Online retail giant Amazon has said it supports US legislation to legalise cannabis at the federal level and will be dropping drug testing for some employees.
In a blog post on Tuesday 1 June, Amazon consumer boss Dave Clark said the company would be “actively supporting” The Marijuana Opportunity Reinvestment and Expungement Act of 2021 (MORE Act), which seeks to legalise cannabis at federal level.
The firm will also be adjusting its drug testing policy.
It will no longer include cannabis in its drug-screening program for any recruitments outside of the Department of Transportation and cannabis would be treated the “same as alcohol use”.
In response to the news, Matthew Schweich, deputy director at the Marijuana Policy Project, the nation’s leading cannabis policy reform organisation, said it would have a “huge impact”.
“Disqualifying potential employees for cannabis use is both outdated and bad for business. Adults should not be punished for responsibly using cannabis outside of the workplace. It simply does not make sense for law-abiding citizens to be denied employment or risk losing their jobs over a substance that is safer than alcohol,” Schweich commented.
“Amazon’s support for the MORE Act is yet another sign that the American people — and the American business community — back federal cannabis reform that begins to rectify the harms of cannabis prohibition by prioritising social justice and social equity.
He added: “The Biden administration and Congressional leaders must take action this year.”
To date more than 35 states have passed independent legislation to legalise the plant, but it remains illegal at the federal level.
Rahul Bhushan, co-founder of London-based investment firm Rize ETF, said the move would “open up the cannabis market” and provide “new growth opportunities” for companies in the US.
“We believe other employers are going to jump on this bandwagon, following Amazon’s lead,” he said.
“We know the Biden administration is committed to cannabis reform, and we know it has a more favourable stance on cannabis than the previous administration. It’s only fair that market participants are expecting deep and system-wide cannabis reform because they know this will create a boom for cannabis businesses.”
Bhushan added that within a few years, the US market could be “more than a decade” ahead of the UK where reform appears to have reached a “stalemate”.
“We expect the UK to lose this footing in the coming months because of the (current) national stalemate around cannabis reform,” he said.
“We expect the US market to power full steam ahead and – within a few years – be at least a decade ahead of Europe, because the market is growing at breakneck speed thanks to the state-level initiatives.”
California must bin cannabis cultivation tax to compete with black market
A new study has concluded that the State’s cannabis tax must be eliminated to move consumers away from illicit products.
California could increase legal cannabis sales and bring in 123 per cent more in total monthly cannabis-related tax revenue by 2024 by eliminating its cultivation tax.
California’s high cannabis taxes are high – as much as USE$90 per ounce, or $1,441 per pound. These taxes are hurting farmers and businesses while the illicit market captures two-thirds of cannabis sales, according to a new study carried out by Reason Foundation, Good Farmers Great Neighbors, and Precision Advocacy.
These taxes mean that California’s legal cannabis market has failed to meet expectations and is just one-third the size expected based on its population and adult usage rates. Additionally, the study estimates that nearly two-thirds of cannabis sales in California are still taking place on the illicit market.
Cannabis taxes average $340 per pound in Oregon and $526 a pound in Colorado, and, due to these lower taxes and greater access to legal products, the report shows that residents in Oregon spend 378 per cent more per capita on legal cannabis. Residents of Colorado spend 335 per cent more per capita on legal cannabis than Californians spend.
Director of drug policy at Reason Foundation, Geoffrey Lawrence, commented: “High taxes are undermining California’s legal cannabis market. California could double monthly cannabis tax revenues by 2024 by eliminating the cultivation tax.
“Without the cultivation tax, our data show lower cannabis prices would increase sales of legal products, increasing the state government’s general sales tax revenue and more than replacing losses from the eliminated cultivation tax.”
President of Precision Advocacy and legislative advocate of the California Cannabis Industry Association, Amy O’Gorman Jenkins, commented: “We are experiencing first-hand a serious price compression in the California supply-chain in part as a result of the illegal market, high taxes and fees and a patchwork of inconsistent local taxes driving legal operators to the brink of a financial cliff.
“We cannot allow the largest cannabis market in the world to fail. This study provides a roadmap of tax policy solutions for the governor and state legislative leaders to consider immediately.”
The study also recommends reducing retail excise taxes and encourages policies that could incentivise California’s local governments to stop banning the sale of legal cannabis products. It also found that Oregon has one legal cannabis retailer for every 6,145 residents and Colorado has one legal retailer for every 13,838 residents while California has just one legal cannabis retailer for every 29,292 residents.
Policy director of Good Farmers Great Neighbors, Sam Rodriguez, stated: “California’s cannabis farmers are experiencing the biggest challenges of their time. Many farmers are considering going fallow this year.
“Busy Bee Organics, one of the first woman-owned, sun-grown farmers in Santa Barbara, has already declared she’s not planting this year.
