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Leafly challenges Florida’s ban on marijuana pre-orders

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E-commerce company Leafly has carved out a niche as one of the nation’s leading shopping sites for all things cannabis.

Leafly and similar websites allow visitors to peruse the stock available at medical marijuana dispensaries, place orders online and pick up and pay for the goods at local storefronts.

But Florida health regulators this year stopped medical marijuana operators from using Leafly and other third-party sites to process patient pre-orders, saying the services violate a state law banning operators from contracting for services “directly related to the cultivation, processing and dispensing” of cannabis.

Read more from Orlando Weekly.

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Banking Activity Increases In States That Legalize Marijuana, Study Finds

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While marijuana businesses often struggle to find banks that are willing to take them on as clients due to risks caused by the ongoing federal prohibition of cannabis, a new study found that banking activity actually increases in states that legalize marijuana.

The research doesn’t make a direct connection between state-level marijuana reform and the increased activity, but it does strongly imply that there’s a relationship—even if the factors behind the trend aren’t exactly clear.

Researchers set out to investigate banking trends in states that have legalized cannabis, looking at bank regulatory filings with the Federal Deposit Insurance Corporation (FDIC) from 2011 to 2016. They found evidence that “banking activity (deposits and subsequent loans) increase considerably in legalizing states relative to non-legalizing states.”

That’s in spite of the fact that banks and credit unions run the risk of being penalized by federal regulators for working with businesses that deal with a federally controlled substance.

“While uncertainty can result in overly cautious behavior and hinder economic activity, we do not find evidence of this with cannabis laws and the banking industry,” the authors wrote in the new paper—titled, “THC and the FDIC: Implications of Cannabis Legalization for the Banking System.”

The study analyzed data from “150,566 bank-quarter observations from 6,932 unique banks located in 46 different states.” It found that deposits increased by an average range of 3.14-4.33 percent—and bank lending increased by 6.54-8.62 percent—post-legalization.

“Our results indicate that deposits and loans increased for banks after recreational cannabis legalization.”

Of course, it makes sense that legal states would see increased financial activity in the banking sector after opening a new market, even if only some banks choose to take the risk of working directly with cannabis businesses. The emerging marijuana industry also supports an array of ancillary firms and traditional companies that provide services to dispensaries and grow operations.

As of June 30, there were 706 financial institutions that had filed requisite reports saying they were actively serving cannabis clients. Thats up from 689 in the previous quarter but still down from a peak of 747 in late 2019.

But the question remains: why are some banks deciding to take on marijuana clients while others remain wary of federal repercussions?

The study authors—from the University of Arizona, Drexel University, San Diego State University and Scripps College—put forward two possibilities about why “the risk from regulatory uncertainty did not decrease banks’ willingness to accept deposits or make loans.”

The increase “may suggest that banks were either unconcerned about the potential risk associated with accepting cannabis related deposits or optimistic about the chances that regulations will adapt to the needs of legalizing states,” the paper reasons.

Confidence about working with a federally illegal industry may well have been bolstered in 2014 when the Financial Crimes Enforcement Network (FinCEN) under the Obama administration issued guidance to financial institutions on reporting requirements for cannabis-related businesses.

The second option, optimism about federal reform, also seems possible. It was around the time that the bipartisan Secure and Fair Enforcement (SAFE) Banking Act was first introduced that there was a notable spike in financial institutions reporting that they have marijuana business clients.

In the years since, that legislation has been approved in some form five times in the U.S. House of Representatives, but it’s continued to stall in the Senate. In general, banks reporting marijuana accounts has remained relatively stable since 2019.

“Although many have speculated about the increased legal risks to banks, there is a lack of evidence for instances where banks are criminally prosecuted or lose their federally insured status,” the study states. “If these negative repercussions rarely happen, it makes sense that banks would not respond to the legislative uncertainty.”

“As more state regulators issue statements in support of banks and credit unions serving the cannabis industry, the financial institutions can become more optimistic about the chances that regulations will adapt in their favor with time,” the authors wrote.

Despite optimism for future reform that certain lawmakers have expressed, it doesn’t necessarily take the sting out of the latest failed attempt to secure protections for banks that choose to work with state-legal cannabis businesses as part of a large-scale defense bill.

