of NY’s budget process. See Marijuana Moment at: Coronavirus Sets Up Back-up Plan for NY Cannabis Reform;

That doesn’t mean the bill is dead.  If included within the state’s budget, reform would have passed as part a myriad of other state issues, on a mere up or down vote on the entire package.  If separated from the budget bill, cannabis reform will have to stand on its own merits – as perhaps it should.

As mentioned in previous posts, as New York goes, so will other states.

5. Can we Ignore Reform any Longer?

It’s time to hit the button for cannabis reform.

Go Button for Cannabis reform in Cannabis News April 2020

One thing is certain. When the Covid-19 tsunami passes us by, the economic wreckage left in its wake will be pervasive and overwhelming.  Unemployment will be devastating. Fiscal pain will be everywhere.

But as the cannabis industry has shown, it can survive a financial nuclear winter.  Just look at it.  The industry has: 

  • no federal banking support
  • an overly oppressive federal tax framework, no interstate logistical structure
  • no interstate commerce (of the flower)
  • impaired access to capital markets
  • limited merchant processing
  • separate rules and regulations in every state
  • even more separate rules in local jurisdictions
  • huge state and local tax burdens
  • byzantine regulations governing ownership, production, product safety, advertising, packaging, social equity, and other matters
  • restrictions as to location and product delivery
  • a frequently hostile federal government
  • years-long delays in license awards
  • a workforce harassed by federal and state government (truckers thrown in jail, green card holders denied path to US citizenship), etc., etc., etc.  

Yet, despite these and other headwinds, the industry thrives. Imagine the results if these restraints are removed or mitigated?

Cannabis News April 2020 talks about job growth

Wherever adult/recreational use has been legalized, a powerful and robust jobs and tax-generating engine has been the result.  Cannabis has the grit to survive the coming coronavirus economic calamity.  It has survived worse conditions.  But the sector can also brighten the aftermath with opportunity for those forsaken by less resilient industries – if we only allow it to do so.

That’s it for Cannabis News April 2020!


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Till next time, be safe.

Best – doug

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