Newsom announced the revision proposal on May 13, which aims to set aside $150 million in order to “temporarily reduce taxes” and simplify the tax structure, while $21 million will go toward local governments to help expand cannabis’s retail footprint.

Newsom said in response to a question from a Bloomberg reporter that he is “…addressing the persistent issue that is exactly what we anticipated would be a persistent issue—and that’s dealing with the black market, going after the illegal growers and the illegal operators,” Newsom explained. “Trying to level-set, trying to be flexible in terms of the cost pressures related to the current tax structure, and the lack thereof, in the black market.”

“This is [the] beginning of a process from my humble perspective, in terms of my thinking,” Newsom continued. “This will be a multi-year process to get that black market, get it on the retreat—not the ascendancy—and to get the retail and responsible adult-use market on steady ground.”

In conjunction with Newsom’s statement, the Department of Cannabis Control also released a statement from Director Nicole Elliot. “We have heard from many of you who have said that the current cannabis tax framework is overly complex,” Elliot wrote. “We know that current tax policies disproportionately burden cannabis farmers and small businesses and create instability throughout the supply chain, ultimately undermining the societal benefits of a taxed and regulated market.”

She summarized some of the changes in the proposal, which includes setting the cultivation tax to zero starting on July 1, strengthening tax enforcement policies, altering the deadline for collecting excise tax, and more. “I share this information because I wanted you all to know about the work the Governor’s Office is doing to support our collective efforts,” Elliot concluded. “Creating a sustainable, safe, equitable, and legal cannabis market in our state is no small feat—it is a labor of love, and it takes all of us working together to help make this a reality.”

The Reason Foundation, which promotes libertarian values, recently analyzed the possible results of altering the current cannabis tax. Ultimately, the organization recommended to repeal or suspend the current cultivation tax, reduce retail excise taxes, or pursue other methods to garner interest from local governments. “Tax costs are a significant component of retail prices and this analysis shows that a reduction in taxes can make legal products more price-competitive with illegal products and lure more consumers into the regulated market. This overall market growth will quickly displace the lost revenue resulting from a reduction in tax rates,” the Reason Foundation concluded.

Newsom initially unveiled his budget proposal for the 2022-2023 fiscal year in January, stating that he strives to make positive changes. “It is my goal to look at tax policy to stabilize markets; at the same time, it’s also my goal to get these municipalities to wake up to the opportunities to get rid of the illegal market and the illicit market and provide support and a regulatory framework for the legal market,” Newsom said. He shared that $595 million of cannabis tax revenue became available to fund substance abuse treatment efforts, environmental remediation illegal cultivation sites, and public safety activities.

In June 2021, Newsom proposed a $100 million package “to be provided as grants to cities and counties to help cannabis businesses transition from provisional to regular licenses.” Seventeen cities and counties were chosen to receive this grant.

Meanwhile, in late April, Assembly Bill 2691 was approved to allow small cannabis business owners to take their products directly to consumers at cannabis farmers markets and other special events. According to Assemblymember Jim Wood, who introduced the measure, this will help small cannabis businesses navigate through the various challenges of high taxes and competition with larger businesses, and will help increase visibility among local consumers.

The top cannabis regulator in New Jersey faced tough questioning on Thursday during a marathon hearing that looked into the oft-delayed rollout of the state’s adult-use weed program.

Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission, testified before the Senate Judiciary Committee during a hearing that reportedly lasted five hours.

The hearing came less than a month after recreational cannabis sales kicked off in the Garden State, a launch that was typified by one delay after another.

The troubled launch prompted Nicholas Scutari, the president of the New Jersey state Senate, to call for the hearings back in March.

“I’m confident that if we did not start this process, the adult weed market would still not be open in New Jersey,” Scutari, a Democrat who pushed for cannabis legalization for years, said at the hearing on Thursday, as quoted by NJ.com.

