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L.A. County approves $30,000-per-day fines for illegal marijuana businesses

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Los Angeles County authorities signed off on a plan to issue $30,000-per-day civil fines against unlicensed commercial marijuana activity, which officials say has grown explosively in recent years.

According to Santa Clarita radio station KHTS, the new ordinance gives L.A. County authorities the power to levy fines against unlicensed cannabis businesses of all kinds, including grows, stores and any others found to be in violation.

“This motion puts teeth in enforcement and ensures that unpermitted dispensaries face stiff penalties in the future,” County Supervisor Sheila Kuehl said after the ordinance was enacted Thursday.

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L.A. County code prohibits all commercial cannabis activity in unincorporated parts of the county, KHTS reported, but illicit marijuana businesses have persisted nonetheless – to the extent that law enforcement often has trouble keeping up with the sheer number of lawbreakers.

Kuehl’s motion points out that, “despite the efforts of numerous County departments, the growth of unpermitted cannabis dispensaries continues to outpace enforcement.”

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Marijuana security guards end overtime dispute after 5-year battle

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A five-year lawsuit about overtime pay has ended after security guards for Colorado-based marijuana security company Helix TCS agreed to drop the action.

The case was closely watched in the industry because of the broad implications it could have had on how state-legal marijuana businesses compensate employees.

According to Law360, Helix and a representative for the guards “said in a joint stipulation they would end the suit with prejudice.”

It was unknown whether the parties reached a settlement over the alleged overtime violations under the Fair Labor Standards Act (FLSA).

Security guards who worked for Helix starting in September 2014 joined the suit.

Robert Kenney, the guards’ representative, alleged in the suit that he and fellow Helix security guards regularly worked more than 40 hours a week for a 14-month span in 2016 and 2017 without receiving paid overtime in violation of the FLSA.

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Helix argued Kenney did not need to receive overtime pay under the FLSA because working for the marijuana industry was illegal.

That argument was rejected, and Helix’s appeal then attempted to escalate the case to the U.S. Supreme Court, which declined to hear it.

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Australia’s new cannabis import rules could leave non-GMP producers in the cold

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By Matt Lamers, International Editor

– Updated

Image of the Sydney Opera House

Australia’s Department of Health, preparing to overhaul its medical cannabis regulations, is poised to require that all products imported into the country’s small but growing market be produced in accordance with Good Manufacturing Practice (GMP).

The move would effectively shut out non-GMP-compliant manufacturers operating overseas by bringing production rules governing imported medical cannabis products into line with those produced domestically.

The proposed rules, which also cover labeling and packaging, are currently before the World Trade Organization (WTO), where member countries have until late February to submit comments.

One of the most meaningful changes involves imported medical cannabis products, which currently don’t have to adhere to the same strict quality production requirements as locally made ones.

The government currently requires Australian medical cannabis manufacturers to comply with Good Manufacturing Practice (GMP) standards. However, a similar requirement does not apply to products imported into Australia.

That has led to charges of unfair competition favoring internationally produced medical marijuana.

Imported medicinal cannabis products will be required to be manufactured on sites with “acceptable” GMP standards, according to the proposed rules.

The companies importing the goods, known as sponsors, will have to maintain evidence to show compliance for each batch of medical cannabis products they import.

The Therapeutic Goods Administration (TGA), which oversees access to unapproved medical cannabis treatments in Australia via the Special Access Scheme, said it will provide “clear guidance” on the GMP practices and evidence that will be required.

The government has pledged an unspecified “reasonable” transition period so companies can adapt to the new requirements.

“For the avoidance of doubt, the TGA will not be requiring sponsors of offshore manufacturers to comply with a unique Australian manufacturing standard,” the TGA said in the WTO notice.

“Sponsors will be able to rely on a manufacturer’s adherence to an internationally accepted GMP standard – of a type acceptable to the TGA – that may be specific to that manufacturer’s country.”

The new rules will also require child-resistant packaging, plus:

  • Labeling that better identifies active ingredients.
  • Clarity on microbiological testing requirements.

“The objectives of the package of reforms are to provide assistance to patients and medicinal practitioners to identify equivalent products within the large range of products available,” according to the WTO document.

“This will be achieved by requiring more information on product labels.”

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Australia growing

Australia is one of the fastest growing federally regulated medical marijuana markets in the world.

But, at an estimated 200 million Australian dollars ($152 million) in sales last year, the country still lags behind Canada, which topped global sales in 2021 with an estimated 484 million Canadian dollars ($390 million) in sales of unapproved medical marijuana.

However, Canadian spending on medical cannabis fell to a five-year low in the first half of 2021.

Since 2018, there have been roughly 208,263 approvals for the drug under Australia’s Special Access Scheme Category B pathway.

Approvals by year were:

  • 122,565 in 2021.
  • 57,714 in 2020.
  • 25,160 in 2019.
  • 2,559 in 2018.

International companies are keen to capitalize on the growing market.

This week, New York-based producer Tilray Brands expanded its medical cannabis product offering in Australia.

