The Week In Cannabis: Federal Legalization, Biden's Drug Czar, Argentina, WADA Vs. The US, And More

Below is a recap of the main news related to the cannabis industry and markets for the week of July 16, 2021.

US Federal Legalization

The United States seems to be on the verge of ending the decades-long prohibition of cannabis, as a discussion draft of a long-anticipated Senate bill that will federally legalize marijuana has been released.

Senate Majority Leader Chuck Schumer (D-N.Y.) and fellow Sens. Cory Booker (D-N.J.) and Ron Wyden (D-Ore.) introduced the outline of the proposed Cannabis Administration & Opportunity Act on Wednesday.

The discussion draft is not yet a formal bill; sponsors are now asking for public input to refine the legislation before the formal introduction.

The proposal includes plans to remove marijuana from the Controlled Substances Act. If passed, the bill would also expunge prior convictions and allow people who are serving time for applicable crimes to petition for resentencing, according to Chicago Sun-Times.

Benzinga Cannabis’ content is now available in Spanish on El Planteo.

In addition, states would keep their rights to set their own marijuana policies and help those who've been criminalized over the cannabis plant.

Finally, the proposal would regulate and tax marijuana, like alcohol and tobacco.

Moreover, under the Schumer bill, regulatory authority over cannabis will be transferred from the Drug Enforcement Administration (DEA) to the Food and Drug Administration (FDA), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Alcohol and Tobacco Tax and Trade Bureau (TTB).

Related reads:

• Sen. Chuck Schumer's Long-Awaited Federal Marijuana Legalization Bill Unveiled: Will The Full Senate Accept It?
• Cantor Fitzgerald Explains Impacts Of Draft Bill & Advises: 'Use The Weakness' To Buy Curaleaf, Green Thumb, Trulieve And Cresco

Markets

Despite the good news, cannabis stocks traded down. Over the five trading days of this week:

• The ETFMG Alternative Harvest ETF MJ: lost more than 9%.
• The AdvisorShares Pure Cannabis ETF YOLO: tumbled 7.4%.
• The AdvisorShares Pure US Cannabis ETF MSOS: fell 8%.
• The Cannabis ETF THCX: was down 10.1%.
• The Amplify Seymour Cannabis ETF CNBS: declined 8.3%.
• The SPDR S&P 500 ETF Trust SPY closed the week down 1%.

Biden’s New Drug Czar

President Biden has chosen the former chair of the West Virginia Medical Cannabis Advisory Board, Dr. Rahul Gupta, as the new head of the Office of National Drug Control Policy (ONDCP), the nation’s main body governing drug policy issues.

The nomination still awaits confirmation by the Senate.

The decision could have implications in the country’s position on federal cannabis policy, considering Gupta's substantial role in the development of West Virginia’s medical marijuana program.

Gupta, who also served as West Virginia’s health commissioner, has led Biden’s transition team on drug policy issues and would be the first physician to serve as the country’s so-called drug czar.

Argentina

Argentina’s Senate approved a regulatory framework for the development of its medical cannabis and industrial hemp sectors in a 56-5 vote with one abstention.

The bill titled "Regulatory framework for the development of the medical cannabis and hemp industry," within the framework of the Economic and Social Council was previously introduced by Argentina’s Minister of Productive Development, Matías Kulfas, about a month ago. 

Supporters of the law say it will enable Argentine to create some 10,000 jobs in the hemp production chain. What’s more, both medical and hemp domestic sales are projected to yield $500 annually in addition to another $50 million per year in exports of both medical cannabis and hemp products, according to Argentina’s Ministry of Development. 

Up until now, Argentina has had a confusing medical cannabis access law, which was ideal for importers. In the case of the proposed regulation becoming law, companies that import into Argentina will face serious competition in the form of domestic producers.

WADA vs. The US

The beat goes on as agencies play the blame game while the fastest woman in the world is still sitting out the 2021 Olympics.

The World Anti-Doping Agency (WADA) issued a public response to a cascade of reactions from U.S. Government officials regarding Sha’Carri Richardson’s disqualification from the Tokyo Olympics due to state-legal marijuana use.

In a public letter signed by Witold Banka, president of WADA, the agency explained that the process by which cannabis is annually included in the list of prohibited substances is consistently reviewed by global experts via a process wherein U.S. representatives have substantial, if not overly represented, voting rights.

WADA annually publishes the Prohibited List with an expert advisory group of 12 international members, three of whom are from the U.S., thus giving the United States more weight and representation than any other nation. It currently includes USADA’s Chief Science Officer, Dr. Matthew Fedoruk.

Cannabinoids have been on the Prohibited List every year since WADA began supervising it in 2004. 

As opposed to claims made by USADA, which essentially blamed WADA for Richardon’s disqualification, WADA stated in a letter that “at no time since the first Prohibited List was published in 2004 has WADA received any objection from U.S. stakeholders concerning the inclusion of cannabinoids on the Prohibited List," said Banka.

“On the contrary,(...) the U.S. has been one of the most vocal and strong advocates for including cannabinoids on the Prohibited List.” 