A pro-reform Republican senator recently slammed Democrats for failing to advance marijuana banking reform despite having a congressional majority and control of the presidency.

For what it’s worth, the secretary of the U.S. Treasury Department recently said that freeing up banks to work with state-legal marijuana businesses would “of course” make the Internal Revenue Service’s (IRS) job of collecting taxes easier.

With respect to the SAFE Banking Act, a bipartisan coalition of two dozen governors recently implored congressional leaders to finally enact marijuana banking reform through the large-scale defense legislation.

A group of small marijuana business owners also recently made the case that the incremental banking policy change could actually help support social equity efforts.

Rodney Hood, a board member of the National Credit Union Administration, wrote in a recent Marijuana Moment op-ed that legalization is an inevitability—and it makes the most sense for government agencies to get ahead of the policy change to resolve banking complications now.

Rhode Island Governor Includes Marijuana Legalization And Expungements In Budget Request

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Tips for reducing and eliminating plastic use in cannabis cultivation

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Image for a Sustainability in Cannabis Cultivation series(This is the first installment in an ongoing series examining sustainability in cannabis cultivation.)

Outdoor marijuana and hemp growers have long relied on plastic to pot plants, build trellises and tamp down weeds.

Now some of them are looking for ways to reduce their plastic dependency.

Plastic is everywhere, and not only is it bad for the environment, but it also affects human health and food security – and agricultural production is one of the biggest culprits and offenders.

So says a new report – by the United Nations Food and Agriculture Organization, an agency that promotes food security and sustainability – that details how plastic pollution has become pervasive in agricultural soils.

The U.N. warns that land used to grow food and other consumer products is contaminated with large quantities of plastic pollutants, including microplastics, to an even higher level than the oceans are.

Plasticulture

Marijuana and hemp are often grown on raised beds covered with plastic to block sunlight from hitting the ground and to stimulate weed growth.

The practice also warms the earth to help seeds germinate and young plants get established quickly, increasing yield and season length.

Unlike other crops that need new plastic each season, cannabis does not, and producers are finding they can leave the plastic in place after harvest.

Even though that saves on waste, chemicals from the plastic could be leaching into the soil, said Brandon Rivers, founder and president of San Luis Obispo, California-based SLO Hemp Co.

“That material is sitting directly on the bedded rows, it’s being exposed to ultraviolet light and moisture and it’s degrading just from natural oxidation,” he said.

Rivers added that instead of plasticulture, many California cannabis producers are using hay and straw, or plant-based biodegradable mulch film to cover outdoor bed rows and block sunlight to weeds. Such methods also hold in moisture and reduce water waste.

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Soil biodegradable and compostable black or white plastic mulch can cost $400 more than its conventional counterpart – or more, depending on the supplier.

However, because of certain regulatory standards, some biodegradable plastics are not entirely petrochemical-free and, in some cases, need to meet only a certain percentage of plant-based materials to be considered biodegradable, Rivers added.

“For this reason, paper-based mulches are being used on organic farms as well,” he said. “It’s important for farmers to do their due diligence.”

Even better for cannabis, this plant cellulose material could ultimately be hemp-based, Rivers said. Meanwhile, producers can suppress weeds using regenerative cultivation practices.

“Farmers don’t necessarily need to be as scared of weeds; they can just find natural cover crops to put down in between their rows or underneath their crops that will outcompete the weeds,” he said.

“You can just let a few weeds grow in there, and it’s not the end of the world. You don’t need to put plastic down to cover your rows.

“It’ll encourage more beneficial insects and bees to move in.”

Plastic pots and trellis netting

Many outdoor and indoor cannabis producers use plastic pots, which can be reused and recycled but eventually must be replaced, said Julia Jacobson, CEO of marijuana producer Aster Farms in Oakland, California.

Instead, growers can use growing beds.

“No matter where you’re growing, it’s possible to create beds … as opposed to growing in 5- or 10-gallon pots,” Jacobson said.

“They’re a better way to grow, you get more out of the actual chemical compounds with the complexity of the plant. Switching from growing in pots to growing in beds is a clear-cut solution to reducing the number of pots that we’re using in the cannabis industry.”

