Cannabis News January 2020 Reboot

Cannabis News January 2020: Time to Reboot

It’s 2020 and it’s time to reboot, reset and restart. 

Here are three (3) trends in 2019 which we hope will change this year:

a. The Vaping Crisis 

The growth of this health emergency has slowed, but it has not stopped.

As of December 27, 2019, the CDC reported 2,561 hospitalizations with 55 deaths.  The CDC identified Vitamin E acetate, a black-market additive, as the primary culprit. Industry officials argue that it’s Prohibition which provides the ideal conditions for EVALI to flourish, and that only cannabis legalization can create a public health and safety regimen sufficient to stop the crisis.

Till then, enforcement agents are actively policing the web, with DEA and FDA recently closing down 44 websites still selling black-market vaping cartridges. See the article here

 b. Adult Use Legalization Falters:  

Nick Kovacevich, CEO of KushCo Holdings, among other industry leaders, projected 2019 as “….a banner year for the normalization of cannabis…” Well, that didn’t happen. Only Illinois approved adult use in 2019 (with sales having started January 1, 2020.)

As mentioned in our last update item #3, eyes are now on strategically located New York. If New York legislatively approves cannabis this coming winter/spring, then the balance of adjacent states in the Northeast and MidAtlantic may soon follow. And with those regions legalizing perhaps federal reform will come.

However, if the New York legislature fails to approve, then momentum may stall until the anticipated New Jersey ballot initiative in November, 2020. And we believe that no reform will occur on the federal level if Congress gets the sense that movement towards legalization at the state level has stopped.

c. The Stock Market:

2019 saw an unprecedented stock market rally with record highs. The Dow Jones was up 22.3%. The S&P 500 was up 28.9% and Nasdaq was up 35.2%. As the New York Times said, if you wanted a successful investment strategy in 2019, it was “Buy almost anything.”

Except cannabis apparently. Ouch!!

Most public companies which touch the flower hit their highs during the first quarter of 2019, when the industry outlook was most rosy. Since then, company values plummeted with year-end double-digit value losses, and with some renowned CEOs losing their jobs. On the whole, it was a bloody year. See Investor’s Business Daily

Is 2020 the year to buy low?


Of course, 2019 frustrations did little to suppress the optimistic views which many in the industry retain for 2020. As reflected in the Greenwich Time article linked below , “canna-preneurs” anticipate adopting to fundamental industry changes which occurred this past year.

Among the projections offered are: a reorientation back to medical cannabis, and a shifting of approach from explosive, break-neck expansion at all costs, to the creation of secure, stable and profitable product creation and distribution networks. See the article here

Cannabis news 2020 California-Tripping-Over-Itself


California, a larger potential cannabis market than Canada, is still tripping over itself.

As of last May, 76% of California municipalities and 69% of counties banned cannabis shops within their jurisdictions. Plus, California has a regulatory scheme which is opaque and burdensome at best, and a tax structure which oppressively pads the price of legal pot.

The result is that 80% of the state’s cannabis market continues to be sourced illicitly.

Frustrated that no legislative fixes have occurred, the state-authorized Cannabis Advisory Committee recommended that Governor Gavin Newsom consider reform by “revisiting the ballot initiative process.”  Hmmm. Ballot initiatives are excellent vehicles for discerning basic voter trends, but they are horrendous mechanisms for working out the nitty-gritty details.  And California’s devil has been in the details. See the San Francisco Examiner article. 

Michigan, which started its roll-out of statewide sales on December 1, 2019, experienced growing pains of a different sort. With only three licensed processing plants and one cannabis transportation business in place, retail restocking has become an issue as demand has gone through the roof. Rationing has commenced. See the Benzinga article here


Brazil has become the third Latin American country to regulate the sale of medical marijuana (after Uruguay and Colombia, and with Mexico to soon follow.) Brazil has 210 million inhabitants. Both THC and CBD products will be available, though product containing more than .2% THC will only be prescribed to terminal patients, or in such cases where patients don’t respond to traditional treatment. See the article on Benzinga here


We note the FDA consumer update on CBD issued at the end of November, 2019, asserting that CBD carries with it the risk of liver injury, adverse drug interaction, changes in alertness and increases in gastrointestinal distress and irritability.

Wow! Where’d that suddenly come from?

Cat-Given too Much Marijuana

Not to offer the “Tobacco Industry” defense, but cannabis industry officials have responded by criticizing studies reflecting these risks as misleading, and mostly performed with animals which were given such high doses of cannabis that, if extrapolated to human use, would never be consumed under ordinary conditions. See the article here

So, is the FDA consumer update merely the latest example of federal fear-mongering consistent with 80+ years of cannabis mistreatment, or is this something truly new?

Cannabis News Short-Takes-Corgi Mascot

 1. A recent study of 204 elderly patients conducted by the DENT Cannabis Clinic in Buffalo, New York (part of the DENT Neurologic Institute) found that medical cannabis alleviated symptoms associated with chronic conditions. 70% of study participants reported an increase in quality of life, and 30% reported being able to forego opioid pain killers. A 1:1 ratio of THC to CBD was found to be the most effective formulation.

2. Harborside, Inc. filed a notice to appeal its now-famous 280E tax case to the U.S. Court of Appeals for the Ninth Circuit. See our update for more background

3. Celebrity Short-Takes: Rapper Dwayne Michael Carter Jr., better known as Lil Wayne, announced the launch of GKUA Ultra Premium, a high-potency cannabis product line.

4. It’s no small amount of irony that, when cannabis legalization is finally taking hold, Hightimes Holding Corp., the parent of High Times Magazine, disclosed doubts about the magazine’s ability to continue operations due to mounting and accumulated losses.


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Till next time,

Best – Doug

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