The hearing also featured “industry leaders and marijuana advocates [who] discussed the pace of setting up the Garden State’s recreational market, scrutinized pricing issues, and griped over still-unwritten regulations for employers seeking clarity on when they can and can’t discipline employees who use cannabis,” according to the New Jersey Monitor.

NJ.com reported that Wesley McWhite, the state’s Cannabis Regulatory Commission’s director of diversity and inclusion, also testified with Brown.

Legal adult-use cannabis sales began in New Jersey last month, drawing more than 12,000 customers who generated almost $1.9 million in sales on the first day.

But that grand opening came after the state had pushed back the launch.

In February, New Jersey Gov. Phil Murphy said the state was hopefully “within weeks” of its first adult-use sales.

But in March, the Cannabis Regulatory Commission pushed back the scheduled launch of sales after opting against awarding licenses to several would-be dispensaries.

“We may not be 100% there today, but I assure you we will get there,” Brown said following that delay. “We have a few things to address and when we address them I’m happy to return to this body with a further update.”

That was the last straw for Scutari, who said at the time that he planned to hold special legislative hearings to look into the delays.

“These delays are totally unacceptable,” Scutari said in a statement at the time. “We need to get the legal marijuana market up and running in New Jersey. This has become a failure to follow through on the public mandate and to meet the expectations for new businesses and consumers.”

In calling for the hearings, Scutari said he wanted “explanations on the repeated hold-ups in expanding medical dispensaries to sell recreational marijuana and in the opening of retail facilities for adult-use cannabis,” and to learn “what can be done to meet the demands and reduce the costs of medical marijuana.”

On Thursday, Brown, according to NJ.com, “said the CRC delayed issuing licenses in March over fears there would not be enough supply of marijuana for both the medical and recreational markets.”

The New Jersey Monitor reported that the “lack of edibles in the Garden State was also a topic Thursday,” noting that “people can find flower, oils that can be vaped or ingested, and limited gummies” in dispensaries.

According to the publication, “edibles like cookies and brownies aren’t allowed under the current law, Brown noted, and any change to that would need to be approved by the Legislature.”

“There are ingestible avenues to purchase and consume, and we hope to expand those in the future. I don’t have a specific timeline,” Brown said, as quoted by the Monitor.

Per the Monitor, Scutari replied: “I’ll call you on that.”

More than five years after Florida voters legalized the medicinal use of cannabis in 2016, city leaders in Miami finally relented and have voted to allow a business to pursue opening a medical dispensary within the city limits. With a 3-2 vote on Thursday, the Miami City Commission ended its de facto ban on medical cannabis retailers and cleared the way for businesses to begin applying for permits to operate.

“The people of Florida decided to allow medical marijuana dispensaries in Florida,” City Commissioner Alex Díaz de la Portilla said at Thursday’s meeting, according to a report from the Miami Herald. “The city of Miami has to keep up with the times. Properly regulated, it’s the time to do it. We have to move forward and not look backwards.”

Medical Cannabis Legalized in Florida in 2016

Florida voters legalized the medicinal use of cannabis with the approval of a constitutional amendment ballot measure in 2016. The amendment passed by voters gave local governments the authority to ban or regulate medical pot dispensaries, but the Miami city government failed to pass measures to take either step.

The passage of the amendment prompted entrepreneur Romie Chaudhari, a Los Angeles-based real estate investor, to apply for a permit for his business MRC44 to open a medical pot dispensary at a site in downtown Miami. Chaudhari was denied a permit for the dispensary, with the Miami city attorney arguing that the ballot initiative is in violation of the federal prohibition of cannabis under the Controlled Substances Act.

Chaudhari and MRC44 then sued the city of Miami in federal court for a permit to open a medical dispensary. The judge sent the case to state court but ruled that the city had “failed to act” by not banning or regulating dispensaries.

