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June 4, 2020

Connecticut opens up medical cannabis to many more patients thanks to some regulatory changes, access to CBD in South Africa is also shifting, and one California-based company is still going to bat to challenge a tax law that many cannabis companies feel is unfair.

The Morning Buzz presented by TRICHOMES brings you late-breaking news that tells you what’s happening within the cannabis industry.


Connecticut Adds Chronic Pain as a Qualifying Condition to Use Medical Cannabis

According to a report from MJ Biz Daily, it took eight months, but Connecticut lawmakers have added chronic pain as a qualifying condition to use medical cannabis, which could significantly boost the state’s growing, $100 million-plus market.

The bipartisan legislative panel also agreed with a state Board of Physicians recommendation in late September 2019 to add Ehlers-Danlos syndrome as the syndrome can cause pain in the joints or muscles.

Chronic pain, which Connecticut defines as pain that has lasted at least six months, generally is a leading sales driver for medical cannabis markets.

The state’s 8-year-old medical program currently has more than 40,000 registered patients. The Marijuana Business Factbook estimated that medical cannabis sales in Connecticut reached $100 million-$120 million in 2019, up from $75 million-$90 million in 2018.

The new regulations will be submitted to the secretary of state’s office, which will post the regulations online. At that point, the regulations will be final.

** Next, South Africa Removes Some CBD Products from Narcotics Scheduling

A report from Hemp Industry Daily says South Africa has amended its drug law to allow some CBD products to be available over the counter, making a temporary rule on non-prescription CBD permanent.

Certain CBD medicines and full-spectrum cannabis-derived products will no longer be subject to medical controls, according to a notice in the official gazette that was published last month.

The move was taken by the health minister at the recommendation of SAHPRA (sap-ruh), the country’s health product regulators, and applies to CBD medication marketed for general health or the “relief of minor symptoms” containing no more than 600 milligrams of cannabidiol per pack and providing a maximum daily dose of 20 mg of cannabidiol. It also pertains to ingestible products derived from raw biomass that contain 0.0075% or less of cannabidiol and only the naturally occurring cannabinoids found in the source material.

All cannabis-containing products in South Africa were previously subject to the Medicines and Related Substances Act of 1965, which said that medicines containing CBD, THC, or both cannabinoids required a prescription.

** California-based Harborside has Appealed a Federal Court Ruling Regarding Cannabis Taxation

According to a Ganjapreneur report, California cannabis company Harborside is continuing its legal challenge to federal tax code 280E but is taking a different approach to the case along with a new legal team.

In short, 280E prevents standard business deductions by companies that deal federally illegal drugs, including cannabis even when state-approved.

Harborside argues that 280E is unconstitutional, running afoul of the 16th Amendment, which allows for income taxes, but attorney James Mann of Greenspoon Marder says it, “results in a tax that’s not on income, it’s not an income tax, so, therefore, it’s unconstitutional.”

The arguments come in an appeal filed by Mann on May 26 on behalf of Harborside. In 2018, the U.S. Tax Court ruled against Harborside calling the firm “a giant drug trafficker, unentitled to the usual deductions that legitimate businesses can claim” because cannabis remains federally illegal.

Mann told MJBizDaily that decision “is just wrong” and calls the determination by the Tax Court and the Internal Revenue Service that state-legal cannabis businesses aren’t afforded the same cost of goods sold deductions “crazy.”

The case is in the U.S. Court of Appeals for the 9th Circuit in San Francisco and a decision on the matter could take years. The original lawsuit by Harborside was filed in 2016 and a decision wasn’t issued until 2018.


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