Ohio’s Rec Bill

Two Ohio House Reps are filing a bill that would legalize adult-use cannabis, marking the first time a proposal allowing recreational cannabis commerce has been introduced in the Ohio legislature.

Co-sponsors of the bill, Reps. Terrence Upchurch and Casey Weinstein began circulating the draft memo to their colleagues on Thursday in order to garner support prior to formally filing the bill.

“Ohio can and should be the leader and pave the way for a successful recreational marijuana program,” Upchurch, who represents Northeast Ohio including Cleveland, told Benzinga. “We really need to get the rollout right.”

While the full details have not been released, Upchurch said components of the bill would allow adults 21 to buy and possess up to 2.5 ounces of marijuana and grow up to 12 plants.

Ohioans with nonviolent cannabis-related records crimes can have their records sealed and participate in the newly legal industry.

Regulatory Updates: NJ, MI

As part of New Jersey’s legal cannabis program, in effect since July 1, the state Judiciary has already dealt with some 88,000 cannabis cases.

These are the first wave of an estimated 360,000 identified cases that will qualify for expungement in the Garden State. 

While many states are dealing with delta-8 THC sales by simply blocking them, Michigan has taken another road – a higher road many would say. Governor Gretchen Whitmer signed legislation that will regulate the production and sales of hemp-derived delta-8 THC.

Financings And M&A

Cannabis-focused real estate investment trust Aventine Property Group, Inc. raised $100 million via a private offering of 8% senior unsecured convertible notes. The notes, due in 2026, were sold to a single institutional investor.

The Flowr Corporation FLWR (OTC: FLWPF) announced a $7.01 million worth offering of units. The company signed a securities purchase agreement under which it will sell 33.4 million of its units at a price of 21 cents per unit. ATB Capital Markets Inc. was chosen as the placement agent for the offering.

High Tide Inc. HITI HITI 2LYA sold its KushBar retail cannabis assets to Halo Collective Inc. HALO AGEEF, previously known as Halo Labs Inc. for $5.7 million.

The company also said it will acquire six retail cannabis stores in Regina, Saskatchewan in a CA$2.9 million ($2.31 million) stock and cash deal.

Pure Beauty raised $5 million in a convertible note fundraising round. The raise included a consortium of investors led by Gron Ventures, Subversive Capital, Ceres Group Holdings and notable celebrities like Timbaland, Nas and film director Tom Kuntz, among others.

Jushi Holdings Inc. JUSH JUSHF purchased OhiGrow, LLC, a licensed Ohio grower and Ohio Green Grow LLC for $5 million in cash.

Harvest Health & Recreation Inc. HARV HRVSF sold its cultivation and processing assets in Utah and opened a new medical dispensary in South Miami Beach, Florida.

Earnings Reports

Glass House Brands Inc. GLAS GLAS announced its first-quarter financial results on the heels of closing a business combination with Mercer Park Brand Acquisition Corp. BRND MRCQF and its debut on the NEO Exchange. Net sales spiked 136% year-over-year, reaching $15.2 million in the first three months of 2021.

Organigram Holdings Inc. OGI OGI posted its latest financial earnings report, touting a sequential increase in both gross and net revenue of 51% and 39%, respectively. During the third quarter of 2021, gross revenue totaled $29.1 million, representing an increase of 31% year-over-year while net revenue grew by 13% over the same period to $20.3 million.

The Valens Company Inc. VLNS (OTCQX: VLNCF) reported its second-quarter financial results with net revenue jumping 6.5% to $18.8 million, compared to $17.6 million in the same period of 2020. When compared to the net revenue achieved in the previous quarter, figures have dropped by 6.2% from $20 million.

The Green Organic Dutchman Holdings Ltd. TGOD TGODF revealed its preliminary unaudited financial results for the second quarter of 2021. TGOD reported that it expects to generate $11.7 million in preliminary unaudited gross revenue for the period, representing a sequential increase of 30% and a 143% growth compared to the second quarter of 2020.

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) NEPT posted its first-quarter and full fiscal 2021 earnings, reporting quarterly revenue of CA$6.8 million ($5.41 million), compared to CA$9.5 million in the same period of fiscal 2020.

Find all the details on these and other earnings reports on Benzinga Cannabis’ Earnings Center.

Density Of Pot Shops Not Associated With Increased Marijuana Use Among Young Adults

Young adults residing near marijuana shops and dispensaries are not more likely to use either cannabis or tobacco than are those who do not, according to data gathered by researchers at the RAND Corporation and the University of Southern California.

The authors reported: “Living near more outlets of any type was not significantly associated with intentions to use in the full sample, adjusting for individual- and neighborhood-level characteristics."

The research, published in The Journal of Cannabis Research, concluded: “This is the first study to simultaneously examine the density of both MCDs [medical cannabis dispensaries] and RCRs [recreational cannabis retailers] around young adults’ homes and associations with future intentions to use cannabis, including the co-use of cannabis with tobacco/nicotine. Our results suggest that young adults who lived in an area with a greater density of any type of outlet were not significantly more likely to report stronger intentions to use cannabis, e-cigarettes, or cannabis mixed with tobacco/nicotine in the future.”