Miami’s Planning and Zoning Appeals Board ruled in favor of Chaudhari’s plan to open a dispensary, but the city zoning director appealed that decision in April 2021. On Thursday the city commissioners voted to deny the appeal, clearing the way for Chaudhari and MRC44 to continue its quest to gain the proper permits and license to operate.

Commissioner Ken Russell, who is a registered medical cannabis patient and has publicly voiced his support for cannabis policy reform, voted to deny the appeal and allow Chaudhari to seek approval for the dispensary.

“I believe the state constitution is clear that we had the right to ban this use in our city and we have not done that,” Russell said, as quoted by the Miami New Times. “[Chaudhari has] applied in earnest under the lack of that ban, and I believe therefore we should grant their certificate of use.”

He said that it is time for the federal government to catch up with state and local governments that have legalized cannabis for medical use.

“Florida voters decided that it should be accessible in our state,” Russell added. “Because of the conflict between state and federal law, however, our City Commission had to settle the dispute as to whether our residents would get that access. We voted that they will.”

Regulations Still To Come

Russell was joined in Thursday’s vote by City Commissioners Alex Díaz de la Portilla and Christine King, who said that the city government was on the wrong side of the issue. Díaz de la Portilla said that the will of the voters should be respected and that the city should regulate medical cannabis dispensaries to avoid a proliferation of the businesses.

“The people of Florida decided to allow medical marijuana dispensaries in Florida,” he said. “The city of Miami has to keep up with the times. Properly regulated, it’s the time to do it. We have to move forward and not look backwards.”

Commissioners Joe Carollo and Manolo Reyes voted against the measure, arguing that the city should first implement a plan to regulate medical pot dispensaries to prevent a mass influx of the operations.

“I’m of the opinion that before we move forward in voting on this we need to establish our ordinance that what are the procedures and guidelines for someone to open up such an establishment,” Carollo said at Thursday’s meeting of the city commission. “Otherwise, we’re kind of making this into a sort of Cheech and Chong free-for-all.”

Reyes echoed his colleague’s sentiments, saying “You know how it is. They are going to be all over.”

“Wherever you go and they are permitted, you see people smoking pot in the streets,” he said.

Diaz de la Portilla agreed that the commission should act to regulate dispensaries.

“With the understanding that we are going to address the issues because Commissioners Reyes and Carollo are correct that we have to have a policy so we don’t have a proliferation of these dispensaries throughout our city,” Diaz de la Portilla said as he seconded Russell’s motion to vote in favor of Chaudhari.

An attorney representing MRC44 declined to comment after Thursday’s vote.

The president of Zimbabwe on Wednesday reportedly commissioned a farm and processing plant for medical cannabis cultivation worth $27 million.

Business Insider reports that President Emmerson Mnangagwa “commissioned the medical cannabis farm, and processing plant at Mount Hampden set up by Swiss Bioceuticals Limited in West Province, Zimbabwe…to produce cannabis (mbanje or dagga) for medical and scientific purposes,” saying in a speech that “the rapid development of the processing plant, which adds significant value to the crop, was a testimony of the success of the Government’s engagement policy and the confidence Swiss companies and investors had in Zimbabwe and its economy.”

“This milestone is a testimony of the successes of my Government’s Engagement and Re-engagement Policy. It further demonstrates the confidence that Swiss companies have in our economy through their continued investment in Zimbabwe. I extend my profound congratulations to the Swiss Bioceuticals Limited for this timely investment in the medicinal cannabis farm, processing plant and value chain, worth US$27 million,” Mnangagwa said in a speech on Wednesday, as quoted by Business Insider.

Business Insider reported that the president “added that the investors should follow the company’s lead and open their business to support the mantra that ‘Zimbabwe is Open for Business and be ready to generate foreign currency generation for the country.”

The announcement of the farm comes nearly three years after the country did away with its laws banning the cultivation of cannabis as it looked to produce a new crop to export. A year before that, in 2018, the country legalized medical cannabis.

