A Look Back on an Epic Year for the Cannabis Industry
… and a peek into 2019
By John Garvey
It’s never been easier to find cannabis-related topics to write about, but providing accurate information that improves the quality of the conversation is another thing altogether. The overall conversation surrounding medical cannabis, cannabis banking and the industry at large definitely moved in the right direction last year despite some obstacles.
In case you ate a giant weed brownie on New Year’s Eve 2017/18 and are just waking up, 2018 was an epic year for cannabis. Here are highlights: Auld lang syne!
Another year went by with no major Justice Department action against prudent legal cannabis industry operators. This in spite of a big scare when (now former) Attorney General Jeff Sessions repealed the Cole Memo in January. Either because Sessions was posturing all along or because he had other things competing for his attention, he never took action against the industry.
If that means you won a bet with one of your neurotic stoner friends, cash in your chips.
Epidiolex, an anti-epileptic drug developed by GW Pharmaceuticals (NASDAQ: GWPH), became the first cannabis plant-derived drug to receive full FDA approval last June. (Long-approved anti-nausea and appetite-stimulating drug MARINOL is made with synthetic THC.) We wrote an entire blog mainly in response to the fear that cannabidiol/CBD would become patented or trademarked by GW Pharma (the claim was malarkey).
Two pieces of major federal legislation were introduced last June: the STATES Act and the Marijuana Freedom and Opportunity Act. Either would be a huge boon to the cannabis industry. Although recent setbacks indicate that neither is likely to pass, the proposed reforms were bold and historic. The fact that these issues are being discussed seriously in a bipartisan manner is huge.
We covered this in-depth in our July blog. If you didn’t catch it, here’s a synopsis:
- The STATES Act sought to extend federal trademark protections to the industry, improve access to banking services and shield compliant operators against seizures by the Department of Justice. “If passed,” we wrote, “the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, co-sponsored by Sen. Cory Gardner (R-CO) and Elizabeth Warren (D-MA), will be to the cannabis industry something like the SpaceX Falcon Heavy launch was to private space travel.”
- Shortly after the STATES Act was introduced, the Marijuana Freedom and Opportunity Act was introduced in the Senate. We wrote, “Above all, passage of the MFOA would provide advocates something they’ve been salivating over the mere thought of since 1971: rescheduling ‘marihana’ to a less-restrictive place in the CSA’s inherently flawed controlled substances schedule.”
Canada legalized cannabis, making it the second country to do so (after Uruguay). The only problem is I think my wife has a thing for their Prime Minister so I still don’t fully trust them.
Two decades and change after California passed the historic Compassionate Use Act (Proposition 215, which made CA the first state to legalize medical cannabis), legal recreational cannabis sales began. Implementation has been complicated due in part to the established grey market operators struggling to meet compliance guidelines or disregarding them altogether. Some licensed, compliant operators may feel that they’re competing against establishments whose main competitive advantage is avoiding taxes and compliance costs. True?
California’s MMJ industry has long been comprised largely of collectives and co-ops. Most municipalities still aren’t allowing licensed cannabis dispensaries to operate locally, the state isn’t issuing nearly enough licenses, and all the unlicensed operators were set to lose their remaining legal protections on January 9, 2019. Licensing, third-party testing, distribution, enforcement, clear rules and point-of-sale capabilities were all lacking to varying degrees through 2018.
It’s been a bear (pun intended).
Vermont became the first state to legalize recreational cannabis by legislative action rather than ballot. Michigan also legalized the whacky weed, the first Midwestern state to do so. This brings the tally of fully-legal states to 10, plus the District of Colombia.
Medical marijuana was legalized by ballot in three red states including Utah, Oklahoma and Missouri—the latter two winning approval by huge margins.
Hemp was removed from the Controlled Substances Act (i.e., legalized) thanks to a provision in the 2018 farm bill, signed into law on Dec 20, 2018. The FDA issued a surprisingly comprehensive and interesting press release.
Five Canadian cannabis firms were listed on major U.S. securities exchanges—three on the New York Stock Exchange and two on the Nasdaq. Meanwhile, dozens of U.S. cannabis companies were listed on the Canadian Stock Exchange.
We started an excellent cannabis industry blog
If you ever meet our parents, please don’t tell them how much we know about weed.
Things to watch in 2019
It might take two, three, or four more attempts to achieve a substantial, legislative drug policy reform at the federal level, but it will happen and soon. What will that look like? We have our guesses. We’ll continue sharing strategic insights about opportunities in the cannabis industry, dispensary operations, and new cannabis regulations.
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