”California’s cultivation tax is regressive and has only contributed to uncertainty about the future of the state’s cannabis farmland economy and whether it can survive. The immediate elimination of the cultivation tax would be a first step in addressing critical issues impacting the state’s legal cannabis market from seed to sale.”
The problem with “copycat” cannabis edibles
With the rise in popularity of cannabis edibles, the problem with “copycat” products that look like popular snacks should be a major concern for the industry.
A recent study has shown that high-THC copycat cannabis edibles that look like well-known snacks increase the risk of ingestion by children.
Edibles are an increasingly popular segment of the cannabis market in the US, with up to 56 per cent of cannabis consumers buying them. Many of these products often use branding and imagery very similar to popular foods, which is raising public health concerns in the country – with nearly 2,000 cases of young children ages 0 to 9 consuming edibles from 2017 to 2019.
The study, carried out by the NYU School of Global Public Health, and published in Drug and Alcohol Dependence, collected hundreds of photos of cannabis products and analysed packaging, finding that out of 267 edibles, 8 per cent closely resembled 13 different snack products.
These findings highlight the risk that these copycat products could be attractive to children.
Lead author, Danielle Ompad, associate professor of epidemiology at NYU School of Global Public Health, said: “At first glance, most of the packages look almost exactly like familiar snacks.
“If these copycat cannabis products are not stored safely, there is the potential for accidental ingestion by children or adults.”
Twelve of the products were candies or sweet snacks and one was a salty snack. Eight of the 13 packages used the exact brand or product name of the original product; the remaining five used names that were similar, for example “Stoner Patch Dummies” instead of “Sour Patch Kids”. Seven of the packages used the same cartoon or brand character as the original product.
“While each package is likely intended to include multiple doses, few packages indicate the serving size or number of servings,” said Ompad. “Moreover, if we’re considering 10 mg a standard dose, these products could contain an alarming 30 to 60 doses per package.
“Policies to prevent cannabis packaging from appealing to children haven’t stopped copycat products from entering the market — nor have food brands taken legal action against cannabis companies for copyright infringement.
“People who purchase edibles that look like snack foods should store them separately from regular snacks and out of reach of children.”
New platform aims to transform US cannabis supply chain
The platform aims to provide information sharing, reduce costs, and increase transparency and trust.
Lucid Green has announced it has raised $10m (~£7.88m) for its UPC platform in a series B funding round. The company is aiming to transform the cannabis supply chain through its LucidIDs, the industry’s first intelligent QR code.
The cannabis supply chain in the US is riddled with challenges for businesses. There are problems with inaccurate product information, inefficient cycle counting, sporadic Certificate of Analysis (COA) compliance and secondary stickering.
Manual inventory management is also time consuming, expensive and prone to errors. Brands experience increased costs and lower profit margins as a result of compliance and supply chain inefficiencies, and lack the mechanisms to communicate directly with consumers and dispensaries. Distributors face reducing retailer order fulfilment time and turnaround – resulting in higher working capital requirements for their customers.
Lucid Green is aiming to solve these problems with its intelligent UPC through its $10m, funding round led by Gron Ventures, with participation by Gotham Green Partners.
Co-founder and CEO of Lucid Green, Larry Levy, commented: “It’s clear that the cannabis supply chain’s status quo is holding the industry back, and Lucid Green is proud to have pioneered the first solutions to benefit all stakeholders.
“We are laser-focused on developing the leading solutions to strengthen our industry. Lucid Green benefits brands, distributors and retailers while delivering a much needed educational experience for consumers that helps to further normalise the industry.”
The new funding will support the recruitment of top tier talent, raise awareness of its technology, and accelerate adoption of its solution.
LucidIDs utilise QR codes to allowing for true truck-to-shelf inventory intake, reducing manual labor and human errors, and virtually eliminating data cleanliness issues.
The QR codes permit dynamic information flow which empowers stakeholders to continue adding information about a product through its lifecycle, unlike the status quo of secondary stickering. The IDs have already been used for more than 17 million products.
The IDs offer brands, retailers and distributors a solution to reduce costs, increase transparency, and drive more sales, delivering data insights and COA management.
Wilder Ramsey, managing partner of Gron Ventures, commented: “Inefficiencies and outdated methods in the supply chain are holding the cannabis industry back from reaching its full potential.
“We are proud to have invested in Lucid Green because the power and promise of their technology and solutions can save all stakeholders time and money, while increasing education and trust among consumers.”
“Our core ethos is quality, consistency and value, and part of our mission is to provide retailers and consumers with the best cannabis products at the best price,” added Skip Motsenbocker, CEO at Pacific Stone.
“Lucid Green is a critical partner for us, and with their LucidIDs, we’re able to directly communicate with budtenders and consumers, increasing education, loyalty and trust. Lucid Green is creating higher profit margins for us thanks to more efficient truck-to-shelf processing, and we think the whole industry would benefit from their solutions.”
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