The repeal of the ban is part of a concerted effort by Zimbabwe to pivot from its longtime major exporter, tobacco, of which it is the leading producer on the continent.

As tobacco exports bring in far less money to Zimbabwe farmers and producers than they used to, many in the country’s industry have shifted to cannabis production.

In reporting on the repeal of the cannabis ban in 2019, Bloomberg noted that the country was seeking “to boost export revenue and offset the global campaign against tobacco, a major source of foreign currency,” with Zimbabwe officials saying at the time that it would initially be focused on hemp and medicinal cannabis.

Earlier this week, Reuters detailed the country’s still-young medical cannabis industry and how farmers there have adapted.

Reuters, citing Barclays analysts, reported that the “global cannabis industry could be worth $272 billion by 2028,” and that “Zimbabwe’s Finance Minister Mthuli Ncube has said the country wants at least $1 billion of that—more than it currently makes from its top agricultural export tobacco.”

Reuters spotlighted a 35-year-old Zimbabwean grower named Munyaradzi Nyanungo, who has been issued one of the 57 cannabis operating licenses in the country.

“We stand to sell cannabis at $25 per kilogramme, which is five, six times more than what a good tobacco crop can give you. We are actually sitting on a green gold mine,” Nyanungo told Reuters.

Nyanungo has a U.S.-based partner in “King Kong Organics, which supplies seed and other inputs, purchased the greenhouses under an off-take agreement that will see the company buying the cannabis crop for processing.”

On Wednesday, Mnangagwa, the country’s president, “also urged other investors with permits to quickly operationalize their permits and licenses for the benefit of the economy in general and people in particular,” according to Business Insider.

“I challenge other players within the medicinal cannabis sub-sector to speedily set up their enterprises, focusing on value addition and beneficiation. It is disappointing that since 2018, only 15 out of the 57 entities issued with cannabis operating [licenses] have been operational,” Mnangagwa said, as quoted by Business Insider.

A massive leak of data associated with government-run cannabis retail stores in Ontario, Canada put retailers in a tailspin. Consumer data, however, is not part of the equation, and wasn’t exposed during the data breach.

The Ontario Cannabis Store (OCS), a government-run agency overseeing the distribution of cannabis from licensed producers to retailers, reported that some of its sales data was “misappropriated.”

An OCS letter sent to retailers on May 10 and quickly picked up by The Canadian Press warned that confidential sales data was being circulated throughout the industry.

“This data was not disclosed by the OCS, nor have we provided any permission or consent to distribute or use this data outside of our organization,” reads the letter, signed by Janet Ihm, vice-president of wholesale partnerships and customer care at OCS. “The data was misappropriated, disclosed, and distributed unlawfully. As a result, we trust you will refrain from sharing or using this stolen data in any way.”

Over 1,200 retail stores in Ontario have been affected. Retail cannabis stores in Ontario rose to 1,333 by a recent count, up from 1,115 in September.

Three anonymous sources say that store names, license numbers, and data showing whether a store is independently owned, run by a corporation, or by a franchisee was also leaked. The matter is being investigated by the Ontario Provincial Police (OPP).

MJBizDaily confirmed with the OPP that the breach is being considered “a criminal matter.” The data was also distributed unlawfully, according to authorities.

Reportedly the data contained ranked sales info of every cannabis store in Ontario. And given that the data also showed kilograms sold during the month, kilograms sold per day, total units sold, total inventory—it could put retailers at risk.

The data could end up in the wrong hands or for the wrong reasons, such as rival retail stores. The data “provides a lot of really competitive insight into who’s doing what, who’s moving what, which retailers are selling what,” Deepak Anand, founder of cannabis company Materia, told The Canadian Press. “That certainly could be a leg up and give a leg up to competition within the industry that’s looking to get ahead of the next person.”

This type of incident has happened before in the area.