Trellis netting, used for spacing plants for better airflow, fuller flower growth and protection against bud rot and mold, is “one of the biggest offenders” of plastic consumption in cannabis cultivation because it is seldom re-used, Jacobson said.

“It’s not just a harmful plastic in general and a large volume, but it’s also shaped in a particular way that can be extremely harmful for ending up in the oceans. It’s basically a web of plastic that animals and sea creatures get stuck in.”

Because of this, Aster Farms has replaced conventional trellis netting with a compostable alternative.

Irrigation

Polyvinyl chloride, or PVC, pipes used for in-field drip irrigation are “made from a whole slew of nasty chemicals,” Rivers said, and the smaller “lay flat” tubing, drip tubes and emitters are made from plastic or polyethylene.

Growers could opt to replace drip irrigation with center pivot, ditch or flood irrigation to avoid using so much plastic, he said.

Potential for plastic bans?

The U.N. report lists several measures that can prevent the release of agricultural plastics into the environment while improving sustainability, including bans on select products and plastic polymers as well as penalties to drive sustainable behaviors.

But the current U.S. political climate doesn’t bode well for making significant changes to environmental policy. Other countries are more likely to take the lead, cannabis entrepreneurs say.

For example, at the end of last year, Canada introduced regulations banning single-use plastics, and a new law in France banning plastic packaging on most fruits and vegetables took effect Jan. 1.

Consumers will choose

In the absence of regulations curbing plastic use, consumers will drive market demand for climate-smart products, Rivers said.

“People will spend the extra buck if they feel good about the product they’re buying,” he said.

Meanwhile, cannabis producers and companies need to demonstrate sustainability efforts rather than damaging industry credibility through greenwashing, said Jacobson.

“There are a lot of operators out there, not just giving the cannabis industry a bad name, but they’re further damaging our climate or environment and they’re creating products that just aren’t good for people.”

Laura Drotleff can be reached at laura.drotleff@hempindustrydaily.com.

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Biden’s cannabis record after a year in office (Newsletter: January 21, 2022)

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RI gov’s legalization plan; Poll: Americans not optimistic about Biden’s marijuana work; VA psilocybin bill has momentum; MO drug decrim measure

Subscribe to receive Marijuana Moment’s newsletter in your inbox every weekday morning. It’s the best way to make sure you know which cannabis stories are shaping the day.

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/ TOP THINGS TO KNOW



One year into President Joe Biden’s administration, his key campaign pledges on marijuana reform remain largely unfulfilled—and he has even taken some overtly hostile actions on the issue, while at the same time overseeing some modest pro-reform developments. Marijuana Moment’s in-depth analysis takes a comprehensive look at what the Biden administration has done—and more importantly not done—on cannabis since taking office one year ago.



A new poll found that a majority of Americans say President Joe Biden has made little to no progress on his marijuana decriminalization campaign pledge—and only 5 percent think he will make a lot of headway on it in 2022.



Rhode Island Gov. Dan McKee (D) again included marijuana legalization in his annual budget proposal—but this time with new automatic expungements provisions. Lawmakers say they’re close to a legal cannabis deal that could be unveiled soon.



A bill to decriminalize psilocybin got bipartisan support at a Virginia Senate Judiciary Committee hearing—including from the Republican Senate minority leader. Members are planning to advance an amended version of the legislation next week.



A Missouri representative filed a bill to decriminalize possession of small amounts of marijuana, psilocybin, LSD, MDMA and cocaine.



/ FEDERAL



The U.S. Department of Agriculture’s National Agricultural Statistics Service tweeted, “Thanks to work done in 2021, @usda_nass will have first-time data on hemp production, conservation practices & agroforestry to better inform decisions pertaining to the nation’s agricultural markets.”



The Drug Enforcement Administration museum is seeking new partner venues and cities to host its traveling exhibit, “Drugs: Costs and Consequences.”



Rep. Ed Perlmutter (D-CO) said passing marijuana banking legislation “is one of my top priorities, and I am pursuing every possible avenue to get the bill signed into law before the end of the year.”



Louisiana Democratic Senate candidate Gary Chambers tweeted, “If you agree with me that we should legalize cannabis nationwide. Expunge the records of those who have been charged with cannabis convictions & build equity into the business for Black & Brown people.” He also tweeted, “My state is ranked #50 in crime. Policing cannabis isn’t making us safer. I’m going to keep talking about how politicians have been smoking our tax resources to benefit only a few. They’ve left us in ashes because they won’t bring meaningful change on a host of issues.” And he spoke about his decision to show himself smoking marijuana in an ad.