The company also launched a medical cannabis educational platform for health-care professionals.

“As medical cannabis demand increases worldwide, we remain committed to providing (health-care) professionals and patients with safe and reliable access to the highest-quality medical cannabis products,” Denise Faltischek, head of international and chief strategy officer, said in a statement.

Tilray shares trade as TLRY on the Nasdaq and Toronto Stock Exchange.

Matt Lamers can be reached at mattl@mjbizdaily.com.

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Majority Of Americans Say They’d Vote For A Politician Who Smokes Marijuana, Poll Finds

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A campaign chaired by a former Arkansas lawmaker has filed a constitutional amendment to put marijuana legalization on the state’s 2022 ballot—and it’s facing pushback from advocates who are working on two separate reform initiatives.

Eddie Armstrong, a Democrat who previously served as minority leader in the state House of Representatives before leaving office in 2019, first unveiled the plan to pursue legalization through the ballot late last year. Now that Armstrong’s group Responsible Growth Arkansas has formally filed the measure, its details are available.

The Arkansas Adult Use Cannabis Amendment would allow adults 21 and older to purchase and possess up to one ounce of marijuana. Existing medical cannabis dispensaries would be permitted to sell in the recreational market starting March 8, 2023, giving them an advantage.

Under the proposal, the Alcoholic Beverage Control Board (ABC) would be responsible for regulating the market and issuing marijuana business licenses. There would be a two-tiered approach to cultivator licensing, with the first tier being reserved for eight existing dispensaries and the second tier going to 12 other applicants through a lottery system.

The measure would also repeal and replace certain provisions of the state’s medical marijuana law, which was approved by voters at the ballot in 2016. Language would be updated for rules on advertising, packaging, labeling and purchase limits.

Advocates who are collecting signatures for separate legalization ballot measures have raised concerns that the Responsible Growth Arkansas proposal would deliberately benefit a select number of businesses, including those that have financially backed it, and stamp out competition.

The five donors who contributed $350,000 each to the campaign—Bold Team, Good Day Farms Arkansas, Osage Creek Cultivation, DMCC and NSMC-OPCO—are all existing cultivators, The Northwest Arkansas Democrat-Gazette reported.

Armstrong argued that his proposal is a “more responsible and regulated approach to expanding into this adult cannabis space for Arkansas,” and the campaign “took a look at how this could be done in a meaningful and well-regulated way for Arkansans.”

A 10 percent supplemental sales tax would be imposed on retail marijuana sales. Revenue would be used for law enforcement funding (15 percent), the University of Arkansas (10 percent), drug court programs (five percent), and the remainder would go to the state general fund after covering administrative costs.

Another issue with the new initiative for advocates is the lack of equity provisions. The measure does not provide a pathway for expungements, nor does it give licensing priorities to communities disproportionately impacted under prohibition.

There are two other campaigns that have already laid the groundwork to put cannabis legalization on the ballot this year. And both of those included equity components in their measures.

Arkansans for Marijuana Reform submitted the proposed constitutional amendment to the secretary of state’s office last year. It would allow adults 21 and older to possess up to four ounces of cannabis flower, two ounces of concentrates and cultivate up to six mature marijuana plants and six seedlings for personal use.

Under the group’s proposal, the state Department of Finance and Administration would be responsible for regulating the program and issuing cannabis business licenses. They would have to issue at least one retail license per 15,000 residents. No individual or entity could possess more than one cultivation and one dispensary license.

Mellisa Fults of Arkansans for Marijuana Reform slammed the new measure from Armstrong’s group, saying “its’ going to be a horrible monopoly.”

“It’s going to be awful for the state,” she told the Democrat-Gazette. “There’s no expungement of records, so they’re going to be making millions upon millions of dollars when there’s people who still have a felony on their record for a joint.”

In contrast, under Fults’s measure, courts would be obligated to provide relief to people with past convictions for possession or sales of up to 16 ounces of cannabis or six plants. However, they would have some discretion as to whether relief constitutes release from incarceration, expungements of past records and/or the restoration of voting rights.

A separate group of activists with Arkansas True Grass is already in the signature gathering process for a 2022 ballot initiative that would create a system of regulated sales for adults 21 and older, allowing them to purchase up to four ounces of cannabis and grow up to 12 plants for personal use.

True Grass spokesperson Jesse Raphael called the new measure from Responsible Growth Arkansas “a power grab by the medical monopoly.”

“It locks in all of the production for the recreational marijuana for the current producers of medical marijuana,” he said.

Both True Grass and Arkansans for Marijuana Reform attempted to place marijuana legalization initiatives on the 2020 ballot, but both campaigns were derailed by the coronavirus pandemic and failed to collect enough signatures by the deadline.

That’s despite a federal judge’s ruling in May 2020 that the secretary of state needed accept signatures that were not collected in-person or notarized due to the excess burdens that arose during the health crisis.

Read the text of the latest medical cannabis legalization ballot initiative below: 

South Carolina Senate Begins Long-Anticipated Medical Marijuana Debate

Photo courtesy of Brian Shamblen.

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