In 2018, the OCS revealed that data for 4,500 of its customers was part of a Canada Post data breach. The 2018 breach was found to be the result of someone accessing data via a Canada Post tracking tool. The data included names of people who purchased pot deliveries, OCS reference numbers as well as postal codes.

Meanwhile, residents are concerned about the rise in competition. Some areas are overrun with cannabis stores, such as Toronto’s Queen Street West. That eventually led the Toronto City Council to issue a moratorium on new cannabis store licenses. The moratorium would run for a year or until a provincial bill is put forth, allowing local communities to have a voice in the matter.

It’s concentrated areas of cannabis retail like Queen Street West, where competition is the most fierce, that would appear to be more vulnerable amid the data leak.

Lisa Campbell, chief executive at cannabis marketing company Mercari Agency, told The Canadian Press that it could be a “death sentence” for some of the businesses who are seeking to be acquired.

Cannabis retail businesses in Ontario face stiff competition already, so underperforming stores could suffer if their data is revealed.

Vermont lawmakers are at loggerheads over a measure that would establish a cap on the level of THC in solid cannabis concentrates sold at the state’s regulated cannabis retailers. 

Local publication VTDigger has the background, reporting that members of the Vermont state Senate “bristled Friday at a last-minute change to a key cannabis bill during a House vote Thursday—and speculated as to why the Vermont Department of Health abruptly reversed its recommendation to lawmakers on the measure last week.”

Members of the House “on Thursday imposed a 60% cap on the level of tetrahydrocannabinol, or THC, in solid cannabis concentrates to be sold at retail establishments when they open in October,” according to VTDigger.

“They held the damn thing for over a week and a half and then come up with this,” said Democratic state Senator Dick Sears, as quoted by VTDigger. “There isn’t much time to call for a conference committee.” 

Sears said he was “frustrated” with Democratic state House Representative John Gannon, who proposed the amendment imposing a 60% cap. 

Sears and other lawmakers contend that caps are counterproductive and will only prompt customers to seek products elsewhere––be it on the illicit market or in neighboring states with adult-use cannabis sales.

Calling the measure passed by the House a “stupid decision,” Sears said that Vermont continues “to invite people to go out of state.” 

“It gives the illicit market a monopoly on supplying the demand for these products,” Vermont Cannabis Control Board chair James Pepper told a state House committee during a hearing, as quoted by VTDigger. 

“There is a very broad consensus among regulators that caps are a bad idea,” Pepper told the publication. “A black market will fill this gap. They’ll do so using very dangerous products.”

Amid the back-and-forth among lawmakers has been a series of inconsistent guidance on the issue from Vermont’s Department of Health. 

VTDigger reported that the department’s senior policy and legal adviser, David Englander, told members of a state House committee late last month that the department agreed with the Cannabis Control Board in opposing the cap.

“The primary reason is that there is a likely significant market for high THC concentrates, and it is more dangerous for people to buy unregulated versions of these products as opposed to buying products that are regulated and tested in accordance with Board rules. Regulating instead of banning THC substances is in line with one of the purposes of creating a regulated market as envisioned by the General Assembly,” Englander said in a letter to the committee. 

“In addition, a complete ban on concentrates above 60% requires manufacturers to keep products below that limit at all times during the manufacturing process. Doing so will require the addition of additives to dilute the product down to a 60% concentrate or below. You may recall that there were recent illnesses and deaths that appeared to be associated with the ingestion of such additives.”

But the very next day, Englander pulled a 180, telling lawmakers that, upon “further consideration, with the lens of prevention and safety as the cornerstone for the coming adult use market in Vermont, the Department does not concur with the lifting of the THC limit and maintains that a foundational component of the original legislation remain in place.”

“The risk to users of high levels of THC are significant and we should not risk contributing to the known risks to consumers physical and mental health,” Englander said. “My communication of yesterday to you was based on incomplete information. All errors are mine, and please accept my apologies to you and the committee.”

Vermont legalized recreational pot use in 2018, but sales did not begin in the state until 2020.