Cannabis Group Weekly Alert - Week Of October 24, 2019

In this week's edition:

State regulation of vaping products continues to evolve, as judges in Montana and Oregon stayed bans on the sale of flavored electronic cigarettes (although Oregon's ban on cannabis vaping products remains in place); a Massachusetts judge allowed a state ban on cannabis vaping products to survive; and the state of Washington imposed additional regulations on marijuana licensees, requiring that they post warning signs and disclose all compounds used to produce, or added to, cannabis concentrates. FDA and FTC posted a joint warning letter to Rooted Apothecary regarding the sale of unapproved CBD products with unsubstantiated health claims. Four Northeastern governors met and formulated a 32-point declaration of "core principles" to support a coordinated, regional approach to the regulation of vaping and cannabis in New York, New Jersey, Connecticut and Pennsylvania. Cannabis legalization legislation was introduced in Pennsylvania and a working group in New Mexico has released its recommendation for legislation to be considered in 2020. Mexico released its draft cannabis legalization bill that is expected to be voted on this week. BNY Mellon's Pershing unit, which is responsible for the clearance of a third of all trades in the US, issued a notice saying that, effective November 30, it will no longer accept incoming positions of "non-permitted" cannabis securities. Federal

Chairman Mike Crapo (R-ID), head of the Senate Banking Committee, outlined how he would like to change the Secure and Fair Enforcement (SAFE) Banking Act that passed the House last month. While the details of his suggestions are unclear, he did outline his key concerns—health and safety, interstate commerce, and money laundering with regard to legacy cash.

Rep. David Joyce (R-OH), co-chair of the Cannabis Caucus in the House of Representatives, provided his views on cannabis legislation, expungement of federal criminal records and states' rights. He said he favors the STATES Act over the SAFE Act and the MORE Act because he likes "to focus on strategies that are actually moving the ball forward," noting that President Trump has indicated his willingness to sign the STATES Act. He voiced concerns about expunging federal criminal records of persons who knowingly engaged in the illicit drug trade, but also noted that during his 25 years as a local prosecutor, the county focused on "coke, meth, heroin—the things that destroy families" and scaled back on the prosecution of cannabis possession cases, "because a lot of times those cases were being used as fodder for stats, for people who were trying to get grants."

The Centers for Disease Control and Prevention (CDC) issued clinical guidance for health care providers evaluating patients with lung injury linked to vaping products. The guidance advises close follow-up, as some patients who have presented with mild symptoms have experienced a rapid worsening of symptoms within 48 hours. Neither the FDA nor the CDC has identified the cause of e-cigarette injuries and whether there is a relationship between any specific products or substances and the reported illnesses. However both agencies have warned the public to stop using THC-containing vaping products, noting that of the 573 patients who self-reported the substances used in e-cigarettes or vaping products, 76 percent said they used THC-containing products, exclusively or with nicotine-containing products.

Major League Baseball and its players union have discussed the possibility of easing up on testing for cannabis and whether to allow players to use cannabis following surgeries or for general pain relief. Back in March, the MLB warned players that CBD could elicit a positive drug test for cannabis despite "THC free" labeling.

The Professional Golfers Association suspended Matt Every for 12 weeks for violating the PGA's conduct policy on drugs of abuse. The two-time winner tested positive for cannabis, which he uses for medical purposes pursuant to Florida's legalized medical cannabis program. "Cannabis has proven to be, by far, the safest and most effective treatment," Every claims. Robert Garrigus had received a three month suspension in March 2019, the first professional golfer to be suspended for the use of cannabis.

States

California's 2019 legislative session closed on October 15, the last day for the Governor to sign or veto passed bills. Governor Newsom signed a number of cannabis-related bills, including AB 37, which allows business expense deductions on state taxes, and SB 34, which allows businesses to provide free medical cannabis to low-income patients and exempts those products from state taxes. He vetoed SB 305, which would have allowed terminally ill patients to use medical cannabis at health care facilities. His veto message suggested that health care entities could risk losing Medicare and Medicaid funds if they allowed the use of...