Celeb Moves

American rapper and record producer best knowns a Travis Scott, formerly Jacques Bermon Webster, is the latest celeb to join the booming marijuana industry. The musician teamed up with Connected Cannabis to create and launch a new cannabis line dubbed Cactus Farms.

Fab 5 Freddy's B Noble Inc. teamed up with Curaleaf Holdings, Inc. CURA CURLF to launch the B Noble brand in Massachusetts and Maryland. The partnership is part of Curaleaf's Rooted in Good corporate social responsibility program.

Sacha Baron Cohen is suing Massachusetts-based cannabis dispensary Solar Therapeutics for using his Borat character image on a billboard without permission.

After Cohen's legal team sent a cease-and-desist letter to Solar Therapeutics, the company removed the billboard, though the dispensary is apparently not prepared to fork over the $9 million being sought in damages.

According to a lawsuit, filed Monday, Cohen is suing Solar Therapeutics for copyright infringement, false advertising and the misappropriation of his right of publicity over the billboard, which was up on a Massachusetts interstate until its removal, reported People Magazine.

A new video campaign from The Beehouse Justice Initiative launched across PBS stations. Focused on the injustice of cannabis prosecution, Beehouse Justice and Matador Content created a short film series called Cannabis and Incarceration. The first film in the series, “Spotlight On: Last Prisoner Project” is narrated by Chris Rock and directed by Ezra Paek.

International News

Flora Growth Corp. FLGC is poised to distribute supply food products to Colombia-based Importaciones y Asesorias Tropi S.A.S.

Under an initial one-year deal between Flora Growth’s food and beverage division Kasa Wholefoods Company S.A.S. and Colombia’s largest food distributor, Tropi, Kasa plans to generate additional CBD and hemp portfolio sales.

Aurora Cannabis Inc. ACB ACB is delivering a nearly CA$8 million ($6.77 million) weed shipment to Israel.

Other News

SweetWater Brewing Company is opening a new, full-service brewery, production facility, taproom and restaurant in Colorado, just months following its debut there. The move follows the recent launch of the first Canadian craft cannabis brew in the U.S., Broken Coast BC Lager, developed in collaboration between SweetWater and Canada's Broken Coast Cannabis Ltd, a leading craft cannabis brand under Tilray Inc's TLRY portfolio in British Columbia.

Pressure BioSciences, Inc. (OTCQB: PBIO) developed technology that can produce water-soluble CBD with the long-term stability of more than twelve months.

Ascend Wellness Holdings, Inc. AAWH AAWH debuted on the OTCQX Best Market.

MediPharm Labs Corp. LABS MEDIF MLZ obtained Health Canada’s Drug Establishment Licence.

Executive Moves

Find out all about the latest executive moves at:

• Nevada CCB, Digipath, Agricor And Botanacor Laboratories, Curaleaf, Hervé, HERBL
• Plus Products, Arcview Capital, Greenspoon Marder, KetamineOne, Open Book Extracts, Cannabics Pharmaceuticals, Sundial, Flora Growth

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

• EXCLUSIVE: B-Real Talks About Cypress Hill's SNL Ban, Conan Lighting Up And Dr. Greenthumb's On 'Cannabis Hour'
• Lion Rolling Circus: The Independent Argentine Brand That Revolutionized The Cannabis Accessories Market In LatAm - And Is Coming For The US Now
• Discussing The Schumer Bill With Nextleaf Solutions' CEO At The Benzinga Cannabis Hour
• Low-Cost Pot Stocks To Consider: Green Chip Stocks' Jeff Siegel Says Check Out Midwest & Outside Major Markets Where Cannabis Enthusiasm Abounds
• Low-Cost Pot Stocks To Consider: Poseidon Asset Management's Emily Paxhia Shares Her Wisdom On The Subject
• Cannabis In New York: Capital Raises And M&A Activity Accelerates [Chart]

Top Spanish Stories

• Estudio: la Presencia de Dispensarios de Marihuana No Aumenta el Consumo en Jóvenes
• Argentina: Senadores Aprobaron la Ley de Cannabis y Cáñamo
• Rapero Travis Scott Lanza Marca de Marihuana Cactus Farms junto a Connected Cannabis
• Australia: Científicos Descifraron el Código Genético del Cannabis Medicinal
• ¿La Marihuana te Da Tos? Esto Es lo que Debes Hacer
• Aviones, Cannabis y Leyes: ¿Podemos Viajar con Marihuana?
• Una Charla con Señorita Bimbo: ‘Mientras Sea Ilegal, Vamos a ser Todos Narcos: Entonces, Seamos Narcomodelos’
• La Primera App de Delivery de Marihuana Legal Llega al iPhone
• Cómo Hacer una Desintoxicación de THC
• Romances Químicos, Estados Alterados y Canciones para Chicas que Acaba de Conocer: Conocé Axel Fiks, el Explorador

Lead image by Ilona Szentivanyi. Copyright: Benzinga.