Cannabis Industry Outlook 2017

New states, more regulation, education, potency

 

DENVER (December 19, 2016) — As the year comes to a close, the Cannabis Business Alliance (CBA)  reviews the highlights of 2016 and provides an outlook for 2017.

Enormous growth: Colorado, the first U.S. state to legalize cannabis for adult-use, has already reported selling more than $1 billion in marijuana and marijuana-related products in the first 10 months of 2016, with the state on track to see a $3 billion economic impact for 2016. Additionally, Colorado’s 2016 tax revenues are projected to total more than 2014 and 2015 combined. Throughout the country, cannabis prohibition continued to be rolled back, with more states legalizing marijuana in 2016. Earlier in 2016, Ohio and Pennsylvania legalized medical marijuana, and Illinois decriminalized the plant. November’s election results found four states voting positively to approve cannabis for adult-use (California, Maine, Massachusetts and Nevada), and four states voting to allow Medical Marijuana use (Florida, Arkansas, North Dakota and Montana). These new additions mean 29 states plus the District of Columbia now offer some category of legal cannabis, and one in five Americans soon will have access to legal marijuana.

Edibles Safety & Regulation: The Colorado edibles industry continued to actively address concerns regarding consumer safety. In June, a bill was signed that mandates that the products cannot be shaped like animals, or be in packaging designed to appeal to children. The industry in Colorado ramped up for stamping regulations that went into full effect Dec. 1, requiring all packaging as well as cannabis-infused products to be marked with the specific symbol of THC and ! within a diamond shape. Recent regulations also prohibit edibles manufacturers from buying commercial non-infused products and spraying them with hash oil, as the average consumer or child would not be able to tell the difference between a medicated and unmedicated product.

With these regulations in place, the cannabis industry can safely claim that between stamping, regulation of shapes, child-resistance, prohibited advertising of cartoon characters, opaque packaging, and warning statements, that Colorado infused products manufacturers are doing more than any other industry to make edibles less appealing to kids while maintaining colors and flavors that do appeal to the adult markets it serves. Legal cannabis products are less likely to be accidentally ingested by kids than dish detergent packets, diaper rash cream, and even alcohol-infused chocolates. With more than five million infused product units sold each year and diminishing cases of accidental ingestion, the industry feels strongly that it is headed in the right direction.

CBA maintains that banning legal edibles or regulating edibles out of existence merely pushes a safe, regulated, taxable industry with professionally produced, lab-tested products packaged in childproof packaging into the Black Market where homemade edibles with no testing or limits on potency and no required packaging become a much more dangerous situation for children. CBA stresses that adults must keep cannabis products safely out of the reach of children, and educate youth on the dangers of underage consumption.

Legislative Successes: The 2016 legislative session in Colorado was eventful for the cannabis industry, and CBA looks forward to seeing how these new regulations will shape the landscape of the legal cannabis industry in Colorado for the better. The retail marijuana Sunset Bill included a section that eliminated the differential between resident and non-resident purchasing limits. Inconsistent purchasing regulations didn’t make sense for the industry because having two different purchasing limits turned every transaction into an algebra equation.

Cannabis Business Alliance worked with the legislature to approve an amendment to keep the most basic labeling requirements in the statute intact, but to entrust the rulemaking process to support a collaborative effort to re-examine, and determine simplified and effective labeling standards. Existing labels contain an enormous amount of information, some of which is redundant, that can confuse consumers and achieve the opposite effect from the intention of the law. CBA looks forward to working with regulators and safety experts to determine the right amount of information and messaging needed for cannabis products to achieve a more effective paradigm for cannabis package labeling.

2017 OUTLOOK

A New Administration. CBA looks forward to working with the new administration to educate incoming lawmakers on how the cannabis industry is compliant, a job creator, and tax engine bringing state budgets out of the red and into the black. Republicans have core values that include belief in state rights and a free market. The same voters that have elected these officials continue to overwhelmingly support cannabis, as was evident in this fall’s Elections.

Potency Education. Misinformation around potency continues to present challenges for the industry. The CBA is committed to educating consumers on what potency means and why it is important to have a wide array of potency in cannabis products. In 2013, Colorado residents voted for Amendment 64, which requires the state to regulate marijuana like alcohol. Attempts to introduce potency limits by prohibitionists are equivalent to limiting all liquor in Colorado to 3.2 percent beer. Limiting potency would cripple the legal cannabis industry and force the industry back into the Black Market. The CBA has developed a debunking the myths fact sheet for potency at this link.

Harmonizing Medical and Recreational rules. CBA looks forward to working with Colorado lawmakers to reconcile the 70/30 rule, which would allow medical dispensaries to source more than 30 percent of their onsite inventory from wholesalers. CBA is also hoping to work with legislators to reconcile other medical rules with retail rules, including harmonize labeling between medical and adult-use products, and discrepancies in transfer policies, such as allowing manufacturer-to-manufacturer transfers for medical in the same manner already allowed by adult use.

Options for Testing Discrepancies. CBA hopes to work with lawmakers to create another option for products that fail pesticide testing. A new rule allows harvest batches to be turned into solvent-based concentrates if it fails microbials. This saves the industry millions of dollars of product that would have been destroyed when  otherwise considered safe.

“As a fledgling industry, cannabis may face more regulations than pharmaceuticals, liquor and tobacco combined, with a patchwork of laws varying from state to state. Rules are changing too fast and too often. Now that Colorado’s adult-use market has a couple of years under its belt, the industry would like to see stability in rules so that law enforcement can regulate industry in a more efficient way,” said CBA Executive Director Mark Malone. “The industry also wants to see more in-depth research that properly codes cannabis sources, so we can decipher between the regulated market and the black market.”

CBA representatives are available for comment on these and other cannabis policy issues. For more information or to schedule an interview, contact Shawna McGregor, 917-971-7852 or shawna@rosengrouppr.com.

About the Cannabis Business Alliance (CBA)

The Cannabis Business Alliance (CBA) is an advocate and a resource for business owners, employees, patients and clients of the medical and adult-use marijuana industry. CBA promotes programs that will enhance the emerging marijuana industry’s place in Colorado’s business economy, create respect for the industry in the communities we serve, and support client and patient access, education and safety. For more information, visit www.cannabisalliance.org. Follow us on Facebook, Twitter and LinkedIn.

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