/ STATES



Ohio Democratic congressional candidate John Cranley, currently Cincinnati’s mayor, tweeted, “We need big, bold ideas and strategic plans to turn around Ohio. Not vague platitudes. That’s why I have plans to create an energy dividend, legalize marijuana, and create over 30k new, middle-class jobs a year for Ohioans.”



Mississippi’s agriculture and commerce commissioner thanked lawmakers for removing his department from any role in a medical cannabis program with new amendments to pending legislation.



Texas’s agriculture commissioner cut ties with a political consultant who was indicted in an alleged hemp licensing bribery scheme.



The Utah Senate approved a bill to force cities to recognize legal, medical cannabis cards held by government employees. Separately, the Department of Food and Agriculture created a Medical Cannabis and Industrial Hemp Division.



The Wisconsin Assembly approved a bill to increase penalties for the manufacturing of resin from marijuana plants using butane extraction.



The Vermont House Judiciary Committee discussed a bill to decriminalize drugs and will take testimony on the measure on Friday.



The Maine legislature’s Veterans and Legal Affairs Committee held a hearing on a marijuana delivery bill and other cannabis legislation.



A New Jersey senator said he will “push like hell” to pass a bill legalizing marijuana home cultivation.



A North Carolina senator tweeted about how his dad’s experience with cancer informs his support for medical cannabis.



South Dakota regulators issued the first medical cannabis dispensary licenses.



Hearings in a lawsuit against Georgia regulators’ medical cannabis business licensing process will begin on Friday.



Oregon regulators are inviting questions about new marijuana and hemp rules.



The Pennsylvania Department of Community & Economic Development tweeted, “🌿 Clothes

🌿 Biofuel 🌿 Drywall 🌿 Vinyl siding 🌿 Beauty products — More than 25K products are currently made from #hemp. Take a look at how this budding industry has impacted #Pennsylvania and created a new business sector for our PA farmers.”



Washington State regulators sent a newsletter with updates on cannabis issues.



New York regulators will discuss a marijuana social and economic equity fund and other issues on Tuesday.



The Minnesota Department of Agriculture will host a hemp forum on February 9.



/ INTERNATIONAL



The Thai Public Health Ministry’s Food and Drug Administration proposed removing cannabis from its status as a prohibited substance.



Malta’s new top marijuana regulator spoke about plans to implement legalization after having opposed the policy change.



/ SCIENCE & HEALTH



A series of case reports of people with attention deficit hyperactivity disorder suggested that “that cannabis played a complimentary role in the therapeutic regimen.”



A study concluded that “medical cannabis companies regularly use associations with academia and academic research to imply that their products are safe and effective before these claims are causally confirmed” and that “this practice may mislead patients, policymakers, and the public into believing unconfirmed claims about the safety and efficacy of cannabis and cannabis-derived products.”



/ ADVOCACY, OPINION & ANALYSIS



A poll of Americans who suffer from anxiety, depression or PTSD found that 65 percent believe psychedelic medicine should be made available to patients with treatment-resistant forms of those conditions.



The Tennessee Democratic Party’s chairman tweeted, “@POTUS  could cancel student debt and order the HHS and DEA to begin the process of rescheduling marijuana, while offering a blanket pardon to those with non-violent marijuana possession charges. With the stroke of a pen, this can be done without fear of Manchin and Sinema blocking.”



The South Carolina Sheriffs Association is speaking out against a pending medical cannabis bill.



A founding partner of RightForge criticized Democrats’ marijuana legalization efforts.



/ BUSINESS



Eleusis is going public through a merger with Silver Spike Acquisition Corp. II.



PharmaCann Inc. completed an additional issuance of Senior Secured Notes worth approximately $39.5 million.



Curaleaf is facing a consumer complaint about inconsistent cannabis product prices across states.

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Photo courtesy of Chris Wallis // Side Pocket Images.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Tom Angell is the editor of Marijuana Moment. A 20-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy.
(Organization citations are for identification only and do not constitute an endorsement or